UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended January 31, 2000
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________ to __________
Commission file numbers: 1-11331
333-06693
Ferrellgas Partners, L.P.
Ferrellgas Partners Finance Corp.
(Exact name of registrants as specified in their charters)
Delaware 43-1698480
Delaware 43-1742520
- ---------------------------- -------------------------------
(States or other jurisdictions of (I.R.S. Employer Identification Nos.)
incorporation or organization)
One Liberty Plaza, Liberty, Missouri 64068
(Address of principal executive offices) (Zip Code)
Registrants' telephone number, including area code: (816) 792-1600
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [ X ] No [ ]
At March 15, 2000, the registrants had units or shares outstanding as follows:
Ferrellgas Partners, L.P. 31,307,116 Common Units
4,428,499 Senior Common Units
Ferrellgas Partners Finance Corp. 1,000 Common Stock
<PAGE>
FERRELLGAS PARTNERS, L.P. and SUBSIDIARIES
FERRELLGAS PARTNERS FINANCE CORP.
Table of Contents
<TABLE>
<CAPTION>
Page
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Ferrellgas Partners, L.P. and Subsidiaries
<S> <C>
Consolidated Balance Sheets - January 31, 2000 and July 31, 1999 1
Consolidated Statements of Earnings -
Three and six months ended January 31, 2000 and 1999 2
Consolidated Statement of Partners' Capital -
Six months ended January 31, 2000 3
Consolidated Statements of Cash Flows -
Six months ended January 31, 2000 and 1999 4
Notes to Consolidated Financial Statements 5
Ferrellgas Partners Finance Corp.
Balance Sheets - January 31, 2000 and July 31, 1999 11
Statements of Earnings - Three and six months ended
January 31, 2000 and 1999 11
Statements of Cash Flows - Six months ended January 31, 2000 and 1999 12
Notes to Financial Statements 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
13
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 18
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 19
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 19
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 19
ITEM 4. SUBMISSION TO A VOTE OF SECURITIES HOLDERS 19
ITEM 5. OTHER INFORMATION 19
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 19
</TABLE>
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
<TABLE>
<CAPTION>
January 31, July 31,
ASSETS 2000 1999
- ------------------------------------------------------------------------- ---------------- ------------
(unaudited)
Current Assets:
<S> <C> <C>
Cash and cash equivalents $ 25,156 $35,134
Accounts and notes receivable, net 161,566 58,380
Inventories 67,232 24,645
Prepaid expenses and other current assets 9,586 6,780
---------------- ------------
Total Current Assets 263,540 124,939
Property, plant and equipment, net 537,844 405,292
Intangible assets, net 264,072 118,117
Other assets, net 8,772 8,397
---------------- ------------
Total Assets $1,074,228 $656,745
================ ============
LIABILITIES AND PARTNERS' CAPITAL
- -------------------------------------------------------------------------
Current Liabilities:
Accounts payable $126,610 $60,754
Other current liabilities 75,510 48,266
Short-term borrowings 35,000 20,486
---------------- ------------
Total Current Liabilities 237,120 129,506
Long-term debt 708,202 583,840
Other liabilities 19,586 12,144
Contingencies and commitments - -
Minority interest 2,709 906
Partners' Capital:
Senior common unitholders (4,428,499 units oustanding
at January 31, 2000 - redeemable liquidation value - $177,139,946) 168,587 -
Common unitholders (31,307,116 and 14,710,765 units
outstanding at January 31, 2000 and July 31, 1999, respectively) (3,452) 1,215
Subordinated unitholders (0 and 16,593,721 units outstanding
at January 31, 2000 and July 31, 1999, respectively) - (10,516)
General partner (57,727) (59,553)
Accumulated other comprehensive income (797) (797)
---------------- ------------
Total Partners' Capital 106,611 (69,651)
---------------- ------------
Total Liabilities and Partners' Capital $1,074,228 $656,745
================ ============
</TABLE>
See notes to consolidated financial statements.
1
<PAGE>
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands, except per-unit data)
(unaudited)
<TABLE>
<CAPTION>
For the three months ended For the six months ended
--------------------------- -----------------------
January 31, January 31, January 31, January 31,
2000 1999 2000 1999
------------ --------------- ----------- -------------
Revenues:
<S> <C> <C> <C> <C>
Gas liquids and related product sales $316,025 $216,541 $457,532 $334,543
Other 24,970 13,536 46,202 25,873
-------------- ----------- ----------- -----------
Total revenues 340,995 230,077 503,734 360,416
Cost of product sold (exclusive of
depreciation, shown separately below) 178,028 101,328 263,353 160,040
-------------- ----------- ----------- -----------
Gross profit 162,967 128,749 240,381 200,376
Operating expense 69,341 56,240 126,518 107,952
Depreciation and amortization expense 13,916 11,806 25,999 23,117
Employee stock ownership plan compensation charge 1,026 800 2,053 1,690
General and administrative expense 5,960 4,197 11,143 8,865
Equipment lease expense 5,586 3,173 9,439 6,141
-------------- ----------- ----------- -----------
Operating income 67,138 52,533 65,229 52,611
Interest expense (14,697) (11,960) (27,278) (23,578)
Interest income 351 386 609 544
Loss on disposal of assets (33) (598) (129) (512)
-------------- ----------- ----------- -----------
Earnings before minority interest and
extraordinary item 52,759 40,361 38,431 29,065
Minority interest 573 446 467 371
-------------- ----------- ----------- -----------
Earnings before extraordinary item 52,186 39,915 37,964 28,694
Extraordinary loss on early extinguishment of debt,
net of minority interest of $130 - - - (12,786)
-------------- ----------- ----------- -----------
Net earnings 52,186 39,915 37,964 15,908
Paid in kind distribution to senior common unitholders 2,140 N/A 2,140 N/A
General partner's interest in net earnings 500 399 358 159
-------------- ----------- ----------- -----------
Limited partners' interest in net earnings $49,546 $39,516 $35,466 $15,749
============== =========== =========== ===========
Basic earnings per limited partner unit:
Earnings before extraordinary item $ 1.58 $ 1.26 $ 1.13 $ 0.91
Extraordinary loss - - - (0.41)
-------------- ----------- ----------- -----------
Net earnings $ 1.58 $ 1.26 $ 1.13 $ 0.50
============== =========== =========== ===========
Diluted earnings per limited partner unit:
Earnings before extraordinary item $ 1.58 $ 1.26 $ 1.13 $ 0.91
Extraordinary loss - - - (0.41)
-------------- ----------- ----------- -----------
Net earnings $ 1.58 $ 1.26 $ 1.13 $ 0.50
============== =========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Number of units Accumulated
--------------------------------- other
Sub- Senior Sub- compre- Total
Senior Common ordinated common Common ordinated General hensive partners'
unitholders unitholders unitholders unitholders unitholders unitholder partner income capital
----------- ----------- ------------ ----------- ---------- ----------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
August 1, 1999 - 14,710.8 16,593.7 $ - $ 1,215 $(10,516) $(59,553) $(797) $(69,651)
Conversion of
subordinated
units into
common units 16,593.7 (16,593.7) - (10,516) 10,516 - - -
Units issued in
connection -
with acquisitions
Common units 2.6 - 45 - - - 45
Senior Common units 4,375.0 - - 175,000 - - 1,768 - 176,768
Fees paid to
issue senior
common units (8,925) - - - - (8,925)
Accretion of
discount on senior
common units - - - 372 (368) - (4) - -
Contribution
from general
partner in
connection with
ESOP compensation
charge - - - - 2,013 - 20 - 2,033
Quarterly cash
distributios - - - - (31,307) - (316) - (31,623)
Accrued paid
in kind
distributions 53.5 2,140 (2,119) (21) -
Comprehensive
income:
Net earnings - - - - 37,585 - 379 - 37,964
--------
Comprehensive income 37,964
----------- ----------- ------------ ----------- ---------- ----------- ------- -------- --------
January 31, 2000 4,428.5 31,307.1 - $168,587 $(3,452) $ - $(57,727) $(797) $106,611
=========== =========== ============ =========== ========== =========== ======= ======== ========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
For the six months ended
----------------------------
January January
31, 2000 31, 1999
------------- ---------------
Cash Flows From Operating Activities:
<S> <C> <C>
Net earnings $37,964 $15,908
Reconciliation of net earnings to net cash used in
operating activities:
Depreciation and amortization 25,999 23,117
Extraordinary loss, net of minority interest - 12,786
Employee stock ownership plan compensation charge 2,053 1,690
Other 2,821 2,837
Changes in operating assets and liabilities,
net of effects from business
acquisitions:
Accounts and notes receivable (79,282) (47,393)
Inventories (24,881) 5,084
Prepaid expenses and other current assets (1,828) (2,609)
Accounts payable 43,977 10,114
Other current liabilities 2,705 2,103
Other liabilities (41) 2,350
------------ ---------------
Net cash provided in operating activities 9,487 25,987
------------ ---------------
Cash Flows From Investing Activities:
Business acquisitions, net of cash acquired 54,827 (19,480)
Capital expenditures (13,597) (14,739)
Proceeds from sale leaseback transaction 25,000 -
Cash paid for acquisition transaction fees (13,294) -
Other 1,934 1,138
------------ ---------------
Net cash provided by (used in) investing activities 54,870 (33,081)
------------ ---------------
Cash Flows From Financing Activities:
Net additions to short-term borrowings 14,514 6,282
Additions to long-term debt 12,812 391,713
Reductions of long-term debt (72,552) (350,668)
Cash paid for debt and lease financing costs (659) (12,528)
Distributions (31,623) (31,612)
Cash contribution from general partner 3,571 -
Other (398) (399)
------------ ---------------
Net cash provided by (used in) financing activities (74,335) 2,788
------------ ---------------
Decrease in cash and cash equivalents (9,978) (4,306)
Cash and cash equivalents - beginning of period 35,134 16,961
------------ ---------------
Cash and cash equivalents - end of period $25,156 $12,655
============ ===============
Cash paid for interest $23,775 $20,935
============ ===============
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2000
(unaudited)
A. The financial statements of Ferrellgas Partners, L.P. and subsidiaries (the
"Partnership") reflect all adjustments which are, in the opinion of
management, necessary for a fair statement of the interim periods
presented. All adjustments to the financial statements were of a normal,
recurring nature. These financial statements should be read in conjunction
with the financial statements and related notes included in our Annual
Report on Form 10-K for the year ended July 31, 1999.
B. The preparation of financial statements in conformity with generally
accepted accounting principles ("GAAP") requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reported period. Actual results could differ from these
estimates.
C. The propane industry is seasonal in nature with peak activity during the
winter months. Therefore, the results of operations for the periods ended
January 31, 2000 and January 31, 1999 are not necessarily indicative of the
results to be expected for a full year.
D. Inventories consist of:
<TABLE>
<CAPTION>
January 31, July 31,
(in thousands) 2000 1999
--------------- ---------------
<S> <C> <C>
Liquefied propane gas and related products $45,791 $15,480
Appliances, parts and supplies 21,441 9,165
--------------- ---------------
$67,232 $24,645
=============== ===============
In addition to inventories on hand, the Partnership enters into contracts
to buy product for supply purposes. Nearly all such contracts have terms of
less than one year and most call for payment based on market prices at date
of delivery. All fixed price contracts have terms of less than one year. As
of January 31, 2000, the Partnership had committed to take delivery of
approximately 9,004,000 gallons at a fixed price for its estimated future
retail propane sales.
Property, plant and equipment, net consist of:
January 31, July 31,
(in thousands) 2000 1999
--------------- ---------------
Property, plant and equipment $787,708 $650,536
Less: accumulated depreciation 249,864 245,244
--------------- ---------------
$537,844 $405,292
=============== ===============
Intangible assets, net consist of:
January 31, July 31,
(in thousands) 2000 1999
--------------- ---------------
Intangible assets $413,079 $257,390
Less: accumulated amortization 149,007 139,273
--------------- ---------------
$264,072 $118,117
=============== ===============
</TABLE>
5
<PAGE>
E. Quarterly Distributions of Available Cash
The Partnership makes quarterly cash distributions to its Common Unitholders
of all of its "Available Cash", generally defined as consolidated cash
receipts less consolidated cash disbursements and net changes in reserves
established by the General Partner for future requirements. Reserves are
retained in order to provide for the proper conduct of the Partnership
business, or to provide funds for distributions with respect to any one or
more of the next four fiscal quarters. Distributions are made within 45 days
after the end of each fiscal quarter ending January, April, July and October
to holders of record on the applicable record date.
Distributions by the Partnership in an amount equal to 100% of its Available
Cash, as defined in its Amended and Restated Agreement of Limited
Partnership of Ferrellgas Partners, L.P. (the "Partnership Agreement"), will
generally be made 98% to the Senior Common Unitholders (see footnote G for
discussion of the in kind distribution paid to the Senior Common
Unitholders) and Common Unitholders (the "Unitholders") and 2% to the
General Partner, subject to the payment of incentive distributions to the
holders of Incentive Distribution Rights to the extent that certain target
levels of cash distributions are achieved. The Senior Common Units have
certain preference rights over the Common Units. See Notes G, I and K for
additional information about the Senior Common Units.
F. Long-term debt consists of:
<TABLE>
<CAPTION>
January 31, July 31,
(in thousands) 2000 1999
---------------- ---------------
Senior Notes
<S> <C> <C>
Fixed rate, 7.16%, due 2005-2013 $350,000 $350,000
Fixed rate, 9.375%, due 2006 160,000 160,000
Bridge Loan
Floating rate, 8.0625%, due 2000 (refinanced with long-term
borrowings on February 28, 2000) (1) 183,000 -
Credit Agreement
Revolving credit loans, 8.5%, due 2001 - 58,314
Notes payable, 7.9% and 6.4% weighted average interest rates,
respectively, due 2000 to 2009 17,978 18,154
---------------- ---------------
710,978 586,468
Less: current portion 2,776 2,628
---------------- ---------------
$708,202 $583,840
================ ===============
</TABLE>
(1) The bridge loan, assumed in connection with the acquisition of
Thermogas L.L.C. on December 17, 1999, (see Note J), has a stated
maturity date of June 30, 2000. At January 31, 2000, the loan was
incurring interest at LIBOR plus 2.25% or 8.0625%.
On December 17, 1999, in connection with the purchase of Thermogas L.L.C.
("Thermogas Acquisition") (see Note J), Ferrellgas, L.P. (the "Operating
Partnership" or "OLP") assumed a $183,000,000 bridge loan that was
originally issued by Thermogas L.L.C. ("Thermogas") and had a maturity date
of June 30, 2000. This loan is classified as long-term because it was
refinanced on a long-term basis on February 28, 2000. On this date, the OLP
issued $184,000,000 of fixed rate Senior Notes which have maturities ranging
from 2006 to 2009 and an average interest rate of 8.8%. The additional
$1,000,000 in borrowings was used to fund debt issuance costs.
6
<PAGE>
On December 17, 1999, in connection with the Thermogas Acquisition, the OLP
paid off the balance remaining of $35,000,000 then outstanding on its
$38,000,000 unsecured credit facility used for acquisitions, capital
expenditures, and general corporate purposes. This outstanding credit
facility was then terminated, leaving the OLP with the $145,000,000 credit
facility as its only senior bank credit facility.
G. Partners' Capital
The Partnership's capital (after including the effect of 53,499 Senior
Common Units issued in order to pay the in-kind distribution) consists of
4,428,499 Senior Common Units and 31,307,116 Common Units representing the
entire limited partner interest, and a 1% General Partner interest. The
Partnership Agreement contains specific provisions for the allocation of
net earnings and loss to each of the partners for purposes of maintaining
the partner capital accounts.
In connection with the Thermogas Acquisition (See Note J) on December 17,
1999, the Partnership issued 4,375,000 Senior Common Units to Williams
Natural Gas Liquids, Inc. ("Williams" or "Seller") with a liquidating value
of $175,000,000 plus accrued and unpaid distributions. The Senior Common
Units entitle the holder to quarterly distributions from the MLP equivalent
to 10 percent per annum of the liquidating value. Distributions are payable
quarterly, in-kind, through issuance of additional Senior Common Units
until the earlier of February 1, 2002 or the occurrence of a Material
Event, as defined in the Partnership Agreement, ("Material Event") after
which distributions are payable in cash. The Senior Common Units are
redeemable by the Partnership 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, subject to certain events and conditions, to
convert any outstanding Senior Common Units into Common Units at the end of
two years or upon the occurrence of a Material Event. Such conversion
rights are contingent upon the Partnership not previously redeeming such
securities, the approval of the Partnership's common unitholders of the
conversion feature, and the passage of two years, among other conditions.
The Partnership has agreed that within 180 days after the closing of the
Thermogas Acquisition, it would submit to its common unitholders a proposal
to approve this common unit conversion feature and to approve an exemption
under the Partnership Agreement to enable Williams to vote the Common
Units, if such conversion were to occur. Ferrell Companies, Inc., which
holds a majority of the Partnership's Common Units, has agreed to vote in
favor of that proposal. The Partnership has also granted Williams demand
registration rights at the end of two years or upon the occurrence of a
Material Event with respect to any outstanding Senior Common Units (or
Common Units into which they may be convertible).
In a non-cash transaction, effective August 1, 1999, the Subordination
period ended and the Subordinated Units converted to Common Units. Certain
financial tests, which were primarily related to making the Minimum
Quarterly Distribution on all Units, were satisfied for each of the three
consecutive four quarter periods ending July 31, 1999.
The Partnership maintains a shelf registration statement for Common Units
representing limited partner interests in the Partnership. The Common Units
may be issued from time to time by the Partnership in connection with the
Partnership's acquisition
of other businesses, properties or securities in business combination
transactions. The Partnership also maintains another shelf registration
statement for the issuance of Common Units, Deferred Participation Units,
Warrants and Debt Securities. The Partnership Agreement allows the General
Partner to issue an unlimited number of additional Partnership general and
limited interests and other equity securities of the Partnership for such
consideration and on such terms and conditions as shall be established by
the General Partner without the approval of any Unitholders.
7
<PAGE>
H. Contingencies and Commitments
The Partnership is threatened with or named as a defendant in various
lawsuits that, among other items, claim damages for product liability. It
is not possible to determine the ultimate disposition of these matters;
however, management is of the opinion that there are no known claims or
contingent claims that are likely to have a material adverse effect on the
financial condition, results of operations or cash flows of the
Partnership.
On December 6, 1999, the OLP entered into, with Banc of America Leasing &
Capital LLC, as lender, and First Security Bank, as agent, a $25,000,000
sale leaseback facility involving a portion of the OLP's customer tanks.
This operating lease has a term that extends over three and one-half years
and may be extended for two additional one-year periods at the option of
the OLP, if such extension is approved by the lessor.
On December 17, 1999, immediately prior to the closing of the Thermogas
Acquisition (See Note J), Thermogas entered into, with Bank of America
Leasing & Capital LLC, as lender, and First Security Bank, as agent, a
$135,000,000 operating tank lease facility involving a portion of its
customer tanks. In connection with the Thermogas Acquisition, the OLP
assumed all obligations under the $135,000,000 operating tank lease
facility, which has terms and conditions similar to the December 6, 1999,
$25,000,000 operating tank lease facility discussed above.
Certain property and equipment is leased under noncancellable operating
leases which require fixed monthly rental payments and which expire at
various dates through 2018. Future minimum lease commitments for such
leases are $29,309,000 in 2000, $33,356,000 in 2001, $29,088,000 in 2002,
$23,765,000 in 2003, $4,971,000 in 2004 and $7,232,000 thereafter.
I. Partnership Distributions
On September 14, 1999, the Partnership paid a cash distribution of $0.50
per Common and Subordinated Unit for the quarter ended July 31, 1999. On
December 14, 1999, the Partnership paid a cash distribution of $0.50 per
Common Unit for the quarter ended October 31, 1999. On February 21, 2000,
the Partnership declared its second-quarter cash distribution of $0.50 per
Common Unit, payable March 14, 2000. Additionally, on February 21, 2000,
the Partnership declared an in-kind distribution to the Senior Common
Unitholders of $2,140,000, payable by the issuance of 53,499 additional
Senior Common Units. The Senior Common Unitholders will continue to receive
quarterly distributions in-kind through issuance of additional Senior
Common Units until the earlier of February 1, 2002 or the occurrence of a
Material Event, after which distributions are payable in cash.
J. Business Combinations
On December 17, 1999, the Partnership purchased Thermogas, a subsidiary of
Williams. At closing the Partnership entered into the following noncash
transactions: a) issued $175,000,000 in Senior Common Units to the seller,
b) assumed a $183,000,000 bridge loan, (see Note F) and c) assumed a
$135,000,000 operating tank lease (see Note H). After the conclusion of
these acquisition-related transactions, including the merger of the OLP and
Thermogas, the Partnership acquired $61,088,000 of cash which remained on
the Thermogas balance sheet at the acquisition date. The Partnership has
paid $13,294,000 in additional costs and fees related to the acquisition
between December 17, 1999 and January 31, 2000.
8
<PAGE>
The total assets contributed to the OLP (at the Partnership's cost basis)
have been preliminarily allocated as follows: (i) working capital of
$9,148,000, (ii) property, plant and equipment of $149,878,000, (iii)
$60,200,000 to customer list, (iv) $18,500,000 to trademarks (v) $9,600,000
to assembled workforce and (vi) $56,559,000 to goodwill. The estimated fair
values and useful lives of assets acquired are based on a preliminary
valuation and are subject to final valuation adjustments. The Partnership
intends to continue its analysis of the net assets of Thermogas to
determine the final allocation of the total purchase price to the various
assets acquired. The transaction has been accounted for as a purchase and,
accordingly, the results of operations of Thermogas have been included in
the consolidated financial statements from the date of acquisition.
The following pro forma financial information assumes that the Thermogas
Acquisition occurred as of August 1, 1998:
<TABLE>
<CAPTION>
Six months ended
--------------------------------
Pro Forma
January 31, January 31,
(in thousands, except per unit amounts) 2000 1999
--------------- ----------------
<S> <C> <C>
Total revenues $599,742 $493,094
Earnings before extraordinary item 20,814 23,822
Net earnings 20,814 11,036
Limited partners' interest in net earnings 20,606 10,926
Basic and diluted earnings per limited partner unit before extraordinary item $ 0.66 $ 0.75
Basic and diluted earnings per limited partner unit after extraordinary item $ 0.66 $ 0.35
</TABLE>
K. Earnings Per Unit
Below is a calculation of the basic and diluted Common Units (and
Subordinated Units prior to August 1, 1999) used to calculate earnings per
basic and diluted earnings per unit on the Statement of Earnings.
(in thousands, except per unit data)
<TABLE>
<CAPTION>
Three months ended Six months ended
January 31, January 31, January 31, January 31,
2000 1999 2000 1999
----- ----- ----- -----
Limited partners' interest in net
<S> <C> <C> <C> <C>
earnings $49,546 $39,516 $35,466 $15,749
---------------- ----------------- ----------------- ----------------
Weighted average common and
subordinated units outstanding 31,307.1 31,297.0 31,306.3 31,295.5
Basic earnings per unit before
extraordinary item $1.58 $1.26 $1.13 $0.91
================ ================= ================= ================
Basic earnings per unit $1.58 $1.26 $1.13 $0.50
================ ================= ================= ================
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Three months ended Six months ended
January 31, January 31, January 31, January 31,
2000 1999 2000 1999
----- ----- ----- -----
Limited partners' interest in net
<S> <C> <C> <C> <C>
earnings $49,546 $39,516 $35,466 $15,749
---------------- ----------------- ----------------- ----------------
Weighted average common and
subordinated units outstanding
31,307.1 31,297.0 31,306.3 31,295.5
Dilutive securities - options 0.0 85.8 0.0 95.4
---------------- ----------------- ----------------- ----------------
Weighted average out-standing units
+ dilutive units 31,307.1 31,382.8 31,306.3 31,390.9
================ ================= ================= ================
Diluted earnings per unit before
extraordinary item $1.58 $1.26 $1.13 $0.91
================ ================= ================= ================
Diluted earnings per unit $1.58 $1.26 $1.13 $0.50
================ ================= ================= ================
</TABLE>
For diluted earnings per unit purposes, the Senior Common Units have been
excluded as they are considered contingently issuable Common Units for which all
necessary conditions for their issuance have not been satisfied as of the end of
the reporting period.
10
<PAGE>
FERRELLGAS PARTNERS FINANCE CORP.
(a wholly owned subsidiary of Ferrellgas Partners, L.P.)
BALANCE SHEETS
<TABLE>
<CAPTION>
January 31, July 31,
ASSETS 2000 1999
- -------------------------------------------------------------------- ------------------ -------------------
(unaudited)
<S> <C> <C>
Cash $1,000 $1,000
------------------ -------------------
Total Assets $1,000 $1,000
================== ===================
STOCKHOLDER'S EQUITY
- --------------------------------------------------------------------
Common stock, $1.00 par value; 2,000 shares
authorized; 1,000 shares issued and outstanding $1,000 $1,000
Additional paid in capital 1,010 774
Accumulated deficit (1,010) (774)
------------------ -------------------
Total Stockholder's Equity $1,000 $1,000
================== ===================
</TABLE>
STATEMENTS OF EARNINGS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
-----------------------------------------------------------------------
January 31, January 31, January 31, January 31,
2000 1999 2000 1999
----------------- ------------------ ----------------- ----------------
<S> <C> <C> <C> <C>
General and administrative expense $ 50 $ 0 $ 236 $ 45
----------------- ------------------ ----------------- ----------------
Net loss $(50) $ 0 $(236) $(45)
================= ================== ================= ================
</TABLE>
See notes to financial statements.
11
<PAGE>
FERRELLGAS PARTNERS FINANCE CORP.
(A wholly owned subsidiary of Ferrellgas Partners, L.P.)
STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended
--------------------------------------------------
January 31, January 31,
2000 1999
--------------------- ------------------------
Cash Flows From Operating Activities:
<S> <C> <C>
Net loss $(236) $(45)
--------------------- ------------------------
Cash used in operating activities (236) (45)
--------------------- ------------------------
Cash Flows From Financing Activities:
Capital contribution 236 45
--------------------- ------------------------
Cash provided by financing activities 236 45
--------------------- ------------------------
Change in cash - -
Cash - beginning of period 1,000 1,000
--------------------- ------------------------
Cash - end of period $1,000 $1,000
===================== ========================
</TABLE>
See notes to financial statements.
NOTES TO FINANCIAL STATEMENTS
January 31, 2000
(unaudited)
A. Ferrellgas Partners Finance Corp., a Delaware corporation, was formed on
March 28, 1996, and is a wholly owned subsidiary of Ferrellgas Partners,
L.P.
B. The financial statements reflect all adjustments which are, in the opinion
of management, necessary for a fair presentation of the interim periods
presented. All adjustments to the financial statements were of a normal,
recurring nature.
12
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following is a discussion of the results of operations and liquidity
and capital resources of Ferrellgas Partners, L.P. (the "Partnership" or "MLP").
Except for the $160,000,000 of 9 3/8% Senior Secured Notes issued in April 1996
by the MLP and the related interest expense, Ferrellgas, L.P. (the "Operating
Partnership" or "OLP") accounts for nearly all of the consolidated assets,
liabilities, sales and earnings of the MLP. When the discussion refers to the
consolidated MLP, the term Partnership will be used.
Ferrellgas Partners Finance Corp. has nominal assets and does not conduct
any operations. Accordingly, a discussion of the results of operations and
liquidity and capital resources is not presented.
Forward-looking statements
Certain statements included in this report that are not historical facts,
including statements of the belief that the OLP will have sufficient funds to
meet its obligations and to enable it to distribute to the MLP sufficient funds
to permit the MLP to meet its obligations with respect to the MLP Senior Notes
issued in April 1996, and sufficient funds to pay the required distribution on
both the Senior Common Units (see Note E in the Consolidated Financial
Statements included elsewhere in this report) and the Minimum Quarterly
Distribution ("MQD") ($0.50 per Unit) on all Common Units, are forward-looking
statements.
Such statements are subject to risks and uncertainties that could cause
actual results to differ materially from those expressed in or implied by the
statements. The risks and uncertainties and their effect on the Partnership's
operations include but are not limited to the following: a) the effect of
weather conditions on demand for propane, b) price and availability of propane
supplies, c) the availability of capacity to transport propane to market areas,
d) competition from other energy sources and within the propane industry, e)
operating risks incidental to transporting, storing, and distributing propane,
f) changes in interest rates, g) governmental legislation and regulations, h)
energy efficiency and technology trends and i) other factors that are discussed
in the Risk Factor section of the Partnership's most recent 1933 Act filing with
the Securities and Exchange Commission, Amendment No. 1 to Form S-3 Registration
Statement, as filed February 5, 1999.
Results of Operations
The propane industry is seasonal in nature with peak activity during the
winter months. Due to the seasonality of the business and the timing of business
acquisitions, results of operations for the six months ended January 31, 2000
and 1999, are not necessarily indicative of the results to be expected for a
full year. Other factors affecting the results of operations include competitive
conditions, demand for product, variations in weather and fluctuations in
propane prices. As the Partnership has grown through acquisitions, fixed costs
such as personnel costs, depreciation and interest expense have increased.
Historically, these fixed cost increases have caused net losses in the first and
fourth quarters and net income in the second and third quarters to be more
pronounced.
On December 17, 1999, the Partnership purchased Thermogas L.L.C. (the
"Thermogas Acquisition" or "Thermogas"), a subsidiary of Williams. During the
second quarter of fiscal 2000, the Partnership was able to identify the effect
of the Thermogas Acquisition on the results of operations, because the Thermogas
operations acquired are currently being operated separately from the existing
Ferrellgas operations. Beginning in the third quarter of fiscal 2000, the
Partnership will begin to implement its strategic and operating plans for the
integration of Thermogas into the Partnership's existing operations. These
integration actions will result in the merging of retail locations and the
related customer groups. Due to the extent of this integration, the Partnership
will be unable to quantify separately the effect of the Thermogas Acquisition in
the discussion of results of operations in future quarters.
13
<PAGE>
Three Months Ended January 31, 2000 vs. January 31, 1999
Total Revenues. Total gas liquids and related product sales increased 45.9%
to $316,025,000 as compared to $216,541,000 in the second quarter of fiscal
1999, primarily due to the addition of Thermogas sales of $56,414,000 and
increased sales price per gallon. For the quarter, temperatures were 12% warmer
than normal and 3% warmer than last year as reported by the American Gas
Association.
Sales price per gallon increased due to the effect of a significant
increase in the wholesale cost of propane as compared to the prior period.
Retail volumes increased 25.0% to 314,044,000 gallons as compared to 251,246,000
gallons for the prior period, primarily due to the acquisition effect of
Thermogas sales of 64,566,000 gallons. Other revenues increased by $11,434,000
primarily due to favorable results from the trading operations.
Gross Profit. Gross profit increased 26.6% to $162,967,000 as compared to
$128,749,000 in the second quarter of fiscal 1999, primarily due to gross profit
of $26,383,000 generated from the acquired Thermogas operations and, to a lesser
extent, favorable results from the trading operations.
Operating Expenses. Operating expenses increased 23.3% to $69,341,000 as
compared to $56,240,000 in the second quarter of fiscal 1999 primarily due the
addition of $7,856,000 related to the acquired Thermogas operations, and, to a
lesser extent, merit salary and incentive increases.
Depreciation and Amortization. Depreciation and amortization expense
increased 17.9% to $13,916,000 as compared to $11,806,000 in the same quarter
last year primarily due to the addition of intangibles and property, plant and
equipment from the Thermogas Acquisition and other acquisitions of propane
businesses.
Equipment Lease Expense. Vehicle, tank and computer lease expense increased
by $2,413,000 primarily due to the addition of the $25,000,000 and $135,000,000
operating tank leases ("Tank Leases") during the quarter, and, to a lesser
extent, increased operating lease facilities for new vehicles and computers for
the retail locations. See Note H to the Consolidated Financial Statements
included elsewhere in this report for additional information regarding the Tank
Leases.
Interest Expense. Interest expense increased 22.9% to $14,697,000 as
compared to $11,960,000 in the second quarter of fiscal 1999. This increase is
primarily the result of increased borrowings related to the Thermogas
acquisition and, to a lesser extent, an increase in the overall average interest
rate paid by the Partnership. As a result of the Thermogas Acquisition which
closed on December 17, 1999, the OLP assumed $183,000,000 in debt and also
refinanced a portion of its existing revolving credit facility balances (see
Financing Activities following).
Six Months Ended January 31, 2000 vs. January 31, 1999
Total Revenues. Total gas liquids and related product sales increased 36.8%
to $457,532,000 as compared to $334,543,000 for the prior period, primarily due
to the addition of Thermogas sales of $56,414,000 and increased sales price per
gallon. For the fiscal year to date, temperatures were 11% warmer than normal
and 2% warmer than last year as reported by the American Gas Association.
Sales price per gallon increased due to the effect of a significant
increase in the wholesale cost of propane as compared to the prior period.
Retail volumes increased 18.1% to 467,473,000 gallons as compared to 395,928,000
gallons for the prior period, primarily due to the acquisition effect of
Thermogas sales of 64,566,000 gallons. Other revenues increased by $20,329,000
primarily due to favorable results from trading operations.
14
<PAGE>
Gross Profit. Gross profit increased 20.0% to $240,381,000 as compared to
$200,376,000 in the year ago period, primarily due to gross profit of
$26,383,000 generated from the acquired Thermogas operations and, to a lesser
extent, increased favorable results from the trading operations.
Operating Expenses. Operating expenses increased 17.2% to $126,518,000 as
compared to $107,952,000 in the first half of fiscal 1999 primarily due to
operating expenses of $7,856,000 incurred due to the acquired Thermogas
operations, merit salary and incentive increases.
Depreciation and Amortization. Depreciation and amortization expense
increased 12.5% to $25,999,000 as compared to $23,117,000 for the same period
last year primarily due to the addition of intangibles and property, plant and
equipment from the Thermogas Acquisition and other acquisitions of propane
businesses.
Equipment Lease Expense. Vehicle, tank and computer lease expense increased
by $3,298,000 due to the addition of the Tank Leases, and increased operating
lease facilities for new vehicles and computers for retail locations. See Note H
to the Consolidated Financial Statements included elsewhere in this report for
additional information regarding the Tank Leases.
Interest Expense. Interest expense increased 15.7% to $27,278,000 as
compared to $23,578,000 in the first half of fiscal 1999. This increase is
primarily the result of increased borrowings related to the Thermogas
Acquisition and, to a lesser extent, an increase in the overall average interest
rate paid by the Partnership. As a result of the Thermogas Acquisition closed on
December 17, 1999, the OLP assumed $183,000,000 in debt and also refinanced a
portion of its existing revolving credit facility balances.
The extraordinary charge in fiscal 1999 is due primarily to the payment of
a $10,000,000 call premium related to the refinancing of $200,000,000 of fixed
rate debt on August 5, 1998. The remaining costs relate to the write off of
unamortized debt issuance costs related to refinancing of the fixed rate debt
and revolving credit facility balances. (See Financing Activities below)
Liquidity and Capital Resources
The ability of the MLP to satisfy its obligations is dependent upon future
performance, which will be subject to prevailing economic, financial, business
and weather conditions and other factors, many of which are beyond its control.
For the fiscal year ending July 31, 2000, the General Partner believes that the
OLP will have sufficient funds to meet its obligations and enable it to
distribute to the MLP sufficient funds to permit the MLP to meet its obligations
with respect to the $160,000,000 senior secured notes issued in April 1996 ("MLP
Senior Secured Notes") and pay the required distribution on the Senior Common
Units (see Note E in to the Consolidated Financial Statements included elsewhere
in this report) and enable it to distribute the minimum quarterly distribution
("MQD") on all Common Units.
The MLP Senior Secured Notes, the $350,000,000 OLP senior notes ("$350
million Senior Notes"), the $145,000,000 amended and restated OLP credit
facility ("Credit Facility"), the $184,000,000 OLP senior notes issued in
February 2000 ("$184 million Senior Notes") and the $25,000,000 and $135,000,000
OLP operating tank leases ("Tank Leases") (See Financing Activities following)
contain several financial tests which restrict the Partnership's ability to pay
distributions, incur indebtedness and engage in certain other business
transactions. These tests, in general, are based on the ratio of the MLP's and
OLP's consolidated cash flow to fixed charges, primarily interest expense.
Because the Partnership is more highly leveraged at the MLP than at the OLP, the
tests related to the MLP Senior Secured Notes are more sensitive to fluctuations
in consolidated cash flows and fixed charges. The most sensitive of the MLP
related tests restricts the Partnership's ability to make certain Restricted
Payments which include, but are not limited to, the payment of distributions to
unitholders.
15
<PAGE>
Although the MLP's financial performance during fiscal both 1999 and the
first six months of fiscal 2000 have been adversely impacted by unseasonably
warmer temperatures, the Partnership believes it will continue to meet the MLP
Senior Secured Notes Restricted Payment test during fiscal 2000, in addition to
meeting the other financial tests in the MLP Senior Secured Notes, the $350
million Senior Notes, the $184 million Senior Notes, Credit Facility agreement
and the Tank Leases. However, if the OLP were to encounter any unexpected
downturns in business operations in the near future, it could result in the
Partnership not meeting certain financial tests in future quarters, including
but not limited to, the MLP Senior Secured Notes Restricted Payment test.
Depending on the circumstances, the Partnership would pursue alternatives to
permit the continued payment of the required distribution on the Senior Common
Units and payment of MQD to its Common Unitholders. No assurances can be given,
however, that such alternatives will be successful with respect to any given
quarter.
Future maintenance and working capital needs of the Partnership are
expected to be provided by cash generated from future operations, existing cash
balances and the working capital borrowing facility. In order to fund expansive
capital projects and future acquisitions, the OLP may borrow on existing bank
lines, the MLP or OLP may issue additional debt or the MLP may issue additional
equity securities, including, among others, Common Units.
Toward this purpose, on February 5, 1999, the MLP filed a shelf
registration statement with the Securities and Exchange Commission (the
"Commission") for the periodic sale of up to $300,000,000 in debt and/or equity
securities. The registered securities would be available for sale by the
Partnership in the future to fund acquisitions or to reduce indebtedness. Also,
the MLP maintains a shelf registration statement with the Commission for
2,010,484 Common Units representing limited partner interests in the MLP. The
Common Units may be issued from time to time by the MLP in connection with the
OLP's acquisition of other businesses, properties or securities in business
combination transactions.
In a non-cash transaction, on August 1, 1999, the subordination period
ended and the Subordinated Units converted to Common Units. This conversion is
more fully described in Note G of the Consolidated Financial Statements provided
herein.
Operating Activities. Cash provided by operating activities was $9,487,000
for the six months ended January 31, 2000, compared to $25,987,000 for the prior
period. This decrease in cash provided from operations is primarily due to the
net effect of increased wholesale cost of product on accounts receivable,
inventory, and accounts payable and to a lesser extent the timing of receipts
and payments related to trading activities.
Investing Activities. During the six months ended January 31, 2000, before
the effect of the Thermogas Acquisition, the Partnership made total acquisition
capital expenditures of $7,055,000. This amount was funded by $6,262,000 cash
payments, $601,000 of noncompete notes, $46,000 of Common Units issued and
$146,000 of other costs and consideration.
On December 17, 1999, the Partnership purchased Thermogas. At closing the
Partnership entered into the following noncash transactions: a) issued
$175,000,000 in Senior Common Units to the seller, b) assumed a $183,000,000
bridge loan, which was refinanced from the proceeds of the $184 million Senior
Notes issued on February 28, 2000, and c) assumed a $135,000,000 operating tank
lease. After the conclusion of these acquisition-related transactions, the
Partnership acquired $61,088,000 of cash which remained on the Thermogas balance
sheet. The Partnership has paid $13,294,000 in additional costs and fees related
to the acquisition between December 17, 1999 and January 31, 2000.
The Partnership has accrued $7,100,000 in exit costs which it expects to
incur over the next twelve months as it implements the integration of the
Thermogas operations. Other than future effects from the Thermogas Acquisition,
the Partnership does not have any material commitments of funds for capital
expenditures other than to support the current level of operations. In fiscal
2000, the Partnership does not expect a significant increase in growth and
maintenance capital expenditures resulting from the Thermogas Acquisition as
compared to fiscal 1999 levels.
16
<PAGE>
During the six months ended January 31, 2000, the Partnership made growth
and maintenance capital expenditures of $13,597,000 consisting primarily of the
following: 1) additions to Partnership-owned customer tanks and cylinders, 2)
relocating and upgrading district plant facilities, 3) upgrading computer
equipment and software, and 4) vehicle lease buyouts. Capital requirements for
repair and maintenance of property, plant and equipment are relatively low since
technological change is limited and the useful lives of propane tanks and
cylinders, the Partnership's principal physical assets, are generally long.
The Partnership meets its vehicle and transportation equipment fleet needs
by leasing light and medium duty trucks, tractors and trailers. The General
Partner believes vehicle leasing is a cost-effective method for meeting the
Partnership's transportation equipment needs.
The Partnership continues seeking to expand its operations through
strategic acquisitions of smaller retail propane operations located throughout
the United States. These acquisitions will be funded through internal cash flow,
external borrowings or the issuance of additional Partnership interests.
Financing Activities. On February 28, 2000, the OLP issued $184 million of
privately placed unsecured senior notes ("$184 million Senior Notes"). The
proceeds of the $184 million Senior Notes, which include three series with
maturities ranging from year 2006 through 2009 and an average fixed interest
rate of 8.8%, were used to retire $183,000,000 of OLP bridge loan financing
assumed in connection with the Thermogas Acquisition.
On December 6, 1999, the OLP entered into, with Banc of America Leasing &
Capital, LLC. as lender and First Security Bank as agent, a $25,000,000 sale
leaseback facility involving a portion of the OLP's customer tanks. This
operating lease has a term that extends over three and one-half years and may be
extended for two additional one-year periods at the option of the OLP, if such
extension is approved by the lessor.
On December 17, 1999, immediately prior to the closing of the Thermogas
Acquisition (See Note J), Thermogas entered into, with Banc of America Leasing &
Capital, LLC as lender and First Security Bank as agent, a $135,000,000
operating tank lease facility involving a portion of its customer tanks. In
connection with the acquisition of Thermogas, the OLP assumed all obligations
under the $135,000,000 operating tank lease facility, which have terms and
conditions similar to the December 6, 1999, $25,000,000 operating tank lease
facility discussed above.
On August 4, 1998, the OLP issued the privately placed unsecured $350
million Senior Notes and entered into a Credit Facility with its existing banks.
The proceeds of the Senior Notes, which include five series with maturities
ranging from year 2005 through 2013 at an average fixed interest rate of 7.16%,
were used to redeem $200,000,000 of OLP fixed rate senior notes issued in July
1994, including a 5% call premium, and to repay outstanding indebtedness under
the former OLP revolving credit facility. On December 17, 1999, the OLP
terminated its Additional Credit Facility agreement that it had entered into on
April 30, 1999. This facility had provided for an unsecured facility for
acquisitions, capital expenditures, and general corporate purposes. The
outstanding Additional Credit Facility before its termination on December 17,
1999 was $35,000,000.
During the six months ended January 31, 2000, the Partnership borrowed
$14,514,000 from its credit facilities to fund working capital, business
acquisitions, and capital expenditure needs. At January 31, 2000, $35,000,000 of
borrowings were outstanding under the Credit Facility. These borrowings carried
an interest rate of LIBOR plus 2.0% or 8.19%. Letters of credit outstanding,
used primarily to secure obligations under certain insurance arrangements,
totaled $22,965,000. At January 31, 2000, the Operating Partnership had
$87,035,000 available for general corporate, acquisition and working capital
purposes under the Credit Facility. The current borrowing rate for future
borrowings under the Credit Facility is 1.75% plus LIBOR.
17
<PAGE>
On February 21, 2000, the Partnership declared a cash distribution of $1.00
per Senior Common Unit payable by the issuance of 53,499 additional Senior
Common Units (see Notes G and I and K in the Consolidated Financial Statements
included elsewhere in this report for additional information regarding the
in-kind distributions to the Senior Common Unitholders) and $0.50 per Common
Unit, payable March 14, 2000.
Adoption of New Accounting Standards. The Financial Accounting Standards
Board ("FASB") recently issued Statement of Financial Accounting Standards No.
133 "Accounting for Derivative Instruments and Hedging Activities" ("SFAS No.
133"). SFAS No. 133, as amended by SFAS No. 137 is required to be adopted by the
Partnership for the first quarter of fiscal 2001. The Partnership is currently
assessing its impact on the Partnership's financial position, results of
operations and cash flows.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The market risk inherent in the Partnership's market risk sensitive
instruments and positions is the potential loss arising from adverse changes in
commodity prices. Additionally, the Partnership seeks to mitigate its interest
rate risk exposure on variable rate debt by entering into interest rate collar
agreements. After the issuance of the $184 million Senior Notes on February 28,
2000, the Partnership had $35,000,000 in variable rate debt and $25,000,000
notional amount of interest rate collar agreements effectively outstanding.
Thus, assuming a 100 basis point increase in the variable interest rate to the
Partnership, the interest rate risk related to the variable rate debt and the
associated interest rate collar agreements is not material to the financial
statements.
The Partnership's trading activities utilize certain types of energy
commodity forward contracts and swaps traded on the over-the-counter financial
markets and futures traded on the New York Mercantile Exchange ("NYMEX" or
"Exchange") to anticipate market movements, manage and hedge its exposure to the
volatility of floating commodity prices and to protect its inventory positions.
The Partnership's non-trading activities utilize certain over-the-counter energy
commodity options to limit overall price risk and to hedge its exposure to
inventory price movements.
Market risks associated with energy commodities are monitored daily for
compliance with the Partnership's trading policy. This policy includes specific
dollar exposure limits, limits on the term of various contracts and volume
limits for various energy commodities. The Partnership also utilizes loss limits
and daily review of open positions to manage exposures to changing market
prices.
Market and Credit Risk. NYMEX traded futures are guaranteed by the Exchange
and have nominal credit risk. The Partnership is exposed to credit risk
associated with futures, swaps and option transactions in the event of
nonperformance by counterparties. For each counterparty, the Partnership
analyzes the financial condition prior to entering into an agreement,
establishes credit limits and monitors the appropriateness of each limit. The
change in market value of Exchange-traded futures contracts requires daily cash
settlement in margin accounts with brokers. Forwards and most other
over-the-counter instruments are generally settled at the expiration of the
contract term.
Sensitivity Analysis. The Partnership has prepared a sensitivity analysis
to estimate the exposure to market risk of its energy commodity positions.
Forward contracts, futures, swaps and options were analyzed assuming a
hypothetical 10% change in forward prices for the delivery month for all energy
commodities. The potential loss in future earnings from these positions from a
10% adverse movement in market prices of the underlying energy commodities is
estimated at $2,200,000 as of January 31, 2000. The preceding hypothetical
analysis is limited because changes in prices may or may not equal 10%. Thus,
actual results may differ.
18
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On December 17, 1999, the Partnership purchased all of the member
interests in Thermogas from Williams Natural Gas Liquids, Inc. in
consideration for the issuance of Senior Common Units. (See Note J
in the Consolidated Financial Statement contained elsewhere in this
document.) The Senior Common Units represent limited partner
interests in the Partnership, and their face value was $175,000,000
million. Williams Natural Gas Liquids qualified as an accredited
investor (as that term is defined in Rule 501 of Regulation D) and
was the only purchaser of the Senior Common Units. As a result, the
issuance of Senior Common Units was exempted from the registration
requirements of the Securities Act pursuant to Rule 506 of
Regulation D.
The Senior Common Units entitle the holder to annual distributions
from the Partnership 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
Partnership Agreement. These distributions are made to the holders
of Senior Common Units in preference over holders of Common Units.
Williams has the right, subject to certain events and conditions, to
convert any outstanding Senior Common Units into Common Units either
at the end of two years or upon the occurrence of a Material Event,
as defined in the Partnership Agreement.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION TO A VOTE OF SECURITIES HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
2.1 Amendment No. 2 to Purchase Agreement dated as of
March 14, 2000, by and among Ferrellgas
Partners, L.P., Ferrellgas L.P., and Williams Natural
Gas Liquids, Inc.
3.1 Amendment to the Amended and Restated Agreement of Limited
Partnership of Ferrellgas Partners, L.P. dated as of March
14, 2000.
4.1 First Amendment to the Registration Rights Agreement dated
as of March 14, 2000, by and between Ferrellgas Partners,
L.P. and Williams Natural Gas Liquids, Inc.
19
<PAGE>
(a) Exhibits (continued)
4.2 Ferrellgas, L.P. Note Purchase Agreement Dated as of
February 28, 2000 Re: $21,000,000 8.68%
Senior Notes, Series A, due August 1, 2006
$70,000,000 8.78% Senior Notes, Series B, due August 1,
2007, and $93,000,000 8.87% Senior Notes, Series C, due
August 1, 2009 .
27.1 Financial Data Schedule - Ferrellgas Partners, L.P.
(filed in electronic format only)
27.2 Financial Data Schedule -Ferrellgas Partners Finance Corp.
(filed in electronic format only)
(b) Reports on Form 8-K
The Partnership filed the following reports on Form 8-K during the
quarter ended January 31, 2000.
(1) Form 8-K dated November 9, 1999, announcing that Ferrellgas
Partners, L.P., entered into a definitive purchase agreement to
purchase Thermogas Company, a subsidiary of Williams (, for total
consideration of $432.5 million.
(2) Form 8-K dated November 12, 1999, announcing that Ferrellgas
Partners, L.P has signed an agreement to purchase Thermogas
Company, a subsidiary of Williams, for total consideration of
$432.5 million.
(3) Form 8-K dated December 7, 1999, reporting that Ferrellgas, Inc.,
the General Partner of Ferrellgas Partners, L.P., balance sheet
as of July 31, 1999, has been audited by an independent auditor.
(4) Form 8-K dated December 29, 1999, reporting that Ferrellgas
Partners, L.P. completed the acquisition of all of the member
interests in Thermogas L.L.C. from Williams
20
<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: March 16, 2000 By /s/ Kevin T. Kelly
-------------------------------------------------
Kevin T. Kelly
Vice President and Chief
Financial Officer (Principal
Financial and Accounting Officer)
FERRELLGAS PARTNERS FINANCE CORP.
Date: March 16, 2000 By /s/ Kevin T. Kelly
-------------------------------------------------
Kevin T. Kelly
Chief Financial Officer (Principal
Financial and Accounting Officer)
21
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description of Exhibit
2.1 Amendment No. 2 to Purchase Agreement dated as of
March 14, 2000, by and among Ferrellgas
Partners, L.P., Ferrellgas L.P., and Williams Natural
Gas Liquids, Inc.
3.1 Amendment No. 1 to the Amended and Restated Agreement of
Limited Partnership of Ferrellgas Partners, L.P. dated as
of March 14, 2000.
4.1 First Amendment to the Registration Rights Agreement dated
as of March 14, 2000, by and between Ferrellgas Partners,
L.P. and Williams Natural Gas Liquids, Inc.
4.2 Ferrellgas, L.P. Note Purchase Agreement Dated as of
February 28, 2000 Re: $21,000,000 8.68%
Senior Notes, Series A, due August 1, 2006
$70,000,000 8.78% Senior Notes, Series B, due August 1,
2007, and $93,000,000 8.87% Senior Notes, Series C, due
August 1, 2009 .
27.1 Financial Data Schedule - Ferrellgas Partners, L.P.
(filed in electronic format only)
27.2 Financial Data Schedule - Ferrellgas Partners Finance
Corp. (filed in electronic format only)
22
SECOND AMENDMENT TO PURCHASE AGREEMENT
THIS SECOND AMENDMENT TO PURCHASE AGREEMENT (this AAmendment@) is made
and entered into as of the 14th day of March 2000, 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, as amended by the First
Amendment to Purchase Agreement on December 17, 1999 (the Purchase Agreement);
and
WHEREAS, Purchaser, Subsidiary OLP and Seller desire to further 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:
ARTICLE I
AMENDMENTS TO THE PURCHASE AGREEMENT
SECTION 1.1 Amendment to Section 1.4 of the Purchase Agreement.
Section 1.4(a) of the Purchase Agreement is hereby amended by deleting
30 days and inserting 105 days.
SECTION 1.2 Amendment to Section 4.2 of the Purchase Agreement.
(a) Section 4.2(d) of the Purchase Agreement is hereby amended by
adding the following sentence at the end of the first paragraph of such section
prior to A(A) Converted Common Unit Value:
Seller agrees that notwithstanding the five business day
requirement above, any obligations of Purchaser and Subsidiary OLP
under this Section 4.2(d) shall not be payable until the earlier to
occur of (x) April 1, 2000 or (y) the date upon which the audit
contemplated by Sections 4.5 and 4.13 is completed.
<PAGE>
(b) Section 4.2(e) of the Purchase Agreement is hereby amended by
deleting 120 days and inserting 180 days.
(c) Section 4.2(f) of the Purchase Agreement is hereby amended
by adding the following sentence to the end of such section:
ASeller agrees that upon the occurrence of a Material Event in
(B) above, notwithstanding the five business day requirement, any
obligations of Purchaser and Subsidiary OLP under this Section 4.2(f)
shall not be payable until the earlier to occur of (x) April 1, 2000 or
(y) the date upon which the audit contemplated by Sections 4.5 and 4.13
is completed.
SECTION 1.3 Amendment to Section 4.13 of the Purchase Agreement.
Section 4.13 of the Purchase Agreement is hereby amended and restated
to read as follows:
ASECTION 4.13 Audit.
Purchaser has engaged Deloitte & Touche 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 to prepare financial
statements whose format will comply with the requirements of
the Securities and Exchange Commission. Costs and expenses of
such an audit will be paid as follows:
$ The audit fees and expenses incurred by Ernst & Young
L.L.P., the first firm initially engaged to perform
the audit, shall be borne by Seller;
$ The first $300,000 of audit fees and expenses
incurred by Deloitte & Touche shall be
borne by Purchaser;
$ The next $343,750 (i.e., from $300,000 through
$643,750) of such audit fees and expenses incurred by
Deloitte & Touche shall be borne by Seller; and
$ Any additional audit fees and expenses incurred by
Deloitte & Touche (i.e., to the extent greater than
$643,750) shall be borne by Purchaser.
<PAGE>
ARTICLE II
GENERAL PROVISIONS
SECTION 2.1 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.
SECTION 2.2 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.
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:
AMENDMENT
TO THE AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
FERRELLGAS PARTNERS, L.P.
This Amendment to the Amended and Restated Agreement of
Limited Partnership (the "Partnership Agreement") of Ferrellgas Partners. L.P.
(the "Partnership") is entered into effective as of March 14, 2000 by
Ferrellgas, Inc., a Delaware corporation and the general partner of the
Partnership (the "General Partner"), on behalf of itself and 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. Unless
otherwise defined herein, all capitalized terms used herein shall have the
meaning given to them in the Partnership Agreement.
RECITALS:
WHEREAS, the General Partner has the authority to adopt
certain amendments to the Partnership Agreement without the approval of the
holders of the Common Units if such change, in the sole discretion of the
General Partner, does not adversely affect the holders of the Common Units in
any material respect;
WHEREAS, The Williams Companies, Inc., the holder of all of
the issued and outstanding Senior Units approved the following amendments by
written consent in accordance with Sections 15.8 and 15.13 of the Partnership
Agreement;
NOW, THEREFORE, effective as of the date first set forth
above, the Partnership Agreement is amended as follows;
ARTICLE I
AMENDMENTS
Article II of the Partnership Agreement is hereby amended by
(a) deleting "180 days" in clause (f) of the definition
of "Material Event" and inserting "240 days",
(b) deleting "120 days" in clause (d) of the definition of
"Senior Unit Distribution" and inserting "180 days,"
(c) inserting the phrase "as amended," to the definition of
"WNGL Purchase Agreement" immediately after "November 7, 1999," and
(d) inserting the phrase ", as amended," to the definition of
"WNGL Registration Rights Agreement" immediately after "WNGL Closing Date."
<PAGE>
ARTICLE II
GENERAL PROVISIONS
Section 2.1 Full Force and Effect.
Except as expressly amended hereby, the Partnership Agreement
shall continue in full force and effect in accordance with the provisions
thereof on the date hereof.
Section 2.2 Other Provisions.
Article XVIII of the Partnership 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>
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment effective for all purposes as of the date first set forth above.
GENERAL PARTNER:
FERRELLGAS, INC.
By:
Name:
Title:
LIMITED PARTNERS:
All Limited Partners
now and hereafter
admitted as limited
partners of the
Partnership, pursuant
to Powers of Attorney
now and hereafter
executed in favor of,
and granted and
delivered to, the
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:
Name:
Title:
FIRST AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
This First Amendment to Registration Rights Agreement (the "Amendment") is made
and entered into as of the 14th day of March, 2000, by and between Ferrellgas
Partners, L.P., a Delaware limited partnership (the "Issuer"), and Williams
Natural Gas Liquids, Inc., a Delaware corporation ("Williams").
WHEREAS, Issuer and Williams have entered into that certain Registration Rights
Agreement dated as of December 17, 1999 (the "Registration Rights Agreement");
WHEREAS, Issuer and Williams desire to amend the Registration Rights Agreement
as set forth in this Amendment; and
WHEREAS, pursuant to Section 9(d) of the Registration Rights Agreement, the
Registration Rights Agreement may be amended in writing by the Issuer and the
Holders (as defined in the Registration Rights Agreement) of not less than a
majority in aggregate number of the then outstanding Registrable Units (as
defined in the Registration Rights Agreement);
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants, agreements and conditions contained
herein, the parties hereto agree as follows:
ARTICLE I
AMENDMENTS TO THE REGISTRATION RIGHTS AGREEMENT
A. Amendment to Definition of "Effectiveness Target Date" in the Registration
Rights Agreement.
The reference in clause (iii) of the definition of "Effectiveness Target Date"
in the Registration Rights Agreement to "180 days" is hereby amended to be "240
days."
B. Amendment to Section 2(a)(iii) of the Registration Rights Agreement.
The reference in the first sentence of Section 2(a)(iii) of the Registration
Rights Agreement to "120 days" is hereby amended to be "180 days." The reference
in the first sentence of Section 2(a)(iii) of the Registration Rights Agreement
to "180 days" is hereby amended to be "240 days."
ARTICLE II
GENERAL PROVISIONS
A. Full Force and Effect.
Except as expressly amended hereby, the Registration Rights Agreement shall
continue in full force and effect in accordance with the provisions thereof on
the date hereof.
<PAGE>
RONNDL\075483\009007
HOUSTON\1090135.1
- -2-
B. Other Provisions.
Section 9 of the Registration Rights 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.
IN WITNESS WHEREOF, the parties have executed this Amendment to be effective
as of the first date stated above.
FERRELLGAS PARTNERS, L.P.
By: FERRELLGAS, INC.,
its general partner
By:________________________
James M. Hake
Sr. Vice President
WILLIAMS NATURAL GAS LIQUIDS, INC.
By:________________________
Don R. Wellendorf
Vice President/Attorney-in-Fact
FERRELLGAS, L.P.
----------------
NOTE PURCHASE AGREEMENT
----------------
DATED AS OF FEBRUARY 1, 2000
Re: $21,000,000 8.68% Senior Notes, Series A, due August 1, 2006
$90,000,000 8.78% Senior Notes, Series B, due August 1, 2007
$73,000,000 8.87% Senior Notes, Series C, due August 1, 2009
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
SECTION HEADING PAGE
<S> <C> <C>
SECTION 1. AUTHORIZATION OF NOTES.................................................................1
SECTION 2. SALE AND PURCHASE OF NOTES.............................................................1
SECTION 3. CLOSING................................................................................2
SECTION 4. CONDITIONS TO CLOSING..................................................................2
Section 4.1. Representations and Warranties.........................................................2
Section 4.2. Performance; No Default................................................................2
Section 4.3. Compliance Certificates................................................................3
Section 4.4. Opinions of Counsel....................................................................3
Section 4.5. Purchase Permitted by Applicable Law, Etc..............................................3
Section 4.6. Related Transactions...................................................................3
Section 4.7. Payment of Special Counsel Fees........................................................3
Section 4.8. Private Placement Numbers..............................................................3
Section 4.9. Changes in Structure...................................................................3
Section 4.10. Rating.................................................................................3
Section 4.11. Proceedings and Documents..............................................................3
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................................3
Section 5.1. Organization; Power and Authority; Ownership...........................................3
Section 5.2. Authorization, Etc.....................................................................3
Section 5.3. Disclosure.............................................................................3
Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.......................3
Section 5.5. Financial Statements...................................................................3
Section 5.6. Compliance with Laws, Other Instruments, Etc...........................................3
Section 5.7. Governmental Authorizations, Etc.......................................................3
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders..............................3
Section 5.9. Taxes..................................................................................3
Section 5.10. Title to Property; Leases..............................................................3
Section 5.11. Licenses, Permits, Etc.................................................................3
Section 5.12. Compliance with ERISA..................................................................3
Section 5.13. Private Offering by the Company........................................................3
Section 5.14. Use of Proceeds; Margin Regulations....................................................3
Section 5.15. Existing Indebtedness; Future Liens....................................................3
Section 5.16. Foreign Assets Control Regulations, Etc................................................3
Section 5.17. Status under Certain Statutes..........................................................3
Section 5.18. Environmental Matters..................................................................3
SECTION 6. REPRESENTATIONS OF THE PURCHASER.......................................................3
Section 6.1. Purchase for Investment................................................................3
Section 6.2. Source of Funds........................................................................3
SECTION 7. INFORMATION AS TO COMPANY; STATUS OF SUBSIDIARIES......................................3
Section 7.1. Financial and Business Information.....................................................3
Section 7.2. Officer's Certificate..................................................................3
Section 7.3. Inspection.............................................................................3
Section 7.4. Change in Status of Subsidiaries.......................................................3
SECTION 8. MATURITY; PREPAYMENT OF THE NOTES......................................................3
Section 8.1. Prepayments............................................................................3
Section 8.2. Optional Prepayments with Make-Whole Amount............................................3
Section 8.3. Allocation of Partial Prepayments......................................................3
Section 8.4. Maturity; Surrender, Etc...............................................................3
Section 8.5. Purchase of Notes......................................................................3
Section 8.6. Make-Whole Amount......................................................................3
SECTION 9. AFFIRMATIVE COVENANTS..................................................................3
Section 9.1. Compliance with Law....................................................................3
Section 9.2. Insurance..............................................................................3
Section 9.3. Maintenance of Properties..............................................................3
Section 9.4. Payment of Taxes.......................................................................3
Section 9.5. Partnership Existence, Etc.............................................................3
Section 9.6. Ranking................................................................................3
SECTION 10. NEGATIVE COVENANTS.....................................................................3
Section 10.1. Incurrence of Debt.....................................................................3
Section 10.2. Guaranty of MLP Notes..................................................................3
Section 10.3. Restricted Subsidiary Debt.............................................................3
Section 10.4. Liens..................................................................................3
Section 10.5. Restricted Payments....................................................................3
Section 10.6. Restrictions on Dividends of Subsidiaries, Etc.........................................3
Section 10.7. Mergers and Consolidations.............................................................3
Section 10.8. Sale of Assets; Sale of Stock..........................................................3
Section 10.9. Nature of Business.....................................................................3
Section 10.10. Transactions with Affiliates...........................................................3
Section 10.11. Certain Refinancings...................................................................3
SECTION 11. EVENTS OF DEFAULT......................................................................3
SECTION 12. REMEDIES ON DEFAULT, ETC...............................................................3
Section 12.1. Acceleration...........................................................................3
Section 12.2. Other Remedies.........................................................................3
Section 12.3. Rescission.............................................................................3
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc......................................3
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES..........................................3
Section 13.1. Registration of Notes..................................................................3
Section 13.2. Transfer and Exchange of Notes.........................................................3
Section 13.3. Replacement of Notes...................................................................3
SECTION 14. PAYMENTS ON NOTES......................................................................3
Section 14.1. Place of Payment.......................................................................3
Section 14.2. Home Office Payment....................................................................3
SECTION 15. EXPENSES, ETC..........................................................................3
Section 15.1. Transaction Expenses...................................................................3
Section 15.2. Survival...............................................................................3
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT...........................3
SECTION 17. AMENDMENT AND WAIVER...................................................................3
Section 17.1. Requirements...........................................................................3
Section 17.2. Solicitation of Holders of Notes.......................................................3
Section 17.3. Binding Effect, Etc....................................................................3
Section 17.4. Notes Held by Company, Etc.............................................................3
SECTION 18. NOTICES................................................................................3
SECTION 19. REPRODUCTION OF DOCUMENTS..............................................................3
SECTION 20. CONFIDENTIAL INFORMATION...............................................................3
SECTION 21. SUBSTITUTION OF PURCHASER..............................................................3
SECTION 22. MISCELLANEOUS..........................................................................3
Section 22.1. Successors and Assigns.................................................................3
Section 22.2. Payments Due on Non-Business Days......................................................3
Section 22.3. Severability...........................................................................3
Section 22.4. Construction...........................................................................3
Section 22.5. Counterparts...........................................................................3
Section 22.6. Governing Law..........................................................................3
Signatures........................................................................................................3
</TABLE>
<PAGE>
SCHEDULE A -- INFORMATION RELATING TO PURCHASERs
SCHEDULE B -- DEFINED TERMs
SCHEDULE 5.1 -- Ownership of Company
SCHEDULE 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership of
Subsidiary Equity Interest
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.11 -- Patents, etc.
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Indebtedness and Liens
EXHIBIT 1-A -- Form of Series A Note
EXHIBIT 1-B -- Form of Series B Note
EXHIBIT 1-C -- Form of Series C Note
EXHIBIT 4.4(a) -- Form of Opinion of Special Counsel for the
Company
EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel for the
Purchasers
EXHIBIT 10.1 -- Subordination Provisions Applicable to
Subordinated Debt
<PAGE>
FERRELLGAS, L.P.
One Liberty Plaza
Liberty, Missouri 64068
$21,000,000 8.68% Senior Notes, Series A, due August 1, 2006
$90,000,000 8.78% Senior Notes, Series B, due August 1, 2007
$73,000,000 8.87% Senior Notes, Series C, due August 1, 2009
TO EACH OF THE PURCHASERS LISTED IN THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
FERRELLGAS, L.P., a Delaware limited partnership (the "Company"),
agrees with the Purchasers listed in the attached Schedule A (the "Purchasers")
as follows:
SECTION 1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of $184,000,000 aggregate
principal amount of its Senior Notes, comprised of $21,000,000 8.68% Senior
Notes, Series A, due August 1, 2006 (the "Series A Notes"), $90,000,000 8.78%
Senior Notes, Series B, due August 1, 2007 (the "Series B Notes"), $73,000,000
8.87% Senior Notes, Series C, due August 1, 2009 (the "Series C Notes") (said
Series A Notes, Series B Notes and Series C Notes being herein collectively
called the "Notes", such term to include any such notes issued in substitution
therefor pursuant to Section 13 of this Agreement (as hereinafter defined)). The
Series A, B and C Notes shall be substantially in the respective forms set out
in Exhibit 1, in each case with such changes therefrom, if any, as may be
approved by each Purchaser and the Company. Certain capitalized terms used in
this Agreement are defined in Schedule B; references to a "Schedule" or an
"Exhibit" are, unless otherwise specified, to a Schedule or an Exhibit attached
to this Agreement.
SECTION 2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to each Purchaser and each Purchaser will purchase from the
Company, at the Closing provided for in Section 3, Notes in the principal amount
and of the series specified opposite such Purchaser's name in Schedule A at the
purchase price of 100% of the principal amount thereof. The obligations of each
Purchaser hereunder are several and not joint obligations and each Purchaser
shall have no obligation and no liability to any Person for the performance or
nonperformance by any other Purchaser hereunder.
SECTION 3. CLOSING.
The sale and purchase of the Notes to be purchased by each Purchaser
shall occur at the offices of Chapman and Cutler, 111 West Monroe Street,
Chicago, Illinois 60603 at 10:00 A.M. Chicago time, at a closing (the "Closing")
on February 28, 2000 or such other Business Day prior to February 29, 2000 as
may be designated by at least five Business Days' prior written notice to the
Purchasers. At the Closing the Company will deliver to each Purchaser the Notes
of any such series to be purchased by such Purchaser in the form of a single
Note of each series to be purchased by such Purchaser (or such greater number of
Notes of any such series in denominations of at least $100,000 as such Purchaser
may request) dated the date of the Closing and registered in such Purchaser's
name (or in the name of such Purchaser's nominee), against delivery by such
Purchaser to the Company or its order of immediately available funds in the
amount of the purchase price therefor by wire transfer of immediately available
funds for the account of the Company to Wells Fargo Bank, (San Francisco, CA),
as cashiering agent, to account #4518-054085 ABA #121000248. If at the Closing
the Company shall fail to tender such Notes to any Purchaser as provided above
in this Section 3, or any of the conditions specified in Section 4 shall not
have been fulfilled to any Purchaser's satisfaction, such Purchaser shall, at
such Purchaser's election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights such Purchaser may have by reason
of such failure or such nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
The obligation of each Purchaser to purchase and pay for the Notes to
be sold to such Purchaser at the Closing is subject to the fulfillment to such
Purchaser's satisfaction, prior to or at the Closing, of the following
conditions:
Section 4.1. Representations and Warranties. The representations
and warranties of the Company in this Agreement shall be
correct when made and at the time of the Closing.
Section 4.2. Performance; No Default. The Company shall have performed
and complied with all agreements and conditions contained in this Agreement
required to be performed or complied with by it prior to or at the Closing, and
after giving effect to the issue and sale of the Notes (and the application of
the proceeds thereof as contemplated by Schedule 5.14), no Default or Event of
Default shall have occurred and be continuing. Neither the Company nor any
Subsidiary shall have entered into any transaction since the date of the
Memorandum that would have been prohibited by Section 10 hereof had such Section
applied since such date.
Section 4.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered
to such Purchaser an Officer's Certificate, dated the date of the
Closing, certifying that the conditions specified in Sections 4.1, 4.2
and 4.9 have been fulfilled.
(b) Secretary's Certificate. The General Partner shall have
delivered to such Purchaser a certificate certifying as to the
resolutions attached thereto and other proceedings relating to the
authorization, execution and delivery of the Notes and this Agreement.
(c) ERISA Certificate. If such Purchaser shall have made the
disclosures referred to in Section 6.2(b), (c) or (e), such Purchaser
shall have received the certificate from the Company described in the
last paragraph of Section 6.2 and such certificate shall state that (i)
the Company is neither a "party in interest" nor a "disqualified
person" (as defined in Section 4975(e)(2) of the Code), with respect to
any plan identified pursuant to Section 6.2(b) or (e) or (ii) with
respect to any plan, identified pursuant to Section 6.2(c), neither the
Company nor any "affiliate" (as defined in Section V(c) of the QPAM
Exemption) has, at such time or during the immediately preceding one
year, exercised the authority to appoint or terminate the QPAM as
manager of the assets of any plan identified in writing pursuant to
Section 6.2(c) or to negotiate the terms of said QPAM's management
agreement on behalf of any such identified plans.
Section 4.4. Opinions of Counsel. Such Purchaser shall have received
opinions in form and substance satisfactory to such Purchaser, dated the date of
the Closing (a) from Bracewell & Patterson, L.L.P., special counsel for the
Company, covering the matters set forth in Exhibit 4.4(a) and covering such
other matters incident to the transactions contemplated hereby as such Purchaser
or such Purchaser's counsel may reasonably request (and the Company hereby
instructs its counsel to deliver such opinion to such Purchaser) and (b) from
Chapman and Cutler, the Purchasers' special counsel in connection with such
transactions, substantially in the form set forth in Exhibit 4.4(b) and covering
such other matters incident to such transactions as such Purchaser may
reasonably request.
Section 4.5. Purchase Permitted by Applicable Law, Etc. On the date of
the Closing each purchase of Notes shall (a) be permitted by the laws and
regulations of each jurisdiction to which each Purchaser is subject, without
recourse to provisions (such as Section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by insurance companies without restriction
as to the character of the particular investment, (b) not violate any applicable
law or regulation (including, without limitation, Regulation T, U or X of the
Board of Governors of the Federal Reserve System) and (c) not subject any
Purchaser to any tax, penalty or liability under or pursuant to any applicable
law or regulation, which law or regulation was not in effect on the date hereof.
If requested by any Purchaser, such Purchaser shall have received an Officer's
Certificate certifying as to such matters of fact as such Purchaser may
reasonably specify to enable such Purchaser to determine whether such purchase
is so permitted.
Section 4.6. Related Transactions. The Company shall have
consummated the sale of the entire principal amount of the
Notes scheduled to be sold on the date of Closing pursuant to this Agreement.
Section 4.7. Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Company shall have paid on or before the Closing
the fees, charges and disbursements of the Purchasers' special counsel referred
to in Section 4.4 to the extent reflected in a statement of such counsel
rendered to the Company at least one Business Day prior to the Closing.
Section 4.8. Private Placement Numbers. A Private Placement Number
issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of the National Association of Insurance
Commissioners) shall have been obtained for each series of the Notes.
Section 4.9. Changes in Structure. The Company shall not have changed
its jurisdiction of organization or, except as described in the Memorandum, been
a party to any merger or consolidation and shall not have succeeded to all or
any substantial part of the liabilities of any other entity, at any time
following the date of the most recent financial statements referred to in
Schedule 5.5.
Section 4.10. Rating. Prior to the date of Closing, the Notes
shall have received a rating of "BBB" or better from Fitch
IBCA, Inc.
Section 4.11. Proceedings and Documents. All proceedings in connection
with the transactions contemplated by this Agreement and all documents and
instruments incident to such transactions shall be satisfactory to such
Purchaser and such Purchaser's special counsel, and such Purchaser and such
Purchaser's special counsel shall have received all such counterpart originals
or certified or other copies of such documents as such Purchaser or such
Purchaser's special counsel may reasonably request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each Purchaser that:
Section 5.1. Organization; Power and Authority; Ownership. The Company
is a limited partnership duly organized, validly existing and in good standing
under the laws of the State of Delaware, and is duly licensed or qualified as a
foreign partnership and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the power and authority to own or hold under lease the properties it
purports to own or hold under lease, to transact the business it transacts and
proposes to transact, to execute and deliver this Agreement and the Notes and to
perform the provisions hereof and thereof. The name of each Person holding an
equity interest in the Company (including a description of the nature of such
interest) is set forth on Schedule 5.1.
Section 5.2. Authorization, Etc. This Agreement and the Notes have been
duly authorized by all necessary action on the part of the Company, and this
Agreement constitutes, and upon execution and delivery thereof each Note will
constitute, a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
Section 5.3. Disclosure. The Company, through its agent, Bank of
America Securities LLC, has delivered to each Purchaser a copy of a Private
Placement Memorandum, dated January, 2000 (the "Memorandum"), relating to the
transactions contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principal properties
of the Company and its Restricted Subsidiaries. Except as disclosed in Schedule
5.3, this Agreement, the Memorandum, the documents, certificates or other
writings delivered to each Purchaser by or on behalf of the Company in
connection with the transactions contemplated hereby and the financial
statements listed in Schedule 5.5, taken as a whole, do not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading in light of the circumstances under
which they were made. Except as disclosed in the Memorandum or as expressly
described in Schedule 5.3, or in one of the documents, certificates or other
writings identified therein, or in the financial statements listed in Schedule
5.5, since July 31, 1999, there has been no change in the financial condition,
operations, business, properties or prospects of the Company or any of its
Restricted Subsidiaries except changes that individually or in the aggregate
could not reasonably be expected to have a Material Adverse Effect. There is no
fact known to the Company that could reasonably be expected to have a Material
Adverse Effect that has not been set forth herein or in the Memorandum or in the
other documents, certificates and other writings delivered to each Purchaser by
or on behalf of the Company specifically for use in connection with the
transactions contemplated hereby.
Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates. (a) Schedule 5.4 contains (except as noted therein) complete and
correct lists (i) of the Company's Subsidiaries, showing, as to each Subsidiary,
its status (whether a Restricted or Unrestricted Subsidiary), the correct name
thereof, the jurisdiction of its organization, and the percentage of shares of
each class of its capital stock or similar equity interests outstanding owned by
the Company and each other Subsidiary, (ii) of the Company's Affiliates, other
than Subsidiaries, and (iii) of the Company's directors and senior officers.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).
(c) Each Restricted Subsidiary identified in Schedule 5.4 is a
corporation or other legal entity duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, and is duly
qualified as a foreign corporation or other legal entity and is in good standing
in each jurisdiction in which such qualification is required by law, other than
those jurisdictions as to which the failure to be so qualified or in good
standing could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Each such Restricted Subsidiary has the
corporate or other power and authority to own or hold under lease the properties
it purports to own or hold under lease and to transact the business it transacts
and proposes to transact.
(d) No Restricted Subsidiary is a party to, or otherwise subject to,
any legal restriction or any agreement (other than this Agreement, the
agreements listed on Schedule 5.4 and customary limitations imposed by corporate
law statutes) restricting the ability of such Restricted Subsidiary to pay
dividends out of profits or make any other similar distributions of profits to
the Company or any of its Restricted Subsidiaries that owns outstanding shares
of capital stock or similar equity interests of such Restricted Subsidiary.
Section 5.5. Financial Statements. The Company has delivered to each
Purchaser copies of the financial statements of the Company and its Restricted
Subsidiaries listed on Schedule 5.5. All of said financial statements (including
in each case the related schedules and notes) fairly present in all material
respects the consolidated financial position of the Company and its Restricted
Subsidiaries as of the respective dates specified in such financial statements
and the consolidated results of their operations and cash flows for the
respective periods so specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as set forth in the
notes thereto (subject, in the case of any interim financial statements, to
normal year-end adjustments).
Section 5.6. Compliance with Laws, Other Instruments, Etc. The
execution, delivery and performance by the Company of this Agreement and the
Notes will not (a) contravene, result in any breach of, or constitute a default
under, or result in the creation of any Lien in respect of any property of the
Company or any Restricted Subsidiary under, any indenture, mortgage, deed of
trust, loan, purchase or credit agreement, lease, partnership agreement,
corporate charter or by-laws, or any other agreement or instrument to which the
Company or any Restricted Subsidiary is bound or by which the Company or any
Restricted Subsidiary or any of their respective properties may be bound or
affected, (b) conflict with or result in a breach of any of the terms,
conditions or provisions of any Material order, judgment, decree, or ruling of
any court, arbitrator or Governmental Authority applicable to the Company or any
Restricted Subsidiary or (c) violate any provision of any Material statute or
other rule or regulation of any Governmental Authority applicable to the Company
or any Restricted Subsidiary.
Section 5.7. Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Notes.
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) There are no actions, suits or proceedings pending or, to the knowledge of
the Company, threatened against or affecting the Company or any Restricted
Subsidiary or any property of the Company or any Restricted Subsidiary in any
court or before any arbitrator of any kind or before or by any Governmental
Authority that, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
(b) Neither the Company nor any Restricted Subsidiary is in default
under any term of any agreement or instrument to which it is a party or by which
it is bound, or any order, judgment, decree or ruling of any court, arbitrator
or Governmental Authority or is in violation of any applicable law, ordinance,
rule or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
Section 5.9. Taxes. The Company and its Restricted Subsidiaries have
filed all tax returns that are required to have been filed in any jurisdiction,
and have paid all taxes shown to be due and payable on such returns and all
other taxes and assessments levied upon them or their properties, assets, income
or franchises, to the extent such taxes and assessments have become due and
payable and before they have become delinquent, except for any taxes and
assessments (a) the amount of which is not individually or in the aggregate
Material or (b) the amount, applicability or validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which the Company or a Restricted Subsidiary, as the case may be, has
established adequate reserves in accordance with GAAP. The Company knows of no
basis for any other tax or assessment that could reasonably be expected to have
a Material Adverse Effect. The charges, accruals and reserves on the books of
the Company and its Restricted Subsidiaries in respect of Federal, state or
other taxes for all fiscal periods are adequate.
Section 5.10. Title to Property; Leases. The Company and its Restricted
Subsidiaries have good and sufficient title to their respective properties that
individually or in the aggregate are Material, including all such properties
reflected in the most recent audited balance sheet referred to in Section 5.5 or
purported to have been acquired by the Company or any Restricted Subsidiary
after said date (except as sold or otherwise disposed of in the ordinary course
of business), in each case free and clear of Liens that individually or in the
aggregate would have a Material Adverse Effect. All leases that individually or
in the aggregate are Material are valid and subsisting and are in full force and
effect in all material respects.
Section 5.11. Licenses, Permits, Etc. Except as disclosed in
Schedule 5.11,
(a) the Company and its Restricted Subsidiaries own or
possess all licenses, permits, franchises, authorizations, patents,
copyrights, service marks, trademarks and trade names, or rights
thereto, that individually or in the aggregate are Material, without
known conflict with the rights of others;
(b) to the best knowledge of the Company, no product of the
Company or any of its Restricted Subsidiaries infringes in any material
respect any license, permit, franchise, authorization, patent,
copyright, service mark, trademark, trade name or other right owned by
any other Person; and
(c) to the best knowledge of the Company, there is no
Material violation by any Person of any right of the Company or any of
its Restricted Subsidiaries with respect to any patent, copyright,
service mark, trademark, trade name or other right owned or used by the
Company or any of its Restricted Subsidiaries.
Section 5.12. Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities. The term "benefit liabilities" has the
meaning specified in Section 4001 of ERISA and the terms "current value" and
"present value" have the meanings specified in Section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
Section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected post-retirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by Section 4980B of
the Code) of the Company and its Restricted Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction that is subject to
the prohibitions of Section 406 of ERISA or in connection with which a tax could
be imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code. The representation
by the Company in the first sentence of this Section 5.12(e) is made in reliance
upon and subject to the accuracy of each Purchaser's representation in Section
6.2 as to the sources of the funds to be used to pay the purchase price of the
Notes to be purchased by such Purchaser.
Section 5.13. Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the Notes or any similar securities for
sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any Person other than the
Purchasers and not more than 40 other institutional investors, each of which has
been offered the Notes at a private sale for investment. Neither the Company nor
anyone acting on its behalf has taken, or will take, any action that would
subject the issuance or sale of the Notes to the registration requirements of
Section 5 of the Securities Act.
Section 5.14. Use of Proceeds; Margin Regulations. The Company will
apply the proceeds of the sale of the Notes as set forth in Schedule 5.14. No
part of the proceeds from the sale of the Notes hereunder will be used, directly
or indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than 0% of the value of the consolidated assets of the Company
and its Restricted Subsidiaries and the Company does not have any present
intention that margin stock will constitute more than 0% of the value of such
assets. As used in this Section, the terms "margin stock" and "purpose of buying
or carrying" shall have the meanings assigned to them in said Regulation U.
Section 5.15. Existing Indebtedness; Future Liens. (a) Schedule 5.15
sets forth a complete and correct list of all outstanding Indebtedness of the
Company and its Restricted Subsidiaries as of January 31, 2000, since which date
there has been no Material change in the amounts, interest rates, sinking funds,
installment payments or maturities of the Indebtedness of the Company or its
Restricted Subsidiaries. Neither the Company nor any Restricted Subsidiary is in
default and no waiver of default is currently in effect, in the payment of any
principal or interest on any Indebtedness of the Company or such Restricted
Subsidiary and no event or condition exists with respect to any Indebtedness of
the Company or any Restricted Subsidiary that would permit (or that with notice
or the lapse of time, or both, would permit) one or more Persons to cause such
Indebtedness to become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company nor any
Restricted Subsidiary has agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its property, whether
now owned or hereafter acquired, to be subject to a Lien not permitted by
Section 10.4.
Section 5.16. Foreign Assets Control Regulations, Etc. Neither the sale
of the Notes by the Company hereunder nor its use of the proceeds thereof will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto.
Section 5.17. Status under Certain Statutes. Neither the Company nor any
Restricted Subsidiary is an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended, or is subject
to regulation under the Public Utility Holding Company Act of 1935, as amended,
the ICC Termination Act of 1995, as amended, or the Federal Power Act, as
amended.
Section 5.18. Environmental Matters. Neither the Company nor any
Restricted Subsidiary has knowledge of any claim or has received any notice of
any claim, and no proceeding has been instituted raising any claim against the
Company or any of its Restricted Subsidiaries or any of their respective real
properties now or formerly owned, leased or operated by any of them or other
assets, alleging any damage to the environment or violation of any Environmental
Laws, except, in each case, such as could not reasonably be expected to result
in a Material Adverse Effect. Except as otherwise disclosed to each Purchaser in
writing:
(a) neither the Company nor any Restricted Subsidiary has
knowledge of any facts which would give rise to any claim, public or
private, of violation of Environmental Laws or damage to the
environment emanating from, occurring on or in any way related to real
properties now or formerly owned, leased or operated by any of them or
to other assets or their use, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Restricted
Subsidiaries has stored any Hazardous Materials on real properties now
or formerly owned, leased or operated by any of them or has disposed of
any Hazardous Materials in a manner contrary to any Environmental Laws
in each case in any manner that could reasonably be expected to result
in a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Restricted Subsidiaries are in
compliance with applicable Environmental Laws, except where failure to
comply could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 6. REPRESENTATIONS OF THE PURCHASER.
Section 6.1. Purchase for Investment. Each Purchaser represents that
(a) it is purchasing the Notes for its own account or for one or more separate
accounts maintained by it or for the account of one or more pension or trust
funds and not with a view to the distribution thereof, provided that the
disposition of such Purchaser's or such pension or trust funds' property shall
at all times be within such Purchaser's or such pension or trust funds' control,
and (b) it is an "accredited investor" within the meaning of Rule 501 of
Regulation D of the Securities Act. Each Purchaser understands that the Notes
have not been registered under the Securities Act and may be resold only if
registered pursuant to the provisions of the Securities Act or if an exemption
from registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Notes.
Section 6.2. Source of Funds. Each Purchaser represents that at least
one of the following statements is an accurate representation as to each source
of funds (a "Source") to be used by it to pay the purchase price of the Notes to
be purchased by it hereunder:
(a) the Source is an "insurance company general account"
within the meaning of Department of Labor Prohibited Transaction
Exemption ("PTE") 95-60 (issued July 12, 1995) and there is no employee
benefit plan, treating as a single plan, all plans maintained by the
same employer or employee organization, with respect to which the
amount of the general account reserves and liabilities for all
contracts held by or on behalf of such plan, exceeds ten percent (10%)
of the total reserves and liabilities of such general account
(exclusive of separate account liabilities) plus surplus, as set forth
in the NAIC Annual Statement for such Purchaser most recently filed
with such Purchaser's state of domicile; or
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except as such Purchaser has
disclosed to the Company in writing pursuant to this paragraph (b), no
employee benefit plan or group of plans maintained by the same employer
or employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund; or
(c) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that
are included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling
or controlled by the QPAM (applying the definition of "control" in
Section V(e) of the QPAM Exemption) owns a 5% or more interest in the
Company and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such investment
fund have been disclosed to the Company in writing pursuant to this
paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (e);
(f) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA; or
(g) the Source is an insurance company separate account
maintained solely in connection with the fixed contractual obligations
of the insurance company under which the amounts payable, or credited,
to any employee benefit plan (or its related trust) and to any
participant or beneficiary of such plan (including any annuitant) are
not affected in any manner by the investment performance of the
separate account.
If any Purchaser or any subsequent transferee of the Notes indicates that such
Purchaser or such transferee is relying on any representation contained in
paragraph (b), (c) or (e) above, the Company shall deliver on the date of
Closing or on the date of transfer, as applicable, a certificate, which shall
state whether (i) it is a party in interest or a "disqualified person" (as
defined in Section 4975(e)(2) of the Code), with respect to any plan identified
pursuant to paragraphs (b) or (e) above, or (ii) with respect to any plan,
identified pursuant to paragraph (c) above, whether it or any "affiliate" (as
defined in Section V(c) of the QPAM Exemption) has at such time, and during the
immediately preceding one year, exercised the authority to appoint or terminate
said QPAM as manager of any plan identified in writing pursuant to paragraph (c)
above or to negotiate the terms of said QPAM's management agreement on behalf of
any such identified plan. As used in this Section 6.2, the terms "employee
benefit plan", "governmental plan", "party in interest" and "separate account"
shall have the respective meanings assigned to such terms in Section 3 of ERISA.
SECTION 7. INFORMATION AS TO COMPANY; STATUS OF SUBSIDIARIES.
Section 7.1. Financial and Business Information. The Company
shall deliver to each holder of Notes that is an
Institutional Investor:
(a) Quarterly Statements -- within 60 days after the end of
each quarterly fiscal period in each fiscal year of the Company (other
than the last quarterly fiscal period of each such fiscal year),
duplicate copies of,
(i) an unaudited consolidated balance sheet
of the Company and its Restricted Subsidiaries as at the end of such quarter,and
(ii) unaudited consolidated statements of income,
changes in partners' equity and cash flows of the Company and
its Restricted Subsidiaries, for such quarter and (in the case
of the second and third quarters) for the portion of the
fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial
position of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from normal,
recurring year-end adjustments, provided that delivery within the time
period specified above of copies of the Company's Quarterly Report on
Form 10-Q prepared in compliance with the requirements therefor and
filed with the Securities and Exchange Commission shall be deemed to
satisfy the requirements of this Section 7.1(a);
(b) Annual Statements-- within 120 days after the end of
each fiscal year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company
and its Restricted Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
partners' equity and cash flows of the Company and its
Restricted Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by
(A) an opinion thereon of independent certified
public accountants of recognized national standing, which
opinion shall state that such financial statements present
fairly, in all material respects, the financial position of
the companies being reported upon and their results of
operations and cash flows and have been prepared in conformity
with GAAP, and that the examination of such accountants in
connection with such financial statements has been made in
accordance with generally accepted auditing standards, and
that such audit provides a reasonable basis for such opinion
in the circumstances, and
(B) a certificate of such accountants stating that
they have reviewed this Agreement and stating further whether,
in making their audit, they have become aware of any condition
or event that then constitutes a Default or an Event of
Default, and, if they are aware that any such condition or
event then exists, specifying the nature and period of the
existence thereof (it being understood that such accountants
shall not be liable, directly or indirectly, for any failure
to obtain knowledge of any Default or Event of Default unless
such accountants should have obtained knowledge thereof in
making an audit in accordance with generally accepted auditing
standards or did not make such an audit),
provided that the delivery within the time period specified above of
the Company's Annual Report on Form 10-K for such fiscal year (together
with the Company's annual report to shareholders, if any, prepared
pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance
with the requirements therefor and filed with the Securities and
Exchange Commission, together with the accountant's certificate
described in clause (B) above, shall be deemed to satisfy the
requirements of this Section 7.1(b);
(c) SEC and Other Reports -- promptly upon their becoming
available, one copy of each regular or periodic report, each
registration statement (without exhibits except as expressly requested
by such holder), and each prospectus and all amendments thereto filed
by the Company or any Restricted Subsidiary with the Securities and
Exchange Commission and of all press releases and other statements made
available generally by the Company or any Restricted Subsidiary to the
public concerning developments that are Material;
(d) Notice of Default or Event of Default -- promptly, and in
any event within five Business Days after a Responsible Officer
becoming aware of the existence of any Default or Event of Default or
that any Person has given any notice or taken any action with respect
to a claimed default hereunder or that any Person has given any notice
or taken any action with respect to a claimed default of the type
referred to in Section 11(f), a written notice specifying the nature
and period of existence thereof and what action the Company is taking
or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within five
Business Days after a Responsible Officer becoming aware of any of the
following, a written notice setting forth the nature thereof and the
action, if any, that the Company or an ERISA Affiliate proposes to take
with respect thereto:
(i) with respect to any Plan, any reportable event,
as defined in section 4043(b) of ERISA and the regulations
thereunder, for which notice thereof has not been waived
pursuant to such regulations as in effect on the date hereof;
or
(ii) the taking by the PBGC of steps to institute, or
the threatening by the PBGC of the institution of, proceedings
under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from
a Multiemployer Plan that such action has been taken by the
PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by the Company or
any ERISA Affiliate pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on
any of the rights, properties or assets of the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material
Adverse Effect;
(f) Notices from Governmental Authority -- promptly, and in
any event within 30 days of receipt thereof, copies of any notice to
the Company or any Restricted Subsidiary from any Federal or state
Governmental Authority relating to any order, ruling, statute or other
law or regulation that could reasonably be expected to have a Material
Adverse Effect; and
(g) Requested Information -- with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or
any of its Restricted Subsidiaries or relating to the ability of the
Company to perform its obligations hereunder and under the Notes as
from time to time may be reasonably requested by any such holder of
Notes, including, without limitation, Form 8-K to be filed with the
Securities and Exchange Commission which shall include the audited
financial statements of Thermogas L.L.C. when available.
Section 7.2. Officer's Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance -- the information (including
detailed calculations) required in order to establish whether the
Company was in compliance with the requirements of Section 10.1 through
Section 10.8 hereof, inclusive, and Section 10.11 hereof, during the
quarterly or annual period covered by the statements then being
furnished (including with respect to each such Section, where
applicable, the calculations of the maximum or minimum amount, ratio or
percentage, as the case may be, permissible under the terms of such
Sections, and the calculation of the amount, ratio or percentage then
in existence); and
(b) Event of Default -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Company and its Restricted Subsidiaries from the
beginning of the quarterly or annual period covered by the statements
then being furnished to the date of the certificate and that such
review shall not have disclosed the existence during such period of any
condition or event that constitutes a Default or an Event of Default
or, if any such condition or event existed or exists (including,
without limitation, any such event or condition resulting from the
failure of the Company or any Restricted Subsidiary to comply with any
Environmental Law), specifying the nature and period of existence
thereof and what action the Company shall have taken or proposes to
take with respect thereto.
Section 7.3. Inspection. The Company shall permit the
representatives of each holder of Notes that is an Institutional
Investor:
(a) No Default -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice
to the Company, to visit the principal executive office of the Company,
to discuss the affairs, finances and accounts of the Company and its
Restricted Subsidiaries with the Company's officers, and (with the
consent of the Company, which consent will not be unreasonably
withheld) its independent public accountants, and (with the consent of
the Company, which consent will not be unreasonably withheld) to visit
the other offices and properties of the Company and each Restricted
Subsidiary, all at such reasonable times and as often as may be
reasonably requested in writing; and
(b) Default -- if a Default or Event of Default then exists,
at the expense of the Company, to visit and inspect any of the offices
or properties of the Company or any Restricted Subsidiary, to examine
all their respective books of account, records, reports and other
papers, to make copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective
officers and independent public accountants (and by this provision the
Company authorizes said accountants to discuss the affairs, finances
and accounts of the Company and its Restricted Subsidiaries), all at
such times and as often as may be requested.
Section 7.4. Change in Status of Subsidiaries. (a) So long as no
Default or Event of Default shall have occurred and be continuing, the Company
may at any time and from time to time, upon not less than 30 days' prior written
notice given to each Holder, designate a previously Restricted Subsidiary as an
Unrestricted Subsidiary or a previously Unrestricted Subsidiary (including a new
Subsidiary designated on the date of its formation or acquisition) which
satisfies the requirements of clauses (i), (ii) and (iii) of the definition of
"Restricted Subsidiary" as a Restricted Subsidiary, provided that immediately
after such designation and after giving effect thereto no Default or Event of
Default shall have occurred and be continuing, and provided further that after
such designation the status of such Subsidiary had not been changed more than
twice.
(b) Any notice of designation pursuant to this Section 7.4 shall be
accompanied by a certificate signed by a Responsible Officer of the Company
stating that the provisions of this Section 7.4 have been complied with in
connection with such designation and setting forth the name of each other
Subsidiary (if any) which has or will become a Restricted Subsidiary or an
Unrestricted Subsidiary, as the case may be, as a result of such designation.
SECTION 8. MATURITY; PREPAYMENT OF THE NOTES.
Section 8.1. Prepayments. The entire outstanding principal amount of
the Series A Notes shall be due on August 1, 2006, the entire outstanding
principal amount of the Series B Notes shall be due on August 1, 2007 and the
entire outstanding principal amount of the Series C Notes shall be due on August
1, 2009. Except as set forth in Section 8.2, the Notes may not be prepaid prior
to maturity at the option of the Company.
Section 8.2. Optional Prepayments with Make-Whole Amount. The Company
may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Notes of any series, in an amount not less
than $5,000,000 in the case of a partial prepayment of any series, at 100% of
the principal amount so prepaid, together with interest accrued thereon to the
date of such prepayment, plus the Make-Whole Amount determined for the
prepayment date with respect to such principal amount. The Company will give
each holder of Notes of any series being prepaid written notice of each optional
prepayment under this Section 8.2 not less than 30 days and not more than 60
days prior to the date fixed for such prepayment. Each such notice shall specify
such date, the aggregate principal amount of the Notes of such series to be
prepaid on such date, the principal amount of each Note of such series held by
such holder to be prepaid (determined in accordance with Section 8.3), and the
interest to be paid on the prepayment date with respect to such principal amount
being prepaid, and shall be accompanied by a certificate of a Senior Financial
Officer as to the estimated Make-Whole Amount due in connection with such
prepayment (calculated as if the date of such notice were the date of the
prepayment), setting forth the details of such computation. Two Business Days
prior to such prepayment, the Company shall deliver to each holder of Notes a
certificate of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified prepayment date.
Section 8.3. Allocation of Partial Prepayments. In the case of each
partial prepayment of the Notes of any series, the principal amount of the Notes
of such series to be prepaid shall be allocated among all of the Notes of such
series at the time outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof not theretofore called for
prepayment.
Section 8.4. Maturity; Surrender, Etc. In the case of each prepayment
of Notes of any series pursuant to this Section 8, the principal amount of each
Note of such series to be prepaid shall mature and become due and payable on the
date fixed for such prepayment, together with interest on such principal amount
accrued to such date and the applicable Make-Whole Amount, if any. From and
after such date, unless the Company shall fail to pay such principal amount when
so due and payable, together with the interest and Make-Whole Amount, if any, as
aforesaid, interest on such principal amount shall cease to accrue. Any Note
paid or prepaid in full shall be surrendered to the Company and cancelled and
shall not be reissued, and no Note shall be issued in lieu of any prepaid
principal amount of any Note.
Section 8.5. Purchase of Notes. The Company will not and will not
permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly
or indirectly, any of the outstanding Notes except upon the payment or
prepayment of the Notes in accordance with the terms of this Agreement, and the
Notes. The Company will promptly cancel all Notes acquired by it or any
Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to
any provision of this Agreement and no Notes may be issued in substitution or
exchange for any such Notes.
Section 8.6. Make-Whole Amount. The term "Make-Whole Amount" means,
with respect to a Note of any Series, an amount equal to the excess, if any, of
the Discounted Value of the Remaining Scheduled Payments with respect to the
Called Principal of such Note over the amount of such Called Principal, provided
that the Make-Whole Amount may in no event be less than zero. For the purposes
of determining the Make-Whole Amount, the following terms have the following
meanings:
"Called Principal" means, with respect to a Note of any
Series, the principal of such Note that is to be prepaid pursuant to
Section 8.2 or has become or is declared to be immediately due and
payable pursuant to Section 12.1, as the context requires.
"Discounted Value" means, with respect to the Called Principal
of a Note of any Series, the amount obtained by discounting all
Remaining Scheduled Payments with respect to such Called Principal from
their respective scheduled due dates to the Settlement Date with
respect to such Called Principal, in accordance with accepted financial
practice and at a discount factor (applied on the same periodic basis
as that on which interest on the Notes of such Series is payable) equal
to the Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called
Principal of a Note of any Series, 0.50% over the yield to maturity
implied by (i) the yields reported, as of 10:00 A.M. (New York City
time) on the second Business Day preceding the Settlement Date with
respect to such Called Principal, on the display designated as "Page
PX-1" on the Bloomberg Financial Markets Services Screen (or such other
display as may replace Page PX-1 on the Bloomberg Financial Markets
Services Screen) for actively traded U.S. Treasury securities having a
maturity equal to the Remaining Average Life of such Called Principal
as of such Settlement Date, or (ii) if such yields are not reported as
of such time or the yields reported as of such time are not
ascertainable, the Treasury Constant Maturity Series Yields reported,
for the latest day for which such yields have been so reported as of
the second Business Day preceding the Settlement Date with respect to
such Called Principal, in Federal Reserve Statistical Release H.15
(519) (or any comparable successor publication) for actively traded
U.S. Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement
Date. Such implied yield will be determined, if necessary, by (a)
converting U.S. Treasury bill quotations to bond-equivalent yields in
accordance with accepted financial practice and (b) interpolating
linearly between (1) the actively traded U.S. Treasury security with
the maturity closest to and greater than the Remaining Average Life and
(2) the actively traded U.S. Treasury security with the maturity
closest to and less than the Remaining Average Life.
"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth year)
that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
"Remaining Scheduled Payments" means, with respect to the
Called Principal of a Note of any Series, all payments of such Called
Principal and interest thereon that would be due after the Settlement
Date with respect to such Called Principal if no payment of such Called
Principal were made prior to its scheduled due date, provided that if
such Settlement Date is not a date on which interest payments are due
to be made under the terms of the Notes of such Series, then the amount
of the next succeeding scheduled interest payment will be reduced by
the amount of interest accrued to such Settlement Date and required to
be paid on such Settlement Date pursuant to Section 8.2 or 12.1.
"Settlement Date" means, with respect to the Called Principal
of a Note of any Series, the date on which such Called Principal is to
be prepaid pursuant to Section 8.2 or has become or is declared to be
immediately due and payable pursuant to Section 12.1, as the context
requires.
SECTION 9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
Section 9.1. Compliance with Law. The Company will, and will cause each
of its Subsidiaries to, comply with all laws, ordinances or governmental rules
or regulations to which each of them is subject, including, without limitation,
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
Section 9.2. Insurance. The Company will, and will cause each of its
Restricted Subsidiaries to, maintain, with financially sound and reputable
insurers, insurance with respect to their respective properties and businesses
against such casualties and contingencies, of such types, on such terms and in
such amounts (including deductibles, co-insurance and self-insurance, if
adequate reserves are maintained with respect thereto) as is customary in the
case of entities of established reputations engaged in the same or a similar
business and similarly situated and consistent with the existing practice of the
Company and its Restricted Subsidiaries as of the date hereof.
Section 9.3. Maintenance of Properties. The Company will, and will
cause each of its Restricted Subsidiaries to, maintain and keep, or cause to be
maintained and kept, their respective properties in good repair, working order
and condition (other than ordinary wear and tear), so that the business carried
on in connection therewith may be properly conducted at all times, provided that
this Section shall not prevent the Company or any Restricted Subsidiary from
discontinuing the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
Section 9.4. Payment of Taxes. The Company will, and will cause each of
its Subsidiaries to, file all tax returns required to be filed in any
jurisdiction and to pay and discharge all taxes shown to be due and payable on
such returns and all other taxes, assessments, governmental charges, or levies
imposed on them or any of their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and before they
have become delinquent and all claims for which sums have become due and payable
that have or might become a Lien on properties or assets of the Company or any
Subsidiary, provided that neither the Company nor any Subsidiary need pay any
such tax or assessment or claims if (i) the amount, applicability or validity
thereof is contested by the Company or such Subsidiary on a timely basis in good
faith and in appropriate proceedings, and the Company or a Subsidiary has
established adequate reserves therefor in accordance with GAAP on the books of
the Company or such Subsidiary or (ii) the nonpayment of all such taxes and
assessments in the aggregate could not reasonably be expected to have a Material
Adverse Effect.
Section 9.5. Partnership Existence, Etc. The Company will at all times
preserve its existence and its status as a partnership and keep in full force
and effect its partnership existence and its status as a partnership not taxable
as a corporation for U.S. federal income tax purposes. Subject to Sections 10.7
and 10.8, the Company will at all times preserve and keep in full force and
effect the corporate or partnership existence, as the case may be, of each of
its Restricted Subsidiaries (unless merged into the Company or a Restricted
Subsidiary) and all rights and franchises of the Company and its Restricted
Subsidiaries unless, in the good faith judgment of the Company, the termination
of or failure to preserve and keep in full force and effect such corporate or
partnership existence, right or franchise could not, individually or in the
aggregate, have a Material Adverse Effect.
Section 9.6. Ranking. The Company will ensure that, at all times, all
liabilities of the Company under the Notes will rank in right of payment either
pari passu or senior to all other Debt of the Company except for Debt which is
preferred as a result of being secured as permitted by Section 10.4 (but then
only to the extent of such security).
SECTION 10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
Section 10.1. Incurrence of Debt. The Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, create, incur,
assume, guarantee, or otherwise become directly or indirectly liable with
respect to, any Debt, other than:
(a) Debt evidenced by the Notes;
(b) Debt of the Company and its Restricted Subsidiaries
outstanding on the date of the Closing and disclosed in Schedule 5.15
(other than Debt of the Company under the Credit Agreement or under the
MLP Note Guaranty referred to in Section 10.2), and any extensions,
refundings, renewals and refinancings (collectively, a "Refinancing")
thereof, provided that (i) the principal amount of the Debt resulting
from such Refinancing shall not exceed the outstanding principal amount
of such Debt being Refinanced, together with any accrued interest and
premium with respect thereto and any and all costs and expenses related
to such Refinancing, (ii) the maturity date of the Debt resulting from
such Refinancing shall not be earlier than the maturity date of the
Debt being Refinanced, (iii) the average life to maturity of the Debt
resulting from such Refinancing shall not be less than the average life
to maturity of the Debt being Refinanced and (iv) no Default or Event
of Default exists at the time of such Refinancing;
(c) Debt of the Company and its Restricted Subsidiaries if on
the date the Company or such Restricted Subsidiary becomes liable with
respect to any such Debt and immediately after giving effect thereto
and the concurrent retirement of any other Debt:
(i) no Default or Event of Default exists; and
(ii) any such Debt of a Restricted Subsidiary is
permitted pursuant to Section 10.3; and
(iii) the ratio of Consolidated Cash Flow for the
period of four consecutive fiscal quarters ending on, or most
recently ended prior to, such date to Consolidated Interest
Expense is not less than 2.25 to 1;
(iv) the ratio of Consolidated Debt to Consolidated
Cash Flow for the period of four consecutive fiscal quarters
ending on, or most recently ended prior to, such date is not
greater than 5.00 to 1;
(v) the ratio of Adjusted Consolidated Cash Flow to
Adjusted Consolidated Interest Expense for the period of four
consecutive fiscal quarters ending on, or most recently ended
prior to, such date is not less than 2.15 to 1; and
(vi) the ratio of Adjusted Consolidated Debt to
Adjusted Consolidated Cash Flow for the period of four
consecutive fiscal quarters ending on, or most recently ended
prior to, such date is not greater than (a) 5.40 to 1 if such
date is on or prior to April 30, 2001, or (b) 5.25 to 1 if
such date is after April 30, 2001;
(d) Debt of the Company and its Restricted Subsidiaries
incurred under a Working Capital Facility if, on the date the Company
or such Restricted Subsidiary becomes liable with respect to any such
Debt and immediately after giving effect thereto and the concurrent
retirement of any other such Debt, the Debt outstanding thereunder will
not exceed Consolidated Cash Flow for the period of four consecutive
fiscal quarters ending on, or most recently ended prior to, such date,
provided that there shall have been during the immediately preceding
four consecutive fiscal quarters a period of at least 30 consecutive
days on each of which the Company and its Restricted Subsidiaries would
have been permitted to (but did not) incur on such day under Section
10.1(c) (without reference to the condition stated in clause (i)
thereof) Debt in the amount of the average daily balance of Debt
outstanding under the Working Capital Facility for such 30-day period,
provided further that any such Debt of a Restricted Subsidiary is
permitted pursuant to Section 10.3;
(e) Subordinated Debt of the Company if on the date the
Company becomes liable with respect to any such Subordinated Debt and
immediately after giving effect thereto and the concurrent retirement
of any other Debt, the aggregate amount of all outstanding Subordinated
Debt of the Company shall not exceed $50,000,000;
(f) Debt of the Company and its Restricted Subsidiaries to a
seller of assets or shares purchased by the Company or any Restricted
Subsidiary if on the date the Company becomes liable with respect to
any such Debt and immediately after giving effect thereto and the
concurrent retirement of any other Debt, the aggregate amount of all
outstanding Debt of the Company to all such sellers of assets or shares
shall not exceed $60,000,000, provided that the agreement or instrument
pursuant to which such Debt is incurred (i) contains no financial
covenants more restrictive on the Company or its Restricted
Subsidiaries than those contained in this Agreement and (ii) contains
no events of default (other than in respect of payment of principal and
interest on such Debt and in respect of the accuracy of representations
and warranties made by the Company or its Restricted Subsidiaries
thereunder) which are capable of occurring prior to the occurrence of
any Event of Default, and provided, further, that any such Debt of a
Restricted Subsidiary is permitted pursuant to Section 10.3; and
(g) Debt of the Company under the "Facility B Commitments" or
the "Facility C Commitments" pursuant to the Credit Agreement if on the
date the Company becomes liable with respect to any such Debt and
immediately after giving effect thereto and the concurrent retirement
of any other Debt, the incurrence of such Debt would be permitted under
Section 10.1(c) and any Refinancing thereof, provided that (i) the
principal amount of the Debt resulting from such Refinancing shall not
exceed the outstanding principal amount of such Debt being Refinanced,
together with any accrued interest and premium with respect thereto and
any and all costs and expenses related to such Refinancing, (ii) the
maturity date of the Debt resulting from such Refinancing shall not be
earlier than the maturity date of the Debt being Refinanced, (iii) the
average life to maturity of the Debt resulting from such Refinancing
shall not be less than the average life to maturity of the Debt being
Refinanced, and (iv) the other terms applicable to the Debt resulting
from such Refinancing shall not be more onerous to the Company than the
terms applicable to the Debt being Refinanced, provided further that
the aggregate amount of all such Debt of the Company permitted by this
clause (g) shall not exceed $75,000,000.
For the purposes of this Section 10.1, any Person becoming a Restricted
Subsidiary after the date hereof shall be deemed, at the time it becomes a
Restricted Subsidiary, to have incurred all of its then outstanding Debt, and
any Person Refinancing any Debt shall be deemed to have incurred such Debt at
the time of such Refinancing.
Section 10.2. Guaranty of MLP Notes. The Company will not permit the
Guaranty executed in favor of the holders of the 9-3/8% Senior Secured Notes,
due 2006 (the "MLP Senior Notes") issued by Ferrellgas Partners, L.P. (the "MLP
Notes Guaranty") to become effective pursuant to the terms thereof as long as
any obligations, indebtedness or otherwise, of the Company are outstanding under
the Notes. Accordingly, the earliest date that the Subsidiary Guaranty
Effectiveness Date (as defined in the Indenture pursuant to which the MLP Senior
Notes were issued) can occur is 91 days following the indefeasible discharge in
full of all of the obligations of the Company under the Notes and this
Agreement.
Section 10.3. Restricted Subsidiary Debt. The Company will not at any
time permit any Restricted Subsidiary to, directly or indirectly, create, incur,
assume, guarantee, have outstanding, or otherwise become or remain directly or
indirectly liable with respect to, any Debt other than:
(a) Debt of a Restricted Subsidiary permitted pursuant
to Section 10.1(b);
(b) Debt of a Restricted Subsidiary to the Company or a
Wholly-Owned Restricted Subsidiary;
(c) secured Debt of a Restricted Subsidiary secured by Liens
permitted by Section 10.4(h), and any Refinancing thereof, provided
that (i) the principal amount of the Debt resulting from such
Refinancing shall not exceed the outstanding principal amount of such
Debt being Refinanced, together with any accrued interest and premium
with respect thereto and any and all costs and expenses related to such
Refinancing, (ii) the maturity date of the Debt resulting from such
Refinancing shall not be earlier than the maturity date of the Debt
being Refinanced, (iii) the average life to maturity of the Debt
resulting from such Refinancing shall not be less than the average life
to maturity of the Debt being Refinanced and (iv) no Default or Event
of Default exists at the time of such Refinancing;
(d) Debt of a Restricted Subsidiary in addition to that
otherwise permitted by the foregoing provisions of this Section 10.3,
provided that on the date the Restricted Subsidiary incurs or otherwise
becomes liable with respect to any such additional Debt and immediately
after giving effect thereto and the concurrent retirement of any other
Debt,
(i) no Default or Event of Default exists, and
(ii) Priority Debt does not exceed 12.5% of
Consolidated Assets.
For the purposes of this Section 10.3, any Person becoming a Restricted
Subsidiary after the date hereof shall be deemed, at the time it becomes a
Restricted Subsidiary, to have incurred all of its then outstanding Debt, and
any Person Refinancing any Debt shall be deemed to have incurred such Debt at
the time of such Refinancing. Also for purposes of this Section 10.3, the Debt
of any Restricted Subsidiary to any Wholly-Owned Restricted Subsidiary the
shares of which are sold by the Company pursuant to Section 10.8(c)(1)(B) shall
be deemed to have been incurred at the time of such sale.
Section 10.4. Liens. The Company will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly create, incur, assume or
permit to exist (upon the happening of a contingency or otherwise) any Lien on
or with respect to any property or asset (including, without limitation, any
document or instrument in respect of goods or accounts receivable) of the
Company or any such Restricted Subsidiary, whether now owned or held or
hereafter acquired, or any income or profits therefrom, or assign or otherwise
convey any right to receive income or profits, except:
(a) Liens for property taxes, assessments or other
governmental charges which are not yet due and payable;
(b) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Liens, in each
case, incurred in the ordinary course of business for sums not yet due
and payable;
(c) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business (i) in connection with
workers' compensation, unemployment insurance and other types of social
security or retirement benefits, or (ii) to secure (or to obtain
letters of credit that secure) the performance of tenders, statutory
obligations, surety bonds, appeal bonds, bids, leases (other than
Capital Leases), performance bonds, purchase, construction or sales
contracts and other similar obligations, in each case not incurred or
made in connection with the borrowing of money, the obtaining of
advances or credit or the payment of the deferred purchase price of
property;
(d) any attachment or judgment Lien, unless the judgment it
secures shall not, within 60 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall not
have been discharged within 60 days after the expiration of any such
stay;
(e) leases or subleases granted to others, easements,
rights-of-way, restrictions and other similar charges or encumbrances,
in each case incidental to, and not interfering with, the ordinary
conduct of the business of the Company or any of its Restricted
Subsidiaries, provided that such Liens do not, in the aggregate,
materially detract from the value of such property or impair the use of
such property;
(f) Liens on property or assets of the Company or any of its
Restricted Subsidiaries securing Debt owing to the Company or to a
Wholly-Owned Restricted Subsidiary;
(g) Liens existing on the date of the Closing and securing
the Debt of the Company and its Restricted Subsidiaries shown as having
"Security" pledged on Schedule 5.15;
(h) any Lien created to secure all or any part of the
purchase price, or to secure Debt incurred or assumed to pay all or any
part of the purchase price or cost of construction, of property (or any
improvement thereon) acquired or constructed by the Company or a
Restricted Subsidiary after the date of the Closing, provided that
(i) any such Lien shall extend solely to the item or
items of such property (or improvement thereon) so acquired or
constructed,
(ii) the principal amount of the Debt secured by any
such Lien shall at no time exceed an amount equal to the
lesser of (A) the cost to the Company or such Restricted
Subsidiary of the property (or improvement thereon) so
acquired or constructed and (B) the Fair Market Value (as
determined in good faith by the board of directors of the
General Partner) of such property (or improvement thereon) at
the time of such acquisition or construction, and
(iii) any such Lien shall be created contemporaneously
with, or within 270 days after, the acquisition or
construction of such property;
(i) Liens on property or assets of any Restricted
Subsidiary securing Indebtedness owing to the Company or to a
Wholly-Owned Restricted Subsidiary;
(j) any Lien existing on property of a Person immediately
prior to its being consolidated with or merged into the Company or a
Restricted Subsidiary, or any Lien existing on any property acquired by
the Company or any Restricted Subsidiary at the time such property is
so acquired (whether or not the Debt secured thereby shall have been
assumed), provided that (i) no such Lien shall have been created or
assumed in contemplation of such consolidation or merger or such
acquisition of property, and (ii) each such Lien shall extend solely to
the item or items of property so acquired;
(k) Liens on personal property leased under leases (including
Synthetic Leases) entered into by the Company which are accounted for
as operating leases in accordance with GAAP;
(l) any Lien renewing, extending or refunding any Lien
permitted by paragraphs (g), (h) or (j) of this Section 10.4, provided
that (i) the principal amount of Debt secured by such Lien immediately
prior to such extension, renewal or refunding is not increased or the
maturity thereof reduced, (ii) such Lien is not extended to any other
property, and (iii) immediately after such extension, renewal or
refunding no Default or Event of Default would exist; and
(m) other Liens securing Debt not otherwise permitted by
paragraphs (a) through (l), provided that on the date any such Lien is
created, incurred or assumed and immediately after giving effect to the
incurrence of any related Debt and the concurrent retirement of any
other Debt, Priority Debt does not exceed 12.5% of Consolidated Assets.
For the purposes of this Section 10.4, any Person becoming a Restricted
Subsidiary after the date of this Agreement shall be deemed to have incurred all
of its then outstanding Liens at the time it becomes a Restricted Subsidiary,
and any Person Refinancing any Debt secured by any Lien shall be deemed to have
incurred such Lien at the time of such Refinancing.
Section 10.5. Restricted Payments.
(a) Limitation. The Company will not, and will not permit any of its
Restricted Subsidiaries to, at any time, declare or make, or incur any liability
to declare or make, any Restricted Payment provided that the Company may make
one Restricted Payment in each fiscal quarter if:
(i) the amount of such Restricted Payment would not
exceed the sum of
(A) Available Cash for the immediately preceding
fiscal quarter, plus
(B) the lesser of (1) the amount of any Available
Cash for the first 45 days of such fiscal quarter, and (2) the
excess of the aggregate amount of Debt that the Company could
have incurred under the Working Capital Facility pursuant to
Section 10.1(d) over the actual amount of loans outstanding
thereunder at the end of the immediately preceding fiscal
quarter;
(ii) the ratio of Adjusted Consolidated Cash Flow for the
period of eight consecutive fiscal quarters ending on, or most recently
ended prior to, such time to Adjusted Consolidated Interest Expense for
such period is greater than 2.0 to 1; and
(iii) no Default or Event of Default would exist;
provided, further, that the Company may declare or order, and make, pay or set
apart a Restricted Payment out of the Restricted Payment Reserve if at such time
(I) no Default or Event of Default exists, and (II) the ratio of Adjusted
Consolidated Cash Flow for the period of eight consecutive fiscal quarters
ending on, or most recently ended prior to, such time to Adjusted Consolidated
Interest Expense for such period is greater than 1.25 to 1. For purposes of this
Section 10.5, "Restricted Payment Reserve" means, as of the date of
determination, the excess of the cumulative amount, if any, of Restricted
Payment Contributions generated each prior fiscal year commencing with the
fiscal year ended July 31, 1999 over the cumulative amount of all Restricted
Payments previously made from the Restricted Payment Reserve, and "Restricted
Payment Contribution" means an amount equal to the excess of (x) Consolidated
Cash Flow for a fiscal year, over (y) the sum of (I) consolidated cash interest
expense of the Company and its Restricted Subsidiaries during such fiscal year,
plus (II) Maintenance Capital Expenditures incurred by the Company during such
fiscal year, plus (III) the cumulative amount of Restricted Payments made during
such fiscal year.
(b) Time of Payment. The Company will not, nor will it permit any of
its Subsidiaries to, authorize a Restricted Payment that is not payable within
60 days of authorization.
Section 10.6. Restrictions on Dividends of Subsidiaries, Etc. The
Company will not, and will not permit any of its Restricted Subsidiaries to,
enter into any agreement which would restrict any Restricted Subsidiary's
ability or right to pay dividends to, or make advances to or Investments in, the
Company or, if such Restricted Subsidiary is not directly owned by the Company,
the "parent" Subsidiary of such Restricted Subsidiary.
Section 10.7. Mergers and Consolidations. The Company will not, and will
not permit any Restricted Subsidiary to, consolidate with or be a party to a
merger with any other Person or convey, transfer or lease substantially all of
its assets in a single transaction or series of transactions to any Person;
provided, however, that:
(a) any Restricted Subsidiary may merge or consolidate with
or into the Company or any Wholly-Owned Restricted Subsidiary so long
as in any merger or consolidation involving the Company, the Company
shall be the surviving or continuing corporation; and
(b) the Company may consolidate or merge with any other
Person if (i) the surviving entity is a solvent partnership or
corporation organized and existing under the laws of the United States
of America or any State thereof, (ii) the surviving entity expressly
assumes in writing the Company's obligations under the Notes and this
Agreement, (iii) at the time of such consolidation or merger, and after
giving effect thereto, no Default or Event of Default shall have
occurred and be continuing, and (iv) the surviving entity would be
permitted by the provisions of Section 10.1(c) hereof to incur at least
$1.00 of additional Debt owing to a Person other than a Restricted
Subsidiary of the surviving entity.
Section 10.8. Sale of Assets; Sale of Stock. (a) The Company will not,
and will not permit any Restricted Subsidiary to, sell, lease, transfer, abandon
or otherwise dispose of assets (except assets sold for fair market value (x) in
the ordinary course of business or (y) in a Sale and Leaseback Transaction
within 90 days following the acquisition or construction thereof); provided that
the foregoing restrictions do not apply to:
(1) the sale, lease, transfer or other disposition of assets
of a Restricted Subsidiary to the Company or a Wholly-Owned Restricted
Subsidiary;
(2) the sale of assets for cash or other property to a
Person or Persons if all of the following conditions are met:
(i) such assets (valued at net book value at the
time of such sale) do not, together with all other assets of
the Company and its Restricted Subsidiaries previously
disposed of (valued at net book value at the time of such
disposition) (other than in the ordinary course of business or
in a Sale and Leaseback Transaction within 90 days following
the acquisition or construction thereof) during the same
fiscal year exceed 10% of Consolidated Assets (which
Consolidated Assets shall be determined as of the last day of
the fiscal year ending on, or most recently ended prior to,
such sale); and
(ii) in the opinion of the board of directors of the
General Partner, the sale is for Fair Market Value and is in
the best interests of the Company.
provided, however, that for purposes of the foregoing calculation,
there shall not be included any assets the proceeds of which were or
are applied within 180 days of the date of sale of such assets to
either (A) the acquisition of fixed assets useful and intended to be
used in the operation of the business of the Company and its Restricted
Subsidiaries within the limitations of Section 10.9 and having a Fair
Market Value (as determined in good faith by the board of directors of
the General Partner) at least equal to that of the assets so disposed
of, or (B) the prepayment at any applicable prepayment premium, of
Senior Funded Debt selected by the Company of the Company or such
Restricted Subsidiary that sold such assets. It is understood and
agreed by the Company that any such proceeds paid and applied to the
prepayment of the Notes as hereinabove provided shall be prepaid as and
to the extent provided in Section 8.2.
If any Restricted Subsidiary is designated as an Unrestricted Subsidiary
pursuant to Section 7.4, the total amount of property of such Restricted
Subsidiary shall be deemed to be sold for purposes of this Section 10.8 at such
time.
(b) The Company will not permit any Restricted Subsidiary to issue or
sell any shares of stock of any class (including as "stock" for the purposes of
this Section 10.8, any warrants, rights or options to purchase or otherwise
acquire stock or other Securities exchangeable for or convertible into stock) of
such Restricted Subsidiary to any Person other than the Company or a
Wholly-Owned Restricted Subsidiary, except for the purpose of qualifying
directors, or except in satisfaction of the validly pre-existing preemptive
rights of minority stockholders in connection with the simultaneous issuance of
stock to the Company and/or a Restricted Subsidiary whereby the Company and/or
such Restricted Subsidiary maintain their same proportionate interest in such
Restricted Subsidiary.
(c) The Company will not sell, transfer or otherwise dispose of any
shares of stock of any Restricted Subsidiary (except to qualify directors) or
any Debt of any Restricted Subsidiary, and will not permit any Restricted
Subsidiary to sell, transfer or otherwise dispose of (except to the Company or a
Wholly-Owned Restricted Subsidiary) any shares of stock or any Debt of any other
Restricted Subsidiary, unless:
(1) either
(A) in the case of such a sale, transfer or
disposition of shares of stock or Debt, simultaneously with
such sale, transfer, or disposition, all shares of stock and
all Debt of such Restricted Subsidiary at the time owned by
the Company and by every other Restricted Subsidiary shall be
sold, transferred or disposed of as an entirety, and the
Restricted Subsidiary being disposed of shall not have any
continuing investment in the Company or any other Restricted
Subsidiary not being simultaneously disposed of; or
(B) in the case of such a sale, transfer or
disposition of shares of stock, at the time of such sale,
transfer or disposition and after giving effect thereto, (i)
no Default or Event of Default exists, and (ii) the minority
interests in the Restricted Subsidiary the shares of which are
being disposed of, after giving effect to such sale, transfer
or disposition, would not exceed 20%;
(2) said shares of stock and Debt are sold, transferred or
otherwise disposed of to a Person, for a cash consideration and on
terms reasonably deemed by the board of directors of the General
Partner to be adequate and satisfactory; and
(3) such sale or other disposition is permitted by Section
10.8(a).
Section 10.9. Nature of Business. Neither the Company nor any Restricted
Subsidiary will engage in any business if, as a result thereof, the Company and
its Restricted Subsidiaries would not be principally and predominantly engaged
in the business of retail and wholesale propane sales and purchases of
inventory, operation of related propane distribution networks and storage
facilities and the acquisitions, operations and maintenance of such facilities.
Section 10.10. Transactions with Affiliates. The Company will not and
will not permit any Restricted Subsidiary to enter into directly or indirectly
any transaction or group of related transactions (including without limitation
the purchase, lease, sale or exchange of properties of any kind or the rendering
of any service) with any Affiliate, except in the ordinary course and pursuant
to the reasonable requirements of the Company's or such Restricted Subsidiary's
business and upon fair and reasonable terms no less favorable to the Company or
such Restricted Subsidiary than would be obtainable in a comparable arm's-length
transaction with a Person not an Affiliate.
Section 10.11. Certain Refinancings. Notwithstanding the provisions of
Section 10.1 or 10.3, the Company will not, and will not permit any Restricted
Subsidiary to, incur any Debt for the purpose of refinancing the Debt of
Ferrellgas Partners, L.P., a Delaware limited partnership and the limited
partner of the Company, or any other entity owning an equity interest in the
Company, provided that the Company may incur Debt for the purpose of refinancing
the Debt of Ferrellgas Partners, L.P. so long as it is a limited partner in the
Company and so long as such incurrence is:
(a) otherwise permitted by the provisions of Section
10.1; and
(b) after giving effect to the issuance of such Debt and the
concurrent issuance or retirement of any other Debt, no Default or
Event of Default exists and either:
(i) either Fitch IBCA, Inc. shall have assigned a
rating of at least BBB- to the Notes, or Standard & Poor's
Ratings Group, a division of McGraw Hill, shall have assigned
a rating of at least BBB- to the Notes or Moody's Investors
Service, Inc. shall have assigned a rating of at least Baa3 to
the Notes; or
(ii) (A) the ratio of Consolidated Cash Flow for the
period of four consecutive fiscal quarters ending on, or most
recently ended prior to, the date of issuance of such Debt to
Consolidated Interest Expense is not less than 2.75 to 1; and
(B) the ratio of Consolidated Debt to Consolidated Cash Flow
for the period of four consecutive fiscal quarters ending on,
or most recently ended prior to, such date is not greater than
4.50 to 1.
SECTION 11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on
any Note for more than five Business Days after the same becomes due
and payable; or
(c) the Company defaults in the performance of or
compliance with any term contained in Section 7.1(d) or
Section 10; or
(d) the Company defaults in the performance of or compliance
with any term contained herein (other than those referred to in
paragraphs (a), (b) and (c) of this Section 11) and such default is not
remedied within 30 days after the earlier of (i) a Responsible Officer
obtaining actual knowledge of such default and (ii) the Company
receiving written notice of such default from any holder of a Note (any
such written notice to be identified as a "notice of default" and to
refer specifically to this paragraph (d) of Section 11); or
(e) any representation or warranty made in writing by or on
behalf of the Company or by any officer of the Company in this
Agreement or in any writing furnished in connection with the
transactions contemplated hereby proves to have been false or incorrect
in any material respect on the date as of which made; or
(f) (i) the Company or any Restricted Subsidiary is in
default (as principal or as guarantor or other surety) in the payment
of any principal of or premium or make-whole amount or interest on any
Indebtedness that is outstanding in an aggregate principal amount of at
least $10,000,000 beyond any period of grace provided with respect
thereto, or (ii) the Company or any Restricted Subsidiary is in default
in the performance of or compliance with any term of any evidence of
any Indebtedness in an aggregate outstanding principal amount of at
least $10,000,000 or of any mortgage, indenture or other agreement
relating thereto or any other condition exists, and as a consequence of
such default or condition such Indebtedness has become, or has been
declared (or one or more Persons are entitled to declare such
Indebtedness to be), due and payable before its stated maturity or
before its regularly scheduled dates of payment, or (iii) as a
consequence of the occurrence or continuation of any event or condition
(other than the passage of time or the right of the holder of
Indebtedness to convert such Indebtedness into equity interests), (x)
the Company or any Restricted Subsidiary has become obligated to
purchase or repay Indebtedness before its regular maturity or before
its regularly scheduled dates of payment in an aggregate outstanding
principal amount of at least $10,000,000, or (y) one or more Persons
have the right to require the Company or any Restricted Subsidiary so
to purchase or repay such Indebtedness; or
(g) the Company, the General Partner or any Restricted
Subsidiary (i) is generally not paying, or admits in writing its
inability to pay, its debts as they become due, (ii) files, or consents
by answer or otherwise to the filing against it of, a petition for
relief or reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy,
insolvency, reorganization, moratorium or other similar law of any
jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes action for the purpose of
any of the foregoing; or
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the
Company, the General Partner or any Subsidiary of the Company, a
custodian, receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its property,
or constituting an order for relief or approving a petition for relief
or reorganization or any other petition in bankruptcy or for
liquidation or to take advantage of any bankruptcy or insolvency law of
any jurisdiction, or ordering the dissolution, winding-up or
liquidation of the Company, the General Partner or any Subsidiary of
the Company, or any such petition shall be filed against the Company,
the General Partner or any Subsidiary of the Company and such petition
shall not be dismissed or appointment discharged within 120 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $10,000,000 are rendered against one or more
of the Company and its Restricted Subsidiaries and which judgments are
not, within 60 days after entry thereof, bonded, discharged or stayed
pending appeal, or are not discharged within 60 days after the
expiration of such stay; or
(j) If (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is
sought or granted under Section 412 of the Code, (ii) a notice of
intent to terminate any Plan shall have been or is reasonably expected
to be filed with the PBGC or the PBGC shall have instituted proceedings
under Section 4042 of ERISA to terminate or appoint a trustee to
administer any Plan or the PBGC shall have notified the Company or any
ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of Section 4001(a)(18) of ERISA) under
all Plans, determined in accordance with Title IV of ERISA, shall
exceed $10,000,000, (iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or
any Restricted Subsidiary establishes or amends any employee welfare
benefit plan that provides post-employment welfare benefits in a manner
that would increase the liability of the Company or any Restricted
Subsidiary thereunder; and any such event or events described in
clauses (i) through (vi) above, either individually or together with
any other such event or events, could reasonably be expected to have a
Material Adverse Effect.
As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
SECTION 12. REMEDIES ON DEFAULT, ETC.
Section 12.1. Acceleration. (a) If an Event of Default with respect to
the Company or the General Partner described in paragraph (g) or (h) of Section
11 (other than an Event of Default described in clause (i) of paragraph (g) or
described in clause (vi) of paragraph (g) by virtue of the fact that such clause
encompasses clause (i) of paragraph (g)) has occurred, all the Notes then
outstanding shall automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, any
holder or holders of more than 33-1/3% in principal amount of the Notes at the
time outstanding may at any time at its or their option, by notice or notices to
the Company, declare all the Notes then outstanding to be immediately due and
payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes at the
time outstanding affected by such Event of Default may at any time, at its or
their option, by notice or notices to the Company, declare all the Notes held by
it or them to be immediately due and payable.
Upon any Note's becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Note will forthwith mature and the
entire unpaid principal amount of such Note, plus (i) all accrued and unpaid
interest thereon and (ii) the Make-Whole Amount determined in respect of such
principal amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
Section 12.2. Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1, the holder of
any Note at the time outstanding may proceed to protect and enforce the rights
of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.
Section 12.3. Rescission. At any time after any Notes have been declared
due and payable pursuant to clause (b) or (c) of Section 12.1, the holders of
not less than 51% in principal amount of the Notes then outstanding, by written
notice to the Company, may rescind and annul any such declaration and its
consequences if (a) the Company has paid all overdue interest on the Notes, all
principal of and Make-Whole Amount, if any, on any Notes that are due and
payable and are unpaid other than by reason of such declaration, and all
interest on such overdue principal and Make-Whole Amount, if any, and (to the
extent permitted by applicable law) any overdue interest in respect of the
Notes, at the Default Rate, (b) all Events of Default and Defaults, other than
non-payment of amounts that have become due solely by reason of such
declaration, have been cured or have been waived pursuant to Section 17, and (c)
no judgment or decree has been entered for the payment of any monies due
pursuant hereto or to the Notes. No rescission and annulment under this Section
12.3 will extend to or affect any subsequent Event of Default or Default or
impair any right consequent thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 15, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including, without limitation,
reasonable attorneys' fees, expenses and disbursements.
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
Section 13.1. Registration of Notes. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes of each
series.
Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note
at the principal executive office of the Company for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or its attorney duly authorized in writing and
accompanied by the address for notices of each transferee of such Note or part
thereof), the Company shall execute and deliver, at the Company's expense
(except as provided below), one or more new Notes (as requested by the holder
thereof) of the same series in exchange therefor, in an aggregate principal
amount equal to the unpaid principal amount of the surrendered Note. Each such
new Note shall be payable to such Person as such holder may request and shall be
substantially in the form of the series of Notes being surrendered as set forth
in Exhibit 1-A, 1-B, and 1-C, as the case may be. Each such new Note shall be
dated and bear interest from the date to which interest shall have been paid on
the surrendered Note or dated the date of the surrendered Note if no interest
shall have been paid thereon. The Company may require payment of a sum
sufficient to cover any stamp tax or governmental charge imposed in respect of
any such transfer of Notes. Notes shall not be transferred in denominations of
less than $100,000, provided that if necessary to enable the registration of
transfer by a holder of its entire holding of Notes, one Note may be in a
denomination of less than $100,000. Any transferee, by its acceptance of a Note
registered in its name (or the name of its nominee), shall be deemed to have
made the representation set forth in Section 6.2.
Section 13.3. Replacement of Notes. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note
is, or is a nominee for, an original Purchaser or another holder of a
Note with a minimum net worth of at least $50,000,000, such Person's
own unsecured agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender and
cancellation thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note of the same series as such lost, stolen, destroyed or mutilated Note, dated
and bearing interest from the date to which interest shall have been paid on
such lost, stolen, destroyed or mutilated Note or dated the date of such lost,
stolen, destroyed or mutilated Note if no interest shall have been paid thereon.
SECTION 14. PAYMENTS ON NOTES.
Section 14.1. Place of Payment. Subject to Section 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in Liberty, Missouri at the principal office of the
Company in such jurisdiction. The Company may at any time, by notice to each
holder of a Note, change the place of payment of the Notes so long as such place
of payment shall be either the principal office of the Company in such
jurisdiction or the principal office of a bank or trust company in such
jurisdiction.
Section 14.2. Home Office Payment. So long as any Purchaser or such
Purchaser's nominee shall be the holder of any Note, and notwithstanding
anything contained in Section 14.1 or in such Note to the contrary, the Company
will pay all sums becoming due on such Note for principal, Make-Whole Amount, if
any, and interest by the method and at the address specified for such purpose
for such Purchaser on Schedule A, or by such other method or at such other
address as such Purchaser shall have from time to time specified to the Company
in writing for such purpose, without the presentation or surrender of such Note
or the making of any notation thereon, except that upon written request of the
Company made concurrently with or reasonably promptly after payment or
prepayment in full of any Note, such Purchaser shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently designated
by the Company pursuant to Section 14.1. Prior to any sale or other disposition
of any Note held by any Purchaser or such Purchaser's nominee such Purchaser
will, at its election, either endorse thereon the amount of principal paid
thereon and the last date to which interest has been paid thereon or surrender
such Note to the Company in exchange for a new Note or Notes pursuant to Section
13.2. The Company will afford the benefits of this Section 14.2 to any
Institutional Investor that is the direct or indirect transferee of any Note
purchased by any Purchaser under this Agreement and that has made the same
agreement relating to such Note as such Purchaser has made in this Section 14.2.
SECTION 15. EXPENSES, ETC.
Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys' fees of one special counsel and, if reasonably
required, local or other counsel) incurred by the Purchasers or the holders of
Notes in connection with such transactions and in connection with any
amendments, waivers or consents under or in respect of this Agreement or the
Notes (whether or not such amendment, waiver or consent becomes effective). The
Company will pay all costs and expenses (including reasonable attorneys' fees of
a special counsel and, if reasonably required, local or other counsel) incurred
by each Purchaser or holder of a Note in connection with enforcing or defending
(or determining whether or how to enforce or defend) any rights under this
Agreement or the Notes or in responding to any subpoena or other legal process
or informal investigative demand issued in connection with this Agreement or the
Notes, or by reason of being a holder of any Note, as well as the costs and
expenses, including financial advisors' fees, incurred in connection with the
insolvency or bankruptcy of the Company or any Subsidiary or in connection with
any work-out or restructuring of the transactions contemplated hereby and by the
Notes. The Company will pay, and will save each Purchaser and each other holder
of a Note harmless from, all claims in respect of any fees, costs or expenses if
any, of brokers and finders (other than those retained by such Purchaser or
holder).
Section 15.2. Survival. The obligations of the Company under this
Section 15 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement or the Notes, and the
termination of this Agreement.
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by any Purchaser of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a Note,
regardless of any investigation made at any time by or on behalf of such
Purchaser or any other holder of a Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant to this Agreement shall be deemed representations and warranties of the
Company under this Agreement. Subject to the preceding sentence, this Agreement
and the Notes embody the entire agreement and understanding between each
Purchaser and the Company and supersede all prior agreements and understandings
relating to the subject matter hereof.
SECTION 17. AMENDMENT AND WAIVER.
Section 17.1. Requirements. This Agreement and the Notes may be amended,
and the observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and the Required Holders, except that (a) no amendment or waiver of any
of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term
(as it is used therein), will be effective as to any Purchaser unless consented
to by such Purchaser in writing, and (b) no such amendment or waiver may,
without the written consent of the holder of each Note at the time outstanding
affected thereby, (i) subject to the provisions of Section 12 relating to
acceleration or rescission, change the amount or time of any prepayment or
payment of principal of, or reduce the rate or change the time of payment or
method of computation of interest or of the Make-Whole Amount on, the Notes,
(ii) change the percentage of the principal amount of the Notes the holders of
which are required to consent to any such amendment or waiver, or (iii) amend
any of Sections 8, 11(a), 11(b), 12, 17 or 20.
Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes of any waiver or amendment of any of the terms and provisions hereof or of
the Notes unless such remuneration is concurrently paid, or security is
concurrently granted, on the same terms, ratably to each holder of Notes then
outstanding even if such holder did not consent to such waiver or amendment.
Section 17.3. Binding Effect, Etc. Any amendment or waiver consented to
as provided in this Section 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term "this Agreement" and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.
Section 17.4. Notes Held by Company, Etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.
SECTION 18. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telefacsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to a Purchaser or such Purchaser's nominee, to such
Purchaser or such Purchaser's nominee at the address specified for such
communications for such Purchaser signature on Schedule A, or at such
other address as such Purchaser or such Purchaser's nominee shall have
specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the Company
in writing, or
(iii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of the Assistant
Treasurer, or at such other address as the Company shall have specified
to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
SECTION 19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by each Purchaser at the Closing (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to each Purchaser, may be
reproduced by such Purchaser by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and such Purchaser
may destroy any original document so reproduced. The Company agrees and
stipulates that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such Purchaser in the
regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence. This
Section 19 shall not prohibit the Company or any other holder of Notes from
contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such
reproduction.
SECTION 20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential Information" means
information delivered to any Purchaser by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified in writing when received by
such Purchaser as being confidential information of the Company or such
Subsidiary, provided that such term does not include information that (a) was
publicly known or otherwise known to such Purchaser prior to the time of such
disclosure, (b) subsequently becomes publicly known through no act or omission
by such Purchaser or any Person acting on such Purchaser's behalf, (c) otherwise
becomes known to such Purchaser other than through disclosure by the Company or
any Subsidiary or (d) constitutes financial statements delivered to such
Purchaser under Section 7.1 that are otherwise publicly available. Each
Purchaser will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by such Purchaser in good faith to protect
confidential information of third parties delivered to such Purchaser, provided
that such Purchaser may deliver or disclose Confidential Information to (i) such
Purchaser's directors, trustees, officers, employees, agents, attorneys and
affiliates (to the extent such disclosure reasonably relates to the
administration of the investment represented by such Purchaser's Notes), (ii)
such Purchaser's financial advisors and other professional advisors who agree to
hold confidential the Confidential Information substantially in accordance with
the terms of this Section 20, (iii) any other holder of any Note, (iv) any
Institutional Investor to which such Purchaser sells or offers to sell such Note
or any part thereof or any participation therein (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 20), (v) any Person from which such Purchaser offers
to purchase any security of the Company (if such Person has agreed in writing
prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 20), (vi) any federal or state regulatory authority
having jurisdiction over such Purchaser, (vii) the National Association of
Insurance Commissioners or any similar organization, or any nationally
recognized rating agency that requires access to information about such
Purchaser's investment portfolio, or (viii) any other Person to which such
delivery or disclosure may be necessary or appropriate (w) to effect compliance
with any law, Rule, regulation or order applicable to such Purchaser, (x) in
response to any subpoena or other legal process, (y) in connection with any
litigation to which such Purchaser is a party or (z) if an Event of Default has
occurred and is continuing, to the extent such Purchaser may reasonably
determine such delivery and disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies under such
Purchaser's Notes and this Agreement. Each holder of a Note, by its acceptance
of a Note, will be deemed to have agreed to be bound by and to be entitled to
the benefits of this Section 20 as though it were a party to this Agreement. On
reasonable request by the Company in connection with the delivery to any holder
of a Note of information required to be delivered to such holder under this
Agreement or requested by such holder (other than a holder that is a party to
this Agreement or its nominee), such holder will enter into an agreement with
the Company embodying the provisions of this Section 20.
SECTION 21. SUBSTITUTION OF PURCHASER.
Each Purchaser shall have the right to substitute any one of such
Purchaser's Affiliates as the purchaser of the Notes that such Purchaser has
agreed to purchase hereunder, by written notice to the Company, which notice
shall be signed by both such Purchaser and such Purchaser's Affiliate, shall
contain such Affiliate's agreement to be bound by this Agreement and shall
contain a confirmation by such Affiliate of the accuracy with respect to it of
the representations set forth in Section 6. Upon receipt of such notice,
wherever the word "Purchaser" is used in this Agreement (other than in this
Section 21), such word shall be deemed to refer to such Affiliate in lieu of
such Purchaser. In the event that such Affiliate is so substituted as a
purchaser hereunder and such Affiliate thereafter transfers to such Purchaser
all of the Notes then held by such Affiliate, upon receipt by the Company of
notice of such transfer, wherever the word "Purchaser" is used in this Agreement
(other than in this Section 21), such word shall no longer be deemed to refer to
such Affiliate, but shall refer to such Purchaser, and such Purchaser shall have
all the rights of an original holder of the Notes under this Agreement.
SECTION 22. MISCELLANEOUS.
Section 22.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.
Section 22.2. Payments Due on Non-Business Days. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of principal
of or Make-Whole Amount or interest on any Note that is due on a date other than
a Business Day shall be made on the next succeeding Business Day without
including the additional days elapsed in the computation of the interest payable
on such next succeeding Business Day.
Section 22.3. 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 (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
Section 22.4. Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
Section 22.5. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original but all of which together
shall constitute one instrument. Each counterpart may consist of a number of
copies hereof, each signed by less than all, but together signed by all, of the
parties hereto.
Section 22.6. Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the law of the State of Illinois excluding choice-of-law principles of the law
of such State that would require the application of the laws of a jurisdiction
other than such State.
* * * * *
<PAGE>
The execution hereof by the Purchasers shall constitute a contract
among the Company and the Purchasers for the uses and purposes hereinabove set
forth. This Agreement may be executed in any number of counterparts, each
executed counterpart constituting an original but all together only one
agreement.
Very truly yours,
FERRELLGAS, L.P.
By Ferrellgas, Inc., its general partner
By____________________________________________________
Its___________________________________________________
<PAGE>
Accepted as of the first date written above:
[VARIATION]
By
Name:
Title:
<PAGE>
SCHEDULE A
(to Note Purchase Agreement)
<TABLE>
<CAPTION>
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
<S> <C> <C>
THE NORTHWESTERN MUTUAL LIFE Series A --
INSURANCE COMPANY Series B $19,000,000
720 East Wisconsin Avenue Series C $9,000,000
Milwaukee, Wisconsin 53202
Attention: Securities Department
Telecopier Number: (414) 299-7124
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Ferrellgas, L.P. and as to interest rate, security, description, maturity date,
PPN, principal, premium or interest) to:
Bankers Trust Company (ABA #0210-01033)
16 Wall Street
Insurance Unit, 4th Floor
New York, New York 10005
for credit to: The Northwestern Mutual Life Insurance Company
Account Number 00-000-027
Notices
All notices and communications to be addressed as first provided above,
except notices with respect to payments and written confirmation of each such
payment to be addressed, Attention: Investment Operations, Fax Number: (414)
299-5714.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 39-0509570
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
THE NORTHWESTERN MUTUAL LIFE Series A --
INSURANCE COMPANY FOR ITS GROUP Series B $1,000,000
ANNUITY SEPARATE ACCOUNT Series C $1,000,000
720 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Securities Department
Telecopier Number: (414) 299-7124
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Ferrellgas, L.P. and as to interest rate, security, description, maturity date,
PPN, principal, premium or interest) to:
Bankers Trust Company
ABA #0210-01033
16 Wall Street
Insurance Unit, 4th Floor
New York, New York 10005
for credit to: The Northwestern Mutual Life Insurance Company, for its
Group Annuity Separate Account
Account Number 00-000-027
Notices
All notices and communications to be addressed as first provided above,
except notices with respect to payments and written confirmation of each such
payment to be addressed, Attention: Investment Operations, Fax Number: (414)
299-5714.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 39-0509570
<PAGE>
<TABLE>
<CAPTION>
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
<S> <C> <C>
PROVIDENT LIFE AND ACCIDENT Series A --
INSURANCE COMPANY Series B --
c/o Provident Investment Management, LLC Series C $10,000,000
One Fountain Square
Chattanooga, Tennessee 37402
Attention: Private Placements
Telefacsimile: (423) 755-1172
Confirmation: (423) 755-3351
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds to:
CUDD & CO.
c/o The Chase Manhattan Bank, N.A.
New York, New York
ABA #021-000-021
SSG Private Income Processing
A/C #900-9-000200
For credit to: Provident Life and Accident Insurance Company
Custodial Account Number G06704
Please reference: Issuer: Ferrellgas, L.P.
PPN: 31529# AC 7
Coupon:
Maturity:
Principal=$__________
Interest=$___________
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: CUDD & CO.
Taxpayer I.D. Number for CUDD & Co.: 13-6022143
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
UNUM LIFE INSURANCE COMPANY OF Series C $10,000,000
AMERICA
2211 Congress Street
Portland, Maine 04122-0590
Attention: Bond Investment Division
Telefacsimile Number: (207) 770-4000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds to:
CUDD & CO.
c/o The Chase Manhattan Bank, N.A.
New York, New York
ABA #021-000-021
SSG Private Income Processing
A/C #900-9-000200
Custodial Account Number G08287
Please reference: Issuer: Ferrellgas, L.P.
PPN: 31529# AC 7
Coupon:
Maturity:
Principal=$__________
Interest=$___________
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: CUDD & CO.
Taxpayer I.D. Number for CUDD & Co.: 13-6022143
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
NATIONWIDE LIFE INSURANCE COMPANY SERIES B $12,000,000
One Nationwide Plaza (1-33-07)
Columbus, Ohio 43215-2220
Attention: Corporate Fixed-Income Securities
Payments
All notices of payment on or in respect of the Notes and written confirmation of
each such payment to:
The Bank of New York
ABA #021-000-018
BNF: IOC566
F/A/O Nationwide Life Insurance Company
Attention: P&I Department
PPN 31529# AB 9
Security Description: ______________________
Notices
All notices of payment on or in respect of the Notes and written confirmation of
each such payment to:
Nationwide Life Insurance Company
c/o The Bank of New York
P. O. Box 19266
Newark, New Jersey 07195
Attention: P&I Department
With a copy to:
Nationwide Life Insurance Company
One Nationwide Plaza (1-32-05)
Columbus, Ohio 43215-2220
Attention: Investment Accounting
All notices and communications other than those in respect to payments to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 31-4156830
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
NATIONWIDE MUTUAL INSURANCE COMPANY Series B $5,000,000
One Nationwide Plaza (1-33-07)
Columbus, Ohio 43215-2220
Attention: Corporate Fixed-Income Securities
Payments
All notices of payment on or in respect of the Notes and written confirmation of
each such payment to:
The Bank of New York
ABA #021-000-018
BNF: IOC566
F/A/O Nationwide Mutual Insurance Company
Attention: P&I Department
PPN 31529# AB 9
Security Description: ____________________
Notices
All notices of payment on or in respect of the Notes and written confirmation of
each such payment to:
Nationwide Mutual Insurance Company
c/o The Bank of New York
P. O. Box 19266
Newark, New Jersey 07195
Attention: P&I Department
With a copy to:
Nationwide Mutual Insurance Company
One Nationwide Plaza (1-32-05)
Columbus, Ohio 43215-2220
Attention: Investment Accounting
All notices and communications other than those in respect to payments to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 31-4177100
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
NATIONWIDE MUTUAL FIRE INSURANCE Series B $3,000,000
COMPANY
One Nationwide Plaza (1-33-07)
Columbus, Ohio 43215-2220
Attention: Corporate Fixed-Income Securities
Payments
All notices of payment on or in respect of the Notes and written confirmation of
each such payment to:
The Bank of New York
ABA #021-000-018
BNF: IOC566
F/A/O Nationwide Mutual Fire Insurance Company
Attention: P&I Department
PPN 31529# AB 9
Security Description: ________________
Notices
All notices of payment on or in respect of the Notes and written confirmation of
each such payment to:
Nationwide Mutual Fire Insurance Company
c/o The Bank of New York
P. O. Box 19266
Newark, New Jersey 07195
Attention: P&I Department
With a copy to:
Nationwide Mutual Fire Insurance Company
One Nationwide Plaza (1-32-05)
Columbus, Ohio 43215-2220
Attention: Investment Accounting
All notices and communications other than those in respect to payments to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 31-4177110
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
JEFFERSON-PILOT LIFE INSURANCE COMPANY Series A --
P. O. Box 21008 Series B --
Greensboro, North Carolina 27420 Series C $10,000,000
Attention: Securities Administration - 3630
Telefacsimile: (336) 691-3025
Overnight Mail Address:
100 North Greene Street
Greensboro, North Carolina 27401
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Ferrellgas, L.P. and as to interest rate, security, description, maturity date,
PPN 31529# AC 7, principal, interest or premium) to:
Jefferson-Pilot Life Insurance Company
c/o The Bank of New York
ABA #021 000 018 BNF: IOC566
Attention: P&I Department
Notices
All notices of payment on or in respect of the Notes and written confirmation of
each such payment, to be addressed to:
Jefferson-Pilot Life Insurance Company
c/o The Bank of New York
P. O. Box 19266
Newark, New Jersey 07195
Attention: P&I Department
with duplicate notice to Jefferson-Pilot Life Insurance Company at the address
first provided above.
All notices and communications other than those in respect to payments to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 56-0359860
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
ALEXANDER HAMILTON LIFE INSURANCE Series A --
COMPANY OF AMERICA Series B $10,000,000
P. O. Box 21008 Series C --
Greensboro, North Carolina 27420
Attention: Securities Administration - 3630
Telefacsimile: (336) 691-3025
Overnight Mail Address:
100 North Greene Street
Greensboro, North Carolina 27401
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Ferrellgas, L.P. and as to interest rate, security, description, maturity date,
PPN 31529# AB 9, principal, interest or premium) to:
Alexander Hamilton Life Insurance Company of America
c/o The Bank of New York
ABA #021 000 018 BNF: IOC566
Attention: P&I Department
Notices
All notices of payment on or in respect of the Notes and written confirmation of
each such payment, to be addressed to:
Alexander Hamilton Life Insurance Company of America
c/o The Bank of New York
P. O. Box 19266
Newark, New Jersey 07195
Attention: P&I Department
with duplicate notice to Alexander Hamilton Life Insurance Company of America at
the address first provided above.
All notices and communications other than those in respect to payments to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 56-1311063
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
TEACHERS INSURANCE AND ANNUITY Series A --
ASSOCIATION OF AMERICA Series B --
730 THIRD AVENUE Series C $15,000,000
New York, New York 10017-3263
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Ferrellgas, L.P. and as to interest rate, security description, maturity date,
PPN 31529# AC 7, principal, premium or interest) to:
The Chase Manhattan Bank
ABA #021000021
New York, New York
Account of: Teachers Insurance and Annuity Association of America
Account Number 900-9-000200
For further credit to: Account Number G07040
On order of: Ferrellgas, L.P., PPN 31529# AC 7
Notices
All notices of payment on or in respect of the Notes and written confirmation of
each such payment to:
Teachers Insurance and Annuity Association of America
730 Third Avenue
New York, New York 10017-3206
Attention: Securities Accounting Division
Telephone: (212) 916-6004
Telefacsimile: (212) 916-6955
All other notices and communications to be addressed to:
Teachers Insurance and Annuity Association of America
730 Third Avenue, 4th Floor
New York, New York 10017-3206
Attention: Securities Division, Archibald Team, Felicissimo Falcon
Telephone: (212) 916-6210 or (212) 490-9000 (General Number)
Telefacsimile: (212) 916-6582 (Team Fax Number)
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 13-1624203
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
MASSACHUSETTS MUTUAL LIFE INSURANCE Series A $3,000,000
COMPANY Series B $3,000,000
1295 State Street Series C $3,000,000
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Ferrellgas, L.P. and as to interest rate, security, description, maturity date,
PPN, principal, premium or interest) to:
Citibank, N.A. (ABA #021000089)
111 Wall Street
New York, New York 10043
for credit to: MassMutual Long Term Pool Account Number 4067-3488
Re: Description of security, principal and interest split
With telephone advice of payment to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (413) 744-3561.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments, to be addressed Attention: Securities Custody
and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 04-1590850
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
MASSACHUSETTS MUTUAL LIFE INSURANCE Series A $800,000
COMPANY Series B $800,000
1295 State Street Series C $800,000
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Ferrellgas, L.P. and as to interest rate, security, description, maturity date,
PPN, principal, premium or interest) to:
Chase Manhattan Bank, N.A. (ABA #021000021)
4 Chase MetroTech Center
New York, New York 10081
for credit to: MassMutual Pension Management Account Number 910-2594018
Re: Description of security, principal and interest split
With telephone advice of payment to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (413) 744-3561.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments, to be addressed Attention: Securities Custody
and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 04-1590850
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
C.M. LIFE INSURANCE COMPANY Series A $700,000
c/o Massachusetts Mutual Life Insurance Company Series B $700,000
1295 State Street Series C $700,000
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Ferrellgas, L.P., and as to interest rate, security, description, maturity date,
PPN, principal, premium or interest) to:
Citibank, N.A.
111 Wall Street
New York, New York 10043
ABA #021000089
for credit to: Segment 43 - Universal Life Account Number 4068-6561
Re: Description of security, principal and interest split
with telephone advice of payment to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (413) 744-3561.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments, to be addressed Attention: Securities Custody
and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 06-1041383
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
MASSACHUSETTS MUTUAL LIFE INSURANCE Series A $500,000
COMPANY Series B $500,000
1295 State Street Series C $500,000
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Ferrellgas, L.P. and as to interest rate, security, description, maturity date,
PPN, principal, premium or interest) to:
Chase Manhattan Bank, N.A. (ABA #021000021)
4 Chase MetroTech Center
New York, New York 10081
for credit to: IFM Non-Traditional Account Number 910-2509073
Re: Description of security, principal and interest split
With telephone advice of payment to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (413) 744-3561.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments, to be addressed Attention: Securities Custody
and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 04-1590850
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
THE GUARDIAN LIFE INSURANCE COMPANY Series A --
OF AMERICA Series B $15,000,000
7 HANOVER SQUARE Series C --
New York, New York 10004-2616
Attention: Tom Donohue, Investment Department 20-D
Fax Number: (212) 919-2656/2658
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Ferrellgas, L.P. and as to interest rate, security, description, maturity date,
PPN 31529# AB 9, principal, premium or interest) to:
The Chase Manhattan Bank
FED ABA #021000021
CHASE/NYC/CTR/BNF
A/C 900-9-000200
Reference A/C #G05978, Guardian Life And the name and CUSIP for which
payment is being made
Notices
All notices of payments, on or in respect of the Notes and written confirmation
of each such payment to:
The Guardian Life Insurance Company of America
7 Hanover Square
New York, New York 10004-2616
Attention: Investment Accounting Dept. 17-B
Fax Number: (212) 598-7011
All notices and communications other than those in respect to payments to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: CUDD & CO.
Taxpayer I.D. Number: 13-6022143
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
SUN LIFE ASSURANCE COMPANY OF CANADA Series A --
One Sun Life Executive Park Series B $4,000,000
Wellesley Hills, Massachusetts 02481 Series C --
Attention: Investment Department/Private Placements,
SC #1303
Telecopier Number: (781) 446-2392
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Ferrellgas, L.P. and as to interest rate, security, description, maturity date,
PPN 31529# AB 9, principal, premium or interest) to:
Citibank, N.A.
Attention: Gary Quitch
ABA #021-000-089
Re: Ferrellgas, L.P.
Account No.: 36112805
For Further Credit: 199 541
Notices
All notices of mandatory payment, on or in respect of the Notes and written
confirmation of each such payment and any audit confirmation to:
Sun Life Assurance Company of Canada
One Sun Life Executive Park, SC 1395
Wellesley Hills, Massachusetts 02481
Attention: Manager, Securities Accounting
All other notices and communications, including notices of optional prepayments,
to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 38-1082080
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
SUN LIFE ASSURANCE COMPANY OF CANADA Series A --
One Sun Life Executive Park Series B $3,000,000
Wellesley Hills, Massachusetts 02481 Series C --
Attention: Investment Department/Private Placements,
SC #1303
Telecopier Number: (781) 446-2392
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Ferrellgas, L.P. and as to interest rate, security, description, maturity date,
PPN 31529# AB 9, principal, premium or interest) to:
Citibank, N.A.
Attention: Gary Quitch
ABA #021-000-089
Re: Ferrellgas, L.P.
Account No.: 36112805
For Further Credit: 199 541
Notices
All notices of mandatory payment, on or in respect of the Notes and written
confirmation of each such payment and any audit confirmation to:
Sun Life Assurance Company of Canada
One Sun Life Executive Park, SC 1395
Wellesley Hills, Massachusetts 02481
Attention: Manager, Securities Accounting
All other notices and communications, including notices of optional prepayments,
to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 38-1082080
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
SUN LIFE ASSURANCE COMPANY OF CANADA Series A --
One Sun Life Executive Park Series B $1,000,000
Wellesley Hills, Massachusetts 02481 Series C --
Attention: Investment Department/Private Placements,
SC #1303
Telecopier Number: (781) 446-2392
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Ferrellgas, L.P. and as to interest rate, security, description, maturity date,
PPN 31529# AB 9, principal, premium or interest) to:
Citibank, N.A.
Attention: Gary Quitch
ABA #021-000-089
Re: Ferrellgas, L.P.
Account No.: 36112805
For Further Credit: 199 541
Notices
All notices of mandatory payment, on or in respect of the Notes and written
confirmation of each such payment and any audit confirmation to:
Sun Life Assurance Company of Canada
One Sun Life Executive Park, SC 1395
Wellesley Hills, Massachusetts 02481
Attention: Manager, Securities Accounting
All other notices and communications, including notices of optional prepayments,
to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 38-1082080
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
SUN LIFE ASSURANCE COMPANY OF CANADA Series A --
One Sun Life Executive Park Series B $750,000
Wellesley Hills, Massachusetts 02481 Series C --
Attention: Investment Department/Private Placements,
SC #1303
Telecopier Number: (781) 446-2392
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Ferrellgas, L.P. and as to interest rate, security, description, maturity date,
PPN 31529# AB 9, principal, premium or interest) to:
Citibank, N.A.
Attention: Gary Quitch
ABA #021-000-089
Re: Ferrellgas, L.P.
Account No.: 36112805
For Further Credit: 199 541
Notices
All notices of mandatory payment, on or in respect of the Notes and written
confirmation of each such payment and any audit confirmation to:
Sun Life Assurance Company of Canada
One Sun Life Executive Park, SC 1395
Wellesley Hills, Massachusetts 02481
Attention: Manager, Securities Accounting
All other notices and communications, including notices of optional prepayments,
to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 38-1082080
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
SUN LIFE ASSURANCE COMPANY OF CANADA Series A --
One Sun Life Executive Park Series B $500,000
Wellesley Hills, Massachusetts 02481 Series C --
Attention: Investment Department/Private Placements,
SC #1303
Telecopier Number: (781) 446-2392
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Ferrellgas, L.P. and as to interest rate, security, description, maturity date,
PPN 31529# AB 9, principal, premium or interest) to:
Citibank, N.A.
Attention: Gary Quitch
ABA #021-000-089
Re: Ferrellgas, L.P.
Account No.: 36112805
For Further Credit: 199 541
Notices
All notices of mandatory payment, on or in respect of the Notes and written
confirmation of each such payment and any audit confirmation to:
Sun Life Assurance Company of Canada
One Sun Life Executive Park, SC 1395
Wellesley Hills, Massachusetts 02481
Attention: Manager, Securities Accounting
All other notices and communications, including notices of optional prepayments,
to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 38-1082080
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
SUN LIFE ASSURANCE COMPANY OF CANADA Series A --
One Sun Life Executive Park Series B $300,000
Wellesley Hills, Massachusetts 02481 Series C --
Attention: Investment Department/Private Placements,
SC #1303
Telecopier Number: (781) 446-2392
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Ferrellgas, L.P. and as to interest rate, security, description, maturity date,
PPN 31529# AB 9, principal, premium or interest) to:
Bank of New York P&I Department ABA #021-000-018 Account #: IOC 566 Re:
Ferrellgas, L.P.
For Further Credit: IOC 566
Notices
All notices of mandatory payment, on or in respect of the Notes and written
confirmation of each such payment and any audit confirmation to:
Sun Life Assurance Company of Canada
One Sun Life Executive Park, SC 1395
Wellesley Hills, Massachusetts 02481
Attention: Manager, Securities Accounting
All other notices and communications, including notices of optional prepayments,
to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 38-1082080
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
SUN LIFE ASSURANCE COMPANY OF CANADA Series A --
One Sun Life Executive Park Series B $200,000
Wellesley Hills, Massachusetts 02481-5615 Series C --
Attention: Investment Department/Private Placements,
SC #1303
Telecopier Number: (781) 446-2392
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Ferrellgas, L.P. and as to interest rate, security, description, maturity date,
PPN 31529# AB 9, principal, premium or interest) to:
Bank of New York P&I Department ABA #021-000-018 Account #: IOC 566 Re:
Ferrellgas, L.P.
For Further Credit: IOC 566
Notices
All notices of mandatory payment, on or in respect of the Notes and written
confirmation of each such payment and any audit confirmation to:
Sun Life Assurance Company of Canada
One Sun Life Executive Park, SC 1395
Wellesley Hills, Massachusetts 02481
Attention: Manager, Securities Accounting
All other notices and communications, including notices of optional prepayments,
to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 38-1082080
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
SUN LIFE INSURANCE AND ANNUITY Series A --
COMPANY OF NEW YORK Series B $250,000
One Sun Life Executive Park Series C --
Wellesley Hills, Massachusetts 02481-5615
Attention: Investment Department/Private Placements, SC #1303
Telecopier Number: (617) 446-2392
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Ferrellgas, L.P. and as to interest rate, security, description, maturity date,
PPN 31529# AB 9, principal, premium or interest") to:
The Chase Manhattan Bank
Private Placement Processing
ABA No. 021-000-021
Account No. 900-9-000192
Re: Ferrellgas, L.P.
Chase Account#: G 51642
Notices
All notices of mandatory payment, on or in respect of the Notes and written
confirmation of each such payment to:
Sun Life Assurance Company of Canada
One Sun Life Executive Park, SC 1395
Wellesley Hills, Massachusetts 02481
Attention: Manager, Securities Accounting
All notices and communications other than those in respect to mandatory payments
to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 04-2845273
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
PRINCIPAL LIFE INSURANCE COMPANY Series A --
c/o Principal Capital Management, LLC Series B $3,000,000
801 Grand Avenue Series C --
Des Moines, Iowa 50392-0800
Payments
All payments on or in respect of the Notes to be made by 12:00 Noon (New York
City time) by wire transfer of immediately available funds to: (identifying each
payment as Ferrellgas, L.P. and as to interest rate, security, description,
maturity date, PPN, principal, premium or interest) to:
ABA #073000228
Norwest Bank Iowa, N.A.
7th and Walnut Streets
Des Moines, Iowa 50309
For credit to Principal Life Insurance Company
Account No. 0000014752
OBI PFGSE (S) B0062740() Ferrellgas L.P.
With sufficient information (including interest rate, maturity date,
interest amount, principal amount and premium amount, if applicable) to
identify the source and application of such funds.
All notices with respect to payments to:
Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0960
Attention: Investment Accounting - Securities
Telefacsimile: (515) 248-2643
Confirmation: (515) 247-0689
All other notices and communications to:
Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0800
Attention: Investment - Securities
Telefacsimile: (515) 248-2490
Confirmation: (515) 248-3495
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 42-0127290
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
PRINCIPAL LIFE INSURANCE COMPANY Series A --
c/o Principal Capital Management, LLC Series B $3,000,000
801 Grand Avenue Series C --
Des Moines, Iowa 50392-0800
Payments
All payments on or in respect of the Notes to be made by 12:00 Noon (New York
City time) by wire transfer of immediately available funds to: (identifying each
payment as Ferrellgas, L.P. and as to interest rate, security, description,
maturity date, PPN, principal, premium or interest) to:
ABA #073000228
Norwest Bank Iowa, N.A.
7th and Walnut Streets
Des Moines, Iowa 50309
For credit to Principal Life Insurance Company
Account No. 0000014752
OBI PFGSE (S) B0062740() Ferrellgas L.P.
With sufficient information (including interest rate, maturity date,
interest amount, principal amount and premium amount, if applicable) to
identify the source and application of such funds.
All notices with respect to payments to:
Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0960
Attention: Investment Accounting - Securities
Telefacsimile: (515) 248-2643
Confirmation: (515) 247-0689
All other notices and communications to:
Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0800
Attention: Investment - Securities
Telefacsimile: (515) 248-2490
Confirmation: (515) 248-3495
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 42-0127290
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
PRINCIPAL LIFE INSURANCE COMPANY Series A --
c/o Principal Capital Management, LLC Series B $2,000,000
801 Grand Avenue Series C --
Des Moines, Iowa 50392-0800
Payments
All payments on or in respect of the Notes to be made by 12:00 Noon (New York
City time) by wire transfer of immediately available funds to: (identifying each
payment as Ferrellgas, L.P. and as to interest rate, security, description,
maturity date, PPN, principal, premium or interest) to:
ABA #073000228
Norwest Bank Iowa, N.A.
7th and Walnut Streets
Des Moines, Iowa 50309
For credit to Principal Life Insurance Company
Account No. 0000014752
OBI PFGSE (S) B0062740() Ferrellgas L.P.
With sufficient information (including interest rate, maturity date,
interest amount, principal amount and premium amount, if applicable) to
identify the source and application of such funds.
All notices with respect to payments to:
Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0960
Attention: Investment Accounting - Securities
Telefacsimile: (515) 248-2643
Confirmation: (515) 247-0689
All other notices and communications to:
Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0800
Attention: Investment - Securities
Telefacsimile: (515) 248-2490
Confirmation: (515) 248-3495
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 42-0127290
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
PRINCIPAL LIFE INSURANCE COMPANY Series A --
c/o Principal Capital Management, LLC Series B $2,000,000
801 Grand Avenue Series C --
Des Moines, Iowa 50392-0800
Payments
All payments on or in respect of the Notes to be made by 12:00 Noon (New York
City time) by wire transfer of immediately available funds to: (identifying each
payment as Ferrellgas, L.P. and as to interest rate, security, description,
maturity date, PPN, principal, premium or interest) to:
ABA #073000228
Norwest Bank Iowa, N.A.
7th and Walnut Streets
Des Moines, Iowa 50309
For credit to Principal Life Insurance Company
Account No. 0000014752
OBI PFGSE (S) B0062740() Ferrellgas L.P.
With sufficient information (including interest rate, maturity date,
interest amount, principal amount and premium amount, if applicable) to
identify the source and application of such funds.
All notices with respect to payments to:
Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0960
Attention: Investment Accounting - Securities
Telefacsimile: (515) 248-2643
Confirmation: (515) 247-0689
All other notices and communications to:
Principal Capital Management, LLC
801 Grand Avenue
Des Moines, Iowa 50392-0800
Attention: Investment - Securities
Telefacsimile: (515) 248-2490
Confirmation: (515) 248-3495
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 42-0127290
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
THE CANADA LIFE ASSURANCE COMPANY Series A $5,000,000
330 University Avenue, SP-11 Series B --
Toronto, Ontario, Canada M5G 1R8 Series C
Attention: Paul English, Associate Treasurer,
U.S. Private Placements
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds to:
FOR REGULAR PRINCIPAL AND INTEREST:
Chase Manhattan Bank
ABA #021-000-021
Account No. 900-9-000200
Trust Account No. G52708, The Canada Life Assurance Company
Attention: Bond Interest
Reference: PPN number, name of issuer, rate, maturity date, type of
security, whether principal and/or interest and due date
FOR CALL OR MATURITY:
Chase Manhattan Bank
ABA #021-000-021
Account No. 900-9-000192
Trust Account No. G52708, The Canada Life Assurance Company
Attention: Doll Balbadar
Reference: PPN number, name of issuer, rate, maturity date, whether
principal and/or interest and effective date of call or
maturity.
<PAGE>
Notices
All notices and communications (including financial statements) to be addressed
as first provided above, except notices with respect to payments and written
confirmation of each such payment, to be addressed:
Chase Manhattan Bank
North America Insurance
3 Chase MetroTech Centre - 6th Floor
Brooklyn, New York 11245
Attention: Ms. Doll Balbadar
with a copy to:
The Canada Life Assurance Company
330 University Avenue, SP-12
Toronto, Ontario, Canada M5G 1R8
Attention: Supervisor, Securities Accounting
Name of Nominee in which Notes are to be issued: J. Romeo & Co.
Taxpayer I.D. Number: 38-0397420
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
CANADA LIFE INSURANCE COMPANY OF Series A
AMERICA Series B
c/o The Canada Life Assurance Company Series C $4,000,000
Corporate Treasury, SP-11
330 University Avenue
Toronto, Ontario, Canada M5G 1R8
Attention: Brian Lynch, Associate Treasurer, U.S. Private Placements
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds to:
FOR REGULAR PRINCIPAL AND INTEREST:
Chase Manhattan Bank
ABA #021-000-021
Account #900-9-000168
Trust Account No. G52709, Canada Life Insurance Company of America
Attention: Bond Interest
Reference: PPN number, name of issuer, rate, maturity date, type of
security, whether principal and/or interest and due date
FOR CALL OR MATURITY:
Chase Manhattan Bank
ABA #021-000-021
Account No. 900-9-000192
Trust Account No. G52708, The Canada Life Assurance Company
Attention: Doll Balbadar
Reference: PPN number, name of issuer, rate, maturity date,
whether principal and/or interest and effective date of call or
maturity.
Notices
All notices and communications (including financial statements) to be addressed
as first provided above, except notices with respect to payments and written
confirmation of each such payment, to be addressed:
Chase Manhattan Bank
North America Insurance
3 Chase MetroTech Centre - 6th Floor
Brooklyn, New York 11245
Attention: Ms. Doll Balbadar
with a copy to:
The Canada Life Assurance Company
330 University Avenue, SP-12
Toronto, Ontario, Canada M5G 1R8
Attention: Supervisor, Securities Accounting
Name of Nominee in which Notes are to be issued: J. Romeo & Co.
Taxpayer I.D. Number: 38-2816473
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
CANADA LIFE INSURANCE COMPANY OF Series A
NEW YORK Series B
c/o The Canada Life Assurance Company Series C $1,000,000
Corporate Treasury, SP-11
330 University Avenue
Toronto, Ontario, Canada M5G 1R8
Attention: Brian Lynch, Associate Treasurer, U.S. Private Placements
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds to:
Chase Manhattan Bank
ABA #021-000-021
A/C #900-9-000200
Trust Account No. G52685, Canada Life of New York
Attention: Bond Interest
Reference: PPN number, name of issuer, rate, maturity date, type of
security, whether principal and/or interest and due date
Notices
All notices and communications (including financial statements) to be addressed
as first provided above, except notice with respect to payment, and written
confirmation of each such payment, to be addressed:
Chase Manhattan Bank
North America Insurance
3 Chase MetroTech Centre - 6th Floor
Brooklyn, New York 11245
Attention: Ms. Doll Balbadar
with a copy to:
The Canada Life Assurance Company
330 University Avenue, SP-12
Toronto, Ontario, Canada M5G 1R8
Attention: Supervisor, Securities Accounting
Name of Nominee in which Notes are to be issued: J. Romeo & Co.
Taxpayer I.D. Number: 13-2690792
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
LUTHERAN BROTHERHOOD Series A $7,000,000
625 Fourth Avenue South Series B --
Minneapolis, Minnesota 55415 Series C --
Attention: Investment Division
Payments
All payments of principal, interest and premium on the account of the Notes
shall be made by bank wire transfer (in immediately available funds) to:
Norwest Bank Minnesota, N.A.
ABA #091000019
For Credit to Trust Clearing Account #0000840245
Attention: Sarah Corcoran
For credit to: Lutheran Brotherhood
Account Number 12651300
All payments must include the following information:
A/C Lutheran Brotherhood
Account No.: 12561300
Security Description
PPN Number 31529# AA1
Reference Purpose of Payment
Interest and/or Principal Breakdown
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments and written confirmation of each such payment,
to be addressed:
Lutheran Brotherhood
625 Fourth Avenue South, 10th Floor
Minneapolis, Minnesota 55415
Attention: Investment Accounting/Trading Administrator
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 41-0385700
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
PHOENIX HOME LIFE MUTUAL INSURANCE Series A --
COMPANY Series B --
One American Row Series C $5,000,000
Hartford, Connecticut 06115
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Ferrellgas, L.P. and as to interest rate, security, description, maturity date,
PPN, principal, premium or interest) to:
ABA #021 000 021
Chase Manhattan Bank, N.A.
New York, New York
Account Number: 900 9000 200
Account Name: Income Processing
Reference: Phoenix Home Life Account #G05143
OBI=[Name of Issuer, PPN=__________, RATE=____%, DUE=___________
(include principal and interest breakdown and premium, if
any)
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed:
Phoenix Home Life Mutual Insurance Company
c/o Phoenix Investment Partners, LTD.
56 Prospect Street
P. O. Box 150480
Hartford, Connecticut 06115-0480
Attention: Private Placements Division
Telecopier Number: (860) 403-5451
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 06-0493340
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
BERKSHIRE LIFE INSURANCE COMPANY Series A --
700 South Street Series B --
Pittsfield, Massachusetts 01201 Series C $3,000,000
Attention: Securities Department
Telefacsimile: (413) 442-9763
Telephone: (413) 499-4321
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds for credit to:
Berkshire Life Insurance Company
Account Number 002-4-020877
The Chase Manhattan Bank, N.A.
ABA #021000021
With sufficient information (including Ferrellgas L.P., PPN 31529 AC 7,
interest rate, maturity and whether payment is of principal, premium or
interest) to identify the source and application of funds.
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 04-1083480
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
WOODMEN ACCIDENT AND LIFE COMPANY Series A $2,000,000
P.O. Box 82288 Series B --
Lincoln, Nebraska 68501 Series C --
Attention: Securities Division
Telecopy Number: (402) 437-4392
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Ferrellgas, L.P. and as to interest rate, security, description, maturity date,
PPN 31529# AA 1, principal, premium or interest) to:
U.S. Bank
13 and M Streets
Lincoln, Nebraska 68508
ABA #104-000-029
for credit to: Woodmen Accident and Life Company's General Fund
Account Number 1-494-0092-9092
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above; provided, however, all notices and communications delivered by overnight
courier shall be addressed as follows:
Woodmen Accident and Life Company
1526 K Street
Lincoln, Nebraska 68508
Attention: Securities Division
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 47-0339220
<PAGE>
PRINCIPAL AMOUNT
SERIES OF NOTES TO BE
NAME OF PURCHASERS OF NOTES PURCHASED
CLARICA LIFE INSURANCE COMPANY-U.S. Series A $2,000,000
c/o Clarica U.S. Inc. Series B --
13890 Bishops Drive, Suite 300 Series C --
Brookfield, Wisconsin 53005
Attention: Connie Keller
Phone: (262) 641-4022
Facsimile: (262) 641-4055
Payments
All payments on or in respect of the Notes to be made by wire or intrabank
transfer of immediately available funds to:
Norwest Bank Minnesota, N.A.
ABA #091000019
BNF A/C: 0000840245 (must be 10 digits in length)
BNF: Trust Wire Clearing (must be on line 2)
OBI= FFC:I.C. 13326600 Ferrellgas, L.P. PPN: 31529# AA 1
P=___________ I=_____________
End Balance=_______________
Notices
All notices with respect to payments and written confirmation of each such
payment, to be addressed to:
Clarica Life Insurance Company-U.S.
c/o Clarica U.S. Inc.
13890 Bishops Drive, Suite 300
Brookfield, Wisconsin 53005
Attention: Tamie Greenwood
Phone: (262) 641-4027
Facsimile: (262) 641-4055
<PAGE>
All other communications to be addressed to:
Clarica Life Insurance Company-U.S.
c/o Clarica U.S. Inc.
13890 Bishops Drive, Suite 300
Brookfield, Wisconsin 53005
Phone: (262) 641-4027
Facsimile: (262) 641-4055
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 45-0208990
<PAGE>
B-14
SCHEDULE B
(to Note Purchase Agreement)
DEFINED TERMS
GENERAL PROVISIONS
Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, the same shall be done in accordance with GAAP, to the extent
applicable, except where such principles are inconsistent with the express
requirements of this Agreement.
DEFINITIONS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"Affiliate" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, (b) any Person beneficially owning or holding, directly or
indirectly, 10% or more of any class of voting or equity interests of such first
Person or any subsidiary of such first Person or any corporation of which such
first Person and the subsidiaries of such first Person beneficially own or hold,
in the aggregate, directly or indirectly, 10% or more of any class of voting or
equity interests, and (c) any officer or director of such first Person. As used
in this definition, "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 the ownership of voting securities, by contract or
otherwise. Unless the context otherwise clearly requires, any reference to an
"Affiliate" is a reference to an Affiliate (other than a Restricted Subsidiary)
of the Company.
"Adjusted Consolidated Cash Flow" means for any period the sum of (i)
Consolidated Cash Flow during such period, plus (ii) to the extent deducted from
Consolidated Net Income for purposes of determining Consolidated Cash Flow for
such period, Synthetic Lease Rent Payments during such period.
"Adjusted Consolidated Debt" means, as of any date of determination,
the sum of (i) Consolidated Debt, plus (ii) Consolidated Synthetic Lease
Obligations on such date.
"Adjusted Consolidated Interest Expense" means for any period the sum
of (i) Consolidated Interest Expense for such period, plus (ii) Synthetic Lease
Interest Expense for such period.
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary in any other Person pursuant to which such Person shall
become a Restricted Subsidiary or shall be merged with or into the Company or
any Restricted Subsidiary, (b) the acquisition by the Company or any Restricted
Subsidiary of the assets of any Person (other than a Restricted Subsidiary)
which constitutes all or substantially all of the assets of such Person or (c)
the acquisition by the Company or any Restricted Subsidiary of any division or
line of business of any Person (other than a Restricted Subsidiary).
"Asset Sale" means any Transfer except:
(a) any
(i) Transfer from a Restricted Subsidiary to the
Company or a Wholly-Owned Restricted Subsidiary;
(ii) Transfer from the Company to a Wholly-Owned
Restricted Subsidiary; and
(iii) Transfer from the Company to a Restricted
Subsidiary (other than a Wholly-Owned Restricted Subsidiary)
or from a Restricted Subsidiary to another Restricted
Subsidiary (other than a Wholly-Owned Restricted Subsidiary),
which in either case is for Fair Market Value,
so long as immediately before and immediately after the consummation of
any such Transfer and after giving effect thereto, no Default or Event
of Default exists; and
(b) any Transfer made in the ordinary course of business and
involving only property that is inventory held for sale.
"Available Cash" means with respect to any period and without
duplication:
(a) the sum of:
(i) all cash receipts of the Company during such
period from all sources (including, without limitation,
distributions of cash received by the Company from a
Subsidiary and borrowings made under the Working Capital
Facility); and
(ii) any reduction with respect to such period 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 period;
(b) less the sum of:
(i) all cash disbursements of the Company during
such period 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 a Subsidiary and cash
distributions to the General Partner and the Limited Partners
(but only to the extent that such cash distributions to the
General Partner and the Limited Partners exceed Available Cash
for the immediately preceding fiscal quarter); and
(ii) any cash reserves established with respect to
such period, and any increase with respect to such period in a
cash reserve previously established pursuant to this clause
(b) (ii) from the level of such reserve at the end of the
prior period, 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 Company (including, without limitation,
reserves for future capital expenditures or capital
contributions to a Subsidiary) or (B) to provide funds for
distributions to the General Partner and the Limited Partners
in respect of any one or more of the next four fiscal quarters
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 Company is a party or by
which it is bound or its assets are subject.
Notwithstanding the foregoing (x) disbursements (including, without limitation,
contributions to a Subsidiary or disbursements on behalf of a Subsidiary) made
or reserves established, increased or reduced after the end of any fiscal
quarter but on or before the date on which the Company makes its distribution of
Available Cash in respect of such fiscal quarter pursuant to Section 10.5(a)
shall be deemed to have been made, established, increased or reduced, for
purposes of determining Available Cash, with respect to such fiscal quarter if
the General Partner so determines and (y) "Available Cash" with respect to any
period shall not include any cash receipts or reductions in reserves or take
into account any disbursements made or reserves established after the
Liquidation Date.
For purposes of the definition of "Available Cash" the following terms
have the following meanings:
"Additional Limited Partner" means a Person admitted to the
Company as a Limited Partner pursuant to Section 11.6 of the
Partnership Agreement and who is shown as such on the books and records
of the Company,
"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 12.1 or Section 12.2 of the
Partnership Agreement.
"Initial Limited Partner means Ferrellgas Partners, L.P., a
Delaware limited partnership.
"Limited Partner" means the Initial Limited Partner, the
General Partner pursuant to Section 4.2 of the Partnership Agreement,
each Substituted Limited Partner, if any, each Additional Limited
Partner and any Departing Partner upon the change of its status from
General Partner to Limited Partner pursuant to Section 12.3 of the
Partnership Agreement, but excluding any such Person from and after the
time it withdraws from the Company.
"Liquidation Date" means (a) in the case of an event giving
rise to the dissolution of the Company of the type described in clauses
(a) and (b) of the first sentence of Section 13.2 of the Partnership
Agreement, the date on which the applicable time period during which
the General Partner and the Limited Partners have the right to elect to
reconstitute the Company 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 Company, the date on which such
event occurs.
"Partnership Agreement" means the Agreement of Limited
Partnership of Ferrellgas, L.P. dated as of July 5, 1995
among the General Partner and the Initial Limited Partner.
"Partnership Interest" means the interest of the General
Partner or a Limited Partner in the Company.
"Substituted Limited Partner" means a Person who is admitted
as a Limited Partner to the Company pursuant to Section 11.3 of the
Partnership Agreement 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 Company.
"Business Day" means (a) for the purposes of Section 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in San Francisco, California, Chicago, Illinois or
Kansas City, Missouri are required or authorized to be closed.
"Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Capital Lease Obligation" means, with respect to any Person and a
Capital Lease, the amount of the obligation of such Person as the lessee under
such Capital Lease which would, in accordance with GAAP, appear as a liability
on a balance sheet of such Person.
"Closing" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"Company" means Ferrellgas, L.P., Delaware limited partnership.
"Confidential Information" is defined in Section 20.
"Consolidated Assets" means, at any time, the total assets of the
Company and its Restricted Subsidiaries which would be shown as assets on a
consolidated balance sheet of the Company and its Restricted Subsidiaries as of
such time prepared in accordance with GAAP, after eliminating all amounts
properly attributable to minority interests, if any, in the stock and surplus of
Restricted Subsidiaries.
"Consolidated Cash Flow" means, in respect of any period, the excess,
if any, of (a) the sum of, without duplication, the amounts for such period,
taken as a single accounting period, of (i) Consolidated Net Income for such
period, plus (ii) to the extent deducted in the determination of Consolidated
Net Income for such period, after excluding amounts attributable to minority
interests in Subsidiaries and without duplication, (A) Consolidated Non-Cash
Charges, (B) Consolidated Interest Expense and (C) Consolidated Income Tax
Expense, over (b) any non-cash items increasing Consolidated Net Income for such
period to the extent that such items constitute reversals of Consolidated
Non-Cash Charges for a previous period and which were included in the
computation of Consolidated Cash Flow for such previous period pursuant to the
provisions of the preceding clause (a), provided that in calculating
Consolidated Cash Flow for any such period, (1) Consolidated Cash Flow shall be
calculated after giving effect on a pro forma basis for such period, in all
respects in accordance with GAAP, to any Asset Acquisitions (including, without
limitation any Asset Acquisition by the Company or any Restricted Subsidiary
giving rise to the need to determine Consolidated Cash Flow as a result of the
Company or one of its Restricted Subsidiaries (including any Person that becomes
a Restricted Subsidiary as result of any such Asset Acquisition) incurring,
assuming or otherwise becoming liable for any Debt) occurring during the period
commencing on the first day of such period to and including the date of such
determination, as if such Asset Acquisition occurred on the first day of such
period and (2) Consolidated Cash Flow attributable to any assets or property
subject to an Asset Sale by the Company or any Restricted Subsidiary on or prior
to the date of such determination shall be deemed to be zero for such period.
"Consolidated Debt" means, as of any date of determination, the total
of all Debt of the Company and its Restricted Subsidiaries outstanding on such
date, after eliminating all offsetting debits and credits between the Company
and its Restricted Subsidiaries and all other items required to be eliminated in
the course of the preparation of consolidated financial statements of the
Company and its Restricted Subsidiaries in accordance with GAAP.
"Consolidated Income Tax Expense" means, with respect to any period,
all provisions for Federal, state, local and foreign income taxes of the Company
and its Restricted Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any period, the
sum (without duplication) of the following (in each case, eliminating all
offsetting debits and credits between the Company and its Restricted
Subsidiaries and all other items required to be eliminated in the course of the
preparation of consolidated financial statements of the Company and its
Restricted Subsidiaries in accordance with GAAP): (a) all interest in respect of
Debt of the Company and its Restricted Subsidiaries whether earned or accrued
(including non-cash interest payments and imputed interest on Capital Lease
Obligations) deducted in determining Consolidated Net Income for such period,
and (b) all debt discount and expense amortized or required to be amortized in
the determination of Consolidated Net Income for such period, provided that for
purposes of making any computation pursuant to Section 10.1(c)(iii) and Section
10.11 (including any calculation of Consolidated Cash Flow relating thereto),
Consolidated Interest Expense shall be determined on a pro forma basis giving
effect to the incurrence of Debt (and the application of proceeds thereof) which
is the subject of such computation as if such Debt had been incurred (and the
proceeds thereof applied) on the first day of such period.
"Consolidated Net Income" means, with reference to any period, the net
income (or loss) of the Company and its Restricted Subsidiaries for such period
(taken as a cumulative whole), as determined in accordance with GAAP, after
eliminating all offsetting debits and credits between the Company and its
Restricted Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the Company
and its Restricted Subsidiaries in accordance with GAAP, provided that there
shall be excluded:
(a) the income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary or is merged into or consolidated with the
Company or a Subsidiary, and the income (or loss) of any Person,
substantially all of the assets of which have been acquired in any
manner, realized by such other Person prior to the date of acquisition,
(b) the income (or loss) of any Person (other than a
Subsidiary) in which the Company or any Subsidiary has an ownership
interest, except to the extent that any such income has been actually
received by the Company or such Subsidiary in the form of cash
dividends or similar cash distributions,
(c) the undistributed earnings of any Restricted Subsidiary
to the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary is not at the time
permitted by the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to such Restricted Subsidiary,
(d) any aggregate net gain or loss during such period arising
from the sale, conversion, exchange or other disposition of capital
assets (such term to include, without limitation, (i) all non-current
assets and, without duplication, and (ii) the following, whether or not
current: all fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of fixed assets, and
all Securities), and
(e) any net income or gain or loss during such period from
(i) any change in accounting principles in accordance with GAAP, (ii)
any prior period adjustments resulting from any change in accounting
principles in accordance with GAAP, or (iii) any extraordinary items.
"Consolidated Non-Cash Charges" means, with respect to any period, the
aggregate depreciation and amortization (other than amortization of debt
discount), and any non-cash employee compensation expenses for such period, in
each case, reducing Consolidated Net Income of the Company and its Restricted
Subsidiaries for such period as determined on a consolidated basis in accordance
with GAAP.
"Consolidated Synthetic Lease Obligations" means, as of any date of
determination, the total amount of the liability of the Company and its
Restricted Subsidiaries in respect of Synthetic Leases that would be required to
be capitalized on the balance sheet of the Company and its Restricted
Subsidiaries at such time, if such Synthetic Leases were required to be
classified and accounted for as Capital Leases on the balance sheet of the
Company and its Restricted Subsidiaries in accordance with GAAP.
"Credit Agreement" means the Second Amended and Restated Credit
Agreement dated July 2, 1998, between the Company and the banks named therein,
as the same may be amended and supplemented from time to time.
"Debt" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including, without limitation, all
liabilities created or arising under any conditional sale or other
title retention agreement with respect to any such property);
(c) its Capital Lease Obligations;
(d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not it
has assumed or otherwise become liable for such liabilities); and
(e) any Guaranty of such Person with respect to liabilities
of a type described in any of clauses (a) through (d) hereof.
Debt of any Person shall include all obligations of such Person of the character
described in clauses (a) through (e) to the extent such Person remains legally
liable in respect thereof notwithstanding that any such obligation is deemed to
be extinguished under GAAP.
"Default" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"Default Rate" means with respect to any Note that rate of interest
that is the greater of (i) 2% per annum above the rate of interest stated in
clause (a) of the first paragraph of such Note or (ii) 2% over the rate of
interest publicly announced by Bank of America, N.A. in Chicago, Illinois as its
"base" or "prime" rate.
"Distribution" means, in respect of any corporation, partnership,
association or other business entity:
(a) dividends or other distributions or payments on capital
stock or other equity interest of such corporation, association or
other business entity (except distributions in such stock or other
equity interest); and
(b) the redemption, retirement, purchase or acquisition of
such stock or other equity interests or of warrants, rights or other
options to purchase such stock or other equity interests (except when
solely in exchange for such stock or other equity interests) unless
made, contemporaneously, from the net proceeds of a sale of such stock
or other equity interests.
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under Section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, at any time and with respect to any
property, the sale value of such property that would be realized in an
arm's-length sale at such time between an informed and willing buyer and an
informed and willing seller (neither being under a compulsion to buy or sell).
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"General Partner" means Ferrellgas, Inc., a Delaware corporation.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State
or other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or which
asserts jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"Guaranty" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such Indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or
payment of such Indebtedness or obligation, or (ii) to maintain any
working capital or other balance sheet condition or any income
statement condition of any other Person or otherwise to advance or make
available funds for the purchase or payment of such Indebtedness or
obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such Indebtedness or
obligation of the ability of any other Person to make payment of the
Indebtedness or obligation; or
(d) otherwise to assure the owner of such Indebtedness or
obligation against loss in respect thereof.
In any computation of the Indebtedness or other liabilities of the obligor under
any Guaranty, the Indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"Holder" or "holder" means, with respect to any Note, the Person in
whose name such Note is registered in the register maintained by the Company
pursuant to Section 13.1.
"Indebtedness" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its
redemption obligations in respect of mandatorily redeemable
Preferred Stock;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including all liabilities created
or arising under any conditional sale or other title retention
agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not it
has assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money); and
(f) any Guaranty of such Person with respect to liabilities
of a type described in any of clauses (a) through (e) hereof.
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (f) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"Institutional Investor" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 2% of the aggregate principal amount
of the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"Investment" means any investment, made in cash or by delivery of
property, by the Company or any of its Restricted Subsidiaries (i) in any
Person, whether by acquisition of stock, Indebtedness or other obligations or
Security, or by loan, Guaranty, advance, capital contribution or otherwise, or
(ii) in any property that would be classified as Investments on a balance sheet
prepared in accordance with GAAP.
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"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 Company and its
Restricted Subsidiaries, taken as a whole, as such assets existed at the time of
such expenditure.
"Make-Whole Amount" is defined in Section 8.6.
"Material" means material in relation to the business, operations,
affairs, financial condition, assets, properties or prospects of the Company and
its Restricted Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Restricted Subsidiaries taken as a whole, or (b) the ability of
the Company to perform its obligations under this Agreement and the Notes, or
(c) the validity or enforceability of this Agreement or the Notes.
"Memorandum" is defined in Section 5.3.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as
such term is defined in Section 4001(a)(3) of ERISA).
"Notes", "Series A Notes", "Series B Notes", and "Series C Notes",
are defined in Section 1.
"Officer's Certificate" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Person" means an individual, partnership, joint venture, corporation,
limited liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in Section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
"Preferred Stock" means any class of capital stock of a corporation
that is preferred over any other class of capital stock of such corporation as
to the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"Priority Debt" means, without duplication, the sum of (a) all Debt of
the Company and its Restricted Subsidiaries secured by Liens permitted by
Section 10.4(m), and (b) all Debt of Restricted Subsidiaries that is not
permitted by Section 10.3(a), (b) or (c).
"property" or "properties" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"Refinancing" is defined in Section 10.1(b).
"Required Holders" means, at any time, the holders of at least 51% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"Restricted Payment" means any Distribution in respect of the Company.
For purposes of this Agreement, the amount of any Restricted Payment made in
property shall be the greater of (x) the Fair Market Value of such property (as
determined in good faith by the board of directors (or equivalent governing
body) of the Person making such Restricted Payment) and (y) the net book value
thereof on the books of such Person, in each case determined as of the date on
which such Restricted Payment is made.
"Restricted Subsidiary" means any Subsidiary (i) of which more than 80%
of the Voting Stock is beneficially owned, directly or indirectly by the
Company, (ii) which is organized under the laws of the United States or any
State thereof, (iii) which maintains substantially all of its assets and
conducts substantially all of its business within the United States, and (iv)
which is properly designated as such by the Company in the most recent notice
(or, prior to any such notice, on Schedule 5.4) with respect to such Subsidiary
given by the Company pursuant to and in accordance with the provisions of
Section 7.4.
"Sale and Leaseback Transaction" means, with respect to a Person and
property, a transaction or series of transactions pursuant to which such Person
sells such property with the intent at the time of entering into such
transaction or transactions of leasing such property for a term in excess of six
months.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Security" has the meaning set forth in section 2(a)(1) of the
Securities Act of 1933, as amended.
"Senior Debt" means (a) any Debt of the Company (other than
Subordinated Debt) and (b) any Debt of any Restricted Subsidiary.
"Senior Funded Debt" means, with respect to any Person, all Senior Debt
of such Person which by its terms, or by the terms of any instrument or
agreement relating thereto, matures or is otherwise payable one year or more
from the date of any determination thereof.
"Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
"Subordinated Debt" means any Debt of the Company that shall contain or
have applicable thereto subordination provisions substantially in the form set
forth in Exhibit 10.1 attached hereto providing for the subordination thereof to
the Notes, or other provisions as may be approved in writing prior to the
incurrence thereof by the Holders of not less than 66-2/3% in aggregate
principal amount or the outstanding Notes.
"Subsidiary" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries (unless such partnership can and does ordinarily
take major business actions without the prior approval of such Person or one or
more of its Subsidiaries). Unless the context otherwise clearly requires, any
reference to a "Subsidiary" is a reference to a Subsidiary of the Company.
"Subsidiary Stock" means the stock (or any options or warrants to
purchase stock or other Securities exchangeable for or convertible into stock)
of any Restricted Subsidiary.
"Synthetic Lease" means each arrangement, however described, under
which the obligor accounts for its interest in the property covered thereby as
the lessee of a lease which is not a Capital Lease for purposes of GAAP and as
the owner of the property for Federal income tax purposes.
"Synthetic Lease Interest Expense" means, for any period, the portion
of rent paid or payable (without duplication) for such period under Synthetic
Leases of the Company and its Restricted Subsidiaries 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 Principal Component" means for any period, the portion
of rent (exclusive of the Synthetic Lease Interest Expense) paid or payable
(without duplication) for such period under Synthetic Leases for the Company and
its Restricted Subsidiaries that was deducted in calculating Consolidated Net
Income of the Company and its Restricted Subsidiaries for such period.
"Synthetic Lease Rent Payments" means, with resect to any Person for
any period, the sum of the Synthetic Lease Interest Expense and the Synthetic
Lease Principal Component for all Synthetic Leases of such Person.
"Transfer" means, with respect to any Person, any transaction in which
such Person sells, conveys, abandons, transfers, leases (as lessor), or
otherwise disposes of (including, without limitation, in connection with a Sale
Leaseback Transaction), any of its property, including, without limitation,
Subsidiary Stock.
"Unrestricted Subsidiary" means a Subsidiary which is not a Restricted
Subsidiary.
"Voting Stock" means (i) Securities of any class of classes, the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the directors (or Persons performing similar functions) or
(ii) in the case of a partnership or joint venture, interests in the profits or
capital thereof entitling the holders of such interests to approve major
business actions.
"Wholly-Owned Restricted Subsidiary" means, at any time, any Restricted
Subsidiary one hundred percent (100%) of all of the equity interests (except
directors' qualifying shares) and voting interests of which are owned by any one
or more of the Company and the Company's other Wholly-Owned Restricted
Subsidiaries at such time.
"Working Capital Facility" means the Debt facility made available to
the Company for working capital purposes under the "Facility A Commitments"
pursuant to the Credit Agreement dated June 30, 1998, between the Company and
the banks named therein, as from time to time amended, supplemented and
Refinanced and any other credit agreement from time to time entered into by the
Company and its Restricted Subsidiaries for purposes of obtaining working
capital Debt.
<PAGE>
SCHEDULE 5.1 - OWNERSHIP OF COMPANY
The Company is owned 1% by Ferrellgas, Inc., as general partner, and
99% by Ferrellgas Partners, L.P., as limited partner.
<PAGE>
SCHEDULE 5.3 - DISCLOSURE MATERIALS
None
<PAGE>
SCHEDULE 5.4 - SUBSIDIARIES OF THE COMPANY AND OWNERSHIP INTERESTS
The Company has no Subsidiaries
<PAGE>
SCHEDULE 5.5 - FINANCIAL STATEMENTS
1999 Annual Report and the audited financial statements (including
balance sheets and income statements) of the Company dated as of July 31, 1999
and July 31, 1998.
SEC Form 10-K of the Company for the fiscal years ending July 31, 1997,
1996 and 1995.
Unaudited financial statements (including balance sheet and income
statement) of the Company dated as of October 31, 1999.
<PAGE>
SCHEDULE 5.11 - PATENTS, ETC.
None
<PAGE>
SCHEDULE 5.14 - USE OF PROCEEDS
The proceeds of the Notes will be used (a) to repay existing
indebtedness owing to Bank of America, N.A. under the Company's Bridge Loan
Credit Agreement dated as of February 17, 1999 among the Company, the banks
named therein, and Bank of America, N.A., as administrative agent for such banks
and (b) to pay related transaction costs and expenses.
<PAGE>
SCHEDULE 5.15 - EXISTING INDEBTEDNESS AND LIENS
A. Existing Indebtedness
See Attached List
B. Existing Liens
Liens securing copiers and other office equipment and other
immaterial liens.
<PAGE>
E-1-A-2
EXHIBIT 1-A
(to Note Purchase Agreement)
[FORM OF SERIES A NOTE]
FERRELLGAS, L.P.
8.68% SENIOR NOTE, SERIES A, DUE AUGUST 1, 2006
No. [R-A-] [Date]
$[__________] PPN 31529# AA 1
FOR VALUE RECEIVED, the undersigned, FERRELLGAS, L.P. (herein called
the "Company"), a limited partnership organized and existing under the laws of
the State of Delaware, hereby promises to pay to [_____________________] or
registered assigns, the principal sum of [______________] DOLLARS on August 1,
2006 with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance thereof at the rate of 8.68% per annum from
the date hereof, payable semiannually, on the first day of February and August
in each year, commencing with the February or August next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (b) to
the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 10.68% or (ii) 2% over the rate of interest publicly
announced by Bank of America, N.A. from time to time in Chicago, Illinois as its
"base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of the Company in Liberty, Missouri or at such
other place as the Company shall have designated by written notice to the holder
of this Note as provided in the Note Purchase Agreement referred to below.
This Note is one of the 8.68% Senior Notes, Series A (herein called the
"Series A Notes"), issued pursuant to the Note Purchase Agreement, dated as of
February 1, 2000 (as from time to time amended, the "Note Purchase Agreement"),
between the Company and the Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
Section 20 of the Note Purchase Agreement and (ii) to have made the
representation set forth in Section 6.2 of the Note Purchase Agreement.
This Note is a registered Series A Note and, as provided in the Note
Purchase Agreement, upon surrender of this Note for registration of transfer,
duly endorsed, or accompanied by a written instrument of transfer duly executed,
by the registered holder hereof or such holder's attorney duly authorized in
writing, a new Series A Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Note shall be construed and enforced in accordance with, and the
rights of the issuer and holder hereof shall be governed by, the law of the
State of Illinois excluding choice-of-law principles of the law of such State
that would require the application of the laws of a jurisdiction other than such
State.
FERRELLGAS, L.P.
By Ferrellgas, Inc., its general partner
By____________________________________________________
Its_______________________________________________
---------
<PAGE>
E-1-B-2
EXHIBIT 1-B
(to Note Purchase Agreement)
[FORM OF SERIES B NOTE]
FERRELLGAS, L.P.
8.78% SENIOR NOTE, SERIES B, DUE AUGUST 1, 2007
No. [R-B-] [Date]
$[__________] PPN 31529# AB 9
FOR VALUE RECEIVED, the undersigned, FERRELLGAS, L.P. (herein called
the "Company"), a limited partnership organized and existing under the laws of
the State of Delaware, hereby promises to pay to [_____________________] or
registered assigns, the principal sum of [______________] DOLLARS on August 1,
2007 with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance thereof at the rate of 8.78% per annum from
the date hereof, payable semiannually, on the first day of February and August
in each year, commencing with the February or August next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (b) to
the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 10.78% or (ii) 2% over the rate of interest publicly
announced by Bank of America, N.A. from time to time in Chicago, Illinois as its
"base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of the Company in Liberty, Missouri or at such
other place as the Company shall have designated by written notice to the holder
of this Note as provided in the Note Purchase Agreement referred to below.
This Note is one of the 8.78% Senior Notes, Series B (herein called the
"Series B Notes"), issued pursuant to Note Purchase Agreement, dated as of
February 1, 2000 (as from time to time amended, the "Note Purchase Agreement"),
between the Company and the Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
Section 20 of the Note Purchase Agreement and (ii) to have made the
representation set forth in Section 6.2 of the Note Purchase Agreement.
This Note is a registered Series B Note and, as provided in the Note
Purchase Agreement, upon surrender of this Note for registration of transfer,
duly endorsed, or accompanied by a written instrument of transfer duly executed,
by the registered holder hereof or such holder's attorney duly authorized in
writing, a new Series B Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Note shall be construed and enforced in accordance with, and the
rights of the issuer and holder hereof shall be governed by, the law of the
State of Illinois excluding choice-of-law principles of the law of such State
that would require the application of the laws of a jurisdiction other than such
State.
FERRELLGAS, L.P.
By Ferrellgas, Inc., its general partner
By____________________________________________________
Its_______________________________________________
<PAGE>
E-1-C-2
EXHIBIT 1-C
(to Note Purchase Agreement)
[FORM OF SERIES C NOTE]
FERRELLGAS, L.P.
8.87% SENIOR NOTE, SERIES C, DUE AUGUST 1, 2009
No. [R-C-] [Date]
$[__________] PPN 31529# AC 7
FOR VALUE RECEIVED, the undersigned, FERRELLGAS, L.P. (herein called
the "Company"), a limited partnership organized and existing under the laws of
the State of Delaware, hereby promises to pay to [_____________________] or
registered assigns, the principal sum of [______________] DOLLARS on August 1,
2009 with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance thereof at the rate of 8.87% per annum from
the date hereof, payable semiannually, on the first day of February and August
in each year, commencing with the February or August next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (b) to
the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 10.87% or (ii) 2% over the rate of interest publicly
announced by Bank of America, N.A. from time to time in Chicago, Illinois as its
"base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of the Company in Liberty Missouri or at such
other place as the Company shall have designated by written notice to the holder
of this Note as provided in the Note Purchase Agreement referred to below.
This Note is one of the 8.87% Senior Notes, Series C (herein called the
"Series C Notes"), issued pursuant to Note Purchase Agreement, dated as of
February 1, 2000 (as from time to time amended, the "Note Purchase Agreement"),
between the Company and the Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
Section 20 of the Note Purchase Agreement and (ii) to have made the
representation set forth in Section 6.2 of the Note Purchase Agreement.
This Note is a registered Series C Note and, as provided in the Note
Purchase Agreement, upon surrender of this Note for registration of transfer,
duly endorsed, or accompanied by a written instrument of transfer duly executed,
by the registered holder hereof or such holder's attorney duly authorized in
writing, a new Series C Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Note shall be construed and enforced in accordance with, and the
rights of the issuer and holder hereof shall be governed by, the law of the
State of Illinois excluding choice-of-law principles of the law of such State
that would require the application of the laws of a jurisdiction other than such
State.
FERRELLGAS, L.P.
By Ferrellgas, Inc., its general partner
By____________________________________________________
Its_______________________________________________
<PAGE>
E-4.4(a)-3
EXHIBIT 4.4(a)
(to Note Purchase Agreement)
FORM OF OPINION OF SPECIAL COUNSEL FOR THE COMPANY
The closing opinion of Bracewell & Patterson, L.L.P., special counsel
for the Company, its Restricted Subsidiaries and the General Partner, which is
called for by Section 4.4(a) of the Note Purchase Agreement, shall be dated the
date of the Closing and addressed to the Purchasers, shall be satisfactory in
scope and form to the Purchasers and shall be to the effect that:
1. The Company is a partnership, duly formed, validly
existing and in good standing under the laws of the State of Delaware,
has the partnership power and authority to execute and perform the Note
Purchase Agreement and to issue the Notes and has the requisite
partnership power and authority to conduct its business in all material
respects as presently conducted and, based solely on certificates of
foreign qualification provided by the Secretary of State of each
jurisdiction, is duly qualified or registered as a foreign partnership
to transact business in, and is in good standing as a foreign
partnership in each jurisdiction set forth on Schedule I hereto, and,
to our knowledge, such jurisdictions are the only jurisdictions in
which the Company conducts any business that requires qualification or
registration to conduct business as a foreign partnership, except where
the failure to so qualify or register would not have a Material Adverse
Effect.
2. The General Partner is a corporation, duly formed,
validly existing and in good standing under the laws of the State of
Delaware, has the partnership power and authority to execute and
deliver the Note Purchase Agreement and to issue the Notes on behalf of
the Company and has the requisite power and authority to conduct its
business in all material respects as presently conducted and, based
solely on certificates of foreign qualification provided by the
Secretary of State of each jurisdiction, is duly qualified or
registered as a foreign corporation to transact business in, and is in
good standing as a foreign corporation in each jurisdiction set forth
on Schedule I hereto, and, to our knowledge, such jurisdictions are the
only jurisdictions in which the General Partner conducts any business
that requires qualification or registration to conduct business as a
foreign partnership, except where the failure to so qualify or register
would not have a Material Adverse Effect.
3. Each Restricted Subsidiary of the Company is a
corporation or limited partnership duly incorporated or formed, as the
case may be, validly existing and in good standing under the laws of
its jurisdiction of incorporation or formation and, based solely upon
certificates of foreign qualification provided by the Secretary of
State of each jurisdiction, is duly qualified or registered as a
foreign corporation or limited partnership to transact business in, and
is in good standing as a foreign corporation or limited partnership in
each jurisdiction set forth on Schedule II hereto, and, to our
knowledge, such jurisdictions are the only jurisdictions in which the
Restricted Subsidiaries of the Company conduct any business that
requires qualification or registration to conduct business as a foreign
corporation or partnership, except where the failure to so qualify or
register would not have a material adverse effect upon the respective
Restricted Subsidiaries; and all of the issued and outstanding shares
of capital stock or other ownership interests of each such Restricted
Subsidiary, as applicable, have been validly issued, are fully paid and
non-assessable and the Company and/or one or more Restricted
Subsidiaries is the holder of record of such shares or ownership
interests.
4. The Note Purchase Agreement has been duly authorized by
all necessary partnership action on the part of the Company, has been
duly executed and delivered by the Company and constitutes the legal,
valid and binding obligation of the Company enforceable in accordance
with its terms, except to the extent that enforceability may be limited
by applicable bankruptcy, insolvency, fraudulent conveyance and similar
laws affecting creditors' rights generally, and general principles of
equity (regardless of whether the enforceability of such principles is
considered in a proceeding in equity or at law).
5. The Notes have been duly authorized by all necessary
partnership action on the part of the Company, have been duly executed
and delivered by the Company, and when paid for by the Purchasers, will
constitute the legal, valid and binding obligations of the Company
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting creditors'
rights generally, and general principles of equity (regardless of
whether the application of such principles is considered in a
proceeding in equity or at law).
6. No approval, consent, registration, qualification or
other action on the part of, or filing with any governmental body,
Federal, state or local, is required for the execution, delivery and
performance by the Company of the Note Purchase Agreement or the
execution, delivery and performance by the Company of the Notes,
except, in each case, such approvals, consents, registrations, or
qualifications as have been obtained.
7. The issuance and sale of the Notes and the execution,
delivery and performance by the Company of the Note Purchase Agreement
do not violate applicable provisions of statutory law applicable to or
binding on the Company or any order of any court or governmental
authority or agency applicable to or binding on the Company, or violate
or result in any breach of any of the provisions of or constitute a
default under, or result in the creation or imposition of a Lien with
respect to, any material bond, note, debenture or other evidence of
indebtedness or any material indenture, mortgage, deed of trust, loan
agreement, contract, lease or other material instrument for money
borrowed known to us to which the Company is a party or by which the
Company is bound or to which the property of the Company is subject,
nor will such action result in a breach or violation of the Certificate
of Formation or Articles of Partnership of the Company.
8. The issuance, sale and delivery of the Notes by the
Company under the circumstances contemplated by the Note Purchase
Agreement do not, under existing law, require the registration of the
Notes under the Securities Act of 1933, as amended, or the
qualification of an indenture in respect thereof under the Trust
Indenture Act of 1939, as amended.
9. To our knowledge, there are no actions, suits or
proceedings pending or overtly threatened by written communication
against the Company or any Restricted Subsidiary in any court or before
any arbitrator of any kind or before or by any Governmental Authority
either (i) which purport to affect the Note Purchase Agreement or the
Notes, or (ii) that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.
10. The issuance of the Notes and the use of the proceeds of
the sale of the Notes in accordance with the provisions of and as
contemplated by the Note Purchase Agreement (including, without
limitation, the representations and warranties set forth in the Note
Purchase Agreement) do not violate or conflict with Regulation T, U or
X of the Board of Governors of the Federal Reserve System.
11. The Company is not an "investment company," or a company
"controlled" by an "investment company," under the Investment Company
Act of 1940, as amended.
12. A court sitting in the State of Missouri will look to the
conflict of law rules of the State of Missouri to determine which law
governs. Under the conflict of law rules of the State of Missouri, a
court sitting in the State of Missouri should give effect to the
contractual choice of law clause in the Note Purchase Agreement and the
Notes electing Illinois law assuming that the Purchasers have
reasonable contacts with the State of Illinois, including without
limitation, that many of the Purchasers have offices or agents in the
State of Illinois, that the Note Purchase Agreement and the Notes will
be delivered in the State of Illinois, and that counsel to the
Purchasers is located in the State of Illinois.
The opinion of Bracewell & Patterson, L.L.P. shall be limited to the
laws of the State of Missouri, the Delaware Revised Uniform Limited Partnership
Act, the general business corporation law of the State of Delaware and the
Federal laws of the United States. In rendering the opinions set forth in
paragraphs (4) and (5) above, Bracewell & Patterson, L.L.P. shall assume that
the laws of Missouri govern the Note Purchase Agreement and the Notes. The
opinion of Bracewell & Patterson, L.L.P. shall cover such other matters relating
to the sale of the Notes as the Purchasers may reasonably request. With respect
to matters of fact on which such opinion is based, such counsel shall be
entitled to rely on appropriate certificates of public officials and officers of
the Company and upon representations of the Company and the Purchasers delivered
in connection with the issuance and sale of the Notes.
<PAGE>
E-4.4(b)-2
EXHIBIT 4.4(b)
(to Note Purchase Agreement)
FORM OF OPINION OF SPECIAL COUNSEL
TO THE PURCHASERS
The closing opinion of Chapman and Cutler, special counsel for the
Purchasers, called for by Section 4.4(b) of the Note Purchase Agreement, shall
be dated the date of the Closing and addressed to the Purchasers, shall be
satisfactory in form and substance to the Purchasers and shall be to the effect
that:
1. The Company is a partnership, validly existing and in
good standing under the laws of the State of Delaware and has the power
and the authority to execute and deliver the Note Purchase Agreement
and to issue the Notes.
2. The Note Purchase Agreement has been duly authorized by
all necessary action on the part of the Company, has been duly executed
and delivered by the Company and constitutes the legal, valid and
binding contract of the Company enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent conveyance and
similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
3. The Notes have been duly authorized by all necessary
action on the part of the Company, and the Notes being delivered on the
date hereof have been duly executed and delivered by the Company and
constitute the legal, valid and binding obligations of the Company
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting creditors'
rights generally, and general principles of equity (regardless of
whether the application of such principles is considered in a
proceeding in equity or at law).
4. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Purchase Agreement do not, under
existing law, require the registration of the Notes under the
Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
The opinion of Chapman and Cutler shall also state that the opinion of
Bracewell & Patterson, L.L.P., special counsel for the Company, is satisfactory
in scope and form to Chapman and Cutler and that, in their opinion, the
Purchasers are justified in relying thereon.
In rendering the opinion set forth in paragraph 1 above, Chapman and
Cutler may rely, as to matters referred to in paragraph 1, solely upon an
examination of the Certificate of Formation certified by, and a certificate of
good standing of the Company from, the Secretary of State of the State of
Delaware, the Articles of Partnership of the Company and the general partnership
law of the State of Delaware. The opinion of Chapman and Cutler shall be limited
to the laws of the State of Illinois, the Delaware Revised Uniform Limited
Partnership Act and the Federal laws of the United States.
With respect to matters of fact upon which such opinion is based,
Chapman and Cutler may rely on appropriate certificates of public officials and
officers of the Company and upon representations of the Company and the
Purchasers delivered in connection with the issuance and sale of the Notes.
<PAGE>
10.1-3
EXHIBIT 10.1
(to Note Purchase Agreement)
SUBORDINATION PROVISIONS APPLICABLE TO
Subordinated Debt
(a) The indebtedness evidenced by the subordinated notes and any
renewals or extensions thereof, premium, if any, interest (including, without
limitation any such interest accruing subsequent to the filing by or against the
Company of any proceeding brought under Chapter 11 of the Bankruptcy Code (11
U.S.C. Section 100 et seq.)) and any fees, charges, expenses or other sums
payable under or in respect of the agreements pursuant to which such
subordinated notes were issued, shall at all times be wholly and unconditionally
subordinate and junior in right of payment to any and all indebtedness of the
Company (including principal, premium, if any, accrued and unpaid interest,
including any interest which may accrue subsequent to commencement of
proceedings under bankruptcy laws (whether or not such interest is allowed as a
claim pursuant to the provisions of any such bankruptcy laws) evidenced by the
Company's $21,000,000 aggregate principal amount 8.68% Senior Notes, Series A,
due August 1, 2006, $90,000,000 aggregate principal amount 8.78% Senior Notes,
Series B, due August 1, 2007, and $73,000,000 aggregate principal amount 8.87%
Senior Notes, Series C, due August 1, 2009, issued pursuant to the Note Purchase
Agreement, dated as of February 1, 2000, as the same shall be amended from time
to time, between the Company and the institutional investors named in Schedule A
attached thereto and all other amounts due under said Note Purchase Agreement
(together with any renewal, replacement or refinancing thereof, herein called
"Superior Indebtedness"), in the manner and with the force and effect hereafter
set forth:
(1) In the event of any (i) liquidation, dissolution or
winding up of the Company, voluntary or involuntary, (ii) any
execution, sale, receivership, insolvency, bankruptcy, liquidation,
readjustment, reorganization or other similar proceeding relative to
the Company or its property, (iii) any general assignment by the
Company for the benefit of creditors, or (iv) any distribution,
division, marshalling or application of any of the properties or assets
of the Company or the proceeds thereof to creditors, voluntary or
involuntary, and whether or not involving legal proceedings, then and
in any event:
(A) all principal, premium, if any, and interest and
all other sums owing on all Superior Indebtedness shall first
be indefeasibly paid in full in cash before any payment or
distribution of any kind or character is made upon the
indebtedness evidenced by the subordinated notes; and in any
such event any payment or distribution of any kind or
character, whether in cash, property or securities (other than
in securities, including equity securities, or other evidences
of indebtedness, the payment of which is unconditionally
subordinated (to the same extent as the subordinated notes) to
the payment of all Superior Indebtedness which may at the time
be outstanding) which shall be made upon or in respect of the
subordinated notes shall immediately be paid over to the
holders of such Superior Indebtedness, pro rata, for
application in payment thereof, unless and until such Superior
Indebtedness shall have been indefeasibly paid or satisfied in
full in cash;
(2) In the event that the subordinated notes are in default
under circumstances when the foregoing clause (l) shall not be
applicable, the holders of the subordinated notes shall be entitled to
payments of principal, premium, if any, or interest only after there
shall first have been indefeasibly paid in full in cash all Superior
Indebtedness outstanding at the time the subordinated notes so become
in default; and
(3) During the continuance of any default with respect to any
Superior Indebtedness, no payment of principal, premium, if any, or
interest or any other fees, charges, expenses or other sums payable
under or in respect of the agreements pursuant to which such
subordinated notes were issued shall be made on the subordinated notes.
(b) The holder of each subordinated note agrees that: (1) it will not
initiate a proceeding for liquidation, dissolution or winding-up of the Company,
or for execution, sale, receivership, insolvency, bankruptcy, liquidation,
readjustment, reorganization or other similar proceeding relative to the Company
or its property and (2) it will not accelerate the maturity of or enforce the
collection of the subordinated notes.
(c) The holder of each subordinated note undertakes and agrees for the
benefit of each holder of Superior Indebtedness to execute, verify, deliver and
file any proofs of claim within 30 days before the expiration of the time to
file the same which any holder of Superior Indebtedness may at any time require
in order to prove and realize upon any rights or claims pertaining to the
subordinated notes and to effectuate the full benefit of the subordination
contained herein; and upon failure of the holder of any subordinated note so to
do, any such holder of Superior Indebtedness shall be deemed to be irrevocably
appointed the agent and attorney-in-fact of the holder of such note to execute,
verify, deliver and file any such proofs of claim.
(d) No right of any holder of any Superior Indebtedness to enforce
subordination as herein provided shall at any time or in any way be affected or
impaired by any failure to act on the part of the Company or the holders of
Superior Indebtedness, or by any noncompliance by the Company with any of the
terms, provisions and covenants of the subordinated notes or the agreement under
which they are issued, regardless of any knowledge thereof that any such holder
of Superior Indebtedness may have or be otherwise charged with.
(e) The subordination effected by the foregoing provisions and the
rights created thereby of the holders of the Superior Indebtedness shall not be
affected by: (1) any amendment of or addition or supplement to any Superior
Indebtedness or any instrument or agreement relating thereto, (2) any exercise
or non-exercise of any right, power or remedy under or in respect of any
Superior Indebtedness or any instrument or agreement relating thereto, or (3)
the giving or denial of any waiver, consent, release, indulgence, extension,
renewal, modification or delay or the taking or nontaking of any other action,
inaction or omission, in respect of any Superior Indebtedness or any instrument
or agreement relating thereto or to any securities relating thereto or any
guarantee thereof, whether or not any holder of any subordinated notes shall
have had notice or knowledge of any of the foregoing.
(f) The Company agrees, for the benefit of the holders of Superior
Indebtedness, that in the event that any subordinated note is declared due and
payable before its expressed maturity because of the occurrence of a default
hereunder: (1) the Company will give prompt notice in writing of such happening
to the holders of Superior Indebtedness and (2) all Superior Indebtedness shall
forthwith become immediately due and payable upon demand, regardless of the
expressed maturity thereof and (3) the holders of such subordinated notes shall
not entitled to receive any payment or distribution in respect thereof or
applicable thereto until all Superior Indebtedness at the time outstanding shall
have been indefeasibly paid in full in cash.
(g) No holder of any subordinated notes will sell, assign, pledge,
encumber or otherwise dispose of any of its subordinated notes unless such sale,
assignment, pledge, encumbrance or disposition is made expressly subject to the
foregoing provisions.
(h) If any payment or distribution of any character, whether in cash,
securities or other property shall be received by any holder of any subordinated
notes in contravention of this Section ________, such payment or distribution
shall be received and held in trust for the benefit of, and shall be promptly
paid over or delivered and transferred in the form received to, the holders of
the Superior Indebtedness pro rata for application to the payment of all
Superior Indebtedness remaining unpaid, to the extent necessary to indefeasibly
pay all such Superior Indebtedness in full in cash. In the event of the failure
of any holder of the subordinated notes to endorse or assign any such payment,
distribution or security, any holder of the Superior Indebtedness or such
holder's representative is hereby irrevocably authorized to endorse or assign
the same.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FERRELLGAS PARTNERS, L.P. BALANCE SHEET ON JANUARY 31, 2000
AND THE STATEMENT OF EARNINGS ENDING JANUARY 31, 2000 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS)
</LEGEND>
<CIK> 0000922358
<NAME> FERRELLGAS PARTNERS, L.P.
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-2000
<PERIOD-START> AUG-01-1999
<PERIOD-END> JAN-31-2000
<EXCHANGE-RATE> 1
<CASH> 25,156
<SECURITIES> 0
<RECEIVABLES> 161,566
<ALLOWANCES> 0
<INVENTORY> 67,232
<CURRENT-ASSETS> 263,540
<PP&E> 787,708
<DEPRECIATION> (249,864)
<TOTAL-ASSETS> 1,074,228
<CURRENT-LIABILITIES> 237,120
<BONDS> 708,202
0
0
<COMMON> (3,452)
<OTHER-SE> 110,063
<TOTAL-LIABILITY-AND-EQUITY> 1,074,228
<SALES> 457,532
<TOTAL-REVENUES> 503,734
<CGS> 263,353
<TOTAL-COSTS> 425,309
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 27,278
<INCOME-PRETAX> 37,964
<INCOME-TAX> 0
<INCOME-CONTINUING> 37,964
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,964
<EPS-BASIC> 1.13
<EPS-DILUTED> 1.13
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FERRELLGAS PARTNERS FINANCE, CORP. BALANCE SHEET ON JANUARY 31, 2000
AND THE STATEMENT OF EARNINGS ENDING JANUARY 31, 2000 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS)
</LEGEND>
<CIK> 0001012493
<NAME> FERRELLGAS PARTNERS FINANCE CORP.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-2000
<PERIOD-START> AUG-01-1999
<PERIOD-END> JAN-31-2000
<EXCHANGE-RATE> 1
<CASH> 1,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 1,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (236)
<INCOME-TAX> 0
<INCOME-CONTINUING> (236)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (236)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
