SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Earliest Event Reported: December 17, 1999
Date of Report: December 29, 1999
Ferrellgas Partners, L.P.
Ferrellgas Partners Finance Corp.
(Exact name of registrants as specified in their charters)
Delaware 1-111331 43-1698480
Delaware 333-06693 43-1742520
- ----------------------- ----------------- ----------------------------------
(States or other Commission file (I.R.S. Employer Identification
jurisdictions of numbers Nos.)
incorporation or
organization)
One Liberty Plaza, Liberty, Missouri 64068
(Address of principal executive office, including zip code)
(816) 792-1600
(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 17, 1999, Ferrellgas Partners, L.P. completed the acquisition
of all of the member interests in Thermogas L.L.C. from Williams Natural Gas
Liquids, Inc., a subsidiary of The Williams Companies, Inc. Thermogas was the
nation's fifth largest propane retailer with 180 retail outlets in 18 states,
annual sales of approximately 300 million gallons, and more than 330,000
residential, industrial/commercial and agricultural customers. Ferrellgas
Partners intends to utilize the Thermogas assets in its existing business,
making Ferrellgas Partners the nation's largest retail propane marketer with
sales approaching 1 billion gallons and more than 1 million customers in 45
states.
Immediately prior to the closing, Thermogas entered into a $183 million
loan and a $135 million operating tank lease financing with Bank of America,
N.A. as Administrative Agent. Upon the funding of the loan, Thermogas
distributed approximately $123.7 million of the proceeds to Williams Natural Gas
Liquids. The remaining proceeds from the loan remained in Thermogas. The
proceeds from the operating tank lease of approximately $133.8 million, net of
related financing costs, were distributed to Williams Natural Gas Liquids.
After the funding of both the loan and the operating tank lease, Ferrellgas
Partners purchased all of the member interests in Thermogas from Williams
Natural Gas Liquids in consideration for the issuance of senior common units
representing limited partner interests of Ferrellgas Partners with a face value
of $175 million. In connection with the issuance of the senior common units and
as allowed by the Ferrellgas Partners partnership agreement, the general partner
of Ferrellgas Partners amended and restated the agreement of limited partnership
of Ferrellgas Partners to provide for the designations, preferences, optional
and other rights, powers and duties of the senior common units and to delete
provisions no longer operative or applicable.
The senior common units entitle the holder to annual distributions from
Ferrellgas Partners equivalent to 10 percent of face value. Distributions are
payable quarterly in kind through issuance of further senior common units until
February 1, 2002, after which distributions are payable in cash. Distributions
are also payable in cash upon the occurrence of a Material Event, as defined in
the Amended and Restated Partnership Agreement of Ferrellgas Partners. The
senior common units are redeemable by Ferrellgas Partners at any time in whole
or in part upon payment in cash of the face value of the senior common units and
the amount of any accrued but unpaid distributions.
Williams has the right to convert any outstanding senior common units into
common units at the end of two years or upon the occurrence of a Material Event.
Ferrellgas Partners agreed that within 120 days after the closing, it would
submit to its common unitholders a proposal to approve this common unit
conversion feature and to approve an exemption under Ferrellgas Partners'
partnership agreement to enable Williams to vote the common units, if such
conversion were to occur. Ferrell Companies, Inc., which holds a majority of
Ferrellgas Partners' common units, agreed to vote in favor of that proposal.
Ferrellgas Partners has also granted Williams demand registration rights at the
end of two years or upon the occurrence of a Material Event with respect to the
any outstanding senior common units (or common units into which they may be
convertible).
Upon the acquisition of Thermogas by Ferrellgas Partners, Ferrellgas
Partners contributed its interest in Thermogas to Ferrellgas, L.P., its
operating subsidiary. Ferrellgas, L.P. then assumed all of Thermogas'
obligations under the loan and the operating tank lease. After the contribution
and assumption, Thermogas was merged with and into Ferrellgas, L.P. and the
separate existence of Thermogas ceased. Ferrellgas, L.P. succeeded to all of the
rights and obligations of Thermogas and will conduct all of Thermogas' former
business and operations. After the merger, the remaining funds from the loan
held by Thermogas were used by Ferrellgas, L.P. to pay down existing debt and to
fund transaction related costs.
2
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
It is impracticable to provide Thermogas' historical financial
statements for the year ended December 31, 1997, 1998 and the nine month period
ended September 30, 1999, as required by this Item within the time this Current
Report on Form 8-K is required to be filed. Such historical financial statements
will be filed as soon as practicable, but not more than 60 days after this
Current Report on Form 8-K is required to be filed.
(b) Pro forma financial information.
It is impracticable to provide the pro forma financial
statements required by this Item within the time this Current Report on Form 8-K
is required to be filed. Such pro forma financial statements will be filed as
soon as practicable, but not more than 60 days after this Current Report on Form
8-K is required to be filed.
(c) Exhibits.
The Exhibits listed in the Index to Exhibits are filed as part
of this Current Report on Form 8-K.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrants have duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FERRELLGAS PARTNERS, L.P.
By Ferrellgas, Inc. (General Partner)
Date: December 29, 1999 By /s/ Kevin T. Kelly
--------------------------------------------
Kevin T. Kelly
Chief Financial Officer (Principal
Financial and Accounting Officer)
FERRELLGAS PARTNERS FINANCE
CORP.
Date: December 29, 1999 By /s/ Kevin T. Kelly
-------------------------------------------
Kevin T. Kelly
Chief Financial Officer (Principal
Financial and Accounting Officer)
4
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit
2.1 Purchase Agreement by and among Ferrellgas
Partners, L.P., Ferrellgas L.P., and Williams
Natural Gas Liquids, Inc., dated as of November 7,
1999. (Incorporated by reference to Exhibit 99.1 to
Registrant's Current Report on Form 8-K filed
November 12, 1999).
2.2 Amendment No. 1 to Purchase Agreement by and among
Ferrellgas Partners, L.P., Ferrellgas L.P.,
and Williams Natural Gas Liquids, Inc., dated as
of December 17, 1999.
2.3 Representations Agreement dated as of December
17, 1999 by and among Ferrellgas Partners, L.P.,
Ferrellgas, Inc., Ferrellgas, L.P. and Williams
Natural Gas Liquids, Inc.
3.1 Amended and Restated Agreement of Limited
Partnership of Ferrellgas Partners, L.P. dated as
of December 17, 1999.
4.1 Covenant to Vote dated as of December 17, 1999,
executed by Ferrell Companies, Inc.
4.2 Registration Rights Agreement dated as of
December 17, 1999 by and between Ferrellgas
Partners, L.P. and Williams Natural
Gas Liquids, Inc.
10.1 Lease Intended as Security dated as of
December 15, 1999, between Thermogas L.L.C.
as Lessee and First Security Bank, National
Association, solely as Certificate Trustee,
as Lessor.
10.2 Participation Agreement dated as of December 15,
1999, among Thermogas L.L.C., as Lessee, The
Williams Companies, Inc., First Security Bank,
National Association, solely as Certificate
Trustee, First Security Trust Company of Nevada,
solely as Agent, and the purchasers named therein.
10.3 Assumption Agreement dated as of December 17, 1999
executed by Ferrellgas, L.P. and Ferrellgas, Inc.,
for the benefit of the First Security Trust Company
of Nevada as Agent, First Security Bank, National
Association solely as Certificate Trustee and the
purchasers and lenders named therein.
10.4 Credit Agreement, dated as of December 17, 1999,
among Thermogas L.L.C., the Financial Institutions
party thereto, and Bank of America, N.A., as
Administrative Agent.
5
<PAGE>
10.5 Assumption Agreement dated as of December 17,
1999 by and among Thermogas, L.L.C., Ferrellgas,
L.P., Ferrellgas, Inc., and Bank of America, N.A.
as Administrative Agent.
99.1 Text of press release issued by Ferrellgas Partners,
L.P. on December 17, 1999.
6
FIRST AMENDMENT TO PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO PURCHASE AGREEMENT (this "Amendment") is made
and entered into as of the 17th day of December, 1999, by and among Ferrellgas
Partners, L.P., a Delaware limited partnership ("Purchaser"), Ferrellgas, L.P.,
a Delaware limited partnership ("Subsidiary OLP"), and Williams Natural Gas
Liquids, Inc., a Delaware corporation ("Seller").
W I T N E S S E T H:
WHEREAS, Purchaser, Subsidiary OLP and Seller have entered into that
certain Purchase Agreement dated as of November 7, 1999 (the "Purchase
Agreement"); and
WHEREAS, Purchaser, Subsidiary OLP and Seller desire to amend the
Purchase Agreement as set forth in this Amendment;
WHEREAS, pursuant to Section 9.3 of the Purchase Agreement, the
Purchase Agreement may be amended in writing by the parties
thereto;
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants, agreements and conditions contained
herein, the parties hereto agree as follows:
<PAGE>
ARTICLE
<PAGE>
1 AMENDMENTS TO THE PURCHASE AGREEMENT 1.1 SECTION Amendment to the Preamble to
the Purchase Agreement .
The Preamble to the Purchase Agreement is hereby amended by deleting
the parenthetical "("Agreement")" in its entirety and inserting in lieu thereof
the parenthetical "(as amended, the "Agreement")".
1.1 SECTION Amendment to Article IV of the Purchase Agreement .
Article IV of the Purchase Agreement is hereby amended by adding the
following section:
"SECTION 4.13 Audit.
At Purchaser's request, Seller has engaged Ernst & Young
L.L.P. to perform an audit of the Company's financial records for the
nine months ended September 30, 1999, and for the years ended December
31, 1998 and December 31, 1997, and prepare financial statements whose
format will comply with the requirements of the Securities and Exchange
Commission. Purchaser agrees to pay the cost of the audit, including
audit fees and expenses, up to $300,000; provided, however, that if
Purchaser requests Ernst & Young L.L.P. to deviate in any substantial
manner from the scope of the audit as set forth in Annex A hereto,
Purchaser shall bear any incremental costs, even if the cost of the
audit exceeds $300,000. The cost of such audit, including audit fees
and expenses but excluding any incremental costs of the audit resulting
from any deviation in the scope of the audit as set forth in Annex A
hereto, above $300,000 will be borne by Seller. In connection with the
Company's audit, Seller agrees to use its reasonable best efforts to
execute a Management Representation Letter to be delivered to Ernst &
Young L.L.P."
1.1 SECTION Amendment to Section 5.1(e) of the Purchase Agreement .
Section 5.1(e) of the Purchase Agreement is hereby amended by deleting
the number "$120,230,000" in the second line thereof and inserting in lieu
thereof the number "$118,426,550".
1.1 SECTION Amendment to Section 5.1(f) of the Purchase Agreement .
Section 5.1(f) of the Purchase Agreement is hereby amended and restated
to read as follows:
"(f) Purchaser shall have received a certificate from an
authorized officer of Seller, dated the Closing Date, to the effect
that the conditions set forth in Sections 5.1(c), (d), (e) and (h) have
been satisfied by Seller; and"
1.1 SECTION Amendment to Section 5.2(e) of the Purchase Agreement .
Section 5.2(e) of the Purchase Agreement shall be amended and restated
to read as follows:
"(e) Seller shall have received a certificate from an
authorized officer of the General Partner with respect to Purchaser,
dated the Closing Date, to the effect that the conditions set forth in
Sections 5.2(c), (d), and (j) have been satisfied by Purchaser."
1.1 SECTION Amendment to Section 7.2(a)(ii) of the Purchase Agreement .
Section 7.2(a)(ii) of the Purchase Agreement shall be amended and
restated to read as follows:
"(ii) a breach of any representation or warranty contained in
Article II of this Agreement or in Section 5 of the Representations
Agreement (the "Representations Agreement") dated as of December 17,
1999, by and among Seller, Purchaser, Subsidiary OLP and the General
Partner,"
1.1 SECTION Amendment to Section 7.2(a)(iii) of the Purchase Agreement .
Section 7.2(a)(iii) of the Purchase Agreement shall be amended and
restated to read as follows:
"(iii) a breach of any agreement or covenant of Seller
set forth in this Agreement or in the Representations
Agreement,"
1.1 SECTION Amendment to Section 7.2(a) of the Purchase Agreement .
The last sentence in Section 7.2(a) of the Purchase Agreement shall be
amended and restated to read as follows:
"Purchaser agrees that, except as provided in Section 7.5, the
indemnification provided in this Section 7.2 is the exclusive remedy
for money damages for a breach by Seller of any representation or
warranty contained in Article II of this Agreement or in Section 5 of
the Representations Agreement, any covenant contained in Article IV of
this Agreement and Section 5 of the Representations Agreement and with
respect to any of the transactions contemplated in this Agreement or in
the Representations Agreement."
1.1 SECTION Amendment to Section 7.2(b) of the Purchase Agreement .
The preamble of Section 7.2(b) of the Purchase Agreement shall be
amended and restated to read as follows:
"(b) Seller's obligations to indemnify Purchaser Indemnitees
pursuant to clause (ii) of Section 7.2(a) hereof with respect to a
breach of a representation or warranty contained in this Agreement and
in the Representations Agreement are subject to the following
limitations:"
1.1 SECTION Amendment to Section 7.2(b)(i) of the Purchase Agreement .
The first clause of Section 7.2(b)(i) of the Purchase Agreement shall
be amended and restated to read as follows:
"(i) Except with respect to a breach of the representations
and warranties set forth in Sections 2.2, 2.4, 2.8, 2.12 and 2.20 of
this Agreement, Sections 5(d)(i), 5(d)(iv), 5(d)(v) and 5(d)(vii) of
the Representations Agreement and any claim based on fraud."
1.1 SECTION Amendment to Section 7.3(a)(ii) of the Purchase Agreement .
Section 7.3(a)(ii) of the Purchase Agreement shall be amended and
restated to read as follows:
"(ii) a breach of any representation or warranty
contained in Article III of this Agreement or Section 1 of the Representations
Agreement,"
1.1 SECTION Amendment to Section 7.3(a)(iv) of the Purchase Agreement .
Section 7.3(a)(iv) of the Purchase Agreement shall be amended and
restated to read as follows:
"(ii) a breach of any agreement or covenant of Purchaser in
this Agreement or in the Representations Agreement."
1.1 SECTION Amendment to Section 7.3(a) of the Purchase Agreement .
The last sentence of Section 7.3(a) of the Purchase Agreement shall be
amended and restated to read as follows:
"Seller agrees that the indemnification provided in this
Section 7.3 is the exclusive remedy for money damages for a breach by
Purchaser, the Subsidiary OLP or the General Partner of any
representation or warranty contained in Article III of this Agreement
and Section 1 of the Representations Agreement, any covenant contained
in Article IV of this Agreement and Section 3 of the Representations
Agreement and with respect to any transactions contemplated in this
Agreement and in the Representations Agreement."
1.1 SECTION Amendment to the Preamble of Section 7.3(b) of the Purchase
Agreement .
The preamble of Section 7.3(b) of the Purchase Agreement shall be
amended and restated to read as follows:
"(b) Purchaser's obligations to indemnify Seller Indemnitees
pursuant to clause (ii) of Section 7.3(a) hereof with respect to a
breach of a representation or warranty contained in this Agreement or
in the Representations Agreement are subject to the following
limitations:"
1.1 SECTION Amendment to Section 7.3(b)(i) of the Purchase Agreement .
The first clause of Section 7.3(b)(i) of the Purchase Agreement shall
be amended and restated to read as follows:
"(i) Except with respect to a breach of the representations
and warranties set forth in Section 3.9 of this Agreement, Sections
1(c), 1(j) and 1(m) of the Representations Agreement and any claim
based on fraud,"
1.1 SECTION Amendment to Section 9.3 of the Purchase Agreement .
The first sentence of Section 9.3 of the Purchase Agreement shall be
amended and restated to read as follows:
"This Agreement and the Representations Agreement dated as of
the Closing Date constitute the entire agreement among the parties
hereto pertaining to the subject matter hereof and supersede all prior
agreements, understandings, negotiations and discussions, whether oral
or written, of the parties, and there are no warranties,
representations or other agreements among the parties in connection
with the subject matter hereof except as set forth specifically herein
or contemplated by this Agreement or the Representations Agreement."
1.1 SECTION Amendment to Exhibit A to the Purchase Agreement .
The first bullet point under the section of Exhibit A to the Purchase
Agreement entitled "Other Features- Material Event" shall be amended and
restated as follows:
"o if the closing price for Common Units (on the New York Stock
Exchange) is below $7.50, as appropriately adjusted for unit splits,
combinations, etc., for 10 consecutive trading days;"
<PAGE>
ARTICLE
<PAGE>
1 GENERAL PROVISIONS
1.1 SECTION Full Force and Effect .
Except as expressly amended hereby, the Purchase Agreement shall
continue in full force and effect in accordance with the provisions thereof on
the date hereof.
1.1 SECTION Other Provisions .
Article IX of the Purchase Agreement shall apply to this Amendment and
be incorporated herein with the same force and effect as if its provisions were
reprinted as part of this Amendment.
<PAGE>
EXECUTED as of the date first written above.
<PAGE>
NYC:71920.3
WILLIAMS NATURAL GAS LIQUIDS, INC.
By:
Name:
Title:
FERRELLGAS PARTNERS, L.P.
By: Ferrellgas Inc., its general partner
By:
Name:
Title:
FERRELLGAS, L.P.
By: Ferrellgas, Inc., its general partner
By:
Name:
Title:
REPRESENTATIONS AGREEMENT
Dated as of December 17, 1999
by and among
FERRELLGAS PARTNERS, L.P.,
FERRELLGAS, INC.,
FERRELLGAS, L.P.,
and
WILLIAMS NATURAL GAS LIQUIDS, INC.
RELATING TO
4,375,000
SENIOR CONVERTIBLE UNITS
REPRESENTING LIMITED PARTNER INTERESTS
of
FERRELLGAS PARTNERS, L.P.
<PAGE>
TABLE OF CONTENTS
SECTION 1. Representations and Warranties 2
SECTION 2. Delivery of the Units 6
SECTION 3. Certain Covenants 7
SECTION 4. Opinion of Purchaser's Counsel 7
SECTION 5. Restrictions on Transfer; Representations and
Warranties and Covenants of the Seller 10
SECTION 6. Survival and Indemnification 13
SECTION 7. Allocation 17
SECTION 8. Notices 17
SECTION 9. Governing Law 18
SECTION 10. Entire Agreement; Amendment and Waivers 19
SECTION 11. Binding Effect and Assignment 19
SECTION 12. Severability 19
SECTION 13. Parties in Interest 20
SECTION 14. Headings; Survival of Covenants 20
SECTION 15. Execution 20
<PAGE>
REPRESENTATIONS AGREEMENT
This Representations Agreement ("Representations Agreement") is made
and entered into as of December 17, 1999, by and among Ferrellgas Partners,
L.P., a Delaware limited partnership (the "Purchaser"), Ferrellgas, L.P., a
Delaware limited partnership (the "Subsidiary OLP"), Ferrellgas, Inc., a
Delaware corporation (the "General Partner"), and Williams Natural Gas Liquids,
Inc., a Delaware corporation (the "Seller").
The Purchaser, the Subsidiary OLP and the Seller have entered into a
Purchase Agreement dated as of November 7, 1999, as amended by the First
Amendment to the Purchase Agreement dated as of December 17, 1999, by and among
the Purchaser, the Subsidiary OLP and the Seller (as amended, the "Thermogas
Purchase Agreement"), that provides for the Purchaser's acquisition (the
"Acquisition") of the Seller's equity interest in Thermogas L.L.C., a Delaware
limited liability company (the "Company") (formerly, Thermogas Company, a
Delaware corporation). Pursuant to Section 1.2 of the Thermogas Purchase
Agreement, the Purchaser agreed, as partial consideration for the Acquisition,
to issue and sell to the Seller an aggregate of 4,375,000 of the Purchaser's
senior convertible units representing limited partner interests, $40.00
liquidation preference per unit (the "Senior Units").
The parties hereto believe it is in their respective best interests to
make certain representations and warranties and agree to certain covenants in
connection with the issuance, sale and delivery of the Senior Units in
accordance with the terms of the Thermogas Purchase Agreement, specifically the
delivery by the Purchaser as set forth in Section 1.7(b)(i) thereof.
The offer and sale of the Senior Units by Purchaser pursuant to the
terms of the Thermogas Purchase Agreement has not been registered under the
Securities Act of 1933, as amended (together with the rules and regulations of
the Securities and Exchange Commission (the "Commission") promulgated
thereunder, the "Securities Act"), in reliance on an exemption therefrom.
The execution of this Representations Agreement shall be concurrent
with the consummation of the Acquisition. Concurrent with the execution of this
Representations Agreement, the Seller and the Purchaser shall enter into a
Registration Rights Agreement (the "Registration Rights Agreement" and together
with this Representations Agreement and the Thermogas Purchase Agreement, the
"Operative Agreements") pursuant to which the Purchaser will agree, among other
things and subject to the terms thereof, to file one or more registration
statements with the Commission registering under the Securities Act the sale of
the Senior Units and the common units of the Purchaser (the "Common Units")
issuable upon conversion of the Senior Units. The transactions contemplated by
the Operative Agreements to the extent such transactions are contemplated to be
completed as of the date hereof are collectively referred to herein as the
"Transactions."
NOW, THEREFORE, in consideration of the mutual representations,
warranties and covenants set forth herein, the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. SECTION Representations and Warranties .
Each of the Purchaser, the Subsidiary OLP and the General Partner
represents and warrants to, and agrees with, the Seller that:
(a) The capitalization of the Purchaser is as set forth in the Purchaser's
Annual Report on Form 10-K filed by the Purchaser with the Commission on October
28, 1999 (the "Form 10-K"); the audited consolidated balance sheet of the
Purchaser included in the Form 10-K presents fairly the financial position of
the Purchaser as of the date indicated; the audited historical consolidated
financial statements of the Purchaser included in the Form 10-K present fairly
the consolidated financial position of the Purchaser and the subsidiaries of the
Purchaser set forth in Exhibit A hereto (the "Subsidiaries") as of the dates
indicated and their results of operations and cash flows for the periods
specified; the supplemental schedules included in the Form 10-K, when considered
in relation to the audited consolidated financial statements of the Purchaser,
present fairly the information shown therein; such audited consolidated
financial statements and supplemental schedules included in the Form 10-K have
been prepared in conformity with generally accepted accounting principles
applied on a substantially consistent basis, except to the extent disclosed
therein; the other financial and statistical information and data included in
the Form 10-K are accurately presented and prepared on a basis consistent with
such financial statements and the books and records of the Purchaser and the
General Partner;
(b) All of the Purchaser's outstanding Common Units and incentive distribution
rights (the "Incentive Distribution Rights") have been duly authorized and
validly issued, are fully paid and non-assessable (except as such
non-assessability may be affected by the Delaware Revised Uniform Limited
Partnership Act (the "Delaware Act")) and are free of any preemptive or similar
rights; there are no subordinated units of the Purchaser ("Subordinated Units")
issued; other than the Common Units and the Incentive Distribution Rights, on
the date hereof, the Senior Units are the only limited partner interests of the
Purchaser issued;
(c) The Senior Units, and the limited partner interests represented thereby, and
any additional Senior Units issued as distributions in respect of the Senior
Units in accordance with the terms of the Purchaser Partnership Agreement (as
defined below) (the "Distribution Units"), and the limited partner interests
represented thereby, have been duly authorized (including due authorization
under the Agreement of Limited Partnership of the Purchaser (as it may be
amended or restated at or prior to the date hereof, the "Purchaser Partnership
Agreement")) and, when issued and delivered to the Seller in accordance with the
terms of the Thermogas Purchase Agreement and the Purchaser Partnership
Agreement will be validly issued, fully paid and nonassessable (except as such
nonassessability may be affected by the Delaware Act) and free of any preemptive
or similar rights; the Common Units issuable upon conversion of the Senior Units
pursuant to the terms of the Purchaser Partnership Agreement, and the limited
partner interests represented thereby, have been duly authorized (including due
authorization under the Purchaser Partnership Agreement) and when issued and
delivered to the Seller upon such conversion, will be validly issued, fully paid
and nonassessable (except as such nonassessability may be affected by the
Delaware Act) and free of any preemptive or similar rights;
(d) The Subsidiary OLP has been duly formed and is validly existing as a limited
partnership under the Delaware Act, with full partnership power and authority to
own or lease the properties it owns or leases and conduct the business it
conducts, as described in the Form 10-K, and has been duly qualified or
registered as a foreign limited partnership for the transaction of business
under the laws of each jurisdiction in which the character of the properties and
assets now owned or held by it or the nature of the business now conducted by it
requires it to be so licensed or qualified;
(e) The General Partner has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own or lease its properties, to conduct its
business and to act as general partner of the Purchaser and of the Subsidiary
OLP, in each case as described in the Form 10-K, and has been duly qualified as
a foreign corporation for the transaction of business and is in good standing
under the laws of each jurisdiction in which the character of the properties and
assets now owned or held by it or the nature of the business now conducted by it
(as described in the Form 10-K) requires it to be so licensed or qualified;
(f) There are no preemptive rights or other rights to subscribe for or to
purchase, nor any restriction upon the voting or transfer of, any limited
partner interest in the Purchaser or the Subsidiary OLP pursuant to either the
Purchaser Partnership Agreement or the Agreement of Limited Partnership of the
Subsidiary OLP (as it may be amended or restated at or prior to the date hereof,
the "Subsidiary OLP Agreement," and, together with the Purchaser Partnership
Agreement, the "Partnership Agreements") or any agreement or other instrument to
which the Purchaser or the Subsidiary OLP is a party or by which either of them
may be bound (other than pursuant to the Operative Agreements, pursuant to the
Amended and Restated Ferrellgas, Inc. Unit Option Plan listed as Exhibit 10.2 to
the Form 10-K, as limited by the pledge and debt documents identified in the
exhibit list to the Form 10-K or the restriction on voting by any Person or
Group (as defined in the Purchaser Partnership Agreement) (other than the
Purchaser or its affiliates) who owns beneficially 20% or more of all Common
Units as set forth in the definition of "Outstanding" set forth in Article II of
the Purchaser Partnership Agreement);
(g) All of the issued and outstanding shares of capital stock of, or other
ownership interests in, each of the Subsidiaries or the General Partner have
been duly and validly authorized and issued, and all of the shares of capital
stock of, or other ownership interests in, each of the Subsidiaries are owned,
directly or through other Subsidiaries, by the Purchaser, the Subsidiary OLP or
the General Partner, as the case may be; all such shares of capital stock are
fully paid and nonassessable (except as such non-assessability may be affected
by the Delaware Act), and are owned free and clear of all liens, security
interests, mortgages, pledges, encumbrances, equities or claims (each a "Lien"),
other than Liens pursuant to the Pledge and Security Agreement dated as of April
16, 1996, made by the Purchaser and the General Partner in favor of American
Bank National Association, as collateral agent;
(h) The Purchaser, the Subsidiary OLP and the General Partner each have the
requisite partnership and corporate power and authority, as applicable, to
execute, deliver and perform their respective obligations under the Partnership
Agreements, this Representations Agreement and the Registration Rights
Agreement, as applicable; this Representations Agreement has been duly
authorized, executed and delivered by each of the Purchaser, the Subsidiary OLP
and the General Partner and is a valid and legally binding agreement of the
Purchaser, the Subsidiary OLP and the General Partner, enforceable against the
Purchaser, the Subsidiary OLP and the General Partner in accordance with its
terms subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights (ii) the
remedy of specific performance and injunctive and other forms of equitable
relief and (iii) to the discretion of the court before which any proceeding
thereof may be brought (collectively, the "Enforceability Exceptions"); the
Purchaser Partnership Agreement has been duly authorized, executed and delivered
by the General Partner and is a valid and legally binding agreement of the
General Partner, enforceable against the General Partner in accordance with its
terms, subject to the Enforceability Exceptions; the Subsidiary OLP Agreement
has been duly authorized, executed and delivered by the General Partner and the
Purchaser and is a valid and legally binding agreement of the General Partner
and the Purchaser, enforceable against the General Partner and the Purchaser in
accordance with its terms, subject to the Enforceability Exceptions; the
Registration Rights Agreement has been duly authorized, executed and delivered
by the Purchaser and is a valid and legally binding agreement of the Purchaser
enforceable against the Purchaser in accordance with its terms, subject to the
Enforceability Exceptions and except as any rights to indemnity and contribution
thereunder may be limited by federal and state securities laws and public policy
considerations;
(i) The issuance and sale of the Senior Units, the Common Units issuable upon
conversion of the Senior Units and the Distribution Units by the Purchaser, and
the execution and delivery of this Representations Agreement and the
Registration Rights Agreement do not, and the fulfillment and compliance with
the terms and conditions hereof and thereof and the consummation of the
Transactions will not (i) conflict with any of, or require the consent of any
person or entity under, the terms, conditions or provisions of the Partnership
Agreements or the charter or bylaws of the General Partner, (ii) violate any
provision of, or require any consent, authorization or approval under, any law
or administrative regulation or any judicial, administrative or arbitration
order, award, judgment, writ, injunction or decree applicable to the Purchaser,
the Subsidiary OLP or the General Partner, (iii) conflict with, result in a
breach of, constitute a default under (whether with notice or the lapse of time
or both) or accelerate or permit the acceleration of the performance required
by, or require any consent, authorization or approval under, any indenture,
mortgage, loan or any material agreement, contract, commitment or instrument to
which the Purchaser, the Subsidiary OLP or the General Partner is a party or by
which the Purchaser, the Subsidiary OLP or the General Partner is bound or to
which any asset of the Purchaser, the Subsidiary OLP or the General Partner is
subject, or (iv) result in the creation of any Lien on the assets or properties
of the Purchaser, the Subsidiary OLP or the General Partner under any such
indenture, mortgage, loan, agreement, contract or instrument; and no consent,
approval, authorization or other order of or registration or filing with, any
court, regulatory body, administrative agency or other governmental body, agency
or official is required for the issuance and sale of the Senior Units by the
Purchaser to the Seller or the consummation by the Purchaser, the Subsidiary OLP
or the General Partner, as the case may be, of the Transactions, except such
consents, approvals, authorizations, orders, registrations or qualifications (i)
as have been obtained prior to the date hereof, (ii) as may be required in
connection with the registration under the Securities Act pursuant to the
Registration Rights Agreement of the Senior Units or the Common Units issuable
upon conversion of the Senior Units and the compliance with securities or Blue
Sky laws of various jurisdictions or (iii) as may be required in connection with
obtaining the unitholder approval for the conversion feature of the Senior Units
and the issuance of Common Units upon conversion of the Senior Units as
contemplated in the Purchaser Partnership Agreement (the "Unitholder Approval");
(j) None of the Purchaser, the General Partner or any of the Subsidiaries is in
breach or violation of the provisions of its agreement of limited partnership or
of its charter or bylaws, as the case may be;
(k) Except as set forth in the Form 10-K, none of the Purchaser, the General
Partner or any of the Subsidiaries has (i) violated any law or regulation
applicable to its business relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("Environmental Laws"), (ii) lacks any permits, licenses or
other approvals required of them under applicable Environmental Laws to own,
lease and operate their respective properties and to conduct their business as
currently conducted; is violating any terms and conditions of any such permit,
license or approval, or (iii) has permitted to occur any event that allows, or
after notice or lapse of time would allow, revocation, termination of any such
permit, license or approval or results in any other impairment of their rights
thereunder;
(l) Except as set forth in the Form 10-K, none of the Purchaser, the General
Partner or any of the Subsidiaries has violated any federal, state or local law
relating to discrimination in the hiring, promotion or pay of employees pursuant
to any applicable wage or hour laws, nor any provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA") or the rules and regulations
promulgated thereunder; except as set forth in the Form 10-K, there is (i) no
unfair labor practice charge or complaint against the business of the Purchaser,
the General Partner or any of the Subsidiaries pending (for which notice has
been provided) or, to the knowledge of the Purchaser, the Subsidiary OLP or the
General Partner, threatened before the National Labor Relations Board, (ii) no
labor strike, dispute, slowdown, stoppage or lockout actually pending (for which
notice has been provided) against the Purchaser, the General Partner or any of
the Subsidiaries or, to the knowledge of the Purchaser, the Subsidiary OLP or
the General Partner, threatened against or affecting the business of the
Purchaser, the General Partner or any of the Subsidiaries and (iii) neither the
Purchaser, the Subsidiary OLP nor the General Partner has received notice of the
intent of any federal or state governmental authority responsible for the
enforcement of labor or employment laws to conduct an investigation with respect
to or relating to their respective business and no such investigation is in
progress;
(m) Except as set forth in the Form 10-K, all tax returns required to be filed
by the Purchaser, the General Partner or any of the Subsidiaries in any
jurisdiction have been filed, other than those filings being contested in good
faith, and all taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due or claimed to be due from such entities
have been paid, other than those being contested in good faith and for which
adequate reserves have been provided or those currently payable without penalty
or interest;
(n) Neither the Purchaser, the General Partner nor any of the Subsidiaries is
(i) an "investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act") or (ii) a "holding company" or a "subsidiary company"
of a holding company, or an "affiliate" thereof within the meaning of the Public
Utility Holding Company Act of 1935, as amended;
(o) Neither the Purchaser, the Subsidiary OLP nor the General Partner or any of
their respective Affiliates (as defined in Rule 501(b) of Regulation D under the
Securities Act), directly or through any agent, (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of any "security" (as
defined in the Securities Act) which is or would reasonably be expected to be
integrated with the sale of the Senior Units or the Common Units issuable upon
conversion of the Senior Units in a manner that would require registration under
the Securities Act of the Senior Units or the Common Units issuable upon
conversion of the Senior Units or (ii) engaged in any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) in connection with the offering of the Senior Units or
the Common Units issuable upon conversion of the Senior Units or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act. Assuming the accuracy of the representations and warranties of the Seller
in Section 5 hereof, it is not necessary in connection with the offer, sale and
delivery of the Senior Units and the Common Units issuable upon conversion of
the Senior Units to Seller in the manner contemplated in this Representations
Agreement, the Thermogas Purchase Agreement or the Purchaser Partnership
Agreement, as applicable, to register any of the Senior Units and the Common
Units issuable upon conversion of the Senior Units under the Securities Act; and
(p) No securities of the Purchaser are of the same class (within the meaning of
Rule 144A under the Securities Act) as the Senior Units and listed on a national
securities exchange registered under Section 6 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or quoted in a U.S. automated
inter-dealer quotation system.
2. SECTION Delivery of the Units .
In connection with the delivery of the Equity Consideration (as defined
in the Thermogas Purchase Agreement) pursuant to Section 1.7(b)(i) of the
Thermogas Purchase Agreement, the Purchaser has delivered on the date hereof a
certificate or certificates in definitive form representing the Senior Units to
be issued pursuant thereto, in the form attached as Exhibit B to the Purchaser
Partnership Agreement, registered in the name of the Seller.
1. SECTION Certain Covenants .
Each of the Purchaser, the Subsidiary OLP and the General Partner
covenants and agrees with the Seller:
(a) For so long as the Senior Units remain outstanding, to furnish to the
holders of Senior Units any reports delivered by the Purchaser to its holders of
Common Units simultaneously with the delivery thereof to such holders;
(b) To pay or cause to be paid the following:
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NYC:70941.9
(c) (i) the fees, disbursements and expenses of the Purchaser's counsel and
accountants in connection with the issuance of the Senior Units hereunder; (ii)
the cost of preparing certificates representing the Senior Units, the Common
Units issuable upon conversion of the Senior Units and the Distribution Units;
and (iii) the cost and charges of any transfer agent; and
(d) Neither the Purchaser, the Subsidiary OLP nor the General Partner nor any of
their Affiliates (as defined in Rule 501(b) of Regulation D under the Securities
Act), will sell, offer for sale or solicit offers to buy or otherwise negotiate
in respect of any "security" (as defined in the Securities Act) which would
reasonably be expected to be integrated with the sale of the Senior Units, the
Common Units issuable upon conversion of the Senior Units or the Distribution
Units in a manner which would require the registration under the Securities Act
of the Senior Units, the Common Units issuable upon conversion of the Senior
Units or the Distribution Units.
2. SECTION Opinion of Purchaser's Counsel .
Bracewell & Patterson LLP, special counsel for the Purchaser, the
General Partner and the Subsidiary OLP, shall have furnished to the Seller its
written opinion or opinions, dated the date hereof, in form and substance
satisfactory to the Seller, to the effect that:
(a) Each of the Purchaser and the Subsidiary OLP is validly existing as a
limited partnership under the Delaware Act;
(b) The General Partner is duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware;
(c) The Senior Units and Distribution Units, and limited partner interests
represented thereby, have been duly authorized (including due authorization
under the Purchaser Partnership Agreement) and, when issued and delivered to the
Seller in accordance with the terms of the Thermogas Purchase Agreement and
based on the representations and warranties in this Representations Agreement,
in the case of the Senior Units, and in accordance with the Purchaser
Partnership Agreement, in the case of the Distribution Units, will be validly
issued, fully paid and nonassessable (except as such nonassessability may be
affected by the Delaware Act) and free of any preemptive or similar rights; the
Common Units issuable upon conversion of the Senior Units pursuant to the terms
of the Purchaser Partnership Agreement, and limited partner interests
represented thereby, have been duly authorized (including due authorization
under the Purchaser Partnership Agreement) and, when issued and delivered to the
Seller upon such conversion in accordance with the terms of the Purchaser
Partnership Agreement, will be validly issued, fully paid and nonassessable
(except as such nonassessability may be affected by the Delaware Act) and free
of any preemptive or similar rights; to the knowledge of such counsel, there are
no Subordinated Units outstanding; to the knowledge of such counsel, other than
the Common Units and the Incentive Distribution Rights, the Senior Units are the
only limited partner interests of the Purchaser outstanding;
(d) To the knowledge of such counsel, there are no preemptive rights or other
rights to subscribe for or to purchase, nor any restriction upon the voting or
transfer of, any limited partner interests in the Purchaser or the Subsidiary
OLP pursuant to the Partnership Agreements or any agreement or other instrument
to which the Purchaser or the Subsidiary OLP is a party or by which either of
them is bound (other than pursuant to the Operative Agreements, pursuant to the
Amended and Restated Ferrellgas, Inc. Unit Option Plan listed as Exhibit 10.2 to
the Form 10-K, as limited by the pledge and debt documents identified in the
exhibit list to the Form 10-K or the restriction on voting by any Person or
Group (as defined in the Purchaser Partnership Agreement) (other than the
Purchaser or its affiliates) who owns beneficially 20% or more of all Common
Units as set forth in the definition of "Outstanding" set forth in Article II of
the Purchaser Partnership Agreement);
(e) The Purchaser, the Subsidiary OLP and the General Partner each have the
requisite partnership and corporate power and authority, as applicable, to
execute, deliver and perform their respective obligations under the Purchaser
Partnership Agreement, this Representations Agreement and the Registration
Rights Agreement; the Purchaser Partnership Agreement, this Representations
Agreement and the Registration Rights Agreement have been duly authorized,
executed and delivered by the General Partner, the Purchaser and the Subsidiary
OLP, as the case may be; each of this Representations Agreement and the
Registration Rights Agreement constitutes a valid and legally binding agreement
of the General Partner, the Purchaser and the Subsidiary OLP, as the case may
be, enforceable against the General Partner, the Purchaser and the Subsidiary
OLP, as the case may be, in accordance with their respective terms, subject to
the Enforceability Exceptions and, with respect to the Registration Rights
Agreement only, except as any rights to indemnity and contribution thereunder
may be limited by federal and state securities laws and public policy
considerations; and the Purchaser Partnership Agreement constitutes a valid and
legally binding agreement of the General Partner, enforceable against the
General Partner in accordance with its terms, subject to the Enforceability
Exceptions;
(f) Neither the issuance, sale or delivery by the Purchaser of the Senior Units
or the Common Units issuable upon conversion of the Senior Units (assuming
receipt of the Unitholder Approval) or the Distribution Units nor the execution,
delivery or performance by the Purchaser, the Subsidiary OLP and the General
Partner, as the case may be, of the Operative Agreements nor the consummation by
the Purchaser, the Subsidiary OLP and the General Partner, as the case may be,
of the Transactions violates, conflicts with or constitutes a breach of, or
default under, any of the provisions of the Partnership Agreements or the
General Partner's charter or bylaws, as applicable;
(g) Neither the Purchaser, the Subsidiary OLP nor the General Partner is (i) an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act or (ii) a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" thereof within the
meaning of the Public Utility Holding Company Act of 1935, as amended;
(h) Each of the Purchaser, the Subsidiary OLP and the General Partner is duly
qualified or registered as a foreign limited partnership or a foreign
corporation, as applicable, and is in good standing under the laws of each of
the jurisdictions set forth in Annex I hereto; and to the knowledge of such
counsel, such jurisdictions are the only jurisdictions in which each of the
Purchaser, the Subsidiary OLP or the General Partner owns or leases property, or
conducts any business, so as to require qualification or registration to conduct
business as a foreign limited partnership or foreign corporation, as applicable,
and in which the failure so to qualify or register would (i) have a Material
Adverse Effect, or (ii) subject the holders of Senior Units or Common Units to
any material liability or disability. "Material Adverse Effect" means any
material adverse change in, or effect on the business, assets, financial
condition or results of operations of the Purchaser and its Subsidiaries, taken
as a whole; provided that any such effect resulting from (i) any change in
economic conditions generally or in the industries in which the Purchaser or its
Subsidiaries operate, (ii) any resignation, retirement or termination of
employees and effects thereof, or (iii) any actions to be taken in connection
with the consummation of the Transactions or pursuant to the Operative Documents
shall not be considered when determining whether a Material Adverse Effect has
occurred;
(i) Neither the issuance, sale or delivery by the Purchaser of the Senior Units
nor the Common Units issuable upon conversion of the Senior Units (assuming
receipt of the Unitholder Approval) or the Distribution Units nor the execution,
delivery or performance by the Purchaser, the Subsidiary OLP and the General
Partner, as the case may be, of the Operative Agreements nor the consummation by
the Purchaser, the Subsidiary OLP and the General Partner, as the case may be,
of the other Transactions, conflicts with or results in a breach or violation of
any of the terms or provisions of, or constitutes a default or causes an
acceleration of any obligation under, or results in the imposition or creation
of (or the obligation to create or impose) a Lien with respect to, any document
listed on the exhibit index to the Form 10-K, excluding in each case any
conflict, breach, violation, default or acceleration which, individually or in
the aggregate, would not have a Material Adverse Effect; nor will the issuance
and sale of the Senior Units by the Purchaser and the execution, delivery and
performance by the Purchaser, the Subsidiary OLP and the General Partner, as the
case may be, of the Operative Agreements or the consummation by any of them of
the other Transactions violate the Delaware General Corporation Law, the
Delaware Act or, to the knowledge of such counsel and assuming the truth of the
representations and warranties of all parties in the Operative Agreements, any
federal law of the United States or any rules or regulations adopted by a
governmental agency thereof applicable to the Purchaser, the General Partner or
any of the Subsidiaries, excluding in each case any violation which,
individually or in the aggregate, would not have a Material Adverse Effect;
(j) No consent, approval, authorization or other order of, or registration or
filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official of the United States or the State of
Delaware having jurisdiction over the Purchaser, the General Partner or any of
the Subsidiaries or any of their properties is required for the issuance and
sale by the Purchaser of the Senior Units, the Common Units issuable upon
conversion of the Senior Units or the Distribution Units or for the consummation
by the Purchaser, the Subsidiary OLP or the General Partner of the other
Transactions or the Operative Agreements, except in each case (i) which, if not
obtained, would not, individually or in the aggregate, have a Material Adverse
Effect (ii) as may be required in connection with the registration under the
Securities Act pursuant to the Registration Rights Agreement of the Senior Units
or the Common Units issuable upon conversion of the Senior Units and the
compliance with securities or Blue Sky laws of various jurisdictions, (iii) as
have been, prior to the date hereof obtained, (iv) as may be required in
connection with the exemption from registration of the issuance of the Senior
Units pursuant to the terms of the applicable Operative Agreements, or (v) as
may be required in connection with obtaining the Unitholder Approval;
(k) No securities of the Purchaser are of the same class (within the meaning of
Rule 144A under the Securities Act) as the Senior Units and listed on a national
securities exchange under Section 6 of the Exchange Act, or quoted in a U.S.
automated inter-dealer quotation system; and
(l) Assuming the truth of the representations and warranties of the Seller, the
Purchaser, the Subsidiary OLP and the General Partner in the Representations
Agreement and Thermogas Purchase Agreement, the proposed issuance of the Senior
Units to Seller under the circumstances contemplated by the Thermogas Purchase
Agreement may be effected without registration of the sale of the Senior Units
under the Securities Act.
In rendering such opinion, such counsel may (i) rely in respect of
matters of fact upon certificates of the Purchaser and the Subsidiary OLP and of
officers and employees of the General Partner and upon information obtained from
public officials and upon opinions of other counsel issued in connection with
the Transactions, and may assume that the signatures on all documents examined
by such counsel are genuine, (ii) state that their opinion is limited to federal
laws, the Delaware Act and the Delaware General Corporation Law and (iii) state
that their opinion is furnished as special counsel for the Purchaser, the
Subsidiary OLP and the General Partner and is solely for the benefit of the
Seller.
1. SECTION Restrictions on Transfer; Representations and Warranties and
Covenants of the Seller .
(a) From and after the date hereof, neither the Senior Units, the Distribution
Units nor the Common Units issued upon conversion of the Senior Units
(collectively, the "Securities") shall be transferable except upon the
conditions specified in this Section 5(a) and in Sections 5(b) and 5(c), which
conditions are intended to ensure compliance with the provisions of the
Securities Act in respect of the transfer of any such Securities or any interest
therein. The Seller shall require (in form and substance reasonably satisfactory
to Purchaser) any proposed transferee of any Securities (or any interest
therein) to be acquired from the Seller to agree to take and hold such
Securities (or any interest therein) subject to the provisions and upon the
conditions specified in this Section 5(a) and in Sections 5(b) and 5(c). Any
transfer of the Securities or any interest therein otherwise than in accordance
with the terms of this Representations Agreement shall be null and void.
(b) Each Security shall (unless otherwise permitted by the provisions of Section
5(c)) include a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD, UNLESS
IT HAS BEEN REGISTERED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE AND THEN ONLY IN COMPLIANCE
WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE REPRESENTATIONS AGREEMENT
DATED AS OF DECEMBER 17, 1999, A COPY OF WHICH MAY BE OBTAINED FROM THE
PARTNERSHIP AT ITS PRINCIPAL EXECUTIVE OFFICE.
<PAGE>
(i) Five business days prior to any proposed transfer (other than transfers
of Securities (i) registered under the Securities Act or (ii) to be made in
reliance on Rule 144A under the Securities Act) of any Securities, the holder
thereof shall give written notice to the Purchaser of such holder's intention to
effect such transfer, setting forth the manner and circumstances of the proposed
transfer, and shall be accompanied by (i) an opinion of counsel reasonably
satisfactory to the Purchaser addressed to the Purchaser to the effect that the
proposed transfer of such Securities may be effected without registration under
the Securities Act, (ii) such representation letters in form and substance
reasonably satisfactory to the Purchaser to ensure compliance with the
provisions of the Securities Act and (iii) such letters in form and substance
reasonably satisfactory to the Purchaser from each such transferee stating such
transferee's agreement to be bound by the terms of this Representations
Agreement. Such proposed transfer may be effected only if the Purchaser shall
have received such satisfactory notice of transfer, opinion of counsel,
representation letters and other letters referred to in the immediately
preceding sentence, whereupon the holder of such Securities shall be entitled to
transfer such Securities in accordance with the terms of the notice delivered by
the holder to the Purchaser. Each certificate evidencing the Securities
transferred as above provided shall bear the legend set forth in Section 5(b),
except that such certificate shall not bear such legend if the opinion of
counsel referred to above is to the further effect that neither such legend nor
the restrictions on transfer in Sections 5(a) through 5(c) are required in order
to ensure compliance with the provisions of the Securities Act.
(ii) Five business days prior to any proposed transfer of any Securities to
be made in reliance on Rule 144A, the holder thereof shall give written notice
to the Purchaser of such holder's intention to effect such transfer, setting
forth the manner and circumstances of the proposed transfer and certifying that
such transfer will be made (A) in full compliance with Rule 144A and (B) to a
transferee that (I) such holder reasonably believes to be a "qualified
institutional buyer" within the meaning of Rule 144A and (II) is aware that such
transfer will be made in reliance on Rule 144A. Such proposed transfer may be
effected only if the Purchaser shall have received such notice of transfer and
an agreement from such transferee agreeing to be bound by the terms of this
Representations Agreement reasonably satisfactory to Purchaser, whereupon the
holder of such Securities may transfer them in accordance with the terms of the
notice delivered by the holder to the Purchaser. Each certificate evidencing the
Securities transferred as above provided shall bear the legend set forth in
Section 5(b).
(b) The Seller represents and warrants to the Purchaser that:
(i) the Seller is an accredited investor within the meaning of Rule 501(a)
under the Securities Act and the Securities to be acquired by it
pursuant to the Operative Agreements are being acquired for its own
account and not with a view toward, or for sale in connection with, any
distribution thereof except in compliance with applicable United States
federal and state securities laws;
(ii) Seller has the requisite corporate power and authority, to execute,
deliver and perform its obligations under the Operative Agreements, as
applicable;
(iii) this Representations Agreement has been duly authorized, executed and
delivered by the Seller;
(iv) Seller is aware that no federal or state governmental authority has
made any finding or determination as to the fairness of an investment
in the Securities, nor any recommendation or endorsement with respect
thereto; Seller acknowledges that the sale of the Senior Units has not
been registered under the Securities Act in reliance on an exemption
therefrom;
(v) the execution and delivery of this Representations Agreement does not,
and the fulfillment and compliance with the terms and conditions hereof will not
(A) conflict with any of, or require the consent of any person or entity under,
the terms, conditions or provisions of the charter or bylaws of the Seller or
the limited liability company agreement of the Company, (B) violate any
provision of, or require any consent, authorization or approval under, any law
or administrative regulation or any judicial, administrative or arbitration
order, award, judgment, writ, injunction or decree applicable to the Seller or
the Company, (C) conflict with, result in a breach of, constitute a default
under (whether with notice or the lapse of time or both) or accelerate or permit
the acceleration of the performance required by, or require any consent,
authorization or approval under, any indenture, mortgage, lien or any material
agreement, contract, commitment or instrument to which the Seller or the Company
is a party or by which the Seller or the Company is bound or to which any asset
of the Company is subject, or (D) result in the creation of any lien, charge or
encumbrance on the assets or properties of the Company under any such indenture,
mortgage, lien, agreement, contract or instrument, excluding from the foregoing
clauses (B), (C), and (D) such conflicts, violations, breaches, defaults,
accelerations, liens, charges or encumbrances which become applicable as a
result of the business or activities in which the Purchaser is engaged or
proposes to be engaged or as a result of any acts or omissions by, or the status
of or any facts pertaining to, Purchaser;
(vi) this Representations Agreement constitutes a valid and binding
agreement of the Seller, enforceable in accordance with its terms,
subject to the Enforceability Exceptions; and
(vii) the Seller has such knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks of its
investment in the Securities and the Seller is capable of bearing the
economic risks of such investment.
(c) the Seller covenants and agrees with the Purchaser that it will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly or indirectly,
the Senior Units without the prior written consent of the Purchaser before the
earlier of (i) February 1, 2002, or (ii) the occurrence of a Material Event (as
defined in the Purchaser Partnership Agreement). Notwithstanding the foregoing,
nothing herein shall prohibit the Seller from (i) transferring the Senior Units
to any of its affiliates, so long as such affiliates agree in writing to be
bound by the provisions of this Representations Agreement, or (ii) offering,
selling, contracting to sell, pledging or otherwise disposing, directly or
indirectly, the Common Units issued upon conversion of the Senior Units.
2. SECTION Survival and Indemnification .
All representations and warranties made in this Representations
Agreement shall survive the date hereof until one year after the date hereof.
Notwithstanding the foregoing, the representations and warranties contained in
Section 1(m) shall survive until 60 days after the expiration of the applicable
statute of limitations and the representations and warranties contained in
Section 1(c), 1(j), 5(d)(i), 5(d)(iv), 5(d)(v) and 5(d)(vii) shall survive
indefinitely. The applicable period of survival with respect to the survival of
the representations and warranties in this Representations Agreement is
sometimes referred to herein and in the Thermogas Purchase Agreement as the
"Indemnity Period." The parties hereto intend to shorten the statute of
limitations and agree that no claims or causes of action may be brought against
the Seller, the Purchaser, the Subsidiary OLP, the General Partner or any of
their directors, officers, employees, affiliates, controlling persons, agents or
representatives based upon, directly or indirectly, any of the representations
or warranties contained in this Representations Agreement after the Indemnity
Period. This Section 6(a) shall not limit any covenant or agreement of the
parties which contemplates performance after the date hereof. The parties hereto
agree that the indemnification provided in Article VII of the Thermogas Purchase
Agreement is the exclusive remedy for money damages for a breach by any party of
any representation or warranty contained in Section 1 and Section 5 of this
Representations Agreement, any covenant contained in Section 3 and Section 5 of
this Representations Agreement and with respect to the transactions contemplated
by this Representations Agreement.
1. SECTION Allocation .
For purposes of Section 704(c) of the Internal Revenue Code of 1984, as
amended, the Seller, the Purchaser and the Subsidiary OLP covenant to use their
good faith reasonable best efforts to agree to the value of each of the assets
of the Company, the depreciation lives of each of the assets of the Company and
the depreciation method to be used with respect to each of the assets of the
Company, in a manner consistent with the Purchaser's past practices with respect
to similar assets, within 90 days after the date hereof.
1. SECTION Notices .
Any notice, request, instruction, correspondence or other document to
be given hereunder by any party to any other (herein collectively called
"Notice") shall be in writing and delivered in person or by courier service
requiring acknowledgment of receipt of delivery or mailed by certified mail,
postage prepaid and return receipt requested, or by telecopier, as follows:
If to the Seller:
Williams National Gas Liquids, Inc.
One Williams Center, Suite 3000
Tulsa, Oklahoma 74172
Attention: Don Wellendorf
Telecopy: (918) 573-3864
with a copy to:
The Williams Companies, Inc.
One Williams Center, Suite 4100
Tulsa, Oklahoma 74172
Attention: Lonny Townsend
Telecopy: (800) 479-6690
Andrews & Kurth L.L.P.
805 Third Avenue
New York, New York 10022
Attention: Michael Swidler
Telecopy: (212) 850-2929
and if to any of the Purchaser, the General Partner and the
Subsidiary OLP to:
Ferrellgas Partners, L.P./Ferrellgas, L.P.
c/o Ferrellgas, Inc.
One Liberty Plaza
Liberty, Missouri 64068
Attention: James M. Hake
Telecopy: (816) 792-7985
with a copy to:
Bracewell & Patterson LLP
South Tower Pennzoil Place
711 Louisiana Street, Suite 2900
Houston, Texas 77002
Attention: David L. Ronn
Telecopy: (713)222-3208
Bryan Cave LLP
3500 One Kansas City Place
1200 Main Street
Kansas City, MO 64105
Attention: Morris K. Withers
Telecopy: (816)374-3300
Notice given by personal delivery, courier service or mail shall be
effective upon actual receipt. Notice given by telecopier shall be confirmed by
appropriate answer back and shall be effective upon actual receipt if received
during the recipient's normal business hours, or at the beginning of the
recipient's next business day after receipt if not received during the
recipient's normal business hours. All Notices by telecopier shall be confirmed
promptly after transmission in writing by certified mail or personal delivery.
Any party may change any address to which Notice is to be given to it by giving
Notice as provided above of such change of address.
1. SECTION Governing Law .
The provisions of this Representations Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of New York
and the federal laws of the United States. Each party hereto hereby irrevocably
and unconditionally (a) consents and submits to the exclusive jurisdiction of
the courts of the State of New York and of the United States of America located
in the State of New York (each a "New York Court") for any actions, suits or
proceedings arising out of or relating to this Representations Agreement or the
transactions contemplated hereby, (b) agrees that any such action, suit or
proceedings may be brought or maintained only in a New York Court and in no
other forum, (c) agrees that service of any process, summons, notice or document
by U.S. registered or certified mail to such party at the address specified in
Section 8 shall be effective service of process in any such action, suit or
proceeding in any New York Court, and (d) irrevocably and unconditionally waives
any objection to the laying of venue of any action, suit or proceeding arising
out of or related to this Representations Agreement or the transactions
contemplated hereby in any New York Court located in New York, New York, and
further irrevocably and unconditionally waives and agrees not to plead a claim
in any such court that any such action, suit or proceeding has been brought in
an inconvenient forum.
1. SECTION Entire Agreement; Amendment and Waivers .
This Representations Agreement and the Thermogas Purchase Agreement
constitute the entire agreement among the parties hereto pertaining to the
subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties, and there
are no warranties, representations or other agreements among the parties in
connection with the subject matter hereof except as set forth specifically
herein or contemplated hereby. All exhibits, annexes, certificate and other
instruments or documents referred to herein are hereby specifically made a part
of this Representations Agreement. Any reference in this Representations
Agreement to an Exhibit or Annex shall be deemed to be a reference to an Exhibit
or Annex to this Representations Agreement unless the context expressly
indicates otherwise. The failure of a party to exercise any right or remedy
shall not be deemed or constitute a waiver of such right or remedy in the
future. No waiver of any of the provisions of this Representations Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(regardless of whether similar), nor shall any such waiver constitute a
continuing waiver unless otherwise expressly provided.
1. SECTION Binding Effect and Assignment .
This Representations Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors and
assigns; but neither this Representations Agreement nor any of the rights,
benefits or obligations hereunder shall be assigned, by operation of law or
otherwise, by any party hereto without the prior written consent of either
Purchaser or Seller, as applicable, other than as set forth herein. Nothing in
this Representations Agreement, express or implied, is intended to confer upon
any person or entity other than the parties hereto and their respective
permitted successors and assigns, any rights, benefits or obligations hereunder.
1. SECTION Severability .
If any provision of this Representations Agreement is rendered or
declared illegal or unenforceable by reason of any existing or subsequently
enacted legislation or by decree of a court of last resort, the parties hereto
shall promptly meet and negotiate substitute provisions for those rendered or
declared illegal or unenforceable, but all of the remaining provisions of this
Representations Agreement shall remain in full force and effect.
1. SECTION Parties in Interest .
This Representations Agreement shall be binding upon and inure solely
to the benefit of each party hereto, and nothing in this Representations
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.
1. SECTION Headings; Survival of Covenants .
The headings of the sections herein are inserted for convenience of
reference only and are not intended to be a part of or to affect the meaning or
interpretation of this Representations Agreement. To the extent covenants
hereunder are intended to be performed following the date hereof, such covenants
shall survive.
1. SECTION Execution .
This Representations Agreement may be executed in multiple counterparts
each of which shall be deemed an original and all of which shall constitute one
instrument.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Representations
Agreement as of the date first written above.
FERRELLGAS PARTNERS, L.P.
By: Ferrellgas, Inc.,
its General Partner
By:
Name:
Title:
FERRELLGAS, INC.
By:
Name:
Title:
FERRELLGAS L.P.
By: Ferrellgas, Inc.,
its General Partner
By:
Name:
Title:
WILLIAMS NATURAL GAS LIQUIDS, INC.
By:
Name:
Title:
SUBSIDIARIES
Ferrellgas, L.P., a Delaware limited partnership
Ferrellgas Partners Finance Corp., a Delaware corporation
<PAGE>
JURISDICTIONS IN WHICH THE PURCHASER, THE SUBSIDIARY OLP AND THE GENERAL
PARTNER ARE QUALIFIED
AMENDED AND RESTATED
AGREEMENT
OF
LIMITED PARTNERSHIP
OF
FERRELLGAS PARTNERS, L.P.
<PAGE>
TABLE OF CONTENTS
ARTICLE I
ORGANIZATIONAL MATTERS Section 1.1 Formation and Continuation Section
1.2 Name Section 1.3 Registered Office; Principal Office Section 1.4
Power of Attorney Section 1.5 Term Section 1.6 Possible Restrictions on
Transfer
ARTICLE II
DEFINITIONS
.Acquisition.
.Additional Limited Partner.
.Additional Senior Units.
.Adjusted Capital Account.
.Adjusted Property.
.Affiliate.
.Agreed Allocation.
.Agreed Value.
.Agreement.
.Assignee.
.Associate.
.Audit Committee.
.Available Cash.
.Book-Tax Disparity.
.Business Day.
.Capital Account.
.Capital Additions and Improvements.
.Capital Contribution.
.Capital Interests.
.Carrying Value.
.Cash from Interim Capital Transactions.
.Cash from Operations.
.Cause.
.Certificate.
.Certificate of Limited Partnership.
.Change of Control.
.Citizenship Certification.
.Closing Price.
.Code.
.Combined Interest.
.Commission.
.Common Unit.
.Contributed Property.
.Contribution Agreement.
.Curative Allocation.
.Current Market Price.
.Delaware Act.
.Departing Partner.
.Depositary.
.Economic Risk of Loss.
.Eligible Citizen.
.Event of Withdrawal.
.FCI ESOT.
.Ferrell.
.Ferrellgas.
.First Liquidation Target Amount.
.First Target Distribution.
.General Partner.
.Group.
.Holder.
.IDR.
.Incentive Distribution.
.Indemnified Persons.
.Indemnitee.
.Initial Closing Date.
.Initial Limited Partners.
.Initial Offering.
.Initial Unit Price.
.Interim Capital Transactions.
.Issue Price.
.Limited Partner.
.Liquidation Date.
.Liquidator.
.Maintenance Capital Expenditures.
.Material Event.
.Merger Agreement.
.Minimum Quarterly Distribution.
.National Securities Exchange.
.Net Agreed Value.
.Net Income.
.Net Loss.
.Net Termination Gain.
.Net Termination Loss.
.Non-citizen Assignee.
.Nonrecourse Built-in Gain.
.Nonrecourse Deductions.
.Nonrecourse Liability.
.Notice of Election to Purchase.
.Operating Partnership.
.Operating Partnership Agreement.
.Opinion of Counsel.
.Organizational Limited Partner.
.Original Agreement.
.Outstanding.
.Overallotment Option.
.Partners.
.Partner Nonrecourse Debt.
.Partner Nonrecourse Debt Minimum Gain.
.Partner Nonrecourse Deductions.
.Partnership.
.Partnership Interest.
.Partnership Minimum Gain.
.Partnership Securities.
.Per Unit Capital Amount.
.Percentage Interest.
.Person.
.Pro Rata.
.Purchase Date.
.Quarter.
.Recapture Income.
.Record Date.
.Record Holder.
.Redeemable Units.
.Registration Statement.
.Related Party.
.Required Allocations.
.Residual Gain or Residual Loss.
.Restricted Activities.
.Second Liquidation Target Amount.
.Second Target Distribution.
.Securities Act.
.Senior Unit.
.Senior Unit Conversion Option.
.Senior Unit Liquidation Preference.
.Senior Unit Distribution.
.Senior Unit Redemption Date.
.Senior Unit Redemption Notice.
.Senior Unit Redemption Price.
.Special Approval.
.Special Limited Partner.
.Special Limited Partners Book Capital.
.Subordinated Unit.
.Subordination Period.
.Subsidiary.
.Substituted Limited Partner.
.Surviving Business Entity.
.Termination Capital Transactions.
.Thermogas.
.Third Target Distribution.
.Trading Day.
.Transaction.
.Transfer.
.Transfer Agent.
.Transfer Application.
.Underwriter.
.Underwriting Agreement.
.Unit.
.Unpaid MQD.
.Unrealized Gain.
.Unrealized Loss.
.Unrecovered Initial Unit Price.
.Withdrawal Opinion of Counsel.
.WNGL.
.WNGL Closing Date.
.WNGL Purchase Agreement.
.WNGL Registration Rights Agreement.
ARTICLE III
PURPOSE
Section 3.1 Purpose and Business
Section 3.2 Powers
ARTICLE IV
CAPITAL CONTRIBUTIONS
Section 4.1 Initial Contributions
Section 4.2 Contributions by the General Partner and the Initial
Limited Partners; Contributions on
the WNGL Closing Date
Section 4.3 Issuances of Additional Units and Other Securities
--------------------------------------------------
Section 4.4 Limited Preemptive Rights
-------------------------
Section 4.5 Capital Accounts
----------------
Section 4.6 Interest
--------
Section 4.7 No Withdrawal
-------------
Section 4.8 Loans from Partners
-------------------
Section 4.9 No Fractional Units
-------------------
Section 4.10 Splits and Combinations
-----------------------
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
Section 5.1 Allocations for Capital Account Purposes
Section 5.2 Allocations for Tax Purposes
Section 5.3 Requirement and Characterization of Distributions
Section 5.4 Distributions of Cash from Operations and Additional Senior
Units Section 5.5 Distributions of Cash from Interim Capital
Transactions Section 5.6 Adjustment of Senior Unit Liquidation
Preference, Senior Unit Distribution, Minimum
Quarterly Distribution and Target Distribution Levels
Section 5.7 Special Provisions Relating to the Senior Units
Section 5.8 Special Provisions Relating to the Special Limited
Partners
Section 5.9 Special Provision Relating to Common Units that were
Subordinated Units Prior to the
Expiration of the Subordination Period
ARTICLE VI
MANAGEMENT AND OPERATION OF BUSINESS
Section 6.1 Management
Section 6.2 Certificate of Limited Partnership
Section 6.3 Restrictions on General Partner's Authority
Section 6.4 Reimbursement of the General Partner
Section 6.5 Outside Activities
Section 6.6 Loans to and from the General Partner; Contracts with
Affiliates
-------------------------------------------------------
- ---------
Section 6.7 Indemnification
---------------
Section 6.8 Liability of Indemnitees
------------------------
Section 6.9 Resolution of Conflicts of Interest
-----------------------------------
Section 6.10 Other Matters Concerning the General Partner
--------------------------------------------
Section 6.11 Title to Partnership Assets
---------------------------
Section 6.12 Purchase or Sale of Units
-------------------------
Section 6.13 Registration Rights of Ferrellgas and its Affiliates
----------------------------------------------------
Section 6.14 Reliance by Third Parties
-------------------------
ARTICLE VII
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 7.1 Limitation of Liability
Section 7.2 Management of Business
Section 7.3 Outside Activities
Section 7.4 Return of Capital
Section 7.5 Rights of Limited Partners Relating to the Partnership
ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 8.1 Records and Accounting
Section 8.2 Fiscal Year
Section 8.3 Reports
ARTICLE IX
TAX MATTERS
Section 9.1 Preparation of Tax Returns
--------------------------
Section 9.2 Tax Elections
-------------
Section 9.3 Tax Controversies
-----------------
Section 9.4 Organizational Expenses
-----------------------
Section 9.5 Withholding
-----------
Section 9.6 Entity-Level Taxation
---------------------
Section 9.7 Entity-Level Arrearage Collections
----------------------------------
Section 9.8 Opinions of Counsel
-------------------
ARTICLE X
CERTIFICATES
Section 10.1 Certificates
Section 10.2 Registration, Registration of Transfer and Exchange
Section 10.3 Mutilated, Destroyed, Lost or Stolen Certificates
Section 10.4 Record Holder
ARTICLE XI
TRANSFER OF INTERESTS
Section 11.1 Transfer
Section 11.2 Transfer of a General Partner's Partnership Interest
Section 11.3 Transfer of Units Section 11.4 Restrictions on Transfers
Section 11.5 Citizenship Certificates; Non-citizen Assignees Section
11.6 Redemption of Interests Section 11.7 Transfer of IDRs
ARTICLE XII
ADMISSION OF PARTNERS
Section 12.1 Admission of Initial Limited Partners
Section 12.2 Admission of Substituted Limited Partners
Section 12.3 Admission of Successor General Partner
Section 12.4 Admission of Additional Limited Partners
Section 12.5 Amendment of Agreement and Certificate of Limited
Partnership
ARTICLE XIII
WITHDRAWAL OR REMOVAL OF PARTNERS
Section 13.1 Withdrawal of the General Partner
Section 13.2 Removal of the General Partner
Section 13.3 Interest of Departing Partner and Successor General
Partner
Section 13.4 Withdrawal of Limited Partners
ARTICLE XIV
DISSOLUTION AND LIQUIDATION
Section 14.1 Dissolution
Section 14.2 Continuation of the Business of the Partnership after
Dissolution
------------------------------------------------------
- -----------
Section 14.3 Liquidation
-----------
Section 14.4 Distributions in Kind
---------------------
Section 14.5 Cancellation of Certificate of Limited Partnership
--------------------------------------------------
Section 14.6 Reasonable Time for Winding Up
------------------------------
Section 14.7 Return of Capital Contributions
-------------------------------
Section 14.8 Capital Account Restoration
---------------------------
Section 14.9 Waiver of Partition
-------------------
ARTICLE XV
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
Section 15.1 Amendment to be Adopted Solely by General Partner
-------------------------------------------------
Section 15.2 Amendment Procedures
--------------------
Section 15.3 Amendment Requirements
----------------------
Section 15.4 Meetings
--------
Section 15.5 Notice of a Meeting
-------------------
Section 15.6 Record Date
-----------
Section 15.7 Adjournment
-----------
Section 15.8 Waiver of Notice; Approval of Meeting; Approval of
Minutes
---------------------------------------------------
- -------
Section 15.9 Quorum
------
Section 15.10 Conduct of Meeting
------------------
Section 15.11 Action Without a Meeting
------------------------
Section 15.12 Voting and Other Rights
-----------------------
Section 15.13 Voting Rights of Senior Units
-----------------------------
ARTICLE XVI
MERGER
Section 16.1 Authority
Section 16.2 Procedure for Merger or Consolidation
Section 16.3 Approval by Holders of Common Units of Merger or
Consolidation
Section 16.4 Certificate of Merger
Section 16.5 Effect of Merger
ARTICLE XVII
RIGHT TO ACQUIRE UNITS
Section 17.1 Right to Acquire Units
Section 17.2 Right to Acquire Senior Units
ARTICLE XVIII
GENERAL PROVISIONS Section 18.1 Addresses and Notices Section 18.2
References Section 18.3 Pronouns and Plurals Section 18.4 Further
Action Section 18.5 Binding Effect Section 18.6 Integration Section
18.7 Creditors Section 18.8 Waiver Section 18.9 Counterparts Section
18.10 Applicable Law Section 18.11 Invalidity of Provisions
<PAGE>
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
FERRELLGAS PARTNERS, L.P.
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
FERRELLGAS PARTNERS, L.P., dated as of December 17, 1999, is entered into by and
among Ferrellgas, Inc., a Delaware corporation, as the General Partner, the
Persons who are Limited Partners in the Partnership as of the date hereof and
those 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:
RECITALS:
WHEREAS, the General Partner and the Organizational Limited
Partner organized the Partnership as a Delaware limited partnership pursuant to
an Agreement of Limited Partnership dated as of July 5, 1994 (the .Original
Agreement.);
WHEREAS, the Partnership, the Operating Partnership and
Williams Natural Gas Liquids, Inc., a Delaware corporation, have entered into a
Purchase Agreement dated November 7, 1999, relating to the sale of Thermogas,
L.L.C. to the Partnership in consideration, in part, for the issuance of Senior
Units, as defined below; and
WHEREAS, in order to effect the transactions contemplated by
the WNGL Purchase Agreement and other matters, it is necessary to amend this
Agreement as provided herein; and
WHEREAS, Section 4.3 of the Original Agreement provides that
the General Partner may cause the Partnership to issue additional equity
interests with such designations, preferences and relative, participating,
optional or other special rights, powers and duties as fixed by the General
Partner in its sole discretion; and
WHEREAS, Section 15.1 of the Original Agreement provides that
the General Partner may amend the Original Agreement without the consent of any
Limited Partner to reflect an amendment that, in the sole discretion of the
General Partner, is necessary or desirable in connection with the authorization
for issuance of any class or series of Partnership Securities pursuant to
Section 4.3;
NOW, THEREFORE, the Original Agreement is hereby amended and,
as so amended, is restated in its entirety as follows:
1 ARTICLE ORGANIZATIONAL MATTERSARTICLE 2 3
ORGANIZATIONAL MATTERS
1.1 Section Formation and Continuation .
1.2
(a) The General Partner and the Organizational Limited Partner previously formed
the Partnership as a limited partnership pursuant to the provisions of the
Delaware Act. The General Partner hereby amends and restates the Original
Agreement in its entirety to continue the Partnership as a limited partnership
pursuant to the provisions of the Delaware Act and to set forth the rights and
obligations of the Partners and certain matters related thereto. 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.
(b) In connection with the formation of the Partnership, Ferrellgas was admitted
as a general partner of the Partnership, and the Organizational Limited Partner
was admitted as a limited partner of the Partnership. As of the Initial Closing
Date, the interest in the Partnership of the Organizational Limited Partner was
terminated and the Organizational Limited Partner withdrew as a limited partner
of the Partnership.
1.3 Section Name . The name of the Partnership is .Ferrellgas Partners, L.P..
The Partnership's business may be conducted under any other name or names deemed
necessary or appropriate by the General Partner, including, without limitation,
the name of the 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 purposes of complying with the laws of any jurisdiction that
so requires. The General Partner in its sole 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.
1.1 Section Registered Office; Principal Office . Unless and until changed by
the General Partner, the registered office of the Partnership in the State of
Delaware shall be located at The Corporation Trust Center, 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 The Corporation Trust Company. The principal office
of the Partnership shall be located at, and the address of the General Partner
shall be, One Liberty Plaza, Liberty, Missouri 64068, or such other place as the
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 General Partner deems necessary
or appropriate.
1.1 Section Power of Attorney .
-----------------
1.2
(a) Each Limited Partner and each Assignee hereby constitutes and appoints each
of the General Partner and, if a Liquidator shall have been selected pursuant to
Section 14.3, the Liquidator severally (and any successor to either thereof by
merger, transfer, assignment, election or otherwise) and each of their
authorized officers and attorneys-in-fact, 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, without limitation, this Agreement and the
Certificate of Limited Partnership and all amendments or restatements
thereof) that the 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 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, without
limitation, conveyances and a certificate of cancellation) that the
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 XI, XII, XIII or XIV or the Capital Contribution of any
Partner; (E) all certificates, documents and other instruments relating
to the determination of the rights, preferences and privileges of any
class or series of Units or other Partnership Securities issued
pursuant to Section 4.2; and (F) all certificates, documents and other
instruments (including, without limitation, agreements and a
certificate of merger) relating to a merger or consolidation of the
Partnership pursuant to Article XVI; 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 sole discretion of
the 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 sole
discretion of the General Partner or the Liquidator, to effectuate the
terms or intent of this Agreement; provided, that when required by
Section 15.3 or any other provision of this Agreement that establishes
a percentage of the Limited Partners or of the Limited Partners of any
class or series required to take any action, the General Partner or the
Liquidator may exercise the power of attorney made in this Section
1.4(a)(ii) only after the necessary vote, consent or approval of the
Limited Partners or of the Limited Partners of such class or series, as
applicable.
Nothing contained in this Section 1.4(a) shall be construed as authorizing the
General Partner to amend this Agreement except in accordance with Article XV or
as may be otherwise expressly provided for in this Agreement.
(a) The foregoing power of attorney is hereby declared to be irrevocable and a
power coupled with an interest, and it shall survive and not be affected by the
subsequent death, incompetency, disability, incapacity, dissolution, bankruptcy
or termination of any Limited Partner or Assignee and the transfer of all or any
portion of such Limited Partner's or Assignee's Partnership Interest and shall
extend to such Limited Partner's or Assignee's heirs, successors, assigns and
personal representatives. Each such Limited Partner or Assignee hereby agrees to
be bound by any representation made by the General Partner or the Liquidator
acting in good faith pursuant to such power of attorney; and each such Limited
Partner or Assignee hereby waives any and all defenses that may be available to
contest, negate or disaffirm the action of the 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 General Partner or the Liquidator,
within 15 days after receipt of the General Partner's or the Liquidator's
request therefor, such further designation, powers of attorney and other
instruments as the General Partner or the Liquidator deems necessary to
effectuate this Agreement and the purposes of the Partnership.
1.2 Section 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 July 31, 2084, or until the
earlier dissolution of the Partnership in accordance with the provisions of
Article XIV.
1.1 Section Possible Restrictions on Transfer . Notwithstanding anything to the
contrary contained in this Agreement, in the event of (a) the enactment (or
imminent enactment) of any legislation, (b) the publication of any temporary or
final regulation by the Treasury Department, (c) any ruling by the Internal
Revenue Service or (d) any judicial decision, that, in any such case, in the
Opinion of Counsel, would result in the taxation of the Partnership as an
association taxable as a corporation or would otherwise result in the
Partnership's being taxed as an entity for federal income tax purposes, then,
the General Partner may impose such restrictions on the transfer of Units or
Partnership Interests as may be required, in the Opinion of Counsel, to prevent
the Partnership from being taxed as an association taxable as a corporation or
otherwise as an entity for federal income tax purposes, including, without
limitation, making such amendments to this Agreement as the General Partner in
its sole discretion may determine to be necessary or appropriate to impose such
restrictions, provided, that any such amendment to this Agreement that would
result in the delisting or suspension of trading of any class of Units on any
National Securities Exchange on which such class of Units is then traded must be
approved by the holders of at least two-thirds of the Outstanding Units of such
class (excluding the vote in respect of Units held by the General Partner and
its Affiliates).
1 ARTICLE DEFINITIONSARTICLE 2 3 DEFINITIONS
4
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 the Partnership
or the Operating Partnership 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 of the Partnership
and the Operating Partnership, taken as a whole, from the operating
capacity of the Partnership and the Operating Partnership, taken as a
whole, existing immediately prior to such transaction.
.Additional Limited Partner. means a Person admitted to
the Partnership as a Limited Partner pursuant to Section 12.4 and who is shown
as such on the books and records of the Partnership.
.Additional Senior Units. has the meaning assigned to such
term in Section 5.4.
.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 5.1(d)(i) or 5.1(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. in
respect of a Common Unit or any other specified interest in the
Partnership shall be the amount which such Adjusted Capital Account
would be if such Common Unit or other interest in the Partnership were
the only interest in the Partnership held by a Limited Partner.
.Adjusted Property. means any property the Carrying Value of
which has been adjusted pursuant to Section 4.5(d)(i) or 4.5(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 4.5(d)(i)
or 4.5(d)(ii).
.Affiliate. means, with respect to any Person, any other
Person that directly or indirectly controls, is controlled by or is
under common control with, the Person in question. As used herein, the
term .control. means the possession, directly or indirectly, 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 5.1, 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 General Partner using such reasonable
method of valuation as it may adopt. The General Partner shall, in its
sole 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 Ferrellgas Partners, L.P., as it may be amended,
supplemented or restated from time to time.
.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 become a
Substituted Limited Partner.
.Associate. means, when used to indicate a relationship with
any Person, (i) 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 of
such corporation or organization; (ii) 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
(iii) any relative or spouse of such Person, or any relative of such
spouse, who has the same residence as such Person.
.Audit Committee. means a committee of the Board of
Directors of the General Partner composed entirely of two or more directors
who are neither officers nor employees of the General Partner or any of its
Affiliates.
.Available Cash. means, with respect to any Quarter and
without duplication:
(a) the sum of:
(i) all cash receipts of the Partnership during such
Quarter from all sources (including, without limitation,
distributions of cash received from the Operating Partnership
and cash proceeds from Interim Capital Transactions, but
excluding cash proceeds from Termination Capital
Transactions), plus, in the case of the Quarter ending October
31, 1994, the cash balance of the Partnership as of the close
of business on the Initial Closing Date; and
(ii) any reduction with respect to such Quarter in a
cash reserve previously established pursuant to clause (b)(ii)
below (either by reversal or utilization) from the level of
such reserve at the end of the prior Quarter;
(b) less the sum of:
(i) all cash disbursements of the Partnership during
such Quarter, including, without limitation, disbursements for
operating expenses, taxes, if any, debt service (including,
without limitation, the payment of principal, premium and
interest), redemption of Partnership Interests, capital
expenditures, contributions, if any, to the Operating
Partnership and cash distributions to Partners (but only to
the extent that such cash distributions to Partners exceed
Available Cash for the immediately preceding Quarter); and
(ii) any cash reserves established with respect to
such Quarter, and any increase with respect to such Quarter in
a cash reserve previously established pursuant to this clause
(b)(ii) from the level of such reserve at the end of the prior
Quarter, in such amounts as the General Partner determines in
its reasonable discretion to be necessary or appropriate (A)
to provide for the proper conduct of the business of the
Partnership or the Operating Partnership (including, without
limitation, reserves for future capital expenditures), (B) to
provide funds for distributions with respect to Units and any
general partner interests in the Partnership in respect of any
one or more of the next four Quarters provided, however, that
for so long as any Senior Units are Outstanding, the General
Partner may not establish cash reserves for distributions
pursuant to Section 5.4(b), (c), (d), (e) or (f) unless the
General Partner has determined that in its judgment the
establishment of such reserves will not prevent the
Partnership from making distributions pursuant to Section
5.4(a) with respect to the four Quarters next following the
date on which such cash reserves are to be so established or
(C) because the distribution of such amounts 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 or the
Operating Partnership is a party or by which any of them is
bound or its assets are subject; provided, however, that for
purposes of determining Available Cash for the Quarter ending
October 31, 1994, such Quarter shall be deemed to have
commenced on the Initial Closing Date.
Notwithstanding the foregoing, .Available Cash. with respect to any
Quarter shall not include any cash receipts or reductions in reserves
or take into account any disbursements made or reserves established in
each case after the Liquidation Date. Taxes paid by the Partnership on
behalf of, or amounts withheld with respect to, all or less than all of
the Partners shall not be considered cash disbursements of the
Partnership that reduce Available Cash, but the payment or withholding
thereof shall be deemed to be a distribution of Available Cash to the
Partners other than the Limited Partners holding Senior Units.
Alternatively, in the discretion of the General Partner, such taxes (if
pertaining to all Partners) may be considered to be cash disbursements
of the Partnership which reduce Available Cash, but the payment or
withholding thereof shall not be deemed to be a distribution of
Available Cash to such Partners. Notwithstanding the foregoing, the
payment of taxes by the Partnership on behalf of Limited Partners
holding Senior Units will not satisfy the obligation of the Partnership
to pay the Senior Unit Distribution.
.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 4.5 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 or the states of New York or Missouri shall not be
regarded as a Business Day.
.Capital Account. means the capital account maintained for a
Partner pursuant to Section 4.5.
.Capital Additions and Improvements. means (a) additions or
improvements to the capital assets owned by the Partnership or the
Operating Partnership or (b) the acquisition of existing or the
construction of new capital assets (including, without limitation,
retail distribution outlets, propane tanks, pipeline systems, storage
facilities and related assets), made to increase the operating capacity
of the Partnership and the Operating Partnership, taken as a whole,
from the operating capacity of the Partnership and the Operating
Partnership, taken as a whole, existing immediately prior to such
addition, improvement, acquisition or construction.
.Capital Contribution. means any cash, cash equivalents or the
Net Agreed Value of Contributed Property that a Partner contributes to
the Partnership pursuant to the Contribution Agreement or Sections 4.1,
4.2, 4.3, 13.3(c) or 14.8.
.Capital Interests. means, with respect to any corporation,
any and all shares, participations, rights or other equivalent
interests in the capital of the corporation, and with respect to any
partnership, any and all partnership interests (whether general or
limited) and any other interests or participations that confer on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, such partnership.
.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 4.5(d)(i) and 4.5(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 General Partner.
.Cash from Interim Capital Transactions. means, at any
date, such amounts of Available Cash as are deemed to be Cash from Interim
Capital Transactions pursuant to Section 5.3.
.Cash from Operations. means, at the close of any Quarter
on a cumulative basis and without duplication,
(a) the sum of all cash receipts of the Partnership
and the Operating Partnership during the period since the
Initial Closing Date through such date (including, without
limitation, the cash balance of the Partnership as of the
close of business on the Initial Closing Date, plus an initial
balance of $25 million, excluding any cash proceeds from any
Interim Capital Transactions (except to the extent specified
in Section 5.3) and Termination Capital Transactions),
(b) less the sum of:
(i) all cash operating expenditures of the
Partnership and the Operating Partnership during such
period, including, without limitation, taxes, if any,
and amounts owed to the General Partner as
reimbursement pursuant to Section 6.4,
(ii) all cash debt service payments of the
Partnership and the Operating Partnership during such
period (other than payments or prepayments of
principal and premium (A) required by reason of loan
agreements (including, without limitation, covenants
and default provisions therein) or by lenders, in
each case in connection with sales or other
dispositions of assets or (B) made in connection with
refinancings or refundings of indebtedness with the
proceeds from new indebtedness or from the sale of
equity interests, provided, that any payment or
prepayment of principal and premium, whether or not
then due, shall be deemed, at the election and in the
discretion of the General Partner, to be refunded or
refinanced by any indebtedness incurred or to be
incurred by the Partnership or the Operating
Partnership simultaneously with or within 180 days
prior to or after such payment or prepayment to the
extent of the principal amount of such indebtedness
so incurred),
(iii) all cash capital expenditures of the
Partnership and the Operating Partnership during such
period, including, without limitation, cash capital
expenditures made in respect of Maintenance Capital
Expenditures, but excluding (A) cash capital
expenditures made in respect of Acquisitions and
Capital Additions and Improvements and (B) cash
expenditures made in payment of transaction expenses
relating to Interim Capital Transactions,
(iv) any cash reserves of the Partnership or
the Operating Partnership outstanding as of such date
that the General Partner deems in its reasonable
discretion to be necessary or appropriate to provide
for the future cash payment of items of the type
referred to in clauses (i) through (iii) of this
sentence, and
(v) any cash reserves of the Partnership or
the Operating Partnership outstanding as of such date
that the General Partner deems in its reasonable
discretion to be necessary or appropriate to provide
funds for distributions with respect to Units and any
general partner interests in the Partnership in
respect of any one or more of the next four Quarters,
all as determined on a consolidated basis and after taking into account
the General Partner's interest therein attributable to its general
partner interest in the Operating Partnership. Where cash capital
expenditures are made in part in respect of Acquisitions or Capital
Additions and Improvements and in part for other purposes, the General
Partner's good faith allocation thereof between the portion made for
Acquisitions or Capital Additions and Improvements and the portion made
for other purposes shall be conclusive. Taxes paid by the Partnership
on behalf of, or amounts withheld with respect to, all or less than all
of the Partners shall not be considered cash operating expenditures of
the Partnership that reduce Cash from Operations, but the payment or
withholding thereof shall be deemed to be a distribution of Available
Cash to such Partners. Alternatively, in the discretion of the General
Partner, such taxes (if pertaining to all Partners) may be considered
to be cash operating expenditures of the Partnership which reduce Cash
from Operations, but the payment or withholding thereof shall not be
deemed to be a distribution of Available Cash to such Partners.
.Cause. means a court of competent jurisdiction has entered a
final, non-appealable judgment finding the General Partner liable for
actual fraud, gross negligence or willful or wanton misconduct in its
capacity as general partner of the Partnership.
.Certificate. means a certificate (a) substantially in the
form of Exhibit A to this Agreement with respect to the Common Units,
(b) substantially in the form of Exhibit B to this Agreement with
respect to the Senior Units, (c) issued in global or book-entry form in
accordance with the rules and regulations of the Depository, or (d) in
such other form as may be adopted by the General Partner in its sole
discretion, issued by the Partnership evidencing ownership of one or
more Common Units or Senior Units, as the case may be, or a
certificate, in such form as may be adopted by the General Partner in
its sole discretion, issued by the Partnership evidencing ownership of
one or more other Units.
.Certificate of Limited Partnership. means the Certificate of
Limited Partnership filed with the Secretary of State of the State of
Delaware as referenced in Section 6.2, as such Certificate of Limited
Partnership may be amended, supplemented or restated from time to time.
.Change of Control. means (a) the sale, lease, conveyance or
other disposition of all or substantially all of the assets of the
Partnership or the Operating Partnership to any Person or group (as
such term is used in Section 13(d)(3) of the Exchange Act) other than
James E. Ferrell, the Related Parties and any Person of which James E.
Ferrell and the Related Parties beneficially own in the aggregate 51%
or more of the outstanding voting stock (or if such Person is a
partnership, 51% or more of the general partner interests), (b) the
liquidation or dissolution of the Partnership, the Operating
Partnership or the General Partner, (c) the occurrence of any
transaction, the result of which is that James E. Ferrell and the
Related Parties beneficially own in the aggregate, directly or
indirectly, less than 51% of the outstanding voting stock entitled to
vote for the election of directors of the General Partner and (d) the
occurrence of any transaction, the result of which is that the General
Partner is no longer the sole general partner of the Partnership or the
Operating Partnership.
.Citizenship Certification. means a properly completed
certificate in such form as may be specified by the General Partner by
which an Assignee or a Limited Partner certifies that he (and if he is
a nominee holding for the account of another Person, that to the best
of his knowledge such other Person) is an Eligible Citizen.
.Closing Price. for any day means the last sale price on such
day, regular way, or in case no such sale takes place on such day, the
average of the closing bid and asked prices on such day, regular way,
in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
National Securities Exchange on which the Units of such class are
listed or admitted to trading or, if the Units of such class are not
listed or admitted to trading on any National Securities Exchange, the
last quoted price on such day or, if not so quoted, the average of the
high bid and low asked prices on such day in the over the counter
market, as reported by the National Association of Securities Dealers,
Inc. Automated Quotation System or such other system then in use, or if
on any such day the Units of such class are not quoted by any such
organization, the average of the closing bid and asked prices on such
day as furnished by a professional market maker making a market in the
Units of such class selected by the Board of Directors of the General
Partner, or if on any such day no market maker is making a market in
the Units of such class, the fair value of such Units on such day as
determined reasonably and in good faith by the Board of Directors of
the General Partner.
.Code. means the Internal Revenue Code of 1986, as amended and
in effect from time to time, as interpreted by the applicable
regulations thereunder. 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 13.3(a).
.Commission. means the Securities and Exchange Commission.
.Common Unit. means a Unit representing a fractional part of
the Partnership Interests of all Limited Partners and Assignees and
having the rights and obligations specified with respect to Common
Units in this 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 4.5(d), such property shall no
longer constitute a Contributed Property, but shall be deemed an
Adjusted Property.
.Contribution Agreement. means that certain Contribution,
Conveyance and Assumption Agreement, dated as of the Initial Closing
Date, between Ferrellgas, the Partnership and the Operating
Partnership, 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 5.1(d)(xi).
.Current Market Price. as of any date of any class of Units
listed or admitted to trading on any National Securities Exchange means
the average of the daily Closing Prices per Unit of such class for the
20 consecutive Trading Days immediately prior to such date.
.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 13.1 or 13.2.
.Depositary. means with respect to any Units issued in global or book-entry
form, The Depository Trust Company and its successors and permitted assigns.
.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 the Partnership or the Operating
Partnership does business or proposes to do business from time to time, and
whose status as a Limited Partner or Assignee does not or would not subject the
Partnership or the Operating Partnership to a substantial 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
13.1(a).
.FCI ESOT. means the employee stock ownership trust related to the employee
stock ownership plan of Ferrell organized under Section 4975(e)(7) of the Code.
.Ferrell. means Ferrell Companies, Inc., a Kansas corporation.
.Ferrellgas. means Ferrellgas, Inc., a Delaware corporation and a wholly
owned subsidiary of Ferrell.
.First Liquidation Target Amount. has the meaning assigned to such term in
Section 5.1(c)(i)(D).
.First Target Distribution. means $0.55 per Unit (or, with respect to the
period commencing on the Initial Closing Date and ending on October 31, 1994,
the product of $0.55 multiplied by a fraction of which the numerator is the
number of days in such period and of which the denominator is 92), subject to
adjustment in accordance with Sections 5.6(b) and (c) and Section 9.6.
.General Partner. means Ferrellgas, and its successors as general partner
of the Partnership.
.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 Interests.
.Holder. has the meaning assigned to such term in Section 6.13(a).
.IDR. means a Partnership Interest issued to Ferrellgas in
connection with the transfer of its assets to the Partnership pursuant
to Section 4.2, which Partnership Interest shall confer upon the holder
thereof only the rights and obligations specifically provided in this
Agreement with respect to IDRs (and no other rights otherwise available
to holders of a Partnership Interest).
.Incentive Distribution. means any amount of cash distributed to the
Special Limited Partners, pursuant to Section 5.4(d), (e) or (f). .Indemnified
Persons. has the meaning assigned to such term in Section 6.13(c).
.Indemnitee. means the General Partner, any Departing Partner,
any Person who is or was an Affiliate of the General Partner or any
Departing Partner, any Person who is or was an officer, director,
employee, partner, agent or trustee of the General Partner or any
Departing Partner or any such Affiliate, or any Person who is or was
serving at the request of the General Partner or any Departing Partner
or any such Affiliate as a director, officer, employee, partner, agent
or trustee of another Person.
.Initial Closing Date. means July 5, 1994.
.Initial Limited Partners. means Ferrellgas (with respect to the Common
Units it owns) and the Underwriters.
.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, $21.00 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 General
Partner, in each case adjusted as the General Partner determines to be
appropriate to give effect to any distribution, subdivision or
combination of Units.
.Interim Capital Transactions. means (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 the
Partnership or the Operating Partnership, (b) sales of equity interests
(including Common Units sold to the Underwriters pursuant to the
exercise of the Overallotment Option) by the Partnership or the
Operating Partnership and (c) sales or other voluntary or involuntary
dispositions of any assets of the Partnership or the Operating
Partnership (other than (x) sales or other dispositions of inventory in
the ordinary course of business, (y) sales or other dispositions of
other current assets including, without limitation, receivables and
accounts and (z) sales or other dispositions of assets as a part of
normal retirements or replacements), in each case prior to the
commencement of the dissolution and liquidation of the Partnership.
.Issue Price. means the price at which a Unit is purchased from the
Partnership, less any sales commission or underwriting discount charged to the
Partnership.
.Limited Partner. means, unless the context otherwise
requires, (a) each Initial Limited Partner, each Substituted Limited
Partner, each Additional Limited Partner and any Departing Partner upon
the change of its status from General Partner to Limited Partner
pursuant to Section 13.3, subject to the provisions of Section 5.7, (b)
solely for the purposes of Section 1.4 and Articles VI and VII, each
Special Limited Partner and (c) solely for purposes of Articles IV, V
and VI and Sections 14.3 and 14.4, 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 14.2, 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 General Partner or other Person approved pursuant to
Section 14.3 who performs the functions described therein.
.Maintenance Capital Expenditures. means cash 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 the Partnership and the Operating Partnership, taken as a
whole, as such assets existed at the time of such expenditure and
shall, therefore, not include cash capital expenditures made in respect
of Acquisitions and Capital Additions and Improvements. Where cash
capital expenditures are made in part to maintain the operating
capacity level referred to in the immediately preceding sentence and in
part for other purposes, the General Partner's good faith allocation
thereof between the portion used to maintain such operating capacity
level and the portion used for other purposes shall be conclusive.
.Material Event. means the occurrence of any of the following
events: (a) the Closing Price for Common Units is below $7.50 (as
adjusted to reflect any distribution, combination or subdivision of
Common Units made in accordance with Section 4.10) for ten consecutive
Trading Days; (b) a Change of Control; (c) the Partnership or the
Operating Partnership is treated as an association taxable as a
corporation for federal income tax purposes or is otherwise subject to
taxation as an entity for federal income tax purposes; (d) the default
under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any indebtedness
by the Partnership or by the Operating Partnership (or the payment of
which is guaranteed by the Partnership or the Operating Partnership),
whether such indebtedness or guarantee exists as of the date of this
Agreement or is created or incurred thereafter, if in each case, such
default shall not have been cured within the grace period provided for
in the mortgage, indenture or instrument governing such indebtedness
and the principal amount of any such indebtedness, together with the
principal amount of any other such indebtedness under which there has
been a default, aggregates $10 million or more; (e) the Partnership
issues any Partnership Interests for cash prior to February 1, 2002 and
the aggregate proceeds of such issuances above $50 million are not used
to redeem the Senior Units; or (f) the Partnership fails to obtain the
approval of the holders of at least a majority of the Outstanding
Common Units for the Senior Unit Conversion Option within 180 days
after the WNGL Closing Date.
.Merger Agreement. has the meaning assigned to such term in Section 16.1.
.Minimum Quarterly Distribution. means $0.50 per Common Unit
per Quarter (or, with respect to the period commencing on the Initial
Closing Date and ending on October 31, 1994, the product of $0.55
multiplied by a fraction of which the numerator is the number of days
in such period and of which the denominator is 92), subject to
adjustment in accordance with Sections 5.6(b) and (c) and Section 9.6.
.National Securities Exchange. means 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.
.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 4.5(d)(ii)) at the time such property is distributed, reduced
by any indebtedness 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 period, the excess, if
any, of the Partnership's items of income and gain (other than those
items attributable to dispositions constituting Termination Capital
Transactions) for such taxable period over the Partnership's items of
loss and deduction (other than those items attributable to dispositions
constituting Termination Capital Transactions) for such taxable period.
The items included in the calculation of Net Income shall be determined
in accordance with Section 4.5(b) and shall not include any items
specially allocated under Section 5.1(d). Once an item of income, gain,
loss or deduction that has been included in the initial computation of
Net Income is subjected to a Required Allocation or a Curative
Allocation, Net Income or Net Loss, whichever the case may be, shall be
recomputed without regard to such item.
.Net Loss. means, for any taxable period, the excess, if any,
of the Partnership's items of loss and deduction (other than those
items attributable to dispositions constituting Termination Capital
Transactions) for such taxable period over the Partnership's items of
income and gain (other than those items attributable to dispositions
constituting Termination Capital Transactions) for such taxable period.
The items included in the calculation of Net Loss shall be determined
in accordance with Section 4.5(b) and shall not include any items
specially allocated under Section 5.1(d). Once an item of income, gain,
loss or deduction that has been included in the initial computation of
Net Loss is subjected to a Required Allocation or a Curative
Allocation, Net Income, or Net Loss, whichever the case may be, shall
be recomputed without regard to such item.
.Net Termination Gain. means, for any taxable period, the sum,
if positive, of all items of income, gain, loss or deduction recognized
by the Partnership (including, without limitation, such amounts
recognized through the Operating Partnership) from Termination Capital
Transactions occurring in such taxable period. The items included in
the determination of Net Termination Gain shall be determined in
accordance with Section 4.5(b) and shall not include any items of
income, gain or loss specially allocated under Section 5.1(d). Once an
item of income, gain or loss that has been included in the initial
computation of Net Termination Gain is subjected to a Required
Allocation or a Curative Allocation, Net Termination Gain or Net
Termination Loss, whichever the case may be, shall be recomputed
without regard to such item.
.Net Termination Loss. means, for any taxable period, the sum,
if negative, of all items of income, gain, loss or deduction recognized
by the Partnership (including, without limitation, such amounts
recognized through the Operating Partnership) from Termination Capital
Transactions occurring in such taxable period. The items included in
the determination of Net Termination Loss shall be determined in
accordance with Section 4.5(b) and shall not include any items of
income, gain or loss specially allocated under Section 5.1(d). Once an
item of gain or loss that has been included in the initial computation
of Net Termination Loss is subjected to a Required Allocation or a
Curative Allocation, Net Termination Gain or Net Termination Loss,
whichever the case may be, shall be recomputed without regard to such
item.
.Non-citizen Assignee. means a Person who the General Partner
has determined in its sole discretion does not constitute an Eligible
Citizen and as to whose Partnership Interest the General Partner has
become the Substituted Limited Partner, pursuant to Section 11.5.
.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 5.2(b)(i)(A), 5.2(b)(ii)(A) or 5.2(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).
.Notice of Election to Purchase. has the meaning assigned to such term in
Section 17.1(b).
.Operating Partnership. means Ferrellgas, L.P., a Delaware limited
partnership.
.Operating Partnership Agreement. means the Agreement of Limited
Partnership of the Operating Partnership, as it may be amended, supplemented or
restated from time to time.
.Opinion of Counsel. means a written opinion of counsel (who may be regular
counsel to Ferrellgas, any Affiliate of Ferrellgas, the Partnership or the
General Partner) acceptable to the General Partner.
.Organizational Limited Partner. means Danley K. Sheldon, in his capacity
as the organizational limited partner of the Partnership.
.Original Agreement. has the meaning assigned to such term in the Recitals
hereto.
.Outstanding. means, with respect to the Units or other
Partnership Securities, all Units or other 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 that, if at any time any Person or Group (other than
Ferrellgas and its Affiliates) own beneficially 20% or more of all
Common Units, such Common Units so owned shall not be voted on any
matter and shall not be considered to be Outstanding when sending
notices of a meeting of Limited Partners (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 13.1(b)(iv) (such Common Units shall not, however, be treated
as a separate class of Partnership Securities for purposes of this
Agreement).
.Overallotment Option. means the overallotment option granted to the
Underwriters by the Partnership pursuant to the Underwriting Agreement.
.Partners. means the General Partner, the Limited Partners and the Special
Limited Partners.
.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.
.Partnership. means Ferrellgas Partners, L.P., a Delaware limited
partnership established by the Certificate of Limited Partnership, and any
successors thereto.
.Partnership Interest. means an interest in the Partnership, which shall
include general partner interests, Senior Units, Common Units, IDRs or 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 Securities. has the meaning assigned to such term in Section
4.3(a).
.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 the General Partner or any Affiliate of the General Partner
who holds Units.
.Percentage Interest. means as of the date of such
determination (a) as to the General Partner, 1%, (b) as to any Limited
Partner or Assignee holding Common Units, the product of (i) 99%
multiplied by (ii) the quotient of the number of Common Units held by
such Limited Partner or Assignee divided by the total number of all
Common Units then Outstanding; provided, however, that following any
issuance of additional Partnership Securities by the Partnership in
accordance with Section 4.3, proper adjustment shall be made to the
Percentage Interest represented by each Common Unit to reflect such
issuance, and (c) as to the holders of additional Partnership
Securities issued by the Partnership in accordance with Section 4.3,
the percentage established as a part of such issuance. The Senior Units
have not been allocated a Percentage Interest.
.Person. means an individual or a corporation, partnership, trust,
unincorporated organization, association or other entity.
.Pro Rata. means (a) when modifying Units or other Partnership
Interests, apportioned equally among all Outstanding Units or other
Partnership Interests, (b) when modifying Common Units, apportioned
equally among all Outstanding Common Units, (c) when modifying Senior
Units, apportioned equally among all Outstanding Senior Units, and (d)
when modifying Partners and Assignees, apportioned among all Partners
and Assignees in accordance with their respective Percentage Interest.
.Purchase Date. means the date determined by the General
Partner as the date for purchase of all Outstanding Units (other than
Units owned by the General Partner and its Affiliates) pursuant to
Article XVII.
.Quarter. means, unless the context requires otherwise, a
three month period of time ending on October 31, January 31, April 30,
or July 31; provided, however, that the General Partner, in its sole
discretion, may amend such period as it deems necessary or appropriate
in connection with a change in the fiscal year 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 General
Partner for determining (a) the identity of the Record Holder entitled
to notice of, or to vote at, any meeting of Limited Partners 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 Limited Partners or (b) the identity of Record
Holders entitled to receive any report or distribution.
.Record Holder. means the Person in whose name a 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 a
general partner interest or an IDR, the Person in whose name such
general partner interest or IDR is registered on the books of the
General Partner as of the opening of business on such Business Day.
.Redeemable Units. means any Units for which a redemption notice has been
given, and has not been withdrawn, under Section 11.6.
.Registration Statement. means the Registration Statement on Form S-1
(Registration No. 33-53383), 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.
.Related Party. means (a) the spouse or any lineal descendant
of James E. Ferrell, (b) any trust for his benefit or for the benefit
of his spouse or any such lineal descendants, (c) any corporation,
partnership or other entity in which James E. Ferrell and/or such other
Persons referred to in the foregoing clauses (a) and (b) are the direct
record and beneficial owners of all of the voting and nonvoting
securities, (d) the FCI ESOT and (e) any participant in the FCI ESOT
whose ESOT account has been allocated shares of Ferrell.
.Required Allocations. means any allocation (or limitation
imposed on any allocation) of an item of income, gain, deduction or
loss pursuant to (a) Section 5.1(b)(ii) or (b) Sections 5.1(d)(i),
5.1(d)(ii), 5.1(d)(iv), 5.1(d)(v), 5.1(d)(vi), 5.1(d)(vii) and
5.1(d)(ix), such allocations (or limitations thereon) being directly or
indirectly required by the Treasury Regulations promulgated under
Section 704(b) of the Code.
.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 Sections
5.2(b)(i)(A) or 5.2(b)(ii)(A), respectively, to eliminate Book-Tax
Disparities.
.Restricted Activities. means the retail sale of propane to end users
within the continental United States in the manner engaged in by Ferrellgas
immediately prior to the Closing Date.
.Second Liquidation Target Amount. has the meaning assigned to such term in
Section 5.1(c)(i)(E).
.Second Target Distribution. means $0.63 per Unit (or, with
respect to the period commencing on the Initial Closing Date and ending
on October 31, 1994, the product of $0.55 multiplied by a fraction of
which the numerator is the number of days in such period and of which
the denominator is 92), subject to adjustment in accordance with
Sections 5.6(b) and (c) and Section 9.6.
.Securities Act. means the Securities Act of 1933, as amended, supplemented
or restated from time to time and any successor to such statute.
.Senior Unit. means a Unit representing a fractional part of the
Partnership Interests of all Limited Partners and Assignees having the rights
and obligations specified with respect to Senior Units in this Agreement. The
term .Senior Unit. includes all Additional Senior Units.
.Senior Unit Conversion Option. means the proposal submitted to the holders
of Outstanding Common Units on the Record Date for their approval to provide for
the conversion of the Senior Units into Common Units as provided in Section 5.7.
.Senior Unit Liquidation Preference. means $40.00 per Senior Unit, subject
to adjustment in accordance with Section 5.6(a).
.Senior Unit Distribution. means distributions that are
required to be paid on the Senior Units (including Additional Senior
Units) at a quarterly rate equal to the sum of (a) $1.00 per Senior
Unit per Quarter (or part thereof or, with respect to the period
commencing with the WNGL Closing Date and ending on January 31, 2000,
the product of $1.00 multiplied by a fraction of which the numerator is
the number of days in such period and of which the denominator is 92),
plus (b) an additional $0.50 per Senior Unit per Quarter (or part
thereof) if the Partnership fails, within 45 days following the end of
any Quarter, to pay in full the Senior Unit Distribution with respect
to such Quarter, plus (c) an additional $0.50 per Senior Unit per
Quarter (or part thereof) if the Partnership fails to pay in full the
Senior Unit Redemption Price on or prior to the Senior Unit Redemption
Date, plus (d) an additional $0.50 per Senior Unit per Quarter (or part
thereof) if the Partnership fails to obtain the approval of the holders
of at least the majority of the Outstanding Common Units for the Senior
Unit Conversion Option within 120 days following the WNGL Closing Date,
in each case accumulating from and including the date of such failure
or default in clauses (a) through (d) until the date such failure or
default has been cured by the Partnership (which in the case of clause
(d) may not be effected without the approval of the holders of at least
the majority of the Outstanding Common Units). Each of the amounts set
forth in clauses (a) through (d) are subject to adjustment in
accordance with Section 5.6(a).
All Senior Unit Distributions shall be cumulative, whether or
not declared and whether or not there is sufficient Available Cash for
the payment thereof, on a daily basis from the WNGL Closing Date and
shall be payable quarterly in arrears on each distribution payment date
pursuant to Section 5.3(a), commencing on the first distribution
payment date after the WNGL Closing Date. Any unpaid or undistributed
Senior Unit Distributions will compound on a quarterly basis at a rate
equal to the then applicable distribution rate, calculated in
accordance with the first sentence of this definition. If any Senior
Unit Distributions are payable through the issuance of Additional
Senior Units pursuant to Section 5.4 and are so paid by such issuance,
such Senior Unit Distributions shall be deemed paid in full. Any
Additional Senior Units that are required to be issued and distributed,
but which are not issued and distributed as required, will be entitled
to the Senior Unit Distribution as if they were issued and distributed
as required.
.Senior Unit Redemption Date. means the date the Partnership shall pay the
Senior Unit Redemption Price to the holders of Senior Units pursuant to Section
17.2(b).
.Senior Unit Redemption Notice. means a written notice from the Partnership
to the holder or holders of Senior Units setting forth:
(a) the Senior Unit Redemption Price;
(b) whether all or less than all of the Outstanding
Senior Units are to be redeemed and the total number
of Senior Units being redeemed;
(c) the Senior Unit Redemption Date;
(d) that the holder is to surrender to the Partnership,
in the manner, at the place or places and at the
price designated, his certificate or certificates
representing the Senior Units to be redeemed; and
(e) that distributions on the Senior Units to be redeemed
shall cease to accumulate on such Senior Unit
Redemption Date unless the Partnership defaults in
the payment of the redemption price.
.Senior Unit Redemption Price. means, with respect to each
Senior Unit called for redemption in accordance with the Senior Unit
Redemption Notice pursuant to Section 17.2(b), an amount in cash equal
to the Senior Unit Liquidation Preference, plus an amount equal to any
accumulated and unpaid Senior Unit Distributions on such Senior Units
to the Senior Unit Redemption Date.
.Special Approval. means approval by the Audit Committee.
.Special Limited Partner. means each holder of an IDR.
.Special Limited Partners Book Capital. means, as of any date
of determination, the amount equal to the sum of the balances of the
Capital Accounts of all the Special Limited Partners, determined
pursuant to Section 4.5 (prior to any adjustment pursuant to Section
4.5(d) arising upon the present event requiring a valuation of the
Partnership's assets).
.Subordinated Unit. means a Unit representing a fractional
part of the Partnership Interests of all Limited Partners and Assignees
and having the rights and obligations specified with respect to
Subordinated Units in the Original Agreement. Each Outstanding
Subordinated Unit converted into a Common Unit on a one-for-one basis
as of August 1, 1999.
.Subordination Period. means the period which commenced on the Initial
Closing Date and ended on August 1, 1999.
.Subsidiary. means, with respect to any Person, (i) a
corporation of which more than 50% of the voting power of shares of
Capital Interests 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, by such
Person, by one or more Subsidiaries of such Person, or a combination
thereof, (ii) 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 Capital Interests of such partnership (considering all of
the Capital Interests of the partnership as a single class) is owned or
controlled, directly or indirectly, by such Person, by one or more
Subsidiaries of such Person, or a combination thereof, or (iii) any
other Person (other than a corporation or a partnership) in which such
Person, directly or indirectly, at the date of determination, has (x)
at least a majority ownership interest or (y) 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 12.2 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 16.2(b).
.Termination Capital Transactions. means any sale, transfer or other
disposition of property of the Partnership or the Operating Partnership
occurring upon or incident to the liquidation and winding up of the Partnership
and the Operating Partnership pursuant to Article XIV.
.Thermogas. means Thermogas L.L.C., a Delaware limited liability company
(previously Thermogas Company, a Delaware corporation).
.Third Target Distribution. means $0.82 per Unit (or, with
respect to the period commencing on the Initial Closing Date and ending
on October 31, 1994, the product of $0.55 multiplied by a fraction of
which the numerator is the number of days in such period and of which
the denominator is 92), subject to adjustment in accordance with
Sections 5.6(b) and (c) and Section 9.6.
.Trading Day. means a day on which the principal National
Securities Exchange on which the Units of any class are listed or
admitted to trading is open for the transaction of business or, if
Units of a class are not listed or admitted to trading on any National
Securities Exchange, a day on which banking institutions in New York
City generally are open.
.Transaction. has the meaning assigned to such term in Section 5.7(g).
.Transfer. has the meaning assigned to such term in Section 11.1(a).
.Transfer Agent. means such bank, trust company or other
Person (including, without limitation, the 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.
.Underwriter. means each Person named as an underwriter in Schedule I to
the Underwriting Agreement who purchased Common Units pursuant thereto.
.Underwriting Agreement. means the Underwriting Agreement
dated June 27, 1994, among the Underwriters, the Partnership, the
General Partner and Ferrell providing for the purchase of Common Units
by such Underwriters.
.Unit. means a Partnership Interest of a Limited Partner or
Assignee in the Partnership representing a fractional part of the
Partnership Interests of all Limited Partners and Assignees and shall
include, without limitation, Senior Units and Common Units; provided,
that each Senior Unit at any time Outstanding shall represent the same
fractional part of the Partnership Interests of all Limited Partners
and Assignees holding Senior Units as each other Senior Unit and each
Common Unit at any time Outstanding shall represent the same fractional
part of the Partnership Interests of all Limited Partners and Assignees
holding Common Units as each other Common Unit.
.Unpaid MQD. has the meaning assigned to such term in Section 5.1(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 4.5(d)) over (b) the Carrying Value of such
property as of such date (prior to any adjustment to be made pursuant
to Section 4.5(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 4.5(d) as of such date) over
(b) the fair market value of such property as of such date (as
determined under Section 4.5(d)).
.Unrecovered Initial Unit Price. means, at any time, with
respect to a class or series of Units (other than Senior Units), the
price per Unit at which such class or series of Units was initially
offered to the public for sale by the underwriters in respect of such
offering, as determined by the General Partner, less the sum of all
distributions theretofore made in respect of a Unit of such class or
series that was sold in the initial offering of Units of said class or
series constituting Cash from Interim Capital Transactions 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 a Unit of such class or
series that was sold in the initial offering of Units of such class or
series, adjusted as the General Partner determines to be appropriate to
give effect to any distribution, subdivision or combination of Units.
.Withdrawal Opinion of Counsel. has the meaning assigned to such term in
Section 13.1(b).
.WNGL. means Williams Natural Gas Liquids, Inc., a Delaware corporation
.WNGL Closing Date. means the closing date of the transactions contemplated
by the WNGL Purchase Agreement.
.WNGL Purchase Agreement. means that certain Purchase Agreement, dated as
of November 7, 1999, by and among the Partnership, the Operating Partnership and
WNGL.
.WNGL Registration Rights Agreement. means that certain Registration Rights
Agreement, dated the WNGL Closing Date between the Partnership and WNGL.
1 ARTICLE PURPOSEARTICLE 2 3 PURPOSE
1.1 Section Purpose and Business . The purpose and nature of the business to be
conducted by the Partnership shall be (a) to serve as a limited partner in the
Operating Partnership and, in connection therewith, to exercise all of 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) to engage directly in, or to enter into or form any corporation,
partnership, joint venture, limited liability company or other arrangement to
engage 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) to engage directly in,
or to enter into or form any corporation, partnership, joint venture, limited
liability company or other arrangement to engage in, any business activity that
is approved by the 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) to do anything necessary or appropriate to the foregoing, including, without
limitation, the making of capital contributions or loans to the Operating
Partnership. The General Partner has no obligation or duty to the Partnership,
the Limited Partners, the Special Limited Partners or the Assignees to propose
or approve, and in its sole discretion may decline to propose or approve, the
conduct by the Partnership of any business.
1.1 Section 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 3.1 and for the protection and benefit of the Partnership.
1 ARTICLE CAPITAL CONTRIBUTIONSARTICLE 2 3 CAPITAL
CONTRIBUTIONS
1.1 Section Initial Contributions . In connection with the formation of the
Partnership under the Delaware Act, the General Partner made an initial Capital
Contribution to the Partnership and was admitted as the general partner of the
Partnership, and the Organizational Limited Partner made a Capital Contribution
to the Partnership and was admitted as a limited partner of the Partnership.
1.1 Section Contributions by the General Partner and the Initial Limited
Partners; Contributions on the WNGL Closing Date .
(a) On the Initial Closing Date, the General Partner contributed and delivered
to the Partnership, as a Capital Contribution, a limited partner interest in the
Operating Partnership which, together with the Partnership Interest (as defined
in the Operating Partnership Agreement) previously held by the Partnership,
represented a 98.9899% Percentage Interest (as defined in the Operating
Partnership Agreement) in the Operating Partnership, in exchange for (i) the
continuation of its Partnership Interest as general partner in the Partnership,
subject to all of the rights, privileges and duties of the General Partner under
this Agreement, (ii) 1,000,000 Common Units and 16,593,721 Subordinated Units
and (iii) the IDRs.
(b) On the Initial Closing Date, each Underwriter contributed and delivered to
the Partnership cash in an amount equal to the Issue Price per Common Unit,
multiplied by the number of Common Units specified in the Underwriting Agreement
to be purchased by such Underwriter. In exchange for such Capital Contribution
by the Underwriters, the Partnership issued Common Units to each Underwriter on
whose behalf such Capital Contribution was made in an amount equal to the
quotient obtained by dividing (x) the cash contribution to the Partnership by or
on behalf of such Underwriter by (y) the Issue Price per Common Unit.
Immediately after these contributions, the Initial Capital Contribution of the
General Partner and the Organizational Limited Partner were refunded, the
interest of the Organizational Limited Partner was terminated and the
Organizational Limited Partner ceased to be a Limited Partner.
(c) To the extent that the Underwriters' Overallotment Option was exercised,
each Underwriter contributed and delivered to the Partnership cash in an amount
equal to the Issue Price per Common Unit multiplied by the number of Common
Units purchased by such Underwriter pursuant to the Overallotment Option. In
exchange for such Capital Contribution, the Partnership issued Common Units to
each Underwriter on whose behalf such Capital Contribution was made in an amount
equal to the quotient obtained by dividing (x) the cash contribution to the
Partnership by or on behalf of such Underwriter by (y) the Issue Price per
Common Unit.
(d) On the WNGL Closing Date, pursuant to the WNGL Purchase Agreement, WNGL
contributed all of its interests in Thermogas to the Partnership in exchange for
4,375,000 Senior Units.
1.2 Section Issuances of Additional Units and Other Securities
--------------------------------------------------
1.3
(a) Subject to Section 4.3(c), the General Partner is hereby authorized to cause
the Partnership to issue, in addition to the Partnership Interests and Units
issued pursuant to Sections 4.1 and 4.2, such additional Units, or classes or
series thereof, or options, rights, warrants or appreciation rights relating
thereto, or any other type of equity security that the Partnership may lawfully
issue, any unsecured or secured debt obligations of the Partnership convertible
into any class or series of equity securities of the Partnership (collectively,
.Partnership Securities.), for any Partnership purpose, at any time or from time
to time, to the Partners or to other Persons for such consideration and on such
terms and conditions as shall be established by the General Partner in its sole
discretion, all without the approval of any Limited Partners. The General
Partner shall have sole discretion, subject to the guidelines set forth in this
Section 4.3 and the requirements of the Delaware Act, in determining the
consideration and terms and conditions with respect to any future issuance of
Partnership Securities.
(b) Additional Partnership Securities to be issued by the Partnership pursuant
to this Section 4.3 shall be issuable from time to time in one or more classes,
or one or more series of any of such classes, with such designations,
preferences and relative, participating, optional or other special rights,
powers and duties, including, without limitation, rights, powers and duties
senior to existing classes and series of Partnership Securities (except as
provided in Section 4.3(c)), all as shall be fixed by the General Partner in the
exercise of its sole discretion, subject to Delaware law and Section 4.3(c),
including, without limitation, (i) the allocations of items of Partnership
income, gain, loss, deduction and credit to each such class or series of
Partnership Securities; (ii) the right of each such class or series of
Partnership Securities to share in Partnership distributions; (iii) the rights
of each such class or series of Partnership Securities upon dissolution and
liquidation of the Partnership; (iv) whether such class or series of additional
Partnership Securities is redeemable by the Partnership and, if so, the price at
which, and the terms and conditions upon which, such class or series of
additional Partnership Securities may be redeemed by the Partnership; (v)
whether such class or series of additional Partnership Securities is issued with
the privilege of conversion and, if so, the rate at which, and the terms and
conditions upon which, such class or series of Partnership Securities may be
converted into any other class or series of Partnership Securities or other
property; (vi) the terms and conditions upon which each such class or series of
Partnership Securities will be issued, evidenced by certificates and assigned or
transferred; and (vii) the right, if any, of each such class or series of
Partnership Securities to vote on Partnership matters, including, without
limitation, matters relating to the relative rights, preferences and privileges
of each such class or series.
(c) Notwithstanding the terms of Sections 4.3(a) and 4.3(b), the issuance by the
Partnership of any Partnership Securities pursuant to this Section 4.3 shall be
subject to the following restrictions and limitations:
(i) Except for the issuance of Additional Senior Units pursuant to
Section 5.4, for so long as any Senior Units are Outstanding, the
Partnership shall not create, authorize or issue additional Partnership
Securities (or securities convertible into Partnership Securities)
having distribution rights or liquidation rights ranking prior or
senior to, or on a parity with, the Senior Units, without the prior
approval of the holders of at least a majority of the Outstanding
Senior Units; and
(ii) Upon the issuance of any Partnership Interests by the Partnership
or the making of any other Capital Contributions to the Partnership,
the General Partner shall be required to make additional Capital
Contributions to the Partnership in an amount equal to a percentage of
the additional Capital Contribution then made by a Person other than
the General Partner equal to one percent divided by ninety-nine
percent.
(d) The General Partner is hereby authorized and directed to take all actions
that it deems necessary or appropriate in connection with each issuance of
Units, IDRs or other Partnership Securities pursuant to Section 4.3(a) and to
amend this Agreement in any manner that it deems necessary or appropriate to
provide for each such issuance, to admit Additional Limited Partners in
connection therewith and to specify the relative rights, powers and duties of
the holders of the Units, IDRs or other Partnership Securities being so issued.
(e) The 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, including, without limitation, 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.
1.4 Section Limited Preemptive Rights . Except as provided in this Section 4.4,
no Person shall have any preemptive, preferential or other similar right with
respect to (a) additional Capital Contributions; (b) issuance or sale of any
class or series of Units, IDRs or other Partnership Securities, 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 Units, IDRs or other Partnership
Securities; (d) issuance of any right of subscription to or right to receive, or
any warrant or option for the purchase of, any such Units, IDRs or other
Partnership Securities; or (e) issuance or sale of any other securities that may
be issued or sold by the Partnership. The 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 Units, IDRs or other Partnership Securities from the
Partnership whenever, and on the same terms that, the Partnership issues Units,
IDRs or other Partnership Securities to Persons other than the General Partner
and its Affiliates, to the extent necessary to maintain the Percentage Interests
of the General Partner and its Affiliates equal to that which existed
immediately prior to the issuance of such Units, IDRs or other Partnership
Securities.
1.1 Section Capital Accounts .
1.2
(a) The Partnership shall maintain for each Partner (or a beneficial owner of a
Partnership Interest 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 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 4.5(b) and
allocated with respect to such Partnership Interest pursuant to Section 5.1, 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 4.5(b) and allocated with respect to such
Partnership Interest pursuant to Section 5.1.
(b) For purposes of computing the amount of any item of income, gain, loss or
deduction 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 4.5, the Partnership shall be
treated as owning directly its proportionate share (as determined by
the General Partner based upon the provisions of the Operating
Partnership Agreements) 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 5.1.
(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.
(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 4.5(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 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 5.1. 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.
(d)
<PAGE>
NYC:72226.1
(e) Consistent with the provisions of Treasury Regulation Section
1.704-1(b)(2)(iv)(f), on an issuance of additional Units for cash or Contributed
Property, the conversion of Senior Units into Common Units pursuant to Section
5.7, or the conversion of the General Partner's Partnership Interest to Common
Units pursuant to Section 13.3(b), 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 Sections 5.1(a) and 5.1(b). 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 General Partner using such reasonable method of valuation as
it may adopt; provided, however, the 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 General Partner shall allocate such
aggregate value among the assets of the Partnership (in such manner as it
determines in its sole discretion to be reasonable) to arrive at a fair market
value for individual properties.
(i) 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
5.1. Any Unrealized Gain or Unrealized Loss attributable to such
property shall be allocated in the same manner as Net Termination Gain
or Net Termination Loss pursuant to Section 5.1(c); provided, however,
that, in making any such allocation, Net Termination Gain or Net
Termination Loss actually realized shall be allocated first. 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 be determined and allocated by the Liquidator using
such reasonable method of valuation as it may adopt.
1.3 Section Interest . No interest shall be paid by the Partnership on Capital
Contributions or on balances in Partners' Capital Accounts.
1.1 Section No Withdrawal . No Partner shall be entitled to withdraw any part of
its Capital Contributions or its Capital Account or to receive any distribution
from the Partnership, except as provided in Section 4.1, and Articles V, VII,
XIII and XIV.
1.1 Section 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 collectible only out of the Partnership
assets in accordance with the terms and conditions upon which such advances are
made.
1.1 Section No Fractional Units . Except for fractional Senior Units issued
pursuant to Section 5.4 and Section 4.10(d), no fractional Units shall be issued
by the Partnership.
1.1 Section Splits and Combinations .
-----------------------
1.2
(a) Subject to Section 4.3(c) and 4.10(d), the General Partner may make a Pro
Rata distribution of Units or other Partnership Securities to all Record Holders
or may effect a subdivision or combination of Units or other Partnership
Securities; provided, however, that, after any such distribution, subdivision or
combination, each Partner shall have the same Percentage Interest in the
Partnership as before such distribution, subdivision or combination.
(b) Whenever such a distribution, subdivision or combination of Units or other
Partnership Securities is declared, the General Partner shall select a Record
Date as of which the distribution, subdivision or combination shall be effective
and shall send notice of the distribution, subdivision or combination at least
20 days prior to such Record Date to each Record Holder as of the date not less
than 10 days prior to the date of such notice. The General Partner also may
cause a firm of independent public accountants selected by it to calculate the
number of Units to be held by each Record Holder after giving effect to such
distribution, subdivision or combination. The General Partner shall be entitled
to rely on any certificate provided by such firm as conclusive evidence of the
accuracy of such calculation.
(c) Promptly following any such distribution, subdivision or combination, the
General Partner may cause Certificates to be issued to the Record Holders of
Units as of the applicable Record Date representing the new number of Units held
by such Record Holders, or the General Partner may adopt such other procedures
as it may deem appropriate to reflect such distribution, subdivision or
combination; provided, however, if any such distribution, subdivision or
combination results in a smaller total number of Units Outstanding, the General
Partner 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) Except with respect to Senior Units, the Partnership shall not issue
fractional Units upon any distribution, subdivision or combination of Units. If
a distribution, subdivision or combination of Common Units would result in the
issuance of fractional Common Units but for the provisions of Section 4.9 and
this Section 4.10(d), each fractional Common Unit shall be rounded to the
nearest whole Common Unit (and a 0.5 Common Unit shall be rounded to the next
higher Common Unit).
2 ARTICLE ALLOCATIONS AND DISTRIBUTIONSARTICLE 3 4
ALLOCATIONS AND DISTRIBUTIONS
1.1 Section 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 4.5(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 5.1(d), Net Income for each taxable period and all items of income,
gain, loss and deduction taken into account in computing Net Income for such
taxable period shall be allocated as follows:
(i) First, 100% to the Limited Partners holding Senior Units, Pro Rata,
until the aggregate Net Income allocated to the Limited Partners
holding Senior Units pursuant to this Section 5.1(a)(i) for the current
and all previous taxable years is equal to the aggregate Net Losses
allocated to the Limited Partners holding Senior Units pursuant to
Section 5.1(b)(iii) for all previous taxable years;
(ii) Second, 100% to the General Partner until the aggregate Net Income
allocated to the General Partner pursuant to this Section 5.1(a)(ii)
for the current taxable year and all previous taxable years is equal to
the aggregate Net Losses allocated to the General Partner pursuant to
Section 5.1(b)(iv) for all previous taxable years;
(iii) Third, 1% to the General Partner and 99% to the Limited Partners
holding Common Units, Pro Rata, until the aggregate Net Income
allocated to such Partners pursuant to this Section 5.1(a)(iii) for the
current taxable year and all previous taxable years is equal to the
aggregate Net Losses allocated to such Partners pursuant to Section
5.1(b)(ii) for all previous taxable years; and
(iv) Fourth, the balance, if any, 1% to the General Partner and 99% to the
Limited Partners holding Common Units, Pro Rata.
(b) Net Losses. After giving effect to the special allocations set forth in
Section 5.1(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, 1% to the General Partner and 99% to the Limited Partners
holding Common Units, Pro Rata, until the aggregate Net Losses
allocated to such Partners pursuant to this Section 5.1(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
5.1(a)(iv) for all previous taxable years;
(ii) Second, 1% to the General Partner and 99% to the Limited Partners
holding Common Units, Pro Rata; provided, that Net Losses shall not be
allocated to such Partners pursuant to this Section 5.1(b)(ii) to the
extent that such allocation would cause any Limited Partner holding
Common Units 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);
(iii) Third, 1% to the General Partner and 99% to the Limited Partners
holding Senior Units, Pro Rata; provided, that Net Losses shall not be
allocated to such Partners pursuant to this Section 5.1(b)(iii) to the
extent such allocation would cause any Limited Partner holding Senior
Units 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
(iv) Fourth, the balance, if any, 100% to the General Partner.
(c) Net Termination Gains and Losses. After giving effect to the special
allocations set forth in Section 5.1(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 5.1(c) shall be made after Capital Account
balances have been adjusted by all other allocations provided under this Section
5.1 and after all distributions of Available Cash provided under Section 5.4
have been made with respect to the taxable period ending on the date of the
Partnership's liquidation pursuant to Section 14.3.
(i) If a Net Termination Gain is recognized (or deemed recognized
pursuant to Section 4.5(d)) from Termination Capital Transactions, such
Net Termination Gain shall be allocated among the General Partner, the
Limited Partners and the Special Limited Partners in the following
manner (and the Adjusted 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
Adjusted Capital Account, in the proportion that such deficit
balance bears to the total deficit balances in the Adjusted
Capital Accounts of all Partners, until each such Partner has
been allocated Net Termination Gain equal to any such deficit
balance in its Adjusted Capital Account;
(B) Second, 99% to the Limited Partners holding Senior Units,
Pro Rata, and 1% to the General Partner until the Adjusted
Capital Account in respect of each Senior Unit then
Outstanding is equal to the sum of (i) the Senior Unit
Liquidation Preference (or fraction thereof) plus (ii) any
accumulated and unpaid Senior Unit Distributions.
(C) Third, 99% to the Limited Partners holding Common Units,
Pro Rata, and 1% to the General Partner until the Adjusted
Capital Account in respect of each Common Unit then
Outstanding is equal to the sum of (1) its Unrecovered Initial
Unit Price plus (2) the Minimum Quarterly Distribution for the
Quarter during which such Net Termination Gain is recognized,
reduced by any distribution pursuant to Section 5.4(b) hereof
and Sections 5.4(a)(i) or 5.4(b)(i) of the Original Agreement
with respect to such Common Unit for such Quarter (the amount
determined pursuant to this clause (2) is hereinafter defined
as the .Unpaid MQD.);
(D) Fourth, 99% to the Limited Partners holding Common Units,
Pro Rata, and 1% to the General Partner until the Adjusted
Capital Account in respect of each Common Unit then
Outstanding is equal to the sum of (1) its Unrecovered Initial
Unit Price, plus (2) the Unpaid MQD, if any, for such Common
Unit with respect to the Quarter during which such Net
Termination Gain is recognized, plus (3) the excess of (aa)
the First Target Distribution less the Minimum Quarterly
Distribution for each Quarter of the Partnership's existence
over (bb) the amount of any distributions of Cash from
Operations that was distributed pursuant to Section 5.4(c)
hereof and Sections 5.4(a)(iv) or 5.4 (b)(ii) of the Original
Agreement (the sum of (1) plus (2) plus (3) is hereinafter
defined as the .First Liquidation Target Amount.);
(E) Fifth, 85.8673% to the Limited Partners holding Common
Units, Pro Rata, and 13.1327% to the Special Limited Partners,
Pro Rata, and 1% to the General Partner until the Adjusted
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 amount of
any distributions of Cash from Operations that was distributed
pursuant to Section 5.4(d) hereof and Sections 5.4(a)(v) or
5.4(b)(iii) of the Original Agreement (the sum of (1) plus (2)
is hereinafter defined as the .Second Liquidation Target
Amount.);
(F) Sixth, 75.7653% to the Limited Partners holding Common
Units, Pro Rata, and 23.2347% to the Special Limited Partners,
Pro Rata, and 1% to the General Partner until the Adjusted
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 amount of
any distributions of Cash from Operations that was distributed
pursuant to Section 5.4(e) hereof and Sections 5.4(a)(vi) or
5.4(b)(iv) of the Original Agreement; and
(G) Finally, any remaining amount 50.5102% to the Limited
Partners holding Common Units, Pro Rata, and 48.4898% to the
Special Limited Partners, Pro Rata, and 1% to the General
Partner.
(ii) If a Net Termination Loss is recognized (or deemed recognized
pursuant to Section 4.5(d)) from Termination Capital Transactions, such
Net Termination Loss shall be allocated to the Partners in the
following manner:
(A) First, 99% to the Limited Partners holding Common Units,
Pro Rata, and 1% to the General Partner, until the Adjusted
Capital Account in respect of each Common Unit then
Outstanding has been reduced to zero; and
(B) Second, 99% to the Limited Partners holding Senior Units,
Pro Rata, and 1% to the General Partner, until the Adjusted
Capital Account in respect of each Senior Unit then
Outstanding has been reduced to zero.
(C) Third, the balance, if any, 100% to the General Partner.
(d) Special Allocations. Notwithstanding any other provision of this Section
5.1, the following special allocations shall be made for such taxable period:
(i) Partnership Minimum Gain Chargeback. Notwithstanding any other
provision of this Section 5.1, 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 5.1(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 5.1(d) with respect to
such taxable period (other than an allocation pursuant to Sections
5.1(d)(vi) and 5.1(d)(vii)). This Section 5.1(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 5.1 (other than
Section 5.1(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 5.1(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 5.1(d), other than Section 5.1(d)(i) and other
than an allocation pursuant to Sections 5.1(d)(vi) and 5.1(d)(vii),
with respect to such taxable period. This Section 5.1(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. First, if the amount of cash or the Net
Agreed Value of any property distributed (except cash or property
distributed pursuant to Section 14.3 or 14.4) to any Limited Partner
holding Common Units with respect to 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 Limited Partners holding Common Units
(on a per Unit basis), then (1) each Limited Partner holding Common
Units 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 Limited
Partners holding Common Units exceeds the distribution (on a per Unit
basis) to the Limited Partner holding Common Units receiving the
smallest distribution and (bb) the number of Units owned by the Limited
Partners holding Common Units receiving the greater distribution; and
(2) the General Partner shall be allocated gross income in an aggregate
amount equal to 1/99 of the sum of the amounts allocated in clause (1)
above. Second, gross income for the taxable period shall be allocated
100% to the Limited Partners holding Senior Units, Pro Rata, until the
aggregate amount of such items allocated to the Limited Partners
holding Senior Units, Pro Rata, under this paragraph (iii) for the
current taxable period and all previous taxable periods is equal to the
cumulative amount of cash distributed to the Limited Partners holding
Senior Units, Pro Rata, pursuant to Sections 5.4(a) and 5.5(a) for the
current and all previous taxable periods. All or a portion of the
remaining items of Partnership gross income or gain for the taxable
period, if any, shall be allocated 100% to the Special Limited
Partners, Pro Rata, until the aggregate amount of such items allocated
to the Special Limited Partners, Pro Rata, under this paragraph (iii)
for the current taxable period and all previous taxable periods is
equal to the cumulative amount of cash distributed to the Special
Limited Partners, Pro Rata, from the Closing Date through the end of
such taxable period.
(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 specifically 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 5.1(d)(i) or (ii).
(v) Gross Income Allocations. In the event any Partner has a deficit
balance in its Adjusted Capital Account at the end of any Partnership
taxable period, 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 5.1(d)(v) shall be made only if and to the extent that such
Partner would have a deficit balance in its Adjusted Capital Account
after all other allocations provided for in this Section 5.1 have been
tentatively made as if this Section 5.1(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 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 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.
(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(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 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.
(i) Economic Uniformity.
(A) Immediately prior to a sale, exchange or other disposition
of all or any portion of the Senior Units, the holders
disposing of Senior Units may elect that the Partnership
allocate items of Partnership gross income or gain 100% to the
Limited Partners disposing of Senior Units until the Limited
Partners disposing of Senior Units have been allocated an
amount of gross income or gain which causes the Capital
Accounts maintained with respect to each of the Senior Units
to be equal. Immediately prior to the conversion of all or any
portion of the Senior Units into Common Units, the Limited
Partners converting such Senior Units may elect that the
Partnership allocate items of Partnership gross income or gain
until the Limited Partners converting such Senior Units have
been allocated an amount of gross income or gain which causes
the Capital Account maintained with respect to each of the
Senior Units to be converted to be equal to the product of (x)
the number of Common Units into which the Senior Units will be
converted and (y) the Per Unit Capital Account for a Common
Unit.
(B) If at the time of the sale, exchange or other disposition
of Senior Units, the Senior Units are publicly traded or will
become publicly traded as a result of the sale, exchange or
disposition, the General Partner may cause the Partnership to
allocate items of gross income or gain 100% to the Limited
Partners disposing of Senior Units until the Limited Partners
disposing of Senior Units have been allocated an amount of
gross income or gain which causes the Capital Accounts
maintained with respect to each of the Senior Units that will
be publicly traded after the disposition to be equal.
Immediately prior to the sale, exchange or other disposition
in the public marketplace of Common Units into which Senior
Units have been converted, the General Partner may cause the
Partnership to allocate items of gross income or gain 100% to
the Limited Partners disposing of such Common Units until the
Limited Partners disposing of such Common Units have been
allocated an amount of gross income or gain which causes the
Capital Account maintained with respect to all Common Units
that are publicly traded after the disposition to be equal.
(C) At the election of the 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,
if any, shall be allocated 100% to each Partner holding
Subordinated Units in the proportion of the number of
Subordinated Units held by such Partner to the total number of
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
Subordinated Units to an amount equal to the product of (x)
the number of Subordinated Units held by such Partner and (y)
the Per Unit Capital Amount for a Common Unit. The purpose of
this allocation is to establish uniformity between the Capital
Accounts underlying Subordinated Units and the Capital
Accounts underlying Common Units held by Persons other than
the General Partner and its Affiliates immediately prior to
the conversion of such Subordinated Units into Common Units.
(ii) Curative Allocation.
(A) Notwithstanding any other provision of this Section 5.1,
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 5.1. 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 5.1(d)(xi)(A) shall only be made with respect to
Required Allocations to the extent the General Partner
reasonably determines that such allocations will otherwise be
inconsistent with the economic agreement among the Partners.
Further, allocations pursuant to this Section 5.1(d)(xi)(A)
shall be deferred with respect to allocations pursuant to
clauses (1) and (2) hereof to the extent the General Partner
reasonably determines that such allocations are likely to be
offset by subsequent Required Allocations.
(B) The General Partner shall have reasonable discretion, with
respect to each taxable period, to (1) apply the provisions of
Section 5.1(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 5.1(d)(xi)(A) among the Partners in a
manner that is likely to minimize such economic distortions.
(iii) Retirement of Assumed Indebtedness. All losses or deductions
attributable to premiums, consent fees, or other expenditures incurred
by the Partnership to retire indebtedness assumed from the General
Partner pursuant to the Contribution Agreement shall be allocated to
the General Partner.
1.2 Section Allocations for Tax Purposes .
----------------------------
1.3
(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 5.1.
(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) except as otherwise provided in Section
5.2(b)(iii), 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 5.1.
(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 4.5(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 5.2(b)(i)(A); and (B) except as otherwise provided in Section
5.2(b)(iii), 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 5.1.
(iii) The General Partner shall apply (a) the principles of Temporary
Regulation Section 1.704-3T to eliminate Book-Tax Disparities with
respect to the Book-Tax Disparities existing on the date of adoption of
Treasury Regulation Section 1.704-3(d) (the .Remedial Regulations.) and
(b) the Remedial Regulations with respect to any Book-Tax Disparity
created thereafter.
(c) For the proper administration of the Partnership and for the preservation of
uniformity of the Units (or any class or classes thereof), the 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
Units (or any class or classes thereof). The General Partner may adopt such
conventions, make such allocations and make such amendments to this Agreement as
provided in this Section 5.2(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 General Partner in its sole 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 the inconsistency of such
approach with Treasury Regulation Section 1.167(c)-1(a)(6) and Proposed Treasury
Regulation 1.197-2(g)(3) or any successor regulations thereto. If the General
Partner determines that such reporting position cannot reasonably be taken, the
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 General
Partner chooses not to utilize such aggregate method, the 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 5.2, 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 a
transferred Partnership Interest of the General Partner or to transferred Units
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 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 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 Limited Partner under the
provisions of this Article V 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 General Partner in its sole
discretion.
1.4 Section Requirement and Characterization of Distributions
-------------------------------------------------
1.5
(a) Within 45 days following the end of (i) the period beginning on the Initial
Closing Date and ending on October 31, 1994 and (ii) each Quarter commencing
with the Quarter beginning on November 1, 1994, an amount equal to 100% of
Available Cash with respect to such Quarter shall be distributed in accordance
with this Article V by the Partnership to the Partners, as of the Record Date
selected by the 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 Cash from Operations until the sum of all amounts of Available
Cash theretofore distributed by the Partnership to the Partners pursuant to
Section 5.4 equals the aggregate amount of all Cash from Operations generated by
the Partnership since the Initial 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 5.5, be deemed to be Cash from Interim Capital Transactions.
(b) Notwithstanding the definitions of Available Cash and Cash from Operations
contained herein, disbursements (including, without limitation, contributions to
the Operating Partnership or disbursements on behalf of the Operating
Partnership) made or cash reserves established, increased or reduced after the
end of any Quarter but on or before the date on which the Partnership makes its
distribution of Available Cash in respect of such Quarter as required by Section
5.3(a) shall be deemed to have been made, established, increased or reduced for
purposes of determining Available Cash and Cash from Operations, within such
Quarter if the General Partner so determines. Notwithstanding the foregoing, in
the event of the dissolution and liquidation of the Partnership, all proceeds of
such liquidation shall be applied and distributed in accordance with, and
subject to the terms and conditions of, Sections 14.3 and 14.4.
1.6 Section Distributions of Cash from Operations and Additional Senior Units .
Subject to Section 17-607 of the Delaware Act, Available Cash with respect to
any Quarter that is deemed to be Cash from Operations pursuant to the provisions
of Section 5.3 or 5.5 shall be distributed as follows, except as otherwise
required by Section 4.3(b) in respect of additional Partnership Securities
issued pursuant thereto:
(a) First, 99% to the Limited Partners holding Senior Units, Pro Rata, and 1% to
the General Partner, until there has been distributed in respect of each Senior
Unit then Outstanding an amount equal to the Senior Unit Distribution and any
accumulated and unpaid Senior Unit Distributions through the last day of the
preceding Quarter;
(b) Second, 99% to the Limited Partners holding Common Units, Pro Rata, and 1%
to the General Partner until there has been distributed in respect of each
Common Unit then Outstanding an amount equal to the Minimum Quarterly
Distribution;
(c) Third, 99% to the Limited Partners holding Common Units, Pro Rata, and 1% to
the General Partner until there has been distributed in respect of each Common
Unit then Outstanding an amount equal to the excess of the First Target
Distribution over the Minimum Quarterly Distribution;
(d) Fourth, 85.8673% to the Limited Partners holding Common Units, Pro Rata,
13.1327% to the Special Limited Partners, Pro Rata, and 1% to the General
Partner until there has been distributed in respect of each Common Unit then
Outstanding an amount equal to the excess of the Second Target Distribution over
the First Target Distribution;
(e) Fifth, 75.7653% to the Limited Partners holding Common Units, Pro Rata,
23.2347% to the Special Limited Partners, Pro Rata, and 1% to the General
Partner until there has been distributed in respect of each Common Unit then
Outstanding an amount equal to the excess of the Third Target Distribution over
the Second Target Distribution; and
(f) Thereafter, 50.5102% to the Limited Partners holding Common Units, Pro
Rata, 48.4898% to the Special Limited Partners, Pro Rata, and 1% to the General
Partner;
provided, however, that (1) notwithstanding the amount of Available Cash that is
deemed to be Cash from Operations with respect to such Quarter, Senior Unit
Distributions accruing prior to the earlier to occur of (x) February 1, 2002 and
(y) the first occurrence of a Material Event shall be paid by the issuance of
additional Senior Units having an aggregate Senior Unit Liquidation Preference
equal to the amount of such Senior Unit Distributions (.Additional Senior
Units.), which may include fractional Senior Units or the cash equivalent
thereof based on the Senior Unit Liquidation Preference;
(2) if (A) the Senior Unit Distribution has been reduced to zero
pursuant to the second sentence of Section 5.6(a), (B) all of the Senior Units
have been converted pursuant to Section 5.7(b) or (C) all of the Senior Units
have been redeemed pursuant to Section 17.2, then subsection (a) of this Section
5.4 shall terminate and have no further force or effect; and,
(3) 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 5.6(b),
then subsections (b), (c), (d) and (e) of this Section 5.4 shall terminate and
have no further force or effect.
1.1 Section Distributions of Cash from Interim Capital Transactions . Subject to
Section 17-607 of the Delaware Act, Available Cash that constitutes Cash from
Interim Capital Transactions shall be distributed, unless the provisions of
Section 5.3 require otherwise, as follows:
(a) First, 99% to the Limited Partners holding Senior Units, Pro Rata, and 1% to
the General Partner until there has been distributed in respect of each Senior
Unit then Outstanding an amount equal to any accumulated and unpaid Senior Unit
Distribution through such date;
(b) Second, 99% to the Limited Partners holding Senior Units, Pro Rata, and 1%
to the General Partner until a hypothetical holder of a Senior Unit acquired on
the WNGL Closing Date has received with respect to such Senior Unit, during the
period since the WNGL Closing Date through such date, distributions of Available
Cash that are deemed to be Cash from Interim Capital Transactions in an
aggregate amount equal to the Senior Unit Liquidation Preference;
(c) Third, 99% to the Limited Partners holding Common Units, Pro Rata, and 1% to
the General Partner until a hypothetical holder of a Common Unit acquired on the
Initial Closing Date has received with respect to such Common Unit, during the
period since the Initial Closing Date through such date, distributions of
Available Cash that are deemed to be Cash from Interim Capital Transactions in
an aggregate amount equal to the Initial Unit Price; and
(d) Thereafter, all Available Cash shall be distributed as if it were Cash from
Operations and shall be distributed in accordance with Section 5.4.
1.2 Section Adjustment of Senior Unit Liquidation Preference, Senior Unit
Distribution, Minimum Quarterly Distribution and Target Distribution Levels .
(a) The Senior Unit Liquidation Preference and the Senior Unit Distribution
shall be proportionately adjusted in the event of any distribution, combination
or subdivision (whether effected by a distribution payable in Senior Units or
otherwise) of Senior Units in accordance with Section 4.10. In the event of a
distribution of Available Cash to the Limited Partners holding Senior Units
pursuant to Section 5.5(b), the Senior Unit Liquidation Preference shall be
reduced by the amount of that distribution to the Limited Partners holding
Senior Units, Pro Rata. In the event of a distribution of Available Cash to the
Limited Partners holding Senior Units pursuant to Section 5.5(b), the Senior
Unit Distribution shall be adjusted proportionately downward to equal the
product obtained by multiplying the otherwise applicable Senior Unit
Distribution by a fraction of which the numerator is the Senior Unit Liquidation
Preference immediately after giving effect to such distribution and of which the
denominator is the Senior Unit Liquidation Preference immediately prior to
giving effect to such distribution.
(b) The Minimum Quarterly Distribution, First Target Distribution, Second Target
Distribution and Third Target Distribution 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 4.10. If a distribution of Available Cash
is made that is deemed to be Cash from Interim Capital Transactions, the 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 Initial Unit Price of the Common Units immediately
after giving effect to such distribution and of which the denominator is the
Unrecovered Initial Unit Price of the Common Units immediately prior to giving
effect to such distribution.
(c) The Minimum Quarterly Distribution, First Target Distribution, Second Target
Distribution and Third Target Distribution shall also be subject to adjustment
pursuant to Section 9.6.
1.2 Section Special Provisions Relating to the Senior Units .
-----------------------------------------------
1.3
(a) Immediately upon the conversion of Senior Units into Common Units as
provided in Section 5.7(b), the holder of a Senior Unit so converted shall
possess all of the rights and obligations of a Limited Partner holding Common
Units hereunder, including, without limitation, the right to vote as a Limited
Partner holding Common Units, the right to participate in allocations of income,
gain, loss and deduction and distributions of cash made with respect to Common
Units pursuant to this Article V. (b) If the holders of the Common Units approve
the Senior Unit Conversion Option, each holder of Senior Units shall have the
right, at its option, subject to the terms of this Section 5.7, to convert any
or all of such holders' Senior Units into Common Units at any time during the
time period commencing upon the earlier to occur of:
(i) February 1, 2002, upon not less than 90 days prior written notice
to the Partnership (which notice may be given prior to February 1,
2002) in accordance with Section 5.7(d), or
(ii) a Material Event, upon not less than 30 days prior written notice
to the Partnership in accordance with Section 5.7(d); provided,
however, that prior to the expiration of such 30-day period, the
holders of the Senior Units may revoke their election to convert Senior
Units into Common Units at any time during the pendency of a Material
Event by written notice to the Partnership. If the holders of the
Senior Units revoke their election to convert Senior Units into Common
Units and the Partnership has cured the Material Event and a subsequent
Material Event occurs, the holders of the Senior Units may elect to
convert their Senior Units into Common Units upon not less than 10 days
prior written notice to the Partnership;
and ending on the date upon which the holders of the Senior Units give
the Partnership notice of their election to exercise their registration
rights with respect to the Senior Units pursuant to the WNGL
Registration Rights Agreement.
<PAGE>
NYC:72226.1
(i) If the holders of the Senior Units elect to convert any or all of their
Senior Units into Common Units, such number of Senior Units shall be converted
into such number of fully paid and nonassessable (subject to Section 17-607 of
the Delaware Act) Common Units as is equal, subject to Section 5.7(g), to the
product of the number of Senior Units being so converted, multiplied by the
quotient of (A) 125% of the sum of (1) the Senior Unit Liquidation Preference
plus (2) any accumulated and unpaid Senior Unit Distributions to and including
the date of conversion, divided by (B) the Current Market Price of the Common
Units as of the date of conversion.
(b) The holders of the Senior Units shall exercise the right to convert by the
delivery of written notice, at the Partnership's principal place of business,
during the applicable time period specified in (b) above, that the holder elects
to convert all or a portion of the Senior Units represented by such Certificates
and, subject to Section 5.7(i), specifying the name or names (with address) in
which Certificates representing Common Units are to be issued. Upon the
expiration of the applicable time period specified in (b) above, each converting
holder of Senior Units shall be deemed to be the holder of record of the number
of Common Units issuable upon conversion in accordance with (c) above,
notwithstanding that the Certificates representing such Common Units shall not
then actually be delivered to such Person. Upon notice from the Partnership,
each holder of Senior Units so converted shall promptly surrender to the
Partnership or the Transfer Agent, Certificates representing the Senior Units so
converted, in proper transfer form. On the date of conversion, all rights with
respect to the Senior Units so converted will terminate except for the right of
holders to receive Certificates for the number of Common Units into which such
Senior Units have been converted. If the date for the conversion of Senior Units
into Common Units shall not be a Business Day, then such conversion shall occur
on the next Business Day. Each Senior Unit shall be canceled by the General
Partner upon its conversion.
(c) During the period beginning on the first of the twenty (20) Trading Days
immediately prior to the date of conversion through and including the date of
conversion, the Partnership shall not take any action that will affect the
Common Units, including, without limitation, the following:
(i) (A) make a redemption payment or make a distribution payable in
Common Units on any class of Partnership Interest (which, for purposes
of this Section 5.7(e) shall include, without limitation, any
distributions in the form of options, warrants or other rights to
acquire Partnership Interests) of the Partnership (other than the
issuance of Common Units in connection with the payment in redemption
for, of distributions on or the conversion of Senior Units); (B)
subdivide the outstanding Common Units into a larger number of Common
Units; (C) combine the outstanding Common Units into a smaller number
of Common Units; (D) issue any of its Partnership Securities in a
reclassification of the Common Units; or (E) set a Record Date with
respect to any of the events described in (A) through (D);
(ii) issue to all holders of its Common Units rights, options or
warrants entitling the holders thereof to subscribe for or purchase
Common Units (or securities convertible into or exchangeable for Common
Units) other than issuances of such rights, options or warrants if the
holder of Senior Units would be entitled to receive such rights,
options or warrants upon conversion at any time of Senior Units;
(iii) (A) other than distributions consistent with past practice, make
a Pro Rata distribution to all holders of Common Units consisting
exclusively of cash (excluding any cash distributed upon a merger or
consolidation to which paragraph (g) below applies), or (B) make a
distribution to all holders of its Common Units consisting of evidences
of indebtedness, its Partnership Interests other than Common Units or
assets (including securities, but excluding those rights, options,
warrants and distributions referred to in paragraphs (e)(i) or (e)(ii)
above); or
(iv) issue or sell Common Units or securities convertible into or
exchangeable for Common Units, or any options, warrants or other rights
to acquire Common Units.
(d) No fractional Common Units shall be issued upon the conversion of any Senior
Units. If more than one Senior Unit shall be surrendered for conversion at one
time by the same holder, the number of full Common Units issuable upon
conversion thereof shall be computed on the basis of the aggregate Senior Unit
Liquidation Preference of the Senior Units so surrendered. If the conversion of
any Senior Units results in a fraction, an amount equal to such fraction
multiplied by the Current Market Price of the Common Units as of the date of
conversion shall be paid to such holder in cash by the Partnership.
(a)
<PAGE>
NYC:72226.1
(i) In the event of any capital reorganization or reclassification or other
change of outstanding Common Units, consolidation or merger of the Partnership
with or into another Person in accordance with Section 16.1(b) (other than a
consolidation or merger in which the Partnership is the Surviving Business
Entity and which does not result in any reclassification or change of
outstanding Common Units) or sale or other disposition to another Person of all
or substantially all of the assets of the Partnership, computed on a
consolidated basis in accordance with Section 16.1(b) (any of the foregoing, a
.Transaction.), lawful provision shall be made such that the Senior Units will
be convertible only into the kind and amount of stock or other securities (of
the Partnership or another issuer) or property or cash receivable upon such
Transaction by a holder of the number of Common Units into which such Senior
Units could have been converted immediately prior to such Transaction. The
provisions of this Section 5.7(g) and any equivalent thereof in any governing
document of the Surviving Business Entity similarly shall apply to successive
Transactions.
(e) The Partnership shall not enter into any agreement that would prohibit the
issuance of the number of Common Units as will from time to time be sufficient
to permit the conversion of all outstanding Senior Units.
(f) The issuance or delivery of certificates for Common Units upon the
conversion of Senior Units shall be made without charge to the converting holder
of Senior Units for such certificates or for any tax in respect of the issuance
or delivery of such certificates or the securities represented thereby, and such
certificates shall be issued or delivered in the respective names of, or in such
names as may be directed by, the holders of the Senior Units converted;
provided, however, that the Partnership shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issuance and
delivery of any such certificate in a name other than that of the holder of the
Senior Units converted, and the Partnership shall not be required to issue or
deliver such certificate unless or until the Person or Persons requesting the
issuance or delivery thereof shall have paid to the Partnership the amount of
such tax or shall have established to the reasonable satisfaction of the
Partnership that such tax has been paid.
(g) The Partnership covenants that all Common Units which may be delivered upon
conversion of Senior Units will be newly issued Common Units, will have been
duly authorized and validly issued and will be fully paid and non-assessable
(except as such non-assessability may be affected by Section 17-607 of the
Delaware Act).
(h) The Common Units issued by the Partnership upon conversion of the Senior
Units shall have, as a substantive manner in the hands of a subsequent holder,
like intrinsic economic and federal income tax characteristics in all material
respects, to the intrinsic economic and federal income tax characteristics of a
Common Unit then Outstanding.
1.2 Section Special Provisions Relating to the Special Limited Partners .
Notwithstanding anything to the contrary set forth in this Agreement, the
Special Limited Partners (a) shall (i) possess the rights and obligations
provided in this Agreement with respect to a Limited Partner pursuant to
Articles VI and VII and (ii) have a Capital Account as a Partner pursuant to
Section 4.5 and all other provisions related thereto and (b) shall not (i) be
entitled to vote on any matters requiring the approval or vote of the holders of
Outstanding Units, (ii) be entitled to any distributions other than to Partners
pursuant to Sections 5.4(d), (e) and (f), 14.3 and 14.4 or (iii) be allocated
items of income, gain, loss or deduction other than as specified in this Article
V.
1.1 Section Special Provision Relating to Common Units that were Subordinated
Units Prior to the Expiration of the Subordination Period . Common Units issued
by the Partnership upon the conversion of the Subordinated Units at the
expiration of the Subordination Period shall remain subject to Section
5.1(d)(x)(C).
1 ARTICLE MANAGEMENT AND OPERATION OF BUSINESSARTICLE 2 3 MANAGEMENT AND
OPERATION OF BUSINESS
1.1 Section Management .
1.2
(a) The 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 General Partner, and no 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 General Partner under any other provision of this Agreement, the General
Partner, subject to Section 6.3, 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 3.2 and to effectuate the purposes set forth in Section
3.1, including, without limitation, (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 (the matters described in this clause (iii) being subject,
however, to any prior approval that may be required by Section 6.3); (iv) the
use of the assets of the Partnership (including, without limitation, cash on
hand) for any purpose consistent with the terms of this Agreement, including,
without limitation, the financing of the conduct of the operations of the
Partnership or the Operating Partnership, the lending of funds to other Persons
(including, without limitation, the Operating Partnership, the General Partner
and Affiliates of the General Partner) and the repayment of obligations of the
Partnership and the Operating Partnership and the making of capital
contributions to the Operating Partnership; (v) the negotiation, execution and
performance of any contracts, conveyances or other instruments (including,
without limitation, 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
Partner or its 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 and agents (including, without
limitation, 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, the Operating Partnership and the Partners
(including, without limitation, the assets of the Operating Partnership and 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 (including, without limitation, 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, without limitation, 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 The New York Stock Exchange, Inc. and any other
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 1.6); (xiii) the purchase, sale or
other acquisition or disposition of Units; and (xiv) the undertaking of any
action in connection with the Partnership's participation in the Operating
Partnership as the limited partner (including, without limitation, contributions
or loans of funds by the Partnership to the Operating Partnership).
(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 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, and the engaging by any Affiliate of the General Partner
in business and activities (other than Restricted Activities) that are in direct
competition with the business and activities of the Partnership and the
Operating Partnership; (ii) agrees that the 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 General Partner, the Partnership, the Operating Partnership
or any Affiliate of any of them, of this Agreement or any agreement authorized
or permitted under this Agreement (including, without limitation, the exercise
by the General Partner or any Affiliate of the General Partner of the rights
accorded pursuant to Article XVII), or the engaging by any Affiliate of the
General Partner in any business and activities (other than Restricted
Activities) that are in direct competition with the business and activities of
the Partnership and the Operating Partnership, shall not constitute a breach by
the General Partner of any duty that the 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. The term .Affiliate. when used in this Section 6.1(b) with respect to
the General Partner shall not include the Partnership or any Subsidiary of the
Partnership.
1.3 Section Certificate of Limited Partnership . The 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 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 General Partner in its sole discretion to
be reasonable and necessary or appropriate, the 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 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 7.5(a),
the 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.
1.1 Section Restrictions on General Partner's Authority .
-------------------------------------------
1.2
(a) The General Partner may not, without written approval of the specific act by
all of the Outstanding Common Units or by other written instrument executed and
delivered by all of the Outstanding Common Units subsequent to the date of this
Agreement, take any action in contravention of this Agreement, including,
without limitation, (i) any act that would make it impossible to carry on the
ordinary business of the Partnership, except as otherwise provided in this
Agreement; (ii) possess Partnership property, or assign any rights in specific
Partnership property, for other than a Partnership purpose; (iii) admit a Person
as a Partner, except as otherwise provided in this Agreement; (iv) amend this
Agreement in any manner, except as otherwise provided in this Agreement; or (v)
transfer its interest as general partner of the Partnership, except as otherwise
provided in this Agreement.
(b) Except as provided in Articles XIV and XVI, the 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 the holders of at least a majority of the Outstanding Common
Units; provided, however, that this provision shall not preclude or limit the
General Partner's ability to mortgage, pledge, hypothecate or grant a security
interest in all or substantially all of the Partnership's assets and shall not
apply to any forced sale of any or all of the Partnership's assets pursuant to
the foreclosure of, or other realization upon, any such encumbrance. Without the
approval of the holders of at least two-thirds of the Outstanding Common Units,
the 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 6.9(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 11.2, 13.1 and 13.2 elect or cause the
Partnership to elect a successor general partner of the Operating Partnership.
(c) Unless approved by the affirmative vote of the holders of at least
two-thirds of the Outstanding Common Units (excluding for purposes of such
determination Common Units owned by the General Partner and its Affiliates), the
General Partner shall not 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 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; provided that this Section 6.3(c) shall not be
construed to apply to amendments to this Agreement (which are governed by
Article XV) or mergers or consolidations of the Partnership with any Person
(which are governed by Article XVI).
(d) At all times while serving as the general partner of the Partnership, the
General Partner shall not (except as provided below) make any dividend or
distribution on, or repurchase any shares of, its stock or take any other action
within its control unless it shall first receive an Opinion of Counsel that the
effect of such dividend, distribution, repurchase or other action would not
reduce its net worth below an amount such that the Partnership will be treated
as an association taxable as a corporation for federal income tax purposes;
provided, however, to the extent the General Partner receives distributions of
cash from the Partnership, the Operating Partnership or any other partnership of
which the Partnership is, directly or indirectly, a partner, the General Partner
shall not use such cash to 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 dividend, distribution, repurchase or other action would be to
reduce its net worth below an amount necessary to receive an Opinion of Counsel
that the Partnership will be treated as a partnership for federal income tax
purposes.
1.3 Section Reimbursement of the General Partner .
------------------------------------
1.4
(a) Except as provided in this Section 6.4 and elsewhere in this Agreement or in
the Operating Partnership Agreement, the General Partner shall not be
compensated for its services as general partner of the Partnership or the
Operating Partnership.
(b) The General Partner shall be reimbursed on a monthly basis, or such other
basis as the General Partner may determine in its sole discretion, for (i) all
direct and indirect expenses it incurs or payments it makes on behalf of the
Partnership (including, without limitation, salary, bonus, incentive
compensation and other amounts paid to any Person to perform services for the
Partnership or for the General Partner in the discharge of its duties to the
Partnership), and (ii) all other necessary or appropriate expenses allocable to
the Partnership or otherwise reasonably incurred by the General Partner in
connection with operating the Partnership's business (including, without
limitation, expenses allocated to the General Partner by its Affiliates). The
General Partner shall determine the fees and expenses that are allocable to the
Partnership in any reasonable manner determined by the General Partner in its
sole discretion. Reimbursements pursuant to this Section 6.4 shall be in
addition to any reimbursement to the General Partner as a result of
indemnification pursuant to Section 6.7.
(c) Subject to Section 4.3(c), the 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 and incentive plans (including, without limitation, plans involving the
issuance of Units), or issue Partnership Securities pursuant to any employee
benefit or incentive plan maintained or sponsored by the General Partner or one
of its Affiliates, in each case for the benefit of employees of the General
Partner, the Partnership, the Operating Partnership or any Affiliate of any of
them in respect of services performed, directly or indirectly, for the benefit
of the Partnership or the Operating Partnership. The Partnership agrees to issue
and sell to the General Partner any Units or other Partnership Securities that
the General Partner is obligated to provide to any employees pursuant to any
such benefit or incentive plans. Expenses incurred by the General Partner in
connection with any such plans (including the net cost to the General Partner of
Units purchased by the General Partner from the Partnership to fulfill options
or awards under such plans) shall be reimbursed in accordance with Section
6.4(b). Any and all obligations of the General Partner under any employee
benefit or incentive plans adopted by the General Partner as permitted by this
Section 6.4(c) shall constitute obligations of the General Partner hereunder and
shall be assumed by any successor General Partner approved pursuant to Section
13.1 or 13.2 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
11.2.
1.5 Section Outside Activities .
1.6
(a) After the Closing Date, the General Partner, for so long as it is the
general partner of the Partnership, (i) agrees that its sole business will be to
act as a general partner of the Partnership, the Operating Partnership and any
other partnership of which the Partnership or the Operating Partnership is,
directly or indirectly, a partner and to undertake activities that are ancillary
or related thereto (including being a limited partner in the Partnership), (ii)
shall not enter into or conduct any business or incur any debts or liabilities
except in connection with or incidental to (A) its performance of the activities
required or authorized by this Agreement or the Operating Partnership Agreement
or described in or contemplated by the Registration Statement and (B) the
acquisition, ownership or disposition of Partnership Interests in the
Partnership or partnership interests in the Operating Partnership or any other
partnership of which the Partnership or the Operating Partnership is, directly
or indirectly, a partner, except that, notwithstanding the foregoing, employees
of the General Partner may perform services for Ferrell and its Affiliates, and
(iii) shall not and shall cause its Affiliates not to engage in any Restricted
Activity.
(b) Except as described in Section 6.5(a), no Indemnitee shall be expressly or
implicitly restricted or proscribed pursuant to this Agreement, the Operating
Partnership Agreement or the partnership relationship established hereby or
thereby from engaging in other activities for profit, whether in the businesses
engaged in by the Partnership or the Operating Partnership or anticipated to be
engaged in by the Partnership, the Operating Partnership or otherwise,
including, without limitation, in the case of any Affiliates of the General
Partner those businesses and activities (other than Restricted Activities) in
direct competition with the business and activities of the Partnership or the
Operating Partnership or otherwise described in or contemplated by the
Registration Statement. Without limitation of and subject to the foregoing each
Indemnitee (other than the General Partner) shall have the right to engage in
businesses of every type and description and to engage in and possess an
interest in other business ventures of any and every type or description,
independently or with others, including, without limitation, in the case of any
Affiliates of the General Partner business interests and activities (other than
Restricted Activities) in direct competition with the business and activities of
the Partnership or the Operating Partnership, and none of the same shall
constitute a breach of this Agreement or any duty to the Partnership, the
Operating Partnership or any Partner or Assignee. Neither the Partnership, the
Operating Partnership, 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 (subject, in the case of the General Partner, to compliance
with Section 6.5(c)) and such Indemnitees shall have no obligation to offer any
interest in any such business ventures to the Partnership, the Operating
Partnership, any Limited Partner or any other Person. The General Partner and
any other Persons affiliated with the General Partner may acquire Units or other
Partnership Securities in addition to those acquired by any of such Persons 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, as the case may
be.
(c) Subject to the terms of Sections 6.5(a) and (b) but otherwise
notwithstanding anything to the contrary in this Agreement, (i) the competitive
activities of any Indemnitees (other than the General Partner) are hereby
approved by the Partnership and all Partners and (ii) it shall be deemed not to
be a breach of the General Partner's fiduciary duty or any other obligation of
any type whatsoever of the General Partner for the General Partner to permit an
Affiliate of the General Partner to engage, or for any such Affiliate to engage,
in business interests and activities (other than Restricted Activities) in
preference to or to the exclusion of the Partnership.
(d) The term .Affiliates. when used in this Section 6.5 with respect to the
General Partner shall not include the Partnership or any Subsidiary of the
Partnership.
1.7 Section Loans to and from the General Partner; Contracts with Affiliates .
1.8 (a) The General Partner or any Affiliate thereof may lend to the Partnership
or the Operating Partnership, and the Partnership and the Operating Partnership
may borrow, funds needed or desired by the Partnership and the Operating
Partnership for such periods of time as the General Partner may determine and
(ii) the General Partner or any Affiliate thereof may borrow from the
Partnership or the Operating Partnership, and the Partnership and the Operating
Partnership may lend to the General Partner or such Affiliate, excess funds of
the Partnership and the Operating Partnership for such periods of time and in
such amounts as the General Partner may determine; provided, however, that in
either 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
(without reference to the lending party's financial abilities or guarantees), by
unrelated lenders on comparable loans. 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 6.6(a) and Section 6.6(b), the term .Partnership. shall
include any Affiliate of the Partnership that is controlled by the Partnership
and the term .Operating Partnership. shall include any Affiliate of the
Operating Partnership that is controlled by the Operating Partnership.
(b) The Partnership may lend or contribute to the Operating Partnership, and the
Operating Partnership may borrow, funds on terms and conditions established in
the sole discretion of the General Partner; provided, however, that the
Partnership may not charge the Operating Partnership interest at a rate greater
than the rate that would be charged to the Operating Partnership (without
reference to the General Partner's financial abilities or guarantees), by
unrelated lenders on comparable loans. The foregoing authority shall be
exercised by the General Partner in its sole discretion and shall not create any
right or benefit in favor of the Operating Partnership or any other Person.
(c) The General Partner may itself, or may enter into an agreement with any of
its Affiliates to, render services to the Partnership or to the General Partner
in the discharge of its duties as general partner of the Partnership. Any
services rendered to the Partnership by the 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 6.6(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), is equitable
to the Partnership. The provisions of Section 6.4 shall apply to the rendering
of services described in this Section 6.6(c).
(d) The Partnership 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 Partner nor any of its 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 6.6(e) shall be deemed to be satisfied as to (i) the transactions
effected pursuant to Sections 4.1, 4.2 and 4.3, the 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 Partner and its Affiliates will have no obligation to permit the
Partnership or the Operating Partnership to use any facilities or assets of the
General Partner and its 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 Partner or its Affiliates to
enter into such contracts.
(g) Without limitation of Sections 6.6(a) through 6.6(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.
1.9 Section Indemnification .
1.10
(a) To the fullest extent permitted by law but subject to the limitations
expressly provided in this Agreement, the General Partner, any Departing Partner
and any Person who is or was an officer or director of the General Partner or
any Departing Partner and all other 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, without limitation,
legal fees and expenses), judgments, fines, penalties, interest, settlements and
other amounts arising from any and all claims, demands, actions, suits or
proceedings, whether civil, criminal, administrative or investigative, in which
any Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, by reason of its status as (i) the General Partner, a Departing
Partner or any of their Affiliates, (ii) an officer, director, employee,
partner, agent or trustee of the Partnership, the General Partner, any Departing
Partner or any of their Affiliates or (iii) a Person serving at the request of
the Partnership in another entity in a similar capacity, provided, that in each
case the Indemnitee acted in good faith and in a manner which 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 6.7 shall be available to the General Partner with
respect to its obligations incurred pursuant to the Underwriting Agreement or
the Contribution Agreement (other than obligations incurred by the 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 6.7 shall be made
only out of the assets of the Partnership, it being agreed that the General
Partner 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, without
limitation, legal fees and expenses) incurred by an Indemnitee who is
indemnified pursuant to Section 6.7(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 an 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 6.7.
(c) The indemnification provided by this Section 6.7 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 (i) the General
Partner, a Departing Partner or an Affiliate thereof, (ii) an officer, director,
employee, partner, agent or trustee of the Partnership, the General Partner, any
Departing Partner or an Affiliate thereof or (iii) a Person serving at the
request of the Partnership in another entity in a similar capacity, and as to
actions in any other capacity (including, without limitation, 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 General Partner
or its Affiliates for the cost of) insurance, on behalf of the General Partner
and such other Persons as the 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, 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 6.7, 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 6.7(a); and action taken or omitted by it with
respect to an 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 6.7 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 6.7 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 6.7 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
obligation of the Partnership to indemnify any such Indemnitee under and in
accordance with the provisions of this Section 6.7 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.
1.11 Section Liability of Indemnitees .
------------------------
1.12
(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 General Partner set forth in
Section 6.1(a), the 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 Partner shall not be
responsible for any misconduct or negligence on the part of any such agent
appointed by the General Partner in good faith.
(c) Any amendment, modification or repeal of this Section 6.8 or any provision
hereof shall be prospective only and shall not in any way affect the limitations
on the liability to the Partnership and the Limited Partners of the General
Partner, its directors, officers and employees under this Section 6.8 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.
1.13 Section Resolution of Conflicts of Interest .
-----------------------------------
1.14
(a) Unless otherwise expressly provided in this Agreement or the Operating
Partnership Agreement, whenever a potential conflict of interest exists or
arises between the General Partner or any of its 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 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 General Partner shall be authorized but not required in
connection with its 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 General Partner may also adopt a resolution or course of
action that has not received Special Approval. The 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
General Partner (including such 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 General Partner (including such Audit Committee) to
consider the interests of any Person other than the Partnership. In the absence
of bad faith by the General Partner, the resolution, action or terms so made,
taken or provided by the 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 under
the Delaware Act or any other law, rule or regulation.
(b) Whenever this Agreement or any other agreement contemplated hereby provides
that the 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 under a grant of similar authority or latitude,
the 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
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 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 General Partner or such Affiliate consistent
with the standards of .reasonable discretion. set forth in the definitions of
Available Cash or Cash from Operations shall not constitute a breach of any duty
of the General Partner to the Partnership or the Limited Partners. The General
Partner shall have no duty, express or implied, to sell or otherwise dispose of
any asset of the Operating Partnership or of the Partnership, other than in the
ordinary course of business. No borrowing by the Partnership or the Operating
Partnership or the approval thereof by the 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 enable Incentive Distributions.
(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 Partners hereby authorize the General Partner, on behalf of the
Partnership as a partner of the Operating Partnership, to approve of actions by
the general partner of the Operating Partnership similar to those actions
permitted to be taken by the General Partner pursuant to this Section 6.9.
1.15 Section Other Matters Concerning the General Partner .
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1.16
(a) The 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 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, without limitation, an Opinion of Counsel) of such Persons
as to matters that such 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 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. Each such attorney shall, to the extent provided by the General
Partner in the power of attorney, have full power and authority to do and
perform each and every act and duty that is permitted or required to be done by
the General Partner hereunder.
(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 as required to permit the 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 General Partner to be in, or not inconsistent with,
the best interests of the Partnership.
1.17 Section 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, the General
Partner, one or more of its Affiliates or one or more nominees, as the General
Partner may determine. The General Partner hereby declares and warrants that any
Partnership assets for which record title is held in the name of the General
Partner or one or more of its Affiliates or one or more nominees shall be held
by the 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 General Partner shall use its reasonable efforts to cause
record title to such assets (other than those assets in respect of which the
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 that, prior to the
withdrawal or removal of the General Partner or as soon thereafter as
practicable, the 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
Partnership. 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.
1.1 Section Purchase or Sale of Units . The General Partner may cause the
Partnership to purchase or otherwise acquire Units; provided that, except
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(a) as permitted pursuant to Section 11.6 and in exchange for other Units or
Partnership Securities that are junior in right of distribution and liquidation
to the Senior Units, the General Partner may not cause the Partnership or any
Subsidiary to directly or indirectly purchase or otherwise acquire Common Units
or any other Units or Partnership Securities that are junior in right of
distribution or liquidation to the Senior Units at any time during which any of
the Senior Units are Outstanding. As long as Units are held by the Partnership
or the Operating Partnership, such Units shall not be considered Outstanding for
any purpose, except as otherwise provided herein. The General Partner or any
Affiliate of the 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 XI and XII.
1.1 Section Registration Rights of Ferrellgas and its Affiliates .
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1.2
(a) If (i) Ferrellgas or any Affiliate of Ferrellgas (including, without
limitation, for purposes of this Section 6.13, any Person that is an Affiliate
of Ferrellgas at the date hereof notwithstanding that it may later cease to be
an Affiliate of Ferrellgas) 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
Ferrellgas or any of its 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 more than six months following its effective date, 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 6.13(a); and provided further, that if
the General Partner or, if at the time a request pursuant to this Section 6.13
is submitted to the Partnership, Ferrellgas or its Affiliate requesting
registration is an Affiliate of the General Partner, the Audit Committee in
connection with Special Approval 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, 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 6.13(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.
(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
6.13(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 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 6.13(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 6.13, 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
6.7, 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, without limitation, 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 6.13(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 Sections 6.13(a) and 6.13(b) shall continue to be
applicable with respect to Ferrellgas (and any of Ferrellgas' 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 securities of the
Partnership with respect to which it has requested during such two year period
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 6.13(c) shall continue in effect thereafter.
(e) Any request to register Partnership Securities pursuant to this Section 6.13
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.
1.3 Section 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 General Partner and any officer of the Partnership authorized by
the General Partner to act on behalf and 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 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 General Partner or any such officer in
connection with any such dealing. In no event shall any Person dealing with the
General Partner or any such officer or its representatives be obligated to
ascertain that the terms of this Agreement have been complied with or to inquire
into the necessity or expedience of any act or action of the General Partner or
any such officer. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the 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.
1 ARTICLE RIGHTS AND OBLIGATIONS OF LIMITED PARTNERSARTICLE 2 3 RIGHTS AND
OBLIGATIONS OF LIMITED PARTNERS
1.1 Section 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.
1.1 Section Management of Business . No Limited Partner or Assignee (other than
the General Partner, any of its Affiliates or any officer, director, employee,
partner, agent or trustee of the General Partner or any of its Affiliates, 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. The transaction of any such business by the
General Partner, any of its Affiliates or any member, officer, director,
employee, partner, agent or trustee of the General Partner or any of its
Affiliates, in its capacity as such, shall not affect, impair or eliminate the
limitations on the liability of the Limited Partners or Assignees under this
Agreement.
1.1 Section Outside Activities . Subject to the provisions of Section 6.5, 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, without limitation, business interests and activities in direct
competition with the Partnership or the Operating Partnership. 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.
1.1 Section Return of Capital . No Limited 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 provided by Article V or as
otherwise expressly provided in this Agreement, no Limited Partner or Assignee
shall have priority over any other Limited 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 ss. 17-502(b) of the Delaware Act.
1.1 Section Rights of Limited Partners Relating to the Partnership .
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1.2
(a) In addition to other rights provided by this Agreement or by applicable law,
and except as limited by Section 7.5(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 demand and at such 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 him, upon notification to the General
Partner, a current list of the name and last known business, residence
or mailing address of each Partner;
(iv) to have furnished to him, upon notification to the General
Partner, 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 true and full information regarding the amount of cash
and a description and statement of the 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) Notwithstanding any other provision of this Agreement, the General Partner
may keep confidential from the Limited Partners and Assignees, for such period
of time as the General Partner deems reasonable, any information that the
General Partner reasonably believes to be in the nature of trade secrets or
other information the disclosure of which the General Partner in good faith
believes is not in the best interests of the Partnership or the Operating
Partnership or could damage the Partnership or the Operating Partnership or that
the Partnership or the Operating Partnership are required by law or by
agreements with third parties to keep confidential (other than agreements with
Affiliates the primary purpose of which is to circumvent the obligations set
forth in this Section 7.5).
2 ARTICLE BOOKS, RECORDS, ACCOUNTING AND REPORTSARTICLE 3 4 BOOKS, RECORDS,
ACCOUNTING AND REPORTS
1.1 Section Records and Accounting . The 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, without limitation, all
books and records necessary to provide to the Limited Partners any information,
lists and copies of documents required to be provided pursuant to Section
7.5(a). Any books and records maintained by or on behalf of the Partnership in
the regular course of its business, including, without limitation, 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 both tax and financial reporting purposes, on an accrual basis
in accordance with generally accepted accounting principles.
1.1 Section Fiscal Year . The fiscal year of the Partnership shall be
August 1 to July 31.
1.1 Section Reports .
1.2
(a) As soon as practicable, but in no event later than 120 days after the close
of each fiscal year of the Partnership, the General Partner shall cause to be
mailed to each Record Holder of a Unit as of a date selected by the General
Partner in its sole discretion, an annual report containing financial statements
of the Partnership for such fiscal year of the Partnership, presented in
accordance with generally accepted accounting principles, including a balance
sheet and statements of operations, Partners' equity and cash flows, such
statements to be audited by a firm of independent public accountants selected by
the 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 General Partner shall
cause to be mailed to each Record Holder of a Unit, as of a date selected by the
General Partner in its sole 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 General Partner determines to be
necessary or appropriate.
2 ARTICLE TAX MATTERSARTICLE 3 4 TAX MATTERS
1.1 Section Preparation of Tax Returns . The General Partner shall arrange for
the preparation and timely filing of all returns of Partnership income, gains,
deductions, losses and other items required of the Partnership for federal and
state income tax purposes and shall use all reasonable efforts to furnish,
within 90 days of the close of each calendar year, the tax information
reasonably required by holders of Outstanding Units for federal and state income
tax reporting purposes. 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. The taxable year of the
Partnership shall be August 1 to July 31.
1.1 Section Tax Elections . Except as otherwise provided herein, the General
Partner shall, in its sole discretion, determine whether to make any available
election pursuant to the Code; provided, however, that the General Partner shall
make the election under Section 754 of the Code in accordance with applicable
regulations thereunder. The General Partner shall have the right to seek to
revoke any such election (including, without limitation, the election under
Section 754 of the Code) upon the General Partner's determination in its sole
discretion that such revocation is in the best interests of the Limited Partners
and Assignees. For purposes of computing the adjustments under Section 743(b) of
the Code, the 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 5.2(g) without regard to the actual price
paid by such transferee.
1.1 Section Tax Controversies . Subject to the provisions hereof, the General
Partner is designated 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, without limitation, resulting
administrative and judicial proceedings, and to expend Partnership funds for
professional services and costs associated therewith. Each Partner and Assignee
agrees to cooperate with the General Partner and to do or refrain from doing any
or all things reasonably required by the General Partner to conduct such
proceedings.
1.1 Section Organizational Expenses . The Partnership shall elect to deduct
expenses, if any, incurred by it in organizing the Partnership ratably over a
60-month period as provided in Section 709 of the Code.
1.1 Section Withholding . Notwithstanding any other provision of this Agreement,
the General Partner is authorized to take any action that it determines in its
sole 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 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 shall be treated as a distribution of
cash pursuant to Section 5.3 in the amount of such withholding from such
Partner.
1.1 Section Entity-Level Taxation . If legislation is enacted or the
interpretation of existing language is modified 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 Minimum Quarterly
Distribution, First Target Distribution, Second Target Distribution or Third
Target Distribution, as the case may be, shall be equal to the product obtained
by multiplying (a) the amount thereof by (b) 1 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.
1.1 Section Entity-Level Arrearage Collections . If the Partnership is required
by applicable law to pay any federal, state or local income tax on behalf of, or
withhold such amount with respect to, any Partner or Assignee or any former
Partner or Assignee in respect of Common Units held by such Person (a) the
General Partner shall cause the Partnership to pay such tax on behalf of such
Partner or Assignee or former Partner or Assignee from the funds of the
Partnership; (b) any amount so paid on behalf of, or withheld with respect to,
any such Partner or Assignee shall constitute a distribution out of Available
Cash to such Partner or Assignee pursuant to Section 5.3; provided, however, in
the discretion of the General Partner, such taxes (if pertaining to all such
Partners) may be considered to be cash disbursements of the Partnership which
reduce Available Cash, but the payment or withholding thereof shall not be
deemed to be a distribution of Available Cash to such Partners; and (c) to the
extent any such Partner or Assignee (but not a former Partner or Assignee) is
not then entitled to such distribution under this Agreement, the General Partner
shall be authorized, without the approval of any Partner or Assignee, to amend
this Agreement insofar as is necessary to maintain the uniformity of intrinsic
tax characteristics as to all Common Units and to make subsequent adjustments to
distributions in a manner which, in the reasonable judgment of the General
Partner, will make as little alteration as practicable in the priority and
amount of distributions otherwise applicable under this Agreement, and will not
otherwise alter the distributions to which Partners and Assignees are entitled
under this Agreement. If the Partnership is permitted (but not required) by
applicable law to pay any such tax on behalf of, or withhold such amount with
respect to, any Partner or Assignee or former Partner or Assignee with respect
to Common Units held by such Person, the General Partner shall be authorized
(but not required) upon the affirmative vote of the holders of at least a
majority of the Outstanding Senior Units, if any, to cause the Partnership to
pay such tax from the funds of the Partnership and to take any action consistent
with this Section 9.7. The General Partner shall be authorized (but not
required) to take all necessary or appropriate actions to collect all or any
portion of a deficiency in the payment of any such tax that relates to prior
periods and that is attributable to Persons who were Limited Partners or
Assignees with respect to Common Units held by such Person when such
deficiencies arose, from such Persons. The payment of taxes by the Partnership
on behalf of Limited Partners holding Senior Units will not satisfy the
obligation of the Partnership to pay the Senior Unit Distribution.
1.1 Section Opinions of Counsel . Notwithstanding any other provision of this
Agreement, if the Partnership or the Operating Partnership is treated as an
association taxable as a corporation at any time or is otherwise taxable for
federal income tax purposes as an entity at any time and, pursuant to the
provisions of this Agreement, an Opinion of Counsel would otherwise be required
to the effect that an action will not cause the Partnership or the Operating
Partnership to become so treated as an association taxable as a corporation or
otherwise taxable as an entity for federal income tax purposes, such requirement
for an Opinion of Counsel shall be deemed automatically waived.
1 ARTICLE CERTIFICATESARTICLE 2 3 CERTIFICATES
1.1 Section Certificates . Upon the Partnership's issuance of Common Units or
Senior 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.
Certificates shall be executed on behalf of the Partnership by the General
Partner. No Common Unit Certificate shall be valid for any purpose until it has
been countersigned by the Transfer Agent; provided, however, that if the General
Partner elects to issue Units in global or book-entry form, the Certificates
shall be valid upon receipt of a certificate from the Transfer Agent certifying
that such Units have been duly registered in accordance with the directions of
the Partnership. The Partners holding Certificates evidencing Senior Units may
exchange such Certificates for Certificates evidencing Common Units on or after
the date on which such Senior Units are converted into Common Units pursuant to
the terms of Section 5.7(d).
1.1 Section Registration, Registration of Transfer and Exchange .
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1.2
(a) The General Partner shall 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 10.2(b), the General Partner 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 same are
effected in the manner described in this Section 10.2. Upon surrender for
registration of transfer of any Units evidenced by a Certificate, and subject to
the provisions of Section 10.2(b), the General Partner on behalf of the
Partnership shall execute, and in the case of Common Units, the Transfer Agent
shall countersign, and deliver (or, in the case of Units issued in global or
book-entry form, register in accordance with the rules and regulations of the
Depositary), 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 11.5, 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 10.2, the General Partner may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed with respect thereto.
1.3 Section Mutilated, Destroyed, Lost or Stolen Certificates .
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1.4
(a) If any mutilated Certificate is surrendered to the Transfer Agent, the
General Partner on behalf of the Partnership shall execute, and upon its request
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 General Partner on behalf of the Partnership shall execute, and upon its
request, in the case of Common Units, the Transfer Agent shall countersign and
deliver (or, in the case of Units issued in global or book-entry form, register
in accordance with the rules and regulations of the Depositary) 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
General Partner, 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 General Partner, delivers to the Partnership
a bond, in form and substance satisfactory to the General Partner, with
surety or sureties and with fixed or open penalty as the General
Partner may reasonably direct, in its sole discretion, to indemnify the
Partnership, the General Partner 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 General
Partner.
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 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 Partner or the
Transfer Agent for such transfer or for a new Certificate.
(a) As a condition to the issuance of any new Certificate under this Section
10.3, the General Partner 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, without limitation, the fees and expenses of the
Transfer Agent) reasonably connected therewith.
1.2 Section Record Holder . In accordance with Section 10.2(b), the Partnership
shall be entitled to recognize the Record Holder as the Limited Partner or
Assignee with respect to any Units and, accordingly, shall not be bound to
recognize any equitable or other claim to or interest in such Units on the part
of any other Person, whether or not 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 Limited Partner or Assignee (as the
case may be) of record and 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 Limited Partner or Assignee (as the case may be) hereunder
and as provided for herein.
1 ARTICLE TRANSFER OF INTERESTSARTICLE 2 3 TRANSFER OF
INTERESTS
1.1 Section Transfer .
1.2
(a) The term .transfer,. when used in this Article XI with respect to a
Partnership Interest, shall be deemed to refer to a transaction by which the
General Partner assigns its Partnership Interest as a general partner in the
Partnership to another Person, by which the holder of a Unit assigns such Unit
to another Person who is or becomes an Assignee or by which a Special Limited
Partner holding an IDR assigns such IDR 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 XI. Any
transfer or purported transfer of a Partnership Interest not made in accordance
with this Article XI shall be null and void.
(c) Nothing contained in this Article XI shall be construed to prevent a
disposition by the parent entity of the General Partner of any or all of the
issued and outstanding capital stock of the General Partner.
(d) Nothing contained in this Article XI, or elsewhere in this Partnership
Agreement, shall preclude the settlement of any transactions involving Common
Units entered into through the facilities of the New York Stock Exchange.
1.3 Section Transfer of a General Partner's Partnership Interest . Except for a
transfer by the General Partner of all, but not less than all, of its
Partnership Interest as a general partner in the Partnership to (a) an Affiliate
of the General Partner or (b) another Person in connection with the merger or
consolidation of the General Partner with or into another Person or the transfer
by the General Partner of all or substantially all of its assets to another
Person, the transfer by the General Partner of all or any part of its
Partnership Interest as a general partner in the Partnership to a Person prior
to July 31, 2004 shall be subject to the prior approval of at least a majority
of the Outstanding Common Units (excluding for purposes of such determination
Units owned by the General Partner and its Affiliates). Notwithstanding anything
herein to the contrary, no transfer by the General Partner of all or any part of
its Partnership Interest as a general partner in the Partnership to another
Person shall be permitted unless (i) the transferee agrees to assume the rights
and duties of the 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, (ii) 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 any of 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 and (iii) such transferee also agrees to purchase
all (or the appropriate portion thereof, if applicable) of the partnership
interest of the General Partner as the general partner of the Operating
Partnership. In the case of a transfer pursuant to and in compliance with this
Section 11.2, the transferee or successor (as the case may be) shall, subject to
compliance with the terms of Section 12.3, be admitted to the Partnership as a
General Partner immediately prior to the transfer of the Partnership Interest,
and the business of the Partnership shall continue without dissolution.
1.1 Section Transfer of Units .
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1.2
(a) Units may be transferred only in the manner described in Section 10.2. The
transfer of any Units and the admission of any new Partner shall not constitute
an amendment to this Agreement.
(b) Until admitted as a Substituted Limited Partner pursuant to Article XII, the
Record Holder of a Unit shall be an Assignee in respect of such Unit. Limited
Partners may include custodians, nominees, or any other individual or entity in
its own or any representative capacity.
(c) Each distribution in respect of Units shall be paid by the Partnership,
directly or through the Transfer Agent or through any other Person or agent,
only to the Record Holders thereof as of the Record Date set for the
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.
(d) A transferee who has completed and delivered a Transfer Application shall be
deemed to have (i) requested admission as a Substituted Limited Partner, (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)
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.
1.3 Section Restrictions on Transfers . Notwithstanding the other provisions of
this Article XI, no transfer of any Unit or interest therein of any Limited
Partner, Special Limited Partner or Assignee shall be made if such transfer
would (a) violate the then applicable federal or state securities laws or rules
and regulations of the Securities and Exchange Commission, any state securities
commission or any other governmental authorities with jurisdiction over such
transfer, (b) result in the taxation of the Partnership or the Operating
Partnership as an association taxable as a corporation or otherwise subject the
Partnership or the Operating Partnership to entity-level taxation for federal
income tax purposes or (c) affect the Partnership's or the Operating
Partnership's existence or qualification as a limited partnership under the
Delaware Act.
1.1 Section Citizenship Certificates; Non-citizen Assignees .
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1.2
(a) If the Partnership or the Operating Partnership is or becomes subject to any
federal, state or local law or regulation that, in the reasonable determination
of the General Partner, creates a substantial risk of cancellation or forfeiture
of any property in which the Partnership or the Operating Partnership has an
interest based on the nationality, citizenship or other related status of a
Limited Partner or Assignee, the General Partner may request any Limited Partner
or Assignee to furnish to the 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
Limited 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 General Partner may request. If a Limited Partner or Assignee fails to
furnish to the 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 Limited Partner or
Assignee is not an Eligible Citizen, the Units owned by such Limited Partner or
Assignee shall be subject to redemption in accordance with the provisions of
Section 11.6. In addition, the General Partner may require that the status of
any such Limited Partner or Assignee be changed to that of a Non-citizen
Assignee, and, thereupon, the General Partner shall be substituted for such
Non-citizen Assignee as the Limited Partner in respect of his Units.
(b) The 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 Limited Partners in respect of Units other than those of
Non-citizen Assignees are cast, either for, against or abstaining as to the
matter.
(c) Upon dissolution of the Partnership, a Non-citizen Assignee shall have no
right to receive a distribution in kind pursuant to Section 14.4 but shall be
entitled to the cash equivalent thereof, and the General Partner shall provide
cash in exchange for an assignment of the Non-citizen Assignee's share of the
distribution in kind. Such payment and assignment shall be treated for
Partnership purposes as a purchase by the General Partner from the Non-citizen
Assignee of his Partnership Interest (representing his right to receive his
share of such distribution in kind).
(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 General Partner,
request admission as a Substituted Limited Partner with respect to any Units of
such Non-citizen Assignee not redeemed pursuant to Section 11.6, and upon his
admission pursuant to Section 12.2 the General Partner shall cease to be deemed
to be the Limited Partner in respect of the Non-citizen Assignee's Units.
1.3 Section Redemption of Interests .
-----------------------
1.4
(a) If at any time a Limited Partner or Assignee fails to furnish a Citizenship
Certification or other information requested within the 30-day period specified
in Section 11.5(a), or if upon receipt of such Citizenship Certification or
other information the General Partner determines, with the advice of counsel,
that a Limited Partner or Assignee is not an Eligible Citizen, the Partnership
may, unless the Limited Partner or Assignee establishes to the satisfaction of
the General Partner that such Limited Partner or Assignee is an Eligible Citizen
or has transferred his Units to a Person who furnishes a Citizenship
Certification to the General Partner prior to the date fixed for redemption as
provided below, redeem the Partnership Interest of such Limited Partner or
Assignee as follows:
(i) The General Partner shall, not later than the 30th day before the
date fixed for redemption, give notice of redemption to the Limited
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 Units, 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 Units and that on and after the date fixed for redemption no
further allocations or distributions to which the Limited Partner or
Assignee would otherwise be entitled in respect of the Redeemable Units
will accrue or be made.
(ii) The aggregate redemption price for Redeemable Units shall be an
amount equal to the Current Market Price (the date of determination of
which shall be the date fixed for redemption) of Units of the class to
be so redeemed multiplied by the number of Units of each such class
included among the Redeemable Units. The redemption price shall be
paid, in the sole discretion of the 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 10%
annually and payable in three equal annual installments of principal
together with accrued interest, commencing one year after the
redemption date.
(iii) Upon surrender by or on behalf of the Limited Partner or
Assignee, at the place specified in the notice of redemption, of the
Certificate evidencing the Redeemable Units, duly endorsed in blank or
accompanied by an assignment duly executed in blank, the Limited
Partner or Assignee or his duly authorized representative shall be
entitled to receive the payment therefor.
(iv) After the redemption date, Redeemable Units shall no longer
constitute issued and Outstanding Units.
(b) The provisions of this Section 11.6 shall also be applicable to Units held
by a Limited Partner or Assignee as nominee of a Person determined to be other
than an Eligible Citizen.
(c) Nothing in this Section 11.6 shall prevent the recipient of a notice of
redemption from transferring his Units 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 Units certifies in 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.
1.5 Section Transfer of IDRs . A Special Limited Partner holding IDRs may
transfer any or all of the IDRs held by such Special Limited Partner. The
General Partner shall have the authority (but shall not be required) to adopt
such reasonable restrictions on the transfer of IDRs, consistent with the
restrictions on transfer of Units provided for in this Agreement, and
requirements for registering the transfer of IDRs as the General Partner, in its
sole discretion, shall determine are necessary or appropriate including, without
limitation, if the General Partner shall so determine, in its sole discretion,
the right of the Partnership to redeem IDRs upon terms and conditions similar to
those applicable to Units.
1 ARTICLE ADMISSION OF PARTNERSARTICLE 2 3 ADMISSION OF
PARTNERS
1.1 Section Admission of Initial Limited Partners . On the Initial Closing Date,
the General Partner was admitted to the Partnership as a Limited Partner in
respect of the Common Units and Subordinated Units issued to it and as a Special
Limited Partner in respect of the IDRs issued to it, and the Underwriters were
admitted to the Partnership as Initial Limited Partners.
1.1 Section Admission of Substituted Limited Partners . By transfer of a Unit in
accordance with Article XI, the transferor shall be deemed to have given the
transferee the right to seek admission as a Substituted Limited Partner 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 Limited Partner to such purchaser or other transferee in respect of
the transferred Units. Each transferee of a Unit (including, without limitation,
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 Limited Partner with respect to the Units so transferred to
such Person. Such Assignee shall become a Substituted Limited Partner (x) at
such time as the General Partner consents thereto, which consent may be given or
withheld in the 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 Limited Partner with respect
to allocations and distributions, including, without limitation, liquidating
distributions, of the Partnership. With respect to voting rights attributable to
Units that are held by Assignees, the General Partner shall be deemed to be the
Limited Partner 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 Limited Partner.
1.1 Section Admission of Successor General Partner . A successor General Partner
approved pursuant to Section 13.1 or 13.2 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 11.2 who is proposed to be admitted as a
successor General Partner shall be admitted to the Partnership as the General
Partner, effective immediately prior to the withdrawal or removal of the General
Partner pursuant to Section 13.1 or 13.2 or the transfer of the General
Partner's Partnership Interest as a general partner in the Partnership pursuant
to Section 11.2; provided, however, that no such successor shall be admitted to
the Partnership until compliance with the terms of Section 11.2 has occurred 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 and Operating
Partnership without dissolution.
1.1 Section Admission of Additional Limited Partners .
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1.2
(a) A Person (other than the General Partner, 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 General Partner (i)
evidence of acceptance in form satisfactory to the General Partner of all of the
terms and conditions of this Agreement, including, without limitation, the power
of attorney granted in Section 1.4, and (ii) such other documents or instruments
as may be required in the discretion of the General Partner to effect such
Person's admission as an Additional Limited Partner.
(b) Notwithstanding anything to the contrary in this Section 12.4, no Person
shall be admitted as an Additional Limited Partner without the consent of the
General Partner, which consent may be given or withheld in the 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 General Partner to such admission.
(c) Upon the issuance by the Partnership of Senior Units to WNGL pursuant to the
WNGL Purchase Agreement and the execution and delivery in writing evidencing
WNGL's acceptance of all of the terms and conditions of this Agreement,
including, without limitation, the power of attorney granted in Section 1.4, the
General Partner shall admit WNGL to the Partnership as an Additional Limited
Partner on the WNGL Closing Date.
1.3 Section Amendment of Agreement and Certificate of Limited Partnership . To
effect the admission to the Partnership of any Partner, the 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 practical an amendment of this Agreement and, if required by
law, to prepare and file an amendment to the Certificate of Limited Partnership
and may for this purpose, among others, exercise the power of attorney granted
pursuant to Section 1.4.
1 ARTICLE WITHDRAWAL OR REMOVAL OF PARTNERSARTICLE 2 3
WITHDRAWAL OR REMOVAL OF PARTNERS
1.1 Section Withdrawal of the General Partner .
---------------------------------
1.2
(a) The 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 General Partner voluntarily withdraws from the Partnership by
giving written notice to the other Partners (and it shall be deemed
that the General Partner has withdrawn pursuant to this Section
13.1(a)(i) if the General Partner voluntarily withdraws as general
partner of the Operating Partnership);
(ii) the General Partner transfers all of its rights as General
Partner pursuant to Section
11.2;
(iii) the General Partner is removed pursuant to Section 13.2;
(iv) the General Partner (A) makes a general assignment for the benefit
of creditors; (B) files a voluntary bankruptcy petition; (C) files a
petition or answer seeking for itself a reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief
under any law; (D) files an answer or other pleading admitting or
failing to contest the material allegations of a petition filed against
the General Partner in a proceeding of the type described in clauses
(A)-(C) of this Section 13.1(a)(iv); or (E) seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator of
the General Partner or of all or any substantial part of its
properties;
(v) a final and non-appealable judgment is entered by a court with
appropriate jurisdiction ruling that the General Partner is bankrupt or
insolvent, or a final and non-appealable order for relief is entered by
a court with appropriate jurisdiction against the General Partner, in
each case under any federal or state bankruptcy or insolvency laws as
now or hereafter in effect; or
(vi) a certificate of dissolution or its equivalent is filed for the
General Partner, or 90 days expire after the date of notice to the
General Partner of revocation of its charter without a reinstatement of
its charter, under the laws of its state of incorporation.
If an Event of Withdrawal specified in Section 13.1(a)(iv), (v) or (vi) occurs,
the withdrawing 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 13.1 shall result in the withdrawal of the
General Partner from the Partnership.
(a) Withdrawal of the 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, Central Standard Time, on July 31,
2004, the 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 the holders of at least two-thirds of the Outstanding Common Units (excluding
for purposes of such determination Common Units owned by the General Partner and
its Affiliates) and the General Partner delivers to the Partnership an Opinion
of Counsel (.Withdrawal Opinion of Counsel.) that such withdrawal (following the
selection of the successor General Partner) would not result in the loss of the
limited liability of any Limited Partner 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; (ii) at any time after 12:00
midnight, Central Standard Time, on July 31, 2004, the 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;
(iii) at any time that the General Partner ceases to be a General Partner
pursuant to Section 13.1(a)(ii) or is removed pursuant to Section 13.2; or (iv)
notwithstanding clause (i) of this sentence, at any time that the General
Partner voluntarily withdraws by giving at least 90 days' advance notice of its
intention to withdraw to the Limited Partners, 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 Partner and its Affiliates) own
beneficially or of record or control at least 50% of the Outstanding Common
Units. The withdrawal of the General Partner from the Partnership upon the
occurrence of an Event of Withdrawal shall also constitute the withdrawal of the
General Partner as general partner of the Operating Partnership. If the General
Partner gives a notice of withdrawal pursuant to Section 13.1(a)(i), holders of
at least a majority of the Outstanding Common Units (excluding for purposes of
such determination Common Units owned by the General Partner and its Affiliates)
may, prior to the effective date of such withdrawal, elect a successor General
Partner. If, prior to the effective date of the General Partner's withdrawal, a
successor is selected by the Limited Partners as provided herein, the
Partnership, as the limited partner of the Operating Partnership, shall cause
such Person to become the successor general partner of the Operating
Partnership, as provided in the Operating Partnership Agreement. If, prior to
the effective date of the 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 14.1. Any successor General Partner elected in
accordance with the terms of this Section 13.1 shall be subject to the
provisions of Section 12.3.
1.2 Section Removal of the General Partner . The General Partner may be removed
if such removal is approved by Limited Partners holding at least two-thirds of
the Outstanding Common Units. Any such action by such Limited Partners for
removal of the General Partner must also provide for the election of a successor
General Partner by Limited Partners holding at least a majority of the
Outstanding Common Units. Such removal shall be effective immediately following
the admission of a successor General Partner pursuant to Article XII. The
removal of the General Partner shall also automatically constitute the removal
of the General Partner as general partner of the Operating Partnership, as
provided in the Operating Partnership Agreement. If a Person is elected as a
successor General Partner in accordance with the terms of this Section 13.2, the
Partnership, as the limited partner of the Operating Partnership, shall cause
such Person to become the successor general partner of the Operating
Partnership, as provided in the Operating Partnership Agreement. The right of
the Limited Partners holding Outstanding Common Units to remove the General
Partner shall not exist or be exercised unless the Partnership has received an
opinion opining as to the matters covered by a Withdrawal Opinion of Counsel.
Any successor General Partner elected in accordance with the terms of this
Section 13.2 shall be subject to the provisions of Section 12.3.
1.1 Section Interest of Departing Partner and Successor General Partner . 1.2
(a) In the event of (i) withdrawal of the General Partner under circumstances
where such withdrawal does not violate this Agreement or (ii) removal of the
General Partner by the holders of Common Units under circumstances where Cause
does not exist, if a successor General Partner is elected in accordance with the
terms of Section 13.1 or 13.2, 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 its Partnership Interest as a
general partner in the Partnership and its partnership interest as the general
partner in the Operating Partnership (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 General Partner is removed by the Limited Partners under
circumstances where Cause exists or if the 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 13.1 or 13.2, such successor shall have the
option, exercisable prior to the effective date of the departure of such
Departing Partner, to purchase the Combined Interest of the Departing Partner
for such fair market value of such Combined Interest. In either event, the
Departing Partner shall be entitled to receive all reimbursements due such
Departing Partner pursuant to Section 6.4, including, without limitation, any
employee-related liabilities (including, without limitation, severance
liabilities), incurred in connection with the termination of any employees
employed by the General Partner for the benefit of the Partnership or the
Operating Partnership. Subject to Section 13.3(b), the Departing Partner shall,
as of the effective date of its departure, cease to share in any allocations or
distributions with respect to its Partnership Interest as a general partner in
the Partnership and Partnership income, gain, loss, deduction and credit will be
prorated and allocated as set forth in Section 5.2(g).
For purposes of this Section 13.3(a), the fair market value of the
Departing Partner's Combined Interest shall be determined by agreement between
the Departing Partner and its successor or, failing agreement within 30 days
after the effective date of such Departing Partner's departure, by an
independent investment banking firm or other independent expert selected by the
Departing Partner and its 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 Partner shall designate an independent investment banking
firm or other independent expert, the Departing Partner's 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 shall determine the fair market value
of the Combined Interest. In making its determination, such independent
investment banking firm or other independent expert shall 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 Partner and other factors it may deem relevant.
(a) If the Combined Interest is not purchased in the manner set forth in Section
13.3(a), the Departing Partner shall become a Limited Partner and the 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
13.3(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 Partner as to all debts
and liabilities of the Partnership arising on or after the date on which the
Departing Partner becomes a Limited Partner. For purposes of this Agreement,
conversion of the General Partner's Combined Interest to Common Units will be
characterized as if the General Partner contributed its Combined Interest to the
Partnership in exchange for the newly issued Common Units.
(b) If a successor General Partner is elected in accordance with the terms of
Section 13.1 or 13.2 and the option described in Section 13.3(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
capital of the Partnership cash in an amount such that its Capital Account,
after giving effect to such contribution and any adjustments made to the Capital
Accounts of all Partners pursuant to Section 4.4(d)(i), shall be equal to that
percentage of the Capital Accounts of all Partners that is equal to its
Percentage Interest as the General Partner. In such event, such successor
General Partner shall, subject to the following sentence, be entitled to such
Percentage Interest of all Partnership allocations and distributions and any
other allocations and distributions to which the Departing Partner was entitled.
In addition, such 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 Limited Partners
shall be 99%, with the priority of such distributions among Limited Partners
remaining unchanged.
1.2 Section 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 becomes a Record Holder, such
transferring Limited Partner shall cease to be a Limited Partner with respect to
the Units so transferred.
1 ARTICLE DISSOLUTION AND LIQUIDATIONARTICLE 2 3
DISSOLUTION AND LIQUIDATION
1.1 Section 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 General Partner, if a
successor General Partner is elected pursuant to Section 13.1 or 13.2, 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 14.2) its affairs should be wound up, upon:
(a) the expiration of its term as provided in Section 1.5;
(b) an Event of Withdrawal of the General Partner as provided in Section 13.1(a)
(other than Section 13.1(a)(ii)), unless a successor is elected and an Opinion
of Counsel is received as provided in Section 13.1(b) or 13.2 and such successor
is admitted to the Partnership pursuant to Section 12.3;
(c) an election to dissolve the Partnership by the General Partner that is
approved by (i) the holders of at least a majority of the Outstanding Units
other than the Senior Units and (ii) the holders of at least a majority of the
Outstanding Senior Units (and all holders of Units hereby expressly consent that
such approval may be effected upon written consent of said applicable percentage
of the Outstanding Units);
(d) entry of a decree of judicial dissolution of the Partnership pursuant to the
provisions of the Delaware Act; or
(e) the sale of all or substantially all of the assets and properties of the
Partnership and the Operating Partnership taken as a whole.
1.2 Section 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 General Partner as provided in Section
13.1(a)(i) or (iii) and the failure of the Partners to select a successor to
such Departing Partner pursuant to Section 13.1 or 13.2, then within 90 days
thereafter or (b) dissolution of the Partnership upon an event constituting an
Event of Withdrawal as defined in Section 13.1(a)(iv), (v) or (vi), then within
180 days thereafter, a majority of the Outstanding Common Units 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 a majority of the Outstanding Common Units.
Upon any such election by a majority of the Outstanding Common Units, all
Partners shall be bound thereby and shall be deemed to have approved thereof.
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 1.5 unless earlier dissolved in accordance
with this Article XIV;
(ii) if the successor General Partner is not the former General
Partner, then the interest of the former General Partner shall be
treated thenceforth as the interest of a Limited Partner and converted
into Common Units in the manner provided in Section 13.3(b); 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 General Partner
pursuant to Section 1.4; provided, that the right of a majority of
Outstanding Common Units 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.
1.3 Section Liquidation . Upon dissolution of the Partnership, unless the
Partnership is continued under an election to reconstitute and continue the
Partnership pursuant to Section 14.2, the General Partner, or in the event the
General Partner has been dissolved or removed, become bankrupt as set forth in
Section 13.1 or withdrawn from the Partnership, a liquidator or liquidating
committee approved by the holders of at least a majority of the Outstanding
Common Units, shall be the Liquidator. The Liquidator (if other than the General
Partner) shall be entitled to receive such compensation for its services as may
be approved by the holders of at least a majority of the Outstanding Common
Units. The Liquidator shall agree not to resign at any time without 15 days'
prior notice and (if other than the General Partner) may be removed at any time,
with or without cause, by notice of removal approved by a majority of the
Outstanding Units. 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 the holders of at least a majority of the Outstanding Common Units.
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 XIV, 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 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 6.3(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. The Liquidator shall liquidate the assets of the Partnership, and apply
and distribute the proceeds of such liquidation in the following order of
priority, unless otherwise required by mandatory provisions of applicable law:
(a) the payment to creditors of the Partnership, including, without limitation,
Partners who are creditors, in the order of priority provided by law; and the
creation of a reserve of cash or other assets of the Partnership for contingent
liabilities in an amount, if any, determined by the Liquidator to be appropriate
for such purposes; and
(b) to all 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 this
clause) for the taxable year of the Partnership during which the liquidation of
the Partnership occurs (with the date of such 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).
1.2 Section Distributions in Kind . Notwithstanding the provisions of Section
14.3, which require the liquidation of the assets of the Partnership, but
subject to the order of priorities set forth therein, if prior to or upon
dissolution of the Partnership the Liquidator determines that an immediate sale
of part or all of the Partnership's assets would be impractical or would cause
undue loss to the Partners, the Liquidator may, in its absolute discretion,
defer for a reasonable time the liquidation of any assets except those necessary
to satisfy liabilities of the Partnership (including, without limitation, those
to Partners as creditors) and or distribute to the Partners or to specific
classes of Partners, in lieu of cash, as tenants in common and in accordance
with the provisions of Section 14.3, undivided interests in such Partnership
assets as the Liquidator deems not suitable for liquidation. Any such
distributions in kind shall be made only if, in the good faith judgment of the
Liquidator, such distributions in kind are in the best interest of the Limited
Partners, and shall be subject to such conditions relating to the disposition
and management of such properties as the Liquidator deems reasonable and
equitable and to any agreements governing the operation of such properties at
such time. The Liquidator shall determine the fair market value of any property
distributed in kind using such reasonable method of valuation as it may adopt.
1.1 Section Cancellation of Certificate of Limited Partnership . Upon the
completion of the distribution of Partnership cash and property as provided in
Sections 14.3 and 14.4 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 cancelled and such other
actions as may be necessary to terminate the Partnership shall be taken.
1.1 Section Reasonable Time for Winding Up . A reasonable time shall be allowed
for the orderly winding up of business and affairs of the Partnership and the
liquidation of its assets pursuant to Section 14.3 in order to minimize any
losses otherwise attendant upon such winding up, and the provisions of this
Agreement shall remain in effect between the Partners during the period of
liquidation.
1.1 Section Return of Capital Contributions . The General Partner 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 Limited Partners, or any portion thereof, it
being expressly understood that any such return shall be made solely from
Partnership assets.
1.1 Section 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 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.
1.1 Section Waiver of Partition . To the maximum extent permitted by law, each
Partner hereby waives any right to partition of the Partnership property.
1 ARTICLE AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD
DATEARTICLE 2 3 AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
1.1 Section Amendment to be Adopted Solely by General Partner . Each Limited
Partner agrees that the General Partner (pursuant to its powers of attorney from
the Limited Partners, Special Limited Partners and Assignees), without the
approval of any Limited Partner or Assignee, may amend any provision of this
Agreement, and 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 General Partner, is necessary
or appropriate 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 that is necessary or advisable in the
opinion of the General Partner to ensure that neither the Partnership nor the
Operating Partnership will be treated as an association taxable as a corporation
or otherwise taxed as an entity for federal income tax purposes;
(d) a change (i) that, in the sole discretion of the General Partner, does not
adversely affect the Limited Partners in any material respect, (ii) that is
necessary or desirable 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, without limitation, the Delaware Act) or that is necessary
or desirable to facilitate the trading of the Units (including, without
limitation, the division 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 General Partner determines in its sole
discretion to be in the best interests of the Partnership and the Limited
Partners or (iii) that is necessary or desirable to implement certain
tax-related provisions of the Partnership Agreement, or (iv) that is required to
effect 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 sole discretion of the General Partner, are necessary or
appropriate as a result of a change in the fiscal year or taxable year of the
Partnership including, without limitation, if the 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 Partner or its directors or officers 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, whether or not substantially similar to plan asset regulations
currently applied or proposed by the United States Department of Labor;
(g) subject to the terms of Section 4.3, an amendment that, in the sole
discretion of the General Partner, is necessary or desirable in connection with
the authorization for issuance of any class or series of Partnership Securities
pursuant to Section 4.3;
(h) any amendment expressly permitted in this
Agreement to be made by the General Partner
acting alone;
(i) an amendment effected, necessitated or contemplated by a Merger Agreement
approved in accordance with Section 16.3;
(j) an amendment that, in the sole discretion of the General Partner, is
necessary or desirable 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 3.1; or
(k) any other amendments substantially similar to the foregoing.
1.2 Section Amendment Procedures . Except as provided in Sections 15.1, 15.3 and
15.13, 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 General Partner. A proposed amendment shall be effective
upon its approval by the holders of at least a majority of the Outstanding
Common Units, unless a greater or different percentage is required under this
Agreement. Each proposed amendment that requires the approval of the holders of
a specified percentage of Outstanding Common Units shall be set forth in a
writing that contains the text of the proposed amendment. If such an amendment
is proposed, the General Partner shall seek the written approval of the
requisite percentage of Outstanding Common Units or call a meeting of the
holders of Common Units to consider and vote on such proposed amendment. The
General Partner shall notify all Record Holders upon final adoption of any such
proposed amendments.
1.1 Section Amendment Requirements .
1.2
(a) Notwithstanding the provisions of Sections 15.1 and 15.2, 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 requirement 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 15.1 and 15.2, no amendment to
this Agreement may (i) enlarge the obligations of any Limited Partner without
its consent, (ii) enlarge the obligations of the General Partner without its
consent, which may be given or withheld in its sole discretion, (iii) modify the
amounts distributable, reimbursable or otherwise payable to the General Partner
by the Partnership or the Operating Partnership, (iv) change Section 14.1(a) or
(c), (v) restrict in any way any action by or rights of the General Partner as
set forth in this Agreement or (vi) change the term of the Partnership or,
except as set forth in Section 14.1(c), give any Person the right to dissolve
the Partnership.
(c) Except as otherwise provided, and without limitation of the General
Partner's authority to adopt amendments to this Agreement as contemplated in
Section 15.1, any amendment that would have a material adverse effect on the
rights or preferences of any class of Outstanding Units in relation to other
classes of Units must be approved by the holders of not less than a majority of
the Outstanding Units of the class affected (excluding for purposes of such
determination Units owned by the General Partner and its Affiliates).
(d) Notwithstanding any other provision of this Agreement, except for amendments
pursuant to Section 6.3 or 15.1 and except as otherwise provided by Section
16.3(b), no amendments shall become effective without the approval of the
holders of at least 95% of the Outstanding Common Units unless the Partnership
obtains an Opinion of Counsel to the effect that (a) such amendment will not
cause the Partnership or the Operating Partnership to be treated as an
association taxable as a corporation or otherwise taxable as an entity for
federal income tax purposes and (b) such amendment will not affect the limited
liability of any Limited Partner or any limited partner of the Operating
Partnership under applicable law.
(e) This Section 15.3 shall only be amended with the
approval of the holders of not less
than 95% of the Outstanding Common Units.
1.3 Section Meetings . All acts of Limited Partners to be taken pursuant to this
Agreement shall be taken in the manner provided in this Article XV. Meetings of
the Limited Partners may be called by the General Partner or by Limited Partners
owning 20% or more of the Outstanding Units of the class or classes for which a
meeting is proposed. Limited Partners shall call a meeting by delivering to the
General Partner one or more requests in writing stating that the signing Limited
Partners wish to call a meeting and indicating the general or specific purposes
for which the meeting is to be called. Within 60 days after receipt of such a
call from Limited Partners 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 General Partner shall
send a notice of the meeting to the Limited Partners either directly or
indirectly through the Transfer Agent. A meeting shall be held at a time and
place determined by the General Partner on a date not more than 60 days after
the mailing of notice of the meeting. Limited Partners 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 Limited Partners' limited liability under the Delaware Act or the
law of any other state in which the Partnership is qualified to do business.
1.1 Section Notice of a Meeting . Notice of a meeting called pursuant to Section
15.4 shall be given to the Record Holders in writing by mail or other means of
written communication in accordance with Section 18.1. 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.
1.1 Section Record Date . For purposes of determining the Limited Partners
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 15.11, the 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 Limited Partners are
requested in writing by the General Partner to give such approvals.
1.1 Section 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
XV.
1.1 Section Waiver of Notice; Approval of Meeting; Approval of Minutes . The
transactions of any meeting of Limited Partners, however called and noticed, and
whenever held, shall be as valid as if had 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, Limited Partners 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 Limited Partner at a meeting shall constitute a waiver of notice of the
meeting, except when the Limited Partner 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.
1.1 Section Quorum . The holders of two-thirds 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 Limited Partners of such class
or classes unless any such action by the Limited Partners requires approval by
holders of a majority in interest of such Units, in which case the quorum shall
be a majority (excluding, in either case, if such are to be excluded from the
vote, Outstanding Units owned by the General Partner and its Affiliates). At any
meeting of the Limited Partners duly called and held in accordance with this
Agreement at which a quorum is present, the act of Limited Partners 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 Limited Partners, 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 Limited Partners
holding Outstanding Units that in the aggregate represent at least such greater
or different percentage shall be required. The Limited Partners 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
Limited Partners 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 Limited
Partners may be adjourned from time to time by the affirmative vote of a
majority of the Outstanding Units of the class or classes for which the meeting
was called represented either in person or by proxy, but no other business may
be transacted, except as provided in Section 15.7.
1.1 Section Conduct of Meeting . The General Partner shall have full power and
authority concerning the manner of conducting any meeting of the Limited
Partners or solicitation of approvals in writing, including, without limitation,
the determination of Persons entitled to vote, the existence of a quorum, the
satisfaction of the requirements of Section 15.4, 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 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
General Partner. The 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 Limited Partners or solicitation of approvals in
writing, including, without limitation, 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.
1.1 Section Action Without a Meeting . Any action that may be taken at a meeting
of the Limited Partners may be taken without a meeting if an approval in writing
setting forth the action so taken is signed by Limited Partners 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 Limited Partners
were present and voted. Prompt notice of the taking of action without a meeting
shall be given to the Limited Partners who have not approved in writing. The
General Partner may specify that any written ballot submitted to Limited
Partners 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 General Partner. If a ballot returned to the
Partnership does not vote all of the Units held by the Limited Partner, 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 Limited
Partners is solicited by any Person other than by or on behalf of the 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 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 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, (ii) will not jeopardize the status of the Partnership as a
partnership under applicable tax laws and regulations and (iii) is otherwise
permissible under the state statutes then governing the rights, duties and
liabilities of the Partnership and the Partners.
1.1 Section Voting and Other Rights .
-----------------------
1.2
(a) Only those Record Holders of Units on the Record Date set pursuant to
Section 15.6 (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
broker, dealer or other agent 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
15.12(b) (as well as all other provisions of this Agreement) are subject to the
provisions of Section 10.4.
1.3 Section Voting Rights of Senior Units . Except as provided in Sections
4.3(c)(i), 9.7, 14.1, 15.3(c), 16.1(b), 17.1, this Section 15.13 or otherwise as
required by law, the Senior Units shall have no voting rights. So long as any
Senior Units remain outstanding, unless a greater percentage shall then be
required by law, the Partnership shall not, without the approval of the holders
of at least a majority of the Outstanding Senior Units voting separately as a
class, (i) amend the Partnership Agreement so as to affect adversely the
specified rights, preferences or privileges of the Senior Units, including any
amendment made in order to issue additional Senior Units other than as provided
for in this Agreement as in effect on the WNGL Closing Date, (ii) except as
permitted pursuant to Section 6.12 and Section 11.6, purchase, redeem or
otherwise acquire for value any Common Units or (iii) permit any of its
Subsidiaries to issue equity interests to any Person (other than the Partnership
and its Subsidiaries and an interest not to exceed a percentage equal to one
percent divided by ninety-nine percent to the General Partner). The holders of
at least a majority of the Outstanding Senior Units, voting separately as one
class, may waive compliance with any provision of this Agreement. In exercising
any voting rights provided for in this Agreement, each Outstanding Senior Unit
shall be entitled to one vote.
1 ARTICLE MERGERARTICLE 2 3 MERGER
1.1 Section Authority . (a) Subject to (b) below, 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, without limitation, 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 XVI;
(b) Without the approval of the holders of at least the
majority of the Outstanding Senior Units, the Partnership shall not, in a single
transaction or series of related transactions, consolidate with or merge with or
into, or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its or the Operating Partnership's (which includes the sale
by the Partnership of its limited partnership interests in the Operating
Partnership) assets to, another Person unless: (A) either (1) the Partnership is
the Surviving Business Entity or (2) the Person (if other than the Partnership)
formed by such consolidation or into which the Partnership is merged or to which
the properties and assets of the Partnership or Operating Partnership are sold,
assigned, transferred, leased, conveyed or otherwise disposed of shall be an
entity organized under the laws of the United States or any State thereof or the
District of Columbia and shall expressly assume all of the obligations of the
Partnership under this Agreement, the WNGL Purchase Agreement and the WNGL
Registration Rights Agreement with respect to the Senior Units; and (B) if the
Partnership is not the Surviving Business Entity, the Senior Units shall be
converted into or exchanged for and shall become equity interests of such
Surviving Business entity, having in respect of such Surviving Business Entity
the same powers, preferences and relative, participating, optional or other
special rights and the qualifications, limitations or restrictions thereon, that
the Senior Units had immediately prior to such transactions.
1.1 Section Procedure for Merger or Consolidation . Merger or consolidation of
the Partnership pursuant to this Article XVI requires the prior approval of the
General Partner. If the General Partner shall determine, in the exercise of its
sole discretion, to consent to the merger or consolidation, the 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;
(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 partnership interests, rights, securities or obligations of the
Surviving Business Entity; and (i) if any general or limited partnership
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
partnership interests, rights, securities or obligations of the Surviving
Business Entity, the cash, property or general or limited partnership 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 partnership interests, securities or rights are to
receive in exchange for, or upon conversion of, their general or limited
partnership 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 partnership 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 16.4 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 General Partner.
1.2 Section Approval by Holders of Common Units of Merger or Consolidation . 1.3
(a) The General Partner of the Partnership, upon its approval of the Merger
Agreement, shall direct that the Merger Agreement be submitted to a vote of the
Limited Partners holding Common Units whether at a meeting or by written
consent, in either case in accordance with the requirements of Article XV. A
copy or a summary of the Merger Agreement shall be included in or enclosed with
the notice of a meeting or the written consent.
(b) The Merger Agreement shall be approved upon receiving the affirmative vote
or consent of the holders of at least a majority of the Outstanding Common Units
unless the Merger Agreement contains any provision which, 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
Common Units or of any class of Limited Partners, in which case such greater
percentage vote or consent shall be required for approval of the Merger
Agreement; provided that, in the case of a merger or consolidation in which the
surviving entity is a corporation or other entity intended to be treated as an
association taxable as a corporation or otherwise taxable as an entity for
federal income tax purposes, if in the opinion of the General Partner it is
necessary to effect, in contemplation of such merger or consolidation, an
amendment that would otherwise require a vote pursuant to Section 15.3(d), no
such vote pursuant to Section 15.3(d) shall be required unless such amendment by
its terms will be applicable to the Partnership in the event the merger or
consolidation is abandoned or unless such amendment will be applicable to the
Partnership during a period in excess of ten days prior to the merger or
consolidation.
(c) After such approval by vote or consent of the holders of the Common Units,
and at any time prior to the filing of the certificate of merger pursuant to
Section 16.4, the merger or consolidation may be abandoned pursuant to
provisions therefor, if any, set forth in the Merger Agreement.
1.4 Section Certificate of Merger . Upon the required approval by the 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.
1.1 Section Effect of Merger .
----------------
1.2
(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 having occurred.
2 ARTICLE RIGHT TO ACQUIRE UNITSARTICLE 3 4 RIGHT TO ACQUIRE
UNITS
1.1 Section Right to Acquire Units .
----------------------
1.2
(a) Notwithstanding any other provision of this Agreement, if at any time not
more than 20% of the total Units of any class then Outstanding are held by
Persons other than the General Partner and its Affiliates, the General Partner
shall, upon the approval of the holders of at least a majority of the
Outstanding Senior Units, have the right, which right it may assign and transfer
to the Partnership or any Affiliate of the General Partner, exercisable in its
sole discretion, to purchase all, but not less than all, of the Units of such
class then Outstanding held by Persons other than the General Partner and its
Affiliates, at the greater of (x) the Current Market Price as of the date three
days prior to the date that the notice described in Section 17.1(b) is mailed,
and (y) the highest cash price paid by the General Partner or any of its
Affiliates for any such Unit purchased during the 90-day period preceding the
date that the notice described in Section 17.1(b) is mailed.
(b) If the General Partner, any Affiliate of the General Partner or the
Partnership elects to exercise the right to purchase Units granted pursuant to
Section 17.1(a), the 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 Units (as of a Record Date selected by the 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 17.1(a) at
which Units will be purchased and state that the General Partner, its Affiliate
or the Partnership, as the case may be, elects to purchase such Units, upon
surrender of Certificates representing such Units 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 Units are
listed or admitted to trading. Any such Notice of Election to Purchase mailed to
a Record Holder of Units at his address as reflected in the records of the
Transfer Agent shall be conclusively presumed to have been given whether or not
the owner receives such notice. On or prior to the Purchase Date, the 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 Units to be purchased in accordance with this
Section 17.1. 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 Units 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
Units (including, without limitation, any rights pursuant to Articles IV, V and
XIV) shall thereupon cease, except the right to receive the purchase price
(determined in accordance with Section 17.1(a)) for Units therefor, without
interest, upon surrender to the Transfer Agent of the Certificates representing
such Units, and such Units shall thereupon be deemed to be transferred to the
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 General Partner, or the Partnership, as the case may be,
shall be deemed to be the owner of all such Units from and after the Purchase
Date and shall have all rights as the owner of such Units (including, without
limitation, all rights as owner of such Units pursuant to Articles IV, V and
XIV).
(c) At any time from and after the Purchase Date, a holder of an Outstanding
Unit subject to purchase as provided in this Section 17.1 may surrender his
Certificate, as the case may be, evidencing such Unit to the Transfer Agent in
exchange for payment of the amount described in Section 17.1(a), therefor,
without interest thereon.
1.3 Section Right to Acquire Senior Units .
-----------------------------
1.4
(a) Notwithstanding any other provision of this Agreement, the Partnership shall
have the right, which it may assign to any of its Affiliates, exercisable in its
sole discretion, to purchase for cash, in whole or in part, at any time or from
time to time, Senior Units at the Senior Unit Redemption Price. The right of the
Partnership and its permitted assigns to purchase Outstanding Senior Units at
the Senior Unit Redemption Price shall not apply to Common Units issued upon
conversion of the Senior Units in accordance with Section 5.7; provided,
however, that the Partnership and its permitted assigns shall have the right to
exercise such right at any time prior to the date of conversion.
(b) If the Partnership or its permitted assigns exercises the right to purchase
Senior Units granted pursuant to Section 17.2(a), the Partnership shall deliver
or cause to be delivered to the holder or holders of Senior Units, a Senior Unit
Redemption Notice at least three, but not more than thirty (30) Business Days
prior to the Senior Unit Redemption Date.
(c) On or prior to the Senior Unit Redemption Date, the General Partner, its
Affiliate or the Partnership, as the case may be, shall deposit with the
Transfer Agent (or if all of the Outstanding Senior Units are held by one Holder
(including Affiliates of such Holder), pay to such Holder and its Affiliates)
cash in an amount sufficient to pay the aggregate Senior Unit Redemption Price
of all of the Senior Units acquired pursuant to this Section 17.2. On the Senior
Unit Redemption Date, each holder of Senior Units shall surrender the
Certificates representing the number of Senior Units set forth in the Senior
Unit Redemption Notice, in proper transfer form, in the manner and place
designated in such notice. On the Senior Unit Redemption Date, the Senior Unit
Redemption Price shall be payable in cash to the person whose name appears on
such Certificates as the owner thereof, and, if purchased by the Partnership and
not any of its Affiliates, each surrendered Certificate shall be canceled and
retired. In the event that less than all of the Senior Units represented by any
such Certificates are being acquired by the Partnership or any of its
Affiliates, new Certificates shall be issued representing the number of Senior
Units to remain Outstanding.
(d) On and after the Senior Unit Redemption Date, unless the Partnership or any
of its Affiliates defaults in the payment in full of the Senior Unit Redemption
Price, all distributions on the Senior Units to be purchased shall cease, and
all rights associated with the Senior Units to be purchased shall terminate
other than the right to receive the Senior Unit Redemption Price.
2 ARTICLE GENERAL PROVISIONSARTICLE 34 GENERAL PROVISIONS
1.1 Section 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 deemed conclusively to have been fully satisfied, upon sending of such
notice, payment or report to the Record Holder of such Unit 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 or the Partnership 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 18.1
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 General Partner at the principal office of the
Partnership designated pursuant to Section 1.3. The General Partner 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.
1.1 Section References. Except as specifically provided
otherwise, references to .Articles.
and .Sections. are to Articles and Sections of this Agreement.
1.1 Section Pronouns and Plurals . Whenever the context may require, 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.
1.1 Section 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.
1.1 Section 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.
1.1 Section 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.
1.1 Section Creditors . None of the provisions of this Agreement shall be for
the benefit of, or shall be enforceable by, any creditor of the Partnership.
1.1 Section 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 or any other covenant, duty, agreement or
condition.
1.1 Section 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.
1.1 Section 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.
1.1 Section 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.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
GENERAL PARTNER:
FERRELLGAS, INC.
By: /S/ KEVIN T. KELLY
Name: Kevin T. Kelly
Title: Vice President and CFO
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
General Partner.
By: FERRELLGAS, INC.
General
Partner, as
attorney-in-fact
for all
Limited
Partners
pursuant to
the Powers of
Attorney
granted
pursuant to
Section 1.4.
By: /S/ KEVIN T. KELLY
Name: Kevin T. Kelly
Title: Vice President and CFO
<PAGE>
EXHIBIT A
to the Agreement of
Limited Partnership of
FERRELLGAS PARTNERS, L.P.
Certificate Evidencing Common Units
Representing Limited Partner Interests
FERRELLGAS PARTNERS, L.P.
No. Common Units
FERRELLGAS, INC., a Delaware corporation, as the General Partner of
FERRELLGAS 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 Agreement of Limited Partnership of FERRELLGAS 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 One Liberty Plaza, Liberty, Missouri 64068.
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:
Countersigned and Registered by: FERRELLGAS, INC.,
as General Partner
By:
Transfer Agent and Registrar President
By:
Authorized Signature Secretary
<PAGE>
[Reverse of Certificate]
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this Certificate, shall be construed as follows according to applicable laws
or regulations:
<TABLE>
<CAPTION>
<S> <C> <C>
TEN COM- as tenants in common UNIF GIFT MIN ACT-
TEN ENT- as tenants by the entireties ................Custodian...............
JT TEN- as joint tenants with right of (Cust) (Minor)
survivorship and not as under Uniform Gifts to Minors
tenants in common Act.....................................
State
</TABLE>
Additional abbreviations, though not in the above list, may
also be used.
ASSIGNMENT OF COMMON UNITS
in
FERRELLGAS PARTNERS, L.P.
IMPORTANT NOTICE REGARDING INVESTOR RESPONSIBILITIES
DUE TO TAX SHELTER STATUS OF FERRELLGAS PARTNERS, L.P.
You have acquired an interest in Ferrellgas Partners, L.P.,
One Liberty Plaza, Liberty, Missouri 64068, whose taxpayer identification number
is 43-1698480. The Internal Revenue Service has issued Ferrellgas Partners, L.P.
the following tax shelter registration number 94201000010:
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 FERRELLGAS PARTNERS, L.P.
You must report the registration number as well as the name
and taxpayer identification number of Ferrellgas 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 FERRELLGAS PARTNERS, L.P.
If you transfer your interest in Ferrellgas 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 Ferrellgas 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.
<PAGE>
FOR VALUE RECEIVED, hereby assigns, conveys, sells and transfers unto
(Please print or typewrite
name and address of
Assignee) (Please
insert Social Security
or other 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 Ferrellgas 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
alteration, enlargement or change.
SIGNATURE(S) MUST BE GUARANTEED BY A MEMBER FIRM OF THE
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. OR BY A
COMMERCIAL BANK OR TRUST COMPANY (Signature)
(Signature)
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.
<PAGE>
APPLICATION FOR TRANSFER OF COMMON UNITS
The undersigned (.Assignee.) hereby applies for transfer to the name of
the Assignee of the Common Units evidenced hereby.
The Assignee (a) requests admission as a Substituted Limited Partner
and agrees to comply with and be bound by, and hereby executes, the Agreement of
Limited Partnership of Ferrellgas 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) grants the powers of attorney provided for in the
Partnership Agreement and (d) 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:
Signature of Assignee
Social Security or other identifying number of Assignee
Name and Address of Assignee
Purchase Price
including commissions, if any
Type of Entity (check one)
Individual Partnership Corporation
Trust Other (specify)
Nationality (Check One):
U.S. Citizen, Resident or Domestic Entity
Foreign Corporation, or 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 interest holder's interest in it, the undersigned hereby certifies
the following (or, if applicable, certifies the following on behalf of the
interest holder).
Complete Either A or B:
A. Individual Interest Holder
1. I am not a non-resident alien for purposes of U.S. income taxation.
2. My U.S. taxpayer identifying number (Social Security Number) is.
3. My home address is
.
B. Partnership, Corporate or Other Interest-Holder
1. is not a
(Name of Interest-Holder)
foreign corporation, foreign partnership, foreign trust or foreign
estate (as those terms are defined in the Code and Treasury
Regulations).
2. The interest-holder's U.S. employer identification number is
.
3. The interest-holder's office address and place of incorporation
(if applicable) is
The interest-holder agrees to notify the Partnership within 60 days of the
date the interest-holder becomes a foreign person.
The interest-holder 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 Interest-Holder)
Signature and Date
Title (if applicable)
Note: If the Assignee is a broker, dealer, bank, trust company, clearing
corporation, other nominee holder or an agent of any of the foregoing, and is
holding for the account of any other person, this application should be
completed by an officer thereof or, in the case of a broker or dealer, by a
registered representative who is a member of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc.,
or, in the case of any other nominee holder, a person performing a similar
function. If the Assignee is a broker, dealer, bank trust company, clearing
corporation, other nominee owner or an agent of any of the foregoing, the above
certification as to any person for whom the Assignee will hold the Common Units
shall be made to the best of the Assignee's knowledge.
<PAGE>
EXHIBIT B
to the Agreement of
Limited Partnership of
FERRELLGAS PARTNERS, L.P.
Certificate Evidencing Senior Units
Representing Limited Partner Interests
FERRELLGAS PARTNERS, L.P.
No.________ Senior Units
FERRELLGAS, INC., a Delaware corporation, as the General Partner of
FERRELLGAS PARTNERS, L.P., a Delaware limited partnership (the .Partnership.),
hereby certifies that ____________________ (the .Holder.) is the registered
owner of _____ Senior Units representing limited partner interests in the
Partnership (the .Senior 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 Senior Units represented by this Certificate. The rights,
preferences and limitations of the Senior Units are set forth in, and this
Certificate and the Senior Units represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Agreement of Limited
Partnership of FERRELLGAS 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 One Liberty Plaza, Liberty, Missouri 64068. 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.
<PAGE>
Dated:
FERRELLGAS, INC.,
as General Partner
By:
President
By:
Secretary
<PAGE>
[Reverse of Certificate]
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this Certificate, shall be construed as follows according to applicable laws
or regulations:
<TABLE>
<CAPTION>
<S> <C> <C>
TEN COM- as tenants in common UNIF GIFT MIN ACT-
TEN ENT- as tenants by the entireties ................Custodian...............
JT TEN- as joint tenants with right of (Cust) (Minor)
survivorship and not as under Uniform Gifts to Minors
tenants in common Act.....................................
State
</TABLE>
Additional abbreviations, though not in the above list, may
also be used.
ASSIGNMENT OF SENIOR UNITS
in
FERRELLGAS PARTNERS, L.P.
IMPORTANT NOTICE REGARDING INVESTOR RESPONSIBILITIES
DUE TO TAX SHELTER STATUS OF FERRELLGAS PARTNERS, L.P.
You have acquired an interest in Ferrellgas Partners, L.P.,
One Liberty Plaza, Liberty, Missouri 64068, whose taxpayer identification number
is 43-1698480. The Internal Revenue Service has issued Ferrellgas Partners, L.P.
the following tax shelter registration number 94201000010:
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 FERRELLGAS PARTNERS, L.P.
You must report the registration number as well as the name
and taxpayer identification number of Ferrellgas 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 FERRELLGAS PARTNERS, L.P.
If you transfer your interest in Ferrellgas 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 Ferrellgas 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.
<PAGE>
FOR VALUE RECEIVED, hereby assigns, conveys, sells and transfers unto
(Please print or typewrite name (Please insert Social Security or other
identifying and address of Assignee) number of Assignee)
Senior 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 Ferrellgas 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 alteration, enlargement or change.
(Signature)
No transfer of the Senior Units evidenced hereby will be registered on
the books of the Partnership, unless the Certificate evidencing the Senior Units
to be transferred is surrendered for registration or transfer and an Application
for Transfer of Senior 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 Senior 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
Senior Units.
<PAGE>
APPLICATION FOR TRANSFER OF SENIOR UNITS
The undersigned (.Assignee.) hereby applies for transfer to the name of the
Assignee of the Senior 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 Agreement of
Limited Partnership of Ferrellgas 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) grants the powers of attorney provided for in the
Partnership Agreement and (d) 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:
Signature of Assignee
Social Security or other identifying Name and Address of Assignee
number of Assignee
Purchase Price
including commissions, if any
Type of Entity (check one)
Individual Partnership Corporation
Trust Other (specify)
Nationality (Check One):
U.S. Citizen, Resident or Domestic Entity
Foreign Corporation, or 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 interest holder's interest in it, the undersigned hereby certifies
the following (or, if applicable, certifies the following on behalf of the
interest holder). Complete Either A or B:
A. Individual Interest Holder
1. I am not a non-resident alien for purposes of U.S. income taxation.
2. My U.S. taxpayer identifying number (Social Security Number) is.
3. My home address is
.
B. Partnership, Corporate or Other Interest-Holder
1. is not a
(Name of Interest-Holder)
foreign corporation, foreign partnership, foreign trust or foreign
estate (as those terms are defined in the Code and Treasury
Regulations).
2. The interest-holder's U.S. employer identification number is
.
3. The interest-holder's office address and place of incorporation
(if applicable) is
The interest-holder agrees to notify the Partnership within 60 days of the
date the interest-holder becomes a foreign person.
The interest-holder 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 Interest-Holder)
Signature and Date
Title (if applicable)
Note: If the Assignee is a broker, dealer, bank, trust company, clearing
corporation, other nominee holder or an agent of any of the foregoing, and is
holding for the account of any other person, this application should be
completed by an officer thereof or, in the case of a broker or dealer, by a
registered representative who is a member of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc.,
or, in the case of any other nominee holder, a person performing a similar
function. If the Assignee is a broker, dealer, bank trust company, clearing
corporation, other nominee owner or an agent of any of the foregoing, the above
certification as to any person for whom the Assignee will hold the Senior Units
shall be made to the best of the Assignee's knowledge.
<PAGE>
Form of Election to Convert
To Ferrellgas Partners, L.P.
The undersigned owner of the Senior Units evidenced by this Certificate
hereby exercises the option to convert all such Senior Units, or the number of
Senior Units below designated, into Common Units of Ferrellgas Partners, L.P. in
accordance with the terms of the Partnership Agreement referred to in this
Certificate, and directs that the Common Units issuable and deliverable upon
conversion, together with any check in payment for fractional shares, be issued
with any check in payment for fractional shares, be issued in the name of and
delivered to the undersigned registered Holder hereof, unless a different name
has been indicated in the assignment below. If Common Units are to be issued in
the name of person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto. Any amount required to be paid by
the undersigned on account of accumulated and undistributed distributions
accompanies this Certificate.
Dated:
Number of Senior Units to be converted:
- ---------------
Signature (for conversion only)
If Common Units are to
be issued and
registered otherwise
than to the registered
Holder named above,
please print or
typewrite name and
address, including zip
code, and social
security or other
taxpayer
identification number.
COVENANT TO VOTE
In connection with the Purchase Agreement dated as of November 7, 1999
("Agreement") among Ferrellgas Partners, L.P. ("Purchaser"), Ferrellgas, L.P.
("Subsidiary OLP") and Williams Natural Gas Liquids, Inc. ("Seller"), the
undersigned hereby agrees with Seller to vote at a duly called meeting of
holders of Purchaser's common units (the "Common Units"), or to execute a
consent in lieu thereof with respect to, all Common Units held by the
undersigned in favor of the following matters:
1. the approval of the conversion feature of the Purchaser's senior
convertible units representing limited partner interests, $40.00 liquidation
preference per unit (the "Senior Unit") and the issuance of Common Units upon
exercise of the conversion option set forth in the terms of the Purchaser's
Agreement of Limited Partnership; and
2. the approval of an exemption under the Purchaser's Agreement of
Limited Partnership for Seller in order for Seller to be able to vote all of its
Common Units upon conversion.
Capitalized terms not otherwise defined herein shall have the meaning set forth
in the Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Covenant to Vote
this 17th day of December, 1999.
FERRELL COMPANIES, INC.
By: /s/ Kevin T. Kelly
- -------------------------------
Name: Kevin T. Kelly
Title: Vice President
Ferrell Companies, Inc.
REGISTRATION RIGHTS AGREEMENT
Dated as of December 17, 1999
by and between
FERRELLGAS PARTNERS, L.P.
and
WILLIAMS NATURAL GAS LIQUIDS, INC.
UNITS REPRESENTING LIMITED PARTNER INTERESTS
of
FERRELLGAS PARTNERS, L.P.
<PAGE>
TABLE OF CONTENTS
SECTION 1. Definitions 1
SECTION 2. Shelf Registration 5
SECTION 3. Additional Payments 8
SECTION 4. Registration Procedures 9
SECTION 5. Registration Expenses 14
SECTION 6. Indemnification 15
SECTION 7. Rule 144A 18
SECTION 8. Underwritten Offerings 18
SECTION 9. Miscellaneous 18
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered into as
of December __, 1999, by and between Ferrellgas Partners, L.P., a Delaware
limited partnership (the "Issuer"), and Williams Natural Gas Liquids, Inc., a
Delaware corporation ("Williams").
This Agreement is entered into in connection with the Purchase
Agreement, dated November 7, 1999, as amended (the "Purchase Agreement"), and a
Representations Agreement, dated the date hereof (the "Representations
Agreement"), by and among the Issuer, Ferrellgas L.P., a Delaware limited
partnership, Ferrellgas, Inc., a Delaware corporation, and Williams, relating to
the sale by Williams to the Issuer of Williams' equity interest in Thermogas
L.L.C., a Delaware limited liability company (formerly, Thermogas Company, a
Delaware corporation), in consideration, among other things, of 4,375,000 of the
Issuer's senior convertible units representing limited partner interests, $40.00
liquidation preference per unit (the "Senior Units").
In order to induce Williams to enter into the Purchase Agreement and
the Representations Agreement, the Issuer has agreed to provide the registration
rights set forth in this Agreement for the benefit of the holders of Registrable
Units (as defined), including, without limitation, Williams. The execution and
delivery of this Agreement is a condition to Williams' obligation to consummate
the transactions contemplated by the Purchase Agreement.
The parties hereby agree as follows:
1. SECTION Definitions .
As used in this Agreement, the following terms shall have the following
meanings:
Additional Payment Rate: See Section 3(b).
Additional Payments: See Section 3(a).
Additional Senior Units: See Section 5.4 of the Partnership Agreement.
Advice: See the last paragraph of Section 4.
Agreement: See the first introductory paragraph to this Agreement.
Business Day: A day that is not a Saturday, a Sunday, or a day on
which banking institutions in New York, New York are required to be closed.
Closing Date: The Closing Date as defined in the Purchase Agreement.
Closing Price: With respect to the Common Units, the last reported sale
price of the Common Units on such day, or in the case no sale takes place on
such day, the average of the closing bid and asked prices in each case on the
principal national securities exchange on which the Common Units are listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the NASDAQ National Market or any successor national
automated interdealer quotation system or, if the Common Units are not listed or
admitted to trading on any national securities exchange or quoted on the NASDAQ
National Market, the average of the closing bid and asked prices of the Common
Units in the over-the-counter market as furnished by any New York Stock Exchange
member firm selected by the Issuer for such purpose.
Commission: The Securities and Exchange Commission.
Common Units: See Article II of the Partnership Agreement.
Effectiveness Actual Date: With respect to any Registration Statement
referred to in Section 2(a), the actual date such Initial Registration Statement
is declared effective.
Effectiveness Target Date:
<PAGE>
NYC:70964.12
(i) With respect to the Initial Registration Statement referred to in
Section 2(a)(i), the date that is 90 days following the occurrence of a Material
Event; (ii) with respect to the Initial Registration Statement referred to in
Section 2(a)(ii), the date that is 90 days after the delivery to the Issuer of a
Shelf Notice thereunder; and (iii) with respect to the Initial Registration
Statement referred to in Section 2(a)(iii), the date that is 180 days after the
Closing Date.
Effectiveness Period: With respect to any Initial Registration
Statement referred to in any subsection of Section 2(a), the period commencing
on the applicable Effectiveness Actual Date during which the Issuer has agreed
to use its reasonable best efforts to keep the applicable Initial Registration
Statement continuously effective under the Securities Act and ending as provided
in the applicable subsection of Section 2(a).
Event Date: See Section 3(b).
Exchange Act: The Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
Holder: Any registered holder of Registrable Units.
Indemnified Person: See Section 6(c).
Indemnifying Person: See Section 6(c).
Initial Shelf Registration: Any Registration Statement filed pursuant
to Section 2(a).
Inspectors: See Section 4(o).
Issuer: Ferrellgas Partners, L.P., a Delaware limited partnership.
Market Value: The average of the daily Closing Prices for Common Units
during the five consecutive trading days prior to and including the date of
determination, as adjusted in good faith by the general partner of the Issuer to
appropriately reflect any splits or combinations of the Common Units subsequent
to the Closing Date.
Material Event: See Article II of the Partnership Agreement.
NASD: National Association of Securities Dealers, Inc.
Outstanding: With respect to the Units, all Units that are issued by
the Partnership and reflected as outstanding on the Partnership's books and
records as of the date of determination.
Participant: See Section 6(a).
Partnership Agreement: The Amended and Restated Agreement of Limited
Partnership of the Issuer, as same may be amended from time to time pursuant to
the terms thereof.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust, unincorporated
organization or government (including any agency or political subdivision
thereof).
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Registrable Units covered by such Registration Statement, and all other
amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
Purchase Agreement: See the second introductory paragraph to this
Agreement.
Records: See Section 4(o).
<PAGE>
Registrable Units: (i) any Units issued or issuable pursuant to the
Purchase Agreement, this Agreement or the provisions of the Partnership
Agreement relating to the issuance of Senior Units (including any Additional
Senior Units) or the issuance of Common Units upon conversion of Senior Units,
(ii) in the case of the Senior Units if the Unitholders have approved the Senior
Unit Conversion Option in accordance with the Partnership Agreement, all Common
Units into which such Senior Units are convertible and (iii) any Units issued or
issuable with respect to the Units referred to in clause (i) or (ii) above by
way of a Unit distribution or Unit split or in connection with a combination of
Units, recapitalization, merger, consolidation or other reorganization. As to
any particular Registrable Units, such Units shall cease to be Registrable Units
upon the earliest to occur of (i) a Registration Statement covering such Units
has been declared effective by the Commission and such Units have been disposed
of in accordance with such effective Registration Statement, (ii) such Units are
eligible for sale to the public pursuant to Rule 144 (or any similar provision
then in force) under the Securities Act without being subject to the volume and
manner of sale restrictions contained therein and the Effectiveness Period
applicable to the Registration Statement has expired, (iii) such Units shall
have been otherwise transferred by such Holder and new certificates for such
securities not bearing a legend restricting further transfer shall have been
delivered by the Issuer or its transfer agent and subsequent disposition of such
securities shall not require registration or qualification under the Securities
Act or any similar state law then in force, or (iv) such Units cease to be
Outstanding for purposes of the Partnership Agreement. Common Units or Senior
Units that are Registrable Units are sometimes referred to herein as Registrable
Common Units or Registrable Senior Units, respectively.
Registration Statement: Any registration statement of the Issuer that
covers any of the Registrable Units pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.
Representations Agreement: See the second introductory paragraph of this
Agreement.
Rule 144: Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the Commission.
Rule 144A: Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule (other than Rule 144) or
regulation hereafter adopted by the Commission.
Rule 415: Rule 415 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
Senior Unit Conversion Option: See Article II of the Partnership Agreement.
Senior Unit Distribution: See Article II of the Partnership Agreement.
Senior Units: See the second introductory paragraph of this Agreement.
Shelf Notice: See Section 2(a).
Shelf Registration: See Section 2(c).
Subsequent Shelf Registration: See Section 2(c).
Suspension Period: See Section 2(d).
Underwritten offering: An offering in which securities of the Issuer
are sold to an underwriter or underwriters for reoffering to the public.
Unitholders: Holders of limited partnership interests in the Issuer.
Units: The Senior Units and the Common Units of the Issuer.
1. SECTION Shelf Registration .
(a) Filing and Effectiveness of Shelf Registration.
(i) Upon the occurrence of a Material Event, the Issuer shall file with the
Commission an Initial Shelf Registration for an offering to be made on a
continuous basis pursuant to Rule 415 covering all of the Registrable Units
within 30 days of the occurrence of the Material Event and shall use its
reasonable best efforts to cause the Initial Shelf Registration to be declared
effective under the Securities Act within 90 days following the occurrence of
the Material Event. The Issuer shall use its reasonable best efforts to keep the
Initial Shelf Registration continuously effective under the Securities Act for
(A) an Effectiveness Period until the date which is two years from the
Effectiveness Actual Date (or, if Rule 144(k) under the Securities Act is
amended to permit unlimited resales of the Registrable Units by non-affiliates
within a lesser period, such lesser period), subject to extension (I) pursuant
to the last paragraph of Section 4 hereof or (II) for so long as at least (x)
$10 million aggregate liquidation preference of the Senior Units or (y) $10
million aggregate Market Value of Common Units, as applicable, covered by the
Initial Registration Statement have not been sold in transactions described in
clauses (i) or (iii) of the second sentence of the definition of Registrable
Units, or (B) such shorter Effectiveness Period ending when all Registrable
Units covered by the Initial Shelf Registration either have been sold in
transactions described in clauses (i) or (iii) of the second sentence of the
definition of Registrable Units or shall cease to be Outstanding, other than, in
either case, less than (x) $10 million aggregate liquidation preference of
Senior Units or (y) $10 million aggregate Market Value of Common Units, as
applicable.
(ii) At any time commencing on or after November 3, 2001, unless Section
2(a)(i) is applicable, the Holders of at least 25% in aggregate number of
outstanding Registrable Units may make a written request (a "Shelf Notice") to
the Issuer for registration of Registrable Units to be made pursuant to an
Initial Registration Statement. The Issuer shall give written notice of such
registration request within 5 Business Days after the receipt thereof to all
other Holders. Within 7 Business Days after receipt of such notice by any
Holder, such Holder may request in writing that such Holder's Registrable Units
be included in such registration and the Issuer shall include in the Initial
Shelf Registration the Registrable Units of any such selling Holder requested to
be so included. A Holder so notified who does not timely make such request may
not later deliver a Shelf Notice to the Company requiring the Company to file
another Shelf Registration under this Section 2 with respect to such Holder's
Registrable Units, but may later request in writing (but no more than twice
during any consecutive 12 months) that such Holder's Registrable Units be
included in the Initial Shelf Registration and the Issuer shall, as soon as
possible, include in such Initial Shelf Registration the Registrable Units of
any such selling Holder requested to be so included (and, if the Initial
Registration Statement has already been filed, shall file with the Commission a
pre-effective or post-effective amendment, as applicable, to effect such
inclusion).
The Issuer shall file with the Commission an Initial
Registration Statement for an offering to be made on a continuous basis
pursuant to Rule 415 covering all of the Registrable Units within 30
days of the delivery of the Shelf Notice and shall use its reasonable
best efforts to cause the Initial Shelf Registration to be declared
effective under the Securities Act within 90 days after the delivery to
the Issuer of a Shelf Notice. The Issuer shall use its reasonable best
efforts to keep the Initial Shelf Registration continuously effective
under the Securities Act for (A) an Effectiveness Period until the date
which is two years from the Effectiveness Actual Date (or, if Rule
144(k) under the Securities Act is amended to permit unlimited resales
of the Registrable Units by non-affiliates within a lesser period such
lesser period), subject to extension (I) pursuant to the last paragraph
of Section 4 hereof or (II) for so long as at least (x) $10 million
aggregate liquidation preference of Senior Units or (y) $10 million
aggregate Market Value of Common Units, as applicable, covered by the
Initial Registration Statement have not been sold in transactions
described in clauses (i) or (iii) of the second sentence of the
definition of Registrable Units, or (B) such shorter Effectiveness
Period ending when all Registrable Common Units covered by the Initial
Shelf Registration either have been sold in transactions described in
clauses (i) or (iii) of the second sentence of the definition of
Registrable Units or shall cease to be Outstanding, other than, in
either case, less than (x) $10 million aggregate liquidation preference
of Senior Units or (y) $10 million aggregate Market Value of Common
Units, as applicable.
(i) In the event that, within 120 days of the closing under the Purchase
Agreement, the Unitholders have not approved the Senior Unit Conversion Option
in accordance with the Partnership Agreement and no Material Event has occurred,
the Issuer shall file with the Commission an Initial Shelf Registration for an
offering to be made on a continuous basis pursuant to Rule 415 covering all of
the Registrable Senior Units and shall use its reasonable best efforts to cause
the Initial Shelf Registration to be declared effective under the Securities Act
within 180 days after the Closing Date. The Issuer shall use its reasonable best
efforts to keep the Initial Shelf Registration continuously effective under the
Securities Act for an Effectiveness Period until the date when all Registrable
Senior Units covered by the Initial Shelf Registration have been sold in
transactions described in clauses (i) or (iii) of the second sentence of the
definition of Registrable Units, or shall cease to be outstanding.
(b) Form of Shelf Registration. The Initial Shelf Registration shall be on Form
S-3 or another appropriate form permitting registration of such Registrable
Units for resale by Holders in the manner or manners designated by them
(including, without limitation, one or more underwritten offerings). The Issuer
shall not permit any securities other than the Registrable Units to be included
in any Shelf Registration.
(c) Subsequent Shelf Registrations. If the Initial Shelf Registration or any
Subsequent Shelf Registration ceases to be effective for any reason at any time
during the Effectiveness Period (other than because of the expiration of the
Effectiveness Period in accordance with Section 2(a)), the Issuer shall use its
reasonable best efforts to obtain the prompt withdrawal of any order suspending
the effectiveness thereof, and in any event shall within 30 days of such
cessation of effectiveness amend the Shelf Registration in a manner to obtain
the withdrawal of the order suspending the effectiveness thereof, or file an
additional "shelf" Registration Statement pursuant to Rule 415 covering all of
the Registrable Units (a "Subsequent Shelf Registration"). If a Subsequent Shelf
Registration is filed, the Issuer shall use its reasonable best efforts to cause
the Subsequent Shelf Registration to be declared effective as soon as
practicable after such filing and to keep such Subsequent Shelf Registration
continuously effective until the end of the applicable Effectiveness Period. As
used herein the term "Shelf Registration" means the Initial Shelf Registration
and any Subsequent Shelf Registration.
(d) Suspension Period. Notwithstanding anything herein to the contrary, the
Issuer shall not be obligated to keep any Shelf Registration effective or to
permit the use of any Prospectus forming a part of any Shelf Registration if
<PAGE>
NYC:70964.12
(i) the Issuer determines, in its reasonable judgment upon advice of counsel,
that the continued effectiveness and use of the Shelf Registration would
<PAGE>
NYC:70964.12
(e) require the disclosure of material information which the Issuer has a bona
fide business reason for preserving as confidential, or interfere with any
acquisition, corporate reorganization or other material transaction involving
the Issuer or any of its subsidiaries; provided, however, that the failure to
keep the Shelf Registration effective and usable for offers and sales of
Registrable Units for such reasons shall last no longer than 30 days per
occurrence or 60 days in the aggregate for any consecutive twelve-month period,
and the Issuer promptly thereafter complies with the requirements of Section
4(k) hereof, if applicable (any such period during which the Issuer is excused
from keeping the Shelf Registration effective and usable for offers and sales of
Registrable Units is referred to herein as a "Suspension Period," and a
Suspension Period shall commence on and include the date that the Issuer gives
notice to the Holders that the Shelf Registration is no longer effective or the
Prospectus included therein is no longer usable for offers and sales of
Registrable Units as a result of the foregoing provisions and shall end on the
earlier to occur of the date on which each selling Holder of Registrable Units
covered by the Shelf Registration either receives the copies of the supplemental
or amended prospectus contemplated by Section 4(k) hereof or is advised in
writing by the Issuer that use of the prospectus may be resumed).
(f) Supplements and Amendments. The Issuer shall promptly supplement and amend
any Shelf Registration if required by the rules, regulations or instructions
applicable to the registration form used for such Shelf Registration, if
required by the Securities Act, or if reasonably requested by the Holders of a
majority in aggregate number of the Registrable Units covered by such Shelf
Registration or by any underwriter of such Registrable Units, in each case, with
the Issuer's consent, which consent shall not be unreasonably withheld or
delayed.
(a)
<PAGE>
NYC:70964.12
2. SECTION Additional Payments .
(a) The Issuer and Williams agree that the Holders of Registrable Units will
suffer damages if the Issuer fails to fulfill its obligations under Section 2
hereof and that it would not be feasible to ascertain the extent of such damages
with precision. Accordingly, the Issuer agrees to pay, as liquidated damages,
payments on the Registrable Units in addition to any amounts otherwise payable
thereon ("Additional Payments") under the circumstances and to the extent set
forth below (each of which shall be given independent effect):
(i) if an Initial Shelf Registration is not declared effective on or prior
to the applicable Effectiveness Target Date, commencing on the day
immediately following such Effectiveness Target Date, Additional
Payments shall accrue on the Registrable Units at the Additional
Payment Rate for each day that such Initial Shelf Registration is not
declared effective; and
(ii) if a Shelf Registration has been declared effective and such Shelf
Registration ceases to be effective at any time during the applicable
Effectiveness Period , commencing on the day immediately following the
date such Shelf Registration ceases to be effective (other than
pursuant to Section 2(d)), Additional Payments shall accrue on the
Registrable Units at the Additional Payment Rate for each day that such
Shelf Registration ceases to be effective;
provided, however, that (1) upon the effectiveness of an Initial Shelf
Registration (in case of (i) above) or (2) upon the reinstatement of
effectiveness of a Shelf Registration which has ceased to remain effective (in
the case of (ii) above), Additional Payments on any Registrable Units then
accruing Additional Payments as a result of such clause shall cease to accrue.
(a) The Issuer shall notify the Holders within one Business Day after each and
every date on which an event occurs in respect of which Additional Payments are
required to be paid (an "Event Date"). Any amounts of Additional Payments due
pursuant to (a)(i) or (a)(ii) of this Section 3 will be payable (i) in the case
of the Common Units, in cash, or (ii) in the case of the Senior Units, (x) on or
prior to the earlier to occur of February 1, 2002 or the first occurrence of a
Material Event, in Additional Senior Units and (y) thereafter, in cash. Any such
amounts will be payable monthly on the first Business Day of each month to the
holder of record on such day commencing with the first such day after any Event
Date. Additional Payments shall accrue at a rate (the "Additional Payment Rate")
equal to (i) in the case of Senior Units, $0.25 per Senior Unit per quarter or
(ii) in the case of Common Units that were issued upon exercise of the Senior
Unit Conversion Option, an amount per Common Unit per quarter equal to $0.25
divided by the number of Common Units into which each Senior Unit was converted.
The amount of Additional Payments will be determined by multiplying the
applicable Additional Payment Rate by the number of the Units subject thereto,
multiplied by a fraction, the numerator of which is the number of days such
Additional Payment Rate was applicable during such period (determined on the
basis of a 90-day quarter comprised of three 30-day months), and the denominator
of which is 90.
(b) The Issuer and the Holders hereby agree that any Additional Payments paid in
cash shall be treated, for federal income tax purposes, as a transaction
occurring between the Issuer and one who is not a partner in the Issuer in
accordance with Section 707(a)(1) of the Internal Revenue Code of 1986, as
amended, and shall not be treated as a distribution under the terms of the
Partnership Agreement.
4. SECTION Registration Procedures .
Whenever the Holders have requested that any Registrable Units be
registered pursuant to Section 2 hereof, the Issuer will use its reasonable best
efforts to effect the registration of such Registrable Units in accordance with
the intended method of disposition thereof as quickly as practicable, and in
connection with any Registration Statements, the Issuer will as expeditiously as
possible:
(a) Prepare and file with the Commission a Registration Statement and use its
reasonable best efforts to cause each such Registration Statement to become
effective and remain effective as provided herein; provided that, before filing
any Registration Statement or any amendments or supplements thereto, the Issuer
shall, if requested, furnish to and afford the Holders of the Registrable Units
to be registered pursuant to such Registration Statement and their counsel and
the managing underwriters, if any, a reasonable opportunity to review copies of
all such documents (including copies of any documents to be incorporated by
reference therein and all exhibits thereto) proposed to be filed (in each case
at least five Business Days prior to such filing). The Issuer shall not file any
such Registration Statement or any amendments or supplements thereto if the
Holders of a majority in aggregate number of the Registrable Units covered by
such Registration Statement or their counsel shall reasonably object.
(b) Prepare and file with the Commission such amendments and post-effective
amendments to each Registration Statement, as may be necessary to keep such
Registration Statement continuously effective for the applicable Effectiveness
Period provided herein; cause the related Prospectus to be supplemented by any
Prospectus supplement required by applicable law, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act; and comply with the provisions of the Securities Act and the
Exchange Act applicable to it with respect to the disposition of all securities
covered by such Registration Statement as so amended or in such Prospectus as so
supplemented.
(a)
<PAGE>
NYC:70964.12
(i) Notify the selling Holders of Registrable Units, their counsel and the
managing underwriters, if any, promptly (but in any event within two Business
Days), and confirm such notice in writing, when a Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same has become
effective (including in such notice a written statement that any Holder may,
upon request, obtain, without charge, one conformed copy of such Registration
Statement or post-effective amendment including financial statements and
schedules, documents incorporated or deemed to be incorporated by reference and
exhibits), of the issuance by the Commission of any stop order suspending the
effectiveness of a Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or the initiation of any
proceedings for that purpose, if at any time when a prospectus is required by
the Securities Act to be delivered in connection with sales of the Registrable
Units the representations and warranties of the Issuer contained in any
agreement (including any underwriting agreement contemplated by Section 4(n)
hereof) cease to be true and correct in any material respect, of the receipt by
the Issuer of any notification with respect to the suspension of the
qualification or exemption from qualification of a Registration Statement or any
of the Registrable Units, or the initiation or threatening of any proceeding for
such purpose, of the happening of any event, the existence of any condition or
any information becoming known that makes any statement made in such
Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in, or amendments or supplements to,
such Registration Statement, Prospectus or docum
<PAGE>
NYC:70964.12
(ii) ents so that, in the case of the Registration Statement, it will not
contain 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 that in the case of the Prospectus, it will not contain 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, in light of
the circumstances under which they were made, not misleading, and of the
Issuer's reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate.
(c) Use its reasonable best efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the qualification
(or exemption from qualification) of any of the Registrable Units, for sale in
any jurisdiction, and, if any such order is issued, to use its reasonable best
efforts to obtain the withdrawal of any such order at the earliest possible
date.
(d) If requested by the managing underwriters, if any, or the Holders of a
majority in aggregate number of the Registrable Units being sold in connection
with an underwritten offering, (i) as promptly as practicable incorporate in a
prospectus supplement or post-effective amendment such information or revisions
to information therein relating to such underwriters or selling Holders as the
managing underwriters, if any, or such Holders or their counsel reasonably
request to be included or made therein, (ii) make all required filings of such
prospectus supplement or such post-effective amendment as soon as practicable
after the Issuer has received notification of the matters to be incorporated in
such prospectus supplement or post-effective amendment, and (iii) supplement or
make amendments to such Registration Statement.
(e) Furnish to each selling Holder of Registrable Units who so requests and to
counsel and each managing underwriter, if any, who so requests without charge,
one conformed copy of the Registration Statement or Registration Statements and
each post-effective amendment thereto, including financial statements and
schedules, and, if requested, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits.
(f) Deliver to each selling Holder of Registrable Units, their respective
counsel, and the underwriters, if any, without charge, as many copies of the
Prospectus or Prospectuses (including each form of preliminary prospectus) and
each amendment or supplement thereto and any documents incorporated by reference
therein as such Persons may reasonably request; and, subject to the last
paragraph of this Section 4, the Issuer hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the selling
Holders of Registrable Units, and the underwriters or agents, if any, and
dealers (if any), in connection with the offering and sale of the Registrable
Units covered by such Prospectus and any amendment or supplement thereto.
(g) Prior to any public offering of Registrable Units, use its reasonable best
efforts to register or qualify, and cooperate with the selling Holders of
Registrable Units, the underwriters, if any, and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Units, for offer and sale
under the securities or Blue Sky laws of such jurisdictions within the United
States as any selling Holder, or the managing underwriter or underwriters, if
any, reasonably request in writing; keep each such registration or qualification
(or exemption therefrom) effective during the period such Registration Statement
is required to be kept effective and do any and all other acts or things
reasonably necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Units covered by the applicable Registration
Statement; provided that the Issuer shall not be required to (A) qualify
generally to do business in any jurisdiction where it is not then so qualified,
(B) take any action that would subject it to general service of process in any
such jurisdiction where it is not then so subject or (C) subject itself to
taxation in any such jurisdiction where it is not then so subject.
(h) Facilitate the timely preparation and delivery of certificates representing
Registrable Units to be sold, which certificates shall not bear any restrictive
legends and shall be in a form eligible for deposit with The Depository Trust
Company; and enable such Registrable Units to be in such denominations and
registered in such names as the managing underwriter or underwriters, if any, or
Holders may reasonably request.
(i) Use its reasonable best efforts to cause the Registrable Units covered by
the Registration Statement to be registered with or approved by such
governmental agencies or authorities as may be necessary to enable the seller or
sellers thereof or the underwriters, if any, to consummate the disposition of
such Registrable Units, in which case the Issuer will cooperate in all
reasonable respects with the filing of such Registration Statement and the
granting of such approvals.
(j) Upon the occurrence of any event contemplated by paragraph 4(c)(v) or
4(c)(vi) hereof, as promptly as practicable prepare and (subject to Section 4(a)
hereof) file with the Commission, at the Issuer's sole expense, a supplement or
post-effective amendment to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Units being sold thereunder, any
such Prospectus 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, in light of the circumstances under which they were made,
not misleading.
(k) Use its reasonable best efforts to cause the Registrable Senior Units
covered by a Registration Statement to be rated with the appropriate rating
agencies, if so requested by the managing underwriter or underwriters, if any.
(l) Prior to the effective date of the first Registration Statement relating to
the Registrable Units, (i) provide the transfer agent with printed certificates,
if not then already available, for the Registrable Units in a form eligible for
deposit with The Depository Trust Company and (ii) provide a CUSIP number for
the Registrable Senior Units.
(a)
<PAGE>
NYC:70964.12
(i) Enter into an underwriting agreement as is customary in underwritten
offerings of master limited partnership equity securities similar to the Senior
Units or the Common Units, as the case may be, and take all such other actions
as are reasonably requested by the managing underwriter or underwriters, if any,
in order to expedite or facilitate the registration or the disposition of such
Registrable Units (including preparation of and participation in a "road show"
in connection with such disposition) and, in such connection, make such
representations and warranties to the underwriters, with respect to the business
of the Issuer and its subsidiaries and the Registration Statement, Prospectus
and documents, if any, incorporated or deemed to be incorporated by reference
therein, in each case, as are customarily made by issuers to underwriters in
underwritten offerings of master limited partnership equity securities similar
to the Senior Units or the Common Units, as the case may be, and confirm the
same in writing if and when requested; if requested by the managing underwriter
or underwriters, obtain the opinion of counsel to the Issuer and updates thereof
in form and substance reasonably satisfactory to the managing underwriter or
underwriters, addressed to the underwriters covering the matters customarily
covered in opinions requested in underwritten offerings of master limited
partnership equity securities similar to the Senior Units or the Common Units,
as the case may be, and such other matters as may be reasonably requested by
underwriters; if requested by the managing underwriter or underwriters, if any,
obtain "cold comfort" letters and updates thereof in form and substance
reasonably satisfactory to the managing underwriter or underwriters from the
independent certified public accountants of the Issuer (and, if necessary, any
other independent certified public accountants of any subsidiary of the Issuer
or of any business acqui
<PAGE>
NYC:70964.12
(ii) red by the Issuer for which financial statements and financial data are, or
are required to be, included in the Registration Statement), addressed to each
of the underwriters, such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters in connection with
underwritten offerings of master limited partnership equity securities similar
to the Senior Units or the Common Units, as the case may be, and such other
matters as reasonably requested by the managing underwriter or underwriters; and
if an underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable than those set forth
in Section 6 hereof (or such other provisions and procedures acceptable to
Holders of a majority in aggregate number of Registrable Units covered by such
Registration Statement and the managing underwriter or underwriters or agents)
with respect to all parties to be indemnified pursuant to said Section. The
above shall be done at each closing under such underwriting agreement, or as and
to the extent required thereunder.
(m) Make available for inspection by representatives appointed by the selling
Holders of a majority of such Registrable Units being sold, and any underwriter
participating in any such disposition of Registrable Units, if any
(collectively, the "Inspectors"), at the offices where normally kept, during
reasonable business hours, all material financial and other records, pertinent
corporate documents and properties of the Issuer and its subsidiaries
(collectively, the "Records") as shall be reasonably necessary to enable them to
exercise any applicable due diligence responsibilities, and cause the officers,
directors and employees of the Issuer and its subsidiaries to supply all
material information reasonably requested by any such Inspector in connection
with such Registration Statement. Each selling Holder of such Registrable Units
will be required to agree that information obtained by it as a result of such
inspections shall be deemed confidential and shall not be used by it as the
basis for any market transactions in the securities of the Issuer unless and
until such is made generally available to the public. Each Inspector and each
selling Holder of such Registrable Units will be required to further agree that
it will, upon learning that disclosure of such Records is sought in a court of
competent jurisdiction of the previous sentence or otherwise, give notice to the
Issuer and allow the Issuer to undertake appropriate action to obtain a
protective order or otherwise prevent disclosure of the Records deemed
confidential at its expense.
(n) Provide a transfer agent for the Registrable Units, to the extent not
already provided.
(o) Comply with all applicable rules and regulations of the Commission and make
generally available to its securityholders earnings statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or
any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Units are sold to underwriters in a firm commitment
or best efforts underwritten offering and (ii) if not sold to underwriters in
such an offering, commencing on the first day of the first fiscal quarter of the
Issuer after the effective date of a Registration Statement, which statements
shall cover said 12-month periods.
(p) Cooperate with each seller of Registrable Units covered by any Registration
Statement and each underwriter, if any, participating in the disposition of such
Registrable Units and their respective counsel in connection with any filings
required to be made with the NASD.
(q) Use its reasonable best efforts to take all other steps reasonably necessary
to effect the registration of the Registrable Units covered by a Registration
Statement contemplated hereby.
The Issuer may, as a condition to such Holder's participation in any
Registration Statements, require each Holder of Registrable Units to (i) furnish
to the Issuer such information regarding the Holder and the proposed
distribution by such Holder of such Registrable Units as the Issuer may from
time to time reasonably request in writing, (ii) agree in writing to be bound by
this Agreement and (iii) enter into a standard form underwriting agreement. The
Issuer may exclude from such registration the Registrable Units of any seller
who fails to furnish such information described in clause (i) of the immediately
preceding sentence or enter into the agreements contemplated by clauses (ii) and
(iii) of the immediately preceding sentence within a reasonable time after being
requested to do so.
Each Holder of Registrable Units agrees by acquisition of such
Registrable Units that, upon receipt of any notice from the Issuer of the
happening of any event of the kind described in Section 4(c)(ii), 4(c)(iv),
4(c)(v), or 4(c)(vi), such Holder will forthwith discontinue disposition of such
Registrable Units covered by such Registration Statement or Prospectus and, in
each case, dissemination of such Prospectus until such Holder's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 4(k),
or until it is advised in writing (the "Advice") by the Issuer that the use of
the applicable Prospectus may be resumed, and has received copies of any
amendments or supplements thereto. In the event the Issuer shall give any such
notice, the period during which such Registration Statement is required to
remain effective shall be extended by the number of days during such periods
from and including the date of the giving of such notice to and including the
date when each seller of Registrable Units covered by such Registration
Statement, shall have received (x) the copies of the supplemented or amended
Prospectus contemplated by Section 4(k) or (y) the Advice.
3. SECTION Registration Expenses .
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NYC:70964.12
(i) All fees and expenses incident to the performance of or compliance with this
Agreement by the Issuer shall be borne by the Issuer whether or not a Shelf
Registration is filed or becomes effective, including, without limitation, all
registration and filing fees (including, without limitation, fees with respect
to filings required to be made with the NASD in connection with an underwritten
offering and fees and expenses of compliance with state securities or Blue Sky
laws (including, without limitation, reasonable fees and disbursements of
counsel in connection with Blue Sky qualifications of the Registrable Units and
determination of the eligibility of the Registrable Units for investment under
the laws of such jurisdictions where the holders of Registrable Units are
located)), printing expenses, including, without limitation, expenses of
printing certificates for Registrable Units in a form eligible for deposit with
The Depository Trust Company and of printing prospectuses if the printing of
prospectuses is requested by the managing underwriter or underwriters, if any,
or by the Holders of a majority in aggregate number of the Registrable Units
included in any Registration Statement, fees and disbursements of counsel for
the Issuer and reasonable fees and disbursements of up to one special counsel
chosen by holders of the majority of the Registrable Units (other than any local
counsel) for the sellers of Registrable Units, fees and disbursements of all
independent certified public accountants referred to in Section 4(n)(iii)
(including, without limitation, the expenses of any special audit and "cold
comfort" letters required by or incident to such performance), rating agency
fees, fees and expenses of all other Persons retained by the Issuer, internal
expenses of the Issuer (including, without limitation, all salaries and expenses
of officers and employees of the Issuer performing legal or accounting duties),
the expense of any
<PAGE>
NYC:70964.12
(ii) annual or special audit, the fees and expenses incurred in connection with
the listing of the securities to be registered on any securities exchange, the
fees and disbursements of underwriters, if any, customarily paid by issuers or
sellers of securities (but not including any underwriting discounts or
commissions or transfer taxes, if any, attributable to the sale of the
Registrable Units which discounts, commissions or taxes shall be paid by Holders
of such Registrable Units) and the expenses relating to printing, word
processing and distributing all Registration Statements, underwriting
agreements, securities sales agreements and any other documents necessary in
order to comply with this Agreement.
4. SECTION Indemnification .
(a) The Issuer agrees to indemnify and hold harmless each Holder of Registrable
Units, the officers, directors, employees and agents of each such Person, and
each Person, if any, who controls any such Person within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a
"Participant"), from and against any and all losses, claims, damages and
liabilities (including, without limitation, the reasonable legal fees and other
reasonable expenses actually incurred in connection with any suit, action or
proceeding or any claim asserted) caused by, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (as amended or supplemented if the Issuer
shall have furnished any amendments or supplements thereto) or caused by,
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information relating to
any Participant furnished to the Issuer in writing by or on behalf of such
Participant expressly for use therein.
(b) Each Participant will be required to agree, severally and not jointly, to
indemnify and hold harmless the Issuer, the general partner of the Issuer and
its directors and officers and each Person who controls the Issuer and its
general partner within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Issuer to each Participant, but only with reference to information
relating to such Participant furnished to the Issuer in writing by such
Participant expressly for use in any Registration Statement or Prospectus, any
amendment or supplement thereto, or any preliminary prospectus. The liability of
any Participant under this paragraph shall in no event exceed the proceeds
received by such Participant from sales of Registrable Units giving rise to such
obligations.
(c) If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any Person
in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such Person (the "Indemnified Person") shall promptly
notify the Person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person may, at its option, participate
in and assume the defense thereof and retain counsel reasonably satisfactory to
the Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may reasonably designate in such proceeding and shall pay
the reasonable fees and expenses actually incurred by such counsel related to
such proceeding; provided, however, that the failure to so notify the
Indemnifying Person shall not relieve it of any obligation or liability which it
may have hereunder or otherwise except to the extent that the Indemnifying
Person is materially prejudiced by such failure to notify. In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed in writing to the contrary, (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person or (iii) the named parties in
any such proceeding (including any impleaded parties) include both the
Indemnifying Person and the Indemnified Person, or affiliates of such Persons,
and there may be one or more defenses available to such Indemnified Person or
Persons that are different from or additional to those available to the
Indemnifying Persons, in which case, if such Indemnified Person or Persons
notifies the Indemnifying Persons in writing that it elects to employ separate
counsel of its choice at the expense of the Indemnifying Persons, the
Indemnifying Persons shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the Indemnifying Persons. The
Indemnifying Person shall not, in any event, unless there exists a conflict
among Indemnified Persons, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of more
than one separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be reimbursed as they are
incurred. Any such separate firm for the Participants and such control Persons
of Participants shall be designated in writing by Participants who sold a
majority in interest of Registrable Units sold by all such Participants and any
such separate firm for the Issuer, its directors, officers and such control
Persons of the Issuer shall be designated in writing by the Issuer. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there is a final nonappealable judgment for the plaintiff, the Indemnifying
Person agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested an
Indemnifying Person to reimburse the Indemnified Person for reasonable fees and
expenses actually incurred by counsel as contemplated by the third sentence of
this paragraph, the Indemnifying Person agrees that it shall be liable for any
settlement of any proceeding effected without its consent if (i) such settlement
is entered into more than 30 days after receipt by such Indemnifying Person of
the aforesaid request and (ii) such Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement. No Indemnifying Person shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement (A) includes an unconditional release
of such Indemnified Person, in form and substance satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter of
such proceeding and (B) does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of an Indemnified Person.
(d) If the indemnification provided for in the first and second paragraphs of
this Section 6 is unavailable to, or insufficient to hold harmless, an
Indemnified Person in respect of any losses, claims, damages or liabilities
referred to therein, then each Indemnifying Person under such paragraphs, in
lieu of indemnifying such Indemnified Person thereunder and in order to provide
for just and equitable contribution, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses, claims, damages
or liabilities in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Person or Persons on the one hand and the Indemnified
Person or Persons on the other in connection with the statements or omissions
(or alleged statements or omissions) that resulted in such losses, claims,
damages or liabilities (or actions in respect thereof) as well as any other
relevant equitable considerations. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Issuer on the one hand or
by the Participants or such other Indemnified Person, as the case may be, on the
other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) The parties agree that it would not be just and equitable if contribution
pursuant to this Section 6 were determined by pro rata allocation (even if the
Participants were treated as one entity for such purpose) or by any other method
of allocation that does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an Indemnified Person as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any reasonable legal or
other expenses actually incurred by such Indemnified Person in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6, in no event shall a Participant be required to
contribute any amount in excess of the amount by which proceeds received by such
Participant from sales of Registrable Units exceeds the amount of any damages
that such Participant has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in this Section 6 will
be in addition to any liability which the Indemnifying Persons may otherwise
have to the Indemnified Persons referred to above.
5. SECTION Rule 144A .
The Issuer covenants that it will file the reports required to be filed
by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the Commission thereunder in a timely manner. The Issuer
further covenants, for so long as any Registrable Units remain outstanding, to
make available to any Holder or beneficial owner of Registrable Units in
connection with any sale thereof and any prospective purchaser of such
Registrable Units from such Holder or beneficial owner, the information required
by Rule 144A(d)(4) under the Securities Act in order to permit resales of such
Registrable Units pursuant to Rule 144A.
3. SECTION Underwritten Offerings .
If the Holders of at least 25% in aggregate number of outstanding
Registrable Units so elect, any one or more offerings of such Registrable Units
pursuant to any Shelf Registration shall be in the form of an underwritten
offering. If any of the Registrable Units covered by any Shelf Registration are
to be sold in an underwritten offering, the Issuer will select a nationally
recognized investment banker or investment bankers and manager or managers that
will manage the offering, that shall be reasonably acceptable to the Holders of
a majority in aggregate number of such Registrable Units included in such
offering.
No Holder of Registrable Units may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Units on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
3. SECTION Miscellaneous .
(a) Remedies. In the event of a breach by the Issuer of any of its obligations
under this Agreement, each Holder of Registrable Units, in addition to being
entitled to exercise all rights provided herein, or in the Purchase Agreement,
or granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Issuer agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of any of the provisions of this Agreement and hereby further
agrees that, in the event of any action for specific performance in respect of
such breach, it shall waive the defense that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Issuer has not entered, as of the date
hereof, and the Issuer shall not enter, after the date of this Agreement, into
any agreement with respect to any of its securities that is inconsistent with
the rights granted to the Holders of Registrable Units in this Agreement or
otherwise conflicts with the provisions hereof.
(c) Adjustments Affecting Registrable Units. The Issuer shall not, directly or
indirectly, take any action with respect to the Registrable Units as a class
that would adversely affect the ability of the Holders of Registrable Units to
include such Registrable Units in a registration undertaken pursuant to this
Agreement.
(d) Amendments and Waivers. The provisions of this Agreement may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, otherwise than with the prior written
consent of the Issuer and the Holders of not less than a majority in aggregate
number of the then outstanding Registrable Units; provided, however, that
Section 6 and this Section 9(d) may not be amended, modified or supplemented
without the prior written consent of the Issuer and each Holder (including any
person who was a Holder of Registrable Units disposed of pursuant to any
Registration Statement). Notwithstanding the consent requirements of Holders set
forth in the previous sentence, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Units whose securities are being sold pursuant
to a Registration Statement and that does not directly or indirectly affect,
impair, limit or compromise the rights of other Holders of Registrable Units may
be given by Holders of at least a majority in aggregate number of the
Registrable Units being tendered or being sold by such Holders pursuant to such
Registration Statement and, provided, further, that no such modification,
amendment or waiver under this sentence may treat any Holder more adversely than
any other Holder without such Holder's written consent.
(e) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, registered first-class
mail, next-day air courier or telecopier:
(1) if to a Holder of Registrable Units, at the most current
address of such Holder, set forth on the records of the
registrar under the Purchase Agreement, with a copy in like
manner to Williams (as long as it holds any Registrable Units)
as follows:
Williams National Gas Liquids, Inc.
One Williams Center, Suite 3000
Tulsa, Oklahoma 74172
Attention: Don Wellendorf
Telecopy: (918) 573-3864
and to:
The Williams Companies, Inc.
One Williams Center, Suite 4100
Tulsa, Oklahoma 74172
Attention: Lonny Townsend
Telecopy: (800) 479-6690
with a copy to:
Andrews & Kurth L.L.P.
805 Third Avenue
New York, New York 10022
Attention: Michael Swidler
Telecopy: (212) 850-2929
(1) if to the Issuer, as follows:
Ferrellgas Partners, L.P.
Ferrellgas, Inc.
One Liberty Plaza
Liberty, Missouri 64068
Attention: James M. Hake
Telecopy: (816) 792-7985
with a copy to:
Bracewell & Patterson LLP
South Tower Pennzoil Place
711 Louisiana Street, Suite 2900
Houston, Texas 77002
Attention: David L. Ronn
Telecopy: (713) 222-3208
Notice given by personal delivery, courier service or mail shall be effective
upon actual receipt. Notice given by telecopier shall be confirmed by
appropriate answer back and shall be effective upon actual receipt if received
during the recipient's normal business hours, or at the beginning of the
recipient's next business day after receipt if not received during the
recipient's normal business hours. All notices by telecopier shall be confirmed
promptly after transmission in writing by certified mail or personal delivery.
Any party may change any address to which Notice is to be given to it by giving
Notice as provided above of such change of address.
(a) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties hereto and the
Holders; provided, however, that this Agreement shall not inure to the benefit
of or be binding upon a successor or assign of a Holder unless and to the extent
such successor or assign holds Registrable Units.
(b) Counterparts. This Agreement may be executed in any number of counterparts
and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(c) Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
(d) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(e) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their reasonable best efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
(f) Units Held by the Issuer or Its Affiliates. Whenever the consent or approval
of Holders of a specified percentage of Registrable Units is required hereunder,
Registrable Units held by the Issuer or its affiliates (as such term is defined
in Rule 405 under the Securities Act) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
(g) Third Party Beneficiaries. Holders of Registrable Units are intended third
party beneficiaries of this Agreement and this Agreement may be enforced by such
Persons
(h) Entire Agreement. This Agreement, together with the Purchase Agreement, is
intended by the parties as a final and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein and any and all prior oral or written agreements,
representations, or warranties, contracts, understandings, correspondence,
conversations and memoranda among Williams on the one hand and the Issuer on the
other, or between or among any agents, representatives, parents, subsidiaries,
affiliates, predecessors in interest or successors in interest with respect to
the subject matter hereof and thereof are merged herein and replaced hereby.
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
FERRELLGAS PARTNERS, L.P.
By: FERRELLGAS, INC.,
its general partner
By:
Name:
Title:
WILLIAMS NATURAL GAS LIQUIDS, INC.
By:
Name:
Title:
COUNTERPART NO. __ OF __ SERIALLY NUMBERED MANUALLY EXECUTED COUNTERPARTS. TO
THE EXTENT THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM
COMMERCIAL CODE, NO SECURITY INTEREST IN THIS DOCUMENT MAY BE CREATED THROUGH
THE TRANSFER AND POSSESSION OF ANY COUNTERPART OTHER THAN COUNTERPART NO. 1.
LEASE INTENDED AS SECURITY
(Ferrellgas, LP Trust No. 1999-A)
Dated as of December 1, 1999
between
FERRELLGAS, LP
as Lessee
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but solely as Certificate Trustee,
as Lessor
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION HEADING PAGE
<S> <C>
Parties...........................................................................................................1
ARTICLE I DEFINITIONS............................................................................1
ARTICLE II ACQUISITION AND LEASE; GENERAL PROVISIONS..............................................1
Section 2.1 Acceptance and Lease...................................................................1
Section 2.2. No Warranty............................................................................2
Section 2.3. Legal and Tax Representation...........................................................2
Section 2.4. Nature of Transaction..................................................................2
ARTICLE III INTENTIONALLY RESERVED.................................................................3
ARTICLE IV LEASE TERM, RENT AND PAYMENT...........................................................3
Section 4.1. Lease Term.............................................................................3
Section 4.2. Basic Rent.............................................................................3
Section 4.3. Supplemental Rent......................................................................3
Section 4.4. Method and Amount of Payment...........................................................4
Section 4.5. Late Payment...........................................................................4
Section 4.6. Net Lease..............................................................................4
ARTICLE V POSSESSION, ASSIGNMENT, USE AND MAINTENANCE OF UNITS...................................5
Section 5.1. Possession and Use of Units; Compliance with Laws......................................5
Section 5.2. Subleases and Assignments..............................................................6
Section 5.3. Maintenance............................................................................7
Section 5.4. Alterations and Modifications..........................................................7
Section 5.5. Legend; Inspection.....................................................................9
Section 5.6. Liens..................................................................................9
Section 5.7. Replacements and Substitutions.........................................................9
Section 5.8. Equipment List........................................................................10
ARTICLE VI RISK OF LOSS; INSURANCE...............................................................11
Section 6.1. Casualty..............................................................................11
Section 6.2. Insurance Coverages...................................................................13
Section 6.3. Insurance Certificates................................................................14
ARTICLE VII [INTENTIONALLY RESERVED]..............................................................14
ARTICLE VIII EVENTS OF DEFAULT; REMEDIES...........................................................14
Section 8.1. Events of Default.....................................................................14
Section 8.2. Remedies..............................................................................17
Section 8.3. Sale of Lessee Collateral.............................................................18
Section 8.4. Application of Proceeds...............................................................18
Section 8.5. Right to Perform Obligations..........................................................18
Section 8.6. Power of Attorney.....................................................................19
Section 8.7. Remedies Cumulative; Consents.........................................................19
Section 8.8. Certain Financial Covenant Defaults...................................................19
ARTICLE IX LEASE TERMINATION.....................................................................20
Section 9.1. Lessee's Options......................................................................20
Section 9.2. Election of Options...................................................................20
Section 9.3. Sale Option Procedures................................................................21
Section 9.4. Appraisals............................................................................21
Section 9.5. Early Termination.....................................................................22
Section 9.6. Designation of Purchaser..............................................................22
ARTICLE X OWNERSHIP AND GRANT OF SECURITY INTEREST..............................................23
Section 10.1. Grant of Security Interest............................................................23
Section 10.2. Retention of Proceeds.................................................................23
ARTICLE XI MISCELLANEOUS.........................................................................23
Section 11.1. Effect of Waiver......................................................................23
Section 11.2. Survival of Covenants.................................................................23
Section 11.3. Applicable Laws and Regulations.......................................................23
Section 11.4. Notices...............................................................................24
Section 11.5. Amendment; Complete Agreements........................................................24
Section 11.6. Counterparts..........................................................................24
Section 11.7. Severability..........................................................................24
Section 11.8. Successors and Assigns................................................................24
Section 11.9. Captions; Table of Contents...........................................................24
Section 11.10. Schedules and Exhibits................................................................24
Section 11.11. Liability of Lessor Limited...........................................................24
Section 11.12. Successor Lessor......................................................................25
Signatures.......................................................................................................26
Schedule I Description of Units
Schedule II Amortization Schedule
</TABLE>
<PAGE>
LEASE INTENDED AS SECURITY
This LEASE INTENDED AS SECURITY (as amended and supplemented from time
to time, this "Lease") is entered into as of December 1, 1999 between
FERRELLGAS, LP, a Delaware limited partnership ("Lessee"), with its principal
office at One Liberty Plaza, Liberty, Missouri 64068 and FIRST SECURITY BANK,
NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity but solely in its capacity as Certificate Trustee under the Trust
Agreement ("Lessor"), with its principal office at 79 South Main Street, Salt
Lake City, Utah 84111.
RECITALS:
WHEREAS, on the Delivery Date, Lessor will purchase from Lessee, and
Lessee will transfer to Lessor, the propane tanks described on Schedule I hereto
(together with any units that may be hereafter substituted for any thereof
pursuant to Section 6.1 and subject to this Lease from time to time, being
referred to collectively as the "Units" and individually as a "Unit") and other
Acquired Property; and
WHEREAS, upon the transfer of the Acquired Property on the Delivery
Date, Lessor will lease such Units to Lessee and Lessee will lease such Acquired
Property from Lessor pursuant to the terms of this Lease, upon the terms and
conditions hereinafter set forth; and
NOW THEREFORE, in consideration of the mutual terms and conditions
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
For all purposes hereof, the capitalized terms used herein and not
otherwise defined shall have the meanings assigned thereto in Appendix 1 to that
certain Participation Agreement dated as of even date herewith, among Lessee,
Lessor, First Security Trust Company of Nevada, and the Participants identified
therein (the "Participation Agreement"). All obligations imposed on "Lessee" in
this Lease shall be the full recourse liability of Lessee.
ARTICLE II
ACQUISITION AND LEASE; GENERAL PROVISIONS
Section 2.1. Acceptance and Lease. Lessor, subject to the satisfaction
or waiver of the conditions set forth in Article III of the Participation
Agreement, hereby agrees to accept delivery on the Delivery Date of title to the
Acquired Property and to lease all of Lessor's interest in the Units to Lessee
hereunder, and Lessee hereby agrees, expressly for the direct benefit of Lessor,
to lease from Lessor for the Lease Term, Lessor's interest in the Acquired
Property, such acceptance by Lessor and lease by Lessee to be evidenced by the
execution and delivery by Lessee of an Acceptance Certificate.
Section 2.2. NO WARRANTY. THE ACQUIRED PROPERTY IS LEASED BY LESSOR "AS
IS" IN THEIR PRESENT OR THEN CONDITION, AS THE CASE MAY BE, SUBJECT TO (i) ANY
RIGHTS OF ANY PARTIES IN POSSESSION THEREOF, (ii) THE STATE OF TITLE THERETO
EXISTING AT THE TIME LESSOR ACQUIRES ITS INTEREST IN THE ACQUIRED PROPERTY,
(iii) ANY STATE OF FACT WHICH AN ACCURATE PHYSICAL INSPECTION MIGHT SHOW, AND
LESSEE CONFIRMS THAT ITS EXECUTION AND DELIVERY OF THE ACCEPTANCE CERTIFICATE
SHALL CONSTITUTE ITS CERTIFICATION THAT IT HAS INSPECTED AND ACCEPTS, AS BETWEEN
LESSOR AND LESSEE, EACH UNIT WHICH IS THE SUBJECT MATTER THEREOF, (iv) ALL
APPLICABLE LAWS AND REGULATIONS, AND (v) ANY VIOLATIONS OF APPLICABLE LAWS AND
REGULATIONS WHICH MAY EXIST AT THE COMMENCEMENT OF THE LEASE TERM. LESSEE
ACKNOWLEDGES AND AGREES THAT (a) EACH UNIT IS OF A SIZE, DESIGN, CAPACITY AND
CONSTRUCTION SELECTED BY LESSEE, (b) LESSEE IS SATISFIED THAT THE SAME IS
SUITABLE FOR ITS PURPOSES, (c) NEITHER LESSOR NOR AGENT NOR ANY PARTICIPANT IS A
MANUFACTURER THEREOF OR A DEALER IN PROPERTY OF SUCH KIND, (d) NEITHER LESSOR
NOR AGENT NOR ANY PARTICIPANT SHALL BE LIABLE FOR ANY LATENT, HIDDEN OR PATENT
DEFECT IN ANY UNIT, OR THE FAILURE OF ANY UNIT TO COMPLY WITH APPLICABLE LAWS
AND REGULATIONS AND (e) NEITHER LESSOR NOR AGENT NOR ANY PARTICIPANT HAS MADE,
OR does OR WILL MAKE, (i) ANY REPRESENTATION OR WARRANTY OR COVENANT, WITH
RESPECT TO THE TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
CONDITION, QUALITY, DESCRIPTION, DURABILITY OR SUITABILITY OF ANY SUCH UNIT IN
ANY RESPECT OR IN CONNECTION WITH OR FOR THE PURPOSES AND USES OF LESSEE OR (ii)
ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY ACQUIRED PROPERTY, IT BEING AGREED THAT, SUBJECT TO THE TERMS OF
THIS LEASE, ALL RISKS, AS BETWEEN LESSOR, ON THE ONE HAND, AND LESSEE, ON THE
OTHER HAND, SHALL BE BORNE BY LESSEE. Lessor assigns to Lessee, to the extent
assignable, all of its interest, if any, in any warranties, covenants and
representations of any manufacturer or vendor of any Unit; provided that such
assignment shall be effective only when no Lease Event of Default has occurred
and is continuing; and provided, further, that any action taken by Lessee by
reason thereof shall be at the expense of Lessee and shall be consistent with
Lessee's obligations pursuant to this Lease.
Section 2.3. Legal and Tax Representation. Lessee acknowledges and
agrees that neither Lessor, Arranger, any Participant nor Agent has made any
representations and warranties concerning the tax, accounting or legal
characteristics of this Lease and that Lessee has obtained and relied on such
tax, accounting and legal advice regarding this Lease and the other Operative
Documents as it deems appropriate.
Section 2.4. Nature of Transaction. It is the intent of the parties
that: (a) the transaction contemplated hereby constitutes an operating lease
from Lessor to Lessee for purposes of Lessee's financial reporting and record
title to the Acquired Property shall at all times during the Lease Term remain
in Lessor, (b) the transaction contemplated hereby preserves ownership in the
Acquired Property to Lessee for all other purposes including Federal, state and
local income tax, regulatory, bankruptcy and UCC and state commercial law
purposes, (c) this Lease grants a Lien in the Acquired Property and the other
Lessee Collateral to Lessor, and (d) this Lease shall be treated as the
repayment and security provisions of a loan from Lessor to Lessee in the amount
of the Purchase Price, and (e) all payments hereunder to Lessor shall be treated
as payments of principal, interest and all other amounts with respect to such
loan. Except as specifically provided for herein, Lessor shall retain title to
the Units, free and clear of all Liens other than Permitted Liens, as security
for the obligations of Lessee under the Operative Documents. Lessee shall not
have any right, title or interest in the Acquired Property except as expressly
set forth in this Lease. Each of the parties to this Lease agrees that it will
not, nor will any Person controlled by it, or under common control with it,
directly or indirectly, at any time take any action or fail to take any action
with respect to the filing of any income tax return, including an amended income
tax return, inconsistent with the intention of the parties expressed in this
Section 2.4.
It is the intent of the parties hereto that the Units shall be and
remain personal property and not a fixture notwithstanding the manner in which
any Unit shall be attached or affixed to realty. The parties further agree that
the Units shall constitute personal property for all purposes of the laws of
each State where any Unit may be located. Lessee shall take no action with
respect to the Units which would be inconsistent with such intent.
ARTICLE III
[INTENTIONALLY RESERVED]
ARTICLE IV
LEASE TERM, RENT AND PAYMENT
Section 4.1. Lease Term. Unless earlier terminated pursuant to the
terms hereof, the term of this Lease shall consist of (a) an interim period
commencing on and including the Delivery Date and ending on but not including
December 30, 1999 (the "Interim Term Expiration Date") and (b) a base period
commencing on and including the Interim Term Expiration Date and ending on June
30, 2003 (collectively, the "Lease Term"). This Lease may be extended pursuant
to and in accordance with Section 2.12 of the Participation Agreement and in the
event of such extension, "Lease Term" shall mean the Lease Term as so extended.
Section 4.2. Basic Rent. During the Lease Term, Lessee shall pay to
Lessor Basic Rent (i) on each Payment Date, (ii) on the date required under
Section 9.3 in connection with Lessee's exercise of the Sale Option and (iii) on
any date on which this Lease terminates or upon demand following a Lease Event
of Default pursuant to Article XVII.
Section 4.3. Supplemental Rent. Lessee shall pay to Lessor, or to
whomever shall be entitled thereto as expressly provided herein or in any other
Operative Document (and Lessor hereby directs Lessee, on behalf of Lessor, to so
pay any such other Person), any and all Supplemental Rent promptly as the same
shall become due and payable (if the payment date therefor is specified in any
Operative Document and otherwise within five (5) days after Lessee's receipt of
written demand therefor) and, in the event of any failure on the part of Lessee
to pay any Supplemental Rent, Lessor shall have all rights, powers and remedies
provided for herein or by law or in equity or otherwise in the case of
nonpayment of Basic Rent. The expiration or other termination of Lessee's
obligations to pay Basic Rent hereunder shall not limit or modify the
obligations of Lessee with respect to Supplemental Rent.
Section 4.4. Method and Amount of Payment. Basic Rent and Supplemental
Rent shall be paid by wire transfer by Lessee to Lessor (or, in the case of
Supplemental Rent, to such Person as may be entitled thereto) at such place as
Lessor (or such other Person) shall specify in writing to Lessee pursuant to
Schedule II to the Participation Agreement or Section 9.3 of the Participation
Agreement; provided, however, that, so long as the Notes remain outstanding,
Lessor directs Lessee to pay Basic Rent and Supplemental Rent payable to Lessor
or any Participant directly to the Agent. Each payment of Rent shall be made by
Lessee prior to 11:00 a.m. New York time (and payments made after such time
shall be deemed to have been made on the next day) at the place of payment in
funds consisting of lawful currency of the United States of America which (in
the case of any amount payable to Lessor, Agent or any Participant or any other
Indemnitee) shall be immediately available on the scheduled date when such
payment shall be due unless with respect to Supplemental Rent, the scheduled
date shall not be a Business Day, in which case such payment shall be due and
made on the next succeeding Business Day.
Section 4.5. Late Payment. If any Basic Rent shall not be paid when
due, Lessee shall pay to Lessor, or if any Supplemental Rent payable to or on
behalf or for the account of Lessor, Agent, any Participant, or other Indemnitee
is not paid when due, Lessee shall pay to whomever shall be entitled thereto, in
each case as Supplemental Rent, interest at the Overdue Rate (to the maximum
extent permitted by law) on such overdue amount from and including the due date
thereof (without regard to any applicable grace period) to but excluding the
Business Day of payment thereof.
Section 4.6. Net Lease. This Lease is a net lease and Lessee's
obligation to pay all Rent, Lease Balance, indemnities and other amounts payable
hereunder shall be absolute and unconditional under any and all circumstances
and, without limiting the generality of the foregoing, Lessee shall not be
entitled to and hereby waives any right to any abatement, suspension, deferment,
reduction, setoff, counterclaim or defense with respect to any Rent, Lease
Balance, indemnity or other amount, whether arising by reason of any past,
present or future claims of any nature by Lessee against Lessor, Agent or any
Participant, or otherwise. Except as otherwise expressly provided herein, this
Lease shall not terminate, nor shall the obligations of Lessee (including the
obligation to pay Rent) be otherwise affected: (a) by reason of any defect in
the condition, merchantability, design, construction, quality or fitness for use
of, damage to, or loss of possession or use, theft, obsolescence or destruction,
of any or all of the Units, however caused; or (b) by the taking, commandeering,
confiscation or requisitioning, complete or partial, of any or all of the
Acquired Property, or any part thereof, by condemnation or otherwise; or (c) by
the invalidity or unenforceability or lack of due authorization by Lessor,
Agent, any Participant or Lessee or other infirmity of this Lease or any other
Operative Document; or (d) by the attachment of any Lien of any third party to
any Acquired Property; or (e) by any prohibition or restriction of or
interference with Lessee's use of any or all of the Acquired Property by any
Person; or (f) by the insolvency of or the commencement by or against Lessor,
Agent or any Participant of any bankruptcy, reorganization or similar
proceeding; or (g) by any other cause, whether similar or dissimilar to the
foregoing, any present or future law to the contrary notwithstanding. Lessee
shall remain obligated under this Lease in accordance with its terms and,
consistent with the intention of the parties expressed in Sections 2.4 and 10.1,
shall not take any action to terminate, rescind or avoid this Lease,
notwithstanding any action for bankruptcy, insolvency, reorganization,
liquidation, dissolution or other proceeding affecting Lessor, Agent or any
Participant, or any action with respect to this Lease which may be taken by any
custodian, receiver, liquidator, assignee, trustee or sequestrator (or other
similar official) of such Person. It is the intention of the parties, and Lessee
expressly agrees, that all Rent, Lease Balance, indemnities and other amounts
payable by Lessee hereunder shall be payable in all events in the manner and at
the times herein provided unless Lessee's obligations in respect thereof have
been terminated or modified pursuant to the express provisions of this Lease and
the Units have been returned to Lessor, purchased by Lessee or sold to a third
party in accordance with the terms hereof. To the extent permitted by Applicable
Laws and Regulations, Lessee hereby waives any and all rights which it may now
have or which may at any time be conferred upon it, by statute or otherwise, to
terminate, cancel, quit or surrender this Lease, in whole or in part, except
strictly in accordance with the express terms hereof. Each rental, indemnity or
other payment made by Lessee hereunder shall be final, and Lessee shall not seek
to recover all or any part of such payment from Lessor, Agent or any Participant
for any reason whatsoever. Without affecting Lessee's obligation to pay Rent,
Lease Balance or other amounts payable hereunder, Lessee may seek damages for a
breach by Lessor, Agent or any Participant of their respective obligations under
the Operative Documents.
ARTICLE V
POSSESSION, ASSIGNMENT, USE AND MAINTENANCE OF UNITS
Section 5.1. Possession and Use of Units; Compliance with Laws. The
Units shall be used only for their originally intended use. Lessee shall not use
the Units or any part thereof for any purpose or in any manner that would
materially adversely affect the Fair Market Value, utility, remaining useful
life or residual value of the Units. Lessee agrees that the Units will be used
and operated in compliance with any and all Applicable Laws and Regulations.
Lessee shall procure and maintain in effect all licenses, registrations,
certificates, permits, approvals, returns, renditions and consents required by
Applicable Laws and Regulations or by any Governmental Authority in connection
with the ownership, delivery, installation, use and operation of each Unit.
Lessee shall not (a) use, operate, maintain or store any Unit or any portion
thereof in violation of Section 5.3 or any Insurance Requirement; (b) sublease,
assign or otherwise permit the use of any Unit except as may be permitted by
Section 5.2 or 5.4; (c) except as set forth in Section 5.2 or 5.4 or Section
5.19 of the Participation Agreement, sell, assign or transfer any of its rights
hereunder or in any Acquired Property, or directly or indirectly create, incur
or suffer to exist any Lien on any of its rights hereunder or in any Unit,
except for Permitted Liens; or (d) permit any Unit to be operated, used or
located outside of the United States. Subject to Section 2.4 hereof, the Lessee
will defend the sale of the Units by the Lessee to Lessor against the claims or
demands of all Persons. Except in the ordinary course of business and except as
in compliance with all Environmental Laws, the Lessee shall not use any Unit, or
permit any Unit to be used, for the transportation or storage of Hazardous
Material. Lessee shall keep in its possession at all times the items described
in clause (e) of the definition of Lessee Collateral.
Section 5.2. Subleases and Assignments. LESSEE SHALL NOT, WITHOUT THE
PRIOR WRITTEN CONSENT OF Lessor AND AGENT, SUBLEASE OR OTHERWISE RELINQUISH
POSSESSION OF ANY UNIT, OR ASSIGN, TRANSFER OR ENCUMBER ITS RIGHTS, INTERESTS OR
OBLIGATIONS HEREUNDER AND ANY ATTEMPTED SUBLEASE OR OTHER RELINQUISHMENT OF
POSSESSION, ASSIGNMENT, TRANSFER OR ENCUMBERING BY LESSEE SHALL BE NULL AND
VOID, except as provided in this Section 5.2 or pursuant to a transaction
permitted under Section 5.4 or Section 5.19 of the Participation Agreement. Each
sublease, lease or user contract entered into in accordance with this Section
5.2 shall be referred to as a "Sublease." Lessee may, without the prior written
consent of Lessor and Agent, enter into subleases of (A) so long as no Lease
Event of Default described in Sections 8.1(f) or (g) exists, one or more of the
Units to any customer of Lessee in connection with the supply of propane by
Lessee to such customer, and (B) so long as no Lease Event of Default exists,
one or more of the Units to a Wholly-Owned Subsidiary of Lessee; provided, that
any Sublease entered into pursuant to clause (B) of this sentence must satisfy
each of the following conditions:
(a) such Sublease shall automatically expire upon the
termination of this Lease (unless Lessee shall have exercised the
Purchase Option) and be expressly subordinate and subject to this Lease
and the Liens created hereunder;
(b) such Sublease shall be in writing and shall expressly
prohibit any further assignment, sublease or transfer;
(c) such Sublease shall not contain a purchase option in
favor of the Sublessee or any other provision pursuant to which the
Sublessee may obtain record or beneficial title to any Unit leased
thereunder from Lessee;
(d) such Sublease shall prohibit the Sublessee from making
any alterations or modifications to any Unit that would result in a
violation of this Lease;
(e) such Sublease shall require the Sublessee to maintain
each Unit subleased thereunder in accordance with Section 5.3;
(f) Lessee shall not, without Agent's prior written consent,
permit or consent to any renewal or extension of such Sublease at any
time when an Lease Default or Lease Event of Default has occurred and
is continuing; and
(g) Lessee shall notify Lessor and Agent in writing within 30
days after entering into such Sublease, which notice shall include (i)
a description of the Unit or Units to be subleased thereunder, and (ii)
the location of such Unit or Units during the term of such Sublease.
The liability of Lessee with respect to this Lease and each of the
other Operative Documents shall not be altered or affected in any way by the
existence of any Sublease. In connection with any Sublease, Lessee shall, at its
own cost and expense, do any further act and execute, acknowledge, deliver,
file, register and record any further documents which Lessor or Agent may
reasonably request in order to preserve, protect and perfect Agent's and
Lessor's Lien in such Sublease. Upon the written request of Lessor or Agent
after a Lease Event of Default has occurred and is continuing, Lessee will
deliver copies of any Subleases (excluding any thereof which are not in written
form) then in effect to Lessor and Agent.
Section 5.3. Maintenance. At all times during the term of this
Lease, Lessee shall, at its own cost and expense including taxes thereon:
(a) keep, repair, maintain and preserve each of the Units in
at least as good order and operating condition, repair and appearance
as when originally delivered, ordinary wear and tear excepted, and (i)
in conformance with (A) customary industry standards, (B) the terms of
all contracts (including, without limitation, service contracts) and
(C) all Applicable Laws and Regulations and Insurance Requirements, and
in the event that Applicable Laws and Regulations require any
alteration, replacement or addition of or to any Part on any Unit,
Lessee will conform therewith at its own expense and (ii) in
conformance with the customary standards used by Lessee or any of its
Subsidiaries in the ordinary course of business for similar equipment
owned or leased by it;
(b) (i) conduct or cause to be conducted all scheduled
maintenance of each Unit in conformity with Lessee's practices for
similar equipment (including, without limitation, Lessee's maintenance
program for such equipment) and (ii) maintain or cause to be maintained
each Unit so as to preserve its remaining economic useful life, utility
and residual value;
(c) cause each Unit to continue to have at all times the
capacity and functional ability to perform, on a continuing basis
(subject to customary interruption in the ordinary course of business
for maintenance, inspection, service, repair and testing) and in
commercial operation, the functions for which it was specifically
designed.
In no event shall Lessee discriminate as to the use or maintenance of
any Unit (including the periodicity of maintenance or recordkeeping in respect
of such Unit) based upon such Unit being leased hereunder and financed under the
Operative Documents as compared to equipment of a similar nature which Lessee
owns or leases. Lessee shall prepare and deliver to Lessor within a reasonable
time prior to the required date of filing (or, to the extent permissible, file
on behalf of Lessor) any and all reports to be filed by Lessor with any
Governmental Authority of any country or subdivision thereof in which any Unit
is located by reason of the ownership by Lessor of the Units or the leasing
thereof to Lessee. Lessor agrees to inform Lessee of any request for such
reports received by it or of which it has knowledge. Lessee shall maintain or
cause to be maintained, and shall permit Lessor to inspect, all records,
returns, renditions, logs and other materials required by any Governmental
Authority having jurisdiction over the Units or Lessee, to be maintained in
respect of each Unit. Lessee hereby waives any right now or hereafter conferred
by law to make repairs on the Units at the expense of Lessor, Agent or any
Participant.
Section 5.4. Alterations and Modifications. In case any Unit, or any
item of equipment, part or appliance therein (each, a "Part") is required to be
altered, added to or modified in order to comply with any Applicable Laws and
Regulations (a "Required Alteration") pursuant to Sections 5.1 or 5.3 hereof,
Lessee agrees to make such Required Alteration at its own expense. Lessee shall
have the right to make or cause to be made any modification, alteration or
improvement to any Unit (herein referred to as a "Permitted Modification"), or
to remove or cause to be removed any Part which has become worn out, broken or
obsolete, provided in each case that Lessee continues to be in compliance with
Sections 5.1 and 5.3 hereof and that such action (a) will not decrease the
present or future economic value of the applicable Unit or impair its originally
intended use or function or decrease its economic useful life and (b) will not
cause such Unit to become suitable for use only by Lessee. In the event any
Permitted Modification (i) is readily removable without impairing the value or
use which the Unit would have had at such time had such Part not been affixed or
placed to or on such Unit (a "Removable Part"), (ii) is not a Required
Alteration and (iii) is not a Part which replaces any Part originally
incorporated or installed in or attached to such Unit on the date on which such
Unit became subject to this Lease, or any Part in replacement of or substitution
for any such original Part (each an "Original Part"), any such Permitted
Modification, unless a Lease Event of Default under clauses (a), (e) or (f) of
Section 8.1 has occurred and is continuing or Lessor has exercised any remedy
under Article VIII, shall be and remain the property of Lessee. To the extent
such Permitted Modification is not a Removable Part, or is a Required Alteration
or an Original Part, and, to the extent a Removable Part is not the property of
Lessee because of the continuance of a Lease Event of Default under clauses (a),
(f) or (g) of Section 8.1 or Lessor has exercised any remedy under Article VIII,
the same shall immediately and automatically be and become the property of
Lessor and subject to the terms of this Lease. Any Required Alterations, and any
Parts installed or replacements made by Lessee upon any Unit pursuant to its
obligation to maintain and keep the Units in good order, operating condition and
repair under Section 5.3 (collectively, "Replacement Parts") and all other Parts
which become the property of Lessor shall be considered, in each case,
accessions to such Unit and title thereto or security interest therein shall be
immediately and automatically vested in Lessor. All Replacement Parts shall be
free and clear of all Liens (other than Permitted Liens) and shall be in as good
an operating condition as, and shall have a value and utility at least equal to,
the Parts replaced, assuming such replaced Parts and the relevant Units were
immediately prior to such replacement or the event or events necessitating such
replacement in the condition and repair required to be maintained by the terms
hereof. Any Part at any time removed from any Unit shall remain subject to the
interests of Lessor and Agent under the Operative Documents, no matter where
located, until such time as such Part shall be replaced by a Part which has been
incorporated or installed in or attached to such Unit and which meets the
requirements for a Replacement Part specified above, whereupon Lessor hereby
releases any and all interest in and to such replaced Part. Upon the occurrence
of a Lease Event of Default or the exercise by Lessee of the Sale Option
pursuant to Section 9.1(b), upon Lessor's or Agent's written request Lessee
shall deliver to Lessor a Bill of Sale evidencing the conveyance by Lessee to
Lessor of all Replacement Parts not previously evidenced by a Bill of Sale
(which Bill of Sale may generally describe such Replacement Parts) and such
other documents in respect of such Part or Parts as Lessor may reasonably
request in order to confirm that title to such Part or Parts has passed to
Lessor, as hereinabove provided. Any such Replacement Part, regardless of
whether evidenced by a Bill of Sale, shall be deemed part of such Unit, for all
purposes hereof to the same extent as the Parts originally incorporated or
installed in such Unit, and title to such Replacement Part shall thereupon vest
in Lessor, subject to the terms of this Lease. All replacements pursuant to this
Section 5.4 shall be purchased by Lessee with its own funds. There shall be no
obligation on the part of Lessor, Agent or any Participant to pay for or
otherwise finance any such replacement.
Section 5.5. Legend; Inspection. Lessee will cause each Unit to be
plainly, conspicuously and permanently marked by a stencil, plate or sticker
disclosing the interests of Lessee (or its predecessors) therein. Lessee will
replace promptly any such marking which may be removed, defaced, obliterated or
destroyed. The Units may be lettered with the names or initials or other
insignia customarily used by the Lessee but Lessee will not allow the name of
any other Person (other than its predecessors) to be placed on any Unit as
designation that might be interpreted as a claim of ownership. Upon the request
of Lessor or Agent, Lessee shall make the Units available to Lessor or Agent or
its agents, representatives or assignees for inspection at reasonable times and
at their then location and upon reasonable notice and shall also make Lessee's
books, manuels, logs, records and other information pertaining to the Units
(other than customer information regarding internal classifications of
customers, payment history, propane gallons delivered, timing of propane gallons
delivered, payment terms and prices charged to customers) available for
inspection and permit such parties to make copies thereof, provided that all
costs and expenses of Lessor or Agent in connection with such inspection shall
be borne by the inspecting party unless a Lease Event of Default has occurred
and is continuing at the time of such inspection, in which case all such costs
and expenses shall be borne by Lessee.
Section 5.6. Liens. Lessee will not directly or indirectly create,
incur, assume or suffer to exist any Lien (other than Permitted Liens) on or
with respect to (i) any Unit or any Part thereof or any other Lessee Collateral,
or Lessor's, Agent's or any Participant's title thereto or interest therein or
(ii) this Lease or any of Lessor's, Agent's or any Participant's interests
hereunder. Lessee, at its own expense, will promptly pay, satisfy and otherwise
take such actions as may be necessary to keep this Lease and the Units and the
other Acquired Property free and clear of, and to duly discharge or eliminate or
bond in a manner satisfactory to Lessor and Agent in their reasonable
discretion, any such Lien not excepted above if the same shall arise at any
time. Lessee will notify Lessor and Agent in writing promptly upon becoming
aware of any Tax or other Lien (other than any Lien excepted above) which
individually or in the aggregate with any other Tax or other Lien exceeds
$1,000,000 that shall attach to the Units or any other Acquired Property, and of
the full particulars thereof. Without limiting the foregoing, Lessee shall not
assign or pledge any of its rights under any Sublease to any Person other than
Lessor.
Section 5.7. Replacements and Substitutions. (a) In addition to the
rights of Lessee under Section 5.4, Lessee shall have the option at any time to
replace any Unit or Units (a "Replaced Unit" or "Replaced Units") with a
substitute Unit or Units (a "Replacement Unit" or "Replacement Units" ), subject
to the following conditions:
(i) No Lease Event of Default shall have occurred and be
continuing;
(ii) The Replacement Unit or Replacement Units shall be
located in the same State as the Replaced Unit or Units;
(iii) The Replacement Unit or Replacement Units shall be of a
type described in the Appraisal delivered on the Delivery Date
(provided that in no event may any Replacement Unit be of a capacity
greater than 3499 gallons) and, taken as a whole, shall have a residual
value, Fair Market Value and economic useful life (based upon the
residual value, Fair Market Value and economic useful life for such
type set forth in the Appraisal delivered on the Delivery Date) at
least equal to those of the Replaced Unit or Replaced Units, taken as a
whole, immediately prior to such substitution, assuming that the
Replaced Unit or Replaced Units were in the condition and repair
required to be maintained by the terms of this Lease, shall be in as
good operating condition and state of repair as the Replaced Unit or
Replaced Units immediately prior to such substitution, assuming that
the Replaced Unit or Replaced Units were in the condition and repair
required to be maintained by the terms of this Lease; and
(iv) As and when required by Section 5.8, Lessee shall (A)
execute and deliver to Lessor a Bill of Sale substantially in the form
of Exhibit I to the Participation Agreement and an Acceptance
Certificate substantially in the form of Exhibit E to the Participation
Agreement in respect of such Replacement Unit or Replacement Units, (B)
provide evidence that the insurance required by Section 6.2 is in
effect with respect to such Replacement Unit or Replacement Units, (C)
perform all acts and execute, file and/or record any and all documents,
financing statements and other instruments as are necessary or
appropriate under Applicable Laws and Regulations or reasonably
requested by Lessor or Agent to perfect Lessor's title to such
Replacement Unit or Replacement Units and to perfect Agent's Lien and
security interest in such Replacement Unit or Replacement Units as a
first priority security interest subject to no Liens other than
Permitted Liens and provide Lessor and Agent with evidence thereof and
(D) provide an Officer's Certificate (which may be combined with the
Officer's Certificate delivered pursuant to Section 5.8) and, if the
value of the Replacement Units exceeds $1,000,000, opinion of counsel
(which may be in-house counsel to Lessee) as to the enforceability of
the Bill of Sale and as to the perfection of such title and security
interest;
(b) All replacements pursuant to Section 5.7(a) shall be purchased by
Lessee with its own funds. There shall be no obligation on the part of Lessor,
Agent or any Participant to pay for or otherwise finance any such replacement.
Section 5.8. Equipment List. (a) Lessee has delivered to Agent on the
Delivery Date the initial Equipment List with respect to the Units, setting
forth the information required by the definition thereof. Lessee shall deliver
to Agent an updated Equipment List (i) annually on each anniversary of the
Delivery Date, (ii) at any time that the aggregate value of Units or Units which
suffer a Casualty or are replaced pursuant to Section 5.7 exceeds $1,000,000,
(iii) on the date the Sale Option is exercised, (iv) on the Lease Termination
Date if the Sale Option has been exercised, or (v) upon the request of Agent or
Lessor after a Lease Event of Default shall have occurred and be continuing.
Such updated list shall reflect any replacements or settlements with respect to
the Units pursuant to Section 6.1 and any Replacement Units pursuant to Section
5.7. In connection with the delivery of such updated Equipment List, Lessee
shall deliver to Agent and Lessor (i) an Officer's Certificate certifying that
such updated Equipment List (except as to serial numbers) is true, correct and
complete in all material respects, and (ii) any documents or showings required
by Sections 5.8 or 6.1 for replacement Units, and, so long as no Lease Event of
Default shall have occurred and be continuing, Agent and Lessor shall release
any Replaced Units or substituted Units from the Lien of this Lease and the
other Operative Documents and Lessor shall execute and deliver to Lessee such
documents as may be reasonably required to release such Units from the terms and
scope of this Lease and reconvey such Units to Lessee (without representations
or warranties, except that such Units are free and clear of Certificate Trustee
Liens), in such form as may be reasonably requested by Lessee, all at Lessee's
sole cost and expense.
(b) In connection with any update to the Equipment List pursuant to
Section 5.8(a), Schedule I hereto shall be correspondingly updated (but only as
to the information set forth therein).
(c) The Equipment List shall be held by the Agent and, so long as no
Lease Event of Default shall have occurred and be continuing, shall not be
disclosed to any Person without the prior written consent of Lessee; provided
that Agent may permit, subject to Section 9.16 of the Participation Agreement,
Lessor and any Participant to inspect the Equipment List at the office of the
Agent and, if a Lease Event of Default has occurred and is continuing, make
copies thereof. Nothing in the foregoing sentence shall limit the right of
Lessor or Agent to utilize the Equipment as it deems appropriate in connection
with the exercise of remedies after a Lease Event of Default shall have occurred
and be continuing. Any such inspection shall be at the expense of the inspecting
party so long as no Lease Event of Default shall have occurred and be continuing
and otherwise at Lessee's expense.
ARTICLE VI
RISK OF LOSS; INSURANCE
Section 6.1. Casualty. Upon the occurrence of a Casualty or a series of
Casualties with respect to a Unit or Units with a Purchase Price aggregating in
excess of $1,000,000 during the term of this Lease or as otherwise required by
Section 5.8, Lessee shall give Lessor and Agent prompt notice thereof (a
"Casualty Notice"). The Casualty Notice shall specify whether Lessee will:
(a) pay to Lessor the Casualty Amount of the Unit or Units
suffering such Casualty or series of Casualties, together with all
other Rent then due and owing, which payment shall be made on the next
scheduled Payment Date after such Casualty or the latest in time of
such series of Casualties, unless such Payment Date is less than 30
days from the date of the Casualty Notice, in which case such payment
shall be made on the following Payment Date (the "Casualty Settlement
Date"); or
(b) replace the Unit or Units with respect to which the
Casualty or series of Casualties has occurred pursuant to the following
provisions of this Section 6.1.
If Lessee has elected to pay the Casualty Amount pursuant to clause (a)
above, such Lessee shall continue to make all payments of Rent due under this
Lease until and including the Casualty Settlement Date. Upon payment of the
Casualty Amount in respect of any Unit suffering a Casualty on such Casualty
Settlement Date together with all Basic Rent and Supplemental Rent then due and
owing, the remaining scheduled payments set forth on Schedule II, if any, shall
be reduced by an amount equal to the product of the scheduled amount of each
such payment (determined in each case prior to the receipt of such Casualty
Amount), multiplied by the Unit Value Fraction of the Unit or Units suffering
such Casualty or series of Casualties.
If Lessee has given notice that it intends to replace the Unit or Units
suffering such Casualty or series of Casualties, Lessee may make subject to this
Lease, not more than 60 days after the date of such Casualty Notice, a
replacement for such Unit or Units meeting the suitability standards hereinafter
set forth. To be suitable as a replacement Unit, an item (or items) (i) shall be
of a type described in the Appraisal delivered on the Delivery Date (provided
that in no event may any Replacement Unit be of a capacity greater than 3499
gallons), (ii) taken as a whole, must be of the same economic useful life, state
of repair and operating condition (immediately preceding the Casualty or
Casualties assuming that such Unit or Units had been maintained in accordance
with the terms of Section 5.3) as the Unit or Units, taken as a whole, suffering
the Casualty or Casualties, (iii) taken as a whole, must have a fair market
value and residual value of not less than the fair market value and residual
value (immediately preceding the Casualty assuming that such Unit or Units had
been maintained in accordance with the terms of Section 5.3) of the Unit or
Units, taken as a whole, suffering the Casualty or Casualties, (iv) must be free
and clear of any Liens other than Permitted Liens, and (v) must be located in
the same state as the Unit or Units suffering the Casualty or Casualties.
Lessee shall (A) execute and deliver to Lessor a Bill of Sale
substantially in the form of Exhibit I to the Participation Agreement and an
Acceptance Certificate substantially in the form of Exhibit E to the
Participation Agreement in respect of such replacement Unit or replacement
Units, (B) provide evidence that the insurance required by Section 6.2 is in
effect with respect to such replacement Unit or replacement Units, (C) perform
all acts and execute, file and/or record any and all documents, financing
statements and other instruments as are necessary or appropriate under
Applicable Laws and Regulations or reasonably requested by Lessor or Agent to
perfect Lessor's title to such replacement Unit or replacement Units and to
perfect Agent's Lien and security interest in such replacement Unit or
replacement Units as a first priority security interest subject to no Liens
other than Permitted Liens and provide Lessor and Agent with evidence thereof
and (D) provide an Officer's Certificate and opinion of counsel (which may be
in-house counsel to Lessee) as to the enforceability of the Bill of Sale and as
to the perfection of such title security interest.
If (i) Lessor has received the amount payable with respect to the
Casualty or Casualties and all other amounts due hereunder, or (ii) the Units
have been substituted in accordance herewith, and, in each case, no Lease Event
of Default exists, Lessee shall be entitled to receive from Lessor the proceeds
of any recovery in respect of the Unit or Units from insurance or otherwise
("Casualty Recoveries"), and Lessor, subject to the rights of any insurer
insuring the Units as provided herein, shall transfer title to the Units
suffering such Casualty or Casualties to Lessee "as-is, where-is" without
representation or warranty of any kind, except as to the absence of Certificate
Trustee Liens. All fees, costs and expenses relating to a substitution as
described herein shall be borne by Lessee. Except as otherwise provided in this
Section 6.1, Lessee shall not be released from its obligations hereunder in the
event of, and shall bear the risk of, any Casualty or Casualties to any Unit
prior to or during the term of this Lease and thereafter until all of Lessee's
obligations hereunder are fully performed.
Any payments (including, without limitation, insurance proceeds)
received at any time by Lessor or Lessee from any Governmental Authority or
other party with respect to any loss or damage to any Unit or Units not
constituting a Casualty (i) up to $1,000,000 shall be paid to Lessee, so long as
no Lease Event of Default shall have occurred and be continuing, for application
to repair or replacement of property in accordance with Sections 5.1 and 5.3,
and (ii) in excess of $1,000,000 will be held by Agent and applied directly in
payment of repairs or for replacement of property in accordance with the
provisions of Sections 5.1 and 5.3, if not already paid by Lessee, or if already
paid by Lessee and no Lease Event of Default shall have occurred and be
continuing, shall be applied to reimburse Lessee for such payment, and any
balance remaining after compliance with said Sections with respect to such loss
or damage shall be retained by Lessee.
LESSEE HEREBY ASSUMES ALL RISK OF LOSS, DAMAGE, THEFT, TAKING,
DESTRUCTION, CONFISCATION, REQUISITION, COMMANDEERING, TAKING BY EMINENT DOMAIN
OR CONDEMNATION, PARTIAL OR COMPLETE, OF OR TO EACH UNIT, HOWEVER CAUSED OR
OCCASIONED, SUCH RISK TO BE BORNE BY LESSEE WITH RESPECT TO EACH UNIT FROM THE
DATE OF THIS LEASE, AND CONTINUING UNTIL SUCH UNIT HAS BEEN RETURNED TO LESSOR
IN ACCORDANCE WITH THE TERMS HEREOF. LESSEE AGREES THAT NO OCCURRENCE SPECIFIED
IN THE PRECEDING SENTENCE SHALL IMPAIR, IN WHOLE OR IN PART, ANY OBLIGATION OF
LESSEE UNDER THIS LEASE, INCLUDING, WITHOUT LIMITATION, THE OBLIGATION TO PAY
RENT.
Section 6.2. Insurance Coverages. Lessee shall at all times, at its
expense, cause to be carried and maintained (a) property insurance against risks
of physical loss or damage to the Units, (b) public liability insurance against
claims for bodily injury, death or property damage in an amount at least equal
to $10,000,000 per occurrence, and (c) worker's compensation, business
interruption and automobile insurance, in each case in such amounts, with such
deductibles and from such financially sound and reputable insurers as shall be
(i) consistent with Lessee's current practices with respect to the Units, (ii)
consistent with the insurance maintained by Lessee with respect to similar
equipment owned or leased by Lessee, and (iii) with respect to the insurance
described in clause (b) above, reasonably acceptable to Lessor and Agent. Lessor
acknowledges that Lessee currently self-insures for physical loss or damage of
the Units.
All such insurance shall name Lessor, Agent and the Participants as
additional insureds, as their respective interests may appear pursuant to the
terms and conditions of this Lease. Each policy referred to in this Section 6.2
shall provide that (i) it will not be cancelled or its limits reduced, or
allowed to lapse without renewal, except after not less than 30 days' written
notice to Lessor, Agent and the Participants, (ii) the interests of Lessor,
Agent and the Participants shall not be invalidated by any act or negligence of,
or breach of representation or warranty by, Lessee or any Person having an
interest in any Unit, (iii) such insurance is primary with respect to any other
insurance carried by or available to Lessor, Agent and/or any Participant, (iv)
the insurer shall waive any right of subrogation, setoff, counterclaim or other
deduction, whether by attachment or otherwise, against Lessor, Agent and the
Participant, (v) the insurer shall waive any right to claim any premiums or
commission against Lessor, Agent or any Participants; and (vi) such policy shall
contain a cross-liability clause providing for coverage of Lessor, Agent and
each Participant as if separate policies had been issued to each of them, except
with respect to the limit of such insurance which shall in no event increase as
a result of such additional language. Lessee will notify Lessor, Agent and the
Participants promptly of any policy cancellation, reduction in policy limits,
modification or amendment.
Section 6.3. Insurance Certificates. Prior to the Delivery Date, and
thereafter not less than 15 days prior to the expiration dates of the expiring
policies theretofore delivered pursuant to Section 6.2, Lessee shall deliver to
Lessor and Agent certificates issued by the insurer(s) for the insurance
maintained pursuant to Section 6.2. Upon the request of Lessor or Agent, which
shall not be made more than once per year, Lessee will furnish to Lessor and
Agent a certificate of either Lessee's insurer or an independent insurance
broker of recognized standing evidencing the maintenance of all insurance
required hereunder.
ARTICLE VII
[INTENTIONALLY RESERVED]
ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
Section 8.1. Events of Default. The following shall constitute
events of default (each a "Lease
Event of Default") hereunder:
(a) Non-Payment. Lessee fails to pay, (i) when and as
required to be paid herein, any payment of Basic Rent or any amount
payable pursuant to Section 6.1(a), or Article IX, or (ii) within 5
days after the same becomes due, any Supplemental Rent (other than
Supplemental Rent described in clause (i)); or
(b) Representation or Warranty. Any representation or
warranty by Lessee or the General Partner made or deemed made herein,
in any other Operative Document, or which is contained in any
certificate, document or financial or other statement by Lessee, the
General Partner, or any Responsible Officer, furnished at any time
under this Lease, or in or under any other Operative Document, is
incorrect in any material respect on or as of the date made or deemed
made; or
(c) Specific Defaults. (i) Lessee fails to maintain the
insurance required by Section 6.2 or Lessee fails to perform or observe
any term, covenant or agreement contained in any of Section 5.2, or
Sections 5.1 through 5.4, inclusive, 5.6, 5.9, 5.12, 5.13 or 5.15
through 5.38, inclusive, of the Participation Agreement; or (ii) Lessee
shall fail to sell all of the Units on the Termination Date in
accordance with and satisfaction of each of the terms, covenants,
conditions and agreements set forth under Article IX in connection with
and following its exercise of the Sale Option; or
(d) Other Defaults. Lessee, the General Partner or any
Subsidiary fails to perform or observe any other term or covenant
contained in this Lease or any other Operative Document, and such
default shall continue unremedied for a period of 30 days after the
earlier of (i) the date upon which a Responsible Officer knew of such
failure or (ii) the date upon which written notice thereof is given to
Lessee by the Lessor or Agent; provided that if (i) such default is not
curable by the payment of money and cannot be cured within such 30 day
period, and (ii) Lessee, the General Partner or such Subsidiary is
diligently pursuing the cure of such default, then the period for cure
of such default will be extended for the period necessary for Lessee,
the General Partner or such Subsidiary to effect such cure, but in no
event longer than 90 days from the date of such notice or knowledge; or
(e) Cross-Default. Lessee, the General Partner or any
Subsidiary (i) fails to make any payment in respect of any Indebtedness
or Contingent Obligation having an aggregate principal amount
(including undrawn committed or available amounts and including amounts
owing to all creditors under any combined or syndicated credit
arrangement) of more than $10,000,000 when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) and
such failure continues after the applicable grace or notice period, if
any, specified in the relevant document on the date of such failure or
(ii) fails to perform or observe any other condition or covenant, or
any other event (including any termination or similar event in respect
of any Accounts Receivable Securitization) shall occur or condition
exist, under any agreement or instrument relating to any such
Indebtedness or Contingent Obligation, and such failure continues after
the applicable grace or notice period, if any, specified in the
relevant document on the date of such failure if the effect of such
failure, event or condition is to cause, or to permit the holder or
holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause such Indebtedness to be
declared to be due and payable prior to its stated maturity or to cause
such Indebtedness or Contingent Obligation to be prepaid, purchased or
redeemed by Lessee, the MLP, the General Partner or any Subsidiary, or
such Contingent Obligation to become payable or cash collateral in
respect thereof to be demanded; or
(f) Insolvency; Voluntary Proceedings. The General Partner,
the MLP, Lessee or any Subsidiary (i) ceases or fails to be solvent, or
generally fails to pay, or admits in writing its inability to pay, its
debts as they become due, subject to applicable grace periods, if any,
whether at stated maturity or otherwise, (ii) voluntarily ceases to
conduct its business in the ordinary course, (iii) commences any
Insolvency Proceeding with respect to itself, or (iv) takes any action
to effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the General Partner, the MLP,
Lessee or any Subsidiary, or any writ, judgment, warrant of attachment,
execution or similar process is issued or levied against a substantial
part of any such Person's properties, and any such proceeding or
petition shall not be dismissed, or such writ, judgment, warrant of
attachment, execution or similar process shall not be released, vacated
or fully bonded within 60 days after commencement, filing or levy, (ii)
the General Partner, the MLP, Lessee or any Subsidiary admits the
material allegations of a petition against it in any Insolvency
Proceeding, or an order for relief (or similar order under non-U.S.
law) is ordered in any Insolvency Proceeding or (iii) the General
Partner, the MLP, Lessee or any Subsidiary acquiesces in the
appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor) or other similar Person for
itself or a substantial portion of its property or business; or
(h) ERISA. (i) An ERISA Event occurs with respect to a
Pension Plan which has resulted or could reasonably be expected to
result in liability of Lessee or the General Partner under Title IV of
ERISA to the Pension Plan or the PBGC in an aggregate amount in excess
of $5 million or (ii) the commencement or increase of contributions to,
or the adoption of or the amendment of a Pension Plan by Lessee, the
General Partner or any of their Affiliates which has resulted or could
reasonably be expected to result in an increase in Unfunded Pension
Liability among all Pension Plans in an aggregate amount in excess of
$5 million.
(i) Monetary Judgments. One or more judgments, orders,
decrees or arbitration awards is entered against Lessee, the General
Partner or any Subsidiary involving in the aggregate a liability (to
the extent not covered by independent third-party insurance as to which
the insurer does not dispute coverage) as to any single or related
series of transactions, incidents or conditions, of more than
$40,000,000; or
(j) Non-Monetary Judgments. Any non-monetary judgment, order
or decree is entered against Lessee, the General Partner or any
Subsidiary which does or would reasonably be expected to have a
Material Adverse Effect, and there shall be any period of 60
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(k) Loss of Licenses. Any Governmental Authority revokes or
fails to renew any material license, permit or franchise of Lessee or
any Subsidiary, or Lessee or any Subsidiary for any reason loses any
material license, permit or franchise, or Lessee or any Subsidiary
suffers the imposition of any restraining order, escrow, suspension or
impound of funds in connection with any proceeding (judicial or
administrative) with respect to any material license, permit or
franchise; or
(l) Adverse Change. There occurs a Material Adverse
Effect; or
(m) Certain Indenture Defaults, Etc. (i) To the extent not
otherwise within the scope of subsection (e) above, any "Event of
Default" shall occur and be continuing under and as defined in the 1998
Note Purchase Agreement or (ii) any of the following shall occur under
or with respect to the 1996 Indenture or any other Indebtedness
guaranteed by Lessee or its Subsidiaries (collectively, the "Guaranteed
Indebtedness"): (A) any demand for payment shall be made under any such
Guaranty Obligation with respect to the Guaranteed Indebtedness or (B)
so long as any such Guaranty Obligation shall be in effect (x) Lessee
or any such Subsidiary shall fail to pay principal of or premium, if
any, or interest on such Guaranteed Indebtedness after the expiration
of any applicable notice or cure periods or (y) any "Event of Default"
(however defined) shall occur and be continuing under such Guaranteed
Indebtedness which results in the acceleration of such Guaranteed
Indebtedness; or
(n) Guarantor Defaults. Any Guarantor fails in any material
respect to perform or observe any term, covenant or agreement in its
Guaranty, or any Guaranty is for any reason partially (including with
respect to future advances) or wholly revoked or invalidated, or
otherwise ceases to be in full force and effect, or any Guarantor or
any other Person contests in any manner the validity or enforceability
thereof or denies that it has any further liability or obligation
thereunder or any event described at subsections (f) or (g) of this
Section 8.1 occurs with respect to the Guarantor; or
(o) Operative Documents. Any Operative Document shall (except
in accordance with its terms), in whole or in part, terminate, cease to
be effective or cease to be the legally valid, binding and enforceable
obligation of Lessee, or Lessee or any of its Affiliates shall,
directly or indirectly, contest in any manner in any court the
effectiveness, validity, binding nature or enforceability thereof, or
the Lien securing Lessee's obligations under the Operative Documents
shall, in whole or in part, cease to be a perfected first priority Lien
free and clear of all Liens (other than Permitted Liens), or, in any
case, Lessee or any of its Affiliates shall, at any time, directly or
indirectly, contest in any manner in any court the validity or
enforceability thereof; or
(p) Other Lease. A "Lease Event of Default" shall occur under
the Other Lease.
(q) Change of Control. A Change of Control occurs.
Section 8.2. Remedies. If any Lease Event of Default exists, Lessor
shall have the rights, options and remedies set forth below and Lessor may
exercise in any order one or more or all of the following remedies (it being
understood that no remedy herein conferred is intended to be exclusive of any
other remedy or remedies, but each and every remedy shall be cumulative and
shall be in addition to every other remedy given herein or now or hereafter
existing at law or in equity or by statute): (i) declare the entire outstanding
Lease Balance to be due and payable, together with accrued and unpaid Rent and
any other amounts payable under the Operative Documents (without double
counting); (ii) proceed by appropriate court action or actions either at law or
in equity, to enforce the declaration of the amounts described in clause (i)
above, the performance by Lessee of the applicable covenants of this Lease and
the other Operative Documents or to recover damages for the breach thereof;
(iii) terminate this Lease by notice in writing to Lessee, but Lessee shall
remain liable as hereinafter provided; (iv) enforce the Lien given hereunder
pursuant to the UCC or any other law; (v) enter upon the premises where any of
the Lessee Collateral may be and take possession of all or any of such Lessee
Collateral and exercise any of its rights with respect thereto; (vi) require
Lessee to assemble and return the Units as provided below; and (vii) avail
itself of the rights, options and remedies of a secured party under the UCC
(regardless of whether the UCC or a law similar thereto has been enacted in a
jurisdiction wherein the rights or remedies are asserted) or any other law.
If Lessor exercises the option set forth in clause (vi) above, Lessee
shall, at its own expense, forthwith deliver exclusive possession of the Units
to Lessor, at a location or locations designated by Agent in the 48 contiguous
United States, together with a copy of an equipment list of the Units then
subject to this Lease, all then current plans, specifications and operating,
maintenance and repair manuals relating to the Units that have been received or
prepared by Lessee or its Affiliates, appropriately protected and in the
condition required by Article V hereof (and in any event in condition to be
placed in immediate revenue service) and free and clear of all Liens other than
Certificate Trustee Liens. In addition, Lessee shall, for 180 days after
redelivery of the Units, maintain (or cause to be maintained) the Units in the
condition required by Article V and free and clear of all Liens other than
Certificate Trustee Liens, store the Units without cost to Lessor, Agent or any
Participant and keep all of the Units insured in accordance with Section 6.2.
This paragraph shall survive termination of this Lease.
Following the foreclosure of Lessee's interest in the Units and the
other Lessee Collateral, Lessee shall take such action as Lessor or Agent shall
reasonably request in order to notify sublessees and users of the Units of such
foreclosure and the succession of Agent, Lessor or its designee to ownership and
operation thereof. Without limiting the foregoing, Lessee agrees that if it
receives any payments in respect of the filling of any Unit by Agent, Lessor or
its designee, such amounts will be held in trust and promptly paid over to the
applicable Person entitled thereto.
Notwithstanding the foregoing, if any Lease Event of Default described
in Section 8.1(e) or 8.1(f) shall have occurred and be continuing, then the
entire outstanding Lease Balance and all accrued and unpaid Rent and other
amounts payable under the Operative Documents (without double counting) shall
automatically and immediately become due and payable, without presentment,
demand, notice, declaration, protest or other requirements of any kind, all of
which are hereby expressly waived.
Section 8.3. Sale of Lessee Collateral. In addition to the remedies set
forth in Section 8.2, if any Lease Event of Default shall occur, Lessor may, but
is not required to, sell the Lessee Collateral in one or more sales. Any
Participant, Lessor and Agent may purchase all or any part of the Lessee
Collateral at such sale. Lessee acknowledges that sales for cash or on credit to
a wholesaler, retailer or user of such Lessee Collateral, or at public or
private auction, are all commercially reasonable. Any notice required by law of
intended disposition by Agent shall be deemed reasonably and properly given if
given at least 10 days before such disposition.
Section 8.4. Application of Proceeds. All payments received and amounts
held or realized by Lessor at any time when a Lease Event of Default shall be
continuing as well as all payments or amounts then held or thereafter received
by Lessor and the proceeds of sale pursuant to Section 8.3 shall be distributed
to the Agent upon receipt by Lessor for distribution in accordance with Article
III of the Loan Agreement.
Section 8.5. Right to Perform Obligations. If Lessee fails to perform
any of its agreements contained herein within 10 days following Lessor's notice
to Lessee describing such failure, Lessor may perform such agreement, and the
fees and expenses incurred by Lessor in connection with such performance
together with interest thereon shall be payable by Lessee upon demand. Interest
on fees and expenses so incurred by Lessor shall accrue as provided in Section
4.5 from the date such expense is incurred until paid in full.
Section 8.6. Power of Attorney. Lessee unconditionally and irrevocably
appoints Lessor as its true and lawful attorney-in-fact, with full power of
substitution, to the extent permitted by Applicable Laws and Regulations, in its
name and stead and on its behalf, for the purpose of effectuating any sale,
assignment, transfer or delivery hereunder, if a Lease Event of Default has
occurred and is continuing and Lessor is exercising any of the remedies
contained in clauses (iii) through (vii) of the first paragraph of Section 8.2,
whether pursuant to foreclosure or power of sale or otherwise, and in connection
therewith to execute and deliver all such deeds, bills of sale, assignments,
releases (including releases of this Lease on the records of any Governmental
Authority) and other proper instruments as Lessor may reasonably consider
necessary or appropriate. Lessee ratifies and confirms all that such attorney or
any substitute shall lawfully do by virtue hereof. If requested by Lessor or any
purchaser, Lessee shall ratify and confirm any such lawful sale, assignment,
transfer or delivery by executing and delivering to Lessor 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.
Section 8.7. Remedies Cumulative; Consents. To the extent permitted by,
and subject to the mandatory requirements of, Applicable Laws and Regulations,
each and every right, power and remedy herein specifically given to Lessor or
otherwise in this Lease shall be cumulative and shall be in addition to every
other right, power and remedy herein specifically given or now or hereafter
existing at law, in equity or by statute, and each and every right, power and
remedy whether specifically herein given or otherwise existing may be exercised
from time to time and as often and in such order as may be deemed expedient by
Lessor, and the exercise or the beginning of the exercise of any power or remedy
shall not be construed to be a waiver of the right to exercise at the same time
or thereafter any right, power or remedy. Lessor's, Agent's or the Participants'
consent to any request made by Lessee shall not be deemed to constitute or
preclude the necessity for obtaining Lessor's, Agent's or the Participants'
consent in the future to all similar requests. To the extent permitted by
Applicable Laws and Regulations, Lessee hereby waives any rights now or
hereafter conferred by statute or otherwise that may require Lessor, Agent or
the Participants to sell, lease or otherwise use the Units, any Unit or any Part
thereof in mitigation of Lessor's, Agent's or the Participants' damages upon the
occurrence of a Lease Event of Default or that may otherwise limit or modify any
of Lessor's, Agent's or the Participants' rights or remedies under this Section
8.
Section 8.8. Certain Financial Covenant Defaults. In the event that,
after taking into account any extraordinary charge to earnings taken or to be
taken as of the end of any fiscal period of Lessee (a "Charge"), and if solely
by virtue of such Charge there would exist a Lease Event of Default due to the
breach of any of Section 5.12(a) or 5.12(b) of the Participation Agreement as of
such fiscal period end date, such Lease Event of Default shall be deemed to
arise upon the earlier of (a) the date after such fiscal period end date on
which Lessee announces publicly it will take, is taking or has taken such Charge
(including an announcement in the form of a statement in a report filed with the
SEC) or, if such announcement is made prior to such fiscal period end date, the
date that is such fiscal period end date, and (b) the date Lessee delivers to
Lessor and Agent its audited annual or unaudited quarterly financial statements
in respect of such fiscal period reflecting such Charge as taken.
ARTICLE IX
LEASE TERMINATION
Section 9.1. Lessee's Option. Not later than 270 days prior to the last
day of the Lease Term, Lessee shall, by delivery of written notice to Lessor and
Agent, exercise one of the following options:
(a) purchase for cash for the Purchase Option Exercise Amount
all, but not less than all, of the Units then subject to this Lease on
the last day of the Lease Term (the "Purchase Option"); or
(b) sell on behalf of Lessor for cash to a purchaser or
purchasers not in any way affiliated with Lessee all, but not less than
all, of the Units then subject to this Lease on the last day of the
Lease Term (the "Sale Option"). Simultaneously with a sale pursuant to
the Sale Option, Lessee shall pay or cause to be paid to Lessor, as
Supplemental Rent, (i) the Applicable Percentage Amount and (ii) that
portion of the gross proceeds of the sale of the Units, without
deductions or expense reimbursements ("Proceeds") which is sufficient
to pay the aggregate outstanding Lease Balance as of the Lease
Expiration Date (as determined after the payment of all Basic Rent due
on such date and after giving effect to the reduction of the Lease
Balance by application of the Applicable Percentage Amount thereto). If
the Proceeds exceed the Lease Balance as of the Lease Expiration Date
as reduced by the application of the Applicable Percentage Amount
thereto, Lessee shall retain the portion of the Proceeds in excess
thereof. If the Proceeds are less than the aggregate outstanding Lease
Balance as reduced by the application of the Applicable Percentage
Amount thereto, Lessee shall not be obligated pursuant to this Section
9.1(b) to pay or cause to be paid to Lessor, as Supplemental Rent, more
than the Proceeds, it being understood, however, that the amount
payable pursuant to this Section 9.1(b) shall in no event be construed
to limit any other obligation of Lessee under the Operative Documents,
including, without limitation, pursuant to Article VII of the
Participation Agreement and Sections 9.3, 9.4 and 9.5 hereof. In
addition to the amounts determined to be payable by Lessee pursuant to
the foregoing provisions of this Section 9.1(b), Lessee shall pay to
Lessor all Supplemental Rent then due and owing. The obligation of
Lessee to pay the amounts determined pursuant to this Section 9.1(b)
shall be a recourse obligation of Lessee and shall be payable on the
Termination Date. All amounts paid to Lessor pursuant to this Section
9.1(b) shall be paid to Agent for distribution pursuant to Article III
of the Loan Agreement.
Section 9.2. Election of Options. Lessee's election of the Purchase
Option will be irrevocable at the time made, but if Lessee fails to make a
timely election, Lessee will be deemed to have irrevocably elected the Purchase
Option. In addition, the Sale Option shall automatically be revoked if there
exists a Lease Default or Lease Event of Default, at any time after the Sale
Option is properly elected. In such event, Lessor shall be entitled to exercise
all rights and remedies provided in Article VIII. Lessee may not elect the Sale
Option if on the date the election is made there exists a Lease Event of Default
or a Lease Default. Lessee's exercise of the Sale Option or the Purchase Option
shall be conditioned upon the corresponding option being concurrently exercised
under the Other Lease. In addition, it shall be a condition to the exercise of
the Sale Option that Lessee shall have settled for or replaced any Unit or Units
suffering a Casualty in accordance with Section 6.1 and shall have delivered an
updated Equipment List to Agent and Lessor and otherwise complied with its
obligations under Section 5.8 of this Lease, in each case regardless of whether
the $1,000,000 threshold has been reached.
Section 9.3. Sale Option Procedures. If Lessee elects the Sale Option,
Lessee shall use its best commercial efforts to obtain the highest all cash
purchase price for the Units. All costs related to such sale including, without
limitation, the cost of sales agents, removal of the Units, delivery of
documents to any location designated by a buyer within the continental United
States, certification and testing of the Units in any reasonable location chosen
by the buyer or prospective buyer, legal costs, costs of notices, any
advertisement or other similar costs, or other information and of any parts,
configurations or repairs, or modifications consistent with the Units being used
to store and/or transport liquids and gases, in each case, required by a buyer
or prospective buyer shall be borne entirely by Lessee, without regard to
whether such costs were incurred by Lessor, Lessee or any potentially qualified
buyer, and shall in no event be paid from any of the Proceeds. Neither Lessor,
Agent nor any Participant shall have any responsibility for procuring any
purchaser. If, nevertheless, Lessor, Agent or any Participant undertakes any
sales efforts, Lessee shall promptly reimburse such Person for any charges,
costs and expenses incurred in such effort, including any allocated time
charges, costs and expenses of internal counsel or other attorneys' fees. Upon a
sale pursuant to the Sale Option, the Units shall be in the condition required
by Section 5.3 and shall be free and clear of all Liens other than Certificate
Trustee Liens. Any purchaser or purchasers of the Units shall not in any way be
affiliated with Lessee or have any understanding or arrangement with Lessee
regarding the future use of the Units. On the Termination Date, so long as no
Lease Event of Default or Lease Default exists: (i) Lessee shall transfer all of
Lessee's right, title and interest in the Units or cause the Units to be so
transferred to such purchaser or purchasers, if any, in accordance with all of
the terms of this Lease; (ii) subject to the simultaneous payment by Lessee of
all amounts due under clause (iii) of this sentence, Lessor shall, without
recourse or warranty, except as to the absence of Certificate Trustee Liens,
transfer by quitclaim or otherwise release, as appropriate, Lessor's right,
title and interest in and to the Units to such purchaser or purchasers; and
(iii) Lessee shall simultaneously pay to Agent all of the amounts contemplated
in Section 9.1(b).
Section 9.4. Appraisals. If Lessee exercises the Sale Option and the
sum of the Proceeds from the sale of all Units subject to this Lease plus the
Applicable Percentage Amount are less than the outstanding Lease Balance, Lessor
(upon direction from any Affected Participant) shall engage an appraiser of
nationally recognized standing, at Lessee's expense, to determine (by appraisal
methods satisfactory to the Affected Participants) the Fair Market Value of the
Units then subject to this Lease as of the Termination Date. If the Appraisal
concludes that the Fair Market Value of such Units as of the Termination Date
was in excess of the aggregate Proceeds from the sale of all Units subject to
this Lease, Lessee shall promptly pay to Lessor, as Supplemental Rent, such
excess, which together with such Proceeds and the Applicable Percentage Amount
so paid shall not exceed the Lease Balance determined immediately prior to the
application of the foregoing amounts.
Section 9.5. Early Termination. (a) If no Lease Event of Default shall
exist, on any scheduled Payment Date after the second anniversary of the Interim
Term Expiration Date, Lessee may, at its option, upon at least 30 days' advance
written notice to Lessor and Agent, purchase all, but not less than all, of the
Units subject to this Lease for the Purchase Option Exercise Amount; provided
that the lessee under the Other Lease shall have concurrently exercised its
early termination option thereunder and designated the same date for purchase.
Upon the indefeasible payment in full of such sums by Lessee in accordance with
the provisions of the preceding sentence, the obligation of Lessee to pay Rent
hereunder shall cease, the term of this Lease shall end on the date of such
payment and Lessor shall execute and deliver to Lessee such documents as may be
reasonably required to release the Units from the terms and scope of this Lease
(without representations or warranties, except that the Units are free and clear
of Certificate Trustee Liens), in such form as may be reasonably requested by
Lessee, all at Lessee's sole cost and expense.
(b) Notwithstanding anything stated herein to the contrary, if (i) due
to a change in accounting rules or treatment, this Lease is no longer treated as
an operating lease for accounting purposes, or (ii) Lessor or any Participant is
required to claim any federal or state tax attributes or benefits (including
depreciation) relating to the Units in respect of any period prior to the Lease
Expiration Date by an appropriate taxing authority or after a clearly applicable
change in Applicable Laws and Regulations or as a protective response to a
proposed adjustment by a Governmental Authority, Lessee may, at its option, upon
at least five (5) days' advance written notice to Lessor and Agent, purchase all
but not less than all of the Units subject to this Lease for the Purchase Option
Exercise Amount; provided that the lessee under the Other Lease shall have
concurrently exercised its early termination option thereunder and designated
the same date for purchase. Upon the indefeasible payment in full of such sums
by Lessee in accordance with the provisions of the preceding sentence, the
obligation of Lessee to pay Rent hereunder shall cease, the term of this Lease
shall end on the date of such payment and Lessor shall execute and deliver to
Lessee such documents as may be reasonably required to release the Units from
the terms and scope of this Lease (without representations or warranties, except
that the Units are free and clear of Certificate Trustee Liens), in such form as
may be reasonably requested by Lessee, all at Lessee's sole cost and expense.
Section 9.6. Designation of Purchaser. If Lessee has exercised the
Purchase Option or any option under Section 9.5, Lessee may assign its right to
purchase the Units to any other person or to designate any other person as the
transferee under any bill of sale to be executed by Lessor in connection with
such sale; provided, however, that Lessee shall remain primarily liable to pay
the Purchase Option Exercise Amount and all other amounts then due and owing by
Lessee under the Operative Documents.
ARTICLE X
OWNERSHIP AND GRANT OF SECURITY INTEREST
Section 10.1. Grant of Security Interest. Title to the Acquired Property
shall remain in Lessor as security for the obligations of Lessee hereunder and
under the other Operative Documents and under the Related Operative Documents to
which it is a party until Lessee has fulfilled all of its obligations hereunder
and thereunder. Lessee hereby assigns, hypothecates, transfers and pledges to
Lessor, and grants to Lessor a security interest in each Unit and in each
Sublease covering any Unit that may be entered into from time to time in
accordance with the provisions of this Lease, and Lessee hereby grants to Lessor
a continuing security interest in all of the other Lessee Collateral, to secure
the payment of all sums due hereunder and under the other Operative Documents
and under the Related Operative Documents to which it is a party and the
performance of all other obligations hereunder and under the other Operative
Documents and under the Related Operative Documents to which it is a party.
Section 10.2. Retention of Proceeds. If Lessee would be entitled to any
amount (including any Casualty Recoveries) held by Lessor or Agent or title to
any Unit hereunder but for the existence of any Lease Event of Default, Agent
shall hold such amount or Unit as part of the Lessee Collateral and shall be
entitled to apply such amounts against any amounts due hereunder; provided, that
Agent shall distribute such amount or transfer such Unit, to the extent not
theretofore applied, in accordance with the other terms of this Lease if and
when no Lease Event of Default exists.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Effect of Waiver. No delay or omission to exercise any
right, power or remedy accruing to Lessor upon any breach or default of Lessee
hereunder shall impair any such right, power or remedy nor shall it be construed
to be a waiver of any such breach or default, or an acquiescence therein or of
or in any similar breach or default thereafter occurring, nor shall any single
or partial exercise of any right, power or remedy preclude other or further
exercise thereof, or the exercise of any other right, power or remedy, nor shall
any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of Lessor of any breach
or default under this Lease must be specifically set forth in writing and must
satisfy the requirements set forth in Section 11.5 with respect to approval by
Lessor.
Section 11.2. Survival of Covenants. All representations, warranties and
covenants of the parties hereto under Article IV, Article V, Article IX and
Article X shall survive the expiration or termination of this Lease to the
extent arising prior to any such expiration or termination.
Section 11.3. Applicable Laws and Regulations. THIS LEASE SHALL BE
GOVERNED BY AND CONSTRUED UNDER
the LAWS OF THE STATE OF NEW YORK.
Section 11.4. Notices. Unless otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be in writing and shall be delivered and shall be deemed to have
been given in accordance with Section 9.3 of the Participation Agreement.
Section 11.5. Amendment; Complete Agreements. Neither this Lease nor any
of the terms hereof may be terminated, amended, supplemented, waived or modified
orally, but only by an instrument in writing signed by the party against which
the enforcement of the termination, amendment, supplement, waiver or
modification shall be sought. This Lease, together with the other Operative
Documents, is intended by the parties as a final expression of their agreement
and as a complete and exclusive statement of the terms thereof, all
negotiations, considerations and representations between the parties having been
incorporated herein and therein. No course of prior dealings between the parties
or their officers, employees, agents or Affiliates shall be relevant or
admissible to supplement, explain, or vary any of the terms of this Lease or any
other Operative Document. Acceptance of, or acquiescence in, a course of
performance rendered under this or any prior agreement between the parties or
their Affiliates shall not be relevant or admissible to determine the meaning of
any of the terms of this Lease or any other Operative Document. No
representations, undertakings or agreements have been made or relied upon in the
making of this Lease other than those specifically set forth in the Operative
Documents.
Section 11.6. Counterparts. This Lease has been executed in several
numbered counterparts. Only the counterpart designated as counterpart "No. 1"
shall be deemed to be an original or to be chattel paper for purposes of the
Uniform Commercial Code, and such copy shall be held by Agent.
Section 11.7. Severability. Whenever possible, each provision of this
Lease shall be interpreted in such a manner as to be effective and valid under
Applicable Laws and Regulations; but if any provision of this Lease shall be
prohibited by or invalid under Applicable Laws and Regulations, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Lease.
Section 11.8. Successors and Assigns. This Lease shall be binding upon
the parties hereto and their respective successors and assigns and shall inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.
Section 11.9. Captions; Table of Contents. Section captions and the
table of contents used in this Lease (including the Schedules, Exhibits and
Annexes hereto) are for convenience of reference only and shall not affect the
construction of this Lease.
Section 11.10. Schedules and Exhibits. The Schedules, Annexes and
Exhibits hereto, along with all attachments referenced in any of such items, are
incorporated herein by reference and made a part hereof.
Section 11.11. Liability of Lessor Limited. The parties hereto agree that
First Security Bank, National Association, in its individual capacity ("First
Security"), shall have no personal liability whatsoever to Lessee or its
respective successors and assigns for any Claim based on or in respect of this
Lease or any of the other Operative Documents or arising in any way from the
transactions contemplated hereby or thereby; provided, however, that First
Security shall be liable in its individual capacity (a) for its own willful
misconduct or gross negligence (or negligence in the handling of funds), (b) for
liabilities that may result from the incorrectness of any representation or
warranty expressly made by it in its individual capacity in Section 4.3 of the
Participation Agreement or from the failure of First Security to perform its
covenants and agreements set forth in Section 6.2 of the Participation
Agreement, or (c) for any Tax based on or measured by any fees, commission or
compensation received by it for acting as Lessor as contemplated by the
Operative Documents. It is understood and agreed that, except as provided in the
preceding proviso: (i) First Security shall have no personal liability under any
of the Operative Documents as a result of acting pursuant to and consistent with
any of the Operative Documents; (ii) all obligations of Lessor to Lessee are
solely nonrecourse obligations except to the extent that it has received payment
from others; (iii) all such personal liability of First Security is expressly
waived and released as a condition of, and as consideration for, the execution
and delivery of the Operative Documents by First Security and (iv) this Lease is
executed and delivered by First Security solely as Certificate Trustee in the
exercise of the powers expressly conferred upon it as Lessor under the Trust
Agreement.
Section 11.12. Successor Lessor. Lessee agrees that, in the case of the
appointment of any successor Certificate Trustee pursuant to the Trust Agreement
and the other Operative Documents, such successor shall, upon written notice by
such successor to Lessee, succeed to all the rights, powers and title of Lessor
hereunder and shall be deemed to be Lessor for all purposes hereof and without
in any way altering the terms of this Lease or Lessee's obligations hereunder.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the day and year first above written.
FERRELLGAS, LP, as Lessee
By: Ferrellgas, Inc., its General Partner
By:_______________________________
Name:
Title:
FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Certificate
Trustee, as Lessor
By:
Name:
Title:
<PAGE>
SCHEDULE I
DESCRIPTION OF UNITS
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SCHEDULE II
AMORTIZATION OF CLASS A NOTES
PARTICIPATION AGREEMENT
(Thermogas Trust No. 1999-A)
Dated as of December 15, 1999
Among
THERMOGAS L.L.C.,
as Lessee,
THE WILLIAMS COMPANIES, INC.,
as Lessee Guarantor
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity except as expressly
stated herein, but solely as Certificate Trustee
FIRST SECURITY TRUST COMPANY OF NEVADA,
not in its individual capacity except as expressly
stated herein, but solely as Agent
THE PERSONS NAMED ON SCHEDULE I-A,
as Certificate Purchasers
THE PERSONS NAMED ON SCHEDULE I-B,
as Lenders
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
SECTION HEADING PAGE
<S> <C>
ARTICLE I DEFINITIONS............................................................................2
ARTICLE II ACQUISITION AND LEASE; GENERAL PROVISIONS..............................................2
Section 2.1. Funding................................................................................2
Section 2.2. Application of Funds; Acquisition and Lease of Units...................................2
Section 2.3. Time and Place of Delivery Date........................................................2
Section 2.4. Postponement of Delivery Date..........................................................3
Section 2.5. Participants'Instructions to Certificate Trustee and Payments to
Participants.......................................................................3
Section 2.6. Nature of Transaction..................................................................4
Section 2.7. Amounts Due............................................................................4
Section 2.8. Computations...........................................................................5
Section 2.9. Determination of Interest Rate and Yield Rate..........................................5
Section 2.10. Obligations Several....................................................................6
Section 2.11. Fees6
Section 2.12. Extension of Lease Expiration Date and Final Maturity Date.............................6
ARTICLE III CONDITIONS TO DELIVERY DATE............................................................8
Section 3.1. Conditions to Delivery Date............................................................8
Section 3.2. Condition Subsequent..................................................................12
ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................13
Section 4.1. Representations and Warranties of Lessee..............................................13
Section 4.2. Representations and Warranties of Each Participant....................................20
Section 4.3. Representations and Warranties of Certificate Trustee.................................21
Section 4.4. Representations and Warranties of Agent...............................................23
ARTICLE V COVENANTS OF LESSEE AND GUARANTOR.....................................................24
Section 5.1. Financial Statements..................................................................24
Section 5.2. Certificates; Other Information.......................................................26
Section 5.3. Notices...............................................................................26
Section 5.4. Preservation of Corporate or Partnership Existence, Etc...............................27
Section 5.5. Maintenance of Property...............................................................27
Section 5.6. Insurance.............................................................................28
Section 5.7. Payment of Obligations................................................................28
Section 5.8. Compliance with Laws..................................................................28
Section 5.9. Inspection of Property and Books and Records..........................................28
Section 5.10. Environmental Laws....................................................................29
Section 5.11. Use of Proceeds.......................................................................29
Section 5.12. Financial Covenants...................................................................29
Section 5.13. [Intentionally Reserved]..............................................................29
Section 5.14. Other General Partner Obligations.....................................................29
Section 5.15. Monetary Judgments....................................................................30
Section 5.16. Year 2000 Compliance..................................................................30
Section 5.17. Limitation on Liens...................................................................31
Section 5.18. Asset Sales...........................................................................33
Section 5.19. Consolidations and Mergers............................................................34
Section 5.20. Acquisitions..........................................................................35
Section 5.21. Limitation on Indebtedness............................................................35
Section 5.22. Transactions with Affiliates..........................................................35
Section 5.23. Use of Proceeds.......................................................................36
Section 5.24. Use of Proceeds - Ineligible Securities...............................................36
Section 5.25. Contingent Obligations................................................................36
Section 5.26. Joint Ventures........................................................................37
Section 5.27. Lease Obligations.....................................................................37
Section 5.28. Restricted Payments...................................................................37
Section 5.29. Prepayments of Subordinated Indebtedness..............................................39
Section 5.30. Dividend and Other Payment Restrictions Affecting Subsidiaries........................39
Section 5.31. Change in Business....................................................................40
Section 5.32. Accounting Changes....................................................................40
Section 5.33. Limitation on Sale and Leaseback Transactions.........................................40
Section 5.34. [Intentionally Omitted]...............................................................40
Section 5.35. Amendments of Organization Documents or 1996 Indenture or 1998 Note
Purchase Agreement................................................................40
Section 5.37. Operations through Subsidiaries.......................................................41
Section 5.38. Operations of MLP.....................................................................41
Section 5.39. Miscellaneous.........................................................................42
Section 5.40. Accounting Principles.................................................................42
ARTICLE VI OTHER COVENANTS AND AGREEMENTS........................................................43
Section 6.1. Cooperation with Lessee...............................................................43
Section 6.2. Covenants of Certificate Trustee and Agent............................................43
Section 6.3. Assignments...........................................................................44
Section 6.4. Participations........................................................................45
ARTICLE VII INDEMNIFICATION.......................................................................45
Section 7.1. General Indemnification...............................................................45
Section 7.2. General Tax Indemnity.................................................................47
Section 7.3. Excessive Use Indemnity...............................................................49
Section 7.4. Gross Up..............................................................................50
Section 7.5. Increased Capital Costs...............................................................50
Section 7.6. LIBO Rate Illegal, Unavailable or Impracticable.......................................50
Section 7.7. Funding Losses........................................................................51
Section 7.8. Actions of Affected Participants......................................................51
ARTICLE VIII AGENT.................................................................................52
Section 8.1. Appointment of Agent; Powers and Authorization to Take Certain Actions................52
Section 8.2. Reliance..............................................................................53
Section 8.3. Action upon Instructions Generally....................................................53
Section 8.4. Indemnification.......................................................................54
Section 8.5. Independent Credit Investigation......................................................54
Section 8.6. Refusal to Act........................................................................55
Section 8.7. Resignation or Removal of Agent; Appointment of Successor.............................55
Section 8.8. Separate Agent........................................................................55
Section 8.9. Termination of Agency.................................................................56
Section 8.10. Compensation of Agent.................................................................56
Section 8.11. Limitations...........................................................................56
ARTICLE IX MISCELLANEOUS.........................................................................57
Section 9.1. Survival of Agreements................................................................57
Section 9.2. No Broker, etc........................................................................57
Section 9.3. Notices...............................................................................57
Section 9.4. Counterparts..........................................................................57
Section 9.5. Amendments............................................................................57
Section 9.6. Headings, etc.........................................................................59
Section 9.7. Parties in Interest...................................................................59
Section 9.8. Governing Law.........................................................................59
Section 9.9. Payment of Transaction Costs and Other Costs..........................................59
Section 9.10. Severability..........................................................................60
Section 9.11. Limited Liability of Certificate Trustee..............................................60
Section 9.12. Liabilities of the Participants.......................................................60
Section 9.13. Submission to Jurisdiction; Waivers...................................................60
Section 9.14. Reproduction of Documents.............................................................61
Section 9.15. Role of Bank of America Leasing & Capital Group, LLC..................................61
Section 9.16. Confidentiality.......................................................................61
Section 9.17. Lessee Obligations....................................................................62
Section 9.18. Acquired Property.....................................................................62
Section 9.19. Effective Date........................................................................62
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APPENDIX 1 Definitions
SCHEDULE I-A Certificate Purchaser Commitments
SCHEDULE I-B Lender Commitments
SCHEDULE II Addresses For Notice; Wire Instructions
SCHEDULE III Units
SCHEDULE 3.1(o) Filings and Recordings
SCHEDULE 4.1(g) ERISA Matters
SCHEDULE 4.1(p) Subsidiaries and Affiliates
SCHEDULE 5.21 Existing Indebtedness
EXHIBIT A Form of Lease
EXHIBIT B Form of Delivery Date Notice
EXHIBIT C Form of Loan Agreement
EXHIBIT D Form of Assignment of Lease and Rent
EXHIBIT E Form of Acceptance Certificate
EXHIBIT F Form of Trust Agreement
EXHIBIT G Form of Lessee Guaranty
EXHIBIT H-1 Form of Opinion of Special Counsel for
Lessee
EXHIBIT H-2 Form of Opinion of Special Counsel for
Certificate Trustee
EXHIBIT H-3 Form of Opinion of Special Counsel for Agent
EXHIBIT I Form of Bill of Sale
EXHIBIT J Form of Compliance Certificate
EXHIBIT K Form of Transfer Documentation
EXHIBIT L-1 Form of Lessee Officer's Certificate
EXHIBIT L-2 Form of Lessee Guarantor Officer's Certificate
EXHIBIT M Form of Assumption Agreement
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT (Thermogas Trust No. 1999-A), dated as of
December 15, 1999 (this "Agreement"), is among THERMOGAS L.L.C., a Delaware
corporation, as Lessee; THE WILLIAMS COMPANIES, INC., a Delaware limited
liability company, as Lessee Guarantor; FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity
except as expressly stated herein, but solely as Certificate Trustee; FIRST
SECURITY TRUST COMPANY OF NEVADA, not in its individual capacity except as
expressly stated herein, but solely as Agent; the Persons named on Schedule I-A
hereto (together with their respective permitted successors, assigns and
transferees), as Certificate Purchasers; and the Persons listed on Schedule I-B
hereto (together with their respective permitted successors, assigns and
transferees), as Lenders.
PRELIMINARY STATEMENT
A. Lessee is the owner of the Units and the other Lessee Collateral
(collectively the "Acquired Property") and desires to enter into the Overall
Transaction for the purpose of financing of the Acquired Property.
B. The Trust under the Trust Agreement has been created for the
purpose of providing financing for the acquisition of the Acquired Property and
to hold title to the Acquired Property to secure Lessee's performance under the
Operative Documents.
C. Subject to the terms and conditions of this Agreement and the other
Operative Documents, on the Delivery Date, among other things:
(i) Lessor will purchase from Lessee, and Lessee will
transfer to Lessor, the Units described on Schedule III hereto
(together with any Units that may be hereafter substituted for any
thereof pursuant to Section 5.7 or Section 6.1 of the Lease and
subjected to the Lease from time to time, being referred to
collectively as the "Units" and individually as a "Unit") and the other
Acquired Property; and
(ii) Lessor will lease such Acquired Property to Lessee and
Lessee will lease such Acquired Property from Lessor, pursuant to the
terms of the Lease.
D. Subject to the terms and conditions of this Agreement and the other
Operative Documents, the Participants are willing to advance funds for the
financing of the Acquired Property and to pay certain Transaction Costs as
contemplated herein.
E. To secure their respective Certificate Amounts and Loans, Agent, on
behalf of the Participants, will have the benefit of a Lien on the Units and the
Lessee Collateral and the Certificate Trustee's interest in the Lease and the
other Lessor Collateral.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Unless the context shall otherwise require, capitalized terms used and
not defined herein shall have the meanings assigned thereto in Appendix 1 hereto
for all purposes hereof; and the rules of interpretation set forth in Appendix 1
hereto shall apply to this Agreement.
ARTICLE II
ACQUISITION AND LEASE; GENERAL PROVISIONS
Section 2.1. Funding.
(a) Amount of Funding. Subject to the terms and conditions of this
Agreement and in reliance on the representations and warranties of each of the
parties hereto contained herein or made pursuant hereto, upon receipt of the
Delivery Date Notice, on the Delivery Date each Certificate Purchaser shall
acquire its interest in the Trust Estate and each Lender will assist in funding
Certificate Trustee's purchase of the Acquired Property, in each case by making
available to Certificate Trustee by wire transfer in accordance with the
instructions set forth in the Delivery Date Notice an amount in immediately
available funds on the Delivery Date equal to such Participant's Commitment.
(b) Notes and Certificates. Each Lender's Loan shall be evidenced by a
separate Class A or Class B Note or Notes issued to such Lender and repayable in
accordance with, and with Interest accruing pursuant to, the terms of the Loan
Agreement. The amounts made available by each Certificate Purchaser shall be
evidenced by a separate Certificate issued by Certificate Trustee to each
Certificate Purchaser. Each Certificate shall accrue Yield at the Yield Rate on
the Certificate Amount thereof, payable as more fully set forth in the Trust
Agreement.
Section 2.2. Application of Funds; Acquisition and Lease of Units. On
the Delivery Date, upon (a) receipt by Agent of all amounts to be paid by the
Participants pursuant to Section 2.1, and (b) satisfaction or waiver of each of
the conditions set forth in Article III, (i) Certificate Trustee shall acquire
record title to the Acquired Property, as specified in the Delivery Date Notice,
(ii) in consideration therefor, Agent, on behalf of Certificate Trustee, shall
pay, from the funds made available by the Participants pursuant to Section 2.1,
an amount equal to the aggregate Purchase Price of the Acquired Property in
immediately available funds remitted by wire transfer to the account specified
by Lessee in the Delivery Date Notice, and (iii) Certificate Trustee shall lease
to Lessee the Acquired Property, and Lessee shall accept delivery of and lease
from Certificate Trustee such Acquired Property, pursuant to the Lease.
Section 2.3. Time and Place of Delivery Date. The Delivery Date shall
take place on the Delivery Date set forth in the Delivery Date Notice,
commencing at 10:00 a.m., Chicago time, at the offices of Chapman and Cutler,
111 West Monroe Street, Chicago, Illinois 60603, subject to the following:
(i) the Funding and Delivery Date shall occur on a Business
Day on or after the date hereof and not later than December 30, 1999,
it being understood that there may be a Funding without the
consummation of the transactions to occur on the Delivery Date if
Lessee has postponed the Delivery Date pursuant to Section 2.4, so long
as the Delivery Date occurs not later than December 30, 1999; and
(ii) in no event shall the aggregate amount advanced by the
Participants exceed the total Commitments of all Participants, nor
shall the aggregate amount advanced by any Participant exceed such
Participant's Commitment.
Section 2.4. Postponement of Delivery Date. In the event that the
Participants shall make the Funding requested pursuant to the Delivery Date
Notice and the transactions contemplated to occur on the Delivery Date shall not
have been consummated on the date specified in such Delivery Date Notice, Lessee
shall pay to Agent, for the benefit of (a) the Certificate Purchasers, yield on
the amount funded by each Certificate Purchaser at the Yield Rate, and (b) the
Lenders, interest on the amount funded by each Lender at the Interest Rate, in
each case less any interest or other amounts earned by Agent investing such
funded amounts, which interest shall be for the ratable benefit of the
Participants; provided that this provision shall not be construed to require
Agent to invest such funds in interest-bearing accounts. Such interest shall be
due and payable by Lessee upon the consummation of the Delivery Date and such
payment shall be an additional condition precedent to such Delivery Date;
provided, however, that no additional Delivery Date Notice shall be required to
be given if such Delivery Date is postponed and thereafter consummated; and
provided, further, that if such Delivery Date shall not have occurred by the
first to occur of (a) the second (2nd) Business Day following the Funding in
respect thereof and (b) December 30, 1999, then all such interest shall be due
and payable on such date, and Agent shall refund to each Participant all amounts
funded by such Participant, plus any amounts due pursuant to Section 7.7 (which
Lessee shall pay to Agent for the benefit of the Participants). Upon a
Participant funding the amount of its Commitment, the Commitment of such
Participant shall terminate.
Section 2.5. Participants' Instructions to Certificate Trustee and
Payments to Participants. (a) Each Participant agrees that the making of its
monies available pursuant to Section 2.1 shall constitute, without further act,
authorization and direction by such Participant to Certificate Trustee to take
the actions specified in Section 1.1 of the Trust Agreement.
(b) The parties to this Participation Agreement hereby agree that any
payment required to be made to the Participants by Certificate Trustee pursuant
to any Operative Document may be made directly to the Participants by Lessee, or
to Agent pursuant to the Loan Agreement for the benefit of the Participants, in
lieu of the corresponding payment required to be made by Lessee to Certificate
Trustee pursuant to any Operative Document. Such payment by Lessee to the
Participants or to Agent pursuant to the Loan Agreement for the benefit of the
Participants, shall be deemed to constitute: (i) the required payment from
Lessee to Certificate Trustee, and (ii) the corresponding payment by Certificate
Trustee to the Participants.
Section 2.6. Nature of Transaction. It is the intention of the
parties that:
(a) the Overall Transaction constitutes an operating
lease from Lessor to Lessee for
purposes of Lessee's financial reporting;
(b) for all other purposes including federal, state and local
income tax, property tax, transfer tax, bankruptcy (including the
substantive law upon which bankruptcy proceedings are based),
regulatory and real estate, commercial law and UCC purposes:
(i) the Overall Transaction constitutes a financing
by the Participants to Lessee, the Overall Transaction
preserves beneficial ownership in the Units in Lessee, and the
obligations of Lessee to pay Basic Rent shall be treated as
payments of interest, yield and/or principal to the
Participants, and the payment by Lessee of any amounts in
respect of the Lease Balance shall be treated as payments of
principal to the Participants;
(ii) Lessor is the owner of record and holds title in
the Acquired Property as security for Lessee's obligations
under the Operative Documents, and the Lease grants a security
interest or a lien, as the case may be, in the Units and the
other Lessee Collateral in favor of the Lessor, and for the
benefit of the Participants; and
(iii) the Assignment of Lease and Rent creates Liens
and security interests in the Lessor Collateral for the
benefit of all of the Participants.
Nevertheless, Lessee acknowledges and agrees that none of Certificate Trustee,
Agent, Arranger, or any Participant has made any representations or warranties
concerning the tax, accounting or legal characteristics of the Operative
Documents or any aspect of the Overall Transaction and that Lessee has obtained
and relied upon such tax, accounting and legal advice concerning the Operative
Documents and the Overall Transaction as it deems appropriate.
Section 2.7. Amounts Due. Anything else herein or elsewhere to the
contrary notwithstanding, it is the intention of Lessee, Certificate Trustee and
Participants that: (i) the amount and timing of installments of Basic Rent due
and payable from time to time from Lessee under the Lease shall be equal to the
aggregate payments due and payable in respect of principal amortization of the
Notes, if any, Interest accrued on the Notes and Yield accrued on the
Certificates on each Payment Date; (ii) if Lessee elects the Early Termination
Option or the Purchase Option or becomes obligated to purchase the Units under
the Lease, the principal of the Notes, the Certificate Amounts, all Interest and
Yield thereon, all Fees and Transaction Costs and all other obligations of
Lessee owing to the Participants, Agent and Certificate Trustee shall be paid in
full by Lessee in accordance with Article IX of the Lease; (iii) if Lessee
properly elects the Sale Option and remarkets the Units in accordance with
Article IX of the Lease, Lessee shall only be required to pay the Proceeds of
the sale of the Units and, if the Proceeds are less than the Lease Balance, the
amount of such difference but not more than the Applicable Percentage Amount,
all in accordance with Article IX of the Lease, and any amounts due pursuant to
Section 7.3 hereof and Section 9.4 of the Lease (which aggregate amounts may be
less than the Lease Balance) together with all other Supplemental Rent then due
and payable; and (iv) upon the occurrence and continuance of a Lease Event of
Default resulting in an acceleration of Lessee's obligation to purchase the
Units under the Lease, the amounts then due and payable by Lessee under the
Lease shall include all amounts necessary to pay in full the outstanding
principal under the Notes, the Certificate Amounts and all accrued Interest and
Yield thereon, plus all other amounts then payable by Lessee to Participants,
Agent and Certificate Trustee under the Operative Documents.
Section 2.8. Computations. For all purposes under the Operative
Documents, all computations of Interest, Yield and other accrued amounts
(including, without limitation, the Overdue Rate) shall be made on the basis of
a 360-day year and the actual days elapsed, unless otherwise specifically
provided herein.
Section 2.9. Determination of Interest Rate and Yield Rate. (a) The
amount of principal outstanding on the Notes shall accrue Interest at the rate
per annum equal to the Interest Rate applicable to the Class of such Note. The
amount of Certificate Amounts outstanding from time to time shall accrue Yield
at the rate per annum equal to the Yield Rate. Agent shall as soon as
practicable, but in no event later than 11:00 a.m., New York time, two (2)
Business Days prior to the effectiveness of each LIBO Rate, notify Certificate
Trustee, Lessee and the Participants of such LIBO Rate and the corresponding
Interest Rates and Yield, as applicable, but failure to so notify shall not
affect the obligations of the parties hereunder or under the other Operative
Documents. Accrued Interest and Yield shall be due and payable by Lessee as
Basic Rent on each applicable Payment Date and on the Lease Expiration Date. If
all or any portion of the principal under the Notes, the Certificate Amounts,
any accrued Interest or Yield payable thereon or any other amount payable
hereunder shall not be paid when due (whether at stated maturity, acceleration
or otherwise), such overdue amount shall bear interest at a rate per annum which
is equal to the Overdue Rate and shall be payable from time to time on demand as
Supplemental Rent. If at any time the rate on which Interest or Yield accrues
cannot be determined by reference to a LIBO Rate, or if such rate becomes
unavailable or illegal, then the rate on which Interest or Yield accrues shall
be determined as provided at Section 7.6.
(b) During such time as the LIBO Rate applies to any of the Notes or
Certificates, Interest in respect of such Notes and Yield in respect of such
Certificates shall be calculated on the basis of a 360-day year and the actual
days elapsed. During such time as the Alternate Base Rate determined by
reference to the Reference Rate applies to any of the Notes or Certificates,
Interest in respect of such Notes and Yield in respect of such Certificates
shall be calculated on the basis of a 365 (or 366, as applicable) day year and
the actual days elapsed. During such time as the Alternate Base Rate determined
by reference to the Federal Funds Effective Rate applies to any of the Notes or
Certificates, Interest in respect of such Notes and Yield in respect of such
Certificates shall be calculated on the basis of a 360-day year and the actual
days elapsed.
(c) Each determination of an Interest Rate pursuant to any provision of
this Agreement and the determination of the corresponding Yield shall be
conclusive and binding on Certificate Trustee, Lessee and the Participants in
the absence of manifest error.
Section 2.10. Obligations Several. The obligations of the Participants
hereunder or elsewhere in the Operative Documents shall be several and not
joint; and no Participant shall be liable or responsible for the acts or
defaults of any other party hereunder or under any other Operative Document.
Section 2.11. Fees. Lessee shall pay any and all fees described in
the succeeding provisions of this
Section 2.11 (collectively, "Fees"):
(a) The Fees specified in the Arranger's Fee Letter,
in the amounts and on the dates set
forth therein;
(b) The Fees of the Bank, for its own account, specified in
the Trustee Fee Letter and the Fees of the Agent, for its own account,
specified in the Agent Fee Letter, in each case in the amounts and on
the dates set forth therein; and
(c) An upfront fee to each Participant as specified in the
Arranger's Fee Letter, such upfront fee to be payable on the date it
acquires its interest in the Notes and/or Certificates.
Section 2.12. Extension of Lease Expiration Date and Final Maturity
Date. (a) Lessee may request in writing (the "Extension Option Request") to the
Agent, Certificate Trustee and each of the Participants that each of the
Participants agrees that Lessee be granted the right (the "Extension Option")
pursuant to the Lease to extend the Lease Term (the "Lease Extension") for up to
two (2) additional one-year periods commencing on the last day of the then
current Lease Term, as applicable (each, a "Lease Renewal Term") and that the
Final Maturity Date be correspondingly extended to the extended Lease Expiration
Date; provided that the lessee under the Other Lease shall have concurrently
requested a similar extension of the term of the Other Lease. Such Extension
Option Request must be delivered in writing to Certificate Trustee and Agent not
later than 270 days nor more than 360 days prior to the expiration of the Lease
Term. Agent and Certificate Trustee shall promptly forward such notice to the
Certificate Purchasers and the Lenders, respectively. Each Participant will
notify the Certificate Trustee in writing of whether or not it has consented to
such Extension Option Request not later than 45 days after receipt of the
Extension Option Request (the "Extension Option Response Date"). Any Participant
who does not so notify Certificate Trustee by the Extension Option Response Date
will be deemed to be, and any Participant that has notified the Certificate
Trustee that it has not consented to an Extension Option Request will be, a
Non-Consenting Participant. Each Participant's determination with respect to an
Extension Option Request shall be a new credit determination and within such
Participant's sole and absolute discretion and may be conditioned upon such
terms and conditions as deemed appropriate by the consenting Participants,
including the modification of the Applicable Percentage Amount, receipt of such
financial information, documentation or other information or conditions as may
be reasonably requested by such Participant, the receipt of an appraisal of the
Units (in form and substance satisfactory to the Participants) opining that the
Appraised Value of the Units on an in-place, in-service basis at the end of the
first or second Lease Renewal Term, as applicable, is reasonably expected to be
at least 95.50% of the aggregate Purchase Price (with respect to the first Lease
Renewal Term) and at least 94.50% (with respect to the second Lease Renewal
Term).
The Extension Option shall become effective as of the first date (the
"Extension Effective Date") on or after the Extension Option Response Date on
which all of the Participants (other than Non-Consenting Participants who have
been replaced by Replacement Participants in accordance with Section 2.12(b))
and Replacement Participants shall have consented to such Lease Extension;
provided that on both the date of the Extension Option Request
and the Extension Effective Date: (w) each of the representations and
warranties made by the Certificate Trustee and Lessee in or pursuant to
the Operative Documents shall be true and correct as if made on and as
of each such date (except to the extent any such representation or
warranty specifically relates to an earlier date), (x) Lessee shall not
have elected the Purchase Option or Sale Option, (y) no Lease Default
or Lease Event of Default shall have occurred and be continuing, and
(z) on each of such dates, the Certificate Trustee shall have received
a certificate of Lessee as to the matters set forth in clauses (x) and
(y) above; and
provided further that in no event shall the Extension
Effective Date occur unless (x) each of the Participants (other than
Non-Consenting Participants who have been replaced in accordance with
Section 2.12(b)) and the Replacement Participants shall have consented
to the Extension Option Request on or before the expiration of the
Lease Term, and (y) each of the participants under the Other
Transaction shall have consented to the corresponding extension option
request on or before the expiration of the term of the Other Lease.
(b) At any time after the Extension Option Response Date, Lessee shall
be permitted to replace any Non-Consenting Participant with a replacement bank
or other financial institution (a "Replacement Participant"), and such
Non-Consenting Participant shall sell (without recourse) to the Replacement
Participant all Notes and/or Certificates of such Non-Consenting Participant for
an amount equal to the aggregate outstanding principal amount of such Notes
and/or Certificates plus accrued Interest and Yield thereon to (but not
including) the date of sale, provided that: (i) such replacement does not
conflict with any Applicable Laws and Regulations, (ii) the Lessee shall pay to
such Non-Consenting Participant any amounts arising under Section 7.7 if any
Notes and/or Certificates of such Non-Consenting Participant shall be purchased
other than on the last day of the Payment Period relating thereto, (iii) such
replacement shall be made in accordance with the provisions of Section 6.3
(provided that the relevant Replacement Participant or Lessee shall be obligated
to pay the transaction costs arising in connection therewith), (iv) the
Replacement Participant shall have agreed to be subject to all of the terms and
conditions of the Operative Documents, and (v) such replacement must be
consummated no later than thirty (30) days prior to the expiration of the Lease
Term. A Non-Consenting Participant's rights under the indemnification provisions
of the Operative Documents shall survive any sale of its Notes and/or
Certificates to a Replacement Participant.
ARTICLE III
CONDITIONS TO DELIVERY DATE
Section 3.1. Conditions to Delivery Date. The obligation of each
Participant to perform its obligations on the Delivery Date shall be subject to
the fulfillment to the reasonable satisfaction of, or the waiver by, such
Participant of the conditions precedent set forth in this Section 3.1 on or
prior to the Delivery Date (except that the obligation of any party hereto shall
not be subject to such party's own performance or compliance):
(a) Delivery Date Notice. Lessee shall have delivered to
Agent, Certificate Trustee and each Participant, not later than three
(3) Business Days prior to the proposed Delivery Date, an irrevocable
notice substantially in the form of Exhibit B (a "Delivery Date
Notice"), setting forth (i) the proposed Delivery Date, (ii) a
description (including, if available, model, make and identification
number) of each Unit to be purchased on the Delivery Date, (iii) the
aggregate Purchase Price of such Units, (iv) the respective Purchase
Price of each Unit and (v) wire transfer instructions for the
disbursement of funds.
(b) Authorization, Execution and Delivery of Documents; No
Default. This Agreement, the Lease, the Assignment of Lease and Rent,
the Trust Agreement, the Certificates, the Loan Agreement and the Notes
shall have been duly authorized, executed and delivered by each of the
other parties thereto, shall (to the extent the form and substance
thereof shall not be prescribed hereby) be in form and substance
satisfactory to each Participant and an executed counterpart of each
thereof (except for the Certificates and the Notes, originals of which
shall only be delivered to the applicable Participant, and the original
counterpart of the Lease, which shall be delivered to the Agent) shall
have been received by each of the Participants, Agent and Certificate
Trustee. Each Participant shall have received an original, duly
executed Note and/or Certificate, as applicable, registered in such
Participant's name. Each of the documents referred to above shall be in
full force and effect as to all other parties and no Lease Default or
Lease Event of Default shall have occurred or be continuing.
(c) Litigation. No action or proceeding shall have been
instituted or threatened nor shall any governmental action be
instituted or threatened before any Governmental Authority, nor shall
any order, judgment or decree have been issued or proposed to be issued
by any Governmental Authority, to set aside, restrain, enjoin or
prevent the performance of this Agreement or any transaction
contemplated hereby or by any other Operative Document or which is
reasonably likely, in the reasonable opinion of each Participant, to
have a Material Adverse Effect.
(d) Legality, etc. In the opinion of each Participant or its
counsel, the transactions contemplated by the Operative Documents shall
not violate any Applicable Laws and Regulations and no change shall
have occurred or been proposed in Applicable Laws and Regulations that
would make it uneconomic or illegal for any party to any Operative
Document to participate in any of the transactions contemplated by the
Operative Documents or otherwise would prohibit the consummation of any
transaction contemplated by the Operative Documents or expand the
duties, obligations and risks of such Participant.
(e) Approvals. (x) All approvals and consents required or
advisable to be taken, given or obtained, as the case may be, by or
from any trustee or holder of any Indebtedness or obligation of Lessee,
that are necessary at such time for the execution, delivery and
performance of the Operative Documents shall have been taken, given or
obtained as the case may be, shall be in full force and effect and the
time for appeal with respect to any thereof shall have expired (or, if
an appeal shall have been taken, the same shall have been dismissed)
and shall not be subject to any pending proceedings or appeals
(administrative, judicial or otherwise).
(y) All approvals, consents, exemptions, authorizations, or
other actions by, or notices to, or filing with, any Governmental
Authority necessary or required in connection with (a) the execution,
delivery or performance by, or enforcement against, the Lessee
Guarantor or Lessee of this Agreement or any other Operative Document,
or (b) the continued operation of Lessee's business as contemplated to
be conducted after the date hereof by the Operative Documents shall
have been obtained on or before the Delivery Date, except in the case
of such approvals, consents, exemptions, authorizations or other
actions, notices or filings (i) as have been obtained, (ii) as may be
required under state securities or Blue Sky laws, (iii) as are of a
routine or administrative nature and are either (A) not customarily
obtained or made prior to the consummation of transactions such as the
transactions described in clauses (a) or (b) or (B) expected in the
judgment of Lessee to be obtained in the ordinary course of business
subsequent to the consummation of the transactions described in clauses
(a) or (b), or (iv) that, if not obtained, could not reasonably be
expected to have a Material Adverse Effect.
(f) Requirements of Law. In the reasonable opinion of
Certificate Trustee, Agent and the Participants and their respective
counsel, the Overall Transaction does not and will not violate any
Applicable Laws and Regulations and does not and will not subject
Certificate Trustee, Agent or any Participant to any adverse regulatory
prohibitions or constraints.
(g) Corporate Status and Proceedings. On or prior to the
Delivery Date, each of the Participants, Agent and Certificate Trustee
shall have received:
(i) certificates of existence and good standing with
respect to Lessee and the Lessee Guarantor from the Secretary
of State of the state of its organization dated no earlier
than the 30th day prior to the Delivery Date;
(ii) copies of Lessee's Certificate of Incorporation,
certified by the Secretary of State of the state of its
organization dated no earlier than the 30th day prior to the
Delivery Date;
(iii) certificates of the Secretary or Assistant
Secretary of the Lessee and of Lessee Guarantor, in form and
substance satisfactory to Agent and the Participants, and
attaching and certifying as to (A) the director's resolutions
in respect of the execution, delivery and performance by
Lessee and Lessee Guarantor of each Operative Document to
which it is or will be a party, (B) Lessee and Lessee
Guarantor's certificate of incorporation and bylaws and (C)
the incumbency and signatures of persons authorized to execute
and deliver documents on behalf of Lessee and Lessee
Guarantor; and
(iv) Officer's Certificates of Lessee and Lessee
Guarantor substantially in the form of Exhibits L-1 and L-2,
respectively.
(h) Certificate Trustee Officer's Certificate. Each
Participant and Agent shall have received (x) a certificate of the
Secretary or Assistant Secretary of Certificate Trustee attaching and
certifying as to: (i) the corporate authority for the execution,
delivery and performance by Certificate Trustee of each Operative
Document to which it is or will be a party, (ii) its organizational
documents, (iii) its by-laws, (iv) the incumbency and signature of
persons authorized to execute and deliver such documents on behalf of
Certificate Trustee and (y) a good standing certificate from the
appropriate Governmental Authority as to Certificate Trustee's good
standing.
(i) Equipment List. Lessee shall have delivered to Agent the
initial Equipment Lists for each State in which the Units are located,
setting forth the description of the Units, the serial numbers thereof
(if available), Lessee's internal unit numbers thereof, Lessee's
District for administration thereof and either Lessee's customer
mailing and/or street address or the address of Lessee's storage
location, as applicable, as of the Delivery Date.
(j) Performance. Lessee shall have performed and complied
with all agreements and conditions contained herein and in any other
Operative Document to which Lessee is a party required to be performed
or complied with by Lessee, on or prior to the Delivery Date.
(k) Representations and Warranties True; Absence of Defaults
Each representation and warranty of Lessee made as of the Delivery Date
contained herein or in any other Operative Document shall be true and
correct in all material respects as though made on and as of the
Delivery Date, except that any such representation or warranty which is
expressly made only as of an earlier date need be true only as of such
date. No Lease Event of Default or Lease Default or default under any
other Operative Document shall have occurred and be continuing.
(l) Appraisal. At least five (5) Business Days prior to the
Delivery Date, Certificate Trustee, Agent and each Participant shall
have received an Appraisal from the Appraiser to their satisfaction
opining (by use of appraisal methods satisfactory to the Participants):
(i) that the Appraised Value of the Units on
the Delivery Date is at least equal
to the aggregate Purchase Price;
(ii) that the Appraised Value of the Units at the end
of the Lease Term (exclusive of any Lease Renewal Terms) is
reasonably expected to be at least 96.50% of the aggregate
Purchase Price;
(iii) that the remaining economic useful life
of each Unit is not less than eight
(8) years; and
(iv) that the value set forth in clause (ii) above
was determined on an in-place, in-service basis.
(m) Bill of Sale. Lessee shall have executed and delivered to
Lessor a bill of sale (a "Bill of Sale") with respect to the Acquired
Property to be sold by it to Lessor on the Delivery Date in the form of
Exhibit I hereto.
(n) Acceptance Certificate. Lessee shall inspect to its
satisfaction and accept the Acquired Property by delivering to
Certificate Trustee, Agent and the Participants an acceptance
certificate (the "Acceptance Certificate") in the form of Exhibit E
hereto whereupon (i) subject to the payment of the Purchase Price for
the Acquired Property, the Acquired Property shall immediately become
subject to and be governed by all the provisions of the Lease and (ii)
Lessee shall be deemed by delivering the Acceptance Certificate to have
reaffirmed each of its representations and warranties set forth in
Section 4.1 hereof.
(o) Lien Searches; Filings and Recordings. At least five (5)
Business Days prior to the Delivery Date, Agent and the Participants
shall have received lien search results against Lessee in each State
where the Units are located. On the Delivery Date, all filings or
recordings enumerated and described in Schedule 3.1(o) hereof, as well
as all other filings and recordings necessary or advisable in the
opinion of counsel to the Participants, to perfect the rights, title
and interest of Certificate Trustee, the Participants and the Agent
intended to be created by the Operative Documents shall have been made
in the appropriate places or offices.
(p) Transaction Costs; Fees. On or prior to the Delivery
Date, Lessee shall have paid any Transaction Costs invoiced and not
previously paid and any Fees required to be paid on the Delivery Date
pursuant to Section 2.11.
(q) Opinions of Counsel. On the Delivery Date, Certificate
Trustee, Agent and the Participants shall have received opinions of
William von Glomm, internal counsel to Lessee, and Ray, Quinney &
Nebeker, special counsel to the Certificate Trustee and to Agent, dated
the Delivery Date and substantially in the forms of Exhibits H-1, H-2
and H-3 respectively, with respect to the Overall Transaction.
(r) Payment of Taxes. All Taxes due and payable on or prior
to the Delivery Date in connection with the execution, delivery,
recording or filing of any of the Operative Documents, in connection
with the filing of any of the financing statements and any other
documents, in connection with the consummation of any other
transactions contemplated hereby or by any of the other Operative
Documents, shall have been paid in full by Lessee.
(s) Insurance. On or prior to the Delivery Date, Agent,
Certificate Trustee and each Participant shall have received a current
certificate of insurance, and the insurance complying with Section 6.2
of the Lease shall be in full force and effect, and there shall be no
past due premiums in respect of any such insurance.
(t) Absence of Material Adverse Effect. Since July 31, 1999,
no Material Adverse Effect shall have occurred.
(u) No Casualty; No Liens. No Casualty shall have occurred
with respect to any Unit being delivered on the Delivery Date. The
Units shall be free and clear of all Liens other than Permitted Liens.
(v) Syndication Agreement. Lessee and Arranger shall have
entered into a syndication agreement in form and substance reasonably
satisfactory to them (the "Syndication Agreement") with respect to the
Notes and the Certificates.
(w) Credit Agreement Amendment. Ferrellgas, the General
Partner, the Credit Agreement Banks and the other parties to the Credit
Agreement shall have entered into the Third Amendment to Second Amended
and Restated Credit Agreement.
(x) Acquisition. The Thermogas Acquisition shall have
been consummated.
(y) Proceedings Satisfactory, Etc. All proceedings taken in
connection with the Delivery Date and all documents relating thereto
shall be reasonably satisfactory to Agent, Certificate Trustee, each
Participant and their respective counsel, and each such Person shall
have received copies of such documents as they may reasonably request
in connection therewith, all in form and substance reasonably
satisfactory to each such Person.
Section 3.2. Condition Subsequent. It shall be condition subsequent to
the obligation of each Participant to perform its obligations on the Delivery
Date that immediately upon the occurrence of the Delivery Date and the
consummation of the Thermogas Acquisition, Ferrellgas, LP shall have assumed all
obligations of Lessee under this Agreement and the other Operative Documents
pursuant to the Assumption Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of Lessee. As of the
Effective Date, Lessee makes the representations and warranties set forth in
this Section 4.1 to each of the other parties hereto:
(a) Corporate or Partnership Existence and Power.
The General Partner, the MLP, Lessee
and each of its Subsidiaries:
(i) is a corporation or partnership duly
organized, validly existing and in good
standing under the laws of the jurisdiction of its formation;
(ii) has the power and authority and all governmental
licenses, authorizations, consents and approvals to own its
assets, carry on its business as now being or as proposed to
be conducted and to execute, deliver, and perform its
obligations under the Operative Documents;
(iii) is duly qualified as a foreign corporation or
partnership and is licensed and in good standing under the
laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires
such qualification or license or where the failure so to
qualify would have a Material Adverse Effect; and
(iv) is in compliance with all material Requirements
of Law.
(b) Corporate or Partnership Authorization; No Contravention.
The execution, delivery and performance by Lessee and the General
Partner of this Agreement and each other Operative Document to which
the General Partner or Lessee is party, have been duly authorized by
all necessary partnership action on behalf of Lessee and all necessary
corporate action on behalf of the General Partner, and do not and will
not:
(i) contravene the terms of any of the General
Partner's or Lessee's Organization
Documents;
(ii) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any
document evidencing any Contractual Obligation to which the
General Partner or Lessee is a party or any order, injunction,
writ or decree of any Governmental Authority to which such
Person or its property is subject where such conflict, breach,
contravention or Lien could reasonably be expected to have a
Material Adverse Effect; or
(iii) violate any material Requirement of Law.
(c) Governmental Authorization. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority is necessary or required in connection
with (a) the execution, delivery or performance by, or enforcement
against, the General Partner or Lessee of this Agreement or any other
Operative Document, or (b) the continued operation of Lessee's business
as contemplated to be conducted after the date hereof by the Operative
Documents, except in each case such approvals, consents, exemptions,
authorizations or other actions, notices or filings (i) as have been
obtained, (ii) as may be required under state securities or Blue Sky
laws, (iii) as are of a routine or administrative nature and are either
(A) not customarily obtained or made prior to the consummation of
transactions such as the transactions described in clauses (a) or (b)
or (B) expected in the judgment of Lessee to be obtained in the
ordinary course of business subsequent to the consummation of the
transactions described in clauses (a) or (b), or (iv) that, if not
obtained, could not reasonably be expected to have a Material Adverse
Effect.
(d) Binding Effect. This Agreement and each other Operative
Document to which the General Partner or Lessee is a party constitute
the legal, valid and binding obligations of such Person, enforceable
against such Person in accordance with their respective terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability.
(e) Litigation. There are no actions, suits, proceedings,
claims or disputes pending, or to the best knowledge of Lessee,
threatened or contemplated, at law, in equity, in arbitration or before
any Governmental Authority, against the General Partner, the MLP,
Lessee or any of its Subsidiaries or any of their respective properties
which:
(i) purport to affect or pertain to this
Agreement or any other Operative Document
or any of the transactions contemplated hereby or thereby; or
(ii) if determined adversely to Lessee or its
Subsidiaries, would reasonably be expected to have a Material
Adverse Effect. No injunction, writ, temporary restraining
order or any order of any nature has been issued by any court
or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this
Agreement or any other Operative Document, or directing that
the transactions provided for herein or therein not be
consummated as herein or therein provided.
(f) No Default. No Lease Default or Lease Event of Default
exists or would result from Lessee entering into the Overall
Transaction or the incurring, continuing or converting of any
Obligations by Lessee. As of the Delivery Date, neither Lessee nor any
Affiliate of Lessee is in default under or with respect to any
Contractual Obligation in any respect which, individually or together
with all such defaults, could reasonably be expected to have a Material
Adverse Effect, or that would, if such default had occurred after the
Delivery Date, create a Lease Event of Default under Section 8.1(e) of
the Lease.
(g) ERISA Compliance. (i) Each Plan is in compliance in all
material respects with the applicable provisions of ERISA, the Code and
other federal or state law. Each Plan which is intended to qualify
under Section 401(a) of the Code has received a favorable determination
letter from the IRS and to the best knowledge of Lessee and the General
Partner, nothing has occurred which would cause the loss of such
qualification.
(ii) There are no pending, or to the best knowledge of Lessee
and the General Partner, threatened claims, actions or lawsuits, or
action by any Governmental Authority, with respect to any Plan which
has resulted or could reasonably be expected to result in a Material
Adverse Effect. There has been no prohibited transaction or other
violation of the fiduciary responsibility rule with respect to any Plan
which could reasonably result in a Material Adverse Effect.
(iii) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Pension Plan.
(iv) No Pension Plan has any Unfunded Pension Liability,
except that the Ferrellgas, Inc. Retirement Income Plan has an Unfunded
Pension Liability in an amount not in excess of $448,221 however, the
Ferrellgas, Inc. Retirement Income Plan is not underfunded.
(v) Lessee has not incurred, nor does it reasonably expect to
incur, any liability under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent under Section
4007 of ERISA).
(vi) Lessee has not transferred any Unfunded Pension Liability
to any Person or otherwise engaged in a transaction that could be
subject to Section 4069 of ERISA.
(vii) Except as specifically disclosed in Schedule 4.1(g), no
trade or business (whether or not incorporated under common control
with Lessee within the meaning of Section 414(b), (c), (m) or (o) of
the Code) maintains or contributes to any Pension Plan or other Plan
subject to Section 412 of the Code. Except as specifically disclosed in
Schedule 4.1(g), neither Lessee nor any Person under common control
with Lessee (as defined in the preceding sentence) has ever contributed
to any multiemployer plan within the meaning of Section 4001(a)(3) of
ERISA.
(h) Use of Proceeds; Margin Regulations. The proceeds of the
sale of the Units, the Certificates and the Notes are to be used solely
for the purposes set forth in and permitted by Section 5.11 and Section
5.23 and 5.24. Neither Lessee nor any Affiliate of Lessee is generally
engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin
Stock.
(i) Title to Properties. Lessee and each Subsidiary have good
record and marketable title in fee simple to, or valid leasehold
interests in, all real property necessary or used in the ordinary
conduct of their respective businesses, except for such defects in
title as could not, individually or in the aggregate, have a Material
Adverse Effect. As of the Delivery Date and subject to the preceding
sentence, the property of Lessee and its Subsidiaries (other than the
Units) is subject to no Liens other than Permitted Encumbrances.
(j) Taxes. The General Partner has filed all Federal and
other material tax returns and reports required to be filed, for itself
and for Lessee, and has paid all Federal and other material taxes,
assessments, fees and other governmental charges levied or imposed upon
it or its properties, income or assets otherwise due and payable,
except those which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against the
Borrower that would, if made, have a Material Adverse Effect.
(k) Financial Condition. (i) The audited consolidated
financial statements of the General Partner, Lessee, the MLP and their
respective Subsidiaries dated July 31, 1999 and the unaudited
consolidated financial statements of the General Partner, Lessee, the
MLP and their respective Subsidiaries dated October 31, 1999, in each
case together with the related consolidated statements of income or
operations, shareholders' equity and cash flows for the fiscal periods
ended on those respective dates:
(A) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein, subject to
ordinary, good faith year end audit adjustments;
(B) fairly present the financial condition of Lessee
and its Subsidiaries as of the date thereof and results of
operations for the period covered thereby; and
(C) show all material indebtedness and other
liabilities, direct or contingent, of Lessee and its
consolidated Subsidiaries as of the date thereof, including
liabilities for taxes, material commitments and Contingent
Obligations.
(ii) Since July 31, 1999, there has been no Material Adverse
Effect.
(iii) The General Partner, the MLP, Lessee and each of the
other Subsidiaries of Lessee are each Solvent, both before and after
giving effect to the consummation of each of the transactions
contemplated by the Operative Documents.
(l) Environmental Matters. Lessee conducts in the ordinary
course of business a review of the effect of existing Environmental
Laws and existing Environmental Claims on its business, operations and
properties, and as a result thereof Lessee has reasonably concluded
that such Environmental Laws and Environmental Claims could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(m) Regulated Entities. None of Lessee or any Affiliate of
Lessee, is an "Investment Company" within the meaning of the Investment
Company Act of 1940. Lessee is not subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other
Federal or state statute or regulation limiting its ability to incur
Indebtedness.
(n) No Burdensome Restrictions. Neither Lessee nor any
Subsidiary is a party to or bound by any Contractual Obligation, or
subject to any restriction in any Organization Document, or any
Requirement of Law, which could reasonably be expected to have a
Material Adverse Effect.
(o) Copyrights, Patents, Trademarks and Licenses, Etc. Lessee
and its Subsidiaries own or are licensed or otherwise have the right to
use all of the patents, trademarks, service marks, trade names,
copyrights, contractual franchises, authorizations and other rights
that are reasonably necessary for the operation of their respective
businesses, without conflict with the rights of any other Person. To
the best knowledge of Lessee, no slogan or other advertising device,
product, process, method, substance, part or other material now
employed, or now contemplated to be employed, by Lessee or any
Subsidiary infringes upon any rights held by any other Person. No claim
or litigation regarding any of the foregoing is pending or, to the best
knowledge of Lessee, threatened, and no patent, invention, device,
application, principle or any statute, law, rule, regulation, standard
or code is pending or, to the knowledge of Lessee, proposed, which, in
either case, could reasonably be expected to have a Material Adverse
Effect.
(p) Subsidiaries and Affiliates. Lessee (a) has no
Subsidiaries or other Affiliates except (i) those specifically
disclosed in part (a) of Schedule 4.1(p) hereto, (ii) one or more SPEs
established in connection with Accounts Receivable Securitizations
permitted by Section 5.21, (iii) Subsidiaries established in compliance
with Section 5.37 and (iv) Thermogas (but only for so long as Thermogas
shall be permitted to be operated as a Wholly-Owned Subsidiary of the
Borrower as set forth in the proviso to Section 5.37) and (b) has no
equity investments in any corporation or entity other than Subsidiaries
and Affiliates disclosed in subsection (a) above and those Permitted
Investments specifically disclosed in part (b) of Schedule 4.1(p).
(q) Insurance. The properties of Lessee and its Subsidiaries
are insured with financially sound and reputable insurance companies
not Affiliates of Lessee, in such amounts, with such deductibles and
covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar properties in localities where
Lessee or such Subsidiary operates.
(r) Tax Status. Lessee is subject to taxation under the Code
only as a partnership and not as a corporation.
(s) Full Disclosure. None of the representations or
warranties made by Lessee or any Affiliate of Lessee in the Operative
Documents as of the date such representations and warranties are made
or deemed made, and none of the statements contained in any exhibit,
report, statement or certificate furnished by or on behalf of Lessee or
any Affiliate of Lessee in connection with the Operative Documents
contains any untrue statement of a material fact or omits any material
fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they are made,
not misleading as of the time when made or delivered.
(t) [Intentionally Reserved].
(u) [Intentionally Reserved].
(v) [Intentionally Reserved].
(w) Year 2000. Lessee and its Subsidiaries have reviewed the
areas within their business and operations which could be adversely
affected by, and have developed or are developing a program to address
on a timely basis, the "Year 2000 Problem" (that is, the risk that
computer applications used by Lessee and its Subsidiaries may be unable
to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date on or after December 31, 1999), and
have made related appropriate inquiry of material suppliers and
vendors. Based on such review and program, Lessee believes that the
"Year 2000 Problem" will not have a Material Adverse Effect.
(x) Title; Liens. Lessee has good and marketable title to
each Unit and the other Acquired Property to be sold and delivered to
Certificate Trustee, free and clear of all Liens other than Permitted
Liens. Lessee has not granted, nor will it grant, any Lien (other than
any Permitted Lien) on any Unit, any other Lessee Collateral or the
Lease, to any Person other than Certificate Trustee; and no Lien (other
than any Permitted Lien) has attached to any Unit, any other Lessee
Collateral or the Lease, or in any manner has affected adversely
Agent's and Certificate Trustee's rights and Lien therein.
(y) Security Interest. (i) Certificate Trustee has a valid
and enforceable Lien in the Units and the other Lessee Collateral free
and clear of all Liens other than Permitted Liens and, upon the filing
of the items listed on Schedule 3.1(o), Certificate Trustee will have a
perfected first priority Lien of record in the Units and in the other
Lessee Collateral as against all Persons including Lessee and its
creditors, free and clear of all Liens other than Permitted Liens.
(ii) Agent has a valid and enforceable Lien in the Lessor
Collateral free and clear of all Liens other than Permitted Liens and,
upon the filing of the items listed on Schedule 3.1(o), Agent will have
a perfected first priority Lien of record in the Lessor Collateral as
against all Persons including Lessee, Certificate Trustee and their
creditors, free and clear of all Liens other than Permitted Liens.
(z) The Units. The Purchase Price for each item of Acquired
Property does not exceed the Appraised Value of such item of Acquired
Property at the time of the sale to Certificate Trustee hereunder and
the aggregate Purchase Price for all Acquired Property does not exceed
the Appraised Value of all of the Acquired Property at the time of the
sale to Certificate Trustee hereunder.
(aa) No Transfer Taxes. No sales, use, excise, transfer or
other tax, fee or imposition shall result from the sale, transfer or
purchase of any Acquired Property or any Certificate or Note pursuant
to this Agreement, except such taxes, fees or impositions that have
been paid in full.
(bb) Casualties, Etc. No Casualty has occurred and is
continuing and there is no action
pending or, to the best of Lessee's knowledge, threatened by any
Governmental Authority to initiate a
Casualty.
(cc) Chief Executive Office of Lessee. The principal place of
business and chief executive office, as such terms are used in Section
9-103(3) of the UCC, of Lessee are each located at One Liberty Plaza,
Liberty, Missouri 64068.
(dd) Compliance with Law. The Units and the current use and
operation thereof and thereon do not violate any Applicable Laws and
Regulations in any material respect, including, without limitation, any
thereof relating to occupational safety and health or Environmental
Laws.
(ee) Subjection to Government Regulation. Neither Agent,
Certificate Trustee nor any Participant will, solely by reason of
entering into the Operative Documents or consummating the transactions
contemplated thereby, become subject to ongoing regulation of its
operations by any Governmental Authority or be required to qualify to
do business in any jurisdiction.
(ff) Licenses, Registrations and Permits. All material
licenses, approvals, authorizations, consents and permits required for
the use and operation of each Unit have been obtained from the
appropriate Governmental Authorities having jurisdiction or from
private parties, as the case may be.
(gg) Appraisal Data. The written information provided by
Lessee and its Affiliates to the Appraiser and forming the basis for
the conclusions set forth in the Appraisal, taken as a whole, was true
and correct in all material respects and did not omit any information
known and available to Lessee necessary to make the information
provided not misleading.
(hh) Private Offering. Neither Lessee nor anyone authorized to
act on its behalf has, directly or indirectly, solicited any offers to
acquire, offered or sold: (i) any interest in the Certificates, the
Notes, the Units, the Trust Estate, the Lease or the Operative
Documents in violation of Section 5 of the Securities Act or any state
securities laws, or (ii) any interest in any security or lease the
offering of which, for purposes of the Securities Act or any state
securities laws, would be deemed to be part of the same offering as the
offering of the aforementioned interests. Neither it nor anyone
authorized to act on its behalf was involved in (y) offering or
soliciting offers for the Certificates or Notes (or any similar
securities) or (z) selling Certificates or Notes (or any similar
securities) to any Person other than the Certificate Purchasers and
Lenders identified and contacted by the Arranger.
(ii) Unit Insurance. The Units are covered by the
insurance required by the Lease and all
premiums in respect thereof have been paid.
(jj) Nature of Units. The Units constitute movable personal
property and not real property or fixtures under the laws of the States
where the Units are located.
(kk) Equipment List. The Equipment List delivered
on the Delivery Date (except as to
serial numbers) is true, correct and complete in all material respect
s.
Section 4.2. Representations and Warranties of Each Participant. As of
the date of its execution of this Agreement, each Participant represents and
warrants severally and only as to itself to each of the other parties hereto as
follows:
(a) Due Organization, etc. It is duly organized and validly
existing under the laws of the jurisdiction of its organization and has
full corporate power and authority to enter into and perform its
obligations as either a Lender or a Certificate Purchaser (as the case
may be) under each Operative Document to which it is or is to be a
party and each other agreement, instrument and document to be executed
and delivered by it on or before the Delivery Date in connection with
or as contemplated by each such Operative Document to which it is or is
to be a party.
(b) ERISA. It is purchasing its interest in the
Certificate(s) and/or the Note(s) to be acquired by it with assets that
are either: (i) not assets of any Employee Benefit Plan (or its related
trust) which is subject to Title I of ERISA or Section 4975 of the
Code; or (ii) assets of any Employee Benefit Plan (or its related
trust) which is subject to Title I of ERISA or Section 4975 of the
Code, but there is available an exemption from the prohibited
transaction rules under Section 406(a) of ERISA and Section 4975 of the
Code and such exemption is immediately applicable to each transaction
contemplated by the Operative Documents.
(c) Investment in Notes and Certificates. It is an
institutional investor, it has been afforded an opportunity to
investigate matters relating to Lessee and any Affiliate thereof and it
is acquiring its interest in the Note(s) and/or Certificate(s) to be
acquired by it for its own account for investment and not with a view
to any distribution (as such term is used in Section 2(11) of the
Securities Act) thereof, and if in the future it should decide to
dispose of its interest in such Notes and/or Certificates, it
understands that it may do so only in compliance with the Securities
Act and the rules and regulations of the SEC thereunder and any
applicable state securities laws. It is aware that the Notes and
Certificates have not been registered under the Securities Act or
qualified or registered under any state or other jurisdiction's
securities laws. Neither it nor anyone authorized to act on its behalf
has taken or will take any action which would subject the issuance or
sale of any Note or Certificate to the registration requirements of
Section 5 of the Securities Act. No representation or warranty
contained in this Section 4.2(c) shall include or cover any action or
inaction of Lessee or any Affiliate thereof whether or not purportedly
on behalf of any Participant, Agent, Certificate Trustee or any of
their Affiliates. Notwithstanding the foregoing, but subject to the
provisions of Article VI hereof, it is understood among the parties
that the disposition of its property shall be at all times within its
control. It and its respective agents and representatives have such
knowledge and experience in financial and business matters as to enable
them to utilize the information made available to them in connection
with the transactions contemplated hereby, to evaluate the merits and
risk of an investment in Notes and/or Certificates and to make an
informed decision with respect thereto and such an evaluation and
informed decision have been made.
It understands and agrees that the Certificates and Notes will bear a
legend that shall read substantially as follows:
"THIS [CERTIFICATE] [NOTE] HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER STATE
SECURITIES OR "BLUE SKY" LAW, AND MAY NOT BE TRANSFERRED, SOLD
OR OFFERED FOR SALE IN VIOLATION OF SUCH ACT OR LAWS."
Section 4.3. Representations and Warranties of Certificate Trustee. As
of the date of its execution of this Agreement and as of the Delivery Date,
First Security Bank, National Association ("Bank"), in its individual capacity
and not as Certificate Trustee (with the exception of the last sentence of
subsection (c), which representation and warranty is made by Bank solely in its
capacity as Certificate Trustee), represents and warrants to each of the other
parties hereto as follows:
(a) Chief Executive Office. The Bank's chief executive office
and principal place of business and the place where the documents,
accounts and records relating to the Overall Transaction are kept is
located at 79 South Main Street, Salt Lake City, Utah 84111.
(b) Due Organization, etc. The Bank is a national banking
association duly organized and validly existing in good standing under
the laws of the United States and has full corporate power and
authority to execute, deliver and perform its obligations: (i) in its
individual capacity under the Trust Agreement and, to the extent it is
a party hereto in its individual capacity, this Agreement, and (ii)
acting as Certificate Trustee under the Trust Agreement, under this
Agreement and each other Operative Document to which it is or will be a
party as Certificate Trustee.
(c) Due Authorization; Enforceability, etc. This Agreement
and each other Operative Document to which the Bank is or will be a
party have been or will be (to the extent it is to be a party thereto
in its individual capacity), duly authorized, executed and delivered by
or on behalf of the Bank (in its individual capacity) and are, or upon
execution and delivery will be, legal, valid and binding obligations of
the Bank (in its individual capacity), enforceable against it in
accordance with their respective terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws
affecting creditors' rights generally and by general equitable
principles. The Operative Documents to which the Certificate Trustee is
a party constitute the legal, valid and binding obligations of the
Certificate Trustee (acting solely as Certificate Trustee under the
Trust Agreement, and not in its individual capacity), enforceable
against it in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally and by general
equitable principles.
(d) No Conflict. The execution and delivery by (a) the Bank,
in its individual capacity, of the Trust Agreement and, to the extent
it is a party hereto in its individual capacity, this Agreement and (b)
the Bank, in its capacity as Certificate Trustee, of each Operative
Document to which Certificate Trustee is or will be a party, are not
and will not be, and the performance by the Bank, in its individual
capacity or as Certificate Trustee, as the case may be, of its
obligations under each are not and will not be, inconsistent with the
articles of association or by-laws of the Bank, do not and will not
contravene any Applicable Laws and Regulations of the United States of
America or the State of Utah relating to the banking or trust powers of
the Bank and do not and will not contravene any provision of, or
constitute a default under, any indenture, mortgage, chattel mortgage,
deed of trust, lease, conditional sales contract, loan or credit
arrangement or other agreement or instrument to which the Bank is a
party or by which it or its properties may be bound or affected.
(e) No Approvals, etc. Neither the execution and delivery by
Bank in its individual capacity or (assuming the due authorization,
execution and delivery of the Trust Agreement by each Certificate
Purchaser) as Certificate Trustee, as the case may be, of any of the
Operative Documents to which it is a party requires the consent or
approval of, or the giving of notice to or registration with, or the
taking of any other action in respect of, any Governmental Authority or
other United States of America or Utah body governing its banking
practices.
(f) Litigation. There is no action, proceeding or
investigation pending or, to its best knowledge, threatened against the
Bank (in its individual capacity or as Certificate Trustee) which
questions the validity of the Operative Documents, and there is no
action, proceeding or investigation pending or, to its best knowledge,
threatened which is likely to result, either in any case or in the
aggregate, in any material adverse change in the ability of the Bank
(in its individual capacity or as Certificate Trustee) to perform its
obligations (in either capacity) under the Operative Documents to which
it is a party.
(g) Certificate Trustee Liens. The Units are free and clear
of all Certificate Trustee Liens attributable to the Bank (in its
individual capacity) and no act or omission by it has occurred which
would cause a Certificate Trustee Lien attributable to it.
(h) Securities Act. Neither the Bank (in its individual
capacity or as a Certificate Trustee) nor anyone authorized to act on
its behalf has, directly or indirectly, in violation of Section 5 of
the Securities Act or any state securities laws, offered or sold any
interest in the Certificates, the Units, the Lease, or the Operative
Documents or in any security or lease the offering of which, for
purposes of the Securities Act or any state securities laws, would be
deemed to be part of the same offering as the offering of the
aforementioned securities or lease, or solicited any offer to acquire
any of the aforementioned securities or lease.
(i) Taxes. There are no taxes payable by the Bank imposed by
the State of Utah or any political subdivision thereof or by the United
States of America in connection with the execution and delivery by the
Bank of this Participation Agreement or the other Operative Documents
to be delivered on the Delivery Date solely because the Bank is a
national banking association with its principal place of business in
the State of Utah and performs certain of its duties as the Certificate
Trustee in the State of Utah and there are no taxes payable by the Bank
imposed by the State of Utah or any political subdivision thereof or by
the United States of America in connection with the acquisition of its
interest in the Trust Estate, and its execution, delivery and
performance of the Trust Agreement and any other Operative Document
(other than franchise or other taxes based on or services rendered in
connection with the transactions contemplated hereby), solely because
the Bank is a national banking association with its principal place of
business in the State of Utah and performs certain of its duties as
Certificate Trustee in the State of Utah.
Section 4.4. Representations and Warranties of Agent. Agent,
in its individual capacity, hereby
represents and warrants to the Participants as follows:
(a) Organization and Authority. Agent is a banking
corporation duly organized and validly existing in good standing under
the laws of the State of Nevada and has the power and authority to
enter into and perform its obligations under the Operative Documents.
(b) Authorization; Binding Effect. The Operative Documents to
which Agent is or will be a party have been or will be, on the date
required to be delivered hereby, duly authorized, executed and
delivered by Agent, and this Participation Agreement is, and such other
Operative Documents are, or, when so executed and delivered by Agent
will be, valid, legal and binding agreements of Agent, enforceable
against Agent in accordance with their respective terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity.
(c) Non-Contravention. Neither the execution and delivery by
Agent of the Operative Documents to which it is or will be a party,
either in its individual capacity, as Agent, or both, nor compliance
with the terms and provisions thereof, conflicts with, results in a
breach of, constitutes a default under (with or without the giving of
notice or lapse of time or both), or violates any of the terms,
conditions or provisions of: (i) the articles of association or by-laws
of Agent; (ii) any bond, debenture, note, mortgage, indenture,
agreement, lease or other instrument to which Agent, either in its
individual capacity, as Agent, or both, is now a party or by which it
or its property, either in its individual capacity, as Agent, or both,
is bound or affected, where such conflict, breach, default or violation
would be reasonably likely to materially and adversely affect the
ability of Agent, either in its individual capacity, as Agent or both,
to perform its obligations under any Operative Document to which it is
or will be a party, either in its individual capacity, as Agent, or
both; or (iii) any of the terms, conditions or provisions of any
federal or Nevada law, rule or regulation governing its banking or
trust powers, or any order, injunction or decree of any Governmental
Authority applicable to it in its individual capacity, as Agent, or
both, where such conflict, breach, default or violation would be
reasonably likely to materially and adversely affect the ability of
Agent, either in its individual capacity, as Agent or both, to perform
its obligations under any Operative Document to which it is or will be
a party.
(d) Absence of Litigation, etc. There is no litigation
(including, without limitation, derivative actions), arbitration or
governmental proceedings pending or, to the best knowledge of Agent,
threatened against it which would be reasonably likely to adversely
affect Agent's ability to perform its obligations under the Operative
Documents to which it is party.
(e) Consents, etc. No authorization, consent, approval,
license or formal exemption from, nor any filing, declaration or
registration with, any federal or Nevada Authority governing its
banking or trust powers, is or will be required in connection with the
execution and delivery by Agent of the Operative Documents to which it
is party or the performance by Agent of its obligations under such
Operative Documents.
ARTICLE V
COVENANTS OF LESSEE
Section 5.1. Financial Statements. Lessee shall deliver to Agent, in
form and detail satisfactory to Agent and the Required Participants and
consistent with the form and detail of financial statements and projections
provided to Agent by Lessee and its Affiliates prior to the Delivery Date, with
sufficient copies for each Participant:
(a) as soon as available, but not later than 100 days after
the end of each fiscal year (commencing with the fiscal year ended July
31, 2000), a copy of the audited consolidated balance sheet of Lessee
and its Subsidiaries as at the end of such year and the related
consolidated statements of income or operations, partners' or
shareholders' equity and cash flows for such year, setting forth in
each case in comparative form the figures for the previous fiscal year,
and accompanied by the opinion of a nationally-recognized independent
public accounting firm ("Independent Auditor") which report shall state
that such consolidated financial statements present fairly the
financial position for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years. Such opinion shall not
be qualified or limited in any manner, including on account of any
limitation on it because of a restricted or limited examination by the
Independent Auditor of any material portion of Lessee's or any
Subsidiary's records;
(b) as soon as available, but not later than 45 days after
the end of each of the first three fiscal quarters of each fiscal year
(commencing with the fiscal quarter ended January 31, 2000), a copy of
the unaudited consolidated balance sheet of Lessee and its Subsidiaries
as of the end of such quarter and the related consolidated statements
of income, partners' or shareholders' equity and cash flows for the
period commencing on the first day and ending on the last day of such
quarter, and certified by a Responsible Officer as fairly presenting,
in accordance with GAAP (subject to ordinary, good faith year-end audit
adjustments), the financial position and the results of operations of
Lessee and the Subsidiaries;
(c) as soon as available, but not later than 100 days after
the end of each fiscal year (commencing with the first fiscal year
during all or any part of which Lessee had one or more Significant
Subsidiaries), a copy of an unaudited consolidating balance sheet of
Lessee and its Subsidiaries as at the end of such year and the related
consolidating statement of income, partners' or shareholders' equity
and cash flows for such year, certified by a Responsible Officer as
having been developed and used in connection with the preparation of
the financial statements referred to in subsection 5.1(a);
(d) as soon as available, but not later than 45 days after
the end of each of the first three fiscal quarters of each fiscal year
(commencing with the first fiscal quarter during all or any part of
which Lessee had one or more Significant Subsidiaries), a copy of the
unaudited consolidating balance sheets of Lessee and its Subsidiaries,
and the related consolidating statements of income, partners' or
shareholders' equity and cash flows for such quarter, all certified by
a Responsible Officer as having been developed and used in connection
with the preparation of the financial statements referred to in
subsection 5.1(b);
(e) as soon as available, but not later than 60 days after
the end of each fiscal year (commencing with the fiscal year beginning
August 1, 2000), projected consolidated balance sheets of Lessee and
its Subsidiaries as at the end of each of the current and following two
fiscal years and related projected consolidated statements of income,
partners' or shareholders' equity and cash flows for each such fiscal
year, including therein a budget for the current fiscal year, certified
by a Responsible Officer as having been developed and prepared by
Lessee in good faith and based upon Lessee's best estimates and best
available information; and
(f) as soon as available, but not later than 100 days after
the end of each fiscal year of the General Partner, commencing with the
fiscal year ended July 31, 2000, a copy of the unaudited (or audited,
if available) consolidated balance sheets of the General Partner as of
the end of such fiscal year and the related consolidated statements of
income, shareholders' equity and cash flows for such fiscal year,
certified by a Responsible Officer as fairly presenting, in accordance
with GAAP, the financial position and the results of operations of the
General Partner and its Subsidiaries (or, if available, accompanied by
an opinion of an Independent Auditor as described in subsection
5.1(a)).
Section 5.2. Certificates; Other Information. Lessee shall
furnish to Agent, with sufficient copies
for each Participant:
(a) concurrently with the delivery of the financial
statements referred to in subsection 5.1(a), a certificate of the
Independent Auditor stating that in making the examination necessary
therefor no knowledge was obtained of any Lease Default or Lease Event
of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial
statements referred to in subsections 5.1(a) and (b), a Compliance
Certificate executed by a Responsible Officer with respect to the
periods covered by such financial statements together with supporting
calculations and such other supporting detail as Agent and the Required
Participants shall require;
(c) promptly, copies of all financial statements and reports
that Lessee, the General Partner, the MLP or any Subsidiary sends to
its partners or shareholders, and copies of all financial statements
and regular, periodic or special reports (including Forms 10-K, 10-Q
and 8-K) that Lessee or any Affiliate of Lessee, the General Partner,
the MLP or any Subsidiary may make to, or file with, the SEC; and
(d) promptly, such additional information regarding the
business, financial or corporate affairs of Lessee, the General
Partner, the MLP or any Subsidiary as Agent, at the request of any
Participant, may from time to time request.
Section 5.3. Notices. Lessee shall promptly notify Agent:
(a) of the occurrence of any Lease Default or Lease Event of
Default, and of the occurrence or existence of any event or
circumstance that foreseeably will become a Lease Default or Lease
Event of Default;
(b) of any matter that has resulted or may reasonably be
expected to result in a Material Adverse Effect, including (i) breach
or non-performance of, or any default under, a Contractual Obligation
of Lessee, the General Partner, the MLP or any Subsidiary; (ii) any
dispute, litigation, investigation, proceeding or suspension between
Lessee, the General Partner, the MLP or any Subsidiary and any
Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting Lessee, the
General Partner, the MLP or any Subsidiary, including pursuant to any
applicable Environmental Laws;
(c) of any of the following events affecting Lessee, the
General Partner, the MLP or any Subsidiary, together with a copy of any
notice with respect to such event that may be required to be filed with
a Governmental Authority and any notice delivered by a Governmental
Authority to such Person with respect to such event:
(i) an ERISA Event;
(ii) if any of the representations and
warranties in Section 4.1(g) ceases to be
true and correct;
(iii) the adoption of any new Pension
Plan or other Plan subject to Section 412 of
the Code;
(iv) the adoption of any amendment to a Pension Plan
or other Plan subject to Section 412 of the Code, if such
amendment results in a material increase in contributions or
Unfunded Pension Liability; or
(v) the commencement of contributions to any
Pension Plan or other Plan subject to
Section 412 of the Code; and
(d) of any material change in accounting policies or
financial reporting practices by Lessee or any of its consolidated
Subsidiaries.
Each notice under this Section shall be accompanied by a written
statement by a Responsible Officer setting forth details of the occurrence
referred to therein, and stating what action Lessee or any affected Affiliate
proposes to take with respect thereto and at what time. Each notice under
subsection 5.3(a) shall describe with particularity any and all clauses or
provisions of this Agreement or other Operative Document that have been (or
foreseeably will be) breached or violated.
Section 5.4. Preservation of Corporate or Partnership Existence,
Etc. The General Partner and Lessee
shall, and Lessee shall cause each Subsidiary to:
(a) preserve and maintain in full force and effect its
partnership or corporate existence and good standing under the laws of
its state or jurisdiction of organization or incorporation except in
connection with transactions permitted by Section 5.19;
(b) preserve and maintain in full force and effect all
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its business
except in connection with transactions permitted by Section 5.19 and
sales of assets permitted by Section 5.18;
(c) use reasonable efforts, in the ordinary course of
business, to preserve its business organization and goodwill; and
(d) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of
which could reasonably be expected to have a Material Adverse Effect.
Section 5.5. Maintenance of Property. Lessee shall maintain, and shall
cause each Subsidiary to maintain, and preserve all its property which is used
or useful in its business in good working order and condition, ordinary wear and
tear excepted. Lessee and each Subsidiary shall use the standard of care typical
in the industry in the operation and maintenance of its facilities. Lessee shall
maintain the Units in accordance with the Lease.
Section 5.6. Insurance. Lessee shall maintain, and shall cause each
Subsidiary to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons. Lessee shall insure
the Units in accordance with the Lease.
Section 5.7. Payment of Obligations. Lessee and the General Partner
shall, and shall cause each Subsidiary to, pay and discharge as the same shall
become due and payable (except to the extent the failure to so pay and discharge
could not reasonably be expected to have a Material Adverse Effect), all their
respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges
or levies upon it or its properties or assets, unless the same are
being contested in good faith by appropriate proceedings and adequate
reserves in accordance with GAAP are being maintained by Lessee, the
General Partner or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a
Lien upon its property, unless such claims are being contested in good
faith by appropriate proceedings and adequate reserves in accordance
with GAAP are being maintained by Lessee, the General Partner or such
Subsidiary; and
(c) all Indebtedness, as and when due and payable, but
subject to any subordination provisions contained in any instrument or
agreement evidencing such Indebtedness.
Section 5.8. Compliance with Laws. Lessee shall comply, and shall cause
each Subsidiary to comply, in all material respects with all Requirements of Law
of any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.
Section 5.9. Inspection of Property and Books and Records. Lessee shall
maintain and shall cause each Subsidiary to maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of Lessee and such Subsidiary. Lessee shall
permit, and shall cause each Subsidiary to permit, representatives and
independent contractors of Agent or any Participant to visit and inspect any of
their respective properties, to examine their respective corporate, financial
and operating records, and make copies thereof or abstracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
directors, officers, and independent public accountants, all at the expense of
Lessee and at such reasonable times during normal business hours and as often as
may be reasonably desired, upon reasonable advance notice to Lessee; provided,
however, when a Lease Event of Default exists Agent or any Participant may do
any of the foregoing at the expense of Lessee at any time during normal business
hours and without advance notice.
Section 5.10. Environmental Laws. Lessee shall, and shall cause each
Subsidiary to, conduct its operations and keep and maintain its property in
material compliance with all Environmental Laws.
Section 5.11. Use of Proceeds. Lessee shall use the proceeds of the sale
of the Units, the Certificates and the Notes for working capital and other
general partnership purposes, in each case not in contravention of any
Requirement of Law or of any Operative Document.
Section 5.12. Financial Covenants.
(a) Leverage Ratio. Lessee shall maintain as of the last day of each
fiscal quarter a Leverage Ratio equal to or less than 4.75 to 1.00 (or, if the
Thermogas Acquisition shall have been consummated on or prior to January 31,
2000, Lessee shall be required to maintain from and after the date of such
Thermogas Acquisition a Leverage Ratio equal to or less than (i) 5.25 to 1.00 as
of the last day of each fiscal quarter ending on or prior to January 31, 2000,
(ii) 5.10 to 1.00 as of the last day of each fiscal quarter ending during the
period commencing on February 1, 2000 and ending on January 31, 2001 and (iii)
4.75 to 1.00 as of the last day of each fiscal quarter ending after January 31,
2001).
(b) Interest Coverage Ratio. Lessee shall maintain, as of the last day
of each fiscal quarter of Lessee, an Interest Coverage Ratio for the fiscal
period consisting of such fiscal quarter and the three immediately preceding
fiscal quarters of at least 2.50 to 1.00 (or, if the Thermogas Acquisition shall
have been consummated on or prior to January 31, 2000, Lessee shall be required
to maintain from and after the date of such Thermogas Acquisition an Interest
Coverage Ratio of at least 2.25 to 1.00 for each such period of four fiscal
quarters ending on or prior to January 31, 2001 and 2.50 to 1.00 for each such
period of four fiscal quarters ending after January 31, 2001).
Section 5.13. [Intentionally Reserved].
Section 5.14. Other General Partner Obligations. (a) The General Partner
shall cause Lessee to pay and perform each of its Obligations when due. The
General Partner acknowledges and agrees that it is executing this Agreement as a
principal as well as the general partner on behalf of Lessee, and that its
obligations hereunder as general partner are full recourse obligations to the
same extent as those of Lessee.
(b) The General Partner represents, warrants and covenants that it is
Solvent, both before and after giving effect to the consummation of the
transactions contemplated by the Operative Documents, and that it will remain
Solvent until all Obligations hereunder and under the other Operative Documents
shall have been repaid in full.
(c) The General Partner, for so long as it is the general partner of
Lessee, (i) agrees that its sole business will be to act as the general partner
of Lessee, the MLP and any further limited partnership of which Lessee or the
MLP is, directly or indirectly, a limited partner and to undertake activities
that are ancillary or related thereto (including being a limited partner in
Lessee), (ii) shall not enter into or conduct any business or incur any debts or
liabilities except in connection with or incidental to (A) its performance of
the activities required or authorized by the partnership agreement of the MLP or
the Partnership Agreement or described in or contemplated by the MLP
Registration Statement, and (B) the acquisition, ownership or disposition of
partnership interests in Lessee or partnership interests in the MLP or any
further limited partnership of which Lessee or the MLP is, directly or
indirectly, a limited partner, except that, notwithstanding the foregoing,
employees of the General Partner may perform services for Ferrell Companies,
Inc. and its Affiliates.
(d) The General Partner agrees that, until all Obligations hereunder
and under the other Operative Documents shall have been repaid in full and all
commitments shall have terminated, it will not exercise any rights it may have
(at law, in equity, by contract or otherwise) to terminate, limit or otherwise
restrict (whether through repurchase or otherwise and whether or not the General
Partner shall remain a general partner in Lessee) the ability of Lessee to use
the name "Ferrellgas".
(e) The General Partner shall not 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 Lessee 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 5.15. Monetary Judgments. If one or more judgments, orders,
decrees or arbitration awards is entered against Lessee or any Subsidiary
involving in the aggregate a liability (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage other
than through a standard reservation of rights letter) as to any single or
related series of transactions, incidents or conditions, of more than $10
million, then Lessee shall reserve for such amount in excess of $10 million, on
a quarterly basis, with each quarterly reserve being at least equal to
one-twelfth of such amount in excess of $10 million. Such amount so reserved
shall be treated as establishment of a reserve for purposes of calculating
Available Cash hereunder.
Section 5.16. Year 2000 Compliance. Lessee shall ensure that all of the
computer software, computer firmware, computer hardware (whether general or
special purpose), and other similar or related items of automated, computerized,
and/or software system(s) that are used or relied on by Lessee or any Subsidiary
in the conduct of its business will not malfunction, will not cease to function,
will not generate incorrect data, and will not produce material incorrect
results when processing, providing and/or receiving date-related data in
connection with any valid date in the twentieth and twenty-first centuries. From
time to time, at the request of any Participant, Lessee and its Subsidiaries
shall provide to such Participant such updated information or documentation as
is requested regarding the status of their efforts to address the Year 2000
Problem (as defined in Section 4.1(w)).
Section 5.17. Limitation on Liens. Lessee shall not, and shall not
suffer or permit any Subsidiary to, directly or indirectly, make, create, incur,
assume or suffer to exist any Lien upon or with respect to any part of its
property or sell any of its accounts receivable, whether now owned or hereafter
acquired, other than (x) in the case of the Units or the other Lessee
Collateral, Permitted Liens, and (y) in the case of any other property of Lessee
or such Subsidiary, the following ("Permitted Encumbrances"):
(a) Liens existing on the Restatement Effective Date set forth in Schedule
8.01 of the Existing Credit Agreement;
(b) Liens in favor of Lessee or Liens to secure Indebtedness
of a Subsidiary to Lessee or a Wholly-Owned Subsidiary;
(c) Liens on property of a Person existing at the time such
Person is merged into or consolidated with Lessee or any Subsidiary,
provided that such Liens were in existence prior to the contemplation
of such merger or consolidation and do not extend to any assets other
than those of the Person merged into or consolidated with Lessee;
(d) Liens on property existing at the time acquired by Lessee
or any Subsidiary, provided that such Liens were in existence prior to
the contemplation of such acquisition and do not extend to any assets
other than those of the Person acquired;
(e) Liens on any property or asset acquired by Lessee or any
Subsidiary in favor of the seller of such property or asset and
construction mortgages on property, in each case, created within six
months after the date of acquisition, construction or improvement of
such property or asset by Lessee or such Subsidiary to secure the
purchase price or other obligation of Lessee or such Subsidiary to the
seller of such property or asset or the construction or improvement
cost of such property in an amount up to 80% of the total cost of the
acquisition, construction or improvement of such property or asset;
provided that in each case such Lien does not extend to any other
property or asset of Lessee and its Subsidiaries;
(f) Liens incurred or pledges and deposits made in connection
with worker's compensation, unemployment insurance and other social
security benefits and Liens to secure the performance of statutory
obligations, surety or appeal bonds, performance bonds or other
obligations of a like nature, in each case, incurred in the ordinary
course of business;
(g) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good
faith by appropriate proceedings promptly instituted and diligently
concluded, provided that any reserve or other appropriate provision as
shall be required in conformity with GAAP shall have been made
therefor;
(h) Liens imposed by law, such as mechanics', carriers',
warehousemen's, materialmen's, and vendors' Liens, incurred in good
faith in the ordinary course of business with respect to amounts not
yet delinquent or being contested in good faith by appropriate
proceedings if a reserve or other appropriate provisions, if any, as
shall be required by GAAP shall have been made therefor;
(i) zoning restrictions, easements, licenses, covenants,
reservations, restrictions on the use of real property or minor
irregularities of title incident thereto that do not, in the aggregate,
materially detract from the value of the property or the assets of
Lessee or any of its Subsidiaries or impair the use of such property in
the operation of the business of Lessee or any of its Subsidiaries;
(j) Liens of landlords or mortgages of landlords, arising
solely by operation of law, on fixtures and movable property located on
premises leased by Lessee or any of its Subsidiaries in the ordinary
course of business;
(k) Liens incurred and financing statements filed or
recorded, in each case with respect to personal property leased by
Lessee and its Subsidiaries to the owners of such personal property
which are either (i) operating leases (including, without limitation,
Synthetic Leases) or (ii) capital leases to the extent (but only to the
extent) permitted by Section 5.21; provided, that in each case such
Lien does not extend to any other property or asset of Lessee and its
Subsidiaries;
(l) judgment Liens to the extent that such judgments do not
cause or constitute a Lease Default or Lease Event of Default;
(m) Liens incurred in the ordinary course of business of
Lessee or any Subsidiary with respect to obligations that do not exceed
$5,000,000 in the aggregate at any one time outstanding and that (i)
are not incurred in connection with the borrowing of money or the
obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (ii) do not in the aggregate
materially detract from the value of the property or materially impair
the use thereof in the operation of business by Lessee or such
Subsidiary;
(n) Liens securing Indebtedness incurred to refinance
Indebtedness that has been secured by a Lien otherwise permitted under
this Agreement, provided that (i) any such Lien shall not extend to or
cover any assets or property not securing the Indebtedness so
refinanced and (ii) the refinancing Indebtedness secured by such Lien
shall have been permitted to be incurred under Section 5.21 hereof and
shall not have a principal amount in excess of the Indebtedness so
refinanced;
(o) any extension or renewal, or successive extensions or
renewals, in whole or in part, of Liens permitted pursuant to the
foregoing clauses (a) through (n); provided that no such extension or
renewal Lien shall (i) secure more than the amount of Indebtedness or
other obligations secured by the Lien being so extended or renewed or
(ii) extend to any property or assets not subject to the Lien being so
extended or renewed;
(p) Liens in favor of the Administrative Agent under the
Credit Agreement, any Issuing Bank and the Credit Agreement Banks
relating to the Cash Collateralization of Lessee's obligations under
the Credit Agreement or Liens created by the Operative Documents; and
(q) Liens securing Indebtedness of an SPE in connection with
an Accounts Receivable Securitization permitted by Section 5.21
(including the filing of any related financing statements naming Lessee
as the debtor thereunder in connection with the sale of accounts
receivable by Lessee to such SPE in connection with any such permitted
Accounts Receivable Securitization); provided that the aggregate amount
of accounts receivable subject to all such Liens shall at no time
exceed 133% of the amount of Accounts Receivable Securitizations
permitted to be outstanding under such Section 5.21.
Section 5.18. Asset Sales. Lessee shall not, and shall not permit any of
its Subsidiaries to, (i) sell, lease, convey or otherwise dispose of any assets
(including by way of a sale-and-leaseback) other than sales of inventory in the
ordinary course of business consistent with past practice (provided that the
sale, lease, conveyance or other disposition of all or substantially all of the
assets of Lessee shall be governed by the provisions of Section 5.19 hereof and
not by the provisions of this Section 5.18), or (ii) issue or sell Equity
Interests of any of its Subsidiaries, in the case of either clause (i) or (ii)
above, whether in a single transaction or a series of related transactions, (A)
that have a fair market value in excess of $5,000,000, or (B) for net proceeds
in excess of $5,000,000 (each of the foregoing, an "Asset Sale"), unless (X)
Lessee (or the Subsidiary, as the case may be) receives consideration at the
time of such Asset Sale at least equal to the fair market value (evidenced by a
resolution of the board of directors of the General Partner (and, if applicable,
the audit committee of such board of directors) set forth in a certificate
signed by a Responsible Officer and delivered to Agent) of the assets sold or
otherwise disposed of and (Y) at least 80% of the consideration therefor
received by Lessee or such Subsidiary is in the form of cash; provided, however,
that the amount of (1) any liabilities (as shown on Lessee's or such
Subsidiary's most recent balance sheet or in the notes thereto), of Lessee or
any Subsidiary (other than liabilities that are by their terms subordinated in
right of payment to the Obligations hereunder and under the other Operative
Documents) that are assumed by the transferee of any such assets and (2) any
notes or other obligations received by Lessee or any such Subsidiary from such
transferee that are immediately converted by Lessee or such Subsidiary into cash
(to the extent of the cash received), shall be deemed to be cash for purposes of
this provision; and provided, further, that the 80% limitation referred to in
this clause (Y) shall not apply to any Asset Sale in which the cash portion of
the consideration received therefrom, determined in accordance with the
foregoing proviso, is equal to or greater than what the after-tax proceeds would
have been had such Asset Sale complied with the aforementioned 80% limitation.
Notwithstanding the foregoing, Asset Sales shall not be deemed to include (w)
sales or transfers of accounts receivable by Lessee to an SPE and by an SPE to
any other Person in connection with any Accounts Receivable Securitization
permitted by Section 5.21 (provided that the aggregate amount of such accounts
receivable that shall have been transferred to and held by all SPEs at any time
shall not exceed 133% of the amount of Accounts Receivable Securitizations
permitted to be outstanding under Section 5.21), (x) any transfer of assets by
Lessee or any of its Subsidiaries to a Subsidiary of Lessee that is a Guarantor
under the Credit Agreement, (y) any transfer of assets by Lessee or any of its
Subsidiaries to any Person in exchange for other assets used in a line of
business permitted under Section 5.31 and having a fair market value not less
than that of the assets so transferred and (z) any transfer of assets pursuant
to a Permitted Lessee Investment or any sale-leaseback (including
sale-leasebacks involving Synthetic Leases) permitted by Section 5.33.
Notwithstanding the foregoing, Lessee may not sell, lease, convey or otherwise
dispose of any Unit except as permitted by the Lease.
Section 5.19. Consolidations and Mergers. (a) Lessee shall not
consolidate or merge with or into (whether or not Lessee is the surviving
Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions, to another Person unless (i) Lessee is the surviving Person, or
the Person formed by or surviving any such consolidation or merger (if other
than Lessee) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation or partnership organized
or existing under the laws of the United States, any state thereof or the
District of Columbia; and (ii) the Person formed by or surviving any such
consolidation or merger (if other than Lessee) or Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made assumes all the Obligations of Lessee under this Agreement and the other
Operative Documents pursuant to an assumption agreement in a form reasonably
satisfactory to Agent; (iii) immediately after such transaction no Lease Default
or Lease Event of Default exists; and (iv) Lessee or any Person formed by or
surviving any such consolidation or merger, or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made (A) shall
have Consolidated Net Worth (immediately after the transaction but prior to any
purchase accounting adjustments resulting from the transaction) equal to or
greater than the Consolidated Net Worth of Lessee immediately preceding the
transaction and (B) shall, at the time of such transaction and after giving
effect thereto, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Leverage Ratio test set forth in Section 5.12(a).
(b) Lessee shall deliver to Agent prior to the consummation of the
proposed transaction pursuant to the foregoing paragraph (a) an officers'
certificate to the foregoing effect signed by a Responsible Officer and an
opinion of counsel satisfactory to Agent stating that the proposed transaction
complies with this Agreement. Agent, Certificate Trustee and the Participants
shall be entitled to conclusively rely upon such officer's certificate and
opinion of counsel.
(c) Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of Lessee in accordance with this Section 5.19, the successor Person
formed by such consolidation or into or with which Lessee is merged or to which
such sale, assignment, transfer, lease, conveyance or other disposition is made
shall succeed to, and be substituted for (so that from and after the date of
such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Agreement and the other Operative Documents referring to the
"Lessee" shall refer to or include instead the successor Person and not Lessee),
and may exercise every right and power of Lessee under this Agreement with the
same effect as if such successor Person had been named as Lessee herein;
provided, however, that the predecessor Lessee shall not be relieved from the
obligation to pay Rent or perform the other Obligations except in the case of a
sale of all of such Lessee's assets that meets the requirements of this Section
5.19 hereof.
Section 5.20. Acquisitions. Without limiting the generality of any other
provision of this Agreement, neither Lessee nor any Subsidiary shall consummate
any Acquisition unless (i) the acquiree is primarily a retail propane
distribution business; (ii) such Acquisition is undertaken in accordance with
all applicable Requirements of Law; (iii) the prior, effective written consent
or approval to such Acquisition of the board of directors or equivalent
governing body of the acquiree is obtained; and (iv) immediately after giving
effect thereto, no Lease Default or Lease Event of Default will occur or be
continuing and each of the representations and warranties of Lessee herein is
true on and as of the date of such Acquisition, both before and after giving
effect thereto. Nothing in Section 5.38 shall prohibit (x) the making by Lessee
of a Permitted Acquisition indirectly through the General Partner, the MLP or
any of its or their Affiliates in a series of substantially contemporaneous
transactions in which Lessee shall ultimately own the assets that are the
subject of such Permitted Acquisition or (y) the assumption of Acquired Debt in
connection therewith to the extent such Acquired Debt is provided by a Bank or a
Participant and, upon such assumption, is (to the extent such Acquired Debt is
not otherwise permitted to be incurred by Lessee pursuant to this Agreement)
immediately repaid (with the proceeds of Revolving Loans or otherwise).
Section 5.21. Limitation on Indebtedness. Lessee shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, create, incur,
issue, assume, suffer to exist, guarantee or otherwise become directly or
indirectly liable with respect to any Indebtedness (including Acquired Debt) or
any Synthetic Leases and Lessee shall not issue any Disqualified Interests and
shall not permit any of its Subsidiaries to issue any shares of preferred stock;
provided, however, that Lessee and any Subsidiary of Lessee may create, incur,
issue, assume, suffer to exist, guarantee or otherwise become directly or
indirectly liable with respect to any Indebtedness or any Synthetic Lease to the
extent that the Leverage Ratio is maintained in accordance with Section 5.12(a),
both before and after giving effect to the incurrence of such Indebtedness or
such Synthetic Lease, as the case may be, and, provided, further, that (x) the
aggregate principal amount of (1) all Capitalized Lease Obligations and all
Synthetic Lease Obligations (other than Capitalized Lease Obligations and
Synthetic Lease Obligations in respect of Growth-Related Capital Expenditures)
of Lessee and its Subsidiaries and (2) all Indebtedness for which Lessee and any
Subsidiary of Lessee become liable in connection with Acquisitions of retail
propane businesses in favor of the sellers of such businesses and secured by any
Lien on any property of Lessee or any of its Subsidiaries, shall not exceed
$65,000,000 at any one time outstanding, and (y) the principal amount of any
Indebtedness for which Lessee or any Subsidiary of Lessee becomes liable in
connection with Acquisitions of retail propane businesses in favor of the
sellers of such businesses shall not exceed the fair market value of the assets
so acquired, and (z) the aggregate amount of Indebtedness of Lessee and its
Subsidiaries through one or more SPEs in connection with Accounts Receivable
Securitizations shall not exceed $60,000,000 at any one time outstanding.
Section 5.22. Transactions with Affiliates. Lessee shall not, and shall
not permit any of its Subsidiaries to, sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into any contract, agreement, understanding, loan, advance
or guarantee with, or for the benefit of, any Affiliate, including any
Non-Recourse Subsidiary (each of the foregoing, an "Affiliate Transaction"),
unless (a) such Affiliate Transaction is on terms that are no less favorable to
Lessee or the relevant Subsidiary than those that would have been obtained in a
comparable transaction by Lessee or such Subsidiary with an unrelated Person and
(b) with respect to (i) any Affiliate Transaction with an aggregate value in
excess of $500,000, a majority of the directors of the General Partner having no
direct or indirect economic interest in such Affiliate Transaction determines by
resolution that such Affiliate Transaction complies with clause (a) above and
approves such Affiliate Transaction and (ii) any Affiliate Transaction involving
the purchase or other acquisition or sale, lease, transfer or other disposition
of properties or assets other than in the ordinary course of business, in each
case, having a fair market value or for net proceeds in excess of $15,000,000,
Lessee delivers to Agent and the Participants an opinion as to the fairness to
Lessee or such Subsidiary from a financial point of view issued by an investment
banking firm of national standing; provided, however, that (i) any employment
agreement or stock option agreement entered into by Lessee or any of its
Subsidiaries in the ordinary course of business and consistent with the past
practice of Lessee (or the General Partner) or such Subsidiary, Restricted
Payments permitted by the provisions of Section 5.28, and transactions entered
into by Lessee in the ordinary course of business in connection with reinsuring
the self-insurance programs or other similar forms of retained insurable risks
of the retail propane businesses operated by Lessee, its Subsidiaries and its
Affiliates, in each case, shall not be deemed Affiliate Transactions, and (ii)
nothing herein shall authorize the payments by Lessee to the General Partner or
any other Affiliate of Lessee for administrative expenses incurred by such
Person other than such out-of-pocket administrative expenses as such Person
shall incur and Lessee shall pay in the ordinary course of business; and
provided, further, that the foregoing provisions of this Section 5.22 shall not
apply to transfers of accounts receivable of Lessee to an SPE in connection with
any Accounts Receivable Securitization permitted by Section 5.21.
Section 5.23. Use of Proceeds. Lessee shall not, and shall not suffer or
permit any Subsidiary to, use any portion of the proceeds of the sale of the
Units, the Certificates or the Notes, directly or indirectly, (i) to purchase or
carry Margin Stock, (ii) to repay or otherwise refinance indebtedness of Lessee
or others incurred to purchase or carry Margin Stock, (iii) to extend credit for
the purpose of purchasing or carrying any Margin Stock, or (iv) to acquire any
security in any transaction that is subject to Section 13 or 14 of the Exchange
Act.
Section 5.24. Use of Proceeds - Ineligible Securities. Lessee shall not,
directly or indirectly, use any portion of the proceeds of the sale of the
Units, the Certificates or the Notes (i) knowingly to purchase Ineligible
Securities from the Credit Agreement Arranger or the Documentation Agent during
any period in which the Credit Agreement Arranger or the Documentation Agent
makes a market in such Ineligible Securities, (ii) knowingly to purchase during
the underwriting or placement period Ineligible Securities being underwritten or
privately placed by the Credit Agreement Arranger or the Documentation Agent, or
(iii) to make payments of principal or interest on Ineligible Securities
underwritten or privately placed by the Credit Agreement Arranger or the
Documentation Agent and issued by or for the benefit of Lessee or any Affiliate
of Lessee.
Section 5.25. Contingent Obligations. Lessee shall not, and shall not
suffer or permit any Subsidiary to, create, incur, assume or suffer to exist any
Contingent Obligations except:
(a) endorsements for collection or deposit in the ordinary course of
business;
(b) subject to compliance with the trading policies in effect
from time to time as submitted to Agent, Hedging Obligations entered
into in the ordinary course of business as bona fide hedging
transactions;
(c) the Guaranties under the Credit Agreement; and
(d) Guaranty Obligations to the extent not prohibited by
Section 5.21.
Section 5.26. Joint Ventures. Lessee shall not, and shall not suffer or
permit any Subsidiary to enter into any Joint Venture.
Section 5.27. Lease Obligations. The aggregate obligations of Lessee and
its Subsidiaries for the payment of rent for any property under lease or
agreement to lease (excluding obligations of Lessee and its Subsidiaries under
or with respect to Synthetic Leases) for any fiscal year shall not exceed the
greater of (a) $25,000,000 or (b) 20% of (i) Consolidated Cash Flow of Lessee
for the most recently ended eight consecutive fiscal quarters divided by (ii)
two; provided, however, that any payment of rent for any property under lease or
agreement to lease for a term of less than one year (after giving effect to all
automatic renewals) shall not be subject to this Section 5.27. For purposes of
this Section 5.27, the calculation of Consolidated Cash Flow shall give pro
forma effect to Acquisitions (including all mergers and consolidations), Asset
Sales and other dispositions and discontinuances of businesses or assets that
have been made by Lessee or any of its Subsidiaries during the reference period
or subsequent to such reference period and on or prior to the date of
calculation of Consolidated Cash Flow assuming that all such Acquisitions, Asset
Sales and other dispositions and discontinuances of businesses or assets had
occurred on the first day of the reference period.
Section 5.28. Restricted Payments. Lessee shall not and shall not permit
any of its Subsidiaries to, directly or indirectly (i) declare or pay any
dividend or make any distribution on account of Lessee's or any Subsidiary's
Equity Interests (other than (x) dividends or distributions payable in Equity
Interests (other than Disqualified Interests) of Lessee, (y) dividends or
distributions payable to Lessee or a Wholly-Owned Subsidiary of Lessee that is a
Guarantor or (z) distributions or dividends payable pro rata to all holders of
Capital Interests of any such Subsidiary); (ii) purchase, redeem, call or
otherwise acquire or retire for value any Equity Interests of Lessee or any
Subsidiary or other Affiliate of Lessee (other than, subject to compliance with
Section 5.37, any such Equity Interests owned by a Wholly-Owned Subsidiary of
Lessee that is a Guarantor); (iii) make any investment other than a Permitted
Lessee Investment; or (iv) prepay, purchase, redeem, retire, defease or
refinance the 1998 Fixed Rate Senior Notes (all payments and other actions set
forth in clauses (i) through (iv) above being collectively referred to as
"Restricted Payments"), except to the extent that, at the time of such
Restricted Payment:
(a) no Lease Default or Lease Event of Default shall have
occurred and be continuing or would occur as a consequence thereof and
each of the representations and warranties of Lessee set forth herein
is true on and as of the date of such Restricted Payment both before
and after giving effect thereto; and
(b) the Fixed Charge Coverage Ratio of Lessee for Lessee's
most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on
which such Restricted Payment is made, calculated on a pro forma basis
as if such Restricted Payment had been made at the beginning of such
four-quarter period, would have been more than 2.25 to 1; and
(c) such Restricted Payment (the amount of any such payment,
if other than cash, to be determined by the Board of Directors, whose
determination shall be conclusive and evidenced by a resolution in an
officer's certificate signed by a Responsible Officer and delivered to
Agent), together with the aggregate of all other Restricted Payments
(other than any Restricted Payments permitted by the provisions of
clause (ii) of the penultimate paragraph of this Section 5.28) made by
Lessee and its Subsidiaries in the fiscal quarter during which such
Restricted Payment is made shall not exceed an amount equal to (x)
Available Cash of Lessee for the immediately preceding fiscal quarter
plus (y) the lesser of (i) the amount of any Available Cash of Lessee
during the first 45 days of such fiscal quarter and (ii) the excess of
the aggregate amount of Credit Agreement Loans that Lessee could have
borrowed over the actual amount of Credit Agreement Loans outstanding,
in each case as of the last day of the immediately preceding fiscal
quarter; and
(d) such Restricted Payment (other than (x) Restricted
Payments described in clause (i) of the first paragraph of this Section
5.28 made during the fiscal quarter ending January 31, 1997 that do not
exceed $26,000,000 in the aggregate or (y) any Restricted Payments
described in clauses (iii) or (iv) of the first paragraph of this
Section 5.28) the amount of which, if made other than with cash, to be
determined in accordance with clause (c) of this Section 5.28 shall not
exceed an amount equal to (1) Consolidated Cash Flow of Lessee and its
Subsidiaries for the period from and after October 31, 1996 through and
including the last day of the fiscal quarter ending immediately
preceding the date of the proposed Restricted Payment (the
"Determination Period"), minus (2) the sum of Consolidated Interest
Expense of Lessee and its Subsidiaries for the Determination Period
plus all capital expenditures (other than Growth-Related Capital
Expenditures and net of capital asset sales in the ordinary course of
business) made by Lessee and its Subsidiaries during the Determination
Period plus the aggregate of all other Restricted Payments (other than
(x) Restricted Payments described in clause (i) of the first paragraph
of this Section 5.28 made during the fiscal quarter ending January 31,
1997 that do not exceed $26,000,000 in the aggregate or (y) any
Restricted Payments described in clauses (iii) or (iv) of the first
paragraph of this Section 5.28) made by Lessee and its Subsidiaries
during the period from and after October 31, 1996 through and including
the date of the proposed Restricted Payment, plus (3) $30,000,000, plus
(4) the excess, if any, of consolidated working capital of Lessee and
its Subsidiaries at July 31, 1996 over consolidated working capital of
Lessee and its Subsidiaries at the end of the fiscal year immediately
preceding the date of the proposed Restricted Payment, minus (5) the
excess, if any, of consolidated working capital of Lessee and its
Subsidiaries at the end of the fiscal year immediately preceding the
date of the proposed Restricted Payment over consolidated working
capital of Lessee and its Subsidiaries at July 31, 1996. For purposes
of this subsection 5.28(d), the calculation of Consolidated Cash Flow
shall give pro forma effect to Acquisitions (including all mergers and
consolidations), Asset Sales and other dispositions and discontinuances
of business or assets that have been made by such Person or any of its
Subsidiaries during the reference period or subsequent to such
reference period and on or prior to the date of calculation of
Consolidated Cash Flow assuming that all such Acquisitions, Asset Sales
and other dispositions and discontinuances of businesses or assets had
occurred on the first day of the reference period.
The foregoing provisions will not prohibit (i) the payment of any
distribution within 60 days after the date on which Lessee becomes committed to
make such distribution, if at said date of commitment such payment would have
complied with the provisions of this Agreement; and (ii) the redemption,
repurchase, retirement or other acquisition of any Equity Interests of Lessee in
exchange for, or out of the proceeds of, the substantially concurrent sale
(other than to a Subsidiary of Lessee) of other Equity Interests of Lessee
(other than any Disqualified Interests).
Not later than the date of making any Restricted Payment, the General
Partner shall deliver to Agent an officer's certificate signed by a Responsible
Officer stating that such Restricted Payment is permitted and setting forth the
basis upon which the calculations required by this Section 5.28 were computed,
which calculations may be based upon Lessee's latest available financial
statements.
Section 5.29. Prepayments of Subordinated Indebtedness. Lessee shall
not, and shall not permit any of its Subsidiaries to, (a) purchase, redeem,
retire or otherwise acquire for value, or set apart any money for a sinking,
defeasance or other analogous fund for, the purchase, redemption, retirement or
other acquisition of, or make any payment or prepayment of the principal of or
interest on, or any other amount owing in respect of, any Indebtedness that is
subordinated to the Obligations, except for regularly scheduled payments of
interest in respect of such Indebtedness required pursuant to the instruments
evidencing such Indebtedness that are not made in contravention of the terms and
conditions of subordination set forth on part II of Schedule 5.21 or (b)
directly or indirectly, make any payment in respect of, or set apart any money
for a sinking, defeasance or other analogous fund on account of, Guaranty
Obligations subordinated to the Obligations. The foregoing provisions will not
prohibit the defeasance, redemption or repurchase of subordinated Indebtedness
with the proceeds of Permitted Refinancing Indebtedness.
Section 5.30. Dividend and Other Payment Restrictions Affecting
Subsidiaries. Lessee shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary to (a)
pay dividends or make any other distributions to Lessee or any of its
Subsidiaries (1) on its Capital Interests or (2) with respect to any other
interest or participation in, or interest measured by, its profits, (b) pay any
indebtedness owed to Lessee or any of its Subsidiaries, (c) make loans or
advances to Lessee or any of its Subsidiaries or (d) transfer any of its
properties or assets to Lessee or any of its Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (i) Existing
Indebtedness, (ii) the Operative Documents, the Credit Agreement, the 1998 Note
Purchase Agreement and the 1998 Fixed Rate Senior Notes, (iii) applicable law,
(iv) any instrument governing Indebtedness or Capital Interests of a Person
acquired by Lessee or any of its Subsidiaries as in effect at the time of such
Acquisition (except to the extent such Indebtedness was incurred in connection
with or in contemplation of such Acquisition), which encumbrance or restriction
is not applicable to any Person, or the properties or assets of any Person,
other than the Person, or the property or assets of the Person, so acquired,
provided that the Consolidated Cash Flow of such Person to the extent that
dividends, distributions, loans, advances or transfers thereof is limited by
such encumbrance or restriction on the date of acquisition is not taken into
account in determining whether such acquisition was permitted by the terms of
this Agreement, (v) customary non-assignment provisions in leases entered into
in the ordinary course of business and consistent with past practices, (vi)
purchase money obligations for property acquired in the ordinary course of
business that impose restrictions of the nature described in clause (d) above on
the property so acquired, (vii) Permitted Refinancing Indebtedness of any
Existing Indebtedness, provided that the restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are no more
restrictive than those contained in the agreements governing the Indebtedness
being refinanced or (viii) other Indebtedness permitted to be incurred
subsequent to the Restatement Effective Date pursuant to the provisions of
Section 5.21 hereof, provided that such restrictions are no more restrictive
than those contained in this Agreement.
Section 5.31. Change in Business. Lessee shall not, and shall not suffer
or permit any Subsidiary to, engage in any material line of business
substantially different from those lines of business carried on by Lessee and
its Subsidiaries on the date hereof.
Section 5.32. Accounting Changes. Lessee shall not, and shall not suffer
or permit any Subsidiary to, make any significant change in accounting treatment
or reporting practices, except as required by GAAP, or change the fiscal year of
Lessee or of any Subsidiary except as required by the Code.
Section 5.33. Limitation on Sale and Leaseback Transactions. Lessee will
not, and will not permit any of its Subsidiaries to, enter into any arrangement
with any Person providing for the leasing by Lessee or such Subsidiary of any
property that has been or is to be sold or transferred by Lessee or such
Subsidiary to such Person in contemplation of such leasing; provided, however,
that Lessee or such Subsidiary may enter into such sale and leaseback
transaction if: (i) Lessee could have (A) incurred Indebtedness in an amount
equal to the Attributable Debt relating to such sale and leaseback transaction
pursuant to the Leverage Ratio test set forth in Section 5.12(a) and (B) secured
a Lien on such Indebtedness pursuant to Section 8.17; (ii) the lease in such
sale and leaseback transaction is for a term not in excess of the lesser of (A)
three years and (B) 60% of the remaining useful life of such property; or (iii)
such sale and leaseback transaction is otherwise permitted by the last sentence
of Section 4.17 of the 1996 Indenture as in effect as of the date hereof.
Section 5.34. [Intentionally Omitted].
Section 5.35. Amendments of Organization Documents or 1996 Indenture or
1998 Note Purchase Agreement. Lessee shall not modify, amend, supplement or
replace, nor permit any modification, amendment, supplement or replacement of
the Organization Documents of the General Partner, Lessee or any Subsidiary of
Lessee, the MLP Senior Notes, the 1996 Indenture, the 1998 Fixed Rate Senior
Notes or the 1998 Note Purchase Agreement or any document executed and delivered
in connection with any of the foregoing, in any respect that would adversely
affect the Participants, Lessee's ability to perform the Obligations, or the
Guarantor's ability to perform its obligations under the Guaranty, in each such
case without the prior written consent of Agent and the Required Participants.
Furthermore, the Lessee shall not permit any modification, amendment, supplement
or replacement of the Organization Documents of the MLP that would have a
material effect on Lessee without the prior written consent of Agent and the
Required Participants.
Section 5.36. [Intentionally Omitted].
Section 5.37. Operations through Subsidiaries. Lessee shall not conduct
any of its operations through Subsidiaries unless: (a) such Subsidiary executes
a Guaranty substantially in the form of Exhibit G to the Credit Agreement
guaranteeing payment of the Obligations, accompanied by an opinion of counsel to
the Subsidiary addressed to Agent and the Participants as to the due
authorization, execution, delivery and enforceability of the Guaranty; (b) such
Subsidiary agrees not to incur any Indebtedness other than (i) trade debt and
(ii) Acquired Debt permitted by Section 5.21; (c) the Consolidated Cash Flow of
such Subsidiary, when added to Consolidated Cash Flow of all other Subsidiaries
for any fiscal year, shall not exceed 10% of the Consolidated Cash Flow of
Lessee and its Subsidiaries for such fiscal year; and (d) the value of the
assets of such Subsidiary, when added to the value of the assets of all other
Subsidiaries for any fiscal year, shall not exceed 10% of the consolidated value
of the assets of Lessee and its Subsidiaries for such fiscal year, as determined
in accordance with GAAP; provided, however, that Lessee may, without regard to
the foregoing provisions of this Section 5.37, (x) establish and operate SPEs
solely in connection with Accounts Receivable Securitizations permitted by
Section 5.21 and (y) operate Thermogas as a Wholly-Owned Subsidiary for a period
of up to (but not exceeding) 30 days following the consummation of the Thermogas
Acquisition pending the merger of Thermogas with and into Lessee.
Section 5.38. Operations of MLP. Except in connection with an indirect
Acquisition permitted by Section 5.20, the General Partner and Lessee shall not
permit the MLP or any of its Affiliates (including any Non-Recourse Subsidiary)
to operate or conduct any business substantially similar to that conducted by
Lessee and its Subsidiaries within a 25 mile radius of any business conducted by
Lessee and its Subsidiaries. In order to comply with this Section 5.38, Lessee
may enter into one or more transactions by which its assets and properties are
"swapped" or "exchanged" for assets and properties of another Person prior to or
concurrently with another transaction which, but for such swap or exchange would
violate this Section; provided, that (i) if the value of the MLP's assets or
units to be so swapped or exchanged exceeds $15 million, as determined by the
audit committee of the Board of Directors of the General Partner, Lessee shall
have first obtained at its expense an opinion from a nationally recognized
investment banking firm, addressed to it, Agent and the Participants and opining
without material qualification and based on assumptions that are realistic at
the time, that the exchange or swap transactions are fair to Lessee and its
Subsidiaries, and (ii) if the value of the MLP's assets or units to be so
swapped or exchanged exceeds $50 million, as determined by the audit committee
of the Board of Directors of the General Partner, at the option of the Required
Participants, Agent shall have first retained, at Lessee's expense, an
investment banking firm on behalf of the Participants who shall also have
rendered an opinion containing the statements and content referred to in clause
(i).
Section 5.39. Miscellaneous.
(a) Further Assurances. The Lessee, at its cost and expense, will cause
to be promptly and duly taken, executed, acknowledged and delivered all such
further acts, documents and assurances as Certificate Trustee or Agent
reasonably may request from time to time in order to carry out more effectively
the intent and purposes of this Agreement and the other Operative Documents and
the Overall Transaction. The Lessee, at its cost and expense, will cause all
financing statements (including precautionary financing statements), fixture
filings, mortgages and other documents, to be recorded or filed at such places
and times in such manner, and will take all such other actions or cause such
actions to be taken, as may be necessary or as may be reasonably requested by
Agent or Certificate Trustee in order to establish, preserve, protect and
perfect the title and Lien of Agent in the Units, the Lessee Collateral and the
Lessor Collateral and Certificate Trustee's, Agent's and/or any Participant's
rights under this Agreement and the other Operative Documents.
(b) Change of Name or Address. Lessee shall provide Agent thirty (30)
days' prior written notice of any change in name, or the address of its chief
executive office and principal place of business or the office where it keeps
its records concerning its accounts and the Units.
(c) Securities. Lessee shall not, nor shall it permit anyone authorized
to act on its behalf to, take any action which would subject the issuance or
sale of the Notes or Certificates, the Units, the Trust Estate or the Operative
Documents, or any security or lease the offering of which, for purposes of the
Securities Act or any state securities laws, would be deemed to be part of the
same offering as the offering of the aforementioned items to the registration
requirements of Section 5 of the Securities Act or any state securities laws.
(d) Rates. With respect to each determination of Interest and Yield
pursuant to this Agreement, the Loan Agreement, the Trust Agreement and Basic
Rent under the Lease, Lessee agrees to be bound by Sections 2.6 and 2.7 of the
Loan Agreement, Sections 2.4 and 2.5 of the Trust Agreement, and Sections 2.8
and 2.9 hereof and the applicable definitions in Appendix 1.
Section 5.40. Accounting Principles. (a) Unless the context otherwise
clearly requires, all accounting terms not expressly defined herein shall be
construed, and all financial computations required under this Agreement shall be
made in accordance with GAAP consistently applied. In the event that GAAP
changes during the term of the Lease such that the covenants contained in
Section 5.12 would then be calculated in a different manner or with different
components, (i) Lessee and the Participants agree to amend this Agreement in
such respects as are necessary to conform those covenants as criteria for
evaluating Lessee's financial condition to substantially the same criteria as
were effective prior to such change in GAAP and (ii) Lessee shall be deemed to
be in compliance with the covenants contained in Section 5.12 during the 90-day
period following any such change in GAAP if and to the extent that Lessee would
have been in compliance therewith under GAAP as in effect immediately prior to
such change.
(b) Except as otherwise specified, references herein to "fiscal year"
and "fiscal quarter" refer to such fiscal periods of Lessee.
ARTICLE VI
OTHER COVENANTS AND AGREEMENTS
Section 6.1. Cooperation with Lessee. (a) Certificate Trustee, Agent
and each Participant shall, to the extent reasonably requested by Lessee (but
without assuming additional liability on account thereof), at Lessee's expense,
cooperate to allow Lessee to (a) perform its covenants contained in Section
5.39(a), including, without limitation, at any time and from time to time, upon
the reasonable request of Lessee, to promptly and duly execute and deliver any
and all such further instruments, documents and financing statements (and
continuation statements related thereto) as Lessee may reasonably request in
order to perform such covenants.
(b) Without limiting the generality of the foregoing, Agent and
Certificate Trustee shall, upon the request of Lessee and at Lessee's expense,
execute and deliver UCC partial termination statements releasing any propane
tank which is not a Unit from the coverage of any Financing Statement filed in
connection with the transactions contemplated by the Operative Documents.
Section 6.2. Covenants of Certificate Trustee and Agent.
(a) Discharge of Liens. Certificate Trustee, in its trust capacity,
will not create or permit to exist at any time, and will promptly take such
action as may be necessary duly to discharge, or to cause to be discharged, all
Certificate Trustee Liens attributable to it and will cause restitution to be
made to the Trust Estate in the amount of any diminution of the value thereof as
a result of its failure to comply with its obligations under this Section
6.2(a). The Bank, in its individual capacity, will not create or permit to exist
at any time, and will, at its own cost and expense, promptly take such action as
may be necessary duly to discharge, or to cause to be discharged, all
Certificate Trustee Liens attributable to it and will cause restitution to be
made to the Trust Estate in the amount of any diminution of the value thereof as
a result of its failure to comply with its obligations under this Section
6.2(a). Agent, in its individual capacity, will not create or permit to exist at
any time, and will, at its own cost and expense, promptly take such action as
may be necessary duly to discharge, or to cause to be discharged, all
Certificate Trustee Liens attributable to it and will cause restitution to be
made to the Trust Estate in the amount of any diminution of the value thereof as
a result of its failure to comply with its obligations under this Section
6.2(a). Notwithstanding the foregoing, none of Certificate Trustee, Agent or the
Bank, as the case may be, shall be required to so discharge any such Certificate
Trustee Lien while the same is being contested in good faith by appropriate
proceedings diligently prosecuted so long as such proceedings shall not involve
any meaningful danger of the sale, forfeiture or loss of, and shall not
interfere with the use or disposition of, the Units, the Lease or the Trust
Estate or title thereto or any interest therein or the payment of Rent.
(b) Trust Agreement. Without prejudice to any right under the Trust
Agreement of Certificate Trustee to resign, or the Certificate Purchasers' right
under the Trust Agreement to remove Certificate Trustee, each of the Certificate
Purchasers and Certificate Trustee hereby agrees with Lessee: (i) except as
permitted by the Trust Agreement not to terminate or revoke the trust created by
the Trust Agreement prior to the Lease Expiration Date, (ii) not to amend,
supplement, terminate or revoke or otherwise modify any provision of the Trust
Agreement prior to the Lease Expiration Date in such a manner as to materially
and adversely affect the rights of Lessee, (iii) except as otherwise expressly
authorized under the Operative Documents, not to withdraw from the Trust Estate
any funds other than amounts payable to it by Certificate Trustee as
distributions of Basic Rent and Supplemental Rent without the prior written
consent of Lessee and (iv) to comply with all of the terms of the Trust
Agreement applicable to it the nonperformance of which would adversely affect
such party.
(c) Successor Certificate Trustee. Certificate Trustee or any successor
may resign or be removed by the Certificate Purchasers as Certificate Trustee, a
successor Certificate Trustee may be appointed, and a corporation may become
Certificate Trustee under the Trust Agreement, only (and, so long as no Lease
Event of Default has occurred and is continuing, with the written consent of
Lessee) in accordance with the provisions of Article IV of the Trust Agreement.
(d) Indebtedness; Other Business. Certificate Trustee on behalf of the
Trust shall not contract for, create, incur or assume any indebtedness, or enter
into any business or other activity, other than pursuant to or under the
Operative Documents and, for the benefit of Lessee and the Certificate
Purchasers, agrees to be bound by Section 1.2(b) of the Trust Agreement.
(e) Change of Principal Place of Business. Certificate Trustee shall
give prompt notice to the Participants and Lessee if Certificate Trustee's
principal place of business or chief executive office, or the office where the
records concerning the accounts or contract rights relating to the Units or the
Overall Transaction are kept, shall cease to be located at its address in the
State of Utah set forth on Schedule II or if it shall change its name or
identity.
(f) Depreciation. Neither Certificate Trustee nor any Participant shall
claim any federal or state tax attributes or benefits (including depreciation)
relating to the Units in respect of any period prior to the Lease Expiration
Date unless required to do so by an appropriate taxing authority or after a
clearly applicable change in Applicable Laws and Regulations or as a protective
response to a proposed adjustment by a Governmental Authority; provided,
however, that if an appropriate taxing authority shall require Certificate
Trustee or any Participant to claim any such federal or state tax attributes or
benefits, such Person shall promptly notify Lessee thereof and shall permit
Lessee to contest such requirement in a manner similar to the contest rights
provided in, and subject to any applicable limitation to a context contained in,
Section 7.2(b) hereof.
Section 6.3. Assignments. (a) All or any part of the interest of any
Lender in, to or under this Participation Agreement, the other Operative
Documents, the Units or the Notes may be assigned or transferred by such Lender
at any time to an Eligible Assignee; provided, however, that (i) each assignment
or transfer shall comply with all applicable securities laws and ERISA; (ii)
each assignment or transfer shall consist of a transfer of equivalent portions
of such Lender's rights and obligations under the Loan Agreement (if applicable
to such Lender); and (iii) each assignment or transfer of Loans shall be in a
minimum aggregate amount of $2,000,000 and $500,000 integral multiples in excess
thereof (or, if less, the aggregate amount of Loans then held by the assignor or
transferor Lender), unless such assignment or transfer is between Lenders and/or
their Affiliates; and provided further that so long as no Lease Default or Lease
Event of Default exists, any such transfer or assignment (other than a transfer
or assignment to a Participant or an Affiliate of the transferor) shall be
subject to the consent of Lessee, which shall not be unreasonably withheld. Such
assignment or transfer shall be pursuant to documentation in the form of Exhibit
K, duly executed by the assignee or transferee.
(b) Any Certificate Purchaser may assign or transfer all or
any part of its interest in, to and under this Participation Agreement,
the other Operative Documents, the Units and the Certificates at any
time to an Eligible Assignee; provided, however, that (i) each
assignment or transfer shall comply with all applicable securities laws
and ERISA; (ii) each assignment or transfer shall consist of a transfer
of equivalent portions of such Certificate Purchaser's rights and
obligations under the Trust Agreement (if applicable to such Lender);
and (iii) each assignment or transfer of Certificate Amounts shall be
in a minimum aggregate amount of $75,000 and $10,000 integral multiples
in excess thereof (or, if less, the aggregate amount of Certificates
then held by the assignor or transferor Certificate Purchaser), unless
such assignment or transfer is between Certificate Purchasers and/or
their Affiliates; and provided further that so long as no Lease Default
or Lease Event of Default exists, any such transfer or assignment
(other than a transfer or assignment to a Participant or an Affiliate
of the transferor) shall be subject to the consent of Lessee, which
shall not be unreasonably withheld. Such assignment or transfer shall
be pursuant to documentation in the form of Exhibit K, duly executed by
the assignee or transferee.
Section 6.4. Participations. Each Participant may sell, transfer or
assign a participation in all or a portion of the interests represented by its
Notes and/or Certificates or any right to payment thereunder (a "Participation")
to any Person (a "Participation Holder"). In the event of any such sale by a
Participant of a Participation to a Participation Holder, the obligations of
such Participant under this Participation Agreement and under the other
Operative Documents shall remain unchanged, such Participant shall remain solely
responsible for the performance thereof, such Participant shall remain the
holder of its Note and/or Certificate for all purposes under this Participation
Agreement and under the other Operative Documents, and Certificate Trustee and
Agent shall continue to deal solely and directly with such Participant in
connection with such Participation Holder's rights and obligations under this
Trust Agreement, under the Loan Agreement and under the other Operative
Documents, as applicable.
ARTICLE VII
INDEMNIFICATION
Section 7.1. General Indemnification. Whether or not the transactions
contemplated hereby are consummated, to the fullest extent permitted by
Applicable Laws and Regulations, Lessee hereby assumes liability for and agrees
to indemnify, protect, defend, save and keep harmless each Indemnitee on an
after-tax basis (in accordance with Section 7.4) from and against, any and all
Claims of every kind and nature whatsoever that may be imposed on, incurred by,
or asserted against any Indemnitee, which are not directly and primarily caused
by (i) the fraud, gross negligence or willful misconduct of such Indemnitee
(provided that the indemnification provided under this Section 7.1 shall
specifically include matters based on or arising from the negligence of any
Indemnitee), (ii) the breach by such Indemnitee of any representation, warranty
or covenant set forth in any Operative Document or (iii) the violation by such
Indemnitee of any Applicable Laws and Regulations, whether or not such
Indemnitee shall also be indemnified as to any such Claim by any other Person
and whether or not such Claim arises or accrues prior to the Delivery Date or
after the Lease Expiration Date, and which relates in any way to or arises in
any way out of:
(a) any of the Operative Documents or any of the transactions
contemplated thereby, or any investigation, litigation or proceeding in
connection therewith, and any amendment, modification or waiver in
respect thereof;
(b) the Thermogas Acquisition, the Acquired Property or any Part thereof or
interest therein;
(c) the acquisition, mortgaging, design, manufacture,
re-manufacture, construction, preparation, installation, inspection,
delivery, non-delivery, acceptance, rejection, purchase, ownership,
possession, rental, lease, sublease, transportation, repossession,
maintenance, repair, alteration, modification, addition or
substitution, storage, transfer of title, registration or
re-registration, redelivery, use, operation, condition, financing,
refinancing, sale (including, without limitation, any sale pursuant to
the Lease), return or other application or disposition of the Units or
any Unit or Part thereof or the imposition of any Lien (or incurring of
any liability to refund or pay over any amount as a result of any Lien)
on any of the Units, including, without limitation, (i) Claims or
penalties arising from any violation of Applicable Laws and Regulations
or in tort (strict liability or otherwise), (ii) loss of or damage to
the environment (including, without limitation, investigation costs,
cleanup costs, response costs, remediation and removal costs, costs of
corrective action, costs of financial assurance, and all other damages,
costs, fees and expenses, fines and penalties, including natural
resource damages), or death or injury to any Person, and any mitigative
action required by or under Environmental Laws, (iii) latent or other
defects, whether or not discoverable, and (iv) any Claim for patent,
trademark or copyright infringement;
(d) the sale or other disposition of any of the Acquired
Property, including, without limitation, any disposition pursuant to
the Sale Option, Purchase Option or as a result of the exercise of
remedies;
(e) the offer, issuance, sale or delivery of the Certificates or the Notes;
(f) the breach by Lessee of any representation or warranty
made by it or deemed made by it in any Operative Document;
(g) the transactions contemplated hereby or by any other
Operative Document in respect of the application of Parts 4 and 5 of
Subtitle B of Title I of ERISA and any prohibited transaction described
in Section 4975(c) of the Code;
(h) any Claims related to the Release from any Unit of any
substance into the environment, including (without limitation) Claims
arising out of the use of any Unit for the transportation or storage of
any Hazardous Material;
(i) any failure on the part of Lessee to perform or comply with any of the
terms of any Operative Document; or
(j) any other agreement entered into or assumed by Lessee in
connection with any Unit.
It is expressly understood and agreed that this Section 7.1 shall not
apply to Claims in respect of:
(A) Taxes (such Claims being subject to Section 7.2), except
with respect to (1) taxes or penalties included in Claims described in
clause (g) above, and (2) any payment necessary to make payments under
this Section 7.1 in accordance with Section 7.4; and
(B) as to an Indemnitee, Certificate Trustee Liens which such
Indemnitee is responsible for discharging under the Operative
Documents.
Section 7.2. General Tax Indemnity. (a) Lessee shall pay, defend and
indemnify and hold each Indemnitee harmless on an after-tax basis (in accordance
with Section 7.4) from any and all Federal, state, local and foreign Taxes
imposed on or with respect to or in connection with any Indemnitee, the Acquired
Property or any portion thereof, any Operative Document, Lessee or any sublessee
or user of any Unit, howsoever imposed, whether levied or imposed upon or
asserted against any Indemnitee, any Acquired Property, or any Part thereof, by
any taxing Governmental Authority (including any Federal, state or local
government or taxing Governmental Authority in the United States and any taxing
Governmental Authority or governmental subdivision of a foreign country), upon
or with respect to:
(i) the acquisition, mortgaging, design, manufacture,
re-manufacture, construction, preparation, installation, inspection,
delivery, non-delivery, acceptance, rejection, purchase, ownership,
possession, rental, lease, sublease, repossession, maintenance, repair,
alteration, modification, addition or substitution, storage, titling or
retitling, transfer of title, registration or re-registration,
redelivery, use, operation, condition, financing, refinancing, sale,
return or other application or disposition of the Units or any Unit or
Part thereof or any other Acquired Property or the imposition of any
Lien (or incurrence of any liability to refund or pay over any amount
as a result of any Lien) thereon,
(ii) Basic Rent or Supplemental Rent or the receipts or
earnings arising from or received with respect to the Units or any Unit
or any Part thereof, or any interest therein or any applications or
dispositions thereof,
(iii) any other amount paid or payable pursuant to the Lease,
the Certificates, the Notes or any other Operative Documents,
(iv) the Units or any Unit or any Part thereof or any other
Acquired Property or any interest therein,
(v) all or any of the Operative Documents, any other
documents contemplated thereby and any amendments and supplements
thereto, and
(vi) otherwise with respect to or in connection with the
transactions contemplated by the Operative Documents;
provided, that the indemnification obligation of this Section 7.2(a) shall not
apply to (1) Taxes which are based upon or measured by the Indemnitee's net
income or which are expressly in substitution for, or relieve Indemnitee from,
any actual Tax based upon or measured by Indemnitee's net income (other than any
such Taxes imposed by means of withholding); (2) Taxes characterized under local
law as franchise, net worth, or shareholder's capital (excluding, however, any
value-added, license, property or similar Taxes); and (3) if no Lease Event of
Default exists, Taxes based upon the voluntary transfer, assignment or
disposition by Lessor or any Participant of any interest in any of the Units,
the Certificates or the Notes (other than transfers pursuant to the exercise of
the Sale Option or the Purchase Option, or any other transfer to Lessee or
otherwise pursuant to the Lease). Notwithstanding the proviso of the preceding
sentence of this Section 7.2(a), Lessee shall pay or reimburse, and indemnify
and hold harmless,
(A) any Indemnitee against any Tax based on, or
measured by the net income of, such Indemnitee imposed by any
Federal, state or local taxing Authority in the United States
(or any taxing Governmental Authority in any other
jurisdiction in which such Indemnitee maintains its principal
place of business) to the extent such Tax would not have been
imposed if on the Delivery Date the Participants had advanced
funds directly to Lessee in the form of a loan secured by the
Units in an amount equal to the aggregate amount funded by the
Participants on the Delivery Date, with the debt service for
such loan equal to the rents provided under the Lease and a
principal balance due at the end of such term in an amount
equal to the Lease Balance remaining at the end of the Lease
Term, or
(B) any Indemnitee which is not incorporated under
the laws of the United States or a State thereof and which has
complied with Section 7.2(c), from any deduction or
withholding of any United States Federal income tax.
All of the indemnities contained in this Section 7.2 shall continue in
full force and effect notwithstanding the expiration or earlier termination of
the Lease and the other Operative Documents in whole or in part, including the
termination of the Lease with respect to any Unit or all of the Units, and are
expressly made for the benefit of, and shall be enforceable by, each Indemnitee.
(b) On or before October 1 of each year occurring during the Lease
Term, Lessee will deliver to Certificate Trustee and Agent an Officer's
Certificate stating that Lessee has filed all reports or returns and paid all
material Taxes which are due and payable and which Lessee is (i) required to
indemnify hereunder and (ii) permitted to so file and pay pursuant to Applicable
Laws and Regulations. If Lessee is not permitted by Applicable Laws and
Regulations to file any report or return required to be made with respect to any
Tax with respect to which Lessee is required to indemnify hereunder, Lessee
shall prepare such reports or returns for signature by Agent, Certificate
Trustee or the applicable Participant and shall forward the same, together with
immediately available funds for payment of any Tax due, to Agent, Certificate
Trustee or such Participant, at least ten (10) days in advance of the date such
payment is to be made. Upon written request, Lessee shall furnish Agent,
Certificate Trustee or any Participant with copies of all reports, returns, paid
receipts or other appropriate evidence of payment for all Taxes paid by Lessee
pursuant to this Section 7.2.
(c) At least five (5) Business Days prior to the first date on which
any payment is due on any Note or Certificate for the account of any Participant
not incorporated under the laws of the United States or a State thereof, such
Participant agrees that it will have delivered to each of Lessee and Agent two
duly completed copies of United States Internal Revenue Service Form 1001 or
4224, certifying in the case of a Form 1001 that such Participant is entitled to
receive payments under the Operative Documents without deduction or withholding
of any United States Federal income taxes, or at a reduced rate, if applicable.
Each Participant which so delivers a Form 1001 or 4224 further undertakes to
deliver to each of Lessee and Agent two additional copies of such form (or a
successor form) on or before the date that such form expires (currently, three
successive calendar years for Form 1001 and one calendar year for Form 4224) or
becomes obsolete or after the occurrence of any event requiring a change in the
most recent forms so delivered by it, and such amendments thereto or extensions
or renewals thereof as may be reasonably requested by Lessee or Agent, in each
case certifying that such Participant is entitled to receive payments under the
Operative Documents without deduction or withholding of any United States
Federal income taxes, unless an event (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 Participant from duly completing and delivering any such form with
respect to it and such Participant advises Lessee and Agent that it is not
capable of receiving payments without any withholding of United States Federal
income tax.
Section 7.3. Excessive Use Indemnity. In the event that at the end of
the Lease Term: (a) Lessee elects the Sale Option and (b) after paying to Agent
any amounts due under Section 9.1(b) of the Lease, Proceeds and the Applicable
Percentage Amount, the Lease Balance shall not have been reduced to zero, then
Lessee shall promptly pay over to Agent the shortfall unless Lessee delivers a
report from an independent appraiser in form and substance satisfactory to the
Required Participants which establishes that the decline in value in the Units
from the aggregate amount anticipated for such date in the Appraiser's report
delivered with respect to each Unit on the Delivery Date was not due to the
excessive use of any Unit, failure to maintain any Unit, modifications or
alteration which reduce the value of any Unit, any adverse change in the
environmental condition of any Unit, any defect or exception to title of any
Unit or any other cause or condition within the power of Lessee to control or
affect, differing from ordinary wear and tear.
Section 7.4. Gross Up. If an Indemnitee shall not be entitled to a
corresponding and equal deduction with respect to any payment or Tax which
Lessee is required to pay or reimburse under any other provision of this Article
VII (each such payment or reimbursement under this Article VII, an "original
payment") and which original payment constitutes income to such Indemnitee, then
Lessee shall pay to such Indemnitee on demand the amount of such original
payment on a gross-up basis such that, after subtracting all Taxes imposed on
such Indemnitee with respect to such original payment by Lessee (including any
Taxes otherwise excluded from the indemnification provided under Section 7.2 and
assuming for this purpose that such Indemnitee was subject to taxation at the
highest Federal, state or local marginal rates applicable to widely held
corporations for the year in which such income is taxable), such payments shall
be equal to the original payment to be received (net of any credits, deductions
or other tax benefits then actually recognized that arise from the payment by
such Indemnitee of any amount, including taxes, for which the payment to be
received is made).
Section 7.5. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank regulator or
other Governmental Authority ("Change in Law") affects or would affect the
amount of capital required or expected to be maintained by any Participant
directly or by its parent company (other than any change by way of imposition of
or increase in reserve requirements included in the calculation of the LIBO Rate
or in respect of the assessment rate payable by any Participant to the FDIC for
insuring U.S. deposits) and such Participant determines (in its sole and
absolute discretion) that the rate of return on it or its parent's capital as a
consequence of any Funding made by such Participant hereunder to pay its share
of the Purchase Price is reduced to a level below that which such Participant or
its parent could have achieved but for the occurrence of any such circumstances,
then, in any such case, upon written notification from time to time by such
Participant to Lessee, Lessee shall, within five (5) Business Days following
receipt of the statement referred to in the next sentence, pay directly to such
Participant, as Supplemental Rent, additional amounts sufficient to compensate
Participant or its parent for such reduction in rate of return (subject to
Section 7.4). A statement of a Participant as to any such additional amount or
amounts (including calculations thereof in reasonable detail) and the reasons
therefor shall, in the absence of manifest error, be conclusive and binding on
Lessee. In determining such amount, each Participant shall use any method of
averaging or attribution that it (in its reasonable discretion) shall deem
applicable.
Section 7.6. LIBO Rate Illegal, Unavailable or Impracticable. If any
Participant shall determine in good faith (which determination shall, upon
notice thereof to Lessee, be conclusive and binding on Lessee) that
(a) a change in law makes it unlawful, or the central bank or
other Governmental Authority asserts that it is unlawful, for such
Participant to make, continue or maintain any amount of such
Participant's investment in the Notes or Certificates on a LIBO Rate
basis,
(b) deposits in Dollars (in the applicable amounts) are not
being offered to such Participant in the relevant market for the
applicable Payment Period, or that by reason of circumstances affecting
the interbank eurodollar market adequate and reasonable means do not
exist for ascertaining the applicable LIBO Rate, or
(c) the LIBO Rate, as determined by Agent, will not
adequately and fairly reflect the cost to such Participant of
maintaining or funding its investments for the applicable Payment
Period,
then the obligations of such Participant to make, continue or maintain any such
investment shall, upon such determination, forthwith be suspended until such
Participant shall notify Lessee that such circumstances no longer exist, and all
Basic Rent (or Interest and Yield) allocable to such Participant shall
automatically be determined on a Alternate Base Rate basis beginning on the next
immediately succeeding Payment Date with respect thereto or sooner, if required
by such law, assertion or determination.
Section 7.7. Funding Losses. Lessee agrees to reimburse any Participant
for any loss or expense incurred (including any loss or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Participant to make, continue or maintain any portion of its investment in
any Note or Certificate on a LIBO Rate basis) as a result of (i) the failure of
the transaction contemplated by Article II to occur on or before the Delivery
Date specified in the Delivery Date Notice or (ii) any payment of all or any
portion of the Lease Balance for any reason on a date other than the Payment
Date when such Lease Balance was scheduled to be paid. Such Participant shall
promptly notify Lessee in writing of the amount of any claim under this Section
7.7, the reason or reasons therefor and the additional amount required fully to
compensate such Participant for such loss or expense. Such written notice (which
shall include calculations in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on Lessee.
Section 7.8. Actions of Affected Participants. Each Participant shall
use reasonable efforts (including reasonable efforts to change the booking
office for this transaction) to avoid or minimize any amounts which might
otherwise be payable pursuant to Sections 7.5 and 7.6; provided, however, that
such efforts shall not be deemed by such Participant, in its sole discretion, to
be disadvantageous to it. In the event that such reasonable efforts are
insufficient to avoid or minimize such amounts that might be payable pursuant to
Sections 7.5 and 7.6, then such Participant (the "Affected Participant") shall
use its reasonable efforts to transfer to any other Participant approved by
Lessee (which itself is not then an Affected Participant) its Notes and/or
Certificates; provided, that such transfer shall not be deemed by such Affected
Participant, in its reasonable sole discretion, to be disadvantageous to it
(other than the economic disadvantage of ceasing to be a Participant). In the
event that the Affected Participant is unable, or otherwise is unwilling, to use
its reasonable efforts to so transfer its rights and obligations, Lessee may
designate an alternate financial institution to purchase the Affected
Participant's Notes and Certificates and, subject to the provisions of Sections
6.3 and 7.7, the Affected Participant shall transfer its rights and obligations
to such alternate financial institution and such alternate financial institution
shall become a Participant hereunder; provided that the costs of such transfer
to either another Participant or an alternate financial institution shall be
borne by Lessee.
ARTICLE VIII
AGENT
Section 8.1. Appointment of Agent; Powers and Authorization to Take
Certain Actions. (a) Each Participant irrevocably appoints and authorizes First
Security Trust Company of Nevada to act as its agent hereunder, with such powers
as are specifically delegated to Agent by the terms hereof, together with such
other powers as are reasonably incidental thereto. Each Participant authorizes
and directs Agent to, and Agent agrees for the benefit of the Participants,
that, on the Delivery Date it will accept the documents described in Article III
of this Participation Agreement. Agent accepts the agency hereby created
applicable to it and agrees to receive all payments and proceeds pursuant to the
Operative Documents and disburse such payments or proceeds in accordance with
the Operative Documents. Agent shall have no duties or responsibilities except
those expressly set forth in the Loan Agreement and this Participation
Agreement. Agent shall not be responsible to any Participant (or to any other
Person): (i) for any recitals, statements, representations or warranties of any
party contained in the Loan Agreement, this Participation Agreement, or in any
certificate or other document referred to or provided for in, or received by it
under, the Operative Documents, other than the representations and warranties
made by Agent in Section 4.4, or (ii) for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of the Units, the Lessee Collateral
or the Lessor Collateral or the title thereto (subject to Agent's obligations
under Section 4.4) or of the Loan Agreement or any other document referred to or
provided for therein or (iii) for any failure by any Lessee, Certificate Trustee
or any other third party (other than Agent) to perform any of its obligations
under any Operative Document. Agent may employ agents, trustees or
attorneys-in-fact, may vest any of them with any property, title, right or power
deemed necessary for the purposes of such appointment and shall not be
responsible for the negligence or misconduct of any of them selected by it with
reasonable care. Except as provided for in Section 8.1(c) below, neither Agent
nor any of its directors, officers, employees or agents shall be liable or
responsible for any action taken or omitted to be taken by it or them hereunder,
or in connection herewith.
(b) Agent shall not have any duty or obligation to manage, control,
use, operate, store, lease, sell, dispose of or otherwise deal with the Units,
the Lessee Collateral or the Lessor Collateral, or to otherwise take or refrain
from taking any action under, or in connection with, this Participation
Agreement or any related document to which Agent is a party, except as expressly
provided by the terms hereof, and no implied duties of any kind shall be read
into any Operative Document against Agent. The permissive right of Agent to take
actions enumerated in this Participation Agreement or any other Operative
Document shall never be construed as a duty, unless Agent is instructed or
directed to exercise, perform or enforce one or more rights by the Required
Participants (provided that Agent has received indemnification reasonably
satisfactory to it). Subject to Section 8.1(c) below, no provision of the
Operative Documents shall require Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its
obligations under the Operative Documents, or in the exercise of any of its
rights or powers thereunder. It is understood and agreed that the duties of
Agent are ministerial in nature.
(c) Except as specifically provided herein, Agent is acting hereunder
solely as agent and, except as specifically provided herein, is not responsible
to any party hereto in its individual capacity, except with respect to any claim
arising from Agent's gross negligence or willful misconduct, or its negligence
in the handling of funds or any breach of a representation or covenant made in
its individual capacity.
(d) Agent may accept deposits from, lend money to and otherwise deal
with Lessee or any of its Affiliates with the same rights as it would have if it
were not the named Agent hereunder.
Section 8.2. Reliance. Agent may rely upon, and shall not be bound or
obligated to make any investigation into the facts or matters stated in, any
certificate, notice or other communication (including any communication by
telephone, telecopy, telex, telegram or cable) reason ably believed by it to be
genuine and correct and to have been made, signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by Agent with due care
(including any expert selected by Agent to aid Agent in any calculations
required in connection with its duties under the Operative Documents).
Section 8.3. Action upon Instructions Generally. Subject to Sections
8.4 and 8.6, upon written instructions of the Required Participants, Agent
shall, on behalf of the Participants, give such notice or direction, exercise
such right, remedy or power hereunder or in respect of the Units, and give such
consent or enter into such amendment to any document to which it is a party as
Agent as may be specified in such instructions. Agent shall deliver to each
Participant a copy of each notice, report and certificate received by Agent
pursuant to the Operative Documents. Agent shall have no obligation to
investigate or determine whether there has been a Lease Event of Default or a
Lease Default. Agent shall not be deemed to have notice or knowledge of a Lease
Event of Default or Lease Default unless a Responsible Officer of Agent is
notified in writing of such Lease Event of Default or Lease Default; provided
that Agent shall be deemed to have been notified in writing of any failure of
Lessee to pay Rent in the amounts and at the times set forth in Article IV of
the Lease. If Agent receives notice of a Lease Event of Default, Agent shall
give prompt notice thereof, at Lessee's expense, to each Participant. Subject to
Sections 8.4, 8.6 and 9.5, Agent shall take action or refrain from taking action
with respect to such Lease Event of Default as directed by the Required
Participants or, in the case of a Payment Default, as directed by any
Participant; provided that, unless and until Agent receives such directions,
Agent may refrain from taking any action with respect to such Lease Event of
Default or Payment Default. Prior to the date the Lease Balance shall have
become due and payable by acceleration pursuant to Section 8.2 of the Lease, the
Required Participants may deliver written instructions to Agent to waive, and
Agent shall waive pursuant thereto, any Lease Event of Default and its
consequences; provided that in the absence of written instructions from all
Participants, Agent shall not waive any: (i) Payment Default, or (ii) covenant
or provision which, under Section 9.5, cannot be modified or amended without the
consent of all Participants. As to any matters not expressly provided for by
this Participation Agreement, Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
signed by the Required Participants and such instructions of the Required
Participants and any action taken or failure to act pursuant thereto shall be
binding on each Participant.
Section 8.4. Indemnification. Each Participant shall reimburse and hold
Agent harmless, ratably in accordance with its Commitment at the time the
indemnification is required to be given, (but only to the extent that any such
indemnified amounts have not in fact been paid to Agent by, or on behalf of,
Lessee in accordance with Section 7.1) from any and all claims, losses, damages,
obligations, penalties, liabilities, demands, suits, judgments, or causes of
action, and all legal proceedings, and any reasonable costs or expenses in
connection therewith, including allocated charges, costs and expenses of
internal counsel of Agent and all other reasonable attorneys' fees and expenses
incurred by Agent, in any way relating to or arising in any manner out of: (i)
any Operative Document, the enforcement hereof or thereof or the consummation of
the transactions contemplated thereby, or (ii) instructions from the Required
Participants (including, without limitation, the costs and expenses that Lessee
is obligated to and does not pay hereunder, but excluding normal administrative
costs and expenses incident to the performance by Agent of its agency duties
hereunder other than materially increased administrative costs and expenses
incurred as a result of a Lease Event of Default); provided that no Participant
shall be liable for any of the foregoing to the extent they arise from (a) the
gross negligence or willful misconduct of Agent, (b) the inaccuracy of any
representation or warranty or breach of any covenant given by Agent in Section
4.4 or in the Loan Agreement, (c) in the case of Agent's handling of funds, the
failure to act with the same care as Agent uses in handling its own funds or (d)
any taxes, fees or other charges payable by Agent based on or measured by any
fees, commissions or compensation received by it for acting as Agent in
connection with the transactions contemplated by the Operative Documents.
Section 8.5. Independent Credit Investigation. Each Participant by
entering into this Participation Agreement agrees that it has, independently and
without reliance on Agent or Arranger or any other Participant and based on such
documents and information as it has deemed appropriate, made its own credit
analysis of Lessee and its own decision to enter into this Participation
Agreement and each of the other Operative Documents to which it is a party and
that it will, independently and without reliance upon Agent, Arranger or any
other Participant and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking action under this Participation Agreement and any related documents to
which it is a party. Agent shall not be required to keep itself informed as to
the performance or observance by Lessee of any other document referred to
(directly or indirectly) or provided for herein or to inspect the properties or
books of Lessee. Except for notices or statements which Agent is expressly
required to give under this Participation Agreement and for notices, reports and
other documents and information expressly required to be furnished to Agent
alone (and not also to each Participant and the Certificate Trustee, it being
understood that Agent shall forward copies of same to each Participant and the
Certificate Trustee) hereunder or under any other Operative Document, Agent
shall not have any duty or responsibility to provide any Participant with copies
of notices or with any credit or other information concerning the affairs,
financial condition or business of Lessee (or any of its Affiliates) that may
come into the possession of Agent or any of its Affiliates.
Section 8.6. Refusal to Act. Except for notices and actions expressly
required of Agent hereunder and except for the performance of its covenants in
Section 4.4, Agent shall in all cases be fully justified in failing or refusing
to act unless (a) it is indemnified to its reasonable satisfaction by the
Participants against any and all liability and reasonable expense which may be
incurred by it by reason of taking or continuing to take any such action
(provided that such indemnity shall be subject to each of the limitations set
forth at Section 8.4, it being understood that no action taken by Agent in
accordance with the instructions of the Required Participants shall be deemed to
constitute any such matter) and (b) it is reasonably satisfied that such action
is not contrary to any Operative Document or to any Applicable Laws and
Regulations.
Section 8.7. Resignation or Removal of Agent; Appointment of Successor.
Subject to the appointment and acceptance of a successor Agent as provided
below, Agent may resign at any time by giving notice thereof to each Certificate
Trustee and Lessee or may be removed at any time by written notice from the
Required Participants. Upon any such resignation or removal, the Required
Participants at the time of the resignation or removal shall have the right to
appoint (so long as no Lease Event of Default is continuing, with the prior
written consent of Lessee) a successor Agent which shall be a financial
institution having a combined capital and surplus of not less than $500,000,000.
If, within 30 calendar days after the retiring Agent's giving of notice of
resignation or receipt of a written notice of removal, a successor Agent is not
so appointed and does not accept such appointment, then the retiring or removed
Agent may appoint a successor Agent and transfer to such successor Agent all
rights and obligations of the retiring Agent. Such successor Agent shall be a
financial institution having combined capital and surplus of not less than
$500,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Agent and the retiring or removed Agent shall be discharged from duties
and obligations as Agent thereafter arising hereunder and under any related
document. If the retiring Agent does not appoint a successor, any Participant
shall be entitled to apply to a court of competent jurisdiction for such
appointment, and such court may thereupon appoint a successor to act until such
time, if any, as a successor shall have been appointed as above provided.
Section 8.8. Separate Agent. The Required Participants may, and if they
fail to do so at any time when they are so required, Agent may, for the purpose
of meeting any legal requirements of any jurisdiction in which the Units, the
Lessee Collateral or the Lessor Collateral may be located and, so long as no
Lease Event of Default has occurred and is continuing, with the prior written
consent of Lessee, appoint one or more individuals or corporations either to act
as co-agent jointly with Agent or to act as separate agent of all or any part of
the Units, the Lessee Collateral or the Lessor Collateral, and vest in such
individuals or corporations, in such capacity, such title to such Units, the
Lessee Collateral or the Lessor Collateral or any part thereof, and such rights
or duties as Agent may consider necessary or desirable. Agent shall not be
required to qualify to do business in any jurisdiction where it is not now so
qualified. Agent shall execute, acknowledge and deliver all such instruments as
may be required by any such co-agent or separate agent more fully confirming
such title, rights or duties to such co-agent or separate agent. Upon the
acceptance in writing of such appointment by any such co-agent or separate
agent, it, she or he shall be vested with such interest in the Units, the Lessee
Collateral or the Lessor Collateral or any part thereof, and with such rights
and duties, not inconsistent with the provisions of the Operative Documents, as
shall be specified in the instrument of appointment, jointly with Agent (except
insofar as local law makes it necessary for any such co-agent or separate agent
to act alone), subject to all terms of the Operative Documents. Any co-agent or
separate agent, to the fullest extent permitted by legal requirements of the
relevant jurisdiction, at any time, by an instrument in writing, shall
constitute Agent its attorney-in-fact and agent, with full power and authority
to do all acts and things and to exercise all discretion on its behalf and in
its name. If any co-agent or separate agent shall die, become incapable of
acting, resign or be removed, the interest in the Units, the Lessee Collateral
and the Lessor Collateral and all rights and duties of such co-agent or separate
agent shall, so far as permitted by law, vest in and be exercised by Agent,
without the appointment of a successor to such co-agent or separate agent.
Section 8.9. Termination of Agency. The agency created hereby shall
terminate upon the final disposition by Agent of all Units, the Lessee
Collateral and the Lessor Collateral and the final distribution by Agent of all
monies or other property or proceeds received pursuant to the Lease in
accordance with their terms; provided, that at such time Lessee shall have
complied fully with all the terms hereof.
Section 8.10. Compensation of Agent. Lessee shall pay Agent its
reasonable fees, costs and expenses for the performance of Agent's obligations
hereunder (including the reasonable fees and expenses of its counsel).
Section 8.11. Limitations. It is expressly understood and agreed by and
among the parties hereto that, except as otherwise provided herein or in the
other Operative Documents: (a) this Participation Agreement and the other
Operative Documents to which Agent is a party are executed by Agent, not in its
individual capacity (except with respect to the representations and covenants of
Agent in Section 4.4), but solely as Agent under the Operative Documents in the
exercise of the power and authority conferred and vested in it as such Agent;
(b) each and all of the undertakings and agreements herein made on the part of
Agent are each and every one of them made and intended not as personal
undertakings and agreements by Agent, or for the purpose or with the intention
of binding Agent personally, unless expressly provided otherwise; (c) actions to
be taken by Agent pursuant to its obligations under the Operative Documents may,
in certain circumstances, be taken by Agent only upon specific authority of the
Participants; (d) nothing contained in the Operative Documents shall be
construed as creating any liability on Agent, individually or personally, or any
incorporator or any past, present or future subscriber to the capital stock of,
or stockholder, officer or director, employee or agent of, Agent to perform any
covenants either express or implied contained herein, all such liability, if
any, being expressly waived by the other parties hereto and by any Person
claiming by, through or under them; and (e) so far as Agent, individually or
personally, is concerned, the other parties hereto and any Person claiming by,
through or under them shall look solely to the Units, the Lessee Collateral, the
Lessor Collateral and Lessee for the performance of any obligation under any of
the instruments referred to herein; provided, however, that nothing in this
Section 8.11 shall be construed to limit in scope or substance the general
corporate liability of Agent in respect of its gross negligence or willful
misconduct, negligence in the handling of funds or for those representations,
warranties and covenants of Agent in its individual capacity set forth herein or
in any of the other agreements contemplated hereby.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Survival of Agreements. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Operative Documents, and the parties' obligations under any and all thereof,
shall survive the execution and delivery and the termination or expiration of
this Agreement and any of the Operative Documents, the transfer of the interest
in the Units as provided herein or in any other Operative Documents, any
disposition of any interest of Certificate Trustee in the Units, the purchase
and sale of the Notes or Certificates, payment therefor and any disposition
thereof and shall be and continue in effect notwithstanding any investigation
made by any party hereto or to any of the other Operative Documents and the fact
that any such party may waive compliance with any of the other terms, provisions
or conditions of any of the Operative Documents.
Section 9.2. No Broker, etc. Except for Lessee's dealing with Banc of
America Leasing & Capital, LLC, as Arranger, each of the parties hereto
represents to the others that it has not retained or employed any arranger,
broker, finder or financial advisor to act on its behalf in connection with this
Agreement, nor has it authorized any arranger, broker, finder or financial
adviser retained or employed by any other Person so to act, nor has it incurred
any fees or commissions to which Certificate Trustee, Agent or any Participant
might be subjected by virtue of their entering into the transactions
contemplated by this Agreement. Any party who is in breach of this
representation shall indemnify and hold the other parties harmless from and
against any liability arising out of such breach of this representation.
Section 9.3. Notices. Unless otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to have been given: (i) in the case of notice by letter,
the earlier of when delivered to the addressee by hand or courier if delivered
on a Business Day and, if not delivered on a Business Day, the first Business
Day thereafter or on the third Business Day after depositing the same in the
mails, registered or certified mail, postage prepaid, return receipt requested,
and (ii) in the case of notice by facsimile or bank wire, when receipt is
confirmed if delivered on a Business Day and, if not delivered on a Business
Day, the first Business Day thereafter, addressed as provided on Schedule II
hereto, or to such other address as any of the parties hereto may designate by
written notice.
Section 9.4. Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement.
Section 9.5. Amendments. No Operative Document nor any of the terms
thereof may be terminated, amended, supplemented, waived or modified without the
written agreement or consent of Certificate Trustee, Agent, Lessee and the
Required Participants; provided, however, that Section 9.15 hereof may not be
terminated, amended, supplemented, waived or modified without the written
agreement or consent of the Arranger; and provided, further, that such
termination, amendment, supplement, waiver or modification shall require the
written agreement or consent of each Participant if such termination, amendment,
supplement, waiver or modification would:
(a) modify any of the provisions of this Section 9.5, change
the definition of "Required Participants", or modify or waive any
provision of any Operative Document requiring action by all of the
Participants, or release any collateral (except in connection with a
transaction permitted by the Operative Documents or approved by all of
the Participants);
(b) reduce the amount or change the time of payment of any
amount of principal owing or payable under any Note, Certificate or
Interest or Yield owing or payable on any Note or Certificate, modify
any of the provisions of Article III of the Loan Agreement or Article
III of the Trust Agreement, or modify the definition of "Interest Rate"
or "Yield Rate";
(c) modify, amend, waive or supplement any of the provisions
of Sections 5.6, 8.1(a), 8.1(c)(i) (to the extent such Section
8.1(c)(i) relates to Section 6.2 of the Lease), 8.1(c)(ii) or 10.1, or
the first paragraph of Section 6.1, in each case of the Lease;
(d) reduce, modify, amend or waive any indemnities in favor of any
Participant;
(e) reduce the amount or change the time of payment of Rent,
the Lease Balance, or Applicable Percentage Amount;
(f) modify any provision of any Operative Document that
expressly requires the unanimous consent of the Participants;
(g) consent to modification, amendment or waiver releasing
Lessee from its obligations to pay Rent, the Lease Balance, Proceeds or
the Applicable Percentage Amount or changing the absolute and
unconditional character of such obligations;
(h) permit the creation of any Lien on the Units, the Lessee
Collateral, the Lessor Collateral or the Trust Estate or any part
thereof except as permitted by the Operative Documents, or deprive any
Participant of the benefit of the security interest and lien secured by
the Units, the Lessee Collateral, the Lessor Collateral or the Trust
Estate in a manner not generally applicable to the other Participants;
or
(i) increase the Commitment of any Participant.
Lessee hereby agrees that it will not directly or indirectly (i) pay or
cause to be paid any fee or other remuneration or (ii) grant or permit the grant
of any Lien on any stock or assets of the Lessee or any of its Subsidiaries, in
each case, to any Participant in connection with, in exchange for, or as an
inducement to, such Participant's consent to any waiver in respect of, any
modification or amendment of, any supplement to, or any other consent or
approval under, any Operative Document unless such fee or other remuneration or
grant is offered on the same terms ratably to all Participants. Lessee will
offer and pay to the Participants any consideration offered or paid to other
creditors of Lessee for amendments or waivers of any obligation of Lessee.
Certain representations, warranties, covenants and events of default
contained in the Credit Agreement are set forth herein and in the other
Operative Documents. Upon any modification to any of such provisions, the
applicable Operative Document shall be correspondingly modified, with the prior
written consent of the Required Participants, upon the request of Lessee. In
connection with any such modification, Lessee shall pay to the Participants any
amendment fee paid to the Credit Agreement Banks in consideration for the
modification of the Credit Agreement.
Lessee hereby agrees that it will not request any amendment, waiver or
modification of any provision of the Operative Documents unless it concurrently
requests the same amendment, waiver or modification of the corresponding
provision of the Related Operative Documents.
Section 9.6. Headings, etc. The Table of Contents and headings of the
various Articles and Sections of this Agreement are for convenience of reference
only and shall not modify, define, expand or limit any of the terms or
provisions hereof.
Section 9.7. Parties in Interest. Except as expressly provided herein,
none of the provisions of this Agreement is intended for the benefit of any
Person except the parties hereto, their successors and permitted assigns.
Section 9.8. Governing Law. THIS 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 THAT
WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH
STATE.
Section 9.9. Payment of Transaction Costs and Other Costs.
(a) Transaction Costs. As and when any portion of Transaction Costs
becomes due and payable, such Transaction Costs shall be paid by Lessee as
Supplemental Rent.
(b) Continuing Expenses. The continuing fees, expenses and
disbursements (including reasonable counsel fees) of (i) Certificate Trustee, as
Lessor under the Lease and as trustee under the Trust Agreement with respect to
the administration of the Trust Estate, and (ii) Agent, under the Operative
Documents, shall be paid directly by Lessee as Supplemental Rent.
(c) Amendments, Supplements and Appraisal. Without limitation of the
foregoing, Lessee agrees to pay to the Participants, Certificate Trustee and
Agent all costs and expenses (including reasonable legal fees and expenses of
counsel to Agent, Certificate Trustee and the Participants) incurred by any of
them in connection with: (i) the considering, evaluating, investigating,
negotiating and entering into or giving or withholding of any amendments or
supplements or waivers or consents with respect to any Operative Document; (ii)
any Casualty or termination of the Lease or any other Operative Document; (iii)
the negotiation and documentation of any restructuring or "workout," whether or
not consummated, of any Operative Document; (iv) the enforcement of the rights
or remedies under the Operative Documents; or (v) any transfer by Certificate
Trustee or a Participant of any interest in the Operative Documents during the
continuance of a Lease Event of Default.
Section 9.10. Severability. Any provision of this Agreement that 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.
Section 9.11. Limited Liability of Certificate Trustee. The parties
hereto agree that the Bank, in its individual capacity, shall have no personal
liability whatsoever to Lessee, Agent, the Participants or any of their
respective successors and assigns for any Claim based on or in respect of this
Agreement or any of the other Operative Documents or arising in any way from the
transactions contemplated hereby or thereby; provided, however, that the Bank
shall be liable in its individual capacity (a) for its own willful misconduct or
gross negligence (or negligence in the handling of funds) and, to each
Participant for the breach of its obligations to the Participants in respect of
the Trust Agreement and the Trust Estate, (b) for liabilities that may result
from the incorrectness of any representation or warranty expressly made by it in
its individual capacity in Section 4.3 or a breach of its covenant in Section
6.2(a) hereof, or (c) for any Tax based on or measured by any fees, commission
or compensation received by it for actions contemplated by the Operative
Documents. The Bank (in its individual capacity and as Lessor, Borrower and
Certificate Trustee) shall have no responsibility for construction of the
Facility or for the accuracy, sufficiency or adequacy of any of the information
or documents submitted in connection with each Advance or upon Completion of the
Facility.
Section 9.12. Liabilities of the Participants. No Participant shall have
any obligation to any other Participant or to Lessee, Certificate Trustee or
Agent with respect to the transactions contemplated by the Operative Documents
except those obligations of such Participant expressly set forth in the
Operative Documents or except as set forth in the instruments delivered in
connection therewith, and no Participant shall be liable for performance by any
other party hereto of such other party's obligations under the Operative
Documents except as otherwise so set forth.
Section 9.13. Submission to Jurisdiction; Waivers. (a) Each party hereto
irrevocably and unconditionally:
(i) submits for itself and its property in any legal action
or proceeding relating to this Agreement or any other Operative
Document, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the United States
District Court for the Southern District of New York and of any New
York state court sitting in the Borough of Manhattan, and appellate
courts from any thereof;
(ii) consents that any such action or proceedings may be
brought in such courts, and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such party at its address set forth on Schedule II or at
such other address of which the other parties hereto shall have been
notified pursuant to Section 9.3; and
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction.
(b) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THE OPERATIVE
DOCUMENTS AND FOR ANY COUNTERCLAIM THEREIN.
Section 9.14. Reproduction of Documents. This Agreement, all documents
constituting an Appendix, Schedule or Exhibit hereto, and all documents relating
hereto received by a party hereto, including, without limitation: (a) consents,
waivers and modifications that may hereafter be executed; (b) documents received
by the Participants or Certificate Trustee in connection with the receipt and/or
acquisition of the Units; and (c) financial statements, certificates, and other
information previously or hereafter furnished to Certificate Trustee, Agent or
any Participant may be reproduced by the party receiving the same by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. Each of the parties hereto agrees and stipulates that, to
the extent permitted by 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 such party in the regular course of business) and that,
to the extent permitted by law, any enlargement, facsimile, or further
reproduction of such reproduction shall likewise be admissible in evidence.
Section 9.15. Role of Banc of America Leasing & Capital Group, LLC. Each
party hereto acknowledges hereby that it is aware of the fact that Banc of
America Leasing & Capital Group, LLC has acted as an "arranger" with respect to
the transactions contemplated by the Operative Documents. The parties hereto
acknowledge and agree that Arranger and its Affiliates, including Bank of
America National Association, have not made any representations or warranties
concerning, and that they have not relied upon Arranger as to, the tax,
accounting or legal characterization or validity of (i) the Operative Documents
or (ii) any aspect of the Overall Transaction. The parties hereto acknowledge
and agree that Arranger has no duties, express or implied, under the Operative
Documents in its capacity as Arranger. The parties hereto further agree that
Section 2.6, Section 2.11, Section 8.5, Section 9.2, Section 9.9(a) and this
Section 9.15 are for the express benefit of Arranger, and Arranger shall be
entitled to rely thereon as if it were a party hereto.
Section 9.16. Confidentiality. Lessee, Certificate Trustee, Agent and
each Participant agree that they will not disclose the terms of the Overall
Transaction without the prior written consent of the other parties and agrees to
take normal and reasonable precautions and exercise due care to maintain the
confidentiality of all information identified as "confidential" or "secret" by
Lessee and provided to it by Lessee or any Subsidiary, or by Agent or
Certificate Trustee on Lessee's behalf, under this Agreement or any other
Operative Document, and neither it nor any of its Affiliates shall use any such
information other than in connection with or in enforcement of this Agreement
and the other Operative Documents, except to the extent such information (i) was
or becomes generally available to the public other than as a result of
disclosure by Agent, Certificate Trustee or such Participant, or (ii) was or
becomes available on a non-confidential basis from a source other than Lessee,
provided that such source is not bound by a confidentiality agreement with
Lessee known to Agent, Certificate Trustee or such Participant; provided
however, that Agent, Certificate Trustee or any Participant may disclose such
information (A) at the request or pursuant to any requirement of any
Governmental Authority to which Agent, Certificate Trustee or such Participant
is subject or in connection with an examination of Agent, Certificate Trustee or
such Participant by any such authority; (B) pursuant to subpoena or other court
process; (C) when required to do so in accordance with the provisions of any
applicable Requirement of Law; (D) to the extent reasonably required in
connection with any litigation or proceeding to which Agent, Certificate
Trustee, any Participant or their respective Affiliates may be party; (E) to the
extent reasonably required in connection with the exercise of any remedy
hereunder or under any other Operative Document; (F) to Agent's, Certificate
Trustee's or such Participant's independent auditors and other professional
advisors; (G) to any Affiliate of Agent, Certificate Trustee or such
Participant, or to any Participation Holder or assignee or transferee, actual or
potential, provided that such Affiliate, Participation Holder or assignee or
transferee agrees to keep such information confidential to the same extent
required of the Participants hereunder, and (H) as to Agent, Certificate Trustee
or any Participant, as expressly permitted under the terms of any other document
or agreement regarding confidentiality to which Lessee is party or is deemed
party with Agent, Certificate Trustee or such Participant.
Lessee hereby identifies the Equipment List and any future updates
thereof as confidential information pursuant to the foregoing provisions of this
Section 9.16.
Section 9.17. Lessee Obligations. Notwithstanding anything to the
contrary herein, compliance with the covenants set forth in Section 5.1 through
5.38, inclusive, shall not be required of Lessee prior to the Effective Date.
Section 9.18. Acquired Property. For all purposes of the Operative
Documents, any purchase, sale, replacement, substitution or return of any Unit
or Units shall include the other Acquired Property which relates thereto.
Section 9.19. Effective Date. Notwithstanding the dating of this Agreement
and certain other Operative Documents as of December 15, 1999, the transactions
contemplated hereby shall be effective on the Delivery Date.
[SIGNATURE PAGES FOLLOW]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first above written.
Lessee: THERMOGAS L.L.C., as Lessee
By:__________________________________________________
Name:
Title:
Lessee Guarantor: THE WILLIAMS COMPANIES, INC.
By:__________________________________________________
Name:
Title:
<PAGE>
Certificate Trustee: FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in its
individual capacity except as expressly stated
herein, but solely as Certificate Trustee
By:
Name:
Title:
<PAGE>
Agent: FIRST SECURITY TRUST COMPANY OF NEVADA, not in its
individual capacity except as expressly stated
herein, but solely as Agent
By:
Name:
Title:
<PAGE>
Certificate Purchasers: BANC OF AMERICA LEASING & CAPITAL, LLC, as Certificate
Purchaser
By:
Name:
Title:
<PAGE>
Lenders: BANC OF AMERICA LEASING & CAPITAL, LLC, as Lender
By:
Name:
Title:
<PAGE>
SCHEDULE I-A
CERTIFICATE PURCHASER COMMITMENTS AND COMMITMENT PERCENTAGES
CERTIFICATE PURCHASER COMMITMENT PERCENTAGE COMMITMENT
Banc of America Leasing & Capital, LLC 100% $5,062,500
<PAGE>
SCHEDULE I-B
LENDER COMMITMENTS AND COMMITMENT PERCENTAGES
LENDER COMMITMENT PERCENTAGE
COMMITMENT
Banc of America Leasing & Capital, LLC
100% $129,937,500
CLASS OF NOTES PERCENTAGE OF PURCHASE PRICE
AGGREGATE AMOUNT
Class A 82.50%
$111,375,000
Class B 13.75%
$ 18,562,500
<PAGE>
SCHEDULE II
NOTICE INFORMATION AND PAYMENT INSTRUCTIONS
LESSEE
Thermogas L.L.C.
4100 One Williams Center
Tulsa, Oklahoma 74172
Contact: Phil Wright, Senior Vice President, Enterprise Development and Planning
Telephone: (918) 573-3310
Fax: (918) 573-4512
CERTIFICATE TRUSTEE
First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Contact: Corporate Trust Department
Telephone: (801) 246-5630
Fax: (801) 246-5053
Payment Instructions
First Security Bank, N.A.
ABA No. 124000012
Acct: 0510922115
Attn: Corporate Trust Services
Re: Ferrellgas - 36078
AGENT
First Security Trust Company of Nevada
79 South Main Street
Salt Lake City, Utah 84111
Contact: Corporate Trust Department
Telephone: (801) 246-5630
Fax: (801) 246-5053
Payment Instructions
First Security Bank, N.A.
ABA No. 124000012
Acct: 0510922115
Attn: Corporate Trust Services
Re: Ferrellgas - 36079
CERTIFICATE PURCHASER
Banc of America Leasing & Capital, LLC
2059 Northlake Parkway
Tucker, Georgia 30084
Contact: Rena Wilson
Telephone: (770) 270-8421
Payment Instructions
Bank of America, N.A.
Atlanta, Georgia
ABA No.: 061000052
Account No.: 01-022-13-569
Account Name: BALLC
Reference: Ferrellgas
Attention: Rana Wilson
LENDER
Banc of America Leasing & Capital, LLC
2059 Northlake Parkway
Tucker, Georgia 30084
Contact: Rena Wilson
Telephone: (770) 270-8421
Payment Instructions
Bank of America, N.A.
Atlanta, Georgia
ABA No.: 061000052
Account No.: 01-022-13-569
Account Name: BALLC
Reference: Ferrellgas
Attention: Rana Wilson
<PAGE>
SCHEDULE III
UNITS
<PAGE>
SCHEDULE 3.1(o)
FILINGS AND RECORDINGS
(1) UCC-1 Financing Statement naming Lessee as debtor, Certificate
Trustee as secured party and Agent as assignee of secured party and covering the
Units and the other Lessee Collateral, to be filed with the Secretary of State
of the States of Ohio, Wisconsin, Indiana, Minnesota, Michigan, Illinois and
Missouri.
(2) UCC-1 Financing Statement naming Certificate Trustee as debtor and
Agent as secured party and covering the Units and the other Lessor Collateral,
to be filed with the State Corporation Commission of the State of Utah and the
Secretaries of State of Ohio, Wisconsin, Indiana, Minnesota, Michigan, and
Illinois.
<PAGE>
SCHEDULE 4.1(g)
ERISA MATTERS
Ferrellgas, Inc. Single Employer Defined Benefit Plan. The Ferrellgas, Inc.
Single Employer Benefit Plan has a projected benefit obligation of no more than
$3,179,000. The Ferrellgas, Inc. Single Employer Benefit Plan is currently being
funded in accordance with ERISA.
Lessee makes annual contribution of approximately $107,340 to Central
States Pension Fund and the Western Conference of Teamsters Fund on behalf of
approximately 48 employees covered by five collective bargaining arrangements.
<PAGE>
SCHEDULE 4.1(p)
SUBSIDIARIES AND AFFILIATES
(a) Subsidiaries:
None.
Affiliates:
o Ferrellgas Partners L.P. - Limited Partner of Ferrellgas, L.P.
o Ferrellgas Partners Finance Corp. - wholly-owned subsidiary of
Ferrellgas Partners, L.P.
o Ferrellgas, Inc. - General Partner of Ferrellgas, L.P.
o Ferrellgas Acquisition Company, LLC
o Ferrellgas Propane, Inc.
o Ferrellgas Companies, Inc.
(b) None.
<PAGE>
SCHEDULE 5.21
EXISTING INDEBTEDNESS
<PAGE>
FORM OF TRANSFER DOCUMENTATION
ASSUMPTION AGREEMENT
Dated as of December 15, 1999
of
FERRELLGAS, LP
Re: Lease Agreement and Related Operative Documents
Dated as of December 15, 1999
of
Thermogas L.L.C.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
SECTION HEADING PAGE
<S> <C>
Recitals..........................................................................................................1
SECTION 1. ASSUMPTION.............................................................................1
SECTION 2. REPRESENTATIONS AND WARRANTIES OF LESSEE...............................................2
SECTION 3. CONDITIONS TO ASSUMPTION...............................................................4
SECTION 4. COVENANT OF LESSEE.....................................................................5
SECTION 6. MISCELLANEOUS..........................................................................6
Section 5.1. Notices................................................................................6
Section 5.2. Counterparts...........................................................................6
Section 5.3. Amendments.............................................................................6
Section 5.4. Headings, etc..........................................................................6
Section 5.5. Governing Law..........................................................................6
Section 5.6. Payment of Costs.......................................................................6
Section 5.7. Severability...........................................................................6
Section 5.8. Submission to Jurisdiction; Waivers....................................................7
Section 5.9. Successors and Assigns.................................................................7
Section 5.10. Further Assurances.....................................................................7
Signature.........................................................................................................8
</TABLE>
<PAGE>
ASSUMPTION AGREEMENT
ASSUMPTION AGREEMENT (this "Agreement"), dated as of December 15, 1999
of FERRELLGAS, LP, a Delaware limited partnership ("Lessee") and FERRELLGAS,
INC., a Delaware corporation and the general partner of Lessee ("General
Partner") for the benefit of the Agent, the Certificate Trustee, the Certificate
Purchasers and the Lenders (as defined below).
RECITALS
A. Capitalized terms not otherwise defined herein shall have the
meanings specified in Appendix 1 to the Participation Agreement (Thermogas
Company Trust No. 1999-A) dated as of December 15, 1999 (the "Participation
Agreement") among Thermogas L.L.C. ("Thermogas"), The Williams Companies, Inc.
("Williams"), First Security Bank, National Association, not in its individual
capacity except as expressly set forth therein but solely as Certificate Trustee
(the "Certificate Trustee"), First Security Trust Company of Nevada, as Agent
(the "Agent"), the Certificate Purchasers named on Schedule I-A thereto (the
"Certificate Purchasers") and the Lenders named on Schedule I-B thereto (the
"Lenders").
B. Pursuant to the Participation Agreement, the Lenders and the
Certificate Purchasers have financed the acquisition by the Certificate Trustee
of the Acquired Property.
C. Pursuant to the Lease, Certificate Trustee has leased the Acquired
Property to Thermogas on the terms and conditions set forth therein and in the
other Operative Documents.
D. The MLP has acquired all of the Member interests in Thermogas
pursuant to the Purchase Agreement dated as of November 7, 1999 among the MLP,
Lessee and Williams Natural Gas Liquids, Inc. and has contributed Thermogas to
Lessee pursuant to the Contribution and Conveyance Agreement
(such transactions being referred to collectively as the "Acquisition").
E. It is a condition to the Certificate Purchasers and the Lenders
entering into the transactions contemplated by the Participation Agreement that
Lessee assume all obligations of Thermogas under the Lease and the other
Operative Documents upon the consummation of the Acquisition, and Lessee, in
consideration of the Certificate Purchasers and the Lenders entering into such
transactions, is willing to assume such obligations pursuant hereto.
NOW, THEREFORE, in consideration of the premises and the benefits to
Lessee and in consideration of the Certificate Purchasers and the Lenders
entering into the transactions contemplated by the Participation Agreement and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Lessee agrees as follows:
SECTION 1. ASSUMPTION.
Subject to the terms of this Agreement, Lessee hereby irrevocably,
absolutely, unconditionally and expressly assumes (i) the due and punctual
payment of all Rent, including all Basic Rent, Supplemental Rent, Lease Balance,
Purchase Option Exercise Amount, Transaction Costs, Fees, indemnities, Interest,
Yield and all other amounts to be paid by Thermogas under or pursuant to the
Lease and the other Operative Documents to which Thermogas is a party in
accordance with the terms thereof, and (ii) the due and punctual observance and
performance of all covenants and agreements of Thermogas contained in the Lease
and the other Operative Documents. Lessee covenants and agrees that its
obligations and liabilities hereunder and under the Lease and the other
Operative Documents shall be those of a primary obligor and not a guarantor,
surety or other secondary party.
Upon such assumption, Lessee shall be deemed the "Lessee" for all
purposes of the Operative Documents and each reference therein to the "Lessee"
shall thereafter be deemed to mean Lessee and Lessee may exercise all rights and
powers, and shall perform all obligations, of the "Lessee" thereunder.
As of the date of the consummation of the Acquisition, the execution
and delivery of this Agreement by Lessee and fulfillment or waiver of the
conditions set forth in Section 3 (the "Effective Date"), Williams (and each of
its officers, directors, employees and agents) shall be released and discharged
from any and all agreements, obligations, undertakings and covenants under the
Lessee Guarantee and the Operative Documents to which it is a party. From and
after the Effective Date, the Agent, the Certificate Trustee and the
Participants shall look solely to Lessee, in accordance with this Agreement and
the Operative Documents, for performance of the Liabilities referred to in the
Lessee Guarantee (whether outstanding on the Effective Date or arising
thereafter).
General Partner hereby agrees to comply with all terms of the Operative
Documents applicable to the "General Partner".
SECTION 2. REPRESENTATIONS AND WARRANTIES OF LESSEE.
Lessee represents and warrants to the Agent, the Certificate Trustee
and each Participant that as of the date hereof and as of the date the
transactions contemplated hereby are consummated:
(a) Corporate or Partnership Existence and Power. Lessee:
(i) is a partnership duly organized, validly existing and in good standing
under the laws of the jurisdiction of its formation;
(ii) has the power and authority and all governmental
licenses, authorizations, consents and approvals to own its assets,
carry on its business as now being or as proposed to be conducted and
to execute, deliver, and perform its obligations under this Agreement;
(iii) is duly qualified as a foreign partnership and is
licensed and in good standing under the laws of each jurisdiction where
its ownership, lease or operation of property or the conduct of its
business requires such qualification or license or where the failure so
to qualify would have a Material Adverse Effect; and
(iv) is in compliance with all material Requirements of Law.
(b) Partnership Authorization; No Contravention. The execution,
delivery and performance by Lessee of this Agreement have been duly authorized
by all necessary partnership action on behalf of Lessee and all necessary
corporate action on behalf of the General Partner, and do not and will not:
(i) contravene the terms of any of the General Partner's or Lessee's
Organization Documents;
(ii) conflict with or result in any breach or contravention
of, or the creation of any Lien under, any document evidencing any
Contractual Obligation to which the General Partner or Lessee is a
party or any order, injunction, writ or decree of any Governmental
Authority to which such Person or its property is subject where such
conflict, breach, contravention or Lien could reasonably be expected to
have a Material Adverse Effect; or
(iii) violate any material Requirement of Law.
(c) Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with (a) the
execution, delivery or performance by, or enforcement against, Lessee of this
Agreement, or (b) the continued operation of Lessee's business as contemplated
to be conducted after the date hereof by the Operative Documents, except in each
case such approvals, consents, exemptions, authorizations or other actions,
notices or filings (i) as have been obtained, (ii) as may be required under
state securities or Blue Sky laws, (iii) as are of a routine or administrative
nature and are either (A) not customarily obtained or made prior to the
consummation of transactions such as the transactions described in clauses (a)
or (b) or (B) expected in the judgment of Lessee to be obtained in the ordinary
course of business subsequent to the consummation of the transactions described
in clauses (a) or (b), or (iv) that, if not obtained, could not reasonably be
expected to have a Material Adverse Effect.
(d) Binding Effect. This Agreement and, after giving effect to this
Agreement, the Lease and the other Operative Documents constitute the legal,
valid and binding obligations of Lessee, enforceable against Lessee in
accordance with their terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles relating to
enforceability.
(e) Litigation. There are no actions, suits, proceedings, claims or
disputes pending, or to the best knowledge of Lessee, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, against the General Partner, the MLP, Lessee or any of its
Subsidiaries or any of their respective properties which:
(i) purport to affect or pertain to this Agreement or any other Operative
Document or any of the transactions contemplated hereby or thereby; or
(ii) if determined adversely to Lessee or its Subsidiaries,
would reasonably be expected to have a Material Adverse Effect. No
injunction, writ, temporary restraining order or any order of any
nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution, delivery or performance
of this Agreement, or directing that the transactions provided for
herein not be consummated as herein provided.
(f) No Default. No Lease Default or Lease Event of Default exists or
would result from Lessee entering into this Agreement. Neither Lessee nor any
Affiliate of Lessee is in default under or with respect to any Contractual
Obligation in any respect which, individually or together with all such
defaults, could reasonably be expected to have a Material Adverse Effect, or
that would create a Lease Event of Default under Section 8.1(e) of the Lease.
(g) Security Interest. (i) Certificate Trustee has a valid and
enforceable Lien in the Units and the other Lessee Collateral free and clear of
all Liens other than Permitted Liens and, upon the filing of the items listed on
Schedule 3.1(o) of the Participation Agreement (as to Lessee), Certificate
Trustee will have a perfected first priority Lien of record in the Units and in
the other Lessee Collateral as against all Persons including Lessee and its
creditors, free and clear of all Liens other than Permitted Liens.
(ii) Agent has a valid and enforceable Lien in the Lessor
Collateral free and clear of all Liens other than Permitted Liens and,
upon the filing of the items listed on Schedule 3.1(o) of the
Participation Agreement (as to Lessee), Agent will have a perfected
first priority Lien of record in the Lessor Collateral as against all
Persons including Lessee, Certificate Trustee and their creditors, free
and clear of all Liens other than Permitted Liens.
(h) Chief Executive Office of Lessee. The principal place of business
and chief executive office, as such terms are used in Section 9-103(3) of the
UCC, of Lessee are each located at One Liberty Plaza, Liberty, Missouri 64068.
(i) Other Representations. The representations and warranties set forth
in Section 4.1 of the Participation Agreement are true and correct in all
material respects; provided that the representation set forth in Section 4.1(bb)
of the Participation Agreement is made to the best of Lessee's knowledge.
SECTION 3. CONDITIONS TO ASSUMPTION.
The transactions contemplated by this Agreement shall be effective on
the date that the following conditions precedent have been satisfied:
(a) Acquisition. The Agent, the Certificate Trustee and the
Participants shall have received evidence satisfactory to them of the
consummation of the Acquisition.
(b) Authorization, Execution and Delivery of Agreement. This Agreement
shall have been duly authorized, executed and delivered by Lessee, shall be in
full force and effect, shall be in form and substance satisfactory to each
Participant and an executed counterpart of each hereof shall have been received
by each of the Participants, the Agent and the Certificate Trustee.
(c) Proceedings. Each of the Participants, the Agent and the
Certificate Trustee shall have received such documents and certificates as it
may reasonably request to establish the authority of Lessee to enter into this
Agreement and the transactions contemplated hereby.
(d) Filings and Recordings. All filings or recordings enumerated and
described in Schedule 3.1(o) of the Participation Agreement (as to Lessee), to
perfect the rights, title and interest of the Certificate Trustee, the
Participants and the Agent intended to be created by the Operative Documents
shall have been made in the appropriate places or offices.
(e) Transaction Costs; Fees. Lessee shall have paid any fees and
expenses required to be paid pursuant to Section 5.6 to the extent invoices have
been received therefor.
(f) Opinions of Counsel. The Certificate Trustee, the Agent and the
Participants shall have received opinions of Bracewell & Patterson, L.L.P.,
special counsel to Lessee, in form and substance satisfactory to them, with
respect to this Agreement and the transactions contemplated hereby (including as
to the filings referred to in clause (d) above).
(g) Consents. All necessary consents, approvals and authorizations of,
and declarations, registrations and filings with, and Governmental Authority or
any other Person required in order to consummate the transactions contemplated
herein shall have been obtained or made and shall be in full force and effect.
(h) Proceedings Satisfactory, Etc. All proceedings taken in connection
with the transactions contemplated hereby and all documents relating thereto
shall be reasonably satisfactory to the Agent, the Certificate Trustee, each
Participant and their respective counsel, and each such Person shall have
received copies of such documents as they may reasonably request in connection
therewith, all in form and substance reasonably satisfactory to each such
Person.
SECTION 4. COVENANT OF LESSEE.
Lessee is also party to that certain Lease Intended as Security
(Ferrellgas, LP Trust No. 1999-A) dated as of December 1, 1999 (the "Ferrellgas
Lease") between Lessee and First Security Bank, National Association, not in its
individual capacity but solely as Certificate Trustee, as lessor. Lessee
covenants and agrees for the benefit of the Agent, the Certificate Trustee and
each Participant that the options set forth in Article IX of the Lease and
Article IX of the Ferrellgas Lease and Section 2.12 of the Participation
Agreement and Section 2.12 of the "Participation Agreement" referred to in the
Ferrellgas Lease will be exercised concurrently and that the exercise of any
such option under one such agreement is contingent on the corresponding option
being exercised under the other agreement, it being the intent of Lessee that
the exercise of such options shall operate in the same manner as if all of the
Units under the Lease and the Ferrellgas Lease were covered by one lease and
related operative documents.
SECTION 5. MISCELLANEOUS.
Section 5.1. Notices. All notices, request, demands or other communications
hereunder shall be delivered in accordance with and shall be deemed to have been
given as provided in Section 9.3 of the Participation Agreement. The address for
notices to Lessee is Ferrellgas, LP, One Liberty Plaza, Liberty, Missouri 64068
attention: Chief Financial Officer.
Section 5.2. Counterparts. This Agreement may be executed in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
agreement.
Section 5.3. Amendments. This Agreement and the terms hereof may not be
terminated, amended, supplemented, waived or modified without the written
agreement or consent of Certificate Trustee, Agent, Lessee and the Required
Participants
Section 5.4. Headings, etc. The Table of Contents and headings of the
various Sections of this Agreement are for convenience of reference only and
shall not modify, define, expand or limit any of the terms or provisions hereof.
Section 5.5. Governing Law. THIS 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 THAT
WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH
STATE.
Section 5.6. Payment of Costs. Lessee shall pay all fees and expenses,
including reasonable fees and expenses of counsel, of the Agent, the Certificate
Trustee and the Participants incurred in connection with the transactions
contemplated by this Agreement.
Section 5.7. Severability. Any provision of this Agreement that 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.
Section 5.8. Submission to Jurisdiction; Waivers. (a) Lessee irrevocably
and unconditionally:
(i) submits for itself and its property in any legal action
or proceeding relating to this Agreement or any other Operative
Document, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the United States
District Court for the Southern District of New York and of any New
York state court sitting in the Borough of Manhattan, and appellate
courts from any thereof;
(ii) consents that any such action or proceedings may be
brought in such courts, and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to Lessee at its address set forth in Section 5.1 or at such
other address of which the Agent, the Certificate Trustee and the
Participants shall have been notified pursuant to Section 9.3 of the
Participation Agreement; and
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction.
(b) LESSEE HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL
BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE
OPERATIVE DOCUMENTS AND FOR ANY COUNTERCLAIM THEREIN.
Section 5.9. Successors and Assigns. All representations, warranties,
covenants and agreements in this Agreement contained by or on behalf of Lessee
shall bind and inure to the benefit of the respective successors and assigns of
Lessee, the Agent, the Certificate Trustee and the Participants whether so
expressed or not. The provisions of this Agreement are intended to be for the
benefit of the Agent, the Certificate Trustee and the Participants, and shall be
enforceable by any such Person and its permitted successors and assigns.
Section 5.10. Further Assurances. Lessee covenants that it shall
cooperate with the Agent, the Certificate Trustee and the Participants and
execute such further instruments and documents as any such Person shall
reasonably request to carry out to such Person's satisfaction the transactions
contemplated by this Agreement.
<PAGE>
IN WITNESS WHEREOF, Lessee and General Partner have caused this
Agreement to be executed as of the day and year first above written.
FERRELLGAS, LP
By Ferrellgas, Inc., its General Partner
By
Name:
Title:
FERRELLGAS, INC.
By:
Name:
Title:
CREDIT AGREEMENT
Dated as of December 17, 1999
among
THERMOGAS L.L.C.,
THE FINANCIAL INSTITUTIONS PARTY HERETO,
and
BANK OF AMERICA, N.A.,
as Administrative Agent
Arranged By
BANC OF AMERICA SECURITIES LLC
<PAGE>
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of December 17, 1999, among
THERMOGAS L.L.C., a Delaware limited liability company ("Thermogas"), together
with any successor and assign of Thermogas hereafter becoming the Borrower
under, and in accordance with, the provisions of this Agreement (collectively,
the "Borrower"), the several financial institutions from time to time party to
this Agreement (collectively, the "Banks" and, individually, a "Bank") and BANK
OF AMERICA, N.A. ("BofA"), as agent for the Banks (in such capacity, the
"Administrative Agent").
R E C I T A L S
WHEREAS, the Borrower has requested that the Banks agree to make loans
to the Borrower in an aggregate amount of up to $183,000,000, a portion of which
proceeds in an amount equal to $123,669,372.50 may be distributed by Thermogas
to Williams Natural Gas Liquids, Inc. in connection with the acquisition by
Ferrellgas Partners, L.P. of all of the limited liability company interests of
Thermogas from Williams Natural Gas Liquids, Inc., and the remainder of which
proceeds may be used for the general purposes of the Borrower, in each case on
the terms and subject to the conditions set forth below in this Agreement;
WHEREAS, it is further contemplated in connection with such acquisition
that (i) Ferrellgas Partners, L.P. will contribute all of the member interests
of Thermogas acquired by it to its affiliate, Ferrellgas, L.P., (ii) Ferrellgas,
L.P. will then assume the obligations of Thermogas and become liable as the
Borrower under this Agreement and (iii) contemporaneously with or promptly
following such assumption Thermogas will be merged with and into Ferrellgas,
L.P.; and
WHEREAS, the Banks are willing, on and subject to the terms and
conditions set forth in this Agreement, to extend credit under this Agreement as
more particularly hereinafter set forth.
ACCORDINGLY, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms. The following terms have the
following meanings:
"1996 Indenture" means the Indenture dated as of April 26,
1996, among the MLP, Ferrellgas Partners Finance Corp., Ferrellgas and
American Bank National Association, pursuant to which the MLP Senior
Notes were issued, as it may be amended, modified or supplemented from
time to time.
"1998 Fixed Rate Senior Notes" means, collectively, (a) the
$109,000,000 6.99% Senior Notes, Series A, due August 1, 2005, (b) the
$37,000,000 7.08% Senior Notes, Series B, due August 1, 2006, (c) the
$52,000,000 7.12% Senior Notes, Series C, due 2008, (d) the $82,000,000
7.24% Senior Notes, Series D, due August 1, 2010 and (e) the
$70,000,000 7.42% Senior Notes, Series E, due August 1, 2013, in each
case issued by Ferrellgas pursuant to the 1998 Note Purchase Agreement.
"1998 Note Purchase Agreement" means the Note Purchase
Agreement, dated as of July 1, 1998, among Ferrellgas and the
Purchasers named therein, pursuant to which the 1998 Fixed Rate Senior
Notes will be issued, as it may be amended, modified or supplemented
from time to time.
"Accounts Receivable Securitization" shall mean a financing
arrangement involving the transfer or sale of accounts receivable of
the Borrower in the ordinary course of business through one or more
SPEs, the terms of which arrangement do not impose (a) any recourse or
repurchase obligations upon the Borrower or any Affiliate of the
Borrower (other than any such SPE) except to the extent of the breach
of a representation or warranty by the Borrower in connection therewith
or (b) any negative pledge or Lien on any accounts receivable not
actually transferred to any such SPE in connection with such
arrangement.
"Acquired Debt" means, with respect to any specified Person,
(a) Indebtedness of any other Person existing at the time such other
Person merged with or into or became a Subsidiary of such specified
Person, including Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person and (b) Indebtedness encumbering
any asset acquired by such specified Person.
"Acquisition" means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly,
in (a) the acquisition of all or substantially all of the assets of a
Person, or of any business or division of a Person, (b) the acquisition
of in excess of 50% of the capital stock, partnership interests or
equity of any Person or otherwise causing any Person, to become a
Subsidiary, or (c) a merger or consolidation or any other combination
with another Person (other than a Person that is a Subsidiary) provided
that the Borrower or the Subsidiary is the surviving entity.
"Administrative Agent" has the meaning specified in the
introductory clause hereto. References to the "Administrative Agent"
shall include BofA in its capacity as agent for the Banks hereunder,
and any successor agent arising under Section 10.09.
"Administrative Agent's Payment Office" means the address for
payments set forth on Schedule 11.02 in relation to the Administrative
Agent, or such other address as the Administrative Agent may from time
to time specify.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. A Person shall be deemed to control
another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the
ownership of voting securities, by contract, or otherwise.
"Agent-Related Persons" means BofA and any successor
Administrative Agent arising under Section 10.09, together with their
respective Affiliates (including, in the case of BofA, the Arranger),
and the officers, directors, employees, agents and attorneys-in-fact of
such Persons and Affiliates.
"Agreement" means this Credit Agreement.
"Applicable Margin" means, for each Type of Loan, the
percentage per annum set forth below opposite the applicable period as
set forth below:
Period Base Rate Loans Eurodollar Rate Loans
From Effective Date 1.25% 2.25%
through March 31, 2000
April 1, 2000 and 1.75% 2.75%
thereafter
"Arranger" means Banc of America Securities LLC, a
Wholly-Owned Subsidiary of BankAmerica Corporation. The Arranger is a
registered broker-dealer and permitted to underwrite and deal in
certain Ineligible Securities.
"Asset Sale" has the meaning specified in Section 8.02.
"Assignee" has the meaning specified in subsection 11.08(a).
"Assumption Agreement" means an Assumption Agreement
substantially in the form of Exhibit H, executed and delivered by
Ferrellgas and the General Partner.
"Attorney Costs" means and includes all reasonable and
itemized fees and disbursements of any law firm or other external
counsel, the allocated cost of internal legal services and all
disbursements of internal counsel.
"Attributable Debt" means, in respect of a sale and leaseback
arrangement of any property, as at the time of determination, the
present value (calculated using a discount rate equal to 7.16%) of the
total obligations of the lessee for rental payments during the
remaining term of the lease included in such arrangement (including any
period for which such lease has been extended).
"Available Cash" has the meaning given to such term in the
Partnership Agreement, as amended to July 5, 1994; provided, that (a)
Available Cash shall not include any amount of Net Proceeds of Asset
Sales until the 270-day period following the consummation of the
applicable Asset Sale, (b) investments, loans and other contributions
to a Non-Recourse Subsidiary are to be treated as "cash disbursements"
when made for purposes of determining the amount of Available Cash and
(c) cash receipts of a Non-Recourse Subsidiary shall not constitute
cash receipts of the Borrower for purposes of determining the amount of
Available Cash until cash is actually distributed by such Non-Recourse
Subsidiary to the Borrower.
"Bank" has the meaning specified in the introductory clause hereto.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978, as
amended (11 U.S.C. ss.101, et seq.).
"Base Rate" means, for any day, the higher of: (a) 0.50% per
annum above the Federal Funds Rate in effect on such day; and (b) the
rate of interest in effect for such day as publicly announced from time
to time by BofA in San Francisco, California, as its "reference rate."
(The "reference rate" is a rate set by BofA based upon various factors
including BofA's costs and desired return, general economic conditions
and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate.)
Any change in the reference rate announced by BofA shall take effect at
the opening of business on the day specified in the public announcement
of such change or if no day is so specified, on the day of the
announcement.
"Base Rate Loan" means a Loan that bears interest based on the
Base Rate.
"BofA" has the meaning specified in the introductory clause hereto.
"Borrower" means Thermogas and, from and after the Ferrellgas
Joinder Event, Ferrellgas.
"Borrowing" means a borrowing hereunder consisting of Loans of
the same Type made to the Borrower on the same day by the Banks and,
for Eurodollar Rate Loans, having the same Interest Period, in either
case under Article II.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York or San Francisco are
authorized or required by law to close and, if the applicable Business
Day relates to any Eurodollar Rate Loan, means such a day on which
dealings are carried on in the London interbank dollar market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force of law,
in each case, regarding capital adequacy of any bank or of any
corporation controlling a bank.
"Capital Interests" means, (a) with respect to any
corporation, any and all shares, participations, rights or other
equivalent interests in the capital of the corporation, (b) with
respect to any partnership or limited liability company, any and all
partnership interests (whether general or limited) or limited liability
company interests, respectively, and other interests or participations
that confer on a Person the right to receive a share of the profits and
losses of, or distributions of assets of, such partnership or limited
liability company, and (c) with respect to any other Person, ownership
interests of any type in such Person.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in
respect of a capital lease that would at such time be so required to be
capitalized on the balance sheet in accordance with GAAP.
"Cash Equivalents" means (a) United States dollars, (b)
securities issued or directly and fully guaranteed or insured by the
United States government or any agency or instrumentality thereof
having maturities of not more than eighteen months from the date of
acquisition, (c) certificates of deposit and eurodollar time deposits
with maturities of six months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case with any Bank or with any other
domestic commercial bank having capital and surplus in excess of $500
million and a Keefe Bank Watch Rating of "B" or better, (d) repurchase
obligations with a term of not more than seven days for underlying
securities of the types described in clauses (b) and (c) entered into
with any financial institution meeting the qualifications specified in
clause (c) above, (e) commercial paper or direct obligations of a
Person, provided such Person has publicly outstanding debt having the
highest short-term rating obtainable from Moody's Investors Service,
Inc. or Standard & Poor's Ratings Services and provided further that
such commercial paper or direct obligation matures within 270 days
after the date of acquisition, and (f) investments in money market
funds all of whose assets consist of securities of the types described
in the foregoing clauses (a) through (e).
"Change of Control" means (a) the sale, lease, conveyance or
other disposition of all or substantially all of the Borrower's assets
to any Person or group (as such term is used in Section 13(d)(3) of the
Exchange Act) other than James E. Ferrell, the Related Parties and any
Person of which James E. Ferrell and the Related Parties beneficially
own in the aggregate 51% or more of the voting Capital Interests (or if
such Person is a partnership, 51% or more of the general partner
interests), (b) the liquidation or dissolution of the Borrower or the
General Partner, (c) the occurrence of any transaction, the result of
which is that James E. Ferrell and the Related Parties beneficially own
in the aggregate, directly or indirectly, less than 51% of the total
voting power entitled to vote for the election of directors of the
General Partner and (d) the occurrence of any transaction, the result
of which is that the General Partner is no longer the sole general
partner of the Borrower.
"Code" means the Internal Revenue Code of 1986, as amended,
and regulations promulgated thereunder.
"Commitment" means, as to each Bank, the amount set forth
opposite such Bank's name on Schedule 2.01 hereof under the caption
"Commitment," as the same may be reduced under subsection 2.06(b) or
reduced or increased as a result of one or more assignments under
Section 11.08; provided, that the maximum aggregate Commitment of all
Banks shall not exceed $183,000,000 at any time.
"Compliance Certificate" means a certificate signed by a
Responsible Officer of the Borrower substantially in the form of
Exhibit C, demonstrating compliance with the covenants contained
herein, including Sections 7.12, 7.13, 7.15 and 8.12.
"Consolidated Cash Flow" means, with respect to any Person for
any period, the Consolidated Net Income of such Person for such period,
plus (a) an amount equal to any extraordinary loss plus any net loss
realized in connection with an asset sale, to the extent such losses
were deducted in computing Consolidated Net Income, plus (b) provision
for taxes based on income or profits of such Person for such period, to
the extent such provision for taxes was deducted in computing
Consolidated Net Income, plus (c) Consolidated Interest Expense of such
Person for such period, whether paid or accrued (including amortization
of original issue discount, non-cash interest payments and the interest
component of any payments associated with Capital Lease Obligations and
net payments (if any) pursuant to Hedging Obligations), to the extent
such expense was deducted in computing Consolidated Net Income, plus
(d) depreciation and amortization (including amortization of goodwill
and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) of such Person for such
period, to the extent such depreciation and amortization were deducted
in computing Consolidated Net Income, plus (e) non-cash employee
compensation expenses of such Person for such period, plus (f) the
Synthetic Lease Principal Component of such Person for such period; in
each case, for such period without duplication on a consolidated basis
and determined in accordance with GAAP.
"Consolidated Interest Expense" means, as of the last day of
any fiscal period, on a consolidated basis, the sum of (a) all
interest, fees, charges and related expenses paid or payable (without
duplication) for that fiscal period to the Banks hereunder or to any
other lender in connection with borrowed money or the deferred purchase
price of assets that are considered "interest expense" under GAAP, plus
(b) the portion of rent paid or payable (without duplication) for that
fiscal period under Capital Lease Obligations that should be treated as
interest in accordance with Financial Accounting Standards Board
Statement No. 13, on a consolidated basis, plus (c) the Synthetic Lease
Interest Component for that fiscal period.
"Consolidated Net Income" means, with respect to any Person
for any period, the aggregate of the Net Income of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided, that (a) the Net Income of any Person
that is not a Subsidiary or that is accounted for by the equity method
of accounting shall be included only to the extent of the amount of
dividends or distributions paid to such Person or a Wholly-Owned
Subsidiary thereof, (b) the Net Income of any Person that is a
Subsidiary (other than a Wholly-Owned Subsidiary) shall be included
only to the extent of the amount of dividends or distributions paid to
such Person or a Wholly-Owned Subsidiary thereof, (c) the Net Income of
any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded except
to the extent otherwise includable under clause (a) above, and (d) the
cumulative effect of a change in accounting principles shall be
excluded.
"Consolidated Net Worth" means, with respect to any Person as
of any date, the sum of (a) the consolidated equity of the common
stockholders or partners of such Person and its consolidated
Subsidiaries as of such date, plus (b) the respective amounts reported
on such Person's balance sheet as of such date with respect to any
series of preferred stock (other than Disqualified Interests) that by
its terms is not entitled to the payment of dividends unless such
dividends may be declared and paid only out of net earnings in respect
of the year of such declaration and payment, but only to the extent of
any cash received by such Person upon issuance of such preferred stock,
less (x) all write-ups (other than write-ups resulting from foreign
currency translations and write-ups of tangible assets of a going
concern business made within 12 months after the acquisition of such
business) subsequent to the Effective Date in the book value of any
asset owned by such Person or a consolidated Subsidiary of such Person,
(y) all investments as of such date in unconsolidated Subsidiaries and
in Persons that are not Subsidiaries (except, in each case, Permitted
Investments), and (z) all unamortized debt discount and expense and
unamortized deferred charges as of such date, all of the foregoing
determined in accordance with GAAP.
"Contingent Obligation" means, as to any Person, any direct or
indirect liability of that Person, whether or not contingent, with or
without recourse, (a) with respect to any Indebtedness, lease,
dividend, distribution, letter of credit or other obligation (the
"primary obligations") of another Person (the "primary obligor"),
including any obligation of that Person (i) to purchase, repurchase or
otherwise acquire such primary obligations or any security therefor,
(ii) to advance or provide funds for the payment or discharge of any
such primary obligation, or to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth
or solvency or any balance sheet item, level of income or financial
condition of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to
make payment of such primary obligation, or (iv) otherwise to assure or
hold harmless the holder of any such primary obligation against loss in
respect thereof (each, a "Guaranty Obligation"); (b) with respect to
any Surety Instrument issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings or
payments; (c) to purchase any materials, supplies or other property
from, or to obtain the services of, another Person if the relevant
contract or other related document or obligation requires that payment
for such materials, supplies or other property, or for such services,
shall be made regardless of whether delivery of such materials,
supplies or other property is ever made or tendered, or such services
are ever performed or tendered; or (d) in respect of any Hedging
Obligation. The amount of any Contingent Obligation shall, in the case
of Guaranty Obligations, be deemed equal to the stated or determinable
amount of the primary obligation in respect of which such Guaranty
Obligation is made or, if not stated or if indeterminable, the maximum
reasonably anticipated liability in respect thereof, and in the case of
other Contingent Obligations, shall be equal to the maximum reasonably
anticipated liability in respect thereof.
"Contingent Payment Agreement" means the Contingent Payment
Agreement dated as of November 7, 1999 between Ferrellgas and the
Seller.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other
instrument, document or agreement to which such Person is a party or by
which it or any of its property is bound.
"Conversion/Continuation Date" means any date on which, under
Section 2.04, the Borrower (a) converts Loans of one Type to another
Type, or (b) continues as Loans of the same Type, but with a new
Interest Period, Loans having Interest Periods expiring on such date.
"Credit Extension" means and includes the making of any Loans
and conversions and continuations of such Loans hereunder.
"Default" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or
otherwise remedied during such time) constitute an Event of Default.
"Disqualified Interests" means any Capital Interests which, by
their terms (or by the terms of any security into which they are
convertible or for which they are exchangeable), or upon the happening
of any event, mature or are mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of
the holder thereof, in whole or in part, on or prior to December 31,
2001.
"Dollars", "dollars" and "$" each mean lawful money of the United States.
"Effective Amount" means as of any date the aggregate
outstanding principal amount thereof after giving effect to any
Borrowings and prepayments or repayments of Loans occurring on such
date.
"Effective Date" means the first date on which all conditions
precedent set forth in Section 4.01 and Section 4.02 are satisfied or
waived by all Banks (or, in the case of subsection 4.01(l), waived by
the Persons entitled to receive such payments).
"Eligible Assignee" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having a
combined capital and surplus of at least $500,000,000; (b) a commercial
bank organized under the laws of any other country which is a member of
the Organization for Economic Cooperation and Development (the "OECD"),
or a political subdivision of any such country, and having a combined
capital and surplus of at least $500,000,000, provided that such bank
is acting through a branch or agency located in the United States; and
(c) a Person that is primarily engaged in the business of commercial
banking and that is (i) a Subsidiary of a Bank, (ii) a Subsidiary of a
Person of which a Bank is a Subsidiary, or (iii) a Person of which a
Bank is a Subsidiary.
"Environmental Claims" means all claims, however asserted, by
any Governmental Authority or other Person alleging potential liability
or responsibility for violation of any Environmental Law, or for
release or injury to the environment.
"Environmental Laws" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to environmental,
health, safety and land use matters.
"Equity Interests" means Capital Interests and all warrants,
options or other rights to acquire Capital Interests (but excluding any
debt security that is convertible into, or exchangeable for, Capital
Interests).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and regulations promulgated thereunder.
"ERISA Event" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by the Borrower or the General Partner
from a Pension Plan subject to Section 4063 of ERISA during a plan year
in which it was a substantial employer (as defined in Section
4001(a)(2) of ERISA) or a cessation of operations which is treated as
such a withdrawal under Section 4062(e) of ERISA; (c) the filing of a
notice of intent to terminate, the treatment of a plan amendment as a
termination under Section 4041 or 4041A of ERISA or the commencement of
proceedings by the PBGC to terminate a Pension Plan subject to Title IV
of ERISA; (d) a failure by the Borrower or the General Partner to make
required contributions to a Pension Plan or other Plan subject to
Section 412 of the Code; (e) an event or condition which might
reasonably be expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (f) the imposition of any liability under
Title IV of ERISA, other than PBGC premiums due but not delinquent
under Section 4007 of ERISA, upon the Borrower or the General Partner;
or (g) an application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code with respect to
any Pension Plan.
"Eurodollar Rate" shall mean, for each Interest Period in
respect of Eurodollar Rate Loans comprising part of the same Borrowing,
an interest rate per annum (rounded to the nearest 1/16th of 1% or, if
there is no nearest 1/16th of 1%, rounded upward) determined pursuant
to the following formula:
Eurodollar Rate = LIBOR
1.00 - Eurodollar Reserve Percentage
The Eurodollar Rate shall be adjusted automatically as of the effective
date of any change in the Eurodollar Reserve Percentage.
"Eurodollar Rate Loan" means a Loan that bears interest based
on the Eurodollar Rate.
"Eurodollar Reserve Percentage" shall mean the maximum reserve
percentage (expressed as a decimal, rounded to the nearest 1/100th of
1% or, if there is no nearest 1/100th of 1%, rounded upward) in effect
on the date LIBOR for such Interest Period is determined (whether or
not applicable to any Bank) under regulations issued from time to time
by the Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities") having a term comparable to
such Interest Period. Without limiting the effect of the foregoing, the
Eurodollar Reserve shall include any other reserves required to be
maintained by any Bank with respect to (a) any category of liabilities
that includes deposits by reference to which the Eurodollar Rate is to
be determined as provided in the definition of "Eurodollar Rate" in
this Section 1.01 or (b) any category of extensions of credit or other
assets that includes Eurodollar Rate Loans.
"Event of Default" means any of the events or circumstances specified in
Section 8.01.
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"Existing Indebtedness" means Indebtedness of Ferrellgas and
its Subsidiaries (other than the Obligations) and certain Indebtedness
of the General Partner with respect to which Ferrellgas has assumed the
General Partner's repayment obligations, in each case in existence on
the Effective Date and as more fully set forth on Schedule 8.05.
"FDIC" means the Federal Deposit Insurance Corporation, and
any Governmental Authority succeeding to any of its principal
functions.
"Federal Funds Rate" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Bank of New
York (including any such successor, "H.15(519)") on the preceding
Business Day opposite the caption "Federal Funds (Effective);" or, if
for any relevant day such rate is not so published on any such
preceding Business Day, the rate for such day will be the arithmetic
mean as determined by the Administrative Agent of the rates for the
last transaction in overnight Federal funds arranged prior to 9:00 a.m.
(New York City time) on that day by each of three leading brokers of
Federal funds transactions in New York City selected by the
Administrative Agent.
"Fee Letters" has the meaning specified in subsection 2.09.
"FCI ESOT" means the employee stock ownership trust of Ferrell Companies,
Inc. organized under section 4975(e)(7) of the Code.
"Ferrellgas" means Ferrellgas, L.P., a Delaware limited partnership.
"Ferrellgas Joinder Event" shall have occurred upon the
satisfaction of each of the conditions set forth in Section 4.03.
"Ferrellgas Partners Finance Corp." means Ferrellgas Partners
Finance Corp., a Delaware corporation and a Wholly-Owned Subsidiary of
the MLP.
"Fixed Charge Coverage Ratio" means with respect to any Person
for any period, the ratio of Consolidated Cash Flow of such Person for
such period to the Fixed Charges of such Person for such period. In the
event that such Person or any of its Subsidiaries incurs, assumes,
guarantees, redeems or repays any Indebtedness (other than revolving
credit borrowings including, with respect to the Borrower, the Loans)
subsequent to the commencement of the period for which the Fixed Charge
Coverage Ratio is being calculated but prior to the date of the event
for which the calculation of the Fixed Charge Coverage Ratio is made
(the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be
calculated giving pro forma effect to such incurrence, assumption,
guarantee, redemption or repayment of Indebtedness, as if the same had
occurred at the beginning of the applicable reference period. The
foregoing calculation of the Fixed Charge Coverage Ratio shall also
give pro forma effect to Acquisitions (including all mergers and
consolidations), dispositions and discontinuances of businesses or
assets that have been made by such Person or any of its Subsidiaries
during the reference period or subsequent to such reference period and
on or prior to the Calculation Date assuming that all such
Acquisitions, dispositions and discontinuances of businesses or assets
had occurred on the first day of the reference period; provided,
however, that with respect to the Borrower, (a) Fixed Charges shall be
reduced by amounts attributable to businesses or assets that are so
disposed of or discontinued only to the extent that the obligations
giving rise to such Fixed Charges would no longer be obligations
contributing to the Fixed Charges of the Borrower subsequent to the
Calculation Date and (b) Consolidated Cash Flow generated by an
acquired business or asset shall be determined by the actual gross
profit (revenues minus costs of goods sold) of such acquired business
or asset during the immediately preceding number of full fiscal
quarters as are in the reference period minus the pro forma expenses
that would have been incurred by the Borrower in the operation of such
acquired business or asset during such period computed on the basis of
(i) personnel expenses for employees retained by the Borrower in the
operation of the acquired business or asset and (ii) non-personnel
costs and expenses incurred by the Borrower on a per gallon basis in
the operation of the Borrower's business at similarly situated Borrower
facilities.
"Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (a) consolidated interest
expense of such Person for such period, whether paid or accrued, to the
extent such expense was deducted in computing Consolidated Net Income
(including amortization of original issue discounts, non-cash interest
payments, the interest component of all payments associated with
Capital Lease Obligations and net payments (if any) pursuant to Hedging
Obligations permitted hereunder), (b) commissions, discounts and other
fees and charges incurred with respect to letters of credit, (c) any
interest expense on Indebtedness of another Person that is guaranteed
by such Person or secured by a Lien on assets of such Person, and (d)
the product of (i) all cash dividend payments (and non-cash dividend
payments in the case of a Person that is a Subsidiary) on any series of
preferred stock of such Person, times (ii) a fraction, the numerator of
which is one and the denominator of which is one minus the then current
combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, determined, in each case, on a consolidated
basis and in accordance with GAAP.
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its
principal functions.
"Funded Debt" means all Indebtedness of the Borrower and its Subsidiaries.
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date
of determination.
"General Partner" means Ferrellgas, Inc., the general partner of
Ferrellgas.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Growth-Related Capital Expenditures" means, 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 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).
"Guarantor" means TWCI and each other Person that executes a
Guaranty and its successors and assigns.
"Guaranty" means a continuing guaranty of the Obligations in
favor of the Administrative Agent on behalf of the Banks, in form and
substance satisfactory to the Administrative Agent.
"Guaranty Obligation" has the meaning specified in the definition of
"Contingent Obligation."
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (a) interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements and
(b) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates.
"Indebtedness" of any Person means, without duplication, (a)
all indebtedness for borrowed money; (b) all obligations issued,
undertaken or assumed as the deferred purchase price of property or
services (other than trade payables entered into in the ordinary course
of business on ordinary terms); (c) all non-contingent reimbursement or
payment obligations with respect to Surety Instruments; (d) all
obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (e) 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); (f) all
Capital Lease Obligations; (g) all Hedging Obligations; (h) all
obligations in respect of Accounts Receivable Securitizations; (i) all
indebtedness referred to in clauses (a) through (h) above secured by
(or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in property
(including accounts and contracts rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of
such Indebtedness; and (j) all Guaranty Obligations in respect of
indebtedness or obligations of others of the kinds referred to in
clauses (a) through (i) above; provided, however, that "Indebtedness"
shall not include Synthetic Lease Obligations.
"Indemnified Liabilities" has the meaning specified in Section 11.05.
"Indemnified Person" has the meaning specified in Section 11.05.
"Independent Auditor" has the meaning specified in subsection 7.01(a).
"Ineligible Securities" means securities which may not be underwritten or
dealt in by member banks of the Federal Reserve System under Section 16 of the
Banking Act of 1933 (12 U.S.C. ss. 24, Seventh), as amended.
"Insolvency Proceeding" means (a) any case, action or
proceeding before any court or other Governmental Authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding-up or relief of debtors, or (b) any general
assignment for the benefit of creditors, composition, marshalling of
assets for creditors, or other similar arrangement in respect of a
Person's creditors generally or any substantial portion of a Person's
creditors; undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy Code.
"Interest Coverage Ratio" means with respect to any Person for
any period, the ratio of Consolidated Cash Flow of such Person for such
period to Consolidated Interest Expense of such Person for such period.
The foregoing calculation of the Interest Coverage Ratio shall give pro
forma effect to Acquisitions (including all mergers and
consolidations), Asset Sales and other dispositions and discontinuances
of businesses or assets that have been made by such Person or any of
its Subsidiaries during the reference period or subsequent to such
reference period and on or prior to the date of calculation of the
Interest Coverage Ratio assuming that all such Acquisitions, Asset
Sales and other dispositions and discontinuances of businesses or
assets had occurred on the first day of the reference period; provided,
however, that with respect to the Borrower and its Subsidiaries,
Consolidated Cash Flow generated by an acquired business or asset shall
be determined by the actual gross profit (revenues minus costs of goods
sold) of such acquired business or asset during the immediately
preceding number of full fiscal quarters as in the reference period
minus the pro forma expenses that would have been incurred by the
Borrower and its Subsidiaries in the operation of such acquired
business or asset during such period computed on the basis of (i)
personnel expenses for employees retained by the Borrower and its
Subsidiaries in the operation of the acquired business or asset and
(ii) non-personnel costs and expenses incurred by the Borrower and its
Subsidiaries on a per gallon basis in the operation of the Borrower's
business at similarly situated facilities of the Borrower.
"Interest Payment Date" means, as to any Eurodollar Rate Loan,
the last day of each Interest Period applicable to such Loan and, as to
any Base Rate Loan, the first Business Day of each fiscal quarter of
the Borrower.
"Interest Period" means, as to any Eurodollar Rate Loan, the
period commencing on the Effective Date or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as a Eurodollar Rate Loan, and ending on the date one or two
months thereafter as selected by the Borrower in its Notice of
Borrowing or Notice of Conversion/Continuation;
provided that:
(a) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period shall be extended
to the following Business Day unless the result of such extension would
be to carry such Interest Period into another calendar month, in which
event such Interest Period shall end on the preceding Business Day;
(b) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the calendar
month at the end of such Interest Period; and
(c) no Interest Period for any Loan shall extend
beyond the Maturity Date.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions.
"Joint Venture" means a single-purpose corporation,
partnership, joint venture or other similar legal arrangement (whether
created by contract or conducted through a separate legal entity) now
or hereafter formed by the Borrower or any of its Subsidiaries with
another Person in order to conduct a common venture or enterprise with
such Person.
"Lending Office" means, as to any Bank, the office or offices
of such Bank specified as its "Lending Office" or "Domestic Lending
Office" or "Eurodollar Lending Office", as the case may be, on Schedule
11.02, or such other office or offices as such Bank may from time to
time notify the Borrower and the Administrative Agent.
"Leverage Ratio" means, with respect to any Person for any
period, the ratio of Funded Debt plus Synthetic Lease Obligations, in
each case of such Person as of the last day of such period, to
Consolidated Cash Flow of such Person for such period. In the event
that such Person or any of its Subsidiaries incurs, assumes,
guarantees, redeems or repays any Indebtedness (other than revolving
credit borrowings) subsequent to the commencement of the period for
which the Leverage Ratio is being calculated but prior to the date on
which the calculation of the Leverage Ratio is made (the "Leverage
Ratio Calculation Date"), then the Leverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, guarantee,
redemption or repayment of Indebtedness, as if the same had occurred at
the beginning of the applicable reference period. The foregoing
calculation of the Leverage Ratio shall also give pro forma effect to
Acquisitions (including all mergers and consolidations), Asset Sales
and other dispositions and discontinuances of businesses or assets that
have been made by such Person or any of its Subsidiaries during the
reference period or subsequent to such reference period and on or prior
to the Leverage Ratio Calculation Date assuming that all such
Acquisitions, Asset Sales and other dispositions and discontinuances of
businesses or assets had occurred on the first day of the reference
period; provided, however, that with respect to the Borrower and its
Subsidiaries, (a) Funded Debt shall be reduced by amounts attributable
to businesses or assets that are so disposed of or discontinued only to
the extent that the Indebtedness included within such Funded Debt would
no longer be an obligation of the Borrower or its Subsidiaries
subsequent to the Leverage Ratio Calculation Date and (b) Consolidated
Cash Flow generated by an acquired business or asset shall be
determined by the actual gross profit (revenues minus costs of goods
sold) of such acquired business or asset during the immediately
preceding number of full fiscal quarters as in the reference period
minus the pro forma expenses that would have been incurred by the
Borrower and its Subsidiaries in the operation of such acquired
business or asset during such period computed on the basis of (i)
personnel expenses for employees retained by the Borrower and its
Subsidiaries in the operation of the acquired business or asset and
(ii) non-personnel costs and expenses incurred by the Borrower and its
Subsidiaries on a per gallon basis in the operation of the Borrower's
business at similarly situated facilities of the Borrower.
"LIBOR" means the rate of interest per annum determined by the
Administrative Agent to be the arithmetic mean (rounded upward to the
next 1/16th of 1%) of the rates of interest per annum notified to the
Administrative Agent by BofA as the rates of interest at which dollar
deposits in the approximate amount of the amount of the Loan to be made
or continued as, or converted into, a Eurodollar Rate Loan by BofA and
having a maturity comparable to such Interest Period would be offered
to major banks in the London interbank market at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.
"Lien" means any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or preferential arrangement of
any kind or nature whatsoever in respect of any property (including
those created by, arising under or evidenced by any conditional sale or
other title retention agreement, the interest of a lessor under a
capital lease, any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any financing
statement naming the owner of the asset to which such lien relates as
debtor, under the Uniform Commercial Code or any comparable law) and
any contingent or other agreement to provide any of the foregoing, but
not including the interest of a lessor under an operating lease.
"LLC Agreement" means the Operating Agreement of Thermogas L.L.C. dated as
of December 15, 1999 made by the Sellerwith respect to Thermogas.
"Loan" shall have the meaning assigned in subsection 2.01(a),
and may be a Base Rate Loan or a Eurodollar Rate Loan.
"Loan Documents" means this Agreement, any Notes, the Fee
Letters, the Guaranties, and all other documents delivered to the
Administrative Agent or any Bank in connection herewith.
"Majority Banks" means at any time Banks then holding more
than 50% of the then aggregate unpaid principal amount of the Loans,
or, if no such principal amount is then outstanding, Banks then having
more than 50% of the aggregate Commitments.
"Margin Stock" means "margin stock" as such term is defined in
Regulation U of the FRB.
"Material Adverse Effect" means (a) a material adverse change
in, or a material adverse effect upon, the operations, business,
properties, condition (financial or otherwise) or prospects of the
Borrower or the Borrower and its Subsidiaries taken as a whole; (b) a
material impairment of the ability of the Borrower or any of its
Subsidiaries or (after the Ferrellgas Joinder Event) the General
Partner or any of its Subsidiaries to perform under any Loan Document
or otherwise to avoid any Event of Default; or (c) a material adverse
effect upon the legality, validity, binding effect or enforceability
against the Borrower or any Subsidiary of any Loan Document.
"Maturity Date" means June 30, 2000.
"MLP" means Ferrellgas Partners, L.P., a Delaware limited
partnership and the sole limited partner of Ferrellgas.
"MLP Senior Notes" means the $160,000,000 9-3/8% Senior Secured Notes
issued by the MLP and Ferrellgas Partners Finance Corp. pursuant to the 1996
Indenture.
"Net Income" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before
any reduction in respect of preferred stock dividends, excluding,
however, (a) any gain (but not loss), together with any related
provision for taxes on such gain (but not loss), realized in connection
with (i) any asset sale (including dispositions pursuant to sale and
leaseback transactions), or (ii) the disposition of any securities or
the extinguishment of any Indebtedness of such Person or any of its
Subsidiaries, and (b) any extraordinary gain (but not loss), together
with any related provision for taxes on such extraordinary gain (but
not loss).
"Net Proceeds of Asset Sale" means the aggregate cash proceeds
received by the Borrower or any of its Subsidiaries in respect of any
Asset Sale, net of the direct costs relating to such Asset Sale
(including legal, accounting and investment banking fees, and sales
commissions) and any relocation expenses incurred as a result thereof,
taxes paid or payable as a result thereof (after taking into account
any available tax credits or deductions and any tax sharing
arrangements), and amounts required to be applied to the repayment of
Indebtedness secured by a Lien on the asset or assets the subject of
such Asset Sale.
"Non-Recourse Subsidiary" means any Person that would
otherwise be a Subsidiary of the Borrower but is designated as a
Non-Recourse Subsidiary in a resolution of the Board of Directors of
the General Partner, so long as each of the following remains true: (a)
no portion of the Indebtedness or any other obligation (contingent or
otherwise) of such Person (i) is a Contingent Obligation of the
Borrower or any of its Subsidiaries, (ii) is recourse or obligates the
Borrower or any of its Subsidiaries in any way or (iii) subjects any
property or asset of the Borrower or any of its Subsidiaries, directly
or indirectly, contingently or otherwise, to satisfaction thereof, (b)
neither the Borrower nor any of its Subsidiaries has any contract,
agreement, arrangement or understanding or is subject to an obligation
of any kind, written or oral, with such Person other than on terms no
less favorable to the Borrower and its Subsidiaries than those that
might be obtained at the time from persons who are not Affiliates of
the Borrower, (c) neither the Borrower nor any of its Subsidiaries has
any obligation with respect to such Person (i) to subscribe for
additional shares of capital stock, Capital Interests or other Equity
Interests therein or (ii) maintain or preserve such Person's financial
condition or to cause such Person to achieve certain levels of
operating or other financial results, (d) such Person has no more than
$1,000 of assets at the time of such designation, (e) such Person is in
compliance with the restrictions applicable to Affiliates of the MLP
under Section 8.21 hereof and (f) such Person takes steps designed to
assure that neither the Borrower nor any of its Subsidiaries will be
liable for any portion of the Indebtedness or other obligations of such
Person, including maintenance of a corporate or limited partnership
structure and observance of applicable formalities such as regular
meetings and maintenance of minutes, a substantial and meaningful
capitalization and the use of a corporate or partnership name, trade
name or trademark not misleadingly similar to those of the Borrower.
"Note" means a promissory note executed by the Borrower in
favor of a Bank pursuant to subsection 2.02(b), in substantially the
form of Exhibit F.
"Notice of Borrowing" means a notice in substantially the form of Exhibit
A.
"Notice of Conversion/Continuation" means a notice in substantially the
form of Exhibit B.
"Obligations" means all Loans, advances, debts, liabilities,
obligations, covenants and duties arising under any Loan Document,
owing by the Borrower to any Bank, the Administrative Agent, or any
Indemnified Person, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due,
now existing or hereafter arising including all Indebtedness of the
Borrower to the Banks for the payment of principal of and interest on
all outstanding Loans.
"Organization Documents" means, for any corporation, the
certificate or articles of incorporation, the bylaws, any certificate
of determination or instrument relating to the rights of preferred
shareholders of such corporation, any shareholder rights agreement, and
all applicable resolutions of the board of directors (or any committee
thereof) of such corporation and, for any general or limited
partnership, the partnership agreement of such partnership and all
amendments thereto and any agreements otherwise relating to the rights
of the partners thereof, and, for any limited liability company, the
limited liability company, operating or similar agreement and all
amendments thereto and any agreements otherwise relating to the rights
of the members thereof.
"Other Taxes" means any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies
which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Documents.
"Participant" has the meaning specified in subsection 11.08(d).
"Partners' Equity" means the partners' equity as shown on a
balance sheet prepared in accordance with GAAP for any partnership.
"Partnership Agreement" shall mean the Agreement of Limited
Partnership of Ferrellgas dated July 5, 1994, as amended from time to
time in accordance with the terms of this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions
under ERISA.
"Pension Plan" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which the Borrower or the
General Partner sponsors, maintains, or to which it makes, is making,
or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made
contributions at any time during the immediately preceding five (5)
plan years.
"Permitted Acquisitions" means Acquisitions by the Borrower
and its Subsidiaries which comply with the provisions of Section 8.04.
"Permitted Investments" means (a) any investments in Cash
Equivalents; (b) any investments in the Borrower or in a Wholly-Owned
Subsidiary of the Borrower that is a Guarantor; (c) investments by the
Borrower or any Subsidiary of the Borrower in a Person, if as a result
of such investment (i) such Person becomes a Wholly-Owned Subsidiary of
the Borrower and a Guarantor or (ii) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Borrower
or a Wholly-Owned Subsidiary of the Borrower that is a Guarantor; and
(d) other investments in Non-Recourse Subsidiaries of the Borrower that
do not exceed $30 million in the aggregate.
"Permitted Liens" has the meaning specified in Section 8.01.
"Permitted Refinancing Indebtedness" means any Indebtedness of
the Borrower or any Subsidiary of the Borrower issued in exchange for,
or the net proceeds of which are used to extend, refinance, renew,
replace, defease or refund other Indebtedness of the Borrower or any of
its Subsidiaries; provided that (a) the principal amount of such
Indebtedness does not exceed the principal amount of the Indebtedness
so extended, refinanced, renewed, replaced, defeased or refunded (the
"Prior Indebtedness") (plus the amount of reasonable expenses incurred
in connection therewith), and the effective interest rate per annum on
such Indebtedness does not or is not likely to exceed the effective
interest rate per annum of the Prior Indebtedness, as determined by the
Administrative Agent in its sole discretion; (b) such Indebtedness has
a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of the Prior Indebtedness; (c) if the
Prior Indebtedness is subordinated to the Obligations, such
Indebtedness is subordinated to the Obligations on the terms and
conditions set forth on part II of Schedule 8.05; and (d) such
Indebtedness is incurred by the Borrower or the Subsidiary who is the
obligor on the Prior Indebtedness.
"Person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, Joint Venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Borrower sponsors or maintains or to which the
Borrower or the General Partner makes, is making, or is obligated to
make contributions and includes any Pension Plan.
"Pro Rata Share" means, as to any Bank at any time, the
percentage set forth on Schedule 2.01 hereto as its "Pro Rata Share,"
as such amount may be adjusted by assignments under Section 11.08.
"Purchase Agreement" means the Purchase Agreement dated as of
November 7, 1999 among the Seller, the MLP and Ferrellgas.
"Related Party" means (a) the spouse or any lineal descendant
of James E. Ferrell, (b) any trust for his benefit or for the benefit
of his spouse or any such lineal descendants, (c) any corporation,
partnership or other entity in which James E. Ferrell and/or such other
Persons referred to in the foregoing clauses (a) and (b) are the direct
record and beneficial owners of all of the voting and nonvoting Equity
Interests, (d) the FCI ESOT or (e) any participant in the FCI ESOT
whose ESOT account has been allocated shares of Ferrell Companies, Inc.
"Release of Guaranty" means a Release of Guaranty
substantially in the form of Exhibit J to this Agreement, executed and
delivered by the Administrative Agent, on behalf of the Banks, in
accordance with Section 4.03 relating to the obligations of TWCI as a
Guarantor.
"Reportable Event" means any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder, other than any
such event for which the 30-day notice requirement under ERISA has been
waived in regulations issued by the PBGC.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of
an arbitrator or of a Governmental Authority, in each case applicable
to or binding upon the Person or any of its property or to which the
Person or any of its property is subject.
"Responsible Officer" means the chief executive officer or the
president of the General Partner or any other officer having
substantially the same authority and responsibility to act for the
General Partner on behalf of the Borrower; or, with respect to actions
taken or to be taken under Article II and compliance with financial
covenants, the chief financial officer or the treasurer of the General
Partner or any other officer having substantially the same authority
and responsibility to act for the General Partner on behalf of the
Borrower or any other employee of the General Partner designated in a
certificate of a Responsible Officer to have authority in such matters.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"Seller" means Williams Natural Gas Liquids, Inc., a Delaware corporation.
"Significant Subsidiary" means any Subsidiary of the Borrower
that would be a "significant subsidiary" as defined in Article 1, Rule
1-02 of Regulation S-X, promulgated pursuant to the Securities Act of
1933, as such Regulation is in effect on the date hereof.
"Solvent" shall mean, with respect to any Person on any date,
that on such date (a) the fair value of the property of such Person is
greater than the fair value of the liabilities (including contingent
liabilities) of such Person, (b) such Person does not intend to, and
does not believe that it will, incur debts and liabilities beyond such
Person's ability to pay as such debts and liabilities mature and (c)
such Person is not engaged in business or a transaction, and is not
about to engage in a business or a transaction, for which such Person's
property would constitute an unreasonably small capital.
"SPE" shall mean any special purpose Non-Recourse Subsidiary
of the Borrower established in connection with Accounts Receivable
Securitizations permitted by Section 8.05.
"Subsidiary" means, with respect to any Person, any
corporation, association or other business entity of which more than
50% of the total voting power of shares of Capital Interests entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof (or, in the case of
a limited partnership, more than 50% of either the general partners'
Capital Interests or the limited partners' Capital Interests) is at the
time owned or controlled, directly or indirectly, by such Person or one
or more of the other Subsidiaries of that Person or a combination
thereof. Unless otherwise indicated herein, "Subsidiary" shall mean a
Subsidiary of the Borrower. Notwithstanding the foregoing, any
Subsidiary of the Borrower that is designated a Non-Recourse Subsidiary
pursuant to the definition thereof shall, for so long as all of the
statements in the definition thereof remain true, not be deemed a
Subsidiary of the Borrower.
"Surety Instruments" means all letters of credit (including
standby and commercial), bankers' acceptances, bank guaranties,
shipside bonds, surety bonds and similar instruments.
"Synthetic Lease" means each arrangement, however described,
under which the obligor accounts for its interest in the property
covered thereby under GAAP as lessee of a lease which is not a capital
lease and accounts for its interest in the property covered thereby for
Federal income tax purposes as the owner.
"Synthetic Lease Interest Component" means, with respect to
any Person for any period, the portion of rent paid or payable (without
duplication) for such period under Synthetic Leases of such Person that
would be treated as interest in accordance with Financial Accounting
Standards Board Statement No. 13 if such Synthetic Leases were treated
as capital leases under GAAP.
"Synthetic Lease Obligation" means, as to any Person with
respect to any Synthetic Lease at any time of determination, the amount
of the liability of such Person in respect of such Synthetic Lease that
would (if such lease was required to be classified and accounted for as
a capital lease on a balance sheet of such Person in accordance with
GAAP) be required to be capitalized on the balance sheet of such Person
at such time.
"Synthetic Lease Principal Component" means, with respect to
any Person for any period, the portion of rent (exclusive of the
Synthetic Lease Interest Component) paid or payable (without
duplication) for such period under Synthetic Leases of such Person that
was deducted in calculating Consolidated Net Income of such Person for
such period.
"Taxes" means any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Bank and the
Administrative Agent, such taxes (including income taxes or franchise
taxes) as are imposed on or measured by each Bank's net income by the
jurisdiction (or any political subdivision thereof) under the laws of
which such Bank or the Administrative Agent, as the case may be, is
organized or maintains a lending office.
"Thermogas" has the meaning specified in the introductory clause hereto.
"Thermogas Merger" means the merger of Thermogas with and into
Ferrellgas (or, alternatively, the dissolution of Thermogas and the
substantially contemporaneous transfer of all of the assets of
Thermogas to Ferrellgas) in accordance with all applicable Requirements
of Law.
"TWCI" means The Williams Companies, Inc., a Delaware corporation.
"TWCI Guaranty" means a Guaranty of TWCI substantially in the form
of Exhibit I.
"Type" means, with respect to any Loan, whether such Loan is a
Base Rate Loan or a Eurodollar Rate Loan.
"Unfunded Pension Liability" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the
current value of that Plan's assets, determined in accordance with the
assumptions used for funding the Pension Plan pursuant to Section 412
of the Code for the applicable plan year.
"United States" and "U.S." each means the United States of America.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a)
the sum of the products obtained by multiplying (x) the amount of each
then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect thereof, by (y) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such
payment, by (b) the then outstanding principal amount of such
Indebtedness; provided, however, that with respect to any revolving
Indebtedness, the foregoing calculation of Weighted Average Life to
Maturity shall be determined based upon the total available commitments
and the required reductions of commitments in lieu of the outstanding
principal amount and the required payments of principal, respectively.
"Wholly-Owned Subsidiary" means a Subsidiary of which all of
the outstanding Capital Interests or other ownership interests (other
than directors' qualifying shares) or, in the case of a limited
partnership, all of the partners' Capital Interests (other than up to a
1% general partner interest), is owned, beneficially and of record, by
the Borrower, a Wholly-Owned Subsidiary of the Borrower or both.
"Year 2000 Problem" has the meaning specified in Section 5.12.
Section 1.02 Other Interpretive Provisions.
(a) The meanings of defined terms are equally applicable to the singular and
plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar words refer to this
Agreement as a whole and not to any particular provision of this Agreement; and
subsection, Section, Schedule and Exhibit references are to this Agreement
unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments, documents,
agreements, certificates, indentures, notices and other writings, however
evidenced.
(ii) The term "including" is not limiting and means "including without
limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from
and including"; the words "to" and "until" each mean "to but
excluding", and the word "through" means "to and including."
(iii) One "basis point" equals 0.01%, and "b.p."
means "basis point(s)."
(d) Unless otherwise expressly provided herein, (i) references to agreements
(including this Agreement) and other contractual instruments shall be deemed to
include all subsequent amendments and other modifications thereto, but only to
the extent such amendments and other modifications are not prohibited by the
terms of any Loan Document, and (ii) references to any statute or regulation are
to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
(e) The captions and headings of this Agreement are for convenience of reference
only and shall not affect the interpretation of this Agreement.
(f) This Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.
(g) Unless otherwise expressly provided herein, financial calculations
applicable to the Borrower shall be made on a consolidated basis.
(h) This Agreement and the other Loan Documents are the result of negotiations
among and have been reviewed by counsel to the Administrative Agent, the
Borrower and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Banks or the Administrative
Agent merely because of the Administrative Agent's or Banks' involvement in
their preparation.
Section 1.03 Accounting Principles.
(a) Unless the context otherwise clearly requires, all accounting terms not
expressly defined herein shall be construed, and all financial computations
required under this Agreement shall be made, in accordance with GAAP,
consistently applied. In the event that GAAP changes during the term of this
Agreement such that the covenants contained in Section 7.12 would then be
calculated in a different manner or with different components, (i) the Borrower
and the Banks agree to amend this Agreement in such respects as are necessary to
conform those covenants as criteria for evaluating Borrower's financial
condition to substantially the same criteria as were effective prior to such
change in GAAP and (ii) the Borrower shall be deemed to be in compliance with
the covenants contained in Section 7.12 during the 90-day period following any
such change in GAAP if and to the extent that the Borrower would have been in
compliance therewith under GAAP as in effect immediately prior to such change.
(b) Except as otherwise specified, references herein to "fiscal year" and
"fiscal quarter" refer to such fiscal periods of the Borrower.
ARTICLE II
THE LOANS
Section 2.01 Amounts and Terms of Commitments.
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(a) Each Bank severally agrees, on the terms and subject to the conditions set
forth herein, to make loans to the Borrower (each such loan, a "Loan") in
Dollars on the Effective Date in an aggregate principal amount not to exceed
such Bank's Commitment as in effect on such day.
(b) The Loans may be comprised of Base Rate Loans or Eurodollar Loans, or a
combination thereof, as the Borrower may request. Subject to the terms and
conditions of this Agreement, the Borrower may convert Loans of one Type into
Loans of another Type or continue Loans of one Type as Loans of the same Type.
Amounts repaid in respect of the Loans may not be reborrowed.
Section 2.02 Loan Accounts. (a) The Loans made by each Bank shall be evidenced
by one or more accounts or records maintained by such Bank in the ordinary
course of business. The accounts or records maintained by the Administrative
Agent and each Bank shall be conclusive absent manifest error of the amount of
the Loans made by the Banks to the Borrower, and the interest and payments
thereon. Any failure so to record or any error in doing so shall not, however,
limit or otherwise affect the obligation of the Borrower hereunder to pay any
amount owing with respect to the Loans.
(b) Upon the request of any Bank made through the
Administrative Agent, the Loans made by such Bank may be evidenced by one or
more Notes, instead of loan accounts. Each such Bank shall endorse on the
schedules annexed to its Note(s) the date, amount and maturity of each Loan made
by it and the amount of each payment of principal made by the Borrower with
respect thereto. Each such Bank is irrevocably authorized by the Borrower to
endorse its Note(s) and each Bank's record shall be conclusive absent manifest
error; provided, however, that the failure of a Bank to make, or an error in
making, a notation thereon with respect to any Loan shall not limit or otherwise
affect the obligations of the Borrower hereunder or under any such Note to such
Bank.
Section 2.03 Procedure for Borrowing. (a) Each Borrowing shall be made only on
the Effective Date upon the Borrower's irrevocable written notice delivered to
the Administrative Agent in the form of a Notice of Borrowing (which notice must
be received by the Administrative Agent prior to 9:00 a.m. San Francisco time
(i) three Business Days prior to the Effective Date, in the case of Eurodollar
Rate Loans, and (ii) one Business Day prior to the Effective Date, in the case
of Base Rate Loans), specifying:
(A) the amount of the Borrowing, which shall be in an
aggregate minimum amount of $3,000,000 or any
multiple of $1,000,000 in excess thereof for
Eurodollar Loans, or $1,000,000 or any multiple of
$100,000 in excess thereof for Base Rate Loans;
(B) the Type of Loans comprising the Borrowing; and
(C) the duration of the Interest Period applicable to any
Eurodollar Rate Loans included in such notice. If the
Notice of Borrowing fails to specify the duration of
the Interest Period for any Borrowing comprised of
Eurodollar Rate Loans, such Interest Period shall be
one month.
(b) The Administrative Agent will promptly notify each Bank of
the Administrative Agent's receipt of any Notice of Borrowing and of the amount
of such Bank's Pro Rata Share of that Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of
each Borrowing available to the Administrative Agent for the account of the
Borrower at the Administrative Agent's Payment Office by 11:00 a.m. San
Francisco time on the Effective Date in funds immediately available to the
Administrative Agent. The proceeds of all such Loans will then be made available
to the Borrower by the Administrative Agent at such office by crediting the
account of the Borrower on the books of BofA with the aggregate of the amounts
made available to the Administrative Agent by the Banks and in like funds as
received by the Administrative Agent.
(d) After giving effect to any Borrowing, there may not be
more than three (3) different Interest Periods in effect with respect to
Eurodollar Rate Loans.
Section 2.04 Conversion and Continuation Elections. (a) The Borrower may,
upon irrevocable written notice to the Administrative Agent in accordance with
subsection 2.04(b):
(i) elect, as of any Business Day, in the case
of Base Rate Loans, or as of the last day of
the applicable Interest Period, in the case
of Eurodollar Rate Loans, to convert any
such Loans (or any part thereof in an amount
not less than $3,000,000, or that is in an
integral multiple of $1,000,000 in excess
thereof) into Loans of the other Type; or
(ii) elect as of the last day of the applicable
Interest Period, to continue as Eurodollar
Rate Loans any Loans having Interest Periods
expiring on such day (or any part thereof in
an amount not less than $3,000,000, or that
is in an integral multiple of $1,000,000 in
excess thereof);
provided, that if at any time the aggregate amount of Eurodollar Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $3,000,000, such Eurodollar Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Borrower to continue such Loans as, and convert such Loans into,
Eurodollar Rate Loans shall terminate.
(b) The Borrower shall deliver a Notice of
Conversion/Continuation to be received by the Administrative Agent not later
than 9:00 a.m. San Francisco time at least (i) three Business Days in advance of
the Conversion/Continuation Date, if the Loans are to be converted into or
continued as Eurodollar Rate Loans; and (ii) one Business Day in advance of the
Conversion/Continuation Date, if the Loans are to be converted into Base Rate
Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be converted or renewed;
(C) the Type of Loans resulting from the proposed conversion or continuation;
and
(D) other than in the case of conversions into Base Rate
Loans, the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable
to Eurodollar Rate Loans, the Borrower has failed to select a new Interest
Period within the time period specified in subsection 2.04(b) to be applicable
to such Eurodollar Rate Loans, or if any Default or Event of Default then
exists, the Borrower shall be deemed to have elected to convert such Eurodollar
Rate Loans into Base Rate Loans effective as of the expiration date of such
Interest Period.
(d) The Administrative Agent will promptly notify each Bank of
its receipt of a Notice of Conversion/Continuation, or, if no notice is provided
by the Borrower within the time period specified in subsection 2.04(b), the
Administrative Agent will promptly notify each Bank of the details of any
automatic conversion. All conversions and continuations shall be made ratably
according to the respective outstanding principal amounts of the Loans with
respect to which the notice was given held by each Bank.
(e) Unless the Majority Banks otherwise agree, during the
existence of a Default or Event of Default, the Borrower may not elect to have a
Loan converted into or continued as a Eurodollar Rate Loan.
(f) After giving effect to any conversion or continuation of
Loans, there may not be more than three (3) different Interest Periods in
effect.
Section 2.05 Optional Prepayments. (a) Subject to Section 3.04, the Borrower
may, at any time or from time to time, not later than 9:00 a.m. San Francisco
time at least three (3) Business Days prior to its effective date by irrevocable
notice to the Administrative Agent, in the case of Eurodollar Rate Loans, and
not later than 9:00 a.m. San Francisco time at least one (1) Business Day prior
to its effective date by irrevocable notice to the Administrative Agent, in the
case of Base Rate Loans, ratably prepay the Loans in whole or in part, in
minimum amounts of $3,000,000 or any multiple of $1,000,000 in excess thereof,
for Eurodollar Rate Loans, and in minimum amounts of $1,000,000 or any multiple
of $100,000 in excess thereof, for Base Rate Loans.
(b) Any such notice of prepayment shall specify the date and
amount of such prepayment and the Type(s) of the Loans to be prepaid.
Prepayments of Base Rate Loans may be made hereunder on any Business Day.
Prepayments of Eurodollar Rate Loans may be made hereunder only on the last day
of any applicable Interest Period; provided, that prepayments of Eurodollar Rate
Loans may be made on a day other than the last day of the applicable Interest
Period only with payment by the Borrower of the aggregate amount of any
associated funding losses of any affected Banks pursuant to Section 3.04. The
Administrative Agent will promptly notify each Bank of its receipt of any such
notice, and of such Bank's Pro Rata Share of such prepayment.
(c) If any such notice is given by the Borrower, the Borrower
shall make such prepayment and the payment amount specified in such notice shall
be due and payable on the date specified therein, together, in the case of a
Eurodollar Rate Loan, with accrued interest to each such date on the amount
prepaid and any amounts required pursuant to Section 3.04.
Section 2.06 Mandatory Prepayments of Loans; Mandatory Commitment Reductions.
(a) If a Change of Control occurs following the Ferrellgas Joinder Event, the
Borrower shall immediately, and without notice or demand, prepay the Obligations
in full, including the aggregate principal amount of all outstanding Loans, all
accrued and unpaid interest thereon and all amounts payable under Section 3.04
hereof, in each case on the 30th day after such Change of Control shall have
occurred and be continuing.
(b) The Commitments shall be automatically reduced to zero at 5:00 p.m. San
Francisco time on the Effective Date.
Section 2.07 Repayment. The Borrower shall repay to the Banks in full on the
Maturity Date the aggregate principal amount of the Loans outstanding on such
date together with all accrued and unpaid interest thereon.
Section 2.08 Interest. (a) Each Loan shall bear interest on the outstanding
principal amount thereof from the Effective Date (subject to the Borrower's
right to convert to other Types of Loans under Section 2.04) at a rate per annum
equal to:
(i) during such periods as such Loan is a Base
Rate Loan, the Base Rate (as in effect from
time to time) plus the Applicable Margin (if
any); and
(ii) during such periods as such Loan is a
Eurodollar Loan, the Eurodollar Rate for
such Loan for its Interest Period plus the
Applicable Margin (if any).
(b) Interest on each Loan shall be paid in arrears on each
applicable Interest Payment Date and on the Maturity Date. Interest in all cases
shall also be paid on the date of any prepayment of Loans under subsection
2.06(a) and interest on Eurodollar Rate Loans shall also be paid on the date of
prepayment of Loans in all other circumstances under Section 2.05 or 2.06, in
each case for the portion of the Loans so prepaid and upon payment (including
prepayment) in full thereof and, during the existence of any Event of Default,
interest shall be paid on demand of the Administrative Agent at the request or
with the consent of the Majority Banks.
(c) Notwithstanding subsection (a) of this Section, while any
Event of Default exists or after acceleration, the Borrower shall pay interest
(after as well as before entry of judgment thereon to the extent permitted by
law) on the principal amount of all outstanding Obligations, at a rate per annum
which is determined by adding 2% per annum to the interest rate then in effect
for the Loans included in such Obligations as set forth in subsection (a) above
and, in the case of Obligations other than Base Rate Loans or Eurodollar Loans,
including all fees provided herein, at a rate per annum which is determined by
adding 2% per annum to the interest rate then in effect for the Loans as set
forth in subsection (a) above (calculated using the Base Rate); provided,
however, that, on and after the expiration of any Interest Period applicable to
any Eurodollar Rate Loan outstanding on the date of occurrence of such Event of
Default or acceleration, the principal amount of such Loan shall, during the
continuation of such Event of Default or after acceleration, bear interest at a
rate per annum equal to the Base Rate plus the Applicable Margin for Base Rate
Loans plus 2%.
(d) Anything herein to the contrary notwithstanding, the
obligations of the Borrower to any Bank hereunder shall be subject to the
limitation that payments of interest shall not be required for any period for
which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by such Bank would be contrary to
the provisions of any law applicable to such Bank limiting the highest rate of
interest that may be lawfully contracted for, charged or received by such Bank,
and in such event the Borrower shall pay such Bank interest at the highest rate
permitted by applicable law.
Section 2.09 Fees. The Borrower shall pay all fees referred to in (a) the letter
agreement dated November 16, 1999 among the MLP, the Borrower, the Arranger and
Administrative Agent and (b) the letter agreement dated the date of this
Agreement among Thermogas, Ferrellgas and the Administrative Agent (such
letters, the "Fee Letters"), in each case at the times and in the amounts set
forth in the Fee Letters.
Section 2.10 Computation of Fees and Interest. (a) All computations of interest
for Base Rate Loans when the Base Rate is determined by BofA's "reference rate"
shall be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of interest and fees shall be made
on the basis of a 360-day year and actual days elapsed (which results in more
interest being paid than if computed on the basis of a 365-day year). Interest
and fees shall accrue during each period during which interest or such fees are
computed from the first day thereof to the last day thereof.
(b) Each determination of an interest rate by the
Administrative Agent shall be conclusive and binding on the Borrower and the
Banks in the absence of manifest error.
Section 2.11 Payments by the Borrower. (a) All payments to be made by the
Borrower under any Loan Document shall be made without set-off, recoupment,
counterclaim or other defense. Except as otherwise expressly provided herein,
all payments by the Borrower shall be made to the Administrative Agent for the
account of the Banks at the Administrative Agent's Payment Office, and shall be
made in dollars and in immediately available funds, no later than 10:00 a.m.
(San Francisco time) on the date specified herein. The Administrative Agent will
promptly distribute to each Bank its Pro Rata Share (or other applicable share
as expressly provided herein) of such payment in like funds as received. Any
payment received by the Administrative Agent later than 10:00 a.m. (San
Francisco time) shall be deemed to have been received on the following Business
Day and any applicable interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
(c) Unless the Administrative Agent receives notice from the
Borrower prior to the date on which any payment is due to the Banks that the
Borrower will not make such payment in full as and when required, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date in immediately available funds and the
Administrative Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent the Borrower has not made such
payment in full to the Administrative Agent, each Bank shall repay to the
Administrative Agent on demand such amount distributed to such Bank, together
with interest thereon at the Federal Funds Rate for each day from the date such
amount is distributed to such Bank until the date repaid.
(d) Unless a due date is otherwise specified herein, the due
date for any Obligation shall be 30 days after demand therefor by the Person to
whom the Obligation is owed.
Section 2.12 Payments by the Banks to the Administrative Agent. (a) Unless the
Administrative Agent receives notice from a Bank on or prior to the Effective
Date that such Bank will not make available as and when required hereunder to
the Administrative Agent for the account of the Borrower the amount of that
Bank's Pro Rata Share of the Borrowing, the Administrative Agent may assume that
each Bank has made such amount available to the Administrative Agent in
immediately available funds on the Effective Date and the Administrative Agent
may (but shall not be so required), in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and to the
extent any Bank shall not have made its full amount available to the
Administrative Agent in immediately available funds and the Administrative Agent
in such circumstances has made available to the Borrower such amount, that Bank
shall on the Business Day following the Effective Date make such amount
available to the Administrative Agent, together with interest at the Federal
Funds Rate for each day during such period. A notice of the Administrative Agent
submitted to any Bank with respect to amounts owing under this subsection (a)
shall be conclusive, absent manifest error. If such amount is so made available,
such payment to the Administrative Agent shall constitute such Bank's Loan on
the Effective Date for all purposes of this Agreement. If such amount is not
made available to the Administrative Agent on the Business Day following the
Effective Date, the Administrative Agent will notify the Borrower of such
failure to fund and, upon demand by the Administrative Agent, the Borrower shall
pay such amount to the Administrative Agent for the Administrative Agent's
account, together with interest thereon for each day elapsed since the Effective
Date, at a rate per annum equal to the interest rate applicable at the time to
the Loans comprising such Borrowing.
(b) The failure of any Bank to make any Loan on Effective Date
shall not relieve any other Bank of any obligation hereunder to make a Loan on
such date, but no Bank shall be responsible for the failure of any other Bank to
make the Loan to be made by such other Bank on the Effective Date.
Section 2.13 Sharing of Payments, Etc. If (other than (x) as expressly provided
elsewhere in this Agreement (including Section 2.14) and (y) with respect to
fees that are not expressly provided for in this Agreement) any Bank shall
obtain on account of the Loans made by it any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) in
excess of its Pro Rata Share, such Bank shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Banks such
participations in the Loans made by them as shall be necessary to cause such
purchasing Bank to share the excess payment pro rata with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Bank, such purchase shall to that
extent be rescinded and each other Bank shall repay to the purchasing Bank the
purchase price paid therefor, together with an amount equal to such paying
Bank's ratable share (according to the proportion of (i) the amount of such
paying Bank's required repayment to (ii) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Borrower agrees
that any Bank so purchasing a participation from another Bank may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Bank were the direct creditor of the Borrower in the amount of such
participation. The Administrative Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of participations
purchased under this Section and will in each case notify the Banks following
any such purchases or repayments.
Section 2.14 Extension of Maturity Date; Amendment and Restatement of Agreement.
(a) The Borrower may from time to time at its option request all of the Banks by
notice to the Administrative Agent to amend and restate this Agreement in order
to extend the current Maturity Date for a period of up to but not exceeding
fifteen (15) years and otherwise to incorporate terms and conditions that are
substantially similar to those set forth in the 1998 Note Purchase Agreement,
together with such other or additional terms and conditions (including with
respect to fees, interest rates and amortization of principal) as shall be set
forth in such request (an "Extension Request"); provided, that the Borrower may
not request any Borrowings that would increase the outstanding principal amount
of the Loans above the principal amount of the Loans outstanding immediately
prior to giving effect to any amendment and restatement of this Agreement
contemplated by this Section 2.14; and provided, further, that the Borrower may
not submit any Extension Request prior to January 31, 2000 or later than April
30, 2000. The Administrative Agent shall notify each Bank of an Extension
Request within five (5) days after the Administrative Agent's receipt of such
Extension Request from the Borrower. Within fifteen (15) days after the receipt
of the Extension Request from the Administrative Agent, each Bank in its sole
and absolute discretion may, by written notice to the Borrower and the
Administrative Agent (an "Extension Commitment"), agree to participate in the
extension of the Maturity Date on the terms and conditions set forth in the
Extension Request and this Section 2.14, in which event such Bank (or, at the
option of such Bank, a financial institution that is an Affiliate of such Bank)
shall continue to make such Loans available to the Borrower pursuant to this
Agreement as amended and restated to incorporate such terms and conditions (and
such Bank or Affiliate of such Bank shall execute any documentation necessary to
implement the foregoing). Any Bank electing not to submit an Extension
Commitment shall, promptly after requested to do so by the Borrower, assign its
Loans to another financial institution or other Person selected by the Borrower
(which financial institution or other Person shall be satisfactory to the
Administrative Agent and the Arranger in their sole discretion), and the
Borrower shall compensate such Bank for its funding losses, if any, in
connection with such assignment pursuant to Section 3.04 as if the Borrower had
prepaid the Loans of such Bank on the date of assignment.
(b) Within five (5) days after expiration of the period for
submission of an Extension Commitment from the Banks, the Administrative Agent
shall promptly send to each Bank submitting an Extension Commitment a notice (an
"Available Loan Notice") identifying (i) each of the Bank's electing not to
submit an Extension Commitment, (ii) the amount of each such Bank's Pro Rata
Share of the Effective Amount of the Loans then outstanding and (iii) the total
Effective Amount of the Loans for which no Extension Commitments have been
submitted (the "Available Loan Interest"). Within five (5) days after receipt of
an Available Loan Notice from the Administrative Agent, each Bank that
previously submitted an Extension Commitment may in its sole and absolute
discretion deliver a notice to the Administrative Agent (a "Confirmation
Notice") specifying the percentage of the Available Loan Interest that such Bank
(or a financial institution that is an Affiliate of such Bank) wishes to assume
(the "Loan Acceptance Percentage"). Failure by any such Bank to timely deliver a
Confirmation Notice shall be deemed notice that such Bank has declined to assume
any of the Available Loan Interest. In the event that the sum of the Loan
Acceptance Percentages is equal to or less than 100% of the Available Loan
Interest, the Administrative Agent shall allocate the Loan Acceptance
Percentages as specified in the corresponding Confirmation Notices and, with
respect to any remaining Available Loan Interest, follow the procedures
described in subsection (c) below. In the event that the sum of the Loan
Acceptance Percentages is greater than 100% of the Available Loan Interest, the
Administrative Agent shall apportion the Available Loan Interest among the Banks
which submitted Extension Commitments pro rata according to the respective Loan
Acceptance Percentage for each such Bank.
(c) If, upon completion of the procedures described in
subsection (b) above, there remains all or some portion of the Available Loan
Interest that has not been assumed by the Banks submitting Confirmation Notices,
the Administrative Agent shall, upon the request of the Borrower and subject to
an agreement having been made with respect to fees as set forth in subsection
(e) below, make a request (by sending an Available Loan Notice) to other
financial institutions or Persons (including insurance companies) selected by
the Administrative Agent and the Arranger (and reasonably acceptable to the
Borrower) to assume such Available Loan Interest. Such Available Loan Interest
or part thereof, as the case may be, shall be apportioned in the sole and
absolute discretion of the Administrative Agent and the Arranger among those
financial institutions, if any, that deliver Confirmation Notices in a timely
manner. All matters relating the timing of the transmittal of the Available Loan
Notices, the delivery of Confirmation Notices, the apportionment of the
Available Loan Interest and all other matters relating to the timing of the
assumption of the Available Loan Interest shall be as determined by the
Administrative Agent and the Arranger in their sole and absolute discretion.
(d) If, upon completion of the procedures described in
subsections (b) and (c) above, there remains any portion of the Available Loan
Interest that has not been assumed by (and the related Loans assigned to) the
remaining Banks and/or any other financial institutions or Persons and the
Borrower nonetheless wishes to proceed with the amendment and restatement of
this Agreement as set forth in this Section 2.14 (and so long as no Event of
Default has occurred), the Borrower shall (subject to giving notice of
prepayment as required by this Agreement) on any Business Day prior to the
current Maturity Date (i) prepay the aggregate unpaid principal amount of each
Bank's Loans which have not been assigned to such remaining Banks and/or other
financial institutions, together with accrued interest on such amount to the
date of such prepayment, and (ii) compensate each such Bank for its funding
losses, if any, in connection with such prepayment in accordance with Section
3.04. Notwithstanding any other provision of this Section 2.14, if the Effective
Amount of the Loans that would be outstanding after giving effect to any
prepayment required by the immediately preceding sentence is less than
$100,000,000, the current Maturity Date shall in no event be extended unless
each of the Banks and other financial institutions or Persons that would be a
party to this Agreement after its amendment and restatement consents in writing
to such extension (and failing such consent the Extension Request prompting the
operation of this Section 2.14 shall be deemed withdrawn).
(e) Notwithstanding any other provision of this Agreement, any extension of the
Maturity Date and amendment and restatement of this Agreement as provided in
this Section 2.14 shall be subject to the payment by the Borrower of such fees
to such Persons (including the Administrative Agent and the Arranger) as shall
be agreed upon by the Administrative Agent, the Arranger and the Borrower.
(f) Any assignment of a Bank's Loans that may be required as a
result of the operation of this Section 2.14 shall be made in accordance with
Section 11.08.
(g) The Borrower may withdraw an Extension Request at any time
prior to the receipt by the Administrative Agent of Confirmation Notices
covering all of the Available Loan Interest. No Extension Request may be made,
and any Extension Request that has been made shall be immediately and
automatically withdrawn, upon and after the occurrence of any Event of Default.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
Section 3.01 Taxes. (a) Any and all payments by the Borrower to each Bank or the
Administrative Agent under this Agreement and any other Loan Document shall be
made free and clear of, and without deduction or withholding for any Taxes. In
addition, the Borrower shall pay all Other Taxes.
(b) The Borrower agrees to indemnify and hold harmless each
Bank and the Administrative Agent for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section) paid by the Bank or the Administrative Agent and any
liability (including interest, additions to tax and expenses) arising therefrom
or with respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted. Payment under this indemnification shall be made within 30
days after the date the Bank or the Administrative Agent makes written demand
therefor.
(c) If the Borrower shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Bank or the Administrative Agent, then:
(i) the sum payable shall be increased as
necessary so that after making all required
deductions and withholdings (including
deductions and withholdings applicable to
additional sums payable under this Section)
such Bank or the Administrative Agent, as
the case may be, receives an amount equal to
the sum it would have received had no such
deductions or withholdings been made;
(ii) the Borrower shall make such deductions and
withholdings;
(iii) the Borrower shall pay the full amount
deducted or withheld to the relevant taxing
authority or other authority in accordance
with applicable law; and
(iv) the Borrower shall also pay to each Bank or
the Administrative Agent for the account of
such Bank, at the time interest is paid, all
additional amounts which the respective Bank
specifies as necessary to preserve the
after-tax yield the Bank would have received
if such Taxes or Other Taxes had not been
imposed.
(d) Within 30 days after the date of any payment by the
Borrower of Taxes or Other Taxes, the Borrower shall furnish the Administrative
Agent with the original or a certified copy of a receipt evidencing payment
thereof, or other evidence of payment satisfactory to the Administrative Agent.
(e) If the Borrower is required to pay additional amounts to
any Bank or the Administrative Agent pursuant to subsection (c) of this Section,
then such Bank shall use reasonable efforts (consistent with legal and
regulatory restrictions) to change the jurisdiction of its Lending Office so as
to eliminate any such additional payment by the Borrower which may thereafter
accrue, if such change in the judgment of such Bank is not otherwise
disadvantageous to such Bank.
Section 3.02 Illegality. (a) If any Bank determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Bank or its applicable Lending Office to make
Eurodollar Rate Loans, then, on notice thereof by the Bank to the Borrower
through the Administrative Agent, any obligation of that Bank to make Eurodollar
Rate Loans shall be suspended until the Bank notifies the Administrative Agent
and the Borrower that the circumstances giving rise to such determination no
longer exist.
(b) If a Bank determines that it is unlawful to maintain any
Eurodollar Rate Loan, the Borrower shall, upon its receipt of notice of such
fact and demand from such Bank (with a copy to the Administrative Agent), prepay
in full such Eurodollar Rate Loans of that Bank then outstanding, together with
interest accrued thereon and amounts required under Section 3.04, either on the
last day of the Interest Period thereof, if the Bank may lawfully continue to
maintain such Eurodollar Rate Loans to such day, or immediately, if the Bank may
not lawfully continue to maintain such Eurodollar Rate Loan. If the Borrower is
required to so prepay any Eurodollar Rate Loan, then concurrently with such
prepayment, the Borrower shall borrow from the affected Bank, in the amount of
such repayment, a Base Rate Loan.
(c) If the obligation of any Bank to make or maintain
Eurodollar Rate Loans has been so terminated or suspended, the Borrower may
elect, by giving notice to the Bank through the Administrative Agent that all
Loans which would otherwise be made by the Bank as Eurodollar Rate Loans shall
be instead Base Rate Loans.
(d) Before giving any notice to the Administrative Agent under
this Section, the affected Bank shall designate a different Lending Office with
respect to its Eurodollar Rate Loans if such designation will avoid the need for
giving such notice or making such demand and will not, in the judgment of the
Bank, be illegal or otherwise disadvantageous to the Bank.
Section 3.03 Increased Costs and Reduction of Return. (a) If any Bank determines
that, due to either (i) the introduction of or any change (other than any change
by way of imposition of or increase in reserve requirements included in the
calculation of the Eurodollar Rate or in respect of the assessment rate payable
by any Bank to the FDIC for insuring U.S. deposits) in or in the interpretation
of any law or regulation or (ii) the compliance by that Bank with any guideline
or request from any central bank or other Governmental Authority (whether or not
having the force of law), there shall be any increase in the cost to such Bank
of agreeing to make or making, funding or maintaining any Eurodollar Rate Loans,
then the Borrower shall be liable for, and shall from time to time, upon demand
(with a copy of such demand to be sent to the Administrative Agent), pay to the
Administrative Agent for the account of such Bank, additional amounts as are
sufficient to compensate such Bank for such increased costs.
(b) If any Bank shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration of
any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or (iv)
compliance by the Bank (or its Lending Office) or any corporation controlling
the Bank with any Capital Adequacy Regulation, affects or would affect the
amount of capital required or expected to be maintained by the Bank or any
corporation controlling the Bank and (taking into consideration such Bank's or
such corporation's policies with respect to capital adequacy and such Bank's
desired return on capital) determines that the amount of such capital is
increased as a consequence of its Commitments, Loans, credits or obligations
under this Agreement, then, upon demand of such Bank to the Borrower through the
Administrative Agent, the Borrower shall pay to the Bank, from time to time as
specified by the Bank, additional amounts sufficient to compensate the Bank for
such increase.
Section 3.04 Funding Losses. The Borrower shall reimburse each Bank and hold
each Bank harmless from any loss or expense which each Bank may sustain or incur
as a consequence of:
(a) the failure of the Borrower to make on a timely basis any
payment of principal of any
Eurodollar Rate Loan;
(b) the failure of the Borrower to borrow, continue or convert a Loan after the
Borrower has given (or is deemed to have given) a Notice of Borrowing or a
Notice of Conversion/ Continuation;
(c) the failure of the Borrower to make any prepayment in accordance with any
notice delivered under Section 2.05;
(d) the prepayment (including pursuant to Section 2.06 or 2.14) or other payment
(including after acceleration thereof) of a Eurodollar Rate Loan on a day that
is not the last day of the relevant Interest Period; or
(e) the automatic conversion under Section 2.04 of any Eurodollar Rate Loan to a
Base Rate Loan on a day that is not the last day of the relevant Interest
Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Eurodollar Rate Loans or from fees
payable to terminate the deposits from which such funds were obtained. Such
reimbursement of funding losses or expenses shall be paid by the Borrower to the
Administrative Agent within 15 days after demand therefor. For purposes of
calculating amounts payable by the Borrower to the Banks under this Section and
under subsection 3.03(a), each Eurodollar Rate Loan made by a Bank (and each
related reserve, special deposit or similar requirement) shall be conclusively
deemed to have been funded at the LIBOR used in determining the Eurodollar Rate
for such Eurodollar Rate Loan by a matching deposit or other borrowing in the
interbank eurodollar market for a comparable amount and for a comparable period,
whether or not such Eurodollar Rate Loan is in fact so funded.
Section 3.05 Inability to Determine Rates. If the Administrative Agent
determines that for any reason adequate and reasonable means do not exist for
determining the Eurodollar Rate for any requested Interest Period with respect
to a proposed Eurodollar Rate Loan or that the Eurodollar Rate applicable
pursuant to subsection 2.09(a) for any requested Interest Period with respect to
a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost
to such Banks of funding such Loan, the Administrative Agent will promptly so
notify the Borrower and each Bank. Thereafter, the obligation of the Banks to
make or maintain Eurodollar Rate Loans, hereunder shall be suspended until the
Administrative Agent upon the instruction of the Majority Banks revokes such
notice in writing. Upon receipt of such notice, the Borrower may revoke any
Notice of Borrowing or Notice of Conversion/Continuation then submitted by it.
If the Borrower does not revoke such Notice, the Banks shall make, convert or
continue the Loans, as proposed by the Borrower, in the amount specified in the
applicable notice submitted by the Borrower, but such Loans shall be made,
converted or continued as Base Rate Loans instead of Eurodollar Rate Loans.
Section 3.06 Survival. The agreements and obligations of the
Borrower in this Article III shall
survive the payment of all other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 Conditions to Effectiveness. The effectiveness of this Agreement is
subject to the satisfaction of the following conditions precedent, including the
condition that the Administrative Agent shall have received on or before January
31, 2000 all of the following, in form and substance satisfactory to the
Administrative Agent and, where provided below, each Bank, and in sufficient
copies for each Bank:
(a) Loan Documents. This Agreement, the TWCI Guaranty, the Fee
Letters and any Notes requested by
the Banks, executed by each party thereto.
(b) Acquisition Documents. The Purchase Agreement (including all schedules and
exhibits thereto), certified by a Responsible Officer as true, complete and in
full force and effect, together with copies of all other documents, instruments,
notices (including any notice required under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976), certificates, opinions and other material writings
executed and delivered in connection with the transactions contemplated by the
Purchase Agreement. The Purchase Agreement and all such other documents shall be
in form and substance satisfactory to the Administrative Agent and, in the case
of opinions, shall be accompanied by a letter from the Person delivering the
same authorizing reliance thereon by the Administrative Agent and the Banks. The
Purchase Agreement shall not have been altered, amended or otherwise changed or
supplemented or any condition therein waived without the prior written consent
of the Administrative Agent.
The transactions contemplated by the Purchase Agreement shall have been
consummated on the Effective Date in accordance with the terms thereof and in
compliance with applicable Requirements of Law.
(c) Certain Information. The Administrative Agent shall have received and
reviewed, with results satisfactory to the Administrative Agent and its counsel,
information regarding litigation, tax, accounting, labor, insurance, pension
liabilities (actual or contingent), real estate leases, environmental matters,
material contracts, debt agreements, property ownership, contingent liabilities
and management of Thermogas and Ferrellgas and their respective Subsidiaries.
(d) Resolutions; Incumbency.
(i) Copies of the resolutions of each of TWCI
and Thermogas (or, if applicable, of the
managing member of Thermogas) authorizing
the transactions contemplated by the Loan
Documents, certified as of the Effective
Date by the Secretary or an Assistant
Secretary of TWCI and Thermogas,
respectively; and
(ii) A certificate of the Secretary or Assistant
Secretary of each of TWCI and Thermogas
certifying the names and true signatures of
the officers of TWCI and Thermogas
authorized to execute, deliver and perform,
as applicable, on behalf of TWCI and
Thermogas, this Agreement and all other Loan
Documents to be delivered by TWCI and
Thermogas hereunder.
(e)
<PAGE>
Organization Documents; Good Standing. Each of the
following documents:
(i) The LLC Agreement as in effect on the
Effective Date, certified by the Secretary
or Assistant Secretary of Thermogas as of
the Effective Date;
(ii) A copy of the articles or certificate of
incorporation or other charter documents of
TWCI and the certificate of formation of
Thermogas, certified by the Secretary of
State (or other applicable Governmental
Authority) of its state of incorporation as
of a recent date;
(iii) A copy of the bylaws of TWCI as in effect on
the Effective Date, certified by the
Secretary or Assistant Secretary of TWCI as
of the Effective Date; and
(iv) A good standing and tax good standing
certificate for each of TWCI and Thermogas
from the Secretary of State (or other,
applicable Governmental Authority) of its
state of incorporation or organization, as
applicable, and (with respect to Thermogas
only) each other state designated by
Administrative Agent where Thermogas
conducts significant business, in each case
as of a recent date.
(f) Financial Statements. The Administrative Agent shall have received and
reviewed, with results satisfactory to the Administrative Agent, the
consolidated financial statements of TWCI and its Subsidiaries, Thermogas and
its Subsidiaries and Ferrellgas and its Subsidiaries, in each case for the
immediately preceding two fiscal years for which such financial statements are
available (or, in the case of Thermogas and its Subsidiaries, for the fiscal
year ending December 31, 1998 and the nine-month period ending September 30,
1999) including balance sheets and income and cash flow statements, which
financial statements (x) have been prepared in conformity with GAAP (subject to
ordinary, good faith year-end audit adjustments) and (y) in the case of TWCI and
its Subsidiaries and Ferrellgas and its Subsidiaries, have been audited by
independent public accountants of recognized national standing.
(g) [Intentionally omitted.]
(h) Funds for Acquisition; No other Obligations. Evidence satisfactory to the
Administrative Agent that (i) Thermogas shall receive as of the Effective Date
net proceeds of $133,830,627.50 in connection with the sale by it of propane
tanks that will be leased back to it pursuant to a Synthetic Lease, (ii) the MLP
shall receive as of the Effective Date net proceeds of at least $175 million
from the issuance of its senior common units, and (iii) Thermogas shall have no
Synthetic Lease Obligations or Indebtedness outstanding as of the Effective Date
other than Synthetic Lease Obligations in respect of the Synthetic Lease
referred to above in this paragraph and Indebtedness under this Agreement.
(i) Consents. Evidence that all governmental, shareholder and third party
consents (including Hart-Scott Rodino clearance) and approvals necessary or
desirable in connection with the transactions contemplated hereby and by the
Purchase Agreement shall have been obtained; all such consents and approvals
shall be in force and effect; and all applicable waiting periods shall have
expired without any action being taken by any authority that could restrain,
prevent or impose any material adverse conditions on the transactions or that
could seek or threaten any of the foregoing, and no law or regulation shall be
applicable which in the judgment of the Banks could have such effect.
(j) Litigation. There shall not exist (i) any order, decree, judgment, ruling or
injunction which restrains the consummation of the transactions contemplated
hereby or by the Purchase Agreement, or (ii) any pending or threatened action,
suit, investigation or proceeding, which, if adversely determined, could
materially and adversely affect TWCI, Thermogas, the General Partner, the MLP,
Ferrellgas or their respective Subsidiaries, any transaction contemplated hereby
or by the Purchase Agreement, or the ability of TWCI, Thermogas, Ferrellgas or
the General Partner to perform their respective obligations under the Loan
Documents or the ability of the Administrative Agent or any of the Banks to
exercise its rights thereunder.
(k) Legal Opinion. The opinion of the Senior Vice President and General Counsel
of TWCI and Thermogas or of such other counsel as are acceptable to the
Administrative Agent and the Banks, addressed to the Administrative Agent and
the Banks, substantially in the form of Exhibit D-1.
(l) Payment of Fees. Evidence of payment by the Borrower of all accrued and
unpaid fees, costs and expenses to the extent due and payable as of the
Effective Date, together with Attorney Costs of the Administrative Agent to the
extent invoiced prior to or on the Effective Date, plus such additional amounts
of Attorney Costs as shall constitute the Administrative Agent's reasonable
estimate of Attorney Costs incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude final
settling of accounts between the Borrower and the Administrative Agent);
including any such costs, fees and expenses arising under or referenced in the
Fee Letters or otherwise in Sections 2.10 and 11.04.
(m) Certificate. A certificate signed by an authorized officer of Thermogas,
dated as of the Effective Date, stating that:
(i) the representations and warranties contained
in Article V are true and correct on and as
of such date, as though made on and as of
such date; and
(ii) no Default or Event of Default exists or
would result from the Credit Extensions to
be made on such date.
(n) No Material Change. There shall have been no material adverse change since
the end of the most recent fiscal year for which audited financial statements
are available, respectively, for TWCI, Thermogas and Ferrellgas, in the
business, assets, liabilities (actual or contingent), operations, condition
(financial or otherwise) or prospects of TWCI, Thermogas or Ferrellgas, as the
case may be, in each case together with their respective Subsidiaries taken as a
whole, or in the facts and information regarding such Persons as represented to
date.
(o) Contingent Payment Agreement. The Seller shall have confirmed in writing to
Ferrellgas and BofA that the obligations of (i) Ferrellgas under the Contingent
Payment Agreement and (ii) BofA under the related Assignment Agreement dated as
of November 7, 1999 between the Seller and BofA, have in each case been
terminated as of the Effective Date.
(p) Year 2000 Readiness. The Administrative Agent shall have received and
reviewed, with results satisfactory to the Administrative Agent, information
confirming that (i) Thermogas, the General Partner, the MLP, Ferrellgas and
their respective Subsidiaries are taking all necessary and appropriate steps to
ascertain the extent of, and to quantify and successfully address, business and
financial risks facing Thermogas, the General Partner, the MLP, Ferrellgas and
their respective Subsidiaries as a result of the Year 2000 Problem, including
risks resulting from the failure of key vendors and customers of Thermogas, the
General Partner, the MLP, Ferrellgas and their respective Subsidiaries to
successfully address the Year 2000 Problem, and (ii) the material computer
applications of Thermogas, the General Partner, the MLP, Ferrellgas and their
respective Subsidiaries, and those of the key vendors and customers of such
Persons will, on a timely basis, adequately address the Year 2000 Problem in all
material respects.
(q) Trading Policies. The trading position policy and the supply inventory
position policy of Ferrellgas as in effect on the Effective Date, as evidenced
by the written policies delivered to the Administrative Agent, shall be
satisfactory to the Administrative Agent and the Majority Banks.
(r) No Material Disruption. There shall have been no material disruption or
material adverse change in the financial, banking or capital markets.
(s) Clear Market. There shall have been no competing offering, placement or
arrangement of any debt securities, bank financings or other Indebtedness by or
on behalf of Thermogas or Ferrellgas (other than the financing arrangements
referred to in subsection (h) above).
(t) Ferrellgas Representations. Evidence satisfactory to the Administrative
Agent that Ferrellgas and the General Partner will be able to make the
representations set forth in Article VI on the Effective Date at the time of the
Ferrellgas Joinder Event.
(u) Other Documents. Such other approvals, opinions, documents or materials as
the Administrative Agent or any Bank may request.
Section 4.02 Conditions to All Credit Extensions. The obligation of each Bank to
make any Loan to be made by it on the Effective Date or to thereafter continue
or convert any Loan under Section 2.04 is subject to the satisfaction of the
following conditions precedent on the Effective Date or the relevant
Conversion/Continuation Date, as applicable:
(a) Notice, Application. The Administrative Agent shall have received
(with, in the case of the Loans to be made on the Effective Date, a copy for
each Bank) a Notice of Borrowing or a Notice of Conversion/Continuation, as
applicable;
(b) Representations and Warranties. The representations and warranties of the
Borrower in this Agreement (other than, after the Ferrellgas Joinder Event, the
representations and warranties made in Article V) and by the Guarantors (if any)
and the General Partner in any Loan Document shall be true and correct in all
material respects on and as of the Effective Date or such
Conversion/Continuation Date with the same effect as if made on and as of the
Effective Date or such Conversion/Continuation Date (except to the extent such
representations and warranties expressly refer to an earlier date, in which case
they shall be true and correct in all material respects as of such earlier
date); and
(c) No Existing Default. No Default or Event of Default shall exist or shall
result from such Borrowing, continuation or conversion.
Each Notice of Borrowing and Notice of Conversion/Continuation
submitted by the Borrower hereunder shall constitute a representation and
warranty by the Borrower hereunder, as of the date of each such notice and as of
the Effective Date and each Conversion/Continuation Date, as applicable, that
the conditions in this Section 4.02 have been satisfied.
Section 4.03 Conditions to Release of Guaranty. Upon the satisfaction of each of
the following conditions (in form and substance acceptable to the Majority
Banks) at or before 5:00 p.m. San Francisco time on the Effective Date, the
Administrative Agent, on behalf of itself and each of the Banks, shall execute
and deliver (and each of the Banks hereby authorize the Administrative Agent to
execute and deliver) to TWCI on the Effective Date a Release of Guaranty in
favor of TWCI:
(a) MLP Contribution to Ferrellgas and Merger. Evidence that all of the Capital
Interests in Thermogas acquired by the MLP from the Seller pursuant to the
Purchase Agreement shall have been transferred to Ferrellgas as a contribution
of capital and that the Thermogas Merger will occur as of the Effective Date
(including a copy of any and all documents and instruments effecting such
tansfer and merger).
(b) Ferrellgas Joinder Documents. Receipt by the Administrative Agent of (i) an
Assumption Agreement duly executed by Ferrellgas and the General Partner, and
(ii) replacement Notes duly executed by Ferrellgas for any Bank requesting the
same.
(c) Resolutions; Incumbency.
(i) Copies of partnership authorizations for
Ferrellgas and resolutions of the board of
directors of the General Partner authorizing
the transactions contemplated hereby,
certified as of the Effective Date by the
Secretary or an Assistant Secretary of the
General Partner; and
(ii) A certificate of the Secretary or Assistant
Secretary of the General Partner certifying
the names and true signatures of the
officers of the General Partner authorized
to execute, deliver and perform, as
applicable, on behalf of Ferrellgas and the
General Partner, this Agreement and all
other Loan Documents to be delivered by
Ferrellgas and the General Partner
hereunder.
(d) Organization Documents; Good Standing. Each of the following documents:
(i) The articles or certificate of incorporation
and the bylaws of the General Partner and
the Certificate of Limited Partnership and
the Partnership Agreement of Ferrellgas, in
each case as in effect on the Effective
Date, certified by the Secretary or
Assistant Secretary of the General Partner
as of the Effective Date;
(ii) A good standing and tax good standing
certificate for the General Partner and the
Borrower from the Secretary of State (or
similar, applicable Governmental Authority)
of its state of incorporation or
organization, as applicable, and each other
state designated by Administrative Agent
where the General Partner or the Borrower
conducts significant business, in each case
as of a recent date.
(e) Legal Opinion. The opinion of Bracewell & Patterson LLP, special counsel to
Ferrellgas and the General Partner or of such other counsel as are acceptable to
the Administrative Agent and the Banks, addressed to the Administrative Agent
and the Banks, substantially in the form of Exhibit D-2.
(f) Certificate. A certificate signed by a Responsible Officer, dated as of the
Effective Date, stating that:
(i) the representations and warranties contained
in Article VI are true and correct on and as
of such date, as though made on and as of
such date;
(ii) no Default or Event of Default exists or
would result from the Credit Extensions to
be made on such date; and
(iii) there has not occurred since July 31, 1999
any event or circumstance that has resulted
or could reasonably be expected to result in
a Material Adverse Effect.
(g) Solvency Certificate. A certificate executed by a Responsible Officer in
form and substance satisfactory to the Administrative Agent as to the financial
condition, solvency and related matters with respect to Ferrellgas, in each case
after giving effect to the Ferrellgas Joinder Event, this Agreement, the
Borrowings to be made under this Agreement on the Effective Date and the other
transactions contemplated by this Agreement (including the distribution to the
Seller of certain of the proceeds of Loans as contemplated by Section 7.11).
(h) Existing Indebtedness. Evidence that the commitments of the lenders under
the Short-Term Revolving Credit Agreement dated as April 30, 1999 among
Ferrellgas, the General Partner, the financial institutions party thereto (as
lenders), BofA (as administrative agent for such Lenders) and the Arranger,
shall have been irrevocably terminated and the loans and all other obligations
thereunder paid in full as of the Effective Date.
(i) 1996 Indenture; 1998 Note Purchase Agreement. The incurrence and maintenance
of the Indebtedness of the Borrower under this Agreement and of the Synthetic
Lease Obligations referred to in subsection 4.01(h) shall be permitted under the
1996 Indenture and the 1998 Note Purchase Agreement, and Ferrellgas shall have
delivered to the Administrative Agent a certificate of a Responsible Officer
demonstrating compliance with the applicable provisions of the 1996 Indenture
and the 1998 Note Purchase Agreement.
(j) Other Conditions Satisfied. Each of the conditions set forth in
Sections 4.01 and 4.02 shall --------------------------
have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THERMOGAS
Thermogas hereby represents and warrants to the Administrative
Agent and each Bank that:
Section 5.01 Corporate or Partnership Existence and Power. Thermogas and
each of its Subsidiaries: --------------------------------------------
(a) is a corporation, limited liability company or partnership duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
formation;
(b) has the power and authority and all governmental licenses, authorizations,
consents and approvals to own its assets, carry on its business as now being or
as proposed to be conducted and to execute, deliver, and perform its obligations
under the Loan Documents;
(c) is duly qualified as a foreign corporation, limited liability company or
partnership and is licensed and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification or license or where the failure so
to qualify would have a Material Adverse Effect; and
(d) is in compliance with all material Requirements of Law.
Section 5.02 Authorization; No Contravention. The execution, delivery and
performance by Thermogas of this Agreement and each other Loan Document to which
Thermogas or any Subsidiary is a party, have been duly authorized by all
necessary action on behalf of Thermogas, and do not and will not:
(a) contravene the terms of any of Thermogas' or any Subsidiary's
Organization Documents;
(b) conflict with or result in any breach or contravention of, or the creation
of any Lien under, any document evidencing any Contractual Obligation to which
Thermogas or any Subsidiary is a party or any order, injunction, writ or decree
of any Governmental Authority to which such Person or its property is subject,
where such conflict, breach, contravention or Lien could reasonably be expected
to have a Material Adverse Effect; or
(c) violate any material Requirement of Law.
Section 5.03 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, Thermogas or any
Subsidiary of this Agreement or any other Loan Document.
Section 5.04 Binding Effect. This Agreement and each other Loan Document to
which Thermogas or any Subsidiary is a party constitute the legal, valid and
binding obligations of such Person, enforceable against such Person in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, or similar laws affecting the enforcement
of creditors' rights generally or by equitable principles relating to
enforceability.
(a) Litigation. There are no actions, suits, proceedings, claims or disputes
pending, or to the best knowledge of Thermogas, threatened or contemplated, at
law, in equity, in arbitration or before any Governmental Authority, against
Thermogas or any of its Subsidiaries or any of their respective properties which
purport to affect or pertain to this Agreement or any other Loan Document or any
of the transactions contemplated hereby or thereby. No injunction, writ,
temporary restraining order or any order of any nature has been issued by any
court or other Governmental Authority purporting to enjoin or restrain the
execution, delivery or performance of this Agreement or any other Loan Document,
or directing that the transactions provided for herein or therein not be
consummated as herein or therein provided.
Section 5.05 No Default. No Default or Event of Default exists or would
result from the incurring of any Obligations by Thermogas.
Section 5.06 Use of Proceeds; Margin Regulations. The proceeds of the Loans are
to be used solely for the purposes set forth in and permitted by Section 7.11.
Neither Thermogas nor any Subsidiary of Thermogas is generally engaged in the
business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock.
Section 5.07 Title to Properties. Thermogas and each Subsidiary have good record
and marketable title in fee simple to, or valid leasehold interests in, all real
property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, have a Material Adverse Effect.
Section 5.08 Taxes. Thermogas has filed all Federal and other material tax
returns and reports required to be filed, and has paid all Federal and other
material taxes, assessments, fees and other governmental charges levied or
imposed upon it or its properties, income or assets otherwise due and payable,
except those which are being contested in good faith by appropriate proceedings
and for which adequate reserves have been provided in accordance with GAAP.
There is no proposed tax assessment against Thermogas that would, if made, have
a Material Adverse Effect.
Section 5.09 Financial Condition. (a) The unaudited consolidated financial
statements of Thermogas and its Subsidiaries dated December 31, 1998 and
September 30, 1999, in each case together with the related consolidated
statements of income or operations, shareholders' equity and cash flows for the
fiscal year and nine-month period ended on those respective dates:
(i) were prepared in accordance with GAAP
consistently applied throughout the period
covered thereby, except as otherwise
expressly noted therein, subject to
ordinary, good faith year end audit
adjustments;
(ii) fairly present the financial condition of
Thermogas and its Subsidiaries as of the
date thereof and results of operations for
the period covered thereby; and
(iii) show all material indebtedness and other
liabilities, direct or contingent, of
Thermogas and its consolidated Subsidiaries
as of the date thereof, including
liabilities for taxes, material commitments
and Contingent Obligations.
(b) Since December 31, 1998, there has been no Material
Adverse Effect.
(c) Thermogas and each of the Subsidiaries of Thermogas are
each Solvent, both before and after giving effect to the consummation of each of
the transactions contemplated by the Loan Documents.
Section 5.10 Regulated Entities. None of Thermogas or any Affiliate of the
Borrower, is an "Investment Company" within the meaning of the Investment
Company Act of 1940. Thermogas is not subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act, any state public utilities code, or any other Federal or state
statute or regulation limiting its ability to incur Indebtedness.
Section 5.11 Full Disclosure. None of the representations or warranties made by
Thermogas or any Affiliate of Thermogas in the Loan Documents as of the date
such representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of Thermogas or any Affiliate of Thermogas in connection with
the Loan Documents contains any untrue statement of a material fact or omits any
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they are made, not
misleading as of the time when made or delivered.
Section 5.12 Year 2000. Thermogas and its Subsidiaries have reviewed the areas
within their business and operations which could be adversely affected by, and
have developed or are developing a program to address on a timely basis, the
"Year 2000 Problem" (that is, the risk that computer applications used by any
relevant Person may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date on or after December 31,
1999), and have made related appropriate inquiry of material suppliers and
vendors. Based on such review and program, Thermogas believes that the Year 2000
Problem will not have a Material Adverse Effect.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF FERRELLGAS
Ferrellgas (upon its becoming the Borrower under this
Agreement by execution and delivery of the Assumption Agreement) and the General
Partner (by execution and delivery of the Assumption Agreement), from and after
the Ferrellgas Joinder Event, hereby represent and warrant to the Administrative
Agent and each Bank that:
Section 6.01 Corporate or Partnership Existence and Power. The General
Partner, the MLP, the Borrower and each of its Subsidiaries:
(a) is a corporation or partnership duly organized, validly existing and in
good standing under the laws of the jurisdiction of its formation;
(b) has the power and authority and all governmental licenses, authorizations,
consents and approvals to own its assets, carry on its business as now being or
as proposed to be conducted and to execute, deliver, and perform its obligations
under the Loan Documents;
(c) is duly qualified as a foreign corporation or partnership and is licensed
and in good standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such
qualification or license or where the failure so to qualify would have a
Material Adverse Effect; and
(d) is in compliance with all material Requirements of Law.
Section 6.02 Corporate or Partnership Authorization; No Contravention. The
execution, delivery and performance by the Borrower and the General Partner of
this Agreement and each other Loan Document to which the General Partner, the
Borrower or any Subsidiary is party, have been duly authorized by all necessary
partnership action on behalf of the Borrower and all necessary corporate action
on behalf of the General Partner and any Subsidiary, and do not and will not:
(a) contravene the terms of any of the General Partner's, the MLP's, the
Borrower's or any Subsidiary's Organization Documents;
(b) conflict with or result in any breach or contravention of, or the creation
of any Lien under, any document evidencing any Contractual Obligation to which
the General Partner, the MLP, the Borrower or any Subsidiary is a party or any
order, injunction, writ or decree of any Governmental Authority to which such
Person or its property is subject, where such conflict, breach, contravention or
Lien could reasonably be expected to have a Material Adverse Effect; or
(c) violate any material Requirement of Law.
Section 6.03 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with (a) the
execution, delivery or performance by, or enforcement against, the General
Partner, the Borrower or any Subsidiary of this Agreement or any other Loan
Document, or (b) the continued operation of Borrower's business as contemplated
to be conducted after the date hereof by the Loan Documents, except in each case
such approvals, consents, exemptions, authorizations or other actions, notices
or filings (i) as have been obtained, (ii) as may be required under state
securities or Blue Sky laws, (iii) as are of a routine or administrative nature
and are either (A) not customarily obtained or made prior to the consummation of
transactions such as the transactions described in clauses (a) or (b) or (B)
expected in the judgment of the Borrower to be obtained in the ordinary course
of business subsequent to the consummation of the transactions described in
clauses (a) or (b), or (iv) that, if not obtained, could not reasonably be
expected to have a Material Adverse Effect.
Section 6.04 Binding Effect. This Agreement and each other Loan Document to
which the General Partner, the Borrower or any Subsidiary is a party constitute
the legal, valid and binding obligations of such Person, enforceable against
such Person in accordance with their respective terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws affecting
the enforcement of creditors' rights generally or by equitable principles
relating to enforceability.
Section 6.05 Litigation. There are no actions, suits, proceedings, claims or
disputes pending, or to the best knowledge of the Borrower, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, against the General Partner, the MLP, the Borrower or any of its
Subsidiaries or any of their respective properties which:
(a) purport to affect or pertain to this Agreement or any other Loan
Document or any of the transactions contemplated hereby or thereby; or
(b) if determined adversely to the Borrower or its Subsidiaries, would
reasonably be expected to have a Material Adverse Effect. No injunction, writ,
temporary restraining order or any order of any nature has been issued by any
court or other Governmental Authority purporting to enjoin or restrain the
execution, delivery or performance of this Agreement or any other Loan Document,
or directing that the transactions provided for herein or therein not be
consummated as herein or therein provided.
Section 6.06 No Default. No Default or Event of Default exists or would result
from the incurring, continuing or converting of any Obligations by the Borrower.
As of the Effective Date, neither the Borrower nor any Affiliate of the Borrower
is in default under or with respect to any Contractual Obligation in any respect
which, individually or together with all such defaults, could reasonably be
expected to have a Material Adverse Effect, or that would, if such default had
occurred after the Effective Date, create an Event of Default under subsection
8.01(e).
Section 6.07 ERISA Compliance. (a) Each Plan is in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law. Each Plan which is intended to qualify under Section 401(a) of the
Code has received a favorable determination letter from the IRS and to the best
knowledge of the Borrower and the General Partner, nothing has occurred which
would cause the loss of such qualification.
(b) There are no pending, or to the best knowledge of Borrower
and the General Partner, threatened claims, actions or lawsuits, or action by
any Governmental Authority, with respect to any Plan which has resulted or could
reasonably be expected to result in a Material Adverse Effect. There has been no
prohibited transaction or other violation of the fiduciary responsibility rule
with respect to any Plan which could reasonably result in a Material Adverse
Effect.
(c) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Pension Plan.
(d) No Pension Plan has any Unfunded Pension Liability, except
that the Ferrellgas, Inc. Retirement Income Plan has an Unfunded Pension
Liability not in excess of $448,221; however, the Ferrellgas, Inc.
Retirement Income Plan is not underfunded.
(e) The Borrower has not incurred, nor does it reasonably
expect to incur, any liability under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent under Section 4007 of
ERISA).
(f) The Borrower has not transferred any Unfunded Pension
Liability to any Person or otherwise engaged in a transaction that could be
subject to Section 4069 of ERISA.
(g) Except as specifically disclosed in Schedule 6.07, no
trade or business (whether or not incorporated under common control with the
Borrower within the meaning of Section 414(b), (c), (m) or (o) of the Code)
maintains or contributes to any Pension Plan or other Plan subject to Section
412 of the Code. Except as specifically disclosed in Schedule 6.07, neither the
Borrower nor any Person under common control with the Borrower (as defined in
the preceding sentence) has ever contributed to any multiemployer plan within
the meaning of Section 4001(a)(3) of ERISA.
Section 6.08 Use of Proceeds; Margin Regulations. The proceeds of the Loans are
to be used solely for the purposes set forth in and permitted by Section 7.11.
Neither the Borrower nor any Affiliate of the Borrower is generally engaged in
the business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock.
Section 6.09 Title to Properties. The Borrower and each Subsidiary have good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, have a Material Adverse Effect. As of the Effective Date and
subject to the preceding sentence, the property of the Borrower and its
Subsidiaries is subject to no Liens other than Permitted Liens.
Section 6.10 Taxes. The General Partner has filed all Federal and other material
tax returns and reports required to be filed, for itself and for the Borrower,
and has paid all Federal and other material taxes, assessments, fees and other
governmental charges levied or imposed upon it or its properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings and for which adequate reserves have been
provided in accordance with GAAP. There is no proposed tax assessment against
the Borrower that would, if made, have a Material Adverse Effect.
Section 6.11 Financial Condition. (a) The audited consolidated financial
statements of the General Partner, the Borrower, the MLP and their respective
Subsidiaries dated July 31, 1999 and the unaudited consolidated financial
statements of the General Partner, the Borrower, the MLP and their respective
Subsidiaries dated October 31, 1999, in each case together with the related
consolidated statements of income or operations, shareholders' equity and cash
flows for the fiscal periods ended on those respective dates:
(i) were prepared in accordance with GAAP
consistently applied throughout the period
covered thereby, except as otherwise
expressly noted therein, subject to
ordinary, good faith year end audit
adjustments;
(ii) fairly present the financial condition of
the Borrower and its Subsidiaries as of the
date thereof and results of operations for
the period covered thereby; and
(iii) show all material indebtedness and other
liabilities, direct or contingent, of the
Borrower and its consolidated Subsidiaries
as of the date thereof, including
liabilities for taxes, material commitments
and Contingent Obligations.
(b) Since July 31, 1999, there has been no Material Adverse
Effect.
(c) The General Partner, the MLP, the Borrower and each of the
other Subsidiaries of the Borrower are each Solvent, both before and after
giving effect to the Ferrellgas Joinder Event and consummation of each of the
transactions contemplated by the Loan Documents.
Section 6.12 Environmental Matters. The Borrower conducts in the ordinary course
of business a review of the effect of existing Environmental Laws and existing
Environmental Claims on its business, operations and properties, and as a result
thereof the Borrower has reasonably concluded that such Environmental Laws and
Environmental Claims could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
Section 6.13 Regulated Entities. None of the Borrower or any Affiliate of the
Borrower, is an "Investment Company" within the meaning of the Investment
Company Act of 1940. The Borrower is not subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act, any state public utilities code, or any other Federal or state
statute or regulation limiting its ability to incur Indebtedness.
Section 6.14 No Burdensome Restrictions. Neither the Borrower nor any Subsidiary
is a party to or bound by any Contractual Obligation, or subject to any
restriction in any Organization Document, or any Requirement of Law, which could
reasonably be expected to have a Material Adverse Effect.
Section 6.15 Copyrights, Patents, Trademarks and Licenses, etc. The Borrower and
its Subsidiaries own or are licensed or otherwise have the right to use all of
the patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person. To the best knowledge of the Borrower, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by the Borrower or any
Subsidiary infringes upon any rights held by any other Person. No claim or
litigation regarding any of the foregoing is pending or, to the best knowledge
of the Borrower, threatened, and no patent, invention, device, application,
principle or any statute, law, rule, regulation, standard or code is pending or,
to the knowledge of the Borrower, proposed, which, in either case, could
reasonably be expected to have a Material Adverse Effect.
Section 6.16 Subsidiaries and Affiliates. The Borrower (a) has no Subsidiaries
or other Affiliates except (i) those specifically disclosed in part (a) of
Schedule 6.16 hereto, (ii) one or more SPEs established in connection with
Accounts Receivable Securitizations permitted by Section 8.05, (iii)
Subsidiaries established in compliance with Section 8.20 and (iv) Thermogas (but
only for so long as Thermogas shall be permitted to be operated as a
Wholly-Owned Subsidiary of the Borrower as set forth in the proviso to Section
8.20) and (b) has no equity investments in any corporation or entity other than
Subsidiaries and Affiliates disclosed in subsection (a) above and those
Permitted Investments specifically disclosed in part (b) of Schedule 6.16.
Section 6.17 Insurance. The properties of the Borrower and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Borrower, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or such Subsidiary operates.
Section 6.18 Tax Status. The Borrower is subject to taxation under the Code
only as a partnership and not as a corporation.
Section 6.19 Full Disclosure. None of the representations or warranties made by
the Borrower or any Affiliate of the Borrower in the Loan Documents as of the
date such representations and warranties are made or deemed made, and none of
the statements contained in any exhibit, report, statement or certificate
furnished by or on behalf of the Borrower or any Affiliate of the Borrower in
connection with the Loan Documents contains any untrue statement of a material
fact or omits any material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they
are made, not misleading as of the time when made or delivered.
Section 6.20 Fixed Price Supply Contracts. None of the Borrower and its
Subsidiaries is a party to any contract for the supply 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 two years after the purchase price is agreed to.
Section 6.21 Trading Policies. The Borrower has provided to the Administrative
Agent an accurate and complete summary of its trading position policy and supply
inventory position policy as currently in effect and the Borrower has complied
in all material respects with such policies.
Section 6.22 Year 2000. The Borrower, the MLP, the General Partner and their
Subsidiaries have reviewed the areas within their business and operations which
could be adversely affected by, and have developed or are developing a program
to address on a timely basis, the Year 2000 Problem, and have made related
appropriate inquiry of material suppliers and vendors. Based on such review and
program, the Borrower, the MLP, the General Partner and their Subsidiaries
believe that the Year 2000 Problem will not have a Material Adverse Effect.
ARTICLE VII
AFFIRMATIVE COVENANTS
Ferrellgas (upon its becoming the Borrower under this
Agreement by execution and delivery of the Assumption Agreement) and the General
Partner (by execution and delivery of the Assumption Agreement) hereby covenant
and agree that, from and after the Ferrellgas Joinder Event, so long as any Bank
shall have any Commitment hereunder, or any Loan or other Obligation shall
remain unpaid or unsatisfied, unless the Majority Banks waive compliance in
writing:
Section 7.01 Financial Statements. The Borrower shall deliver, or cause to be
delivered to the Administrative Agent, in form and detail satisfactory to the
Administrative Agent and the Majority Banks and consistent with the form and
detail of financial statements and projections provided to the Administrative
Agent by the Borrower and its Affiliates prior to the Effective Date, with
sufficient copies for each Bank:
(a) as soon as available, but not later than 100 days after the end of each
fiscal year (commencing with the first such fiscal year ending after the date of
this Agreement), a copy of the audited consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such year and the related
consolidated statements of income or operations, partners' or shareholders'
equity and cash flows for such year, setting forth in each case in comparative
form the figures for the previous fiscal year, and accompanied by the opinion of
a nationally-recognized independent public accounting firm (the "Independent
Auditor") which report shall state that such consolidated financial statements
present fairly the financial position for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years. Such opinion shall not
be qualified or limited in any manner, including on account of any limitation on
it because of a restricted or limited examination by the Independent Auditor of
any material portion of the Borrower's or any Subsidiary's records;
(b) as soon as available, but not later than 45 days after the end of each of
the first three fiscal quarters of each fiscal year (commencing with the first
such fiscal quarter ending after the date of this Agreement), a copy of the
unaudited consolidated balance sheet of the Borrower and its Subsidiaries as of
the end of such quarter and the related consolidated statements of income,
partners' or shareholders' equity and cash flows for the period commencing on
the first day and ending on the last day of such quarter, and certified by a
Responsible Officer as fairly presenting, in accordance with GAAP (subject to
ordinary, good faith year-end audit adjustments), the financial position and the
results of operations of the Borrower and the Subsidiaries; (c) as soon as
available, but not later than 100 days after the end of each fiscal year
(commencing with the first fiscal year during all or any part of which the
Borrower had one or more Significant Subsidiaries), a copy of an unaudited
consolidating balance sheet of the Borrower and its Subsidiaries as at the end
of such year and the related consolidating statement of income, partners' or
shareholders' equity and cash flows for such year, certified by a Responsible
Officer as having been developed and used in connection with the preparation of
the financial statements referred to in subsection 7.01(a);
(d) as soon as available, but not later than 45 days after the end of each of
the first three fiscal quarters of each fiscal year (commencing with the first
fiscal quarter during all or any part of which the Borrower had one or more
Significant Subsidiaries), a copy of the unaudited consolidating balance sheets
of the Borrower and its Subsidiaries, and the related consolidating statements
of income, partners' or shareholders' equity and cash flows for such quarter,
all certified by a Responsible Officer as having been developed and used in
connection with the preparation of the financial statements referred to in
subsection 7.01(b);
(e) as soon as available, but not later than 60 days after the end of each
fiscal year (commencing with the first such fiscal year ending after the date of
this Agreement), projected consolidated balance sheets of the Borrower and its
Subsidiaries as at the end of each of the current and following two fiscal years
and related projected consolidated statements of income, partners' or
shareholders' equity and cash flows for each such fiscal year, including therein
a budget for the current fiscal year, certified by a Responsible Officer as
having been developed and prepared by the Borrower in good faith and based upon
the Borrower's best estimates and best available information;
(f) as soon as available, but not later than 100 days after the end of each
fiscal year of the General Partner (commencing with the first such fiscal year
ending after the date of this Agreement), a copy of the unaudited (or audited,
if available) consolidated balance sheets of the General Partner as of the end
of such fiscal year and the related consolidated statements of income,
shareholders' equity and cash flows for such fiscal year, certified by a
Responsible Officer as fairly presenting, in accordance with GAAP, the financial
position and the results of operations of the General Partner and its
Subsidiaries (or, if available, accompanied by an opinion of an Independent
Auditor as described in subsection 7.01(a));
(g) as soon as available, but not later than 45 days after the end of each of
the first three fiscal quarters of each fiscal year and, with respect to the
final fiscal quarter, concurrently with the financial statements referred to in
subsection 7.01(a), a trading position report as of the last day of each fiscal
quarter, certified by a Responsible Officer; and
(h) as soon as available, but not later than 75 days after the Effective Date, a
copy of the MLP's Current Report on Form 8-K filed with the SEC in connection
with the Ferrellgas Acquisition of Thermogas (including all pro forma financial
statements required to be filed with the SEC in connection therewith).
Section 7.02 Certificates; Other Information. The Borrower shall furnish,
or cause to be furnished to the Administrative Agent, with sufficient copies for
each Bank:
(a) concurrently with the delivery of the financial statements referred to in
subsection 7.01(a), a certificate of the Independent Auditor stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements referred to in
subsections 7.01(a) and (b), a Compliance Certificate executed by a Responsible
Officer with respect to the periods covered by such financial statements
together with supporting calculations and such other supporting detail as the
Administrative Agent and Majority Banks shall require;
(c) promptly, copies of all financial statements and reports that the Borrower,
the General Partner, the MLP or any Subsidiary sends to its partners or
shareholders, and copies of all financial statements and regular, periodic or
special reports (including Forms 10-K, 10-Q and 8-K) that the Borrower or any
Affiliate of the Borrower, the General Partner, the MLP or any Subsidiary may
make to, or file with, the SEC; and
(d) promptly, such additional information regarding the business, financial or
corporate affairs of the Borrower, the General Partner, the MLP or any
Subsidiary as the Administrative Agent, at the request of any Bank, may from
time to time request.
Section 7.03 Notices. The Borrower shall promptly notify the Administrative
Agent and each Bank: -------
(a) of the occurrence of any Default or Event of Default, and of the occurrence
or existence of any event or circumstance that foreseeably will become a Default
or Event of Default;
(b) of any matter that has resulted or may reasonably be expected to result in a
Material Adverse Effect, including (i) breach or non-performance of, or any
default under, a Contractual Obligation of the Borrower, the General Partner,
the MLP or any Subsidiary; (ii) any dispute, litigation, investigation,
proceeding or suspension between the Borrower, the General Partner, the MLP or
any Subsidiary and any Governmental Authority; or (iii) the commencement of, or
any material development in, any litigation or proceeding affecting the
Borrower, the General Partner, the MLP or any Subsidiary, including pursuant to
any applicable Environmental Laws;
(c) of any of the following events affecting the Borrower, the General Partner,
the MLP or any Subsidiary, together with a copy of any notice with respect to
such event that may be required to be filed with a Governmental Authority and
any notice delivered by a Governmental Authority to such Person with respect to
such event:
(i) an ERISA Event;
(ii) if any of the representations and warranties in Section 6.07 ceases to
be true
and correct;
(iii) the adoption of any new Pension Plan or other Plan subject to Section
412 of the Code;
(iv) the adoption of any amendment to a Pension
Plan or other Plan subject to Section 412 of
the Code, if such amendment results in a
material increase in contributions or
Unfunded Pension Liability; or
(v) the commencement of contributions to any
Pension Plan or other Plan subject to
Section 412 of the Code;
(d) of any material change in accounting policies or financial reporting
practices by the Borrower or any of its consolidated Subsidiaries; and
(e) not later than five Business Days after the effective date of a change in
the Borrower's trading position policy or inventory supply position policy, of
any change in either policy.
Each notice under this Section shall be accompanied by a
written statement by a Responsible Officer setting forth details of the
occurrence referred to therein, and stating what action the Borrower or any
affected Affiliate proposes to take with respect thereto and at what time. Each
notice under subsection 7.03(a) shall describe with particularity any and all
clauses or provisions of this Agreement or other Loan Document that have been
(or foreseeably will be) breached or violated.
Section 7.04 Preservation of Corporate or Partnership Existence, Etc. The
General Partner and the Borrower shall, and the Borrower shall cause each
Subsidiary to:
(a) preserve and maintain in full force and effect its partnership or corporate
existence and good standing under the laws of its state or jurisdiction of
organization or incorporation except in connection with transactions permitted
by Section 8.03;
(b) preserve and maintain in full force and effect all governmental rights,
privileges, qualifications, permits, licenses and franchises necessary or
desirable in the normal conduct of its business except in connection with
transactions permitted by Section 8.03 and sales of assets permitted by Section
8.02;
(c) use reasonable efforts, in the ordinary course of business, to preserve its
business organization and goodwill; and
(d) preserve or renew all of its registered patents, trademarks, trade names and
service marks, the non-preservation of which could reasonably be expected to
have a Material Adverse Effect.
Section 7.05 Maintenance of Property. The Borrower shall maintain, and shall
cause each Subsidiary to maintain, and preserve all its property which is used
or useful in its business in good working order and condition, ordinary wear and
tear excepted. The Borrower and each Subsidiary shall use the standard of care
typical in the industry in the operation and maintenance of its facilities.
Section 7.06 Insurance. The Borrower shall maintain, and shall cause each
Subsidiary to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons.
Section 7.07 Payment of Obligations. The Borrower and the General Partner shall,
and shall cause each Subsidiary to, pay and discharge as the same shall become
due and payable (except to the extent the failure to so pay and discharge could
not reasonably be expected to have a Material Adverse Effect), all their
respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges or levies upon it
or its properties or assets, unless the same are being contested in good faith
by appropriate proceedings and adequate reserves in accordance with GAAP are
being maintained by the Borrower, the General Partner or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a Lien upon its
property, unless such claims are being contested in good faith by appropriate
proceedings and adequate reserves in accordance with GAAP are being maintained
by the Borrower, the General Partner or such Subsidiary; and
(c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
Section 7.08 Compliance with Laws. The Borrower shall comply, and shall cause
each Subsidiary to comply, in all material respects with all Requirements of Law
of any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.
Section 7.09 Inspection of Property and Books and Records. The Borrower shall
maintain and shall cause each Subsidiary to maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of the Borrower and such Subsidiary. The
Borrower shall permit, and shall cause each Subsidiary to permit,
representatives and independent contractors of the Administrative Agent or any
Bank to visit and inspect any of their respective properties, to examine their
respective corporate, financial and operating records, and make copies thereof
or abstracts therefrom, and to discuss their respective affairs, finances and
accounts with their respective directors, officers, and independent public
accountants, all at the expense of the Borrower and at such reasonable times
during normal business hours and as often as may be reasonably desired, upon
reasonable advance notice to the Borrower; provided, however, when an Event of
Default exists the Administrative Agent or any Bank may do any of the foregoing
at the expense of the Borrower at any time during normal business hours and
without advance notice.
Section 7.10 Environmental Laws. The Borrower shall, and shall cause each
Subsidiary to, conduct its operations and keep and maintain its property in
material compliance with all Environmental Laws.
Section 7.11 Use of Proceeds. The proceeds of the Loans in an amount equal to
$123,669,372.50 may be distributed by Thermogas to the Seller on the Effective
Date, and any and all remaining proceeds of the Loans shall be used solely for
the general partnership purposes of the Borrower following the Ferrellgas
Joinder Event, in each case not in contravention of any Requirement of Law or of
any Loan Document.
Section 7.12 Financial Covenants.
(a) Leverage Ratio. The Borrower shall maintain as of the last day of each
fiscal quarter a Leverage Ratio equal to or less than 5.25 to 1.00 as of the
last day of each fiscal quarter ending on or prior to January 31, 2000 and (ii)
5.10 to 1.00 as of the last day of each fiscal quarter ending after January 31,
2000. For purposes of this Section 7.12(a), (x) Funded Debt and Synthetic Lease
Obligations shall be calculated as of the last day of such fiscal quarter and
(y) Consolidated Cash Flow shall be calculated for the most recently ended four
consecutive fiscal quarters; provided, however, that prior to or concurrently
with each delivery of a Compliance Certificate pursuant to Section 7.02(b), the
Borrower may elect to calculate Consolidated Cash Flow for the most recently
ended eight consecutive fiscal quarters (in which case Consolidated Cash Flow
shall be divided by two).
(b) Interest Coverage Ratio. The Borrower shall maintain, as of the last day of
each fiscal quarter of the Borrower, an Interest Coverage Ratio for the fiscal
period consisting of such fiscal quarter and the three immediately preceding
fiscal quarters of at least 2.25 to 1.00.
Section 7.13 Trading Policies. The Borrower and its Affiliates shall comply with
the Borrower's trading position policy and supply inventory position policy as
in effect on March 31, 1999, copies of which have been provided to the
Administrative Agent on or prior to the Effective Date; provided, however, that
the Borrower and its Affiliates may, during any period of four consecutive
fiscal quarters, (a) increase the stop loss limit specified in either the
trading position or supply inventory position policy by up to 100% of the amount
of such limit as in effect on July 5, 1994 and (b) increase the volume limit
specified in either of such policies on the number of barrels of a single
product or of all products in the aggregate by up to 100% of each such number as
in effect on July 5, 1994.
Section 7.14 Other General Partner Obligations.
(a) The General Partner shall cause the Borrower to pay and perform each of its
Obligations when due. The General Partner acknowledges and agrees that it is
executing this Agreement as a principal as well as the general partner on behalf
of the Borrower, and that its obligations hereunder as general partner are full
recourse obligations to the same extent as those of the Borrower.
(b) The General Partner represents, warrants and covenants that it is Solvent,
both before and after giving effect to the consummation of the transactions
contemplated by the Loan Documents, and that it will remain Solvent until all
Obligations hereunder shall have been repaid in full and all commitments shall
have terminated.
(c) The General Partner, for so long as it is the general partner of the
Borrower, (i) agrees that its sole business will be to act as the general
partner of the Borrower, the MLP and any further limited partnership of which
the Borrower or the MLP is, directly or indirectly, a limited partner and to
undertake activities that are ancillary or related thereto (including being a
limited partner in the Borrower), (ii) shall not enter into or conduct any
business or incur any debts or liabilities except in connection with or
incidental to (A) its performance of the activities required or authorized by
the partnership agreement of the MLP or the Partnership Agreement or described
in or contemplated by the MLP Registration Statement, and (B) the acquisition,
ownership or disposition of partnership interests in the Borrower or partnership
interests in the MLP or any further limited partnership of which the Borrower or
the MLP is, directly or indirectly, a limited partner, except that,
notwithstanding the foregoing, employees of the General Partner may perform
services for Ferrell Companies, Inc. and its Affiliates.
(d) The General Partner agrees that, until all Obligations hereunder shall have
been repaid in full and all commitments shall have terminated, it will not
exercise any rights it may have (at law, in equity, by contract or otherwise) to
terminate, limit or otherwise restrict (whether through repurchase or otherwise
and whether or not the General Partner shall remain a general partner in the
Borrower) the ability of the Borrower to use the name "Ferrellgas".
(e) The General Partner shall not 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 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 7.15 Monetary Judgments. If one or more judgments, orders, decrees or
arbitration awards is entered against the Borrower or any Subsidiary involving
in the aggregate a liability (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage other
than through a standard reservation of rights letter) as to any single or
related series of transactions, incidents or conditions, of more than $10
million, then the Borrower shall reserve for such amount in excess of $10
million, on a quarterly basis, with each quarterly reserve being at least equal
to one-twelfth of such amount in excess of $10 million. Such amount so reserved
shall be treated as establishment of a reserve for purposes of calculating
Available Cash hereunder.
Section 7.16
<PAGE>
Year 2000 Compliance. The Borrower shall ensure that all of
the computer software, computer firmware, computer hardware (whether general or
special purpose), and other similar or related items of automated, computerized,
and/or software system(s) that are used or relied on by the Borrower, the MLP,
the General Partner or any Subsidiary in the conduct of its business will not
malfunction, will not cease to function, will not generate incorrect data, and
will not produce material incorrect results when processing, providing and/or
receiving date-related data in connection with any valid date in the twentieth
and twenty-first centuries. From time to time, at the request of any Bank, the
Borrower, the MLP, the General Partner and their Subsidiaries shall provide to
such Bank such updated information or documentation as is requested regarding
the status of their efforts to address the Year 2000 Problem (as defined in
Section 6.22).
Section 7.17 Thermogas Merger. The Borrower shall cause the Thermogas
Merger to occur within 30 days after the Effective Date.
ARTICLE VIII
NEGATIVE COVENANTS
Ferrellgas (upon its becoming the Borrower under this
Agreement by execution and delivery of the Assumption Agreement) and the General
Partner (by execution and delivery of the Assumption Agreement) hereby covenant
and agree that, from and after the Ferrellgas Joinder Event, so long as any Bank
shall have any Commitment hereunder, or any Loan or other Obligation shall
remain unpaid or unsatisfied, unless the Majority Banks waive compliance in
writing:
Section 8.01 Limitation on Liens. The Borrower shall not, and shall not suffer
or permit any Subsidiary to, directly or indirectly, make, create, incur, assume
or suffer to exist any Lien upon or with respect to any part of its property or
sell any of its accounts receivable, whether now owned or hereafter acquired,
other than the following ("Permitted Liens"):
(a) Liens existing on the Effective Date set forth in the schedule referred to
in subsection 8.01(a) of that certain Second Amended and Restated Credit
Agreement, dated as of July 2, 1998, among the Borrower, the General Partner,
the Administrative Agent and the other financial institutions a party thereto ;
(b) Liens in favor of the Borrower or Liens to secure Indebtedness of a
Subsidiary to the Borrower or a Wholly-Owned Subsidiary;
(c) Liens on property of a Person existing at the time such Person is merged
into or consolidated with the Borrower or any Subsidiary, provided that such
Liens were in existence prior to the contemplation of such merger or
consolidation and do not extend to any assets other than those of the Person
merged into or consolidated with the Borrower;
(d) Liens on property existing at the time acquired by the Borrower or any
Subsidiary, provided that such Liens were in existence prior to the
contemplation of such acquisition and do not extend to any assets other than
those of the Person acquired;
(e) Liens on any property or asset acquired by the Borrower or any Subsidiary in
favor of the seller of such property or asset and construction mortgages on
property, in each case, created within six months after the date of acquisition,
construction or improvement of such property or asset by the Borrower or such
Subsidiary to secure the purchase price or other obligation of the Borrower or
such Subsidiary to the seller of such property or asset or the construction or
improvement cost of such property in an amount up to 80% of the total cost of
the acquisition, construction or improvement of such property or asset; provided
that in each case such Lien does not extend to any other property or asset of
the Borrower and its Subsidiaries;
(f) Liens incurred or pledges and deposits made in connection with worker's
compensation, unemployment insurance and other social security benefits and
Liens to secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature, in each case,
incurred in the ordinary course of business;
(g) Liens for taxes, assessments or governmental charges or claims that are not
yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded, provided that any
reserve or other appropriate provision as shall be required in conformity with
GAAP shall have been made therefor;
(h) Liens imposed by law, such as mechanics', carriers', warehousemen's,
materialmen's, and vendors' Liens, incurred in good faith in the ordinary course
of business with respect to amounts not yet delinquent or being contested in
good faith by appropriate proceedings if a reserve or other appropriate
provisions, if any, as shall be required by GAAP shall have been made therefor;
(i) zoning restrictions, easements, licenses, covenants, reservations,
restrictions on the use of real property or minor irregularities of title
incident thereto that do not, in the aggregate, materially detract from the
value of the property or the assets of the Borrower or any of its Subsidiaries
or impair the use of such property in the operation of the business of the
Borrower or any of its Subsidiaries;
(j) Liens of landlords or mortgages of landlords, arising solely by operation of
law, on fixtures and movable property located on premises leased by the Borrower
or any of its Subsidiaries in the ordinary course of business;
(k) Liens incurred and financing statements filed or recorded, in each case with
respect to personal property leased by the Borrower and its Subsidiaries to the
owners of such personal property which are either (i) operating leases
(including Synthetic Leases) or (ii) capital leases to the extent (but only to
the extent) permitted by Section 7.05; provided, that in each case such Lien
does not extend to any other property or asset of the Borrower and its
Subsidiaries;
(l) judgment Liens to the extent that such judgments do not cause or constitute
a Default or an Event of Default;
(m) Liens incurred in the ordinary course of business of the Borrower or any
Subsidiary with respect to obligations that do not exceed $5,000,000 in the
aggregate at any one time outstanding and that (i) are not incurred in
connection with the borrowing of money or the obtaining of advances or credit
(other than trade credit in the ordinary course of business) and (ii) do not in
the aggregate materially detract from the value of the property or materially
impair the use thereof in the operation of business by the Borrower or such
Subsidiary;
(n) Liens securing Indebtedness incurred to refinance Indebtedness that has been
secured by a Lien otherwise permitted under this Agreement, provided that (i)
any such Lien shall not extend to or cover any assets or property not securing
the Indebtedness so refinanced and (ii) the refinancing Indebtedness secured by
such Lien shall have been permitted to be incurred under Section 8.05 hereof and
shall not have a principal amount in excess of the Indebtedness so refinanced;
(o) any extension or renewal, or successive extensions or renewals, in whole or
in part, of Liens permitted pursuant to the foregoing clauses (a) through (n);
provided that no such extension or renewal Lien shall (i) secure more than the
amount of Indebtedness or other obligations secured by the Lien being so
extended or renewed or (ii) extend to any property or assets not subject to the
Lien being so extended or renewed;
(p) Liens in favor of the Administrative Agent and the Banks relating to the
Cash Collateralization of the Borrower's Obligations; and
(q) Liens securing Indebtedness of an SPE in connection with an Accounts
Receivable Securitization permitted by Section 8.05 (including the filing of any
related financing statements naming the Borrower as the debtor thereunder in
connection with the sale of accounts receivable by the Borrower to such SPE in
connection with any such permitted Accounts Receivable Securitization); provided
that the aggregate amount of accounts receivable subject to all such Liens shall
at no time exceed 133% of the amount of Accounts Receivable Securitizations
permitted to be outstanding under such Section 8.05.
Section 8.02 Asset Sales. The Borrower shall not, and shall not permit any of
its Subsidiaries to, (i) sell, lease, convey or otherwise dispose of any assets
(including by way of a sale-and-leaseback) other than sales of inventory in the
ordinary course of business consistent with past practice (provided that the
sale, lease, conveyance or other disposition of all or substantially all of the
assets of the Borrower shall be governed by the provisions of Section 8.03
hereof and not by the provisions of this Section 8.02), or (ii) issue or sell
Equity Interests of any of its Subsidiaries, in the case of either clause (i) or
(ii) above, whether in a single transaction or a series of related transactions,
(A) that have a fair market value in excess of $5,000,000, or (B) for net
proceeds in excess of $5,000,000 (each of the foregoing, an "Asset Sale"),
unless (X) the Borrower (or the Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value (evidenced by a resolution of the board of directors of the General
Partner (and, if applicable, the audit committee of such board of directors) set
forth in a certificate signed by a Responsible Officer and delivered to the
Administrative Agent) of the assets sold or otherwise disposed of and (Y) at
least 80% of the consideration therefor received by the Borrower or such
Subsidiary is in the form of cash; provided, however, that the amount of (1) any
liabilities (as shown on the Borrower's or such Subsidiary's most recent balance
sheet or in the notes thereto), of the Borrower or any Subsidiary (other than
liabilities that are by their terms subordinated in right of payment to the
Obligations hereunder) that are assumed by the transferee of any such assets and
(2) any notes or other obligations received by the Borrower or any such
Subsidiary from such transferee that are immediately converted by the Borrower
or such Subsidiary into cash (to the extent of the cash received), shall be
deemed to be cash for purposes of this provision; and provided, further, that
the 80% limitation referred to in this clause (Y) shall not apply to any Asset
Sale in which the cash portion of the consideration received therefrom,
determined in accordance with the foregoing proviso, is equal to or greater than
what the after-tax proceeds would have been had such Asset Sale complied with
the aforementioned 80% limitation. Notwithstanding the foregoing, Asset Sales
shall not be deemed to include (w) sales or transfers of accounts receivable by
the Borrower to an SPE and by an SPE to any other Person in connection with any
Accounts Receivable Securitization permitted by Section 8.05 (provided that the
aggregate amount of such accounts receivable that shall have been transferred to
and held by all SPEs at any time shall not exceed 133% of the amount of Accounts
Receivable Securitizations permitted to be outstanding under Section 8.05), (x)
any transfer of assets by the Borrower or any of its Subsidiaries to a
Subsidiary of the Borrower that is a Guarantor, (y) any transfer of assets by
the Borrower or any of its Subsidiaries to any Person in exchange for other
assets used in a line of business permitted under Section 8.15 and having a fair
market value not less than that of the assets so transferred and (z) any
transfer of assets pursuant to a Permitted Investment or any sale-leaseback
(including sale-leasebacks involving Synthetic Leases) permitted by Section
8.17.
Section 8.03 Consolidations and Mergers.
(a) The Borrower shall not consolidate or merge with or into (whether or not the
Borrower is the surviving Person), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets in one
or more related transactions, to another Person unless (i) the Borrower is the
surviving Person, or the Person formed by or surviving any such consolidation or
merger (if other than the Borrower) or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made is a corporation or
partnership organized or existing under the laws of the United States, any state
thereof or the District of Columbia; and (ii) the Person formed by or surviving
any such consolidation or merger (if other than the Borrower) or Person to which
such sale, assignment, transfer, lease, conveyance or other disposition shall
have been made assumes all the Obligations of the Borrower pursuant to an
assumption agreement in a form reasonably satisfactory to the Administrative
Agent, under this Agreement; (iii) immediately after such transaction no Default
or Event of Default exists; and (iv) the Borrower or any Person formed by or
surviving any such consolidation or merger, or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made (A) shall
have Consolidated Net Worth (immediately after the transaction but prior to any
purchase accounting adjustments resulting from the transaction) equal to or
greater than the Consolidated Net Worth of the Borrower immediately preceding
the transaction and (B) shall, at the time of such transaction and after giving
effect thereto, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Leverage Ratio test set forth in Section 7.12(a).
(b) The Borrower shall deliver to the Administrative Agent prior to the
consummation of the proposed transaction pursuant to the foregoing paragraphs
(a) an officers' certificate to the foregoing effect signed by a Responsible
Officer and an opinion of counsel satisfactory to the Administrative Agent
stating that the proposed transaction complies with this Agreement. The
Administrative Agent and the Banks shall be entitled to conclusively rely upon
such officer's certificate and opinion of counsel.
(c) Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of the
Borrower in accordance with this Section 8.03, the successor Person formed by
such consolidation or into or with which the Borrower is merged or to which such
sale, assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Agreement referring to the "Borrower" shall refer to or
include instead the successor Person and not the Borrower), and may exercise
every right and power of the Borrower under this Agreement with the same effect
as if such successor Person had been named as the Borrower herein; provided,
however, that the predecessor Borrower shall not be relieved from the obligation
to pay the principal of, premium, if any, and interest on the Obligations except
in the case of a sale of all of such Borrower's assets that meets the
requirements of Section 8.02 hereof.
Section 8.04 Acquisitions. Without limiting the generality of any other
provision of this Agreement, neither the Borrower nor any Subsidiary shall
consummate any Acquisition unless (i) the acquiree is primarily a retail propane
distribution business; (ii) such Acquisition is undertaken in accordance with
all applicable Requirements of Law; (iii) the prior, effective written consent
or approval to such Acquisition of the board of directors or equivalent
governing body of the acquiree is obtained; and (iv) immediately after giving
effect thereto, no Default or Event of Default will occur or be continuing and
each of the representations and warranties of the Borrower herein is true on and
as of the date of such Acquisition, both before and after giving effect thereto.
Nothing in Section 8.21 shall prohibit (x) the making by the Borrower of a
Permitted Acquisition indirectly through the General Partner, the MLP or any of
its or their Affiliates in a series of substantially contemporaneous
transactions in which the Borrower shall ultimately own the assets that are the
subject of such Permitted Acquisition or (y) the assumption of Acquired Debt in
connection therewith to the extent such Acquired Debt is provided by a Bank and,
upon such assumption, is (to the extent such Acquired Debt is not otherwise
permitted to be incurred by the Borrower pursuant to this Agreement) immediately
repaid (with the proceeds of the Loans or otherwise).
Section 8.05 Limitation on Indebtedness. The Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create, incur, issue,
assume, suffer to exist, guarantee or otherwise become directly or indirectly
liable with respect to any Indebtedness (including Acquired Debt) or any
Synthetic Leases and the Borrower shall not issue any Disqualified Interests and
shall not permit any of its Subsidiaries to issue any shares of preferred stock;
provided, however, that the Borrower and any Subsidiary of the Borrower may
create, incur, issue, assume, suffer to exist, guarantee or otherwise become
directly or indirectly liable with respect to any Indebtedness or any Synthetic
Lease to the extent that the Leverage Ratio is maintained in accordance with
Section 7.12(a), both before and after giving effect to the incurrence of such
Indebtedness or such Synthetic Lease, as the case may be, and, provided,
further, that (x) the aggregate principal amount of (1) all Capitalized Lease
Obligations and all Synthetic Lease Obligations (other than Capitalized Lease
Obligations and Synthetic Lease Obligations in respect of Growth-Related Capital
Expenditures) of the Borrower and its Subsidiaries and (2) all Indebtedness for
which the Borrower and any Subsidiary of the Borrower become liable in
connection with Acquisitions of retail propane businesses in favor of the
sellers of such businesses and secured by any Lien on any property of the
Borrower or any of its Subsidiaries, shall not exceed $65,000,000 at any one
time outstanding, and (y) the principal amount of any Indebtedness for which the
Borrower or any Subsidiary of the Borrower becomes liable in connection with
Acquisitions of retail propane businesses in favor of the sellers of such
businesses shall not exceed the fair market value of the assets so acquired, and
(z) the aggregate amount of Indebtedness of the Borrower and its Subsidiaries
through one or more SPEs in connection with Accounts Receivable Securitizations
shall not exceed $60,000,000 at any one time outstanding.
Section 8.06 Transactions with Affiliates. The Borrower shall not, and shall not
permit any of its Subsidiaries to, sell, lease, transfer or otherwise dispose of
any of its properties or assets to, or purchase any property or assets from, or
enter into any contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate, including any Non-Recourse
Subsidiary (each of the foregoing, an "Affiliate Transaction"), unless (a) such
Affiliate Transaction is on terms that are no less favorable to the Borrower or
the relevant Subsidiary than those that would have been obtained in a comparable
transaction by the Borrower or such Subsidiary with an unrelated Person and (b)
with respect to (i) any Affiliate Transaction with an aggregate value in excess
of $500,000, a majority of the directors of the General Partner having no direct
or indirect economic interest in such Affiliate Transaction determines by
resolution that such Affiliate Transaction complies with clause (a) above and
approves such Affiliate Transaction and (ii) any Affiliate Transaction involving
the purchase or other acquisition or sale, lease, transfer or other disposition
of properties or assets other than in the ordinary course of business, in each
case, having a fair market value or for net proceeds in excess of $15,000,000,
the Borrower delivers to the Administrative Agent an opinion as to the fairness
to the Borrower or such Subsidiary from a financial point of view issued by an
investment banking firm of national standing; provided, however, that (i) any
employment agreement or stock option agreement entered into by the Borrower or
any of its Subsidiaries in the ordinary course of business and consistent with
the past practice of the Borrower (or the General Partner) or such Subsidiary,
Restricted Payments permitted by the provisions of Section 8.12, and
transactions entered into by the Borrower in the ordinary course of business in
connection with reinsuring the self-insurance programs or other similar forms of
retained insurable risks of the retail propane businesses operated by the
Borrower, its Subsidiaries and its Affiliates, in each case, shall not be deemed
Affiliate Transactions, and (ii) nothing herein shall authorize the payments by
the Borrower to the General Partner or any other Affiliate of the Borrower for
administrative expenses incurred by such Person other than such out-of-pocket
administrative expenses as such Person shall incur and the Borrower shall pay in
the ordinary course of business; and provided, further, that the foregoing
provisions of this Section 8.06 shall not apply to transfers of accounts
receivable of the Borrower to an SPE in connection with any Accounts Receivable
Securitization permitted by Section 8.05.
Section 8.07 Use of Proceeds. The Borrower shall not, and shall not suffer or
permit any Subsidiary to, use any portion of the Loan proceeds, directly or
indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Borrower or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act.
Section 8.08 Use of Proceeds - Ineligible Securities. The Borrower shall not,
directly or indirectly, use any portion of the Loan proceeds (i) knowingly to
purchase Ineligible Securities from the Arranger or the Documentation Agent
during any period in which the Arranger or the Documentation Agent makes a
market in such Ineligible Securities, (ii) knowingly to purchase during the
underwriting or placement period Ineligible Securities being underwritten or
privately placed by the Arranger or the Documentation Agent, or (iii) to make
payments of principal or interest on Ineligible Securities underwritten or
privately placed by the Arranger or the Documentation Agent and issued by or for
the benefit of the Borrower or any Affiliate of the Borrower.
Section 8.09 Contingent Obligations. The Borrower shall not, and shall not
suffer or permit any Subsidiary to, create, incur, assume or suffer to exist any
Contingent Obligations except:
(a) endorsements for collection or deposit in the ordinary course of
business;
(b) subject to compliance with the trading policies in effect from time to time
as submitted to the Administrative Agent, Hedging Obligations entered into in
the ordinary course of business as bona fide hedging transactions;
(c) the Guaranties hereunder; and
(d) Guaranty Obligations to the extent not prohibited by Section 8.05.
Section 8.10 Joint Ventures. The Borrower shall not, and shall not suffer
or permit any Subsidiary to enter into any Joint Venture.
Section 8.11 Lease Obligations. The aggregate obligations of the Borrower and
its Subsidiaries for the payment of rent for any property under lease or
agreement to lease (excluding obligations of the Borrower and its Subsidiaries
under or with respect to Synthetic Leases) for any fiscal year shall not exceed
the greater of (a) $25,000,000 or (b) 20% of (i) Consolidated Cash Flow of the
Borrower for the most recently ended eight consecutive fiscal quarters divided
by (ii) two; provided, however, that any payment of rent for any property under
lease or agreement to lease for a term of less than one year (after giving
effect to all automatic renewals) shall not be subject to this Section 8.11. For
purposes of this Section 8.11, the calculation of Consolidated Cash Flow shall
give pro forma effect to Acquisitions (including all mergers and
consolidations), Asset Sales and other dispositions and discontinuances of
businesses or assets that have been made by the Borrower or any of its
Subsidiaries during the reference period or subsequent to such reference period
and on or prior to the date of calculation of Consolidated Cash Flow assuming
that all such Acquisitions, Asset Sales and other dispositions and
discontinuances of businesses or assets had occurred on the first day of the
reference period.
Section 8.12 Restricted Payments. The Borrower shall not and shall not permit
any of its Subsidiaries to, directly or indirectly (i) declare or pay any
dividend or make any distribution on account of the Borrower's or any
Subsidiary's Equity Interests (other than (x) dividends or distributions payable
in Equity Interests (other than Disqualified Interests) of the Borrower, (y)
dividends or distributions payable to the Borrower or a Wholly-Owned Subsidiary
of the Borrower that is a Guarantor or (z) distributions or dividends payable
pro rata to all holders of Capital Interests of any such Subsidiary); (ii)
purchase, redeem, call or otherwise acquire or retire for value any Equity
Interests of the Borrower or any Subsidiary or other Affiliate of the Borrower
(other than, subject to compliance with Section 8.20, any such Equity Interests
owned by a Wholly-Owned Subsidiary of the Borrower that is a Guarantor); (iii)
make any investment other than a Permitted Investment; or (iv) prepay, purchase,
redeem, retire, defease or refinance the 1998 Fixed Rate Senior Notes (all
payments and other actions set forth in clauses (i) through (iv) above being
collectively referred to as "Restricted Payments"), except to the extent that,
at the time of such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof and each of the representations and
warranties of the Borrower set forth herein is true on and as of the date of
such Restricted Payment both before and after giving effect thereto; and
(b) the Fixed Charge Coverage Ratio of the Borrower for the Borrower's most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which such Restricted Payment is
made, calculated on a pro forma basis as if such Restricted Payment had been
made at the beginning of such four-quarter period, would have been more than
2.25 to 1; and
(c) such Restricted Payment (the amount of any such payment, if other than cash,
to be determined by the Board of Directors, whose determination shall be
conclusive and evidenced by a resolution in an officer's certificate signed by a
Responsible Officer and delivered to the Administrative Agent), together with
the aggregate of all other Restricted Payments (other than any Restricted
Payments permitted by the provisions of clause (ii) of the penultimate paragraph
of this Section 8.12) made by the Borrower and its Subsidiaries in the fiscal
quarter during which such Restricted Payment is made shall not exceed an amount
equal to (x) Available Cash of the Borrower for the immediately preceding fiscal
quarter plus (y) the lesser of (i) the amount of any Available Cash of the
Borrower during the first 45 days of such fiscal quarter and (ii) the excess of
the aggregate amount of Loans that the Borrower could have borrowed over the
actual amount of Loans outstanding, in each case as of the last day of the
immediately preceding fiscal quarter; and
(d) such Restricted Payment (other than (x) Restricted Payments described in
clause (i) of the first paragraph of this Section 8.12 made during the fiscal
quarter ending January 31, 1997 that do not exceed $26,000,000 in the aggregate
or (y) any Restricted Payments described in clauses (iii) or (iv) of the first
paragraph of this Section 8.12) the amount of which, if made other than with
cash, to be determined in accordance with clause (c) of this Section 8.12, shall
not exceed an amount equal to (1) Consolidated Cash Flow of the Borrower and its
Subsidiaries for the period from and after October 31, 1996 through and
including the last day of the fiscal quarter ending immediately preceding the
date of the proposed Restricted Payment (the "Determination Period"), minus (2)
the sum of Consolidated Interest Expense of the Borrower and its Subsidiaries
for the Determination Period plus all capital expenditures (other than
Growth-Related Capital Expenditures and net of capital asset sales in the
ordinary course of business) made by the Borrower and its Subsidiaries during
the Determination Period plus the aggregate of all other Restricted Payments
(other than (x) Restricted Payments described in clause (i) of the first
paragraph of this Section 8.12 made during the fiscal quarter ending January 31,
1997 that do not exceed $26,000,000 in the aggregate or (y) any Restricted
Payments described in clauses (iii) or (iv) of the first paragraph of this
Section 8.12) made by the Borrower and its Subsidiaries during the period from
and after October 31, 1996 through and including the date of the proposed
Restricted Payment, plus (3) $30,000,000, plus (4) the excess, if any, of
consolidated working capital of the Borrower and its Subsidiaries at July 31,
1996 over consolidated working capital of the Borrower and its Subsidiaries at
the end of the fiscal year immediately preceding the date of the proposed
Restricted Payment, minus (5) the excess, if any, of consolidated working
capital of the Borrower and its Subsidiaries at the end of the fiscal year
immediately preceding the date of the proposed Restricted Payment over
consolidated working capital of the Borrower and its Subsidiaries at July 31,
1996. For purposes of this subsection 8.12(d), the calculation of Consolidated
Cash Flow shall give pro forma effect to Acquisitions (including all mergers and
consolidations), Asset Sales and other dispositions and discontinuances of
businesses or assets that have been made by such Person or any of its
Subsidiaries during the reference period or subsequent to such reference period
and on or prior to the date of calculation of Consolidated Cash Flow assuming
that all such Acquisitions, Asset Sales and other dispositions and
discontinuances of businesses or assets had occurred on the first day of the
reference period.
The foregoing provisions will not prohibit (i) the payment of
any distribution within 60 days after the date on which the Borrower becomes
committed to make such distribution, if at said date of commitment such payment
would have complied with the provisions of this Agreement; and (ii) the
redemption, repurchase, retirement or other acquisition of any Equity Interests
of the Borrower in exchange for, or out of the proceeds of, the substantially
concurrent sale (other than to a Subsidiary of the Borrower) of other Equity
Interests of the Borrower (other than any Disqualified Interests).
Not later than the date of making any Restricted Payment, the
General Partner shall deliver to the Administrative Agent an officer's
certificate signed by a Responsible Officer stating that such Restricted Payment
is permitted and setting forth the basis upon which the calculations required by
this Section 7.12 were computed, which calculations may be based upon the
Borrower's latest available financial statements.
Section 8.13 Prepayments of Subordinated Indebtedness. The Borrower shall not,
and shall not permit any of its Subsidiaries to, (a) purchase, redeem, retire or
otherwise acquire for value, or set apart any money for a sinking, defeasance or
other analogous fund for, the purchase, redemption, retirement or other
acquisition of, or make any payment or prepayment of the principal of or
interest on, or any other amount owing in respect of, any Indebtedness that is
subordinated to the Obligations, except for regularly scheduled payments of
interest in respect of such Indebtedness required pursuant to the instruments
evidencing such Indebtedness that are not made in contravention of the terms and
conditions of subordination set forth on part II of Schedule 8.05 or (b)
directly or indirectly, make any payment in respect of, or set apart any money
for a sinking, defeasance or other analogous fund on account of, Guaranty
Obligations subordinated to the Obligations. The foregoing provisions will not
prohibit the defeasance, redemption or repurchase of subordinated Indebtedness
with the proceeds of Permitted Refinancing Indebtedness.
Section 8.14 Dividend and Other Payment Restrictions Affecting Subsidiaries. The
Borrower shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any Subsidiary to (a) pay dividends
or make any other distributions to the Borrower or any of its Subsidiaries (1)
on its Capital Interests or (2) with respect to any other interest or
participation in, or interest measured by, its profits, (b) pay any Indebtedness
owed to the Borrower or any of its Subsidiaries, (c) make loans or advances to
the Borrower or any of its Subsidiaries or (d) transfer any of its properties or
assets to the Borrower or any of its Subsidiaries, except for such encumbrances
or restrictions existing under or by reason of (i) Existing Indebtedness, (ii)
this Agreement, the 1998 Note Purchase Agreement and the 1998 Fixed Rate Senior
Notes, (iii) applicable law, (iv) any instrument governing Indebtedness or
Capital Interests of a Person acquired by the Borrower or any of its
Subsidiaries as in effect at the time of such Acquisition (except to the extent
such Indebtedness was incurred in connection with or in contemplation of such
Acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that the Consolidated
Cash Flow of such Person to the extent that dividends, distributions, loans,
advances or transfers thereof is limited by such encumbrance or restriction on
the date of acquisition is not taken into account in determining whether such
acquisition was permitted by the terms of this Agreement, (v) customary
non-assignment provisions in leases entered into in the ordinary course of
business and consistent with past practices, (vi) purchase money obligations for
property acquired in the ordinary course of business that impose restrictions of
the nature described in clause (d) above on the property so acquired, (vii)
Permitted Refinancing Indebtedness of any Existing Indebtedness, provided that
the restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive than those contained in the
agreements governing the Indebtedness being refinanced or (viii) other
Indebtedness permitted to be incurred subsequent to the Effective Date pursuant
to the provisions of Section 8.05 hereof, provided that such restrictions are no
more restrictive than those contained in this Agreement.
Section 8.15 Change in Business. The Borrower shall not, and shall not suffer or
permit any Subsidiary to, engage in any material line of business substantially
different from those lines of business carried on by the Borrower and its
Subsidiaries on the date hereof.
Section 8.16 Accounting Changes. The Borrower shall not, and shall not suffer or
permit any Subsidiary to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or change the fiscal year of
the Borrower or of any Subsidiary except as required by the Code.
Section 8.17 Limitation on Sale and Leaseback Transactions. The Borrower will
not, and will not permit any of its Subsidiaries to, enter into any arrangement
with any Person providing for the leasing by the Borrower or such Subsidiary of
any property that has been or is to be sold or transferred by the Borrower or
such Subsidiary to such Person in contemplation of such leasing; provided,
however, that the Borrower or such Subsidiary may enter into such sale and
leaseback transaction if: (i) the Borrower could have (A) incurred Indebtedness
in an amount equal to the Attributable Debt relating to such sale and leaseback
transaction pursuant to the Leverage Ratio test set forth in Section 7.12(a) and
(B) secured a Lien on such Indebtedness pursuant to Section 8.01; (ii) the lease
in such sale and leaseback transaction is for a term not in excess of the lesser
of (A) three years and (B) 60% of the remaining useful life of such property; or
(iii) such sale and leaseback transaction is otherwise permitted by the last
sentence of Section 4.17 of the 1996 Indenture as in effect as of the date
hereof.
Section 8.18 Amendments of Organization Documents or 1996 Indenture or 1998 Note
Purchase Agreement. The Borrower shall not modify, amend, supplement or replace,
nor permit any modification, amendment, supplement or replacement of the
Organization Documents of the General Partner, the Borrower or any Subsidiary of
the Borrower, the MLP Senior Notes, the 1996 Indenture, the 1998 Fixed Rate
Senior Notes or the 1998 Note Purchase Agreement or any document executed and
delivered in connection with any of the foregoing, in any respect that would
adversely affect the Banks, the Borrower's ability to perform the Obligations,
or any Guarantor's ability to perform its obligations under its Guaranty, in
each such case without the prior written consent of the Administrative Agent and
the Majority Banks. Furthermore, the Borrower shall not permit any modification,
amendment, supplement or replacement of the Organization Documents of the MLP
that would have a material effect on the Borrower without the prior written
consent of the Administrative Agent and the Majority Banks.
Section 8.19 Fixed Price Supply Contracts. None of the Borrower and its
Subsidiaries shall at any time be a party or subject to any contract for the
supply 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 two years after the purchase price is agreed to.
Section 8.20 Operations through Subsidiaries. The Borrower shall not conduct any
of its operations through Subsidiaries unless: (a) such Subsidiary executes a
Guaranty substantially in the form of Exhibit G guaranteeing payment of the
Obligations, accompanied by an opinion of counsel to the Subsidiary addressed to
the Administrative Agent and the Banks as to the due authorization, execution,
delivery and enforceability of the Guaranty; (b) such Subsidiary agrees not to
incur any Indebtedness other than (i) trade debt and (ii) Acquired Debt
permitted by Section 7.05; (c) the Consolidated Cash Flow of such Subsidiary,
when added to Consolidated Cash Flow of all other Subsidiaries for any fiscal
year, shall not exceed 10% of the Consolidated Cash Flow of the Borrower and its
Subsidiaries for such fiscal year; and (d) the value of the assets of such
Subsidiary, when added to the value of the assets of all other Subsidiaries for
any fiscal year, shall not exceed 10% of the consolidated value of the assets of
the Borrower and its Subsidiaries for such fiscal year, as determined in
accordance with GAAP; provided, however, that the Borrower may, without regard
to the foregoing provisions of this Section 8.20, (x) establish and operate SPEs
solely in connection with Accounts Receivable Securitizations permitted by
Section 8.05 and (y) operate Thermogas as a Wholly-Owned Subsidiary for a period
of up to (but not exceeding) 30 days following the Effective Date pending the
merger of Thermogas with and into the Ferrellgas.
Section 8.21 Operations of MLP. Except in connection with an indirect
Acquisition permitted by Section 8.04, the General Partner and the Borrower
shall not permit the MLP or any of its Affiliates (including any Non-Recourse
Subsidiary) to operate or conduct any business substantially similar to that
conducted by the Borrower and its Subsidiaries within a 25 mile radius of any
business conducted by the Borrower and its Subsidiaries. In order to comply with
this Section 8.21, the Borrower may enter into one or more transactions by which
its assets and properties are "swapped" or "exchanged" for assets and properties
of another Person prior to or concurrently with another transaction which, but
for such swap or exchange would violate this Section; provided, that (i) if the
value of the MLP's assets or units to be so swapped or exchanged exceeds $15
million, as determined by the audit committee of the Board of Directors of the
General Partner, the Borrower shall have first obtained at its expense an
opinion from a nationally recognized investment banking firm, addressed to it,
the Administrative Agent and the Banks and opining without material
qualification and based on assumptions that are realistic at the time, that the
exchange or swap transactions are fair to the Borrower and its Subsidiaries, and
(ii) if the value of the MLP's assets or units to be so swapped or exchanged
exceeds $50 million, as determined by the audit committee of the Board of
Directors of the General Partner, at the option of the Majority Banks, the
Administrative Agent shall have first retained, at the Borrower's expense, an
investment banking firm on behalf of the Banks who shall also have rendered an
opinion containing the statements and content referred to in clause (i).
ARTICLE IX
<PAGE>
EVENTS OF DEFAULT
Section 9.01 Event of Default. Any of the following shall constitute an
"Event of Default": ----------------
(a) Non-Payment. The Borrower or the General Partner fails to pay, (i) when and
as required to be paid herein, any amount of principal of any Loan, or (ii)
within 5 days after the same becomes due, any interest, fee or any other amount
payable hereunder or under any other Loan Document; or
(b) Representation or Warranty. Any representation or warranty by the Borrower,
the General Partner or any Subsidiary made or deemed made herein, in any other
Loan Document, or which is contained in any certificate, document or financial
or other statement by the Borrower, the General Partner, any Subsidiary, or any
Responsible Officer, furnished at any time under this Agreement, or in or under
any other Loan Document, is incorrect in any material respect on or as of the
date made or deemed made; or
(c) Specific Defaults. The Borrower fails to perform or observe any term,
covenant or agreement contained in any of Sections 7.01, 7.02, 7.03, 7.04, 7.06,
7.09, 7.12, 7.13, 7.15, 7.16 or in any Section in Article VIII; or
(d) Other Defaults. The Borrower, the General Partner or any Subsidiary fails to
perform or observe any other term or covenant contained in this Agreement or any
other Loan Document, and such default shall continue unremedied for a period of
20 days after the earlier of (i) the date upon which a Responsible Officer knew
or reasonably should have known of such failure or (ii) the date upon which
written notice thereof is given to the Borrower by the Administrative Agent or
any Bank; or
(e) Cross-Default. The Borrower, the General Partner or any Subsidiary (i) fails
to make any payment in respect of any Indebtedness or Contingent Obligation
having an aggregate principal amount (including undrawn committed or available
amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than $10,000,000 when due (whether by
scheduled maturity, required prepayment, acceleration, demand, or otherwise) and
such failure continues after the applicable grace or notice period, if any,
specified in the relevant document on the date of such failure; or (ii) fails to
perform or observe any other condition or covenant, or any other event
(including any termination or similar event in respect of any Accounts
Receivable Securitization) shall occur or condition exist, under any agreement
or instrument relating to any such Indebtedness or Contingent Obligation, and
such failure continues after the applicable grace or notice period, if any,
specified in the relevant document on the date of such failure if the effect of
such failure, event or condition is to cause, or to permit the holder or holders
of such Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause such Indebtedness to be declared to be due and payable
prior to its stated maturity or to cause such Indebtedness or Contingent
Obligation to be prepaid, purchased or redeemed by the Borrower, the MLP, the
General Partner or any Subsidiary, or such Contingent Obligation to become
payable or cash collateral in respect thereof to be demanded; or
(f) Insolvency; Voluntary Proceedings. The General Partner, the MLP, the
Borrower or any Subsidiary (i) ceases or fails to be solvent, or generally fails
to pay, or admits in writing its inability to pay, its debts as they become due,
subject to applicable grace periods, if any, whether at stated maturity or
otherwise; (ii) voluntarily ceases to conduct its business in the ordinary
course; (iii) commences any Insolvency Proceeding with respect to itself; or
(iv) takes any action to effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding is
commenced or filed against the General Partner, the MLP, the Borrower or any
Subsidiary, or any writ, judgment, warrant of attachment, execution or similar
process, is issued or levied against a substantial part of any such Person's
properties, and any such proceeding or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within 60 days after commencement, filing or
levy; (ii) the General Partner, the MLP, the Borrower or any Subsidiary admits
the material allegations of a petition against it in any Insolvency Proceeding,
or an order for relief (or similar order under non-U.S. law) is ordered in any
Insolvency Proceeding; or (iii) the General Partner, the MLP, the Borrower or
any Subsidiary acquiesces in the appointment of a receiver, trustee, custodian,
conservator, liquidator, mortgagee in possession (or agent therefor), or other
similar Person for itself or a substantial portion of its property or business;
or
(h) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan which has
resulted or could reasonably be expected to result in liability of the Borrower
or the General Partner under Title IV of ERISA to the Pension Plan or the PBGC
in an aggregate amount in excess of $5 million; or (ii) the commencement or
increase of contributions to, or the adoption of or the amendment of a Pension
Plan by the Borrower, the General Partner or any of their Affiliates which has
resulted or could reasonably be expected to result in an increase in Unfunded
Pension Liability among all Pension Plans in an aggregate amount in excess of $5
million; or
(i) Monetary Judgments. One or more judgments, orders, decrees or arbitration
awards is entered against the Borrower, the General Partner or any Subsidiary
involving in the aggregate a liability (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage) as to
any single or related series of transactions, incidents or conditions, of more
than $40,000,000; or
(j) Non-Monetary Judgments. Any non-monetary judgment, order or decree is
entered against the Borrower, the General Partner or any Subsidiary which does
or would reasonably be expected to have a Material Adverse Effect, and there
shall be any period of 60 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect; or
(k) Loss of Licenses. Any Governmental Authority revokes or fails to renew any
material license, permit or franchise of the Borrower or any Subsidiary, or the
Borrower or any Subsidiary for any reason loses any material license, permit or
franchise, or the Borrower or any Subsidiary suffers the imposition of any
restraining order, escrow, suspension or impound of funds in connection with any
proceeding (judicial or administrative) with respect to any material license,
permit or franchise; or
(l) Adverse Change. There occurs a Material Adverse Effect; or
(m) Certain Indenture Defaults, Etc. (i) To the extent not otherwise within the
scope of subsection 9.01(e) above, any "Event of Default" shall occur and be
continuing under and as defined in the 1998 Note Purchase Agreement or (ii) any
of the following shall occur under or with respect to the 1996 Indenture or any
other Indebtedness guaranteed by the Borrower or its Subsidiaries (collectively,
the "Guaranteed Indebtedness"): (A) any demand for payment shall be made under
any such Guaranty Obligation with respect to the Guaranteed Indebtedness or (B)
so long as any such Guaranty Obligation shall be in effect (x) the Borrower or
any such Subsidiary shall fail to pay principal of or premium, if any, or
interest on such Guaranteed Indebtedness after the expiration of any applicable
notice or cure periods or (y) any "Event of Default" (however defined) shall
occur and be continuing under such Guaranteed Indebtedness which results in the
acceleration of such Guaranteed Indebtedness; or
(n) Guarantor Defaults. Any Guarantor fails in any material respect to perform
or observe any term, covenant or agreement in its Guaranty; or any Guaranty is
for any reason partially (including with respect to future advances) or wholly
revoked or invalidated, or otherwise ceases to be in full force and effect
(except to the extent released pursuant to the express terms of this Agreement),
or any Guarantor or any other Person contests in any manner the validity or
enforceability thereof or denies that it has any further liability or obligation
thereunder; or any event described at subsections (f) or (g) of this Section
occurs with respect to the Guarantor; or
(o) Ferrellgas Joinder Event. The Ferrellgas Joinder Event shall not have
occurred on or before the Effective Date.
Section 9.02 Remedies. If any Event of Default occurs, the Administrative
Agent shall, at the request of, or may, with the consent of, the Majority Banks,
(a) declare the commitment of each Bank to make Loans to be terminated,
whereupon such commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable (including
amounts due under Section 3.04), without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrower;
and
(c) exercise on behalf of itself and the Banks all rights and remedies available
to it and the Banks under the Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in subsection
(f) or (g) of Section 9.01 (in the case of clause (i) of subsection (g) upon the
expiration of the 60-day period mentioned therein), the obligation of each Bank
to make Loans shall automatically terminate and the unpaid principal amount of
all outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable without further act of the Administrative
Agent or any Bank.
Section 9.03 Rights Not Exclusive. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
Section 9.04 Certain Financial Covenant Defaults. In the event that, after
taking into account any extraordinary charge to earnings taken or to be taken as
of the end of any fiscal period of the Borrower (a "Charge"), and if solely by
virtue of such Charge, there would exist an Event of Default due to the breach
of any of subsections 7.12(a) or 7.12(b) as of such fiscal period end date, such
Event of Default shall be deemed to arise upon the earlier of (a) the date after
such fiscal period end date on which the Borrower announces publicly it will
take, is taking or has taken such Charge (including an announcement in the form
of a statement in a report filed with the SEC) or, if such announcement is made
prior to such fiscal period end date, the date that is such fiscal period end
date, and (b) the date the Borrower delivers to the Administrative Agent its
audited annual or unaudited quarterly financial statements in respect of such
fiscal period reflecting such Charge as taken.
ARTICLE X
THE ADMINISTRATIVE AGENT
Section 10.01 Appointment and Authorization. Each of the Banks hereby
irrevocably appoints, designates and authorizes the Administrative Agent to take
such action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Administrative Agent shall not have
any duties or responsibilities, except those expressly set forth herein, nor
shall the Administrative Agent have or be deemed to have any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
Section 10.02 Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
Section 10.03 Liability of Administrative Agent. None of the Agent-Related
Persons shall (i) be liable for any action taken or omitted to be taken by any
of them under or in connection with this Agreement or any other Loan Document or
the transactions contemplated hereby (except for its own gross negligence or
willful misconduct), or (ii) be responsible in any manner to any of the Banks
for any recital, statement, representation or warranty made by the Borrower or
any Subsidiary or Affiliate of the Borrower, or any officer thereof, contained
in this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
the Borrower or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Bank to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of the
Borrower or any of the Borrower's Subsidiaries or Affiliates.
Section 10.04 Reliance by Administrative Agent. (a) The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to the Borrower), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Majority Banks as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Banks against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. The Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Majority Banks and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Administrative Agent to such Bank
for consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to the Bank.
Section 10.05 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Administrative Agent for the account of the Banks,
unless the Administrative Agent shall have received written notice from a Bank
or the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". The
Administrative Agent will notify the Banks of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as may be requested by the Majority Banks in accordance with
Article VIII; provided, however, that unless and until the Administrative Agent
has received any such request, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable or in the best
interest of the Banks.
Section 10.06 Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Administrative Agent hereinafter taken, including any review of the
affairs of the Borrower and its Subsidiaries, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Bank. Each Bank
represents to the Administrative Agent that it has, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Borrower and its Subsidiaries, and
all applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to the Borrower hereunder. Each Bank also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents to be furnished to the Banks by the Administrative Agent as specified
on Schedule 10.06, the Administrative Agent shall have any duty or
responsibility to provide any Bank with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Borrower which may come into the possession
of any of the Agent-Related Persons. The Administrative Agent shall promptly
deliver to the Banks the items specified on Schedule 10.06 that are required to
be provided by the Borrower only to the extent such items are actually provided
by the Borrower.
Section 10.07 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Banks shall indemnify upon demand the Agent-Related
Persons (to the extent not reimbursed by or on behalf of the Borrower and
without limiting the obligation of the Borrower to do so), pro rata in
accordance with its Pro Rata Share on the date the Borrower's reimbursement
obligation arises, from and against any and all Indemnified Liabilities;
provided, however, that no Bank shall be liable for the payment to the
Agent-Related Persons of any portion of such Indemnified Liabilities resulting
solely from such Person's gross negligence or willful misconduct. Without
limitation of the foregoing, each Bank shall reimburse the Administrative Agent
upon demand for their ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by them in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any other
Loan Document, or any document contemplated by or referred to herein, to the
extent that the Administrative Agent is not reimbursed for such expenses by or
on behalf of the Borrower. The undertaking in this Section shall survive the
payment of all Obligations hereunder and the resignation or replacement of the
Administrative Agent.
Section 10.08 Administrative Agent in Individual Capacity. BofA and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with the
Borrower and its Subsidiaries and Affiliates as though BofA were not the
Administrative Agent hereunder and without notice to or consent of the Banks.
The Banks acknowledge that, pursuant to such activities, BofA or its Affiliates
may receive information regarding the Borrower or its Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Borrower or such Subsidiary) and acknowledge that the Administrative Agent shall
be under no obligation to provide such information to them. With respect to its
Loans, BofA shall have the same rights and powers under this Agreement as any
other Bank and may exercise the same as though it were not the Administrative
Agent.
Section 10.09 Successor Administrative Agent. The Administrative Agent may, and
at the request of the Majority Banks shall, resign as Administrative Agent upon
30 days' notice to the Banks. If the Administrative Agent resigns under this
Agreement, the Majority Banks shall appoint from among the Banks a successor
agent for the Banks. If no successor agent is appointed prior to the effective
date of the resignation of the Administrative Agent, the Administrative Agent
may appoint, after consulting with the Banks and the Borrower, a successor agent
from among the Banks. Upon the acceptance of its appointment as successor agent
hereunder, such successor agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the term "Administrative Agent"
shall mean such successor agent and the retiring Administrative Agent's
appointment, powers and duties as Administrative Agent shall be terminated.
After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article X and Sections 11.04 and
11.05 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Agreement. If no successor
agent has accepted appointment as Administrative Agent by the date which is 30
days following a retiring Administrative Agent's notice of resignation, the
retiring Administrative Agent's resignation shall nevertheless thereupon become
effective and the Banks shall perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Majority Banks appoint a
successor agent as provided for above.
Section 10.10 Withholding Tax. (a) If any Bank is a "foreign corporation,
partnership or trust" within the meaning of the Code and such Bank claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the Code, such Bank agrees with and in favor of the Administrative
Agent, to deliver to the Administrative Agent:
(i) if such Bank claims an exemption from, or a
reduction of, withholding tax under a United
States tax treaty, properly completed IRS
Forms 1001 and W-8 (or any successor forms)
before the payment of any interest in the
first calendar year and before the payment
of any interest in each third succeeding
calendar year during which interest may be
paid under this Agreement;
(ii) if such Bank claims that interest paid under this Agreement is exempt
from United States withholding tax because it is effectively connected with a
United States trade or business of such Bank, two properly completed and
executed copies of IRS Form 4224 (or any successor form) before the payment of
any interest is due in the first taxable year of such Bank and in each
succeeding taxable year of such Bank during which interest may be paid under
this Agreement, and IRS Form W-9 (or any successor form); and
(iii) such other form or forms as may be required
under the Code or other laws of the United
States as a condition to exemption from, or
reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Administrative Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(b) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001 and
such Bank sells, assigns, grants a participation in, or otherwise transfers all
or part of the Obligations of the Borrower to such Bank, such Bank agrees to
notify the Administrative Agent of the percentage amount in which it is no
longer the beneficial owner of Obligations of the Borrower to such Bank. To the
extent of such percentage amount, the Administrative Agent will treat such
Bank's IRS Form 1001 as no longer valid.
(c) If any Bank claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Administrative Agent sells,
assigns, grants a participation in, or otherwise transfers all or part of the
Obligations of the Borrower to such Bank, such Bank agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed by
Sections 1441 and 1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Administrative Agent may withhold from any interest payment
to such Bank an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation required by
subsection (a) of this Section are not delivered to the Administrative Agent,
then the Administrative Agent may withhold from any interest payment to such
Bank not providing such forms or other documentation an amount equivalent to the
applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the Administrative
Agent did not properly withhold tax from amounts paid to or for the account of
any Bank (because the appropriate form was not delivered, was not properly
executed, or because such Bank failed to notify the Administrative Agent of a
change in circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Bank shall indemnify
the Administrative Agent fully for all amounts paid, directly or indirectly, by
the Administrative Agent as tax or otherwise, including penalties and interest,
and including any taxes imposed by any jurisdiction on the amounts payable to
the Administrative Agent under this Section, together with all costs and
expenses (including Attorney Costs). The obligation of the Banks under this
subsection shall survive the payment of all Obligations and the resignation or
replacement of the Administrative Agent.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Borrower or the General Partner therefrom, shall be effective
unless the same shall be in writing and signed by the Majority Banks (or by the
Administrative Agent at the written request of the Majority Banks) and the
Borrower and acknowledged by the Administrative Agent, and then any such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such waiver, amendment, or
consent shall, unless in writing and signed by all the Banks, the Borrower and
the General Partner and acknowledged by the Administrative Agent, do any of the
following:
(a) increase or extend the Commitment of any Bank (or reinstate any
Commitment terminated pursuant to Section 9.02);
(b) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees or other amounts due to
the Banks (or any of them) hereunder or under any other Loan Document;
(c) reduce the principal of, or the rate of interest specified herein on any
Loan, or (subject to clause (ii) below) any fees or other amounts payable
hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans which is required for the Banks or any of them to
take any action hereunder;
(e) amend this Section, or Section 2.13, or any provision herein providing for
consent or other action by all Banks; or
(f) release any Guaranty (other than the TWCI Guaranty, which TWCI Guaranty
shall be released as provided in Section 4.03);
and, provided, further, that (i) no amendment, waiver or consent shall, unless
in writing and signed by the Administrative Agent in addition to the Majority
Banks or all the Banks, as the case may be, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document, and (ii)
the Fee Letters may be amended, or rights or privileges thereunder waived, in a
writing executed solely by the parties thereto.
Section 11.02 Notices. (a) Except as otherwise specifically provided in Section
3.02, all notices, requests and other communications shall be in writing
(including, unless the context expressly otherwise provides, by facsimile
transmission; provided, that any matter transmitted by the Borrower by facsimile
(i) shall be immediately confirmed by a telephone call to the recipient at the
number specified on Schedule 11.02, and (ii) shall be followed promptly by
delivery of a hard copy original thereof) and mailed, faxed or delivered, to the
address or facsimile number specified for notices on Schedule 11.02; or, as
directed to the Borrower or the Administrative Agent, to such other address as
shall be designated by such party in a written notice to the other parties, and
as directed to any other party, at such other address as shall be designated by
such party in a written notice to the Borrower and the Administrative Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery; except that
notices pursuant to Article II or X shall not be effective until actually
received by the Administrative Agent.
(c) Any agreement of the Administrative Agent and the Banks
herein to receive certain notices by telephone or facsimile is solely for the
convenience and at the request of the Borrower. The Administrative Agent and the
Banks shall be entitled to rely on the authority of any Person purporting to be
a Person authorized by the Borrower to give such notice and the Administrative
Agent and the Banks shall not have any liability to the Borrower or other Person
on account of any action taken or not taken by the Administrative Agent or the
Banks in reliance upon such telephonic or facsimile notice. The obligation of
the Borrower to repay the Loans shall not be affected in any way or to any
extent by any failure by the Administrative Agent and the Banks to receive
written confirmation of any telephonic or facsimile notice or the receipt by the
Administrative Agent and the Banks of a confirmation which is at variance with
the terms understood by the Administrative Agent and the Banks to be contained
in the telephonic or facsimile notice.
Section 11.03 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Bank, any
right, remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.
Section 11.04 Costs and Expenses. The Borrower shall:
(a) whether or not the transactions contemplated hereby are consummated, pay or
reimburse BofA (including in its capacity as Administrative Agent) and the
Arranger within five Business Days after demand (subject to subsection 4.01(e))
for all costs and expenses incurred by BofA (including in its capacity as
Administrative Agent) and the Arranger in connection with the development
(including due diligence), preparation, delivery, administration, syndication
and execution of, and any amendment, supplement, waiver or modification to (in
each case, whether or not consummated), this Agreement, any Loan Document and
any other documents prepared in connection herewith or therewith, and the
consummation of the transactions contemplated hereby and thereby, including
reasonable (giving due regard to the prevailing circumstances) Attorney Costs
incurred by BofA (including in its capacity as Administrative Agent) and the
Arranger with respect thereto (other than, with respect to the preparation,
delivery, syndication and execution of such documents, the allocated cost of
internal legal services); and
(b) pay or reimburse the Administrative Agent, the Arranger and each Bank within
five Business Days after demand for all costs and expenses (including Attorney
Costs) incurred by them in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies under this Agreement or
any other Loan Document during the existence of an Event of Default or after
acceleration of the Loans (including in connection with any "workout" or
restructuring regarding the Loans, and including in any Insolvency Proceeding or
appellate proceeding).
Section 11.05 Indemnity. Whether or not the transactions contemplated hereby are
consummated, the Borrower shall indemnify and hold the Agent-Related Persons,
the Arranger and each Bank and each of their respective officers, directors,
employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person")
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits and reasonable (giving due regard to the
prevailing circumstances) costs, charges, expenses and disbursements (including
Attorney Costs) of any kind or nature whatsoever which may at any time
(including at any time following repayment of the Loans and the termination,
resignation or replacement of the Administrative Agent or replacement of any
Bank) be imposed on, incurred by or asserted against any such Person in any way
relating to or arising out of the transactions contemplated by the Purchase
Agreement, the Merger, the Loans, the Borrower's use of loan proceeds or the
commitments pursuant to this Agreement or any document contemplated by or
referred to herein, or the transactions contemplated hereby, or any action taken
or omitted by any such Person under or in connection with any of the foregoing,
including with respect to any investigation, litigation or proceeding (including
any Insolvency Proceeding or appellate proceeding) related to or arising out of
this Agreement or the Loans or the actual or proposed use of the proceeds
thereof, whether or not any Indemnified Person is a party thereto (all the
foregoing, collectively, the "Indemnified Liabilities"); provided, that the
Borrower shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities resulting solely from the gross negligence or
willful misconduct of such Indemnified Person. The agreements in this Section
shall survive payment of all other Obligations.
Section 11.06 Payments Set Aside. To the extent that the Borrower makes a
payment to the Administrative Agent or the Banks, or the Administrative Agent or
the Banks exercise their right of set-off, and such payment or the proceeds of
such set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Bank in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any Insolvency Proceeding or otherwise, then (a) to the extent
of such recovery the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred, and (b) each Bank
severally agrees to pay to the Administrative Agent upon demand its pro rata
share of any amount so recovered from or repaid by the Administrative Agent.
Section 11.07 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, that the Borrower may not assign or transfer
any of its rights or obligations under this Agreement to any other Person (other
than on the Effective Date to Ferrellgas and the General Partner pursuant to the
Assumption Agreement) without the prior written consent of the Administrative
Agent and each Bank. Any attempted or purported assignment in contravention of
the preceding sentence shall be null and void.
Section 11.08 Assignments, Participations, Etc. (a) Any Bank may, with the
written consent of the Administrative Agent, which consent shall not be
unreasonably withheld, at any time assign and delegate to one or more Eligible
Assignees (provided that no written consent of the Administrative Agent shall be
required in connection with any assignment and delegation by a Bank to an
Eligible Assignee that is an Affiliate of such Bank) (each an "Assignee") all,
or any ratable part of all, of the Loans, the Commitments and the other rights
and obligations of such Bank hereunder in an aggregate minimum amount of
$3,000,000 or a lesser amount to be agreed upon by the Administrative Agent and
the Borrower (unless to an existing Bank, in which case no minimum assignment
shall apply); provided that such Bank shall retain an aggregate amount of not
less than $3,000,000 in respect thereof, unless such Bank assigns and delegates
all of its rights and obligations hereunder to one or more Eligible Assignees at
the time and subject to the conditions set forth herein; and provided, further,
however, that the Borrower and the Administrative Agent may continue to deal
solely and directly with such Bank in connection with the interest so assigned
to an Assignee until (i) written notice of such assignment, together with
payment instructions, addresses and related information with respect to the
Assignee, shall have been given to the Borrower and the Administrative Agent by
such Bank and the Assignee; (ii) such Bank and its Assignee shall have delivered
to the Borrower and the Administrative Agent an Assignment and Acceptance in the
form of Exhibit E ("Assignment and Acceptance"), together with any Note or Notes
subject to such assignment; and (iii) the assignor Bank has paid to the
Administrative Agent a processing fee in the amount of $3,500.
(b) From and after the date that the Administrative Agent
notifies the assignor Bank that it has received (and provided its consent with
respect to) an executed Assignment and Acceptance and payment of the
above-referenced processing fee, (i) the Assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Bank under the Loan Documents, and (ii) the assignor Bank
shall, to the extent that rights and obligations hereunder and under the other
Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Loan Documents.
(c) Within five Business Days after its receipt of notice by
the Administrative Agent that it has received an executed Assignment and
Acceptance and payment of the processing fee (and provided that it consents to
such assignment in accordance with subsection 11.08(a)), if the Assignee so
requests, the Borrower shall execute and deliver to the Administrative Agent,
new Notes evidencing such Assignee's assigned Loans and Commitments and, if the
assignor Bank has retained a portion of its Loans and its Commitments and so
requests, replacement Notes in the principal amount or amounts of the Loans
retained by the assignor Bank (such Notes to be in exchange for, but not in
payment of, the Notes held by such Bank). Immediately upon each Assignee's
making its processing fee payment under the Assignment and Acceptance, this
Agreement shall be deemed to be amended to the extent, but only to the extent,
necessary to reflect the addition of the Assignee and the resulting adjustment
of the Commitments arising therefrom. The Commitments allocated to each Assignee
shall reduce such Commitments of the assigning Bank pro tanto and the
Administrative Agent shall promptly prepare and distribute a new Schedule 2.01
reflecting the new commitments.
(d) Any Bank may at any time sell to one or more commercial
banks or other Persons not Affiliates of the Borrower (a "Participant")
participating interests in any Loans, the Commitments of that Bank and the other
interests of that Bank (the "originating Bank") hereunder and under the other
Loan Documents; provided, however, that (i) the originating Bank's obligations
under this Agreement shall remain unchanged, (ii) the originating Bank shall
remain solely responsible for the performance of such obligations, (iii) the
Borrower and the Administrative Agent shall continue to deal solely and directly
with the originating Bank in connection with the originating Bank's rights and
obligations under this Agreement and the other Loan Documents, and (iv) no Bank
shall transfer or grant any participating interest under which the Participant
has rights to approve any amendment to, or any consent or waiver with respect
to, this Agreement or any other Loan Document, except to the extent such
amendment, consent or waiver would require unanimous consent of the Banks as
described in the first proviso to Section 11.01. In the case of any such
participation, the Participant shall be entitled to the benefit of Sections
3.01, 3.03 and 11.05 as though it were also a Bank hereunder, and if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Bank under this Agreement.
(e) Each Bank agrees to take normal and reasonable precautions
and exercise due care to maintain the confidentiality of all information
identified as "confidential" or "secret" by the Borrower and provided to it by
the Borrower or any Subsidiary, or by the Administrative Agent on such
Borrower's or Subsidiary's behalf, under this Agreement or any other Loan
Document, and neither it nor any of its Affiliates shall use any such
information other than in connection with or in enforcement of this Agreement
and the other Loan Documents; except to the extent such information (i) was or
becomes generally available to the public other than as a result of disclosure
by the Bank, or (ii) was or becomes available on a non-confidential basis from a
source other than the Borrower, provided that such source is not bound by a
confidentiality agreement with the Borrower known to the Bank; provided,
however, that any Bank may disclose such information (A) at the request or
pursuant to any requirement of any Governmental Authority to which the Bank is
subject or in connection with an examination of such Bank by any such authority;
(B) pursuant to subpoena or other court process; (C) when required to do so in
accordance with the provisions of any applicable Requirement of Law; (D) to the
extent reasonably required in connection with any litigation or proceeding to
which the Administrative Agent, any Bank or their respective Affiliates may be
party; (E) to the extent reasonably required in connection with the exercise of
any remedy hereunder or under any other Loan Document; (F) to such Bank's
independent auditors and other professional advisors; (G) to any Affiliate of
such Bank, or to any Participant or Assignee, actual or potential, provided that
such Affiliate, Participant or Assignee agrees to keep such information
confidential to the same extent required of the Banks hereunder, and (H) as to
any Bank, as expressly permitted under the terms of any other document or
agreement regarding confidentiality to which the Borrower is party or is deemed
party with such Bank.
(f) Notwithstanding any other provision in this Agreement, any
Bank may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement and any Note held by
it in favor of any Federal Reserve Bank in accordance with Regulation A of the
FRB or U.S. Treasury Regulation 31 CFR ss.203.14, and such Federal Reserve Bank
may enforce such pledge or security interest in any manner permitted under
applicable law.
Section 11.09 Set-off. In addition to any rights and remedies of the Banks
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Bank is authorized at any time and from time to time, without
prior notice to the Borrower, any such notice being waived by the Borrower 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 by,
and other indebtedness at any time owing by, such Bank to or for the credit or
the account of the Borrower against any and all Obligations owing to such Bank,
now or hereafter existing, irrespective of whether or not the Administrative
Agent or such Bank shall have made demand under this Agreement or any Loan
Document and although such Obligations may be contingent or unmatured. Each Bank
agrees promptly to notify the Borrower and the Administrative Agent after any
such set-off and application made by such Bank; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application.
Section 11.10 Notification of Addresses, Lending Offices, Etc. Each Bank shall
notify the Administrative Agent in writing of any changes in the address to
which notices to the Bank should be directed, of addresses of any Lending
Office, of payment instructions in respect of all payments to be made to it
hereunder and of such other administrative information as the Administrative
Agent shall reasonably request.
Section 11.11 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument. Transmission by telecopier of an
executed counterpart of this Agreement shall be deemed to constitute due and
sufficient delivery of such counterpart. The parties hereto shall deliver to
each other an original counterpart of this Agreement promptly after the delivery
by telecopier; provided, however, that the failure by any party to so deliver an
original counterpart shall not affect the sufficiency of a telecopy of such
counterpart (and the fact that such telecopy constitutes the due and sufficient
delivery of such counterpart), as provided above.
Section 11.12 Severability. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
Section 11.13 No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the Borrower, the Banks, the
Administrative Agent and the Agent-Related Persons, the Arranger and their
permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents.
Section 11.14 Governing Law and Jurisdiction. (a) THIS AGREEMENT AND ALL
NOTES ISSUED HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK; PROVIDED THAT THE ADMINISTRATIVE AGENT AND THE
BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER, THE GENERAL
PARTNER, THE ADMINISTRATIVE AGENT AND THE BANKS CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH
OF THE BORROWER, THE GENERAL PARTNER, THE ADMINISTRATIVE AGENT AND THE BANKS
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE BORROWER, THE GENERAL
PARTNER, THE ADMINISTRATIVE AGENT AND THE BANKS EACH WAIVE PERSONAL SERVICE OF
ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY NEW YORK LAW.
Section 11.15 Waiver of Jury Trial. THE BORROWER, THE GENERAL PARTNER, THE BANKS
AND THE ADMINISTRATIVE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY
JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED
PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. THE BORROWER, THE GENERAL PARTNER, THE BANKS AND THE
ADMINISTRATIVE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
Section 11.16 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding between and among the
Borrower, the General Partner (from and after the Ferrellgas Joinder Event), the
Banks and the Administrative Agent, and supersedes all other understandings of
such Persons, verbal or written, relating to the subject matter hereof and
thereof including all term sheets and commitment letters relating to the credit
facilities provided herein.
<PAGE>
A:\326542..DOC
DOCSLA1:326542.4 84
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
THERMOGAS L.L.C.
By:
Name: Don R. Wellendorf
Title: Vice President
Address for Notices for the Borrower:
One Williams Center, Suite 3000
Tulsa, Oklahoma 74172
Attention: Don R. Wellendorf
Telephone: (918) 573-4119
Facsimile: (918) 573-3864
BANK OF AMERICA, N.A., as Administrative Agent
By:
Name: Daryl G. Patterson
Title: Managing Director
BANK OF AMERICA, N.A., as a Bank
By:
Name: Daryl G. Patterson
Title: Managing Director
<PAGE>
TABLE OF CONTENTS
(continued)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I DEFINITIONS................................................................................1
Section 1.01 Certain Defined Terms......................................................................1
Section 1.02 Other Interpretive Provisions.............................................................22
Section 1.03 Accounting Principles.....................................................................23
ARTICLE II THE LOANS.................................................................................23
Section 2.01 Amounts and Terms of Commitments..........................................................23
Section 2.02 Loan Accounts.............................................................................23
Section 2.03 Procedure for Borrowing...................................................................24
Section 2.04 Conversion and Continuation Elections.....................................................24
Section 2.05 Optional Prepayments......................................................................26
Section 2.06 Mandatory Prepayments of Loans; Mandatory Commitment Reductions...........................26
Section 2.07 Repayment.................................................................................26
Section 2.08 Interest..................................................................................27
Section 2.09 Fees 28
Section 2.10 Computation of Fees and Interest..........................................................28
Section 2.11 Payments by the Borrower..................................................................28
Section 2.12 Payments by the Banks to the Administrative Agent.........................................29
Section 2.13 Sharing of Payments, Etc..................................................................29
Section 2.14 Extension of Maturity Date; Amendment and Restatement of Agreement........................30
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY....................................................32
Section 3.01 Taxes.....................................................................................32
Section 3.02 Illegality................................................................................33
Section 3.03 Increased Costs and Reduction of Return...................................................33
Section 3.04 Funding Losses............................................................................34
Section 3.05 Inability to Determine Rates..............................................................35
Section 3.06 Survival..................................................................................35
ARTICLE IV CONDITIONS PRECEDENT......................................................................35
Section 4.01 Conditions to Effectiveness...............................................................35
Section 4.02 Conditions to All Credit Extensions.......................................................39
Section 4.03 Conditions to Release of Guaranty.........................................................40
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THERMOGAS...............................................42
Section 5.01 Corporate or Partnership Existence and Power..............................................42
Section 5.02 Authorization; No Contravention...........................................................42
Section 5.03 Governmental Authorization................................................................43
Section 5.04 Binding Effect............................................................................43
Section 5.05 No Default................................................................................43
Section 5.06 Use of Proceeds; Margin Regulations.......................................................43
Section 5.07 Title to Properties.......................................................................43
Section 5.08 Taxes.....................................................................................43
Section 5.09 Financial Condition.......................................................................44
Section 5.10 Regulated Entities........................................................................44
Section 5.11 Full Disclosure...........................................................................44
Section 5.12 Year 2000.................................................................................44
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF FERRELLGAS..............................................45
Section 6.01 Corporate or Partnership Existence and Power..............................................45
Section 6.02 Corporate or Partnership Authorization; No Contravention..................................45
Section 6.03 Governmental Authorization................................................................46
Section 6.04 Binding Effect............................................................................46
Section 6.05 Litigation................................................................................46
Section 6.06 No Default................................................................................46
Section 6.07 ERISA Compliance..........................................................................46
Section 6.08 Use of Proceeds; Margin Regulations.......................................................47
Section 6.09 Title to Properties.......................................................................47
Section 6.10 Taxes.....................................................................................47
Section 6.11 Financial Condition.......................................................................48
Section 6.12 Environmental Matters.....................................................................48
Section 6.13 Regulated Entities........................................................................48
Section 6.14 No Burdensome Restrictions................................................................48
Section 6.15 Copyrights, Patents, Trademarks and Licenses, etc.........................................49
Section 6.16 Subsidiaries and Affiliates...............................................................49
Section 6.17 Insurance.................................................................................49
Section 6.18 Tax Status................................................................................49
Section 6.19 Full Disclosure...........................................................................49
Section 6.20 Fixed Price Supply Contracts..............................................................49
Section 6.21 Trading Policies..........................................................................50
Section 6.22 Year 2000.................................................................................50
ARTICLE VII AFFIRMATIVE COVENANTS.....................................................................50
Section 7.01 Financial Statements......................................................................50
Section 7.02 Certificates; Other Information...........................................................52
Section 7.03 Notices...................................................................................52
Section 7.04 Preservation of Corporate or Partnership Existence, Etc...................................53
Section 7.05 Maintenance of Property...................................................................54
Section 7.06 Insurance.................................................................................54
Section 7.07 Payment of Obligations....................................................................54
Section 7.08 Compliance with Laws......................................................................54
Section 7.09 Inspection of Property and Books and Records..............................................54
Section 7.10 Environmental Laws........................................................................55
Section 7.11 Use of Proceeds...........................................................................55
Section 7.12 Financial Covenants.......................................................................55
Section 7.13 Trading Policies..........................................................................55
Section 7.14 Other General Partner Obligations.........................................................55
Section 7.15 Monetary Judgments........................................................................56
Section 7.16 Year 2000 Compliance......................................................................57
Section 7.17 Thermogas Merger..........................................................................57
ARTICLE VIII NEGATIVE COVENANTS........................................................................57
Section 8.01 Limitation on Liens.......................................................................57
Section 8.02 Asset Sales...............................................................................59
Section 8.03 Consolidations and Mergers................................................................60
Section 8.04 Acquisitions..............................................................................61
Section 8.05 Limitation on Indebtedness................................................................61
Section 8.06 Transactions with Affiliates..............................................................62
Section 8.07 Use of Proceeds...........................................................................62
Section 8.08 Use of Proceeds - Ineligible Securities...................................................63
Section 8.09 Contingent Obligations....................................................................63
Section 8.10 Joint Ventures............................................................................63
Section 8.11 Lease Obligations.........................................................................63
Section 8.12 Restricted Payments.......................................................................63
Section 8.13 Prepayments of Subordinated Indebtedness..................................................65
Section 8.14 Dividend and Other Payment Restrictions Affecting Subsidiaries............................66
Section 8.15 Change in Business........................................................................66
Section 8.16 Accounting Changes........................................................................66
Section 8.17 Limitation on Sale and Leaseback Transactions.............................................66
Section 8.18 Amendments of Organization Documents or 1996 Indenture or 1998 Note Purchase
Agreement............................................................................67
Section 8.19 Fixed Price Supply Contracts..............................................................67
Section 8.20 Operations through Subsidiaries...........................................................67
Section 8.21 Operations of MLP.........................................................................67
ARTICLE IX EVENTS OF DEFAULT.........................................................................69
Section 9.01 Event of Default..........................................................................69
Section 9.02 Remedies..................................................................................71
Section 9.03 Rights Not Exclusive......................................................................72
Section 9.04 Certain Financial Covenant Defaults.......................................................72
ARTICLE X THE ADMINISTRATIVE AGENT..................................................................72
Section 10.01 Appointment and Authorization........................................................72
Section 10.02 Delegation of Duties.................................................................72
Section 10.03 Liability of Administrative Agent....................................................72
Section 10.04 Reliance by Administrative Agent.....................................................73
Section 10.05 Notice of Default....................................................................73
Section 10.06 Credit Decision......................................................................74
Section 10.07 Indemnification......................................................................74
Section 10.08 Administrative Agent in Individual Capacity..........................................74
Section 10.09 Successor Administrative Agent.......................................................75
Section 10.10 Withholding Tax......................................................................75
ARTICLE XI MISCELLANEOUS.............................................................................77
Section 11.01 Amendments and Waivers...............................................................77
Section 11.02 Notices..............................................................................77
Section 11.03 No Waiver; Cumulative Remedies.......................................................78
Section 11.04 Costs and Expenses...................................................................78
Section 11.05 Indemnity............................................................................79
Section 11.06 Payments Set Aside...................................................................79
Section 11.07 Successors and Assigns...............................................................79
Section 11.08 Assignments, Participations, Etc.....................................................80
Section 11.09 Set-off..............................................................................82
Section 11.10 Notification of Addresses, Lending Offices, Etc......................................82
Section 11.11 Counterparts.........................................................................82
Section 11.12 Severability.........................................................................82
Section 11.13 No Third Parties Benefited...........................................................82
Section 11.14 Governing Law and Jurisdiction.......................................................82
Section 11.15 Waiver of Jury Trial.................................................................83
Section 11.16 Entire Agreement.....................................................................83
</TABLE>
Schedules
2.01 - Commitments; Pro Rata Shares
6.07 - ERISA
6.16 - Subsidiaries and Affiliates
8.05 - Existing Indebtedness and Subordination Provisions
10.06 - Information to be provided to Banks by Administrative Agent
11.02 - Addresses for Notices
<PAGE>
Exhibits
A - Form of Notice of Borrowing
B - Form of Notice of Conversion/Continuation
C - Form of Compliance Certificate
D-1 - Form of Opinion of Counsel to TWCI and Thermogas
D-2 - Form of Opinion of Counsel to Ferrellgas and the General Partner
E - Form of Assignment and Acceptance
F - Form of Note
G - Form of Subsidiary Guaranty
H - Form of Assumption Agreement
I - Form of TWCI Guaranty
J - Form of Release of TWCI Guaranty
ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT, dated as of December 17, 1999 (the
"Agreement"), is made and entered into by and among THERMOGAS L.L.C., a Delaware
limited liability company ("Thermogas"), FERRELLGAS, L.P., a Delaware limited
partnership ("Ferrellgas"), FERRELLGAS, INC., a Delaware corporation and the
sole general partner of Ferrellgas ("FGI"), and BANK OF AMERICA, N.A., in its
capacity as Administrative Agent for the Banks under the Credit Agreement
referred to below. Capitalized terms used herein but not otherwise defined shall
have the meanings set forth in the Credit Agreement.
WITNESSETH
WHEREAS, pursuant to that certain Credit Agreement, dated as of
December 17, 1999 (as amended, modified, extended, renewed or replaced from time
to time, the "Credit Agreement"), among Thermogas, as Borrower, the several
financial institutions party thereto (the "Banks") and Bank of America, N.A., as
Administrative Agent, the Banks have agreed to provide Thermogas with a
$183,000,000 credit facility;
WHEREAS, Ferrellgas Partners, L.P. (the "MLP"), an Affiliate of
Ferrellgas, has acquired all of the limited liability company interests of
Thermogas from Williams Natural Gas Liquids, Inc. and, immediately following the
consummation of such acquisition, the MLP contributed all of such limited
liability company interests to Ferrellgas;
WHEREAS, the Credit Agreement contemplates that, following the
contribution of the limited liability company interests of Thermogas to
Ferrellgas, Ferrellgas will assume all of the obligations of Thermogas and
become liable as the "Borrower" under the Loan Documents and Thermogas will be
merged with and into Ferrellgas;
WHEREAS, Ferrellgas now desires to assume all of the rights,
obligations, duties and responsibilities of Thermogas under the Credit Agreement
and the other Loan Documents; and
WHEREAS, FGI, as the sole general partner of Ferrellgas, now desires to
assume all of the rights, obligations, duties and responsibilities of the
"General Partner" under the Credit Agreement and the other Loan Documents;
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Assumption by Ferrellgas. Effective as of the date hereof,
Ferrellgas hereby (i) assumes all of the rights, duties and obligations of
Thermogas under the Credit Agreement and the Loan Documents, (ii) irrevocably
and unconditionally agrees with the Administrative Agent and the Banks to be
bound by all of the terms and conditions of the Credit Agreement and the Loan
Documents and to perform all of the obligations and discharge all of the
liabilities of Thermogas existing at or accrued prior to the date hereof or
hereafter arising under the Credit Agreement and the Loan Documents and (iii)
without limiting any of the foregoing, ratifies, and agrees to be bound by, (A)
the representations and warranties set forth in Article VI of the Credit
Agreement and (B) all of the affirmative and negative covenants set forth in
Articles VII and VIII of the Credit Agreement. Without limiting the generality
of the foregoing terms of this Section 1, Ferrellgas hereby promises to pay to
each Bank the principal balance of, and accrued interest on, each Loan made
under the Loan Documents and the other Obligations in accordance with the terms
of the Loan Documents.
SECTION 2. Assumption by FGI. Effective as of the date hereof, FGI
hereby (i) assumes all of the rights, duties and obligations of the General
Partner under the Credit Agreement and the other Loan Documents, (ii)
irrevocably and unconditionally agrees with the Administrative Agent and the
Banks to be bound by all of the terms and conditions of the Credit Agreement and
the Loan Documents and to perform all of the obligations and discharge all of
the liabilities of the General Partner existing at or accrued prior to the date
hereof or hereafter arising under the Credit Agreement and the Loan Documents
and (iii) without limiting any of the foregoing, ratifies, and agrees to be
bound by, (A) the representations and warranties set forth in Article VI of the
Credit Agreement and (B) all of the affirmative and negative covenants set forth
in Articles VII and VIII of the Credit Agreement.
SECTION 3. No Release of Thermogas. Notwithstanding the agreements of
Ferrellgas set forth in Section 1 above, Thermogas shall not be released from
its rights, duties and obligations under the Credit Agreement and the other Loan
Documents.
SECTION 4. References in the Loan Documents. From and after the
execution and delivery of this Agreement, (a) Ferrellgas shall have succeeded
Thermogas as the "Borrower" under the Loan Documents, and all references to the
"Borrower" in the Loan Documents shall refer to Ferrellgas and not to Thermogas,
(b) all references to the "General Partner" in the Loan Documents shall refer to
FGI and (c) all references to the "Credit Agreement" in any Loan Documents shall
refer to the Credit Agreement, as modified by this Agreement. Except as
expressly modified by this Agreement, all of the terms and provisions of the
Credit Agreement and the other Loan Documents shall remain in full force and
effect.
SECTION 5. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
SECTION 7. Severability If any provision of this Agreement is
determined to be illegal, invalid or unenforceable, such provisions shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed in without giving effect to the illegal, invalid
or unenforceable provisions.
SECTION 8. Counterparts. This Agreement may be executed in any number
of counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart.
[Remainder of page intentionally left blank]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
THERMOGAS L.L.C.
a Delaware limited liability company
By:_______________________________________
Name:
Title:
FERRELLGAS, L.P.,
a Delaware limited partnership
By: Ferrellgas, Inc.
Its: General Partner
By:_______________________________________
Name:
Title:
FERRELLGAS, INC.,
a Delaware corporation
By:_______________________________________
Name:
Title:
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A.,
as Administrative Agent
By:_______________________________________
Name: Daryl G. Patterson
Title: Managing Director
<PAGE>
For release: Immediate
Contacts: Kenneth A. Heinz, Investor Relations, 816-792-6907
Pam Blase, Media Relations, 816-792-7902
Ferrellgas completes Thermogas acquisition,
creating largest retail propane marketer in the United States
Liberty, Mo. (December 17, 1999)--Ferrellgas Partners, L.P. (NYSE:FGP)
announced today that it has completed the previously announced acquisition of
Thermogas from Williams (NYSE:WMB) of Tulsa, Oklahoma, for $432.5 million. At
closing, Williams received $257.5 million cash and $175 million newly issued
Senior Common Units of Ferrellgas Partners, L.P. This transaction makes
Ferrellgas the nation's largest retail propane marketer, with sales approaching
1 billion gallons and serving more than 1 million Customers in 45 states.
"The transaction solidifies our position as the leading consolidator in
our industry and gives us a great platform from which to continue our aggressive
acquisition activities," said Danley K. Sheldon, Ferrellgas' President and Chief
Executive Officer. "It will immediately provide a large boost to our cash flow
and earnings. The transaction is accretive and we expect the ongoing increased
cash flow will support future quarterly distributions to our unitholders.
Moreover, the acquisition was completed just as we move into the full winter
heating season."
Ferrellgas currently pays a $.50 per quarter cash distribution on each
of the partnership's publicly traded Common Units. The Senior Common Units held
by Williams will receive quarterly distributions of additional partnership
Senior Common Units instead of a cash distribution for a period of up to two
years at an annual rate of 10 percent. Further, the partnership estimates that
cash distributions on Common Units are
deferred from federal income tax for a period of five years. Ferrellgas
Employees own approximately 50 percent of the partnership through an Employee
Stock Ownership Plan.
"This transaction benefits both Williams and Ferrellgas," said Don
Wellendorf, Vice President of Strategic Development and Planning for Williams
Energy Services. "Williams can invest the sales proceeds in its core businesses
and Ferrellgas' management team has a proven ability to integrate large propane
acquisitions and deliver strong financial results."
"We enthusiastically welcome Thermogas' 1,400 Employees and look
forward to working with them as Employee-Owners of the largest propane company
in the United States," Sheldon said.
Banc of America Securities LLC acted as financial advisor to Ferrellgas
in connection with this transaction.
Thermogas was the nation's fifth largest propane retailer with 180
retail outlets in 18 states, annual sales of approximately 300 million gallons,
and more than 330,000 residential, industrial/commercial, and agricultural
Customers. Thermogas' strongest geographic areas of concentration are in the
upper-Midwest.
Prior to the transaction, Ferrellgas was the nation's second largest
retail propane company. The combined operation now has approximately 6,000
Employees in more than 700 retail locations in 45 states.
