<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 28, 1994
REGISTRATION NO. 33-53379
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FERRELLGAS, L.P.
FERRELLGAS FINANCE CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 5984 43-1676206
DELAWARE 6799 43-1677595
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)
----------------
ONE LIBERTY PLAZA
LIBERTY, MISSOURI 64068
(816) 792-1600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
DANLEY K. SHELDON
ONE LIBERTY PLAZA
LIBERTY, MISSOURI 64068
(816) 792-1600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------
COPIES TO:
SMITH, GILL, FISHER & BUTTS, P.C. LATHAM & WATKINS
1200 MAIN STREET 885 THIRD AVENUE
KANSAS CITY, MISSOURI 64105 NEW YORK, NEW YORK 10022
(816) 474-7400 (212) 906-1200
ATTENTION: KENDRICK T. WALLACE ATTENTION: PHILIP E. COVIELLO
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
----------------
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
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<PAGE>
FERRELLGAS, L.P.
CROSS-REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K
<TABLE>
<CAPTION>
FORM S-1 ITEM NUMBER AND HEADING LOCATION IN PROSPECTUS
-------------------------------- ----------------------
<C> <S> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus.... Outside Front Cover Page
2. Inside Front and Outside Back Cover Pages
of Prospectus............................. Inside Front and Outside Back
Cover Pages
3. Summary Information, Risk Factors and Ratio
of Earnings to Fixed Charges.............. Prospectus Summary; Risk
Factors; Selected Historical
and Pro Forma Consolidated
Financial and Operating Data
4. Use of Proceeds............................ Prospectus Summary; Use of
Proceeds
5. Determination of Offering Price............ Underwriting
6. Dilution................................... *
7. Selling Security Holders................... *
8. Plan of Distribution....................... Outside Front Cover Page;
Underwriting
9. Description of Securities to be Registered. Prospectus Summary;
Description of Senior Notes;
Certain Federal Income Tax
Consequences
10. Interests of Named Experts and Counsel..... *
11. Information with Respect to the Registrant. Outside Front Cover Page;
Prospectus Summary; Risk
Factors; The Transactions;
Capitalization; Selected
Historical and Pro Forma
Consolidated Financial and
Operating Data; Management's
Discussion and Analysis of
Financial Condition and
Results of Operations;
Business; Management; Cash
Distributions to Partners;
The Partnership; Financial
Statements
12. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities............................... *
</TABLE>
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* Not Applicable
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Set forth below are the expenses (other than underwriting discounts and
commissions) expected to be incurred in connection with the issuance and
distribution of the securities registered hereby. With the exception of the
Securities and Exchange Commission registration fee and the NASD filing fee,
the amounts set forth below are estimates.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............. $ 86,207
NASD filing fee................................................. 25,500
Rating agency fees.............................................. 30,000
Printing and engraving expenses................................. 100,000
Legal fees and expenses......................................... 155,000
Accounting fees and expenses.................................... 68,750
Blue Sky fees and expenses...................................... 15,675
Trustee fees and expenses....................................... 12,000
Funding fee for Floating Rate Senior Notes...................... 250,000
Miscellaneous................................................... 5,000
--------
Total......................................................... $748,132
========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Section of the Prospectus entitled "The Partnership Agreement--
Indemnification" is incorporated herein by reference.
Article VII of the Company's bylaws provides, with respect to
indemnification, as follows:
"Section 7.01. Indemnification of Authorized Representatives in Third Party
Proceedings. The Corporation shall indemnify any person who was or is an
"authorized representative" of the Corporation (which shall mean for purposes
of this Article a Director or officer of the Corporation, or a person serving
at the request of the Corporation as a director, officer, or trustee, of
another corporation, partnership, joint venture, trust or other enterprise) and
who was or is a "party" (which shall include for purposes of this Article the
giving of testimony or similar involvement) or is threatened to be made a party
to any "third party proceeding" (which shall mean for purposes of this Article
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, or investigative, other than an action by or in the
right of the Corporation) by reason of the fact that such person was or is an
authorized representative of the Corporation, against expenses (which shall
include for purposes of this Article attorneys' fees), judgments, penalties,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such third party proceeding if such person acted in
good faith and in a manner such person reasonably believed to be in, or not
opposed to, the best interests of the Corporation and, with respect to any
criminal third party proceeding (which could or does lead to a criminal third
party proceeding) had no reasonable cause to believe such conduct was unlawful.
The termination of any third party proceeding by judgment, order, settlement,
indictment, conviction or upon a plea of nolo contendere or its equivalent,
shall not of itself create a presumption that the authorized representative did
not act in good faith and in a manner which such person reasonably believed to
be in or not opposed to the best interests of the Corporation, and, with
respect to any criminal third party proceeding, had reasonable cause to believe
that such conduct was unlawful.
II-1
<PAGE>
Section 7.02. Indemnification of Authorized Representatives in Corporate
Proceedings. The Corporation shall indemnify any person who was or is an
authorized representative of the Corporation and who was or is a party or is
threatened to be made a party to any "corporation proceeding" (which shall mean
for purposes of this Article any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor
or investigative proceeding by the Corporation) by reason of the fact that such
person was or is an authorized representative of the Corporation, against
expenses actually and reasonably incurred by such person in connection with the
defense or settlement of such corporate action if such person acted in good
faith and in a manner reasonably believed to be in, or not opposed to, the best
interests of the Corporation, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable for negligence or misconduct in the performance of such
person's duty to the Corporation unless and only to the extent that the Court
of Chancery or the court in which such corporate proceeding was pending shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such authorized representative is
fairly and reasonably entitled to indemnity for such expenses which the Court
of Chancery or such other court shall deem proper.
Section 7.03. Mandatory Indemnification of Authorized Representatives. To the
extent that an authorized representative of the Corporation has been successful
on the merits or otherwise in defense of any third party or corporate
proceeding or in defense of any claim, issue or matter therein, such person
shall be indemnified against expenses actually and reasonably incurred by such
person in connection therewith.
Section 7.04. Determination of Entitlement to Indemnification. Any
indemnification under Section 7.01, 7.02 or 7.03 of this Article (unless
ordered by a court) shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of the authorized
representative is proper in the circumstances because such person has either
met the applicable standards of conduct set forth in Section 7.01 or 7.02 or
has been successful on the merits or otherwise as set forth in Section 7.03 and
that the amount requested has been actually and reasonably incurred. Such
determination shall be made:
(1) By the Board of Directors by a majority of a quorum consisting of
Directors who were not parties to such third party or corporate proceeding,
or
(2) If such a quorum is not obtainable, or, even if obtainable, a
majority vote of such a quorum so directs, by independent legal counsel in
a written opinion, or
(3) By the stockholders.
Section 7.05. Advancing Expenses. Expenses actually and reasonably incurred
in defending a third party or corporate proceeding shall be paid on behalf of
an authorized representative by the Corporation in advance of the final
disposition of such third party or corporate proceeding as authorized in the
manner provided in Section 7.04 of this Article upon receipt of an undertaking
by or on behalf of the authorized representative to repay such amount unless it
shall ultimately be determined that such person is entitled to be indemnified
by the Corporation as authorized in this Article. The financial ability of such
authorized representative to make such repayment shall not be a prerequisite to
the making of an advance.
Section 7.06. Employee Benefit Plans. For purposes of this Article, the
Corporation shall be deemed to have requested an authorized representative to
serve an employee benefit plan where the performance by such person of duties
to the Corporation also imposes duties on, or otherwise involves services by,
such person to the plan or participants or beneficiaries of the plan; excise
taxes assessed on an authorized representative with respect to an employee
benefit plan pursuant to applicable law shall be deemed "fines"; and action
taken or omitted by such person with respect to an employee benefit plan in the
performance of duties for a purpose reasonably believed to be in the interest
of the participants and beneficiaries of the plan shall be deemed to be for a
purpose which is not opposed to the best interests of the Corporation.
II-2
<PAGE>
Section 7.07. Scope of Article. The indemnification of authorized
representatives, as authorized by this Article, shall (1) not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any statute, agreement, vote of stockholders or disinterested
Directors or otherwise, both as to action in an official capacity and as to
action in another capacity, (2) continue as to a person who has ceased to be an
authorized representative and (3) inure to the benefit of the heirs, executors
and administrators of such a person.
Section 7.08. Reliance on Provisions. Each person who shall act as an
authorized representative of the Corporation shall be deemed to be doing so in
reliance upon rights of indemnification provided by this Article."
Article EIGHTH of Ferrell's Articles of Incorporation provides, with respect
to indemnification, as follows:
"Article EIGHTH. No Director shall be personally liable to this Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director provided that nothing in this Article EIGHTH shall be construed so as
to eliminate or limit the liability of a director (A) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (B) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (C) under the provisions of K.S.A. 17-6424 and
amendments thereto, (D) for any transaction from which the director derived an
improper personal benefit or (E) for any act or omission occurring prior to the
effective date of this Article EIGHTH. No amendment to or repeal of this
Article EIGHTH shall adversely affect any right, benefit or protection of a
director of the Corporation existing at the time of such amendment or repeal
with respect to any acts or omissions occurring prior to such amendment or
repeal."
In addition, paragraph 22 of Ferrell's bylaws provides as follows:
"22. Indemnification of Directors and Officers. (a) Subject to subparagraph
(c) below, the corporation shall indemnify every director and officer who is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation),
by reason of the fact that he is or was a director or officer of the
corporation, or is or was serving at the request of the corporation, as a
director or officer, of another corporation, partnership, joint venture, trust
or other enterprise, against expenses, including attorneys' fees, judgments,
fines and amounts paid in settlement, actually and reasonably incurred by him
in connection with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
(b) Subject to subparagraph (c) below, the corporation shall indemnify every
person who is a party or is threatened to be made a party, to any threatened,
pending or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was a
director or officer of the corporation, or is or was serving at the request of
the corporation as a director or officer of another corporation, partnership,
joint venture, trust or other enterprise against expenses, including attorneys'
fees, and amounts paid in settlement actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation; except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable for negligence or misconduct in the performance
of his duty to the corporation unless and only to the extent that the court in
which the action or suit was brought determines upon application that, despite
the adjudication of liability and in view of all the circumstances of the case,
the person is fairly and reasonably entitled to indemnity for such expense
which the court shall deem proper.
II-3
<PAGE>
(c) Any indemnification under the subparagraphs (a) or (b) above, unless
ordered by a court, shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the director or
officer is proper in the circumstances because he has met the applicable
standard of conduct set forth in this Section 22. The determination shall be
made by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to the action, suit or proceeding, or if such a
quorum is not obtainable, or even if obtainable a quorum of disinterested
directors so directs, by independent counsel in a written opinion, or by the
stockholders.
(d) It is the intent of this Section 22 that the corporation shall be
obligated to indemnify every officer and director of this corporation to the
fullest extent permitted by law provided that the officer and director has met
the standard of conduct applicable by law which entitles such director and
officer to such indemnification. To such end:
(i) The indemnification and advancement of expenses provided by this
Section 22 shall not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be entitled under
any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a
person who has ceased to be a director or officer and shall inure to the
benefit of the heirs, executors and administrators of such a person; and
(ii) In the event the matter with respect to which indemnification is
sought under this Section 22 is required by law to be authorized in
accordance with subparagraph (c) above, then the exercise of discretion in
granting any such authorization shall be on the basis of the utmost good
faith consistent with the intent of this Section 22 to indemnify every
officer and director of this corporation to the fullest extent permitted by
law.
(e) Expenses incurred in defending a civil or criminal action, suit or
proceeding shall be paid by the corporation in advance of the final disposition
of the action, suit or proceeding upon receipt of an undertaking by or on
behalf of the director or officer to repay such amounts if it is ultimately
determined that the director or officer is not entitled to be indemnified by
the corporation as authorized in this Section 22.
(f) Absent a vote by a majority of the Board of Directors or a determination
by independent legal counsel appointed by a majority of the Board of Directors
upon the facts of a specific case, indemnification described in this Section 22
will be limited to defensive application.
(g) The corporation may purchase and maintain insurance on behalf of any
person who is or was a director or officer of the corporation, or is or was
serving at the request of the corporation as a director or officer of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the corporation would have
the power to indemnify him against such liability under the provisions of this
Section 22.
(h) For purposes of this Section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consideration or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors or officers so that any person who is or
was a director or officer of such constituent corporation, or is or was serving
at the request of such constituent corporation as a director or officer of
another corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under this Section with respect to the
resulting or surviving corporation as such person would have with respect to
such constituent corporation if its separate existence had continued.
(i) For purposes of this Section, reference to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as director or
II-4
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officer of the corporation which imposes duties on, or involves services by,
such director or officer, with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a
manner such person reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "not opposed to the best interests of the corporation"
as referred to in this Section."
Section 145 of the General Corporation Law of the State of Delaware
authorizes the indemnification of directors and officers of a corporation
against liability incurred by reason of being a director or officer and against
expenses (including attorneys' fees) in connection with defending any action
seeking to establish such liability, in the case of third party claims, if the
director or officer acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation, and in the
case of action by or in the right of the corporation, if the director or
officer acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation and if such director or
officer shall not have been adjudged liable to the corporation, unless a court
otherwise determines. Indemnification is also authorized with respect to any
criminal action or proceeding where the director or officer had no reasonable
cause to believe his conduct was unlawful.
Reference is made to Section 6 of the Underwriting Agreement filed as Exhibit
1.1 to this Registration Statement.
Subject to any terms, conditions or restrictions set forth in the Partnership
Agreements, Section 17-108 of the Delaware Revised Limited Partnership Act
empowers a Delaware limited partnership to indemnify and hold harmless any
partner or other person from and against any and all claims and demands
whatsoever.
Under insurance policies maintained by Ferrell, directors and officers of
Ferrell and its subsidiaries may be indemnified against losses arising from
certain claims, including claims under the Securities Act of 1933, as amended,
which may be made against such persons by reason of their being directors or
officers.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
There has been no sale of securities of the Partnership within the past three
years.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS
<TABLE>
<C> <S>
*1.1 --Form of Underwriting Agreement
**3.1 --Form of Agreement of Limited Partnership of Ferrellgas, L.P.
**5.1 --Opinion of Smith, Gill, Fisher & Butts, P.C. as to the legality
of the securities being registered
**8.1 --Opinion of Smith, Gill, Fisher & Butts, P.C. relating to tax
matters
**10.1 --Form of Credit Agreement dated as of July 5, 1994 among
Ferrellgas, L.P., Stratton Insurance Company, Ferrellgas, Inc.,
Bank of America National Trust and Savings Association, as Agent,
and the other financial institutions party thereto in the amount
of $185,000,000
*10.2 --Form of Indenture among Ferrellgas, L.P., and Norwest Bank
Minnesota, National Association, as Trustee, relating to Senior
Notes due 2001
**10.3 --$250,000,000 11 5/8% Senior Subordinated Debenture Indenture due
2003, dated as of December 1, 1991, between the Company and
Norwest Bank Minnesota, National Association, as Trustee
</TABLE>
II-5
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<TABLE>
<S> <C>
**10.4 --Assignment and Agreement dated as of January 1, 1989 between BP Oil
Company and Ferrell Petroleum, Inc.
**10.5 --Ferrell Long-Term Incentive Plan, dated June 23, 1987, between Ferrell
and the participants in the Plan
**10.6 --Ferrell 1992 Key Employee Stock Option Plan
**10.7 --Form of Contribution, Conveyance and Assumption Agreement between
Ferrellgas, the Partnership and the Master Partnership
**10.8 --First Supplemental Indenture dated June 2, 1994 relating to $250,000,000
11 5/8% Senior Subordinated Debentures
**12.1 --Computation of Ratio of Earnings to Fixed Charges
**21.1 --List of subsidiaries
**23.1 --Consent of Deloitte & Touche
**23.2 --Consent of Smith, Gill, Fisher & Butts, P.C. (included in Exhibit 5.1)
**23.3 --Consent of Smith, Gill, Fisher & Butts, P.C. (included in Exhibit 8.1)
**24.1 --Powers of Attorney (included on signature page)
**25.1 --Statement of Eligibility of Trustee
</TABLE>
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* Filed herewith
**Previously filed
<TABLE>
<S> <C>
Index of Financial Statement Schedules..................................... S-1
Independent Auditors' Report............................................... S-2
Schedule I--Marketable Securities--Other Investments ...................... S-3
Schedule II--Amounts Receivable From Related Parties and Employees......... S-4
Schedule V--Property, Plant and Equipment.................................. S-5
Schedule VI--Accumulated Depreciation and Amortization of Property, Plant
and Equipment ............................................................ S-6
Schedule VIII--Valuation and Qualifying Accounts........................... S-7
Schedule IX--Short-Term Borrowings......................................... S-8
Schedule X--Supplementary Income Statement Information..................... S-9
</TABLE>
All other financial statement schedules are omitted because the information
is not required, is not material or is otherwise included in the financial
statements or related notes thereto.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Act") may be permitted to directors, officers or
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
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The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Act, the
information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be a part of this Registration
Statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the Act, each
post-effective amendment that contains a form of Prospectus shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
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<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT HAS DULY CAUSED THIS POST-EFFECTIVE AMENDMENT NO. 1 TO THE
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF LIBERTY, STATE OF MISSOURI, ON THE 28TH DAY OF
JUNE, 1994.
Ferrellgas Finance Corp.
By: *
---------------------------------
JAMES E. FERRELL
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
POST-EFFECTIVE AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY
THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Director, Chairman June 28, 1994
- ------------------------------------- of the Board and
JAMES E. FERRELL Chief Executive
Officer (Principal
Executive Officer)
/s/ Danley K. Sheldon Chief Financial June 28, 1994
- ------------------------------------- Officer/Treasurer
DANLEY K. SHELDON (Principal
Financial and
Accounting Officer)
*By: /s/ Danley K. Sheldon
--------------------------------
DANLEY K. SHELDON
ATTORNEY-IN-FACT
</TABLE>
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<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT HAS DULY CAUSED THIS POST-EFFECTIVE AMENDMENT NO. 1 TO THE
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF LIBERTY, STATE OF MISSOURI, ON THE 28TH DAY OF
JUNE, 1994.
Ferrellgas, L.P.
By: Ferrellgas, Inc., as General
Partner
By: *
---------------------------------
JAMES E. FERRELL
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
POST-EFFECTIVE AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY
THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Director, Chairman June 28, 1994
- ------------------------------------- of the Board and
JAMES E. FERRELL Chief Executive
Officer (Principal
Executive Officer)
/s/ Danley K. Sheldon Chief Financial June 28, 1994
- ------------------------------------- Officer/Treasurer
DANLEY K. SHELDON (Principal
Financial and
Accounting Officer)
*By: /s/ Danley K. Sheldon
--------------------------------
DANLEY K. SHELDON
ATTORNEY-IN-FACT
</TABLE>
II-9
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
NO. NO.
<S> <C> <C>
*1.1 --Form of Underwriting Agreement
**3.1 --Form of Agreement of Limited Partnership of Ferrellgas, L.P.
**5.1 --Opinion of Smith, Gill, Fisher & Butts, P.C. as to the legality of the
securities being registered
**8.1 --Opinion of Smith, Gill, Fisher & Butts, P.C. relating to tax matters
**10.1 --Form of Credit Agreement dated as of July 5, 1994 among Ferrellgas,
L.P., Stratton Insurance Company, Ferrellgas, Inc., Bank of America
National Trust and Savings Association, as Agent, and the other
financial institutions party thereto in the amount of $185,000,000
*10.2 --Form of Indenture among Ferrellgas, L.P., and Norwest Bank Minnesota,
National Association as Trustee, relating to Senior Notes due 2001
**10.3 --$250,000,000 11 5/8% Senior Subordinated Debenture Indenture due 2003,
dated as of December 1, 1991, between the Company and Norwest Bank
Minnesota, National Association, as Trustee
**10.4 --Assignment and Agreement dated as of January 1, 1989 between BP Oil
Company and Ferrell Petroleum, Inc.
**10.5 --Ferrell Long-Term Incentive Plan, dated June 23, 1987, between Ferrell
and the participants in the Plan
**10.6 --Ferrell 1992 Key Employee Stock Option Plan
**10.7 --Form of Contribution, Conveyance and Assumption Agreement between
Ferrellgas, the Partnership and the Master Partnership
**10.8 --First Supplemental Indenture dated June 2, 1994 relating to
$250,000,000 11 5/8% Senior Subordinated Debentures
**12.1 --Computation of Ratio of Earnings to Fixed Charges
**21.1 --List of subsidiaries
**23.1 --Consent of Deloitte & Touche
**23.2 --Consent of Smith, Gill, Fisher & Butts, P.C. (included in Exhibit 5.1)
**23.3 --Consent of Smith, Gill, Fisher & Butts, P.C. (included in Exhibit 8.1)
**24.1 --Powers of Attorney (included on signature page)
**25.1 --Statement of Eligibility of Trustee
</TABLE>
- ---------------------
* Filed herewith
** Previously filed
<PAGE>
EXECUTION COPY
--------------
FERRELLGAS, L.P.
and
FERRELLGAS FINANCE CORP.
10% Fixed Rate Senior Notes Due 2001
Floating Rate Senior Notes Due 2001
UNDERWRITING AGREEMENT
June 27, 1994
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
140 Broadway
New York, New York 10005
Ladies and Gentlemen:
Ferrellgas, L.P., a Delaware limited partnership (the "Partnership"), and
Ferrellgas Finance Corp., a wholly owned subsidiary of the Partnership ("Finance
Corp." and, together with the Partnership, the "Issuers"), propose to issue and
sell to Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") and Goldman,
Sachs & Co. ("Goldman, Sachs" and, together with DLJ, the "Underwriters") an
aggregate of $200,000,000 principal amount of their 10% Fixed Rate Senior Notes
due 2001 (the "Fixed Rate Senior Notes") and $50,000,000 principal amount of
their Floating Rate Senior Notes due 2001 (the "Floating Rate Senior Notes" and,
together with the Fixed Rate Senior Notes, the "Senior Notes"). The Senior
Notes are to be issued pursuant to the provisions of an Indenture to be dated as
of July 5, 1994 by and among the Issuers and Norwest Bank Minnesota, National
Association, as Trustee (the "Indenture").
It is understood by all parties that (i) Ferrellgas Partners L.P, a
Delaware limited Partnership (the "Master Partnership"), the Underwriters and
certain other underwriters are entering into an underwriting agreement (the
"Common Units Underwriting Agreement") providing for the sale by the Master
Partnership of 13,100,000 common units (the "Common Units") representing limited
partner interests in the Master Partnership and, at the option of such
Underwriters, the sale by the Master Partnership of up to 1,965,000 additional
Common Units to cover overallotments, if any, and (ii) concurrent with the
Closing Date (as defined in Section 3 herein), (a) the closing under the Common
Units Underwriting Agreement will occur, (b) Ferrellgas, Inc., a Delaware
corporation (the "General Partner") will accept for purchase all of its 11 5/8%
Senior Subordinated Debentures due December 15, 2003 (the "Senior Subordinated
Debentures") validly tendered and not withdrawn pursuant to its Offer to
Purchase the Senior Subordinated Debentures (the "Offer to Purchase"), thereby
giving effect to the
<PAGE>
supplemental indenture deleting or amending certain restrictive covenants and
events of default relating to the Senior Subordinated Debentures, (c) the
General Partner will call for redemption its Series A and Series C Floating Rate
Senior Notes due 1996 and Series B and Series D Fixed Rate Senior Notes due 1996
(collectively, the "Existing Senior Notes") and the Partnership will deposit
with the trustee under the Indenture, dated as of July 1, 1990 (the "Existing
Indenture"), relating to the Existing Senior Notes an amount of funds reasonably
anticipated to be sufficient to redeem such Existing Senior Notes on their
redemption date and (d) the Partnership will enter into a working capital credit
facility for up to $185 million (the "Credit Facility") with a group of
commercial banks. The closing of the issuance and sale of Senior Notes pursuant
hereto is conditional on the closing with respect to the transactions described
in the preceding sentence.
1. Registration Statement and Prospectus. The Issuers have prepared and
-------------------------------------
filed with the Securities and Exchange Commission (the "Commission"), in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-1 (No. 33-53379), including a
preliminary prospectus, subject to completion, relating to the Senior Notes.
Any preliminary prospectus included in such registration statement or filed with
the Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act, is hereinafter referred to as the "Preliminary
Prospectus"; the registration statement, as amended at the time it becomes
effective or, if a post-effective amendment is filed with respect thereto, as
amended by such post-effective amendment at the time of its effectiveness,
including, in each case, all documents incorporated by reference therein, all
financial statements and exhibits thereto, and the information (if any)
contained in a prospectus subsequently filed with the Commission pursuant to
Rule 424(b) under the Act and deemed to be a part of the registration statement
at the time of its effectiveness pursuant to Rule 430A under the Act, is
hereinafter referred to as the "Registration Statement"; and the prospectus in
the form first used to confirm sales of the Senior Notes, whether or not filed
with the Commission pursuant to Rule 424(b) under the Act, including all
documents incorporated by reference therein, is hereinafter referred to as the
"Prospectus."
2. Agreements to Sell and Purchase. The Issuers agree to issue and sell
-------------------------------
to the Underwriters, and on the basis of the representations and warranties
contained in this Agreement, and subject to its terms and conditions, the
Underwriters agree, severally and not jointly, to purchase from the Issuers,
Senior Notes in the respective principal amounts set forth opposite their names
on Schedule A hereto at a purchase price equal to 2% of the principal amount
thereof (the "Purchase Price").
3. Delivery and Payment. Delivery to you of and payment for the Senior
--------------------
Notes shall be made at 10:00 A.M., New York City time, on the fifth business day
(such time and date being referred to as the "Closing Date") following the date
of the initial public offering of the Senior Notes as advised by you to the
Partnership, at the offices of Sullivan & Cromwell, 125 Broad Street, New York,
New York. The Closing Date and the location of delivery of the Senior Notes may
be varied by agreement among you and the Partnership.
The Senior Notes in definitive form shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
full business days prior to the Closing Date, and shall be made available to you
at the offices of DLJ (or at such other place as shall be acceptable to you) for
inspection not later than 9:30 A.M., New York City time, on the business day
next preceding the Closing Date. The Senior Notes shall be delivered to you on
the Closing Date with any transfer taxes payable upon initial issuance thereof
duly paid by the Partnership, for your respective accounts against payment of
the Purchase Price therefor. Payment shall be made to the Partnership by, at
the option of the Partnership, (i) certified or official bank check or checks
drawn in New York
2
<PAGE>
Clearing House funds or similar next day funds payable to the order of the
Partnership or (ii) certified or official bank check or checks drawn in, or a
wire transfer to an account designated in writing by the Partnership to the
Underwriters of, immediately available funds; provided that if the payment shall
be made in such immediately available funds, the amount of net payment shall be
reduced by one day's interest on the amount of gross payment at the
Underwriters' cost of borrowing such funds plus any other expenses associated
with such payment of immediately available funds.
4. Agreements of the Parties. Each of the Partnership, Finance Corp. and
-------------------------
the General Partner agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to comply fully and
in a timely manner with all other applicable provisions of Rule 424 and Rule
430A under the Act;
(b) If necessary, to file an amendment to the Registration Statement
including, if necessary pursuant to Rule 430A under the Act, a post-effective
amendment to the Registration Statement, in each case as soon as practicable
after the execution and delivery of this Agreement, and to use its best
efforts to cause the Registration Statement or such post-effective amendment
to become effective at the earliest possible time;
(c) To advise you promptly and, if requested by any of you, to confirm
such advice in writing, (i) when the Registration Statement has become
effective, if and when the Prospectus is sent for filing pursuant to Rule 424
under the Act and when any post-effective amendment to the Registration
Statement becomes effective, (ii) of the receipt of any comments from the
Commission or any state securities commission or regulatory authority that
relate to the Registration Statement or requests by the Commission or any
state securities commission or regulatory authority for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement, or of the
suspension of qualification of the Senior Notes for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purpose by the
Commission or any state securities commission or other regulatory authority,
and (iv) of the happening of any event during such period as in your
reasonable judgment you are required to deliver a prospectus in connection
with sales of the Senior Notes which makes any statement of a material fact
made in the Registration Statement untrue or which requires the making of any
additions to or changes in the Registration Statement (as amended or
supplemented from time to time) in order to make the statements therein not
misleading or that makes any statement of a material fact made in the
Prospectus (as amended or supplemented from time to time) untrue or which
requires the making of any additions to or changes in the Prospectus (as
amended or supplemented from time to time) in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; to use its best efforts to prevent the issuance of any stop order
or order suspending the qualification or exemption of the Senior Notes under
any state securities or Blue Sky laws, and, if at any time the Commission
shall issue any stop order suspending the effectiveness of the Registration
Statement, or any state securities commission or other regulatory authority
shall issue an order suspending the qualification or exemption of the Senior
Notes under any state securities or Blue Sky laws, to use every reasonable
effort to obtain the withdrawal or lifting of such order at the earliest
possible time;
3
<PAGE>
(d) To furnish to each of you without charge one signed copy (plus one
additional signed copy to your legal counsel) of the Registration Statement
as first filed with the Commission and of each amendment thereto, including
all exhibits filed therewith, and to furnish to you such number of conformed
copies of the Registration Statement as so filed and of each amendment
thereto, without exhibits, as you may reasonably request;
(e) Not to file any amendment or supplement to the Registration
Statement, whether before or after the time when it becomes effective, or
make any amendment or supplement to the Prospectus, of which you shall not
previously have been advised and provided a copy within two business days
prior to the filing thereof (or such reasonable amount of time as is
necessitated by the exigency of such amendment or supplement) or to which you
shall reasonably object; and to prepare and file with the Commission,
promptly upon your reasonable request, any amendment to the Registration
Statement or supplement to the Prospectus which may be necessary or advisable
in connection with the distribution of the Senior Notes by you, and to use
its best efforts to cause the same to become effective as promptly as
possible;
(f) Promptly from time to time to take such action as you may reasonably
request to qualify the Senior Notes for offering and sale under the state
securities or Blue Sky laws of such jurisdictions as you may reasonably
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Senior Notes, provided that in connection
therewith neither Issuer shall be required to qualify as a foreign
partnership or corporation or to file a general consent to service of process
in any jurisdiction in which it is not so qualified or has not so filed;
(g) Promptly after the Registration Statement becomes effective, and from
time to time thereafter prior to the expiration of nine months after the time
of issue of the Prospectus if the delivery of a prospectus is required in
connection with the offering or sale of the Senior Notes, to furnish to each
Underwriter and dealer without charge as many copies of the Prospectus (and
of any amendment or supplement to the Prospectus) as such Underwriters and
dealers may reasonably request; if in your reasonable judgment a prospectus
is required to be delivered any time prior to the expiration of such nine-
month period any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made when such Prospectus was delivered, not misleading, or, if for
any other reason it shall be necessary during such period to amend or
supplement the Prospectus in order to comply with any law, to promptly notify
you and upon your request to promptly prepare, file with the Commission and
furnish without charge to each Underwriter and to any dealer in securities as
many copies as such Underwriter may from time to time reasonably request of
an amended Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance; and in case any
Underwriter is required to deliver a prospectus in connection with sales of
any of the Senior Notes at any time nine months or more after the time of
issue of the Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many copies as you
may request of an amended or supplemental Prospectus complying with Section
10(a)(3) of the Act;
(h) To mail and make generally available to security holders of each of
the Issuers as soon as reasonably practicable, but in any event not later
than 18 months after the "effective date" (as defined in Rule 158 under the
Act) of the Registration Statement a consolidated earning statement of each
of the Issuers covering a period of at least twelve months beginning after
such effective date
4
<PAGE>
(but in no event commencing later than 90 days after such effective date)
which shall satisfy the provisions of Section 11(a) of the Act and Rule 158
thereunder, and to advise you in writing when such statement has been so made
available;
(i) To timely complete all required filings and otherwise fully comply in
a timely manner with all provisions of the Securities Exchange Act of 1934,
as amended, including the rules and regulations thereunder (collectively, the
"Exchange Act"), in connection with the registration, if any, of the Senior
Notes thereunder;
(j) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement becomes effective or is terminated, to pay all
costs, expenses, fees and taxes incident to and in connection with; (i) the
fees, disbursements and expenses of the Partnership's counsel and accountants
in connection with the registration of the Senior Notes under the Act and all
other expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or
producing any Agreement among Underwriters, this Agreement, the Blue Sky
Memorandum and any other documents in connection with the offering, purchase,
sale and delivery of the Senior Notes; (iii) all expenses in connection with
the qualification of the Senior Notes for offering and sale under state
securities laws as provided in paragraph (f) above, including the reasonable
fees and disbursements of counsel for the Underwriters in connection with
such qualification and in connection with the Blue Sky Memorandum; (iv) the
filing fees incident to securing any required review by the National
Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale
of the Senior Notes; (v) the cost of preparing certificates representing the
Senior Notes; (vi) the cost and charges of any transfer agent or registrar;
(vii) the rating of the Senior Notes by rating agencies; (viii) all fees and
expenses of listing the Senior Notes on a stock exchange or automated
quotation system; and (ix) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section;
(k) To furnish to the holders of Senior Notes within 120 days after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, security holders' equity and cash flow of such Issuer
and the entities consolidated therewith certified by independent public
accountants) and, within 90 days after the end of each of the first three
quarters of each fiscal year, consolidated summary financial information of
each of the Issuers for such quarter in reasonable detail;
(l) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to security holders of each of
the Issuers, and deliver to you (i) as soon as they are available, copies of
any reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which any class of
securities of any Issuer is listed; and (ii) such additional information
concerning the business and financial condition of each of the Issuers as you
may from time to time reasonably request (such financial statements to be on
a consolidated basis to the extent the accounts of any Issuer and the
entities consolidated therewith are consolidated in reports furnished to its
security holders generally or to the Commission);
(m) To use the net proceeds from the sale of the Senior Notes pursuant to
this Agreement in the manner specified in the Prospectus under the caption
"Use of Proceeds";
5
<PAGE>
(n) Not to voluntarily claim, and to actively resist any attempts to
claim, the benefit of any usuary laws against the holders of Senior Notes;
(o) To file with the Commission such reports on Form SR as may be
required by Rule 463 under the Act; and
(p) To use their best efforts to do and perform all things required to be
done and performed under this Agreement by them prior to or after the Closing
Date and to satisfy all conditions precedent on their part to the delivery of
the Senior Notes.
5. Representations and Warranties. Each of the Partnership, Finance Corp.
------------------------------
and the General Partner represents and warrants to, and agrees with, each of the
Underwriters that:
(a) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material respects
to the requirements of the Act and the rules and regulations of the
Commission thereunder, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing
to the Partnership by an Underwriter through you expressly for use therein;
(b) When the Registration Statement becomes effective, including at the
date of any post-effective amendment, at the date of the Prospectus (if
different) and at the Closing Date, the Registration Statement will comply in
all material respects with the provisions of the Act and will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading; the Prospectus and any supplements or amendments thereto will not
at the date of the Prospectus, at the date of any such supplements or
amendments and at the Closing Date contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties
contained in this paragraph (b) shall not apply to statements in or omissions
from the Registration Statement or the Prospectus (or any supplement or
amendment to them) made in reliance upon and in conformity with information
relating to you furnished to the Issuers in writing by you expressly for use
therein. When the Registration Statement becomes effective, including at the
date of any post-effective amendment, at the date of the Prospectus and any
amendment or supplement thereto (if different) and at the Closing Date, the
Indenture will have been qualified under and will conform in all material
respects to the requirements of the Trust Indenture Act of 1939, as amended,
and the rules and regulations thereunder (collectively, the "TIA"). No
contract or document of a character required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement is not described or filed as required;
(c) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus and up to each Closing Date,
(i) none of the Partnership, Finance Corp., the General Partner or any of
their respective subsidiaries (collectively, the "Subsidiaries") has incurred
(A) any material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any
labor
6
<PAGE>
dispute or court or governmental action, order or decree, otherwise than as
set forth or contemplated in the Prospectus or (B) any liabilities or
obligations, direct or contingent, which are material to the Partnership,
Finance Corp., the General Partner and the Subsidiaries, taken as a whole, or
entered into any material transaction not in the ordinary course of business,
and (ii) there has not been any change in the capitalization or long-term
debt or increase in short-term debt of the Partnership, Finance Corp. or the
General Partner or, singly or in the aggregate, any material adverse change,
or any development which may reasonably be expected to involve a material
adverse change, in the properties, business, general affairs, management,
condition (financial or otherwise), financial position, results of operations
or prospects of the Partnership, Finance Corp., the General Partner and the
Subsidiaries, taken as a whole, otherwise than as set forth or contemplated
in the Prospectus;
(d) The firm of accountants that has certified or shall certify the
applicable consolidated financial statements and supporting schedules of the
General Partner and its Subsidiaries filed or to be filed with the Commission
as part of the Registration Statement and the Prospectus are independent
public accountants with respect to the General Partner and its Subsidiaries,
as required by the Act. The consolidated historical and pro forma financial
statements, together with related schedules and notes, set forth in the
Prospectus and the Registration Statement comply as to form in all material
respects with the requirements of the Act; at April 30, 1994, the Partnership
would have had, on the pro forma basis indicated in the Prospectus, a duly
authorized and outstanding capitalization as set forth therein. The audited
balance sheet of the Partnership included in the Prospectus presents fairly
the financial position of the Partnership as of the date indicated. The
audited and unaudited historical consolidated financial statements of the
General Partner included in the Prospectus present fairly the consolidated
financial position of the General Partner and the Subsidiaries as of the
dates indicated and their results of operations and cash flows for the
periods specified. The supplemental schedules included in the Registration
Statement, when considered in relation to the audited and unaudited
historical consolidated financial statements of the General Partner, present
fairly in all material respects the information shown therein. Such audited
and unaudited historical consolidated financial statements and supplemental
schedules included in the Registration Statement and the Prospectus have been
prepared in conformity with generally accepted accounting principles applied
on a substantially consistent basis, except to the extent disclosed therein;
the historical information set forth in the Prospectus under the caption
"Selected Historical and Pro Forma Financial and Operating Data" is fairly
stated in all material respects in relation to the audited and unaudited
historical consolidated financial statements from which it has been derived.
The pro forma financial information set forth in the Prospectus under the
caption "Selected Historical and Pro Forma Financial and Operating Data" is
fairly stated in all material respects in relation to the pro forma financial
statements from which it has been derived. The pro forma financial
statements of the Partnership included in the Registration Statement and the
Prospectus have been prepared on a basis consistent with such historical
statements, except for the pro forma adjustments specified therein, and in
accordance with the applicable published rules and regulations of the
Commission, the assumptions used in the preparation of such pro forma
financial statements are reasonable, and the pro forma entries reflected in
such pro forma financial statements have been properly applied in such pro
forma financial statements. The other financial and statistical information
and data included in the Prospectus and in the Registration Statement,
historical and pro forma, are, in all material respects, accurately presented
and prepared on a basis consistent with such financial statements and the
books and records of the Partnership and the General Partner;
7
<PAGE>
(e) Each of the Partnership and the Master Partnership has been duly
formed and is validly existing as a limited partnership under the Delaware
Revised Limited Uniform Partnership Act (the "Delaware Act"), with
partnership power and authority to own or lease the properties it will own or
lease at the Closing Date and conduct the business it will conduct at the
Closing Date, in each case as described in the Prospectus, and has been duly
qualified or registered as a foreign limited partnership for the transaction
of business under the laws of each jurisdiction in which the failure to so
qualify or register would have a material adverse effect upon the Partnership
or the Master Partnership or subject the Partnership or the Master
Partnership to any material liability or disability;
(f) The General Partner is and, upon consummation of the transactions
described under the caption "The Transactions" in the Prospectus and
contemplated by the Operative Agreements (as defined in (m) below) (the
"Transactions"), will be the sole general partner of the Partnership with a
general partner interest in the Partnership of 1.0101%. Such general partner
interest is duly authorized by the Agreement of Limited Partnership of the
Partnership (as it may be amended or restated at or prior to the Closing
Date, the "Partnership Agreement"), and will be validly issued to the General
Partner and will be fully paid (to the extent required at such time). At the
Closing Date the General Partner will own such general partner interest free
and clear of all liens, encumbrances, charges or claims;
(g) Upon consummation of the Transactions, the Master Partnership will be
the sole limited partner of the Partnership, with a limited partner interest
of 98.9899%. At the Closing Date, such limited partner interest will be duly
authorized by the Partnership Agreement, will have been validly issued and
will be fully paid and non-assessable (except as such non-assessability may
be affected by matters described in the prospectus relating to the Common
Units under the caption "The Partnership Agreement -- Limited Liability").
Upon consummation of the Transactions, the Master Partnership will own such
limited partner interest in the Partnership free and clear of all liens,
encumbrances, charges or claims;
(h) Each of the General Partner and Finance Corp. has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the state of its incorporation, with power and authority
(corporate and other) to own or lease its properties, to conduct its business
and (in the case of the General Partner) to act as general partner of the
Partnership, in each case as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which the failure
to so qualify or register would have a material adverse effect upon the
General Partner, the Partnership or Finance Corp. or subject the General
Partner, the Partnership or Finance Corp. to any material liability or
disability;
(i) All of the issued shares of capital stock of the General Partner have
been duly authorized and validly issued and are fully paid and non-
assessable; and all of the issued shares of capital stock of the General
Partner are owned by Ferrell Companies, Inc., a Kansas corporation
("Ferrell"), free and clear of all liens, security interests, mortgages,
pledges, encumbrances, equities or claims (each a "Lien") except as set forth
in the Prospectus and except for such Liens created pursuant to the pledge
agreement entered into in connection with (A) that certain Amended and
Restated Loan Agreement, dated as of May 10, 1993, among Ferrellgas, Inc.,
Stratton Insurance Company, Inc., Ferrell Companies, Inc., One Liberty Oil
Company, Ferrellgas International (F.L.) Establishment, Vaduz and Wells Fargo
Bank, National Association, as agent and the other lenders party thereto (the
"Wells Fargo Agreement") and
8
<PAGE>
(B) the Existing Indenture (such pledge agreement is referred to herein as
the "Existing Pledge Agreement").
(j) All of the issued and outstanding shares of capital stock of, or
other ownership interests in, each Subsidiary of the Partnership, Finance
Corp. and the General Partner have been duly and validly authorized and
issued, and all of the shares of capital stock of, or other ownership
interests in, each such Subsidiary are owned, directly or through other
Subsidiaries, by the Partnership, Finance Corp. or the General Partner, as
the case may be. All such shares of capital stock are fully paid and
nonassessable, and are owned free and clear of any Liens, except as set forth
in the Prospectus and except for such Liens created pursuant to the Existing
Pledge Agreement. There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or Liens related
to or entitling any person to purchase or otherwise to acquire any shares of
the capital stock of, or other ownership interest in, any such Subsidiary;
(k) The General Partner has the corporate power and authority to convey
the Properties (as defined in paragraph (s) below) to the Partnership
pursuant to the Closing Agreement (as defined in paragraph (m) below). The
General Partner has, and, upon execution, delivery and performance of the
Closing Agreement, the Partnership will have, good and indefeasible title to
the Properties, free and clear of all liens, encumbrances, security
interests, equities, charges, claims or defects except such as are described
in the Prospectus or such as do not materially interfere with the ownership
or benefits of ownership or materially increase the cost of ownership of the
Properties, taken as a whole. The Properties then owned by the General
Partner are accurately reflected in the General Partner's consolidated
financial statements at and for the period ended April 30, 1994. All real
property, buildings and equipment held under lease by the General Partner are
held by the General Partner under valid, subsisting and enforceable leases
and, following the execution, delivery and performance of the Closing
Agreement, the Partnership will have the right to use all such real property,
buildings and equipment in a manner consistent with the past business
practices of the General Partner, in each case, except as described in the
Prospectus and except as are not material and do not interfere with the use
made and proposed to be made of such real property, buildings and equipment
by the General Partner and the Partnership;
(l) Each of the Partnership, Finance Corp., the General Partner and the
Master Partnership has full power and authority to execute, deliver and
perform this Agreement and the Operative Agreements, as applicable, and each
of the Partnership and Finance Corp. has full power and authority to
authorize, issue, sell and deliver the Senior Notes as contemplated by this
Agreement;
(m) This Agreement has been duly authorized, executed and delivered by
each of the Partnership, Finance Corp. and the General Partner and (assuming
the due execution and delivery by you) is a valid and legally binding
agreement of each of the Partnership, Finance Corp. and the General Partner,
enforceable against each of them in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles. At or before the Closing Date, the
Partnership Agreement will have been duly authorized, executed and delivered
by the General Partner and the Master Partnership and will be a valid and
legally binding agreement of the General Partner and the Master Partnership,
enforceable against the General Partner and the Master Partnership in
accordance with its terms,
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subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles and except as set forth in
the Registration Statement. At or before the Closing Date, the Contribution,
Conveyance and Assumption Agreement among the Partnership, the Master
Partnership and the General Partner (the "Closing Agreement") will have been
duly authorized, executed and delivered by the Partnership, the Master
Partnership and the General Partner and will be a valid and legally binding
agreement of the Partnership, the Master Partnership and the General Partner
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; the Partnership Agreement, the Closing Agreement, the
Credit Facility and the Indenture are herein collectively referred to as the
"Operative Agreements";
(n) The Senior Notes have been duly authorized by each Issuer and, at the
Closing Date, will have been duly executed by each Issuer and will conform in
all material respects to the description thereof in the Prospectus. When the
Senior Notes are issued, authenticated and delivered in accordance with the
Indenture and paid for in accordance with the terms of this Agreement, they
will constitute valid and legally binding obligations of each Issuer,
enforceable against each Issuer in accordance with their terms and entitled
to the benefits of the Indenture, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles;
(o) The Indenture has been duly authorized by each Issuer and, at the
Closing Date, will have been duly executed by each Issuer and will conform in
all material respects to the description thereof in the Prospectus. When the
Indenture has been duly executed and delivered, the Indenture will be a valid
and legally binding agreement of each Issuer, enforceable against each Issuer
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles;
(p) The capitalization of the Partnership is in all material respects as
described in the Prospectus under the caption "Capitalization";
(q) The execution and delivery of this Agreement and the Indenture by the
Issuers, the issuance and sale of the Senior Notes by the Issuers, the
execution, delivery and performance by the Partnership, Finance Corp., the
General Partner and the Master Partnership, as the case may be, of the
Operative Agreements and the consummation by the Partnership, Finance Corp.,
the General Partner, the Master Partnership and Ferrell, as the case may be,
of the Transactions will not conflict with or result in a breach or violation
of any of the terms provisions of, or constitute a default or cause an
acceleration of any obligation under, or result in the imposition or creation
of (or the obligation to create or impose) 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 agreement or instrument to which the Partnership, Finance Corp., the
General Partner, the Master Partnership or any of the Subsidiaries is a party
or by which the Partnership, Finance Corp., the General Partner, the Master
Partnership or any of the Subsidiaries is bound or to which any of their
properties or assets is subject (other than any default or event of default
arising as a result of the Transactions under the Existing Indenture) nor
will such action result in any breach or violation of the
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provisions of the Partnership Agreement or of the charter or bylaws of the
General Partner, Finance Corp. or any of the Subsidiaries or contravene any
order of any court or governmental agency or body having jurisdiction over
the Partnership, Finance Corp., the General Partner, the Master Partnership
or any of the Subsidiaries or any of their respective properties, or violate
or conflict with any statute, rule or regulation or administrative or court
decree applicable to the Partnership, Finance Corp., the General Partner, the
Master Partnership or any of the Subsidiaries or any of their respective
properties, and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issuance and sale of the Senior Notes by the Partnership and
Finance Corp. or the consummation by the Partnership, Finance Corp., the
General Partner or the Master Partnership, as the case may be, of the
Transactions, except (i) the registration under the Act of the Senior Notes
and under the Trust Indenture Act of 1939, as amended, of the Indenture or
(ii) such consents, approvals, authorizations, orders, registrations or
qualifications (A) as have been, or prior to the Closing Date will be,
obtained or (B) as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Senior Notes;
(r) No action has been taken and no statute, rule or regulation or order
has been enacted, adopted or issued by any governmental agency or body which
prevents the issuance of the Senior Notes, suspends the effectiveness of the
Registration Statement, prevents or suspends the use of any preliminary
prospectus or suspends the sale of the Senior Notes in any jurisdiction
referred to in Section 4(f) hereof; no injunction, restraining order or order
of any nature by a federal or state court of competent jurisdiction has been
issued with respect to the Partnership, Finance Corp., the General Partner or
any of the Subsidiaries which would prevent or suspend the issuance or sale
of the Senior Notes, the effectiveness of the Registration Statement, or the
use of any preliminary prospectus in any jurisdiction referred to in Section
4(f) hereof; no action, suit or proceeding is pending against or, to the best
knowledge of the Partnership, Finance Corp. or the General Partner,
threatened against or affecting the Partnership, Finance Corp., the General
Partner or any of the Subsidiaries before any court or arbitrator or any
governmental body, agency or official, domestic or foreign, which, if
adversely determined, would materially interfere with or adversely affect the
issuance of the Senior Notes or in any manner draw into question the validity
of this Agreement, the Indenture or the Senior Notes; and every request of
the Commission or any securities authority or agency of any jurisdiction for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise) has been complied with in all material respects;
(s) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body will be
required for the conveyance of the real and personal property to be conveyed
pursuant to the Closing Agreement (the "Properties"), except such consents,
approvals, authorizations, orders, registrations or qualifications (i) as
have been, or prior to the Closing Date will be, obtained, or (ii) which, if
not obtained, would not, individually or in the aggregate, have a material
adverse effect upon the ability of the Partnership to conduct its business
substantially in accordance with the past practice of the General Partner;
(t) The Partnership has, or at or before the Closing Date will have, all
necessary consents, approvals, authorizations, orders, registrations and
qualifications (or the equivalent thereof in all material respects) of or
with any court or governmental agency or body having jurisdiction over it or
any of its properties or of or with any other person to permit the
Partnership to conduct its business substantially in accordance with the past
practice of the
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General Partner, except such consents, approvals, authorizations, orders,
registrations or qualifications which, if not obtained, would not,
individually or in the aggregate, have a material adverse effect upon the
properties, business, general affairs, management, condition (financial or
otherwise), financial position, results of operations, or prospects of the
Partnership, Finance Corp., the General Partner and the Subsidiaries taken as
a whole, or upon the holders of Senior Notes;
(u) Except as set forth or contemplated in the Prospectus or as
contemplated by this Agreement, neither the Partnership nor Finance Corp. has
incurred any material liabilities or obligations, direct or contingent, or
entered into any material agreement or engaged in any material business other
than in connection with its formation;
(v) Other than as set forth in the Prospectus, there is no action, suit
or proceeding before or by any court or governmental agency or body, domestic
or foreign, pending against the Partnership, Finance Corp., the General
Partner or any of the Subsidiaries, or any of their respective properties,
which is required to be disclosed in the Prospectus and is not so disclosed,
which, if determined adversely to such person, would individually or in the
aggregate have a material adverse effect upon the properties, business,
general affairs, management, condition (financial or otherwise), financial
position, results of operations or prospects of the Partnership, Finance
Corp., the General Partner and the Subsidiaries, taken as a whole, or which
could reasonably be expected to materially and adversely affect the
consummation of this Agreement, the Operative Agreements or the Transactions;
and to the best of the knowledge of the Partnership, Finance Corp. and the
General Partner, no such actions, suits or proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(w) The statements made in the Prospectus under the caption "Description
of Senior Notes", insofar as they purport to constitute summaries of the
terms of the Senior Notes and the Indenture, under the caption "The
Partnership", under the caption "Tax Considerations" and under the caption
"Underwriting", insofar as they describe the provisions of the documents
therein, are accurate, complete and fair summaries;
(x) None of the Partnership, Finance Corp., the General Partner or any
Subsidiary is in: (i) breach or violation of its agreement of limited
partnership or of its charter or bylaws, as the case may be; or (ii) default
(and no event has occurred which, with notice or lapse of time or both, would
constitute such a default) in the due performance or observance of any term,
covenant or condition contained in any bond, note, debenture or other
evidence of indebtedness or any indenture, mortgage, deed of trust, loan
agreement, contract, lease or other agreement or instrument to which it is a
party or by which it is bound or to which any of its properties or assets is
subject (other than any default or event of default arising as a result of
the Transactions under the Existing Indenture); or (iii) violation of any
statute, rule or regulation or administrative or court decree applicable to
it or any of its properties, which default or violation described in clause
(ii) or (iii), individually or in the aggregate, could have a material
adverse effect upon the holders of Senior Notes or the properties, business,
general affairs, management, prospects, condition (financial or otherwise),
financial position or results of operations of any of the Partnership,
Finance Corp., the General Partner and the Subsidiaries taken as a whole;
(y) Except as described in the Prospectus, (i) each of the Partnership,
Finance Corp., the General Partner and the Subsidiaries has all certificates,
consents, exemptions, orders, permits,
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licenses, authorizations, or other approvals (each, an "Authorization") of
and from, and has made all declarations and filings with, all federal, state,
local and other governmental authorities, all self-regulatory organizations
and all courts and other tribunals, necessary or required to own, lease,
license and use its properties and assets and to conduct its business in the
manner described in the Prospectus, except to the extent that the failure to
obtain or file would not, singly or in the aggregate, have a material adverse
effect upon the ability of the Partnership, Finance Corp., the General
Partner or the Subsidiaries to conduct their businesses in all material
respects as currently conducted and as contemplated by the Prospectus to be
conducted; (ii) all such Authorizations are valid and in full force and
effect; (iii) the Partnership, Finance Corp., the General Partner and the
Subsidiaries are in compliance in all material respects with the terms and
conditions of all such Authorizations and with the rules and regulations of
the regulatory authorities and governing bodies having jurisdiction with
respect thereto; and, (iv) except as described in the Prospectus, none of the
Partnership, Finance Corp., the General Partner or the Subsidiaries has
received any notice of proceedings relating to the revocation or modification
of any such Authorization which, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or filing, would be expected to
have a material adverse effect upon the ability of the Partnership, Finance
Corp., the General Partner and the Subsidiaries to conduct their businesses
in all material respects as currently conducted and as contemplated by the
Prospectus to be conducted;
(z) None of the Partnership, Finance Corp., the General Partner nor any
of the Subsidiaries has violated any environmental safety or similar law or
regulation applicable to its business relating to the protection of human
health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), lacks any permits,
licenses or other approvals required of them under applicable Environmental
Laws to own, lease and operate their respective properties and to conduct
their business in the manner described in the Prospectus, is violating any
terms and conditions of any such permit, license or approval or has permitted
to occur any event that allows, or after notice or lapse of time would allow,
revocation or termination of any such permit, license or approval or results
in any other impairment of their rights thereunder, which in each case might
result, singly or in the aggregate, in a material adverse effect on the
Partnership, Finance Corp., the General Partner and the Subsidiaries, taken
as a whole (a "Material Adverse Effect"). None of the Partnership, Finance
Corp., the General Partner nor any of the Subsidiaries violated any federal,
state or local law relating to discrimination in the hiring, promotion or pay
of employees prior to any applicable wage or hour laws, nor any provisions of
the Employee Retirement Income Security Act of 1974 ("ERISA") or the rules
and regulations promulgated thereunder, nor has the Partnership, Finance
Corp., the General Partner or any of the Subsidiaries engaged in any unfair
labor practice, which in each case might result, singly or in the aggregate,
in a Material Adverse Effect. There is (i) no significant unfair labor
practice complaint pending against the Partnership, Finance Corp., the
General Partner or any of the Subsidiaries or, to the best knowledge of the
Partnership, Finance Corp. or the General Partner, threatened against any of
them before the National Labor Relations Board or any state or local labor
relations board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against the Partnership, Finance Corp., the General Partner or any of
the Subsidiaries or, to the best knowledge of the Partnership, Finance Corp.
or the General Partner, threatened against any of them, (ii) no significant
strike, labor dispute, slowdown or stoppage pending against the Partnership,
Finance Corp., the General Partner or any of the Subsidiaries or, to the best
knowledge of the Partnership, Finance Corp. or the General Partner,
threatened against the Partnership, Finance Corp., the General Partner
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or any of the Subsidiaries and (iii) to the best knowledge of the
Partnership, Finance Corp. or the General Partner, no union representation
question existing with respect to the employees of the Partnership, Finance
Corp., the General Partner or any of the Subsidiaries and, to the best
knowledge of the Partnership, Finance Corp. or the General Partner, no union
organizing activities are taking place, except (with respect to any matter
specified in clause (i), (ii) or (iii) above, singly or in the aggregate)
such as could not have a Material Adverse Effect;
(aa) All tax returns required to be filed by the Partnership, Finance
Corp., the General Partner or any of the Subsidiaries in any jurisdiction
have been filed, other than those filings being contested in good faith, and
all material taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due or claimed to be due from such
entities have been paid, other than those being contested in good faith and
for which adequate reserves have been provided or those currently payable
without penalty or interest;
(bb) Except pursuant to this Agreement, none of the Partnership, Finance
Corp., the General Partner or the Subsidiaries has (i) taken, directly or
indirectly, any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of any Issuer to
facilitate the sale or resale of the Senior Notes or (ii) since the initial
filing of the Registration Statement (A) sold, bid for, purchased, or paid
anyone any compensation for soliciting purchases of, the Senior Notes or (B)
paid or agreed to pay to any person any compensation for soliciting another
to purchase any other securities of the Partnership or Finance Corp.;
(cc) None of the Partnership, Finance Corp., the General Partner nor any
of the Subsidiaries is (i) an "investment company" or a company "controlled"
by an investment company within the meaning of the Investment Company Act of
1940, as amended, or (ii) a "holding company" or a "subsidiary company" of a
holding company, or an "affiliate" thereof within the meaning of the Public
Utility Holding Company Act of 1935, as amended;
(dd) Except as disclosed in the Prospectus, no holder of any security of
the Partnership or Finance Corp. has or will have any right to require the
registration of such security by virtue of any transaction contemplated by
this Agreement;
(ee) None of the Partnership, Finance Corp., the General Partner or the
Subsidiaries does business with the government of Cuba or with any person or
affiliate located in Cuba within the meaning of Section 517.075 of Florida
Statutes (Chapter 92-198, Laws of Florida);
(ff) At the Closing Date, the General Partner will have (excluding its
interests in the Partnership and the Master Partnership and any notes
receivable from or payable to the Partnership or the Master Partnership) a
net worth of at least $25,000,000;
(gg) Each of the Partnership, Finance Corp., the General Partner and
their respective Subsidiaries maintains insurance which is adequate in
accordance with customary industry practice; none of the Partnership, the
Finance Corp., the General Partner and their respective Subsidiaries has
received notice from any insurer or agent of such insurer that substantial
capital improvements or other expenditures will have to be made in order to
continue such insurance; all such insurance is outstanding and duly in force
on the date hereof and will be outstanding and duly in force at the Closing
Date; and
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(hh) Each certificate signed by any officer of an Issuer and delivered to
the Underwriters or counsel for the Underwriters shall be deemed to be a
joint and several representation and warranty by the Issuers to each
Underwriter as to the matters covered thereby.
6. Indemnification.
---------------
(a) The Issuers, jointly and severally, agree to indemnify and hold
harmless (i) each of the Underwriters, (ii) each person, if any, who controls
(within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act) any of the Underwriters (any of the persons referred to in this clause
(ii) being hereinafter referred to as a "controlling person"), and (iii) the
respective officers, directors, partners, employees, representatives and
agents of any of the Underwriters or any controlling person (any person
referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an
"Indemnified Person") to the fullest extent lawful, from and against any and
all losses, claims, damages, liabilities, judgments, actions and expenses
(including without limitation and as incurred, reimbursement of all
reasonable costs of investigating, preparing, pursuing or defending any claim
or action, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, including the reasonable fees and expenses of
counsel to any Indemnified Person) directly or indirectly caused by, related
to, based upon, arising out of or in connection with any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto) or the Prospectus (including any
amendment or supplement thereto) or any preliminary prospectus or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of
the Prospectus, in the light of the circumstances under which they were made)
not misleading, except (i) insofar as such losses, claims, damages,
liabilities or expenses are caused by an untrue statement or omission or
alleged untrue statement or omission that is made in reliance upon and in
conformity with information relating to any of the Underwriters furnished in
writing to the Issuers by any of the Underwriters expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus and (ii)
insofar as any such losses, claims, damages, liabilities or expenses are
caused by an untrue statement or omission or alleged untrue statement or
omission contained in any preliminary prospectus, the foregoing indemnity
shall not inure to the benefit of any Underwriter which sold Senior Notes to
a person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus or of the Prospectus as
then amended or supplemented, whichever is most recent, if the Partnership
has previously furnished copies thereof to such Underwriter, and if such
Prospectus or Prospectus as amended or supplemented, as the case may be,
completely corrected the untrue statement or alleged untrue statement or
omission or alleged omission giving rise to such losses, claims, damages,
liabilities or expenses. The Issuers shall notify you promptly of the
institution, threat or assertion of any claim, proceeding (including any
governmental investigation) or litigation in connection with the matters
addressed by this Agreement which involves an Issuer or an Indemnified
Person.
(b) In case any action or proceeding (including any governmental
investigation) shall be brought or asserted against any of the Indemnified
Persons with respect to which indemnity may be sought against the Issuers,
such Underwriter (or the Underwriter controlled by such controlling person)
shall promptly notify the Partnership in writing (provided, that the failure
to give such notice shall not relieve the Issuers of their obligations
pursuant to this Agreement). Such Indemnified Person shall have the right to
employ its own counsel in any such action and
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the reasonable fees and expenses of such counsel shall be paid, as incurred,
by the Issuers (regardless of whether it is ultimately determined that an
Indemnified Party is not entitled to Indemnification hereunder). The Issuers
shall not, in connection with any one such action or proceeding or separate
but substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) at any time for such Indemnified
Persons, which firm shall be designated by the Underwriters. The Issuers
shall be liable for any settlement of any such action or proceeding effected
with any Issuer's prior written consent, which consent will not be
unreasonably withheld, and the Issuers agree to indemnify and hold harmless
any Indemnified Person from and against any loss, claim, damage, liability or
expense by reason of any settlement of any action effected with the written
consent of any Issuer. The Issuers shall not, without the prior written
consent of each Indemnified Person, settle or compromise or consent to the
entry of Judgment in or otherwise seek to terminate any pending or threatened
action, claim or litigation proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not any Indemnified Person
is a party thereto), unless such settlement, compromise, consent or
termination includes an unconditional release of each Indemnified Person from
all liability arising out of such action, claim, litigation or proceeding.
(c) Each of the Underwriters agrees, severally and not jointly, to
indemnify and hold harmless the Issuers, their directors, their officers who
sign the Registration Statement, any person controlling (within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act) the Partnership,
and the officers, directors, partners, employees, representatives and agents
of each such person, to the same extent as the foregoing indemnity from the
Issuers to each of the Indemnified Persons, but only with respect to claims
and actions based on information relating to such Underwriter furnished in
writing by such Underwriter expressly for use in the Registration Statement
or the Prospectus.
(d) If the indemnification provided for in this Section 6 is unavailable
to an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the indemnifying party on the one
hand and the indemnified party on the other hand from the offering of the
Senior Notes or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the indemnifying parties and the indemnified party, as well
as any other relevant equitable considerations. The relative benefits
received by the Issuers, on the one hand, and any of the Underwriters, on the
other hand, shall be deemed to be in the same proportion as the total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Issuers bear to the total
underwriting discounts and commissions received by such underwriter, in each
case as set forth in the table on the cover page of the Prospectus. The
relative fault of the Issuers and the Underwriters shall be determined by
reference to, among other things whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact related to information supplied by the Issuers or the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The indemnity and contribution obligations
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of the Issuers set forth herein shall be in addition to any liability or
obligation the Issuers may otherwise have to any Indemnified Person.
The Issuers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or expenses referred to in
the immediately preceding paragraph shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 6, none of the Underwriters (and its related Indemnified Persons)
shall be required to contribute, in the aggregate, any amount in excess of
the amount by which the total underwriting discount applicable to the Senior
Notes purchased by such Underwriter exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations
to contribute pursuant to this Section 6(d) are several in proportion to the
respective principal amount of Senior Notes purchased by each of the
Underwriters hereunder and not joint.
7. Conditions of Underwriters' Obligations. The obligations of the
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Underwriters hereunder shall be subject, in their discretion, to the condition
that all representations and warranties and other statements on the part of the
Partnership, Finance Corp. and the General Partner herein are, at and as of the
Closing Date, true and correct with the same force and effect as if made at and
as of the Closing Date, the condition that each of the Partnership, Finance
Corp. and the General Partner shall have performed all of its obligations and
agreements hereunder theretofore to be performed, and the following additional
conditions:
(a) The Registration Statement shall have become effective (or, if a
post-effective amendment is required to be filed pursuant to Rule 430A
promulgated under the Act, such post-effective amendment shall have become
effective) not later than 10:00 A.M., New York City time, on the date of this
Agreement or at such later date and time as you may approve in writing; the
Prospectus shall have been filed with the Commission pursuant to Rule 424(b)
within the applicable time period prescribed for such filing by the rules and
regulations under the Act and in accordance with Section 4(a) hereof; no stop
order suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; all requests for additional
information on the part of the Commission shall have been complied with to
your reasonable satisfaction; no stop order suspending the sale of the Senior
Notes in any jurisdiction referred to in Section 4(f) shall have been issued
and no proceeding for that purpose shall have been commenced or shall be
pending or threatened;
(b) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued, by any governmental agency
which would, as of the Closing Date, prevent the issuance of the Senior
Notes; and no injunction, restraining order or order
17
<PAGE>
of any nature by a federal or state court of competent jurisdiction shall
have been issued as of the Closing Date which would prevent the issuance of
the Senior Notes;
(c) Andrews and Kurth L.L.P., special counsel for the Partnership,
Finance Corp. and the General Partner, shall have furnished to you their
written opinion, dated the Closing Date, in form and substance satisfactory
to you, to the effect that:
(i) Each of the Partnership and the Master Partnership has been duly
formed and is validly existing as a limited partnership under the Delaware
Act, with partnership power and authority to own or lease its properties
and conduct its business as described in the Prospectus.
(ii) The General Partner is and, upon consummation of the
Transactions, will be the sole general partner of the Partnership with a
general partner interest in the Partnership of 1.0101%; such general
partner interest is duly authorized by the Partnership Agreement, is
validly issued and fully paid, and is owned by the General Partner free
and clear of all liens, encumbrances, charges or claims of record (A) in
respect of which a financing statement under the Uniform Commercial Code
of the State of Delaware naming the General Partner as debtor is on file
in the office of the Secretary of State of the State of Delaware or (B)
otherwise known (based solely upon its participation as special counsel in
matters relating to the Transactions, and without having conducted an
independent investigation) to such counsel, other than those created by or
arising under the Delaware Act.
(iii) The Master Partnership is, and upon consummation of the
Transactions will be, the sole limited partner of the Partnership, with a
limited partner interest of 98.9899%; such limited partner interest is
duly authorized by the Partnership Agreement and is validly issued, fully
paid and non-assessable (except as such non-assessability may be affected
by matters described in the Prospectus relating to the Common Units under
the caption "The Partnership Agreement--Limited Liability"); and, the
Master Partnership will own such limited partner interest in the
Partnership free and clear of all liens, encumbrances, charges or claims
of record (A) in respect of which a financing statement under the Uniform
Commercial Code of the State of Delaware naming the Partnership as debtor
is on file in the office of the Secretary of State of the State of
Delaware or (B) otherwise known (based solely upon its participation as
special counsel in matters relating to the Transactions, and without
having conducted an independent investigation) to such counsel, other than
those created by or arising under the Delaware Act.
(iv) The Partnership Agreement has been duly authorized, executed and
delivered by the parties thereto and the Partnership Agreement constitutes
a valid and legally binding agreement of the parties thereto, enforceable
against each of them in accordance with its terms, subject to (A)
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles (B) limitations imposed
by public policy, applicable law relating to fiduciary duties and the
judicial imposition of an implied covenant of good faith and fair dealing
and (C) the effect of general principles of equity, whether enforcement is
considered in a proceeding in equity or at law, and the discretion of the
court before which any proceeding therefor may be brought.
(v) The issuance and sale of the Senior Notes by the Issuers and the
execution, delivery and performance by the Partnership, Finance Corp. and
the Master Partnership, as the case may be, of this Agreement and the
Operative Agreements and the consummation by the Partnership, Finance
Corp. and the Master Partnership, as the case may be, of the Transactions
will not
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conflict with or result in a breach or violation of any of the provisions
of the Partnership Agreement;
(vi) None of the Partnership, Finance Corp. or the General Partner is
an "investment company" within the meaning of the Investment Company Act
of 1940, as amended.
(vii) None of the Partnership, Finance Corp. or the General Partner is
a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
In addition, such counsel shall also state that it has participated in the
preparation of the Registration Statement and Prospectus and, although such
counsel is not passing upon, and does not assume responsibility for the
accuracy, completeness or fairness of, any portion of the Registration
Statement and the Prospectus, as amended or supplemented, subject to
customary qualifications and assumptions and relying as to materiality to a
large extent upon the statements of officers and other representatives of the
Partnership, nothing has come to the attention of such counsel that causes
such counsel to believe that, as of its effective date, the Registration
Statement, or any further amendment thereto made by the Issuers prior to such
Closing Date (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or that, as of its date, the Prospectus or any further amendment
or supplement thereto made by the Issuers prior to such Closing Date (other
than the financial statements and related schedules therein, as to which such
counsel need express no opinion) contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading or that, as of such Closing Date, the Prospectus or any further
amendment or supplement thereto made by the Issuers prior to such Closing
Date (other than the financial statements and related schedules therein, as
to which such counsel need express no opinion) contains an untrue statement
of a material fact or omits to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
In rendering such opinion, such counsel may (A) rely in respect of matters
of fact upon certificates of the Partnership and the Master Partnership and
of officers and employees of the General Partner and Finance Corp. and upon
information obtained from public officials and upon opinions of other counsel
issued in connection with the Transactions, and may assume that the
signatures on all documents examined by such counsel are genuine, (B) state
that their opinion is limited to federal laws, the Delaware Act and the
Delaware General Corporation Law and the laws of the State of Texas, (C)
state that they express no opinion with respect to the title of any of the
General Partner, the Partnership or the Master Partnership to any real or
personal property transferred by or to them and that they express no opinion
regarding the accuracy of the description or references to any real or
personal property, (D) state that they express no opinion with respect to
state or local taxes or tax statutes to which any of the General Partner, the
Partnership, the Master Partnership or the limited partners of the Master
Partnership may be subject, and (E) state that their opinion is furnished as
special counsel for the Partnership, the Master Partnership and the General
Partner to you, as representatives of the several Underwriters, and is solely
for the benefit of the several Underwriters;
(d) Smith, Gill, Fisher & Butts, counsel to the General Partner and
Ferrell, shall have furnished to you their written opinion, dated such
Closing Date in form and substance satisfactory to you, to the effect that:
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(i) Finance Corp. has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the state of its
incorporation, with power and authority (corporate and otherwise) to own
or lease its properties, to conduct its businesses as described in the
Prospectus.
(ii) The General Partner has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the state of
its incorporation, with power and authority (corporate and otherwise) to
own or lease its properties, to conduct its businesses and to act as
general partner of the Partnership and of the Master Partnership, in each
case as described in the Prospectus.
(iii) Based solely on opinions of local counsel (copies of which shall
have been provided to you pursuant to paragraph (e) of this Section 7),
the Partnership has been duly qualified or registered as a foreign
partnership to transact business in, and is in good standing under the
laws of, each of the jurisdictions set forth on Schedule B hereto; based
solely upon certificates of foreign qualification provided by the
Secretary of State of such jurisdiction (each of which shall be dated as
of a date not more than ten business days prior to the Closing Date) and
oral or written confirmation of the continuance of such foreign
qualification as of a date which is not more than one business day prior
to the Closing Date (which shall be provided by the Secretary of State of
such jurisdiction), the Partnership has been duly qualified or registered
as a foreign limited partnership to transact business in, and is in good
standing under the laws of, each of the jurisdictions set forth on
Schedule C hereto; and, to the knowledge of such counsel, such
jurisdictions and the State of Missouri are the only jurisdictions in
which the Partnership owns or leases property, or conducts any business,
so as to require qualification or registration to conduct business as a
foreign limited partnership, except where the failure to so qualify or
register would not (i) have a material adverse effect upon the Partnership
or the General Partner or (ii) subject the holders of Senior Notes to any
material liability or disability.
(iv) Based solely on opinions of local counsel (copies of which shall
have been provided to you pursuant to paragraph (e) of this Section 7),
the General Partner has been duly qualified or registered as a foreign
corporation and is in good standing under the laws of each of the
jurisdictions set forth on Schedule B hereto; based solely upon
certificates of foreign qualification provided by the Secretary of State
of such jurisdiction (each of which shall be dated as of a date not more
than ten business days prior to the Closing Date) and oral or written
confirmation of the continuance of such foreign qualification as of a date
which is not more than one business day prior to the Closing Date (which
shall be provided by the Secretary of State of such jurisdiction), the
General Partner has been duly qualified or registered as a foreign
corporation and is in good standing under the laws of each of the
jurisdictions set forth on Schedule C hereto; and to the knowledge of such
counsel, such jurisdictions and the State of Missouri are the only
jurisdictions in which the General Partner owns or leases property, or
conducts any business, so as to require qualification or registration to
conduct business as a foreign corporation, and in which the failure so to
qualify or register would be likely in the judgment of such counsel to
subject the General Partner to any liability or disability which is
material to the General Partner, the Partnership or Finance Corp. or would
be likely in the judgment of such counsel to subject the holders of Senior
Notes to any material liability or disability; all of the issued shares of
capital stock of the General Partner have been duly authorized and validly
issued and are fully paid and nonassessable; and, to the knowledge of such
counsel, all of the issued shares of capital stock of the General Partner
are owned, directly or indirectly, by Ferrell, free and clear of all Liens
(A) in respect of which a financing
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statement under the Uniform Commercial Code of the State of Delaware
naming the General Partner or Ferrell, as the case may be, as debtor is on
file in the office of the Secretary of State of the State of Delaware or
(B) otherwise known, without investigation, to such counsel, except for
such Liens created pursuant to the Existing Pledge Agreement.
(v) All of the issued and outstanding shares of capital stock of, or
other ownership interests in, each Subsidiary of the Partnership, Finance
Corp., the General Partner and the Master Partnership have been duly and
validly authorized and issued, and all of the shares of capital stock of,
or other ownership interests in, each such Subsidiary are owned, directly
or through other Subsidiaries, by the Partnership, Finance Corp., the
General Partner and the Master Partnership; all such shares of capital
stock are fully paid and nonassessable, and are owned free and clear of
any Liens, except as set forth in the Prospectus and except for such Liens
created pursuant to the Existing Pledge Agreement; there are no
outstanding subscriptions, rights, warrants, options, calls, convertible
securities, commitments of sale or Liens related to or entitling any
person to purchase or otherwise to acquire any shares of the capital stock
of, or other ownership interest in, any such Subsidiary.
(vi) Each of the Closing Agreement, the Credit Facility and the
Indenture (collectively, the "Other Operative Agreements") and this
Agreement has been duly authorized, executed and delivered by the
Partnership, the Master Partnership, the General Partner and Finance
Corp., as the case may be, and each of the Other Operative Agreements and
this Agreement constitutes a valid and legally binding agreement of the
Partnership, the Master Partnership, the General Partner and Finance
Corp., as the case may be, enforceable against the Partnership, the Master
Partnership, the General Partner and Finance Corp., as the case may be, in
accordance with their respective terms, subject to (A) bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles and (B) limitations imposed by public
policy, applicable law relating to fiduciary duties and the judicial
imposition of an implied covenant of good faith and fair dealing.
(vii) When authenticated in accordance with the terms of the Indenture
and delivered to and paid for by you in accordance with the terms of this
Agreement, the Senior Notes will constitute valid and legally binding
obligations of each Issuer, enforceable against each Issuer in accordance
with their terms and entitled to the benefits of the Indenture, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally and to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(viii) The Indenture, assuming due authorization, execution and
delivery thereof by the Trustee, constitutes a valid and legally binding
agreement of each Issuer, enforceable against each Issuer in accordance
with its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law
or in equity).
(ix) None of the Partnership, Finance Corp., the General Partner or
the Master Partnership is in violation of its partnership agreement or
charter, as the case may be, or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note,
lease or other
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instrument to which it is a party or by which it or any of them or their
properties may be bound.
(x) The statements made in the Prospectus under the caption
"Description of Senior Notes", insofar as they purport to constitute
summaries of the terms of the Senior Notes and the Indenture, under the
caption "The Partnership", under the caption "Tax Considerations" and
under the caption "Underwriting", insofar as they describe the provisions
of the documents therein described, are accurate, complete and fair
summaries.
(xi) The issuance and sale of the Senior Notes by the Issuers and the
execution, delivery and performance by the Partnership, Finance Corp., the
General Partner and the Master Partnership, as the case may be, of this
Agreement and the Operative Agreements and the consummation by the
Partnership, Finance Corp., the General Partner and the Master
Partnership, as the case may be, of the Transactions will not conflict
with or result in a breach or violation of any of the terms or provisions
of, or constitute a default or cause an acceleration of any obligation
under, or result in the imposition or creation of (or the obligation to
create or impose) 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 to which the Partnership, Finance Corp., the General
Partner, the Master Partnership or any of their Subsidiaries is a party or
by which the Partnership, Finance Corp., the General Partner, the Master
Partnership or any of their Subsidiaries is bound or to which any of their
properties or assets is subject (other than any default or event of
default under the Existing Indenture arising as a result of the
Transactions) nor will such action result in any breach or violation of
the charter or bylaws of Finance Corp. or the General Partner, or any of
the Subsidiaries of the Partnership, Finance Corp., the General Partner or
the Master Partnership or contravene any order of any court or
governmental agency or body having jurisdiction over the Partnership,
Finance Corp., the General Partner or the Master Partnership or any of
their Subsidiaries or any of their respective properties, or violate or
conflict with any statute, rule or regulation or administrative or court
decree applicable to the Partnership, Finance Corp., the General Partner,
the Master Partnership or any of their Subsidiaries or any of their
respective properties, excluding in each case any violations which,
individually or in the aggregate, would not have a material adverse effect
upon the holders of Senior Notes or on the Partnership, Finance Corp., the
General Partner or any of their Subsidiaries; provided, however, that, for
the purposes of this paragraph (xi), no opinion is expressed with respect
to federal or state securities laws, other antifraud laws and fraudulent
transfer laws; and, provided, further, that performance by the
Partnership, Finance Corp., the General Partner and the Master Partnership
of their respective obligations under the Operative Agreements are subject
to (A) bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles and (B)
limitations imposed by public policy, applicable law relating to fiduciary
duties and the judicial imposition of an implied covenant of good faith
and fair dealing.
(xii) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the
United States or the State of Missouri having jurisdiction over the
Partnership, Finance Corp., the General Partner, the Master Partnership,
any of their Subsidiaries or any of their properties is required for the
issuance and sale of the Senior Notes by the Issuers or for the
consummation by the Partnership, Finance Corp., the General Partnership or
the Master Partnership of the Transactions or this Agreement, except
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in each case (A) such consents, approvals, authorizations, orders,
registrations or qualifications (1) as have been obtained, (2) as may be
required under state securities or Blue Sky laws, (3) as are of a routine
or administrative nature and are either (i) not customarily obtained or
made prior to the consummation of transactions such as the Transactions or
(ii) expected in the judgment of such counsel to be obtained in the
ordinary course of business subsequent to the consummation of the
Transactions, (4) which, if not obtained, would not, individually or in
the aggregate, have a material adverse effect upon the holders of Senior
Notes or upon the properties, business, general affairs, management,
prospects, condition (financial or otherwise), financial position,
securityholder's equity or results of operations of, the Partnership,
Finance Corp., the General Partner or any of their Subsidiaries.
(xiii) The descriptions in the Registration Statement and the
Prospectus of statutes, legal and governmental proceedings and contracts
and other documents are accurate in all material respects and fairly
present the information required to be shown; and such counsel does not
know of any legal or governmental proceedings required to be described in
the Registration Statement or Prospectus which are not described as
required or of any contracts or documents of a character required to be
described in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement which are not described and filed
as required.
(xiv) The Registration Statement has become effective under the Act;
and to the knowledge of such counsel no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission.
(xv) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Issuers prior to such
Closing Date (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the Act and the
rules and regulations thereunder.
(xvi) The Indenture has been duly qualified under the TIA.
In addition, such counsel shall also state that it has participated in the
preparation of the Registration Statement and Prospectus and, although such
counsel is not passing upon, and does not assume responsibility for the
accuracy, completeness or fairness of, any portion of the Registration
Statement and the Prospectus, as amended or supplemented, nothing has come to
the attention of such counsel that causes such counsel to believe that, as of
its effective date, the Registration Statement, or any further amendment
thereto made by the Issuers prior to such Closing Date (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that, as of its date, the
Prospectus or any further amendment or supplement thereto made by the Issuers
prior to such Closing Date (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or that, as of such
Closing Date, either the Registration Statement or the Prospectus or any
further amendment or supplement thereto made by the Issuers prior to such
Closing Date (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contains an untrue
statement of a material fact or omits
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to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading; and they do
not know of any contracts or other documents of a character required to be
filed as an exhibit to the Registration Statement or required to be described
in the Registration Statement or the Prospectus which are not filed or
described as required.
In rendering such opinion, such counsel may (A) rely in respect of matters
of fact upon certificates of officers and employees of the General Partner
and Ferrell and upon information obtained from public officials and upon
opinions of other counsel issued in connection with the Transactions, and may
assume that the signatures on all documents examined by such counsel are
genuine and (B) state that their opinion is limited to federal laws, the laws
of the State of Missouri and the Delaware General Corporation Law.
(e) Each of Smith, Gill, Fisher & Butts, P.C., with respect to the State
of Missouri, Andrews and Kurth L.L.P., with respect to the State of Texas,
Arnall, Golden & Gregory, with respect to the State of Georgia, Miller,
Canfield, Paddock & Stone, with respect to the State of Michigan and Taft,
Stettinius & Hollister, with respect to the States of Ohio and Kentucky, each
of which is special counsel for the Partnership, Finance Corp., the General
Partner and the Master Partnership, shall have furnished to you their written
opinion or opinions, dated such Closing Date in form and substance
satisfactory to you, to the effect that:
(i) The Partnership has been duly qualified or registered as a
foreign limited partnership for the transaction of business under the
laws of such state.
(ii) The General Partner has been duly qualified or registered as a
foreign corporation and is in good standing under the laws of such state;
(iii) The Partnership has all requisite partnership power and
authority as a limited partnership under the laws of such state to own or
lease the Properties and to conduct its business in such state.
(iv) The execution, delivery and performance of the Closing Agreement
relating to the transfer of property in such state in accordance with the
terms thereof will not violate any statute of such state or, to the
knowledge of such counsel, based solely upon such counsel's participation
as special local counsel with respect to matters relating to the
Transactions and without having conducted an independent investigation,
any order, rule or regulation of any agency of such state having
jurisdiction over any of the Partnership, the General Partner, the Master
Partnership or any of their respective properties, except for (A) any such
violations which, individually or in the aggregate, would not have a
material adverse effect upon the holders of Senior Notes or upon the
General Partner or the Partnership, and (B) as to performance by the
parties thereto of the Closing Agreement, any violations which may arise
by reason of the business activities of the Partnership or the Master
Partnership, the nature of the assets of either of them or the manner in
which such assets were constructed or are operated; provided, that such
counsel need express no opinion with respect to the securities or Blue Sky
laws of such state, other antifraud laws or fraudulent transfer laws or
the extent to which indemnity and contribution provisions of such
documents may be limited by the laws of such state; and provided, further,
that as to performance by the parties to the Closing Agreement of their
respective obligations thereunder, such counsel need express no opinion as
to bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium
and similar laws of
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general applicability relating to or affecting creditors' rights, or as to
the effect of general equity principles.
(v) The Closing Agreement, assuming the due authorization, execution
and delivery thereof by the parties thereto, to the extent it is a valid
and legally binding agreement under the applicable law as stated therein
and that such law applies thereto, is a valid and legally binding
agreement of the parties thereto under the laws of such state, enforceable
in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting the rights of contracting
parties and to general equity principles; each of the Closing Agreement
and the form of deeds and assignments is in a form legally sufficient as
between the parties thereto to convey to the transferee thereunder all of
the General Partner's right, title and interest in and to the Properties
located in such state, as described in the Closing Agreement or the form
of deeds and assignments, as the case may be, subject to the conditions,
reservations and limitations contained in the Closing Agreement or the
form of deeds and assignments, as the case may be, except motor vehicles
or other property requiring conveyance of certificated title as to which
the Closing Agreement is legally sufficient to compel delivery of such
certificated title. No opinion is expressed as to whether the Closing
Agreement complies with applicable recording, filing and registration laws
and regulations.
(vi) No consent, approval, authorization, order, registration or
qualification of or with any governmental agency or body of such state
governing (A) changes in ownership or control of industrial or other
facilities generally, (B) retail propane sales generally or (C) the
issuance of securities by entities owning retail propane sales facilities,
or, to such counsel's knowledge, based solely upon such counsel's
participation as special local counsel with respect to matters relating to
the Transactions and without having conducted an independent
investigation, any other governmental agency or body of such state having
jurisdiction over the Partnership, Finance Corp., the General Partner or
the Master Partnership, as the case may be, or any of their respective
properties is required for the issue and sale of the Senior Notes by the
Issuers or for the conveyance of the Properties located in such state
purported to be conveyed to the Partnership pursuant to the Closing
Agreement, except such consents, approvals, authorizations, orders,
registrations or qualifications (1) as have been obtained, (2) as may be
required under the Act or state securities or Blue Sky laws, (3) as are of
a routine or administrative nature and either are (i) not customarily
obtained or made prior to the consummation of transactions such as the
Transactions, or (ii) expected in the reasonable judgment of such counsel
to be obtained in the ordinary course of business subsequent to the
consummation of the Transaction, (4) which, if not obtained, would not,
individually or in the aggregate, have a material adverse effect upon the
ability of the Partnership to conduct its business substantially in
accordance with the past practice of the General Partner, (5) that relate
to zoning or subdivision mapping, or (6) as set forth or contemplated in
the Prospectus.
In rendering such opinion, such counsel may (A) rely in respect of matters of
fact upon certificates of the Partnership, the Master Partnership and of
officers and employees of the General Partner and Finance Corp., and upon
information obtained from public officials, and upon opinions of other counsel
issued in connection with the Transactions, and may assume that the signatures
on all documents examined by such counsel are genuine, (B) state that their
opinion is limited to the laws of their state of practice, excepting therefrom
municipal and local ordinances and regulations, (C) state that they express no
opinion with respect to state or local taxes or tax statutes and (D) state that
they express no opinion with respect to the title of any of the General Partner,
the Partnership or the Master Partnership to any
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real or personal property purported to be transferred by or to them, that they
have not made any review of specific property or facilities or title files
relating to any such properties, that they express no opinion regarding the
accuracy of the description or references to any real or personal property, that
they have assumed that references in exhibits or schedules to other instruments
already of record are correct and that such instruments contain legally
sufficient property descriptions.
The opinions described in subsections (c), (d) and (e) of this Section 7
shall be rendered to you by each respective counsel at the request of the
Partnership and shall so state therein.
(f) You shall have received an opinion, dated the Closing Date, of Latham
& Watkins, counsel for the Underwriters, in form and substance reasonably
satisfactory to you;
(g) On the effective date of the Registration Statement and the most
recently filed post-effective amendment to the Registration Statement and
also on the Closing Date, Deloitte & Touche shall have furnished to you a
letter or letters, dated the respective date of delivery thereof, in form and
substance satisfactory to you;
(h) (i) Since the date hereof or since the dates as of which information
is given in the Registration Statement and the Prospectus, there shall not
have been, singly or in the aggregate, any change, or any development which
may reasonably be expected to involve a change, in the properties, business,
general affairs, management, condition (financial or otherwise), financial
position, or prospects of the Partnership, Finance Corp., the General Partner
and the Subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus, (ii) since the respective dates as of which
information is given in the Registration Statement and Prospectus, there
shall not have been any change in the capital stock or long-term debt, or
increase in short-term debt, of the Partnership, Finance Corp., the General
Partner or any of the Subsidiaries, and (iii) each of the Partnership,
Finance Corp., the General Partner, and the Subsidiaries shall not have
incurred (A) since the date of the latest audited financial statements
included in the Registration Statement and the Prospectus, any material loss
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus or (B) any liability or obligation, direct or
contingent, that is required to be disclosed on a balance sheet in accordance
with generally accepted accounting principles and is not disclosed on the
latest balance sheet included in the Registration Statement and the
Prospectus, the effect of which, in any such case described in clause (i),
(ii) or (iii), is in your judgment so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Senior Notes being delivered at the Closing Date on the terms
and in the manner contemplated in the Prospectus;
(i) The closing under the Common Units Underwriting Agreement shall have
occurred and the proceeds therefrom shall have been transferred to the
Partnership in immediately available funds pursuant to the terms and
conditions of the Partnership Agreement;
(j) The General Partner shall have accepted for purchase all of the
Senior Subordinated Debentures validly tendered and not withdrawn pursuant to
the Offer to Purchase;
(k) The Existing Senior Notes shall have been called for redemption and
an amount of funds reasonably anticipated to be sufficient to redeem such
Existing Senior Notes shall have been deposited with the trustee therefor;
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(l) The closing of the Credit Facility shall have occurred;
(m) All indebtedness and other obligations outstanding pursuant to the
Wells Fargo Agreement shall have been repaid in full and the lenders
thereunder shall have released all Liens on collateral securing obligations
of the borrowers thereunder; and
(n) There shall have been furnished to you on the Closing Date
certificates reasonably satisfactory to you, signed on behalf of the General
Partner and Finance Corp. by a President or Vice President thereof and on
behalf of the Partnership by the General Partner by an authorized officer
thereof to the effect that:
(i) In the case of the Partnership and Finance Corp. (A) the
representations and warranties of the Partnership and Finance Corp.
contained in this Agreement are true and correct at and as of the Closing
Date as though made at and as of the Closing Date; (B) each of the
Partnership and Finance Corp. has duly performed all obligations required
to be performed by it pursuant to the terms of this Agreement at or prior
to the Closing Date; (C) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose
has been initiated or, to the knowledge of the Partnership or Finance
Corp., threatened by the Commission, and all requests for additional
information on the part of the Commission have been complied with or
otherwise satisfied; and (D) no event contemplated by subsection (h) of
this Section 7 in respect of the Partnership or Finance Corp. shall have
occurred.
(ii) In the case of the General Partner (A) the representations
and warranties of the General Partner contained in this Agreement are true
and correct at and as of the Closing Date as though made at and as of the
Closing Date; (B) the General Partner has duly performed all obligations
required to be performed by it pursuant to the terms of this Agreement at
or prior to the Closing Date; and (C) no event contemplated by subsection
(h) of this Section 7 in respect of the General Partner shall have
occurred.
8. Defaults. If at the Closing Date, any of the Underwriters shall fail
--------
or refuse to purchase Senior Notes which it has agreed to purchase hereunder on
such date, and the aggregate principal amount of such Senior Notes that such
defaulting Underwriter(s) agreed but failed or refused to purchase does not
exceed 10% of the total principal amount of such Senior Notes that all of the
Underwriters are obligated to purchase at such Closing Date, each non-defaulting
Underwriter shall be obligated to purchase the amount of the Senior Notes that
such defaulting Underwriter(s) agreed but failed or refused to purchase on such
date. If, at the Closing Date, any of the Underwriters shall fail or refuse to
purchase Senior Notes in an aggregate principal amount that exceeds 10% of such
total principal amount of the Senior Notes and arrangements satisfactory to the
other Underwriter(s) and the Issuers for the purchase of such Senior Notes are
not made within 48 hours after such default, this Agreement shall terminate
without liability on the part of the non-defaulting Underwriter(s) or the
Issuers, except as otherwise provided in Section 9. In any such case that does
not result in termination of this Agreement, the Underwriters or the Issuers may
postpone the Closing Date for not longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. Any action taken under
this paragraph shall not relieve a defaulting underwriter from liability in
respect of any default by any such Underwriter under this Agreement.
27
<PAGE>
9. Effective Date of Agreement and Termination.
-------------------------------------------
(a) This Agreement shall become effective upon the later of (i) the
execution and delivery of this Agreement by the parties hereto, (ii) the
effectiveness of the Registration Statement and (iii) if a post-effective
amendment is required to be filed pursuant to Rule 430A under the Act, the
effectiveness of such post-effective amendment;
(b) This Agreement may be terminated at any time on or prior to the
Closing Date by you by notice to the Partnership if any of the following
has occurred: (i) subsequent to the date the Registration Statement is
declared effective or the date of this Agreement, singly or in the
aggregate, any material adverse change, or any development which may be
expected to involve a material adverse change, in the properties, business,
general affairs, management, condition (financial or otherwise), financial
position or prospects of the Partnership, Finance Corp., the General
Partner and the Subsidiaries taken as a whole, which in your judgment
materially impairs the investment quality of the Senior Notes; (ii) any
suspension or limitation of trading generally in securities on the New York
Stock Exchange or in the over-the-counter markets or any setting of minimum
prices for trading on such exchange or markets; (iii) any suspension or
material limitation in trading of the securities of the Partnership,
Finance Corp., the General Partner or any of the Subsidiaries on the New
York Stock Exchange or in the over-the-counter markets; (iv) a general
moratorium on commercial banking activities in New York declared by either
Federal or New York State authorities; (v) any outbreak or escalation of
hostilities involving the United States, the declaration by the United
States of a national emergency or war, or any other national or
international calamity or crisis or material adverse change in the
financial markets of the United States or elsewhere, or any other
substantial national or international calamity or emergency if the effect
of any such event in your judgment makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Senior Notes being
delivered at the Closing Date on the terms and in the manner contemplated
by the Prospectus; (vi) the taking of any action by any federal, state or
local government or agency in respect of its monetary or fiscal affairs
that in your judgment has a material adverse effect on the financial
markets in the United States and would, in your judgment, make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Senior Notes being delivered at the Closing Date on the
terms and in the manner contemplated by the Prospectus; (vii) the
enactment, publication, decree, or other promulgation of any federal or
state statute, regulation, rule or order of any court or other governmental
authority which, in your judgment, materially and adversely affect the
business or operations of the Partnership, Finance Corp., the General
Partner or any Subsidiary; or (viii) any downgrading in the rating accorded
the securities of the Partnership, Finance Corp., the General Partner or
any Subsidiary by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes of
Rule 436(g)-(2) under the Act, or any such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any of such securities;
(c) The indemnities and contribution provisions and other agreements,
representations and warranties of the Issuers, their officers and directors
and of the Underwriters set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of
and payment for the Securities, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of any of the
Underwriters or by or on behalf of the Issuers, the officers or directors of
any Issuer or any controlling person of any Issuer, (ii) acceptance of the
Securities and payment for them hereunder and (iii) termination of this
Agreement;
28
<PAGE>
(d) If this Agreement shall be terminated by the Underwriters pursuant to
clauses (i) or (viii) of paragraph (b) of this Section 9 or because of the
failure or refusal on the part of the Issuers to comply with the terms or to
fulfill any of the conditions of this Agreement, the Issuers agree, jointly
and severally, to reimburse you for all out-of-pocket expenses (including the
fees and disbursements of counsel) incurred by you. Notwithstanding any
termination of this Agreement, the Issuers shall be liable, jointly and
severally, for all expenses which it has agreed to pay pursuant to Section
4(j) hereof;
(e) Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Issuers, the
Underwriters, any Indemnified Person referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement,
and no other person shall acquire or have any right under or by virtue of
this Agreement. The terms "successors and assigns" shall not include a
purchaser of any of the Securities from any of the Underwriters merely
because of such purchase.
10. Notices. Notices given pursuant to any provision of this Agreement
-------
shall be addressed as follows: (a) if to the Partnership or Finance Corp., to
Ferrellgas, L.P., One Liberty Plaza, Liberty, MO 64068, Attention: Danley K.
Sheldon, with a copy to Smith, Gill, Fisher & Butts, P.C., One Kansas City
Place, 1200 Main Street, Kansas City, MO 64105, Attention: Kendrick T. Wallace,
Esq., and (b) if to any Underwriter, to it c/o Donaldson, Lufkin & Jenrette
Securities Corporation, 140 Broadway, New York, New York 10005, Attention:
Syndicate Department, with a copy to Latham & Watkins, 885 Third Avenue, New
York, New York 10022, Attention: Philip E. Coviello, Esq., or in any case to
such other address as the person to be notified may have requested in writing.
11. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
-------------
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK AS APPLIED TO
CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK.
12. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the officers
and directors and other persons referred to in Section 7, and no other person
will have any right or obligation hereunder.
29
<PAGE>
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument. Please confirm that the foregoing
correctly sets forth the agreement among the Issuers and you.
Very truly yours,
FERRELLGAS, L.P.
By: FERRELLGAS, INC., as General Partner
By:
-----------------------------------------
Name: Danley K. Sheldon
Title: Vice President and Chief Financial
Officer/Treasurer
FERRELLGAS FINANCE CORP.
By:
-----------------------------------------
Name: Danley K. Sheldon
Title: Vice President and Chief Financial
Officer/Treasurer
FERRELLGAS, INC.
By:
-----------------------------------------
Name: Danley K. Sheldon
Title: Vice President and Chief Financial
Officer/Treasurer
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:
----------------------------
Name:
Title:
GOLDMAN, SACHS & CO.
By:
----------------------------
30
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Principal Principal
Amount Amount
Fixed Rate Floating Rate
Senior Notes Senior Notes
------------ -------------
<S> <C> <C>
Donaldson, Lufkin & Jenrette
Securities Corporation $120,000,000 $30,000,000
Goldman, Sachs & Co. $ 80,000,000 $20,000,000
Total: $200,000,000 $50,000,000
============ =============
</TABLE>
31
<PAGE>
SCHEDULE B
Georgia
Kentucky
Michigan
Ohio
Texas
<PAGE>
SCHEDULE C
Alabama Nebraska
Arizona Nevada
Arkansas New Jersey
California New Mexico
Colorado New York
Connecticut North Carolina
District of Columbia North Dakota
Florida Oklahoma
Idaho Oregon
Illinois Pennsylvania
Indiana Rhode Island
Iowa South Carolina
Kansas South Dakota
Louisiana Tennessee
Maine Utah
Maryland Vermont
Massachussetts Virginia
Minnesota Washington
Mississippi West Virginia
Wisconsin
Wyoming
<PAGE>
L&W DRAFT 06/27/94
================================================================================
FERRELLGAS, L.P.
FERRELLGAS FINANCE CORP.
$250,000,000
$200,000,000 10% SERIES A FIXED RATE SENIOR NOTES
$50,000,000 SERIES B FLOATING RATE SENIOR NOTES
_________________
INDENTURE
Dated as of July 5, 1994
_________________
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee
================================================================================
<PAGE>
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310 (a)(1)............................................... 7.10
(a)(2)............................................... 7.10
(a)(3)............................................... N.A.
(a)(4)............................................... N.A.
(a)(5)............................................... 7.10
(b).................................................. 7.10
(c).................................................. N.A.
311 (a).................................................. 7.11
(b).................................................. 7.11
(c).................................................. N.A.
312 (a).................................................. 2.05
(b).................................................. 11.03
(c).................................................. 11.03
313 (a).................................................. 7.06
(b).................................................. 7.06
(c).................................................. 7.06;11.02
(d).................................................. 7.06
314 (a).................................................. 4.03;11.05
(b).................................................. 10.02
(c)(1)............................................... 11.04
(c)(2)............................................... 11.04
(c)(3)............................................... N.A.
(d).................................................. N.A.
(e).................................................. 11.05
(f).................................................. N.A.
315 (a).................................................. 7.01
(b).................................................. 7.05,11.02
(c).................................................. 7.01
(d).................................................. 7.01
(e).................................................. 6.11
316 (a)(last sentence)................................... 2.09
(a)(1)(A)............................................ 6.05
(a)(1)(B)............................................ 6.04
(a)(2)............................................... N.A.
(b).................................................. 6.07
(c).................................................. 2.12
317 (a)(1)............................................... 6.08
(a)(2)............................................... 6.09
(b).................................................. 2.04
318 (a).................................................. 11.01
(b).................................................. N.A.
(c).................................................. 11.01
N.A. means not applicable.
*This Cross-Reference Table is not part of this Indenture.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions....................................... 1
Section 1.02. Other Definitions................................. 11
Section 1.03. Incorporation by Reference of Trust Indenture
Act............................................... 12
Section 1.04. Rules of Construction............................. 12
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating................................... 13
Section 2.02. Execution and Authentication...................... 13
Section 2.03. Registrar and Paying Agent........................ 14
Section 2.04. Paying Agent to Hold Money in Trust............... 14
Section 2.05. Lists of Holders of the Notes..................... 14
Section 2.06. Transfer and Exchange............................. 15
Section 2.07. Replacement Notes................................. 15
Section 2.08. Outstanding Notes................................. 16
Section 2.09. Treasury Notes.................................... 16
Section 2.10. Temporary Notes................................... 16
Section 2.11. Cancellation...................................... 16
Section 2.12. Defaulted Interest................................ 17
Section 2.13. Record Date....................................... 17
Section 2.14. CUSIP Number...................................... 17
ARTICLE 3
REDEMPTION AND OFFERS TO PURCHASE
Section 3.01. Notices to Trustee................................ 17
Section 3.02. Selection of Notes to Be Purchased or Redeemed.... 18
Section 3.03. Notice of Redemption.............................. 18
Section 3.04. Effect of Notice of Redemption.................... 19
Section 3.05. Deposit of Redemption Price....................... 19
Section 3.06. Notes Redeemed in Part............................ 20
Section 3.07. Optional Redemption............................... 20
Section 3.08. Mandatory Redemption.............................. 20
Section 3.09. Asset Sale Offers................................. 20
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.................................. 22
Section 4.02. Maintenance of Office or Agency................... 22
Section 4.03. Reports........................................... 22
Section 4.04. Compliance Certificate............................ 23
Section 4.05. Taxes............................................. 24
Section 4.06. Stay, Extension and Usury Laws.................... 24
Section 4.07. Restricted Payments............................... 24
i
<PAGE>
Section 4.08. Dividend and Other Payment Restrictions
Affecting Subsidiaries............................ 26
Section 4.09. Incurrence of Indebtedness and Issuance of
Disqualified Interests............................ 26
Section 4.10. Asset Sales....................................... 28
Section 4.11. Transactions with Affiliates...................... 29
Section 4.12. Liens............................................. 30
Section 4.13. Subsidiary Note Guarantees........................ 30
Section 4.14. Offer to Purchase Upon Change of Control.......... 30
Section 4.15. Partnership or Corporate Existence................ 31
Section 4.16. Line of Business.................................. 32
Section 4.17. Limitation on Sale and Leaseback Transactions..... 32
Section 4.18. Restrictions on Nature of Indebtedness and
Activities of Finance Corp........................ 32
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.......... 32
Section 5.02. Successor Person Substituted...................... 33
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default................................. 34
Section 6.02. Acceleration...................................... 36
Section 6.03. Other Remedies.................................... 36
Section 6.04. Waiver of Past Defaults........................... 36
Section 6.05. Control by Majority............................... 37
Section 6.06. Limitation on Suits............................... 37
Section 6.07. Rights of Holders of Notes to Receive Payment..... 37
Section 6.08. Collection Suit by Trustee........................ 37
Section 6.09. Trustee May File Proofs of Claim.................. 38
Section 6.10. Priorities........................................ 38
Section 6.11. Undertaking for Costs............................. 38
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee................................. 39
Section 7.02. Rights of Trustee................................. 40
Section 7.03. Individual Rights of Trustee...................... 40
Section 7.04. Trustee's Disclaimer.............................. 40
Section 7.05. Notice of Defaults................................ 41
Section 7.06. Reports by Trustee to Holders of the Notes........ 41
Section 7.07. Compensation and Indemnity........................ 41
Section 7.08. Replacement of Trustee............................ 42
Section 7.09. Successor Trustee by Merger, etc.................. 43
Section 7.10. Eligibility; Disqualification..................... 43
Section 7.11. Preferential Collection of Claims Against
Issuers........................................... 43
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
ii
<PAGE>
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance........................................ 43
Section 8.02. Legal Defeasance and Discharge.................... 43
Section 8.03. Covenant Defeasance............................... 44
Section 8.04. Conditions to Legal or Covenant Defeasance........ 44
Section 8.05. Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions......46
Section 8.06. Repayment to Issuers.............................. 46
Section 8.07. Reinstatement..................................... 47
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes............... 47
Section 9.02. With Consent of Holders of Notes.................. 48
Section 9.03. Compliance with Trust Indenture Act............... 49
Section 9.04. Revocation and Effect of Consents................. 49
Section 9.05. Notation on or Exchange of Notes.................. 49
Section 9.06. Trustee to Sign Amendments, etc................... 50
ARTICLE 10
NOTE GUARANTEES
Section 10.01. Note Guarantee.................................... 50
Section 10.02. Limitation of Guarantor's Liability............... 51
Section 10.03. Guarantors May Consolidate, etc., on Certain
Terms............................................. 52
Section 10.04. Releases Following Sale of Assets................. 52
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls...................... 52
Section 11.02. Notices........................................... 53
Section 11.03. Communication by Holders of Notes with Other
Holders of Notes.................................. 54
Section 11.04. Certificate and Opinion as to Conditions
Precedent......................................... 54
Section 11.05. Statements Required in Certificate or Opinion..... 54
Section 11.06. Rules by Trustee and Agents....................... 54
Section 11.07. No Personal Liability of Directors, Officers,
Employees and Stockholders........................ 55
Section 11.08. Governing Law..................................... 55
Section 11.09. No Adverse Interpretation of Other Agreements..... 55
Section 11.10. Successors........................................ 55
Section 11.11. Severability...................................... 55
Section 11.12. Counterpart Originals............................. 55
Section 11.13. Table of Contents, Headings, etc.................. 55
iii
<PAGE>
EXHIBITS
Exhibit A FORM OF SERIES A FIXED RATE SENIOR NOTE
Exhibit B FORM OF SERIES B FLOATING RATE SENIOR NOTE
Exhibit C FORM OF SUPPLEMENTAL INDENTURE
Exhibit D FORM OF NOTATION ON SENIOR NOTE RELATING TO NOTE GUARANTEE
iv
<PAGE>
INDENTURE dated as of July 5, 1994 between Ferrellgas, L.P., a Delaware
limited partnership (the "Partnership"), Ferrellgas Finance Corp., a Delaware
corporation ("Finance Corp." and, together with the Partnership, the "Issuers"),
and Norwest Bank Minnesota, National Association, as trustee (the "Trustee").
The Partnership, Finance Corp. and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders of
the Notes (as defined below):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a Subsidiary of such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Subsidiary of such specified Person
and (ii) Indebtedness encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided, however,
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Attributable Debt" means, in respect of a sale and leaseback arrangement
of any property, as at the time of determination, the present value (calculated
using a discount rate equal to the interest rate of the Notes and annual
compounding) of the total obligations of the lessee for rental payments during
the remaining term of the lease included in such arrangement (including any
period for which such lease has been extended).
"Available Cash" has the meaning given to such term in the Partnership
Agreement, as amended to the date of the Indenture.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Board of Directors" means the Board of Directors of the General Partner,
or any authorized committee of the Board of Directors.
"Business Day" means any day other than a Legal Holiday.
<PAGE>
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on the balance sheet in accordance
with GAAP.
"Capital Interests" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock, including,
without limitation, with respect to partnerships, partnership interests (whether
general or limited) and any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, such partnership.
"Cash Equivalents" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than
eighteen months from the date of acquisition, (iii) certificates of deposit and
eurodollar time deposits with maturities of six months or less from the date of
acquisition, bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case with any lender party to the Credit
Facility or with any domestic commercial bank having capital and surplus in
excess of $500 million and a Keefe Bank Watch Rating of "B" or better, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) entered into with
any financial institution meeting the qualifications specified in clause (iii)
above and (v) commercial paper having the highest rating obtainable from Moody's
Investors Service, Inc. or Standard & Poor's Corporation and in each case
maturing within nine months after the date of acquisition and (vi) investments
in money market funds all of whose assets consist of securities of the types
described in the foregoing clauses (i) through (v).
"Change of Control" means (i) the sale, lease, conveyance or other
disposition of all or substantially all of the Partnership's assets to any
Person or group (as such term is used in Section 13(d)(3) of the Exchange Act)
other than James E. Ferrell, the Related Parties and any Person of which James
E. Ferrell and the Related Parties beneficially own in the aggregate 51% or more
of the voting Capital Interests (or if such Person is a partnership, 51% or more
of the general partner interests), (ii) the liquidation or dissolution of the
Partnership or the General Partner, (iii) the occurrence of any transaction, the
result of which is that James E. Ferrell and the Related Parties beneficially
own in the aggregate, directly or indirectly, less than 51% of the total voting
power entitled to vote for the election of directors of the General Partner and
(iv) the occurrence of any transaction, the result of which is that the General
Partner is no longer the sole general partner of the Partnership.
"Common Units" means the common units, representing limited partner
interests, being offered by the Master Partnership contemporaneously with the
sale of the Notes.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period, plus (a) an amount
equal to any extraordinary loss plus any net loss realized in connection with an
asset sale, to the extent such losses were deducted in computing Consolidated
Net Income, plus (b) provision for taxes based on income or profits of such
Person for such period, to the extent such provision for taxes was deducted in
computing Consolidated Net Income, plus (c) Consolidated Interest Expense of
such Person for such period, whether paid or accrued (including amortization of
original issue discount, non-cash interest payments and the interest component
of any payments associated with Capital Lease Obligations and net payments (if
any) pursuant to Hedging Obligations), to the extent such expense was deducted
in computing Consolidated Net Income, plus (d) depreciation and amortization
(including amortization of goodwill and other intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period) of such
Person for such period,
2
<PAGE>
to the extent such depreciation and amortization were deducted in computing
Consolidated Net Income, in each case, for such period without duplication on a
consolidated basis and determined in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided, that (i) the Net Income of any Person that is not a Subsidiary or that
is accounted for by the equity method of accounting shall be included only to
the extent of the amount of dividends or distributions paid to the referent
Person or a Wholly Owned Subsidiary thereof, (ii) the Net Income of any Person
that is a Subsidiary (other than a Wholly Owned Subsidiary) shall be included
only to the extent of the amount of dividends or distributions paid to the
referent Person or a Wholly Owned Subsidiary thereof, (iii) the Net Income of
any Person acquired in a pooling of interests transaction for any period prior
to the date of such acquisition shall be excluded (except to the extent
otherwise includable under clause (i) above) and (iv) the cumulative effect of a
change in accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of (i) the consolidated equity of the common stockholders of such Person
and its consolidated Subsidiaries as of such date plus (ii) the respective
amounts reported on such Person's balance sheet as of such date with respect to
any series of preferred stock (other than Disqualified Interests) that by its
terms is not entitled to the payment of dividends unless such dividends may be
declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, less (x) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition
of such business) subsequent to the date of this Indenture in the book value of
any asset owned by such Person or a consolidated Subsidiary of such Person, (y)
all investments as of such date in unconsolidated Subsidiaries and in Persons
that are not Subsidiaries (except, in each case, Permitted Investments), and (z)
all unamortized debt discount and expense and unamortized deferred charges as of
such date, all of the foregoing determined in accordance with GAAP.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Partnership.
"Credit Facility" means the credit facility under that certain Credit
Agreement, dated as of , 1994, by and among the Partnership, the
Insurance Company Subsidiary, the General Partner and Bank of America National
Trust and Savings Association, as agent for the financial institutions listed
therein, providing for up to $185 million of credit borrowings and letters of
credit, including any related notes, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed, refunded,
replaced or refinanced from time to time.
"Custodian" means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Disqualified Interests" means any Capital Interests which, by their terms
(or by the terms of any security into which they are convertible or for which
they are exchangeable), or upon the happening
3
<PAGE>
of any event, mature or are mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the Holder thereof, in
whole or in part, on or prior to August 1, 2001.
"Distribution" means, for purposes of Article 10, a distribution
consisting of cash, securities or other property, by set off or otherwise.
"Equity Interests" means Capital Interests and all warrants, options or
other rights to acquire Capital Interests (but excluding any debt security that
is convertible into, or exchangeable for, Capital Interests).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Fixed Rate Notes" means the Series B and D Fixed Rate Senior
Notes due 1996 of the General Partner.
"Existing Floating Rate Notes" means the Series A and C Floating Rate
Senior Notes due 1996 of the General Partner.
"Existing Indebtedness" means up to $5.0 million in aggregate principal
amount of Indebtedness of the Partnership and its Subsidiaries (other than
under the Credit Facility) in existence on the date of this Indenture, until
such amounts are repaid.
"Existing Senior Notes" means the Existing Fixed Rate Notes and the
Existing Floating Rate Notes.
"Existing Subordinated Debentures" means the General Partner's 11 5/8%
Senior Subordinated Debentures due December 15, 2003.
"Finance Corp." means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that the
reference Person or any of its Subsidiaries incurs, assumes, guarantees, redeems
or repays any Indebtedness (other than revolving credit borrowings) subsequent
to the commencement of the period for which the Fixed Charge Coverage Ratio is
being calculated but prior to the date of the event for which the calculation of
the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed
Charge Coverage Ratio shall be calculated giving pro forma effect to such
incurrence, assumption, guarantee, redemption or repayment of Indebtedness, as
if the same had occurred at the beginning of the applicable reference period.
The foregoing calculation of the Fixed Charge Coverage Ratio shall also give pro
forma effect to acquisitions (including all mergers and consolidations),
dispositions and discontinuance of businesses or assets that have been made by
the reference Person or any of its Subsidiaries during the reference period or
subsequent to such reference period and on or prior to the Calculation Date
assuming that all such acquisitions, dispositions and discontinuance of
businesses or assets had occurred on the first day of the reference period;
provided, however, that (a) Fixed Charges shall be reduced by amounts
attributable to businesses or assets that are so disposed of or discontinued
only to the extent that the obligations giving rise to such Fixed Charges would
no longer be obligations contributing to the Partnership's Fixed Charges
subsequent to the Calculation Date and (b) Consolidated Cash Flow generated by
an acquired business or asset shall be
4
<PAGE>
determined by the actual gross profit (revenues minus cost of goods sold) of
such acquired business or asset during the immediately preceding number of full
fiscal quarters as in the reference period minus the pro forma expenses that
would have been incurred by the Partnership in the operation of such acquired
business or asset during such period computed on the basis of (i) personnel
expenses for employees retained by the Partnership in the operation of the
acquired business or asset and (ii) non-personnel costs and expenses incurred by
the Partnership on a per gallon basis in the operation of the Partnership's
business at similarly situated Partnership facilities. If the applicable
reference period for any calculation of the Fixed Charge Coverage Ratio with
respect to the Partnership shall include a portion prior to the date of this
Indenture, then such Fixed Charge Coverage Ratio shall be calculated based upon
the Consolidated Cash Flow and the Fixed Charges of the General Partner for such
portion of the reference period prior to the date of this Indenture and the
Consolidated Cash Flow and the Fixed Charges of the Partnership for the
remaining portion of the reference period on and after the date of the
Indenture, giving pro forma effect, as described in the two foregoing sentences,
to all applicable transactions occurring on the date of the Indenture or
otherwise.
"Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of (a) consolidated interest expense of such person for
such period, whether paid or accrued, to the extent such expense was deducted in
computing Consolidated Net Income (including amortization of original issue
discount, non-cash interest payments, the interest component of all payments
associated with Capital Lease Obligations and net payments (if any) pursuant to
Hedging Obligations), (b) commissions, discounts and other fees and charges
incurred with respect to letters of credit and bankers' acceptances financing,
(c) any interest expense on Indebtedness of another Person that is Guaranteed by
such Person or secured by a Lien on assets of such Person, and (d) the product
of (i) all cash dividend payments (and non-cash dividend payments in the case of
a Person that is a Subsidiary) on any series of preferred stock of such Person,
times (ii) a fraction, the numerator of which is one and the denominator of
which is one minus the then current combined federal, state and local statutory
tax rate of such Person, expressed as a decimal, determined, in each case, on a
consolidated basis and in accordance with GAAP.
"Fixed Rate Senior Notes" means the 10% Series A Fixed Rate Senior Notes,
in the form attached hereto as Exhibit A and as amended or supplemented from
---------
time to time pursuant to the terms hereof, issued by the Issuers pursuant to
this Indenture.
"Floating Rate Senior Notes" means the Series B Floating Rate Senior
Notes, in the form attached hereto as Exhibit B and as amended or supplemented
---------
from time to time pursuant to the terms hereof, issued by the Issuers pursuant
to this Indenture.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect in the United States on the date of this
Indenture.
"General Partner" means Ferrellgas, Inc., a Delaware corporation and the
sole general partner of the Partnership.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States of America is
pledged.
5
<PAGE>
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Guarantors" means any Subsidiary of the Partnership that executes a Note
Guarantee in accordance with the provisions of Section 4.13 hereof, and their
respective successors and assigns.
"Hedging Obligations" means, with respect to any Person, the obligations
of such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or representing Capital Lease
Obligations or the balance deferred and unpaid of the purchase price of any
property or representing any Hedging Obligations, except any such balance that
constitutes an accrued expense or trade payable, if and to the extent any of the
foregoing indebtedness (other than letters of credit and Hedging Obligations)
would appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP, as well as all indebtedness of others secured by a Lien on
any asset of such Person (whether or not such indebtedness is assumed by such
Person) and, to the extent not otherwise included, the Guarantee by such Person
of any Indebtedness of any other Person.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Insurance Company Subsidiary" means Stratton Insurance Company, a Vermont
corporation, a wholly owned subsidiary of the Partnership.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of loans (including
Guarantees), advances or capital contributions (excluding commission, travel and
similar advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities and all other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
"Issuers" means the parties named as such in this Indenture until a
successor replaces any such Issuer pursuant to this Indenture and thereafter
means the remaining Issuer and the successor.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
6
<PAGE>
in the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Master Partnership" means Ferrellgas Partners, L.P., a Delaware limited
partnership and the sole limited partner of the Partnership.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (a) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (i) any asset sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions), or (ii)
the disposition of any securities or the extinguishment of any Indebtedness of
such Person or any of its Subsidiaries, and (b) any extraordinary gain (but not
loss), together with any related provision for taxes on such extraordinary gain
(but not loss), provided, however, that all costs and expenses with respect to
the retirement of the Existing Senior Notes and the Existing Subordinated
Debentures, including, without limitation, cash premiums, tender offer premiums,
consent payments and all fees and expenses in connection therewith, shall be
added back to the Net Income of the General Partner, the Partnership or their
Subsidiaries to the extent that the same were deducted from such Net Income in
accordance with GAAP.
"Net Proceeds" means the aggregate cash proceeds received by the
Partnership or any of its Subsidiaries in respect of any Asset Sale, net of the
direct costs relating to such Asset Sale (including, without limitation, legal,
accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness secured by a Lien on the asset or assets the
subject of such Asset Sale and any reserve for adjustment in respect of the sale
price of such asset or assets.
"Non-Recourse Subsidiary" means (1) the Insurance Company Subsidiary and
(2) any other Person that would otherwise be a Subsidiary of the Partnership but
is designated as a Non-Recourse Subsidiary in a resolution of the Board of
Directors of the General Partner, so long as (a) no portion of the Indebtedness
or any other obligation (contingent or otherwise) of such Person (i) is
guaranteed by the Partnership or any of its Subsidiaries, (ii) is recourse or
obligates the Partnership or any of its Subsidiaries in any way or (iii)
subjects any property or asset of the Partnership or any of its Subsidiaries,
directly or indirectly, contingently or otherwise, to satisfaction thereof, (b)
neither the Partnership nor any of its Subsidiaries has any contract, agreement,
arrangement or understanding or is subject to an obligation of any kind, written
or oral, with such Person other than on terms no less favorable to the
Partnership and its Subsidiaries than those that might be obtained at the time
from persons who are not Affiliates of the Partnership, (c) neither the
Partnership nor any of its Subsidiaries has any obligation with respect to such
Person (i) to subscribe for additional shares of capital stock, Capital
Interests or other Equity Interests therein or (ii) maintain or preserve such
Person's financial condition or to cause such Person to achieve certain levels
of operating or other financial results, and (d) such Person has no more than
$1,000 of assets at the time of such designation.
"Notes" means the Fixed Rate Senior Notes and the Floating Rate Senior
Notes.
"Note Guarantee" means each guarantee of the Notes by a Guarantor pursuant
to Article 10 hereof.
7
<PAGE>
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person; provided, however, that any
reference to an Officer with respect to the Partnership shall mean the
respective Officer of the General Partner.
"Officers' Certificate" means a certificate signed on behalf of (i) the
General Partner (acting on behalf of the Partnership) by two Officers of the
General Partner, one of whom must be the principal executive officer, the
principal financial officer, the treasurer or the principal accounting officer
of the General Partner, or (ii) Finance Corp. by two Officers of Finance Corp.,
one of whom must be the principal executive officer, the principal financial
officer, the treasurer or the principal accounting officer of Finance Corp., in
either case that meets the requirements of Section 12.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 12.05 hereof.
The counsel may be an employee of or counsel to the Partnership, the General
Partner, Finance Corp., any of their respective Subsidiaries or the Trustee.
"Partnership Agreement" means the Agreement of Limited Partnership of
Ferrellgas, L.P., dated as of July 5, 1994, between Ferrellgas, Inc. and
Ferrellgas Partners, L.P.
"Partnership" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor.
"Permitted Investments" means (a) any Investments in Cash Equivalents; (b)
any Investments in the Partnership or in a Wholly Owned Subsidiary of the
Partnership that is a Guarantor; (c) Investments by the Partnership or any
Subsidiary of the Partnership in a Person, if as a result of such Investment (i)
such Person becomes a Wholly Owned Subsidiary of the Partnership and a Guarantor
or (ii) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated into,
the Partnership or a Wholly Owned Subsidiary of the Partnership that is a
Guarantor; and (d) other Investments in Non-Recourse Subsidiaries of the
Partnership that do not exceed $30 million at any time outstanding.
"Permitted Liens" means (a) Liens existing on the date of the Indenture;
(b) Liens in favor of the Issuers or Liens to secure Indebtedness of a
Subsidiary of the Partnership to the Partnership or a Wholly Owned Subsidiary of
the Partnership; (c) Liens on property of a Person existing at the time such
Person is merged into or consolidated with the Partnership or any Subsidiary of
the Partnership, provided that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any assets
other than those of the Person merged into or consolidated with the Partnership;
(d) Liens on property existing at the time of acquisition thereof by the
Partnership or any Subsidiary of the Partnership, provided that such Liens were
in existence prior to the contemplation of such acquisition; (e) Liens on any
property or asset acquired by the Partnership or any of its Subsidiaries in
favor of the seller of such property or asset and construction mortgages on
property, in each case, created within six months after the date of acquisition,
construction or improvement of such property or asset by the Partnership or such
Subsidiary to secure the purchase price or other obligation of the Partnership
or such Subsidiary to the seller of such property or asset or the construction
or improvement cost of such property
8
<PAGE>
in an amount up to 80% of the total cost of the acquisition, construction or
improvement of such property or asset; provided that in each case, such Lien
does not extend to any other property or asset of the Partnership and its
Subsidiaries; (f) Liens incurred or pledges and deposits made in connection with
worker's compensation, unemployment insurance and other social security benefits
and Liens to secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature, in each case,
incurred in the ordinary course of business; (g) Liens for taxes, assessments or
governmental charges or claims that are not yet delinquent or that are being
contested in good faith by appropriate proceedings promptly instituted and
diligently concluded, provided that any reserve or other appropriate provision
as shall be required in conformity with GAAP shall have been made therefor; (h)
Liens imposed by law, such as mechanics', carriers', warehousemen's,
materialmen's, and vendors' Liens, incurred in good faith in the ordinary course
of business with respect to amounts not yet delinquent or being contested in
good faith by appropriate proceedings if a reserve or other appropriate
provisions, if any, as shall be required by GAAP shall have been made therefor;
(i) zoning restrictions, easements, licenses, covenants, reservations,
restrictions on the use of real property or minor irregularities of title
incident thereto that do not, in the aggregate, materially detract from the
value of the property or the assets of the Partnership or impair the use of such
property in the operation of the business of the Partnership or any of its
Subsidiaries; (j) Liens of landlords or mortgages of landlords, arising solely
by operation of law, on fixtures and movable property located on premises leased
by the Partnership or any of its Subsidiaries in the ordinary course of
business; (k) financing statements granted with respect to personal property
leased by the Partnership and its Subsidiaries in the ordinary course of
business to the owners of such personal property, provided that such financing
statements are granted solely in connection with such leases and not the
borrowing of money or the obtaining of advances or credit; (l) judgment Liens to
the extent that such judgments do not cause or constitute a Default or an Event
of Default; (m) Liens incurred in the ordinary course of business of the
Partnership or any Subsidiary of the Partnership with respect to obligations
that do not exceed $5 million in the aggregate in any one time outstanding and
that (i) are not incurred in connection with the borrowing of money or the
obtaining of advances or credit (other than trade credit in the ordinary course
of business) and (ii) do not in the aggregate materially detract from the value
of the property or materially impair the use thereof in the operation of
business by the Partnership or such Subsidiary; (n) Liens securing Indebtedness
incurred to refinance Indebtedness that has been secured by a Lien permitted
under the Indenture, provided that (i) any such Lien shall not extend to or
cover any assets or property not securing the Indebtedness so refinanced and
(ii) the refinancing Indebtedness secured by such Lien shall have been permitted
to be incurred under Section 4.09 hereof and shall not have a principal amount
in excess of the Indebtedness so refinanced; and (o) any extension or renewal,
or successive extensions or renewals, in whole or in part, of Liens permitted
pursuant to the foregoing clauses (a) through (n); provided that no such
extension or renewal Lien shall (i) secure more than the amount of Indebtedness
or other obligations secured by the Lien being so extended or renewed or (ii)
extend to any property or assets not subject to the Lien being so extended or
renewed.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Partnership or any Subsidiary of the Partnership issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Partnership or any of its Subsidiaries (other
than Indebtedness under the Credit Facility) or the Indebtedness represented by
the then outstanding Existing Subordinated Debentures of the General Partner;
provided that (a) the principal amount of such Indebtedness does not exceed the
principal amount of the Indebtedness so extended, refinanced, renewed, replaced,
defeased or refunded (plus the amount of reasonable expenses incurred in
connection therewith); (b) such Indebtedness has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (c) such Indebtedness is subordinated in right of payment to
9
<PAGE>
the Notes on terms at least as favorable to the Holders of Notes as those, if
any, contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and (d) such Indebtedness
(other than indebtedness incurred to extend, refinance, renew, replace, defease
or refund the Existing Subordinated Debentures) is incurred by the Partnership
or the Subsidiary who is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.
"Permitted Senior Debt" means, with respect to any Person, (i) any
Acquired Debt of such Person, (ii) any Indebtedness incurred by such Person, the
proceeds of which are applied solely to finance capital expenditures made to
improve or enhance the existing capital assets of such Person or to acquire or
construct new capital assets (but excluding capital expenditures necessary to
maintain the existing capital assets of such Person) and (iii) any Indebtedness
incurred by such Person, the proceeds of which are used solely for working
capital purposes.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof.
"Related Party" means (i) the spouse or any lineal descendant of James E.
Ferrell, (ii) any trust for his benefit or for the benefit of his spouse or any
such lineal descendants or (iii) any corporation, partnership or other entity in
which James E. Ferrell and/or such other Persons referred to in the foregoing
clauses (i) and (ii) are the direct record and beneficial owners of all of the
voting and nonvoting Equity Interests.
"Responsible Officer" when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means, without duplication, (i) the Notes, (ii) all other
Indebtedness of the Partnership or Finance Corp., unless the instrument under
which such Indebtedness is incurred expressly provides that it is subordinated
in right of payment to the Notes and (iii) all Indebtedness of Subsidiaries of
the Partnership, other than Finance Corp.
"Significant Subsidiary" means any Subsidiary of the Partnership that
would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Act, as such Regulation is in effect
on the date hereof.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Interests entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or trustees
thereof or, in the case of a partnership, more than 50% of the partners' Capital
Interests (considering all partners' Capital Interests as a single class), is at
the time owned or controlled, directly or indirectly, by
10
<PAGE>
such Person or one or more of the other Subsidiaries of that Person or a
combination thereof. Notwithstanding the foregoing, any Subsidiary of the
Partnership that is designated a Non-Recourse Subsidiary pursuant to the
definition thereof shall not thereafter be deemed a Subsidiary of the
Partnership.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
77bbbb) as in effect on the date on which this Indenture is qualified under the
TIA.
"Trustee" means the party named as such above until a successor replaces
it in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (y) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (b) the then outstanding principal
amount of such Indebtedness; provided, however, that with respect to any
revolving Indebtedness, the foregoing calculation of Weighted Average Life to
Maturity shall be determined based upon the total available commitments and the
required reductions of commitments in lieu of the outstanding principal amount
and the required payments of principal, respectively.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Interests or other ownership interests or, in the
case of a limited partnership, all of the partners' Capital Interests (other
than up to a 1% general partner interest), of which (other than directors'
qualifying shares) shall at the time be owned by such Person or by one or more
Wholly Owned Subsidiaries of such Person and one or more Wholly Owned
Subsidiaries of such Person.
Section 1.02. Other Definitions.
<TABLE>
<CAPTION>
Defined in
Term Section
<S> <C>
"Affiliate Transaction"........... 4.11
"Aggregate Consideration"......... 4.07
"Asset Sale"...................... 4.10
"Asset Sale Offer"................ 3.09
"Benefitted Party"................ 10.01
"Capital Investment".............. 4.07
"Change of Control Offer"......... 4.14
"Change of Control Payment"....... 4.14
"Change of Control Payment Date".. 4.14
"Covenant Defeasance"............. 8.03
"Commencement Date"............... 3.09
"Event of Default"................ 6.01
"Excess Proceeds"................. 4.10
"incur"........................... 4.09
"Incurrence Date"................. 4.09
"Legal Defeasance"................ 8.02
"Offer Amount".................... 3.09
"Offer Period".................... 3.09
</TABLE>
11
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<TABLE>
<S> <C>
"Paying Agent".................... 2.03
"Payment Default"................. 6.01
"Purchase Date"................... 3.09
"Registrar"....................... 2.03
"Restricted Payments"............. 4.07
"Senior Debt Ratio Test".......... 4.09
</TABLE>
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture, other than those
provisions of the TIA that may be excluded herein, which provision shall be
excluded to the extent specifically excluded in this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes and the Note Guarantees, if any;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Issuers, the Guarantors, if any, and any
successor obligor upon the Notes or any Note Guarantee, as the case may be.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by a rule or regulation
promulgated by the SEC under the TIA have the meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include
the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act or the
Exchange Act shall be
12
<PAGE>
deemed to include substitute, replacement or successor sections or rules
adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating.
The Fixed Rate Senior Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A which is part
---------
of this Indenture and shall be in a principal amount of no greater than
$200,000,000. The Floating Rate Senior Notes and the Trustee's certificate
of authentication shall be substantially in the form of Exhibit B which is a
---------
part of this Indenture and shall be in a principal amount of no greater than
$50,000,000. The Notes may have notations, legends or endorsements required
by law, stock exchange rule or usage which will be provided by the Company.
Each Note shall be dated the date of its authentication.
The terms and provisions contained in the Notes annexed hereto as
Exhibit A and Exhibit B, and the Guarantees annexed hereto as Exhibit C shall
- ----------------------- ---------
constitute, and are hereby expressly made, a part of this Indenture. To the
extent applicable, the Company, each Guarantor and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Section 2.02. Execution and Authentication.
Two Officers of each of the General Partner (in the case of the
Partnership) and Finance Corp. shall sign the Notes for the Issuers by manual or
facsimile signature. The seal of each Issuer shall be reproduced on the Notes
and may be in facsimile form.
If an Officer of the General Partner or Finance Corp. whose signature is
on a Note no longer holds that office at the time the Note is authenticated, the
Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature of the Trustee shall be conclusive evidence that the
Note has been authenticated under this Indenture. The form of Trustee's
certificate of authentication to be borne by the Notes shall be substantially as
set forth in Exhibit A hereto.
The Trustee shall, upon a written order of the Issuers signed by two
Officers of the General Partner and Finance Corp., authenticate Notes for
original issue up to an aggregate principal amount stated in paragraph 4 of the
Notes. The aggregate principal amount of Notes outstanding at any time shall
not exceed the amount set forth herein except as provided in Section 2.07
hereof.
The Trustee may appoint an authenticating agent acceptable to the Issuers
to authenticate Notes. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Partnership or Finance Corp. or an Affiliate of the
Partnership or Finance Corp.
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Section 2.03. Registrar and Paying Agent.
The Issuers shall maintain (i) an office or agency where Notes may be
presented for registration of transfer or for exchange (including any co-
registrar, the "Registrar") and (ii) an office or agency where Notes may be
presented for payment ("Paying Agent"). The Registrar shall keep a register of
the Notes and of their transfer and exchange. The Issuers may appoint one or
more co-registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent. The Issuers may change any Paying
Agent, Registrar or co-registrar without prior notice to any Holder of a Note.
The Issuers shall notify the Trustee and the Trustee shall notify the Holders of
the Notes of the name and address of any Agent not a party to this Indenture.
The Partnership, Finance Corp. or any Guarantor may act as Paying Agent,
Registrar or co-registrar. The Issuers shall enter into an appropriate agency
agreement with any Agent not a party to this Indenture, which shall be subject
to any obligations imposed by the provisions of the TIA. The agreement shall
implement the provisions of this Indenture that relate to such Agent. The
Issuers shall notify the Trustee of the name and address of any such Agent. If
the Issuers fail to maintain a Registrar or Paying Agent, or fails to give the
foregoing notice, the Trustee shall act as such, and shall be entitled to
appropriate compensation in accordance with Section 7.07 hereof.
The Issuers initially appoint the Trustee as Registrar, Paying Agent and
agent for service of notices and demands in connection with the Notes.
Section 2.04. Paying Agent to Hold Money in Trust.
The Issuers shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent shall hold in trust for the benefit of
the Holders of the Notes or the Trustee all money held by the Paying Agent for
the payment of principal of, premium, if any, and interest on the Notes, and
shall notify the Trustee of any Default by the Issuers or any Guarantors in
making any such payment. While any such Default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Issuers
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Partnership, Finance Corp. or a Guarantor) shall have no further liability for
the money delivered to the Trustee. If the Partnership, Finance Corp. or any
Guarantor acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders of the Notes all money held by it as Paying
Agent. Upon any bankruptcy or reorganization proceeding relating to the
Partnership, Finance Corp. or any Guarantor, the Trustee shall serve as Paying
Agent for the Notes.
Section 2.05. Lists of Holders of the Notes.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders of the Notes and shall otherwise comply with TIA (S) 312(a). If the
Trustee is not the Registrar, the Issuers and/or any Guarantors shall furnish to
the Trustee at least seven Business Days before each interest payment date and
at such other times as the Trustee may request in writing a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of Holders of the Notes, including the aggregate principal amount of
the Notes held by each thereof, and the Issuers and each Guarantor, if any,
shall otherwise comply with TIA (S) 312(a).
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Section 2.06. Transfer and Exchange.
When Notes are presented to the Registrar with a request to register the
transfer or to exchange them for an equal principal amount of Notes of other
denominations, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met; provided, however, that any Note
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar and the Trustee duly executed by the Holder
thereof or by his attorney duly authorized in writing. To permit registrations
of transfer and exchanges, the Issuers shall issue and the Trustee shall
authenticate Notes at the Registrar's request, subject to such rules as the
Trustee may reasonably require.
Neither the Issuers nor the Registrar shall be required to (i) issue,
register the transfer of or exchange Notes during a period beginning at the
opening of business on a Business Day 15 days before the day of any selection of
Notes for redemption under Section 3.02 hereof or (ii) register the transfer of
or exchange any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
No service charge shall be made to any Holder of a Note for any
registration of transfer or exchange (except as otherwise expressly permitted
herein), but the Issuers may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than such transfer tax or similar governmental charge payable upon
exchanges pursuant to Sections 2.10, 3.06 or 9.05 hereof, which shall be paid by
the Issuers).
Prior to due presentment to the Trustee for registration of the transfer
of any Note, the Trustee, any Agent, the Issuers and each Guarantor, if any, may
deem and treat the Person in whose name any Note is registered as the absolute
owner of such Note for the purpose of receiving payment of principal of,
premium, if any, and interest on such Note and for all other purposes
whatsoever, whether or not such Note is overdue, and none of the Trustee, any
Agent, the Issuers or any Guarantor shall be affected by notice to the contrary.
Section 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee, or the Issuers and
the Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Note, the Issuers shall issue and the Trustee, upon the written
order of the Issuers signed by (i) two Officers of the General Partner and (ii)
two Officers of Finance Corp., shall authenticate a replacement Note if the
Trustee's requirements for replacements of Notes are met. If required by the
Trustee, the Issuers or the Guarantors, if any, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Trustee, the
Issuers and the Guarantors to protect the Issuers, the Guarantors, the Trustee,
any Agent or any authenticating agent from any loss which any of them may suffer
if a Note is replaced. Each of the Partnership, Finance Corp, each Guarantor
and the Trustee may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Issuers and the
Guarantors, if any, and shall be entitled to all of the benefits of this
Indenture equally and ratably with all other Notes duly issued hereunder.
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Section 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those cancelled by it, those delivered to it for cancellation
and those described in this Section 2.08 as not outstanding. If a Note is
replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a
bona fide purchaser. If the principal amount of any Note is considered paid
under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases
to accrue. Subject to Section 2.09 hereof, a Note does not cease to be
outstanding because the Partnership, Finance Corp., any Guarantor, a Subsidiary
of the Partnership, Finance Corp. or any Guarantor or an Affiliate of the
Partnership, Finance Corp. or any Guarantor holds the Note.
Section 2.09. Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Partnership, Finance Corp., any Guarantor, any of their respective Subsidiaries
or any Affiliate of the Partnership, Finance Corp. or any Guarantor shall be
considered as though not outstanding, except that for purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Notes which a Responsible Officer knows to be so owned shall be
so considered. Notwithstanding the foregoing, Notes that are to be acquired by
the Partnership, Finance Corp., any Guarantor, any Subsidiary of the
Partnership, Finance Corp. or any Guarantor or an Affiliate of the Partnership,
Finance Corp. or any Guarantor pursuant to an exchange offer, tender offer or
other agreement shall not be deemed to be owned by the Partnership, Finance
Corp., such Guarantor, a Subsidiary of the Partnership, Finance Corp. or such
Guarantor or an Affiliate of the Partnership, Finance Corp. or such Guarantor
until legal title to such Notes passes to the Partnership, Finance Corp., such
Guarantor, Subsidiary of the Partnership, Finance Corp. or such Guarantor or
Affiliate of the Partnership, Finance Corp. or such Guarantor, as the case may
be.
Section 2.10. Temporary Notes.
Until definitive Notes are ready for delivery, the Issuers may prepare and
the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Issuers and the Trustee consider appropriate for temporary Notes. Without
unreasonable delay, the Issuers shall prepare and the Trustee, upon receipt of
the written order of the Issuers signed by (i) two Officers of the General
Partner and (ii) two Officers of Finance Corp., shall authenticate definitive
Notes in exchange for temporary Notes. Until such exchange, temporary Notes
shall be entitled to the same rights, benefits and privileges as definitive
Notes.
Section 2.11. Cancellation.
The Issuers at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee shall cancel all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and shall destroy cancelled Notes
(subject to the record retention requirement of the Exchange Act), unless the
Issuers direct cancelled Notes to be returned to them. The Issuers may not
issue new Notes to replace Notes that they have redeemed or paid or that have
been delivered to the Trustee for cancellation. All cancelled Notes held by the
Trustee shall be destroyed and certification of their destruction delivered to
the Issuers, unless by a written order, signed
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by (i) two Officers of the General Partner and (ii) two Officers of Finance
Corp., the Issuers shall direct that cancelled Notes be returned to them.
Section 2.12. Defaulted Interest.
If the Issuers or any Guarantor defaults in a payment of interest on the
Notes, the Issuers or such Guarantor (to the extent of its obligations under its
Note Guarantees) shall pay the defaulted interest in any lawful manner plus, to
the extent lawful, interest payable on the defaulted interest, to the Persons
who are Holders of the Notes on a subsequent special record date, which date
shall be at the earliest practicable date but in all events at least five
Business Days prior to the payment date, in each case at the rate provided in
the Notes and in Section 4.01 hereof. The Issuers shall fix or cause to be
fixed each such special record date and payment date, and shall, promptly
thereafter, notify the Trustee of any such date. At least 15 days before the
special record date, the Issuers (or the Trustee, in the name of and at the
expense of the Issuers) shall mail to Holders of the Notes a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
Section 2.13. Record Date.
The record date for purposes of determining the identity of Holders of the
Notes entitled to vote or consent to any action by vote or consent authorized or
permitted under this Indenture shall be determined as provided for in TIA (S)
316(c).
Section 2.14. CUSIP Number.
The Issuers in issuing the Notes may use a "CUSIP" number and, if they do
so, the Trustee shall use the CUSIP number in notices of redemption or exchange
as a convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Notes and that reliance may be placed only on
the other identification numbers printed on the Notes. The Issuers will
promptly notify the Trustee of any change in the CUSIP number.
ARTICLE 3
REDEMPTION AND OFFERS TO PURCHASE
Section 3.01. Notices to Trustee.
If the Issuers elect to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, they shall furnish to the Trustee, at least
30 days but not more than 75 days before a redemption date, an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Notes to be redeemed and (iv) the redemption price.
If the Issuers elect to reduce the principal amount of Floating Rate
Senior Notes to be redeemed pursuant to the mandatory redemption provisions of
paragraph 6 of the Floating Rate Senior Notes, it shall notify the Trustee of
the amount of the reduction and the basis for it at least 50 days prior to the
applicable mandatory redemption date. If the Issuers elect to credit against
any such redemption Floating Rate Senior Notes they have not previously
delivered to the Trustee for cancellation, the Issuers shall deliver such
Floating Rate Senior Notes with the notice to the Trustee.
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If the Issuers are required to make an offer to purchase Notes pursuant to
the provisions of Sections 4.10 or 4.14 hereof, they shall furnish to the
Trustee, at least 30 days before the scheduled Purchase Date, an Officers'
Certificate setting forth (i) the Section of this Indenture pursuant to which
the offer to purchase shall occur, (ii) the terms of the offer, (iii) the
purchase price, (iv) the principal amount of the Notes to be purchased, and (v)
further setting forth a statement to the effect that (a) the Partnership or one
of its Subsidiaries has made an Asset Sale and there are Excess Proceeds
aggregating more than $15 million and the amount of such Excess Proceeds or (b)
a Change of Control has occurred, as applicable.
Section 3.02. Selection of Notes to Be Purchased or Redeemed.
If the Issuers elect to redeem less than all of either series of Notes
pursuant to the optional redemption provisions of Section 3.07 hereof and
paragraph 5 of the applicable series of Notes, the Trustee shall select the
Notes to be redeemed as follows:
The Trustee shall select the Floating Rate Senior Notes or Fixed Rate
Senior Notes (as applicable) to be redeemed among the Holders of the same series
of Notes on a pro rata basis.
If less than all of the Notes properly tendered in an Asset Sale Offer
pursuant to Sections 3.09 and 4.10 hereof are to be purchased, the Trustee shall
select the Floating Rate Senior Notes and Fixed Rate Senior Notes to be
purchased as follows:
The Trustee shall select the Notes to be purchased between the Floating
Rate Senior Notes and the Fixed Rate Senior Notes on a pro rata basis and then
among the Holders of Floating Rate Senior Notes and Fixed Rate Senior Notes on a
pro rata basis.
The Trustee shall promptly notify the Issuers in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
purchase or redemption, the principal amount thereof to be purchased or
redeemed. Notes and portions of Notes selected shall be in amounts of $1,000 or
whole multiples of $1,000; except that if all of the Notes of a Holder are to be
purchased or redeemed, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, shall be purchased or redeemed.
Except as provided in the preceding sentence, provisions of this Indenture that
apply to Notes called for redemption also apply to portions of Notes called for
redemption.
In the event the Issuers are required to make an Asset Sale Offer pursuant
to Section 4.10 hereof and the amount of Excess Proceeds to be applied to such
purchase would result in the purchase of a principal amount of Notes which is
not evenly divisible by $1,000, the Trustee shall promptly refund to the Issuers
the portion of such Excess Proceeds that is not necessary to purchase the
immediately lesser principal amount of Notes that is so divisible.
Section 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date, the
Issuers shall mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed at its registered
address.
The notice shall identify the Notes to be redeemed and shall state:
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(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion shall be issued upon cancellation of the
original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(f) that, unless the Issuers default in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Issuers' request, the Trustee shall give the notice of redemption
in the Issuers' name and at their expense; provided, however, that the Issuers
shall have delivered to the Trustee, at least 45 days prior to the redemption
date, an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph (which request may be revoked by so notifying the Trustee in
writing on or before the Business Day immediately preceding the date requested
for the mailing of such notice).
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.05. Deposit of Redemption Price.
One Business Day prior to the redemption date, the Issuers shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued interest on all Notes to be redeemed on that date. The
Trustee or the Paying Agent shall promptly return to the Issuers any money
deposited with the Trustee or the Paying Agent by the Issuers in excess of the
amounts necessary to pay the redemption price of, and accrued interest on, all
Notes to be redeemed.
If the Issuers comply with the provisions of the preceding paragraph, on
and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note called for redemption
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shall not be so paid upon surrender for redemption because of the failure of the
Issuers to comply with the preceding paragraph, interest shall be paid on the
unpaid principal, from the redemption date until such principal is paid, and to
the extent lawful on any interest not paid on such unpaid principal, in each
case at the rate provided in the Notes and in Section 4.01 hereof.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Issuers shall issue
and, upon the Issuers' written request, the Trustee shall authenticate for the
Holder at the expense of the Issuers a new Note equal in principal amount to the
unredeemed portion of the Note surrendered.
Section 3.07. Optional Redemption.
The Issuers may redeem all or any portion of either series of Notes, upon
the terms and at the redemption prices set forth in paragraph 5 of the
applicable series of Notes. Any redemption pursuant to this Section 3.07 shall
be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.
Section 3.08. Mandatory Redemption.
The Company shall redeem $5,000,000 principal amount of the Floating Rate
Senior Notes on each of August 1, 1999 and August 1, 2000, upon the terms and
subject to the conditions set forth in paragraph 6 of the Floating Rate Senior
Notes. Except pursuant to the preceding sentence and as set forth below under
Section 4.10 and Section 4.14 hereof, the Issuers shall not be required to make
mandatory redemption or sinking fund payments with respect to the Notes.
Section 3.09. Asset Sale Offers.
(a) In the event that, pursuant to Section 4.10 hereof, the Issuers shall
be required to commence an offer to all Holders to purchase Notes (an "Asset
Sale Offer"), it shall follow the procedures specified in this Section 3.09.
(b) The Asset Sale Offer shall commence on the date (the "Commencement
Date") specified in Section 4.10 hereof and shall remain open for a period
specified by the Issuers, which shall be in accordance with Section 4.10 hereof
(the "Offer Period"). No later than five Business Days after the termination of
the Offer Period and, in any event, on a Floating Rate Interest Payment Date (as
defined in the Floating Rate Senior Notes) (the "Purchase Date"), the Issuers
shall purchase the principal amount of Notes required to be purchased pursuant
to Section 4.10 hereof (the "Offer Amount") or, if less than the Offer Amount
has been tendered, all Notes tendered in response to such Asset Sale Offer.
Payment for any Notes so purchased shall be made in the same manner as interest
payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest, if
any, shall be paid to the Person in whose name a Note is registered at the close
of business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to such Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Issuers shall send, by
first class mail, a notice to the Trustee and each of the Holders. The notice
shall contain all instructions and materials necessary to enable such Holders to
tender Notes pursuant to such Asset Sale Offer. The Asset Sale
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Offer shall be made to all Holders. The notice, which shall govern the terms of
the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to Section 4.10
hereof, the Offer Period, and the expiration date of the Offer Period;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered and accepted for payment shall continue
to accrue interest;
(d) that, unless the Issuers default in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer shall cease to accrue
interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, to the Issuers, a depositary, if appointed by the Issuers, or a
Paying Agent at the address specified in the notice prior to the close of the
Offer Period;
(g) that Holders shall be entitled to withdraw their election if the
Issuers, the depositary or the Paying Agent, as the case may be, receives,
not later than the close of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that
such Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Notes to be purchased shall be selected
pursuant to the terms of Section 3.02 hereof, and that Holders whose Notes
were purchased only in part shall be issued new Notes (accompanied by a
notation of the Note Guarantees duly endorsed by each Guarantor) equal in
principal amount to the unpurchased portion of the Notes surrendered; and
(i) the circumstances and material facts regarding the Asset Sale or
Asset Sales giving rise to such Asset Sale Offer, including but not limited
to, information with respect to pro forma and historical financial
information if material operations of the Partnership or any Subsidiary were
divested in such Asset Sale or Asset Sales.
On or before the Purchase Date, the Issuers shall, to the extent lawful,
accept for payment, pursuant to the terms of Section 3.02 hereof, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and
shall deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Issuers in accordance with the
terms of this Section 3.09. The Issuers, the depositary or the Paying Agent, as
the case may be, shall promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Notes tendered by such Holder and accepted by the
Issuers for purchase, and the Issuers shall promptly issue a new Note, and the
Trustee, upon written request from the Issuers shall authenticate and mail or
deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Issuers to the Holder thereof. The Issuers
shall publicly announce the results of such Asset Sale Offer on the Purchase
Date.
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Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof to the extent applicable.
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.
The Issuers shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Issuers or any Guarantor, holds
as of 10:00 a.m. Eastern Time on the due date money deposited by the Issuers in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due.
The Issuers shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
Section 4.02. Maintenance of Office or Agency.
The Issuers shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Issuers or any Guarantor in respect of the Notes and this Indenture may
be served. The Issuers shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Issuers shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Issuers may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Issuers
of their obligation to maintain an office or agency in the Borough of Manhattan,
the City of New York for such purposes. The Issuers shall give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
The Issuers hereby designate the Corporate Trust Office of the Trustee as
one such office or agency of the Issuers in accordance with Section 2.03 hereof.
Section 4.03. Reports.
Whether or not required by the rules and regulations of the SEC, so long
as any Notes are outstanding, the Issuers will furnish to the Holders of Notes
(i) all quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if
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the Issuers were required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual information only, a report thereon by the Issuers'
certified independent accountants and (ii) all reports that would be required to
be filed with the SEC on Form 8-K if the Issuers were required to file such
reports. In addition, whether or not required by the rules and regulations of
the SEC, the Issuers will file a copy of all such information with the SEC for
public availability (unless the SEC will not accept such a filing) and make such
information available to investors who request it in writing. To the extent
permissible under the rules and regulations of the SEC (assuming at all times
that the Issuers were required to file reports with the SEC), such information
and reports with respect to the Master Partnership may be filed and provided in
lieu of such information and reports with respect to the Partnership.
Section 4.04. Compliance Certificate.
(a) Each Issuer shall deliver to the Trustee, within 90 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Partnership and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether each Issuer, each Guarantor, if any, and each obligor on the
Notes and this Indenture has kept, observed, performed and fulfilled its
obligations under this Indenture (including with respect to any Restricted
Payments made during such year, the basis upon which the calculations required
by Section 4.07 hereof were computed, which calculations may be based on the
Partnership's latest available financial statements), and further stating, as to
each such Officer signing such certificate, that to the best of his or her
knowledge, each Issuer, each Guarantor, if any, and each such obligor has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action each Issuer, each
Guarantor, if any, or each such obligor, as the case may be, is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action each Issuer, each Guarantor, if any, or each such obligor, as the case
may be, is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03 hereof shall be accompanied by a
written statement of the Partnership's independent public accountants (who shall
be a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Issuers have violated
any provisions of Article Four or Article Five hereof or, if any such violation
has occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) Each Issuer shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer of such Issuer (or of the
General Partner, in the case of the Partnership) becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action such Issuer is taking or proposes to take with
respect thereto.
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Section 4.05. Taxes.
The Issuers shall pay, and shall cause each of their Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
Section 4.06. Stay, Extension and Usury Laws.
Each of the Issuers and each of the Guarantors, if any, covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law wherever enacted, now or at any time hereafter
in force, that may affect the covenants or the performance of this Indenture;
and each of the Issuers and each of the Guarantors, if any, (to the extent that
it may lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and covenants that it shall not, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the Trustee, but
shall suffer and permit the execution of every such power as though no such law
had been enacted.
Section 4.07. Restricted Payments.
The Partnership shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly: (i) declare or pay any dividend or make any
distribution on account of the Partnership's or any Subsidiary's Equity
Interests (other than (x) dividends or distributions payable in Equity Interests
(other than Disqualified Stock) of the Partnership, (y) dividends or
distributions payable to the Partnership or a Wholly Owned Subsidiary of the
Partnership that is a Guarantor or (z) distributions or dividends payable pro
rata to all holders of Capital Interests of any such Subsidiary); (ii) purchase,
redeem or otherwise acquire or retire for value any Equity Interests of the
Partnership or any Subsidiary or other Affiliate of the Partnership (other than
any such Equity Interests owned by the Partnership or a Wholly Owned Subsidiary
of the Partnership that is a Guarantor); (iii) purchase, redeem or otherwise
acquire or retire for value any Indebtedness that is subordinated to the Notes;
or (iv) make any Restricted Investment (all such payments and other actions set
forth in clauses (i) through (iv) above being collectively referred to as
"Restricted Payments"), unless, at the time of and after giving effect to such
Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Fixed Charge Coverage Ratio of the Partnership for the
Partnership's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such Restricted Payment is made, calculated on a pro forma basis as if
such Restricted Payment had been made at the beginning of such four-quarter
period, would have been more than 2.25 to 1;
(c) such Restricted Payment (the amount of any such payment, if other
than cash, to be determined by the Board of Directors, whose determination
shall be conclusive and evidenced by a resolution in an Officers' Certificate
delivered to the Trustee), together with the aggregate of all other
Restricted Payments (other than any Restricted Payments permitted by the
provisions of clauses (ii), (iii) or (iv) of the penultimate paragraph of
this Section 4.07) made by the Partnership and its Subsidiaries in the fiscal
quarter during which such Restricted Payment is made, shall not exceed an
amount equal to the sum of (i) Available Cash of the Partnership for the
immediately preceding
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fiscal quarter (or, with respect to the first fiscal quarter during which
Restricted Payments are made, the amount of Available Cash of the Partnership
for the period commencing on the date of this Indenture and ending on the
last day of the immediately preceding fiscal quarter) plus (ii) the lesser of
(x) the amount of Available Cash of the Partnership for the first 45 days of
the fiscal quarter during which such Restricted Payment is made and (y) the
amount of working capital Indebtedness that the Partnership could have
incurred on the last day of the immediately preceding fiscal quarter under
the terms of the agreements and instruments governing its outstanding
Indebtedness on such date; and
(d) the Partnership and its Subsidiaries and Non-Recourse Subsidiaries
shall have, in the aggregate (i) acquired, improved or repaired property,
plant or equipment which is accounted for as a capital expenditure in
accordance with GAAP or (ii) acquired, through merger or otherwise, all or
substantially all of the outstanding Capital Interests, or all or
substantially all of the assets, of any entity engaged in the business in
which the Partnership is engaged on the date of this Indenture (each of the
transactions referred to in clauses (i) and (ii) above, a "Capital
Investment") for Aggregate Consideration since the date of the Indenture
which, when added to all cash reserves then funded and maintained by the
Partnership (the proceeds of which shall be used solely for Capital
Investments) is no less than the amounts set forth in the table below, if
such Restricted Payment is made in the 12-month period beginning August 1 of
the years indicated:
<TABLE>
<CAPTION>
Year Amount
---- ----------
<S> <C>
1994 $0
1995 $15 million
1996 $30 million
1997 $45 million
1998 $70 million
1999 $95 million
2000 $120 million
</TABLE>
For purposes of the foregoing, "Aggregate Consideration" at any date shall
mean all cash paid in connection with all Capital Investments consummated on or
prior to such date, the fair market value of all Capital Interests of the Master
Partnership or the Partnership (determined by the General Partner in good faith
with reference to, among other things, the trading price of such Capital
Interests, if then traded on any national securities exchange or automated
quotation system) constituting all or a portion of the purchase price of all
Capital Investments consummated on or prior to such date and the aggregate
principal amount of all Indebtedness incurred or assumed by the Partnership in
connection with all Capital Investments consummated on or prior to such date.
The foregoing provisions will not prohibit (i) the payment of any
distribution within 60 days after the date on which the Partnership becomes
committed to make such distribution, if at said date of commitment such payment
would have complied with the provisions of this Indenture; (ii) the redemption,
repurchase, retirement or other acquisition of any Equity Interests of the
Partnership in exchange for, or out of the proceeds of, the substantially
concurrent sale (other than to a Subsidiary of the Partnership) of other Equity
Interests of the Partnership (other than any Disqualified Interests); (iii) the
defeasance, redemption or repurchase of subordinated Indebtedness with the
proceeds of Permitted Refinancing Indebtedness; and (iv) the defeasance,
redemption or repurchase of any Existing Subordinated Debentures of the General
Partner and the payment of all costs and expenses in connection therewith.
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Not later than the date of making any Restricted Payment, the General
Partner shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.07 were computed, which calculations may
be based upon the Partnership's latest available financial statements.
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries.
The Partnership shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any Subsidiary
to (a) pay dividends or make any other distributions to the Partnership or any
of its Subsidiaries (1) on its Capital Interests or (2) with respect to any
other interest or participation in, or interest measured by, its profits, (b)
pay any indebtedness owed to the Partnership or any of its Subsidiaries, (c)
make loans or advances to the Partnership or any of its Subsidiaries or (d)
transfer any of its properties or assets to the Partnership or any of its
Subsidiaries, except for such encumbrances or restrictions existing under or by
reason of (i) Existing Indebtedness as in effect on the date of this Indenture,
(ii) the Credit Facility, as in effect on the date of this Indenture, this
Indenture, the Notes and the Note Guarantees, (iii) applicable law, (iv) any
instrument governing Indebtedness or Capital Interests of a Person acquired by
the Partnership or any of its Subsidiaries as in effect at the time of such
acquisition (except to the extent such Indebtedness was incurred in connection
with or in contemplation of such acquisition), which encumbrance or restriction
is not applicable to any Person, or the properties or assets of any Person,
other than the Person, or the property or assets of the Person, so acquired,
provided that the Consolidated Cash Flow of such Person to the extent that
dividends, distributions, loans, advances or transfers thereof is limited by
such encumbrance or restriction on the date of acquisition is not taken into
account in determining whether such acquisition was permitted by the terms of
the Indenture, (v) customary non-assignment provisions in leases entered into in
the ordinary course of business and consistent with past practices, (vi)
purchase money obligations for property acquired in the ordinary course of
business that impose restrictions of the nature described in clause (d) above on
the property so acquired, (vii) Permitted Refinancing Indebtedness of any
Existing Indebtedness, provided that the restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are no more
restrictive than those contained in the agreements governing the Indebtedness
being refinanced or (viii) agreements governing any Indebtedness that is
permitted to be incurred hereunder and that is incurred to extend, refinance,
renew, replace, defease or refund Indebtedness outstanding pursuant to the
Credit Facility, provided that the restrictions contained in the agreements
governing such refinancing Indebtedness are no more restrictive than those
contained in the Credit Facility as in effect on the date of this Indenture.
Section 4.09. Incurrence of Indebtedness and Issuance of Disqualified Interests.
The Partnership shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt) and the Partnership shall not issue any
Disqualified Interests and shall not permit any of its Subsidiaries to issue any
shares of preferred stock; provided, however, that the Partnership may incur
Indebtedness and any Subsidiary of the Partnership may incur Acquired Debt if:
(a) the Fixed Charge Coverage Ratio for the Partnership's most recently
ended four full fiscal quarters for which internal financial statements are
available immediately preceding the date on which such additional
Indebtedness is incurred would have been at least 2.75 to 1 if such date is
on or prior to August 1, 1996 and 3.00 to 1 if such date is after August 1,
1996, in each case,
26
<PAGE>
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred at
the beginning of such four-quarter period; and
(b) either (x) such Indebtedness shall be subordinated in right of
payment to the Notes and shall have a Weighted Average Life to Maturity
greater than the remaining Weighted Average Life to Maturity of the Notes or
(y) such Indebtedness shall be Permitted Senior Debt and the Senior Debt
Ratio Test shall have been met at the time of incurrence thereof.
The foregoing limitations of this Section 4.09 will not apply to: (i) the
Indebtedness represented by the Notes and any Note Guarantees; (ii) the
incurrence by the Partnership of Indebtedness pursuant to the Credit Facility in
an aggregate principal amount at any time outstanding not to exceed $185
million; (iii) revolving Indebtedness incurred solely for working capital
purposes in an aggregate outstanding principal amount not to exceed $20 million
at any time on or prior to August 1, 1996 and $40 million thereafter, provided,
in each case, that the outstanding principal balance of such revolving
Indebtedness (or, if such revolving Indebtedness is incurred as an addition or
extension to the Credit Facility, the outstanding principal balance under the
Credit Facility in excess of the limits set forth in clause (ii) above) shall be
reduced to zero for a period of 30 consecutive days during each fiscal year;
(iv) the incurrence by the Partnership of Indebtedness in respect of Capitalized
Lease Obligations in an aggregate principal amount not to exceed $15 million;
(v) the Existing Indebtedness; (vi) the incurrence by the Partnership or any of
its Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
proceeds of which are used to extend, refinance, renew, replace, defease or
refund any then outstanding Indebtedness of the Partnership or such Subsidiary
not incurred in violation of the Indenture; (vii) Hedging Obligations that are
incurred for the purpose of fixing or hedging interest rate risk with respect to
any floating rate Indebtedness that is permitted by the terms of the Indenture
to be outstanding; (viii) Indebtedness of any Subsidiary of the Partnership to
the Partnership or any of its Wholly Owned Subsidiaries; (ix) the incurrence by
the Partnership or the Insurance Company Subsidiary of Indebtedness owing
directly to its insurance carriers (without duplication) in connection with the
Partnership's, its Subsidiaries' or its Affiliates' self-insurance programs or
other similar forms of retained insurable rights for their respective retail
propane businesses, consisting of reinsurance agreements and indemnification
agreements (and guarantees of the foregoing) secured by letters of credit,
provided that the Indebtedness evidenced by such reinsurance agreements,
indemnification agreements, guarantees and letters of credit shall be counted
(without duplication) for purposes of all calculations pursuant to the Fixed
Charge Coverage Ratio test above; (x) surety bonds and appeal bonds required in
the ordinary course of business or in connection with the enforcement of rights
or claims of the Partnership or any of its Subsidiaries or in connection with
judgments that do not result in a Default or Event of Default; (xi) the
incurrence by the Partnership (or any Subsidiary of the Partnership that is a
Guarantor) of Indebtedness in connection with acquisitions of retail propane
businesses in favor of the sellers of such businesses in a principal amount not
to exceed $15 million in any fiscal year or $45 million in the aggregate
outstanding at any one time, provided that the principal amount of such
Indebtedness incurred in connection with any such acquisition shall not exceed
the fair market value of the assets so acquired; and (xii) in addition to the
Indebtedness permitted under the foregoing clauses (i) through (xi), the
incurrence by the Partnership of Indebtedness in an aggregate principal amount
outstanding not to exceed $15 million at any time, provided that any
Indebtedness incurred pursuant to this clause (xii) shall be subordinated in
right of payment to the Notes and shall have a Weighted Average Life to Maturity
greater than the remaining Weighted Average Life to Maturity of the Notes.
The "Senior Debt Ratio Test" will be met with respect to the incurrence of
any Indebtedness by the Partnership or any Subsidiary of the Partnership if the
ratio of (1) the aggregate outstanding principal amount of Senior Debt on the
date of and after giving effect to the incurrence of such
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<PAGE>
Indebtedness (the "Incurrence Date") to (2) the Consolidated Cash Flow for the
Partnership's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the Incurrence Date
would have been 2.50 to 1 or less. For purposes of the computation in clause
(1) of the foregoing sentence, the outstanding principal amount of Indebtedness
under the Credit Facility shall be deemed to equal the principal amount of such
Indebtedness actually outstanding plus the maximum additional principal amount
of such Indebtedness available thereunder, and letters of credit shall be deemed
to have a principal amount equal to the maximum potential liability of the
Partnership or any of its Subsidiaries thereunder. The foregoing calculation of
Consolidated Cash Flow shall give pro forma effect to acquisitions (including
all mergers and consolidations), dispositions and discontinuance of operations
that have been made by the Partnership or any of its Subsidiaries during the
four-quarter reference period or subsequent to such reference period and on or
prior to the Incurrence Date assuming that all such acquisitions, dispositions
and discontinuance of operations had occurred on the first day of the four-
quarter reference period in the same manner as described in the definition of
"Fixed Charge Coverage Ratio".
For purposes of this Section 4.09, any revolving Indebtedness (under the
Credit Facility or otherwise) shall be deemed to have been incurred only at
such time at which the agreements and instruments (or any amendments thereto
that increase the amount, reduce the Weighted Average Life to Maturity, change
any subordination provisions or create any additional obligor of such
revolving Indebtedness) are executed, in an amount equal to the maximum amount
of such revolving Indebtedness permitted to be borrowed thereunder, and the
Partnership's ability to borrow or reborrow such revolving Indebtedness up to
such maximum permitted amount shall not thereafter be limited by the
provisions of this Section 4.09 (other than the proviso set forth in clause
(iii) of the second paragraph of this Section 4.09.)
Section 4.10. Asset Sales.
The Partnership shall not, and shall not permit any of its Subsidiaries
to, (i) sell, lease, convey or otherwise dispose of any assets (including by way
of a sale-and-leaseback) other than sales of inventory in the ordinary course of
business consistent with past practice (provided that the sale, lease,
conveyance or other disposition of all or substantially all of the assets of the
Partnership shall be governed by the provisions of Sections 4.14 and/or 5.01
hereof and not by the provisions of this Section 4.10), or (ii) issue or sell
Equity Interests of any of its Subsidiaries, in the case of either clause (i) or
(ii) above, whether in a single transaction or a series of related transactions,
(a) that have a fair market value in excess of $5 million, or (b) for net
proceeds in excess of $5 million (each of the foregoing, an "Asset Sale"),
unless (x) the Partnership (or the Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value (evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee) of the assets sold or otherwise
disposed of and (y) at least 80% of the consideration therefor received by the
Partnership or such Subsidiary is in the form of cash; provided, however, that
the amount of (A) any liabilities (as shown on the Partnership's or such
Subsidiary's most recent balance sheet or in the notes thereto), of the
Partnership or any Subsidiary (other than liabilities that are by their terms
subordinated in right of payment to the Notes) that are assumed by the
transferee of any such assets and (B) any notes or other obligations received by
the Partnership or any such Subsidiary from such transferee that are immediately
converted by the Partnership or such Subsidiary into cash (to the extent of the
cash received), shall be deemed to be cash for purposes of this provision; and
provided, further, that the 80% limitation referred to in this clause (y) shall
not apply to any Asset Sale in which the cash portion of the consideration
received therefrom, determined in accordance with the foregoing proviso, is
equal to or greater than what the after-tax proceeds would have been had such
Asset Sale complied with the aforementioned 80%
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<PAGE>
limitation. Notwithstanding the foregoing, Asset Sales shall not be deemed to
include (1) any transfer of assets by the Partnership or any of its Subsidiaries
to a Subsidiary of the Partnership that is a Guarantor, (2) any transfer of
assets by the Partnership or any of its Subsidiaries to any Person in exchange
for other assets used in a line of business permitted under Section 4.16 hereof
and having a fair market value not less than that of the assets so transferred
and (3) any transfer of assets pursuant to a Permitted Investment.
Within 270 days after any Asset Sale, the Partnership may apply the Net
Proceeds from such Asset Sale to (a) permanently reduce Indebtedness outstanding
under the Credit Facility (with a permanent reduction of availability in the
case of revolving Indebtedness) or (b) an investment in capital expenditures or
other long-term tangible assets, in each case, in the same line of business as
the Partnership was engaged in on the date of this Indenture. Pending the final
application of any such Net Proceeds, the Partnership may temporarily reduce
borrowings under the Credit Facility or otherwise invest such Net Proceeds in
any manner that is not prohibited by this Indenture. Any Net Proceeds from the
Asset Sale that are not applied or invested as provided in the first sentence of
this paragraph will be deemed to constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $15 million, the Issuers shall make
an Asset Sale Offer to all Holders of Notes to purchase the maximum principal
amount of Notes that may be purchased out of the Excess Proceeds, at an offer
price in cash in an amount equal to 100% of the principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase, in accordance with
the procedures set forth in Article 3 hereof. The Issuers shall commence an
Asset Sale Offer with respect to Excess Proceeds within 10 Business Days after
the date that Excess Proceeds exceeds $15 million by mailing the notice required
in Section 3.09 hereof to the Holders. The Offer Period shall be not less than
30 days and not more than 40 days, unless a longer period is required by law.
The Issuers shall comply with the requirements of Rule 14e-1 under the Exchange
Act and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable in connection with such Asset Sale Offer.
To the extent that the aggregate amount of Notes tendered pursuant to such Asset
Sale Offer is less than the Excess Proceeds, the Partnership may use such
deficiency for general business purposes. If the aggregate principal amount of
Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis. Upon
completion of such Asset Sale Offer, the amount of Excess Proceeds shall be
reset at zero.
Section 4.11. Transactions with Affiliates.
The Partnership shall not, and shall not permit any of its Subsidiaries
to, sell, lease, transfer or otherwise dispose of any of its properties or
assets to, or purchase any property or assets from, or enter into any contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate, including any Non-Recourse Subsidiary (each of the foregoing,
an "Affiliate Transaction"), unless (a) such Affiliate Transaction is on terms
that are no less favorable to the Partnership or the relevant Subsidiary than
those that would have been obtained in a comparable transaction by the
Partnership or such Subsidiary with an unrelated Person and (b) with respect to
(i) any Affiliate Transaction with an aggregate value in excess of $500,000, a
majority of the directors of the General Partner having no direct or indirect
economic interest in such Affiliate Transaction determines by resolution that
such Affiliate Transaction complies with clause (a) above and approves such
Affiliate Transaction and (ii) any Affiliate Transaction involving the purchase
or other acquisition or sale, lease, transfer or other disposition of properties
or assets other than in the ordinary course of business, in each case, having a
fair market value or for net proceeds in excess of $15 million, the Partnership
delivers to the Trustee an opinion as to the fairness to the Partnership or such
Subsidiary from a financial point of view issued by an investment banking firm
of national standing; provided, however, that (i) any
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<PAGE>
employment agreement or stock option agreement entered into by the Partnership
or any of its Subsidiaries in the ordinary course of business and consistent
with the past practice of the Partnership (or the General Partner) or such
Subsidiary, (ii) Restricted Payments permitted by the provisions of Section 4.07
hereof, and (iii) transactions entered into by the Partnership or the Insurance
Company Subsidiary in the ordinary course of business in connection with
reinsuring the self-insurance programs or other similar forms of retained
insurable risks of the retail propane businesses operated by the Partnership,
its Subsidiaries and its Affiliates, in each case, shall not be deemed Affiliate
Transactions.
Section 4.12. Liens.
The Partnership shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, assume or suffer to exist any Lien on
any asset now owned or hereafter acquired, or any income or profits therefrom or
assign or convey any right to receive income therefrom, except Permitted Liens.
Section 4.13. Subsidiary Note Guarantees.
The Partnership may, at any time that it transfers or causes to be
transferred to any of its Subsidiaries assets, businesses or properties having a
fair market value (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and evidenced by a resolution of such Board)
of $5 million or more, cause such Subsidiary to unconditionally guarantee,
jointly and severally, the Issuers' payment obligations under the Notes as
provided in Article 10 hereof pursuant to a supplemental indenture in the form
attached hereto as Exhibit B, together with an Opinion of Counsel to the effect
that such supplemental indenture has been duly executed and delivered by such
Subsidiary and is in compliance with the terms of this Indenture.
Section 4.14. Offer to Purchase Upon Change of Control.
Upon the occurrence of a Change of Control, the Issuers shall make an
offer (a "Change of Control Offer") to each Holder to purchase all or any part
of such Holder's Notes on the next succeeding Floating Rate Interest Payment
Date which is at least 40 days after the Change of Control (the "Change of
Control Payment Date") at an offer price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (the "Change of Control Payment"). The Issuers shall comply with
the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with such Change of Control Offer.
The Issuers shall commence such Change of Control Offer within 10 days
following any Change of Control by mailing a notice of such Change of Control to
each Holder at its last registered address with a copy to the Trustee and the
Paying Agent. The Change of Control Offer shall remain open from the time of
mailing until the close of business on the Business Day preceding the Change of
Control Payment Date. The notice, which shall govern the terms of the Change of
Control Offer, shall state:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.14 and that all Notes tendered will be accepted for payment;
(2) the amount of the Change of Control Payment and the Change of Control
Payment Date;
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(3) that any Notes not tendered will continue to accrue interest in
accordance with the terms of the Indenture;
(4) that, unless the Issuers default in the payment of the Change of
Control Payment, all Notes accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after the Change of
Control Payment Date;
(5) that Holders electing to have Notes purchased pursuant to the Change
of Control Offer will be required to surrender their Notes, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of
the Note completed, to the Paying Agent at the address specified in
the notice prior to the close of business on the Business Day
preceding the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the Paying
Agent receives, not later than the close of business on the Business
Day preceding the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of Notes the Holder delivered for purchase, and a
statement that such Holder is withdrawing its election to have such
Notes purchased;
(7) that Holders whose Notes are being purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered, which unpurchased portion must be equal to
$1,000 in principal amount or an integral multiple thereof; and
(8) the circumstances and relevant facts regarding such Change of Control
(including, but not limited to, information with respect to pro forma
historical financial information after giving effect to such Change of
Control, information regarding the Person or Persons acquiring control
and such Person's or Persons' business plans going forward).
On the Change of Control Payment Date, the Issuers shall, to the extent
lawful, (i) accept for payment Notes or portions thereof tendered pursuant to
the Change of Control Offer, (ii) deposit with the Paying Agent an amount equal
to the Change of Control Payment in respect of all Notes or portions thereof so
tendered and (iii) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the Notes or portions
thereof tendered to the Issuers. The Paying Agent shall promptly, but in no
event later than three Business Days following the Change of Control Payment
Date, mail to each Holder of Notes so accepted payment in an amount equal to the
Change of Control Payment for such Notes, and the Issuers shall promptly issue a
new Note, and the Trustee shall authenticate and mail or deliver a new Note to
such Holder equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided, that each such new Note shall be in a principal
amount of $1,000 or an integral multiple thereof. The Issuers shall publicly
announce in The Wall Street Journal, or if no longer published, a national
newspaper of general circulation the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Payment Date.
Section 4.15. Partnership or Corporate Existence.
Subject to Article 5 and Article 10 hereof, as the case may be, each
Issuer and each of the Guarantors, if any, shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its corporate
or partnership existence, and the corporate or partnership existence of each of
their Subsidiaries, in accordance with the respective organizational documents
(as the same may be
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amended from time to time) of each Issuer, any such Guarantor or any such
Subsidiary, as the case may be, and (ii) the rights (charter and statutory),
licenses and franchises of each Issuer, the Guarantors and their respective
Subsidiaries; provided, however, that the Issuers and the Guarantors shall not
be required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of their respective Subsidiaries, if an
officer of the General Partner or Finance Corp., as the case may be, shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Issuers, the Guarantors and their Subsidiaries, taken as a
whole and that the loss thereof is not adverse in any material respect to the
Holders of the Notes.
Section 4.16. Line of Business.
For so long as any Notes are outstanding, the Partnership and its
Subsidiaries will not materially or substantially engage in any business other
than that in which the Partnership and its Subsidiaries were engaged on the date
of this Indenture.
Section 4.17. Limitation on Sale and Leaseback Transactions.
The Partnership will not, and will not permit any of its Subsidiaries to,
enter into any arrangement with any Person providing for the leasing by the
Partnership or such Subsidiary of any property that has been or is to be sold or
transferred by the Partnership or such Subsidiary to such Person in
contemplation of such leasing; provided, however, that the Partnership or such
Subsidiary may enter into such sale and leaseback transaction if (i) the
Partnership could have (A) incurred Indebtedness in an amount equal to the
Attributable Debt relating to such sale and leaseback transaction pursuant to
the Fixed Charge Coverage Ratio Test set forth in paragraph (a) of Section 4.09
and (B) secured a Lien on such Indebtedness pursuant to Section 4.12, or (ii)
the lease in such sale and leaseback transaction is for a term not in excess of
the lesser of (A) three years and (B) 60% of the remaining useful life of such
property.
Section 4.18. Restrictions on Nature of Indebtedness and Activities of Finance
Corp.
Notwithstanding the provisions of Section 4.09 hereof, Finance Corp. shall
not incur any Indebtedness unless (a) the Partnership is a co-obligor or
guarantor of such Indebtedness or (b) the net proceeds of such Indebtedness are
lent to the Partnership, used to acquire outstanding debt securities issued by
the Partnership or used directly or indirectly to refinance or discharge
Indebtedness permitted under the limitations of this Section 4.18. Finance
Corp. shall not engage in any business not related directly or indirectly to
obtaining money or arranging financing for the Partnership.
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.
(a) The Partnership shall not consolidate or merge with or into (whether
or not the Partnership is the surviving corporation), or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its properties
or assets in one or more related transactions, to another Person unless (i) the
Partnership is the surviving Person, or the Person formed by or surviving any
such consolidation or merger (if other than the Partnership) or to which such
sale, assignment, transfer, lease, conveyance or other disposition shall have
been made is a corporation or partnership organized or existing under the laws
of the United States, any state thereof or the District of Columbia; (ii) the
Person formed by or
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surviving any such consolidation or merger (if other than the Partnership) or
Person to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made assumes all the obligations of the Partnership
pursuant to a supplemental indenture in a form reasonably satisfactory to the
Trustee, under the Notes and this Indenture; (iii) immediately after such
transaction no Default or Event of Default exists; and (iv) the Partnership or
any Person formed by or surviving any such consolidation or merger, or to which
such sale, assignment, transfer, lease, conveyance or other disposition shall
have been made (A) shall have Consolidated Net Worth (immediately after the
transaction but prior to any purchase accounting adjustments resulting from the
transaction) equal to or greater than the Consolidated Net Worth of the
Partnership immediately preceding the transaction and (B) shall, at the time of
such transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable four-quarter period,
be permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in Section 4.09 hereof.
(b) Finance Corp. may not consolidate or merge with or into (whether or
not Finance Corp. is the surviving Person), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another Person unless (i) Finance
Corp. is the surviving Person, or the Person formed by or surviving any such
consolidation or merger (if other than Finance Corp.) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia and a Wholly Owned Subsidiary of
the Partnership; (ii) the Person formed by or surviving any such consolidation
or merger (if other than Finance Corp.) or the Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made assumes all the obligations of Finance Corp., pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee, under the Notes and
the Indenture; and (iii) immediately after such transaction no Default or Event
of Default exists.
(c) The Partnership or Finance Corp., as the case may be, shall deliver
to the Trustee prior to the consummation of the proposed transaction pursuant to
the foregoing paragraphs (a) and (b) an Officers' Certificate to the foregoing
effect and an Opinion of Counsel stating that the proposed transaction and such
supplemental indenture comply with this Indenture. The Trustee shall be
entitled to conclusively rely upon such Officers' Certificate and Opinion of
Counsel.
Section 5.02. Successor Person Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Partnership or Finance Corp. in accordance with Section 5.01 hereof, the
successor Person formed by such consolidation or into or with which the
Partnership or Finance Corp. is merged or to which such sale, assignment,
transfer, lease, conveyance or other disposition is made shall succeed to, and
be substituted for (so that from and after the date of such consolidation,
merger, sale, lease, conveyance or other disposition, the provisions of this
Indenture referring to the "Partnership," "Finance Corp.," or the "Issuers," as
the case may be shall refer to or include instead the successor Person and not
the Partnership or Finance Corp., as the case may be), and may exercise every
right and power of the Partnership or Finance Corp., as the case may be under
this Indenture with the same effect as if such successor Person had been named
as the Partnership or Finance Corp., as the case may be, herein; provided,
however, that the predecessor Issuer shall not be relieved from the obligation
to pay the principal of, premium, if any, and interest on the Notes except in
the case of a sale of all of such Issuer's assets that meets the requirements of
Section 5.01 hereof.
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ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(a) the Issuers or the Guarantors default in the payment of interest
on the Notes when the same becomes due and payable and such default continues
for a period of 30 days;
(b) the Issuers or the Guarantors default in the payment of principal
of or premium, if any, on the Notes when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to purchase)
or otherwise;
(c) the Issuers fail for a period of 20 days to observe or perform any
covenant, condition or agreement on the part of the Issuers to be observed or
performed pursuant to Sections 4.07, 4.09, 4.10, 4.14 and 5.01 hereof;
(d) the Issuers or any Guarantor fails to comply with any of their
other respective agreements or covenants in, or provisions of, the Notes, the
Note Guarantees or this Indenture and the Default continues for the period
and after the notice specified below;
(e) a default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Partnership or any of its Subsidiaries
(or the payment of which is Guaranteed by the Partnership or any of its
Subsidiaries), whether such Indebtedness or Guarantee now exists or shall be
created hereafter, which default (i) is caused by a failure to pay principal
of or premium, if any, or interest on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness (a "Payment
Default") or (ii) results in the acceleration of such Indebtedness prior to
its express maturity and, in each case, the principal amount of such
Indebtedness, together with the principal amount of any other Indebtedness as
to which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $10 million or more, excluding any acceleration of
maturity of the Indebtedness represented by the General Partner's Existing
Floating Rate Notes and Existing Fixed Rate Notes to the extent that such
Indebtedness shall be redeemed on or prior to the 40th day after the date of
this Indenture;
(f) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the
Partnership or any of its Subsidiaries and such judgments are not paid,
discharged or stayed for a period of 60 days, provided that the aggregate of
all such undischarged judgments exceeds $10 million;
(g) except as otherwise permitted hereunder, any Note Guarantee shall
be held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or any Guarantor (or its
successors or assigns), or any Person acting on behalf of any Guarantor (or
its successors or assigns), shall deny or disaffirm its obligations under its
Note Guarantee;
(h) the Partnership or any of its Subsidiaries pursuant to or within
the meaning of any Bankruptcy Law:
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(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case,
(iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors,
or
(v) generally is not paying its debts as they become due; or
(i) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Partnership or any Subsidiary of the
Partnership in an involuntary case,
(ii) appoints a Custodian of the Partnership or any Subsidiary of
the Partnership or for all or substantially all of the property of the
Partnership or any Subsidiary of the Partnership, or
(iii) orders the liquidation of the Partnership or any Subsidiary of
the Partnership,
and the order or decree remains unstayed and in effect for 60 consecutive
days.
A Default under clause (d) is not an Event of Default until the Trustee
notifies the Issuers, or the Holders of at least 25% in principal amount of the
then outstanding Notes notify the Issuers and the Trustee, of the Default and
the Issuers do not cure the Default within 60 days after receipt of the notice.
The notice must specify the Default, demand that it be remedied and state that
the notice is a "Notice of Default."
In the case of any Event of Default pursuant to the provisions of this
Section 6.01 occurring by reason of any willful action (or inaction) taken (or
not taken) by or on behalf of the Issuers with the intention of avoiding payment
of the premium that the Issuers would have had to pay if the Issuers then had
elected to redeem the Notes pursuant to Section 3.07 hereof, an equivalent
premium shall also become and be immediately due and payable to the extent
permitted by law, anything in this Indenture or in the Notes to the contrary
notwithstanding. If an Event of Default occurs prior to August 1, 1998 by
reason of any willful action (or inaction) taken (or not taken) by or on behalf
of the Issuers with the intention of avoiding the prohibition on redemption of
the Notes prior to August 1, 1998 pursuant to Section 3.07 hereof, then the
premium payable for purposes of this paragraph for each of the years beginning
on August 1 of the years set forth below shall be as set forth in the following
table expressed as a percentage of the amount that would otherwise be due but
for the provisions of this sentence, plus accrued interest, if any, to the date
of payment:
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<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
1994 ................... 110.00%
1995 ................... 108.75%
1996 ................... 107.50%
1997 ................... 106.25%
</TABLE>
Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in
clauses (h) and (i) of Section 6.01 hereof relating to either Issuer, any
Significant Subsidiary or any group of Subsidiaries that, taken together, would
constitute a Significant Subsidiary) occurs and is continuing, the Trustee by
notice to the Issuers, or the Holders of at least 25% in principal amount of the
then outstanding Notes by written notice to the Issuers and the Trustee may
declare the unpaid principal of and any accrued interest on all the Notes to be
due and payable. Upon such declaration the principal and interest shall be due
and payable immediately (together with the premium referred to in Section 6.01
hereof, if applicable). If an Event of Default specified in clause (h) or (i)
of Section 6.01 hereof relating to either Issuer, any Significant Subsidiary or
any group of Subsidiaries that, taken together, would constitute a Significant
Subsidiary occurs, such an amount shall ipso facto become and be immediately due
and payable without any declaration or other act on the part of the Trustee or
any Holder. The Holders of a majority in principal amount of the then
outstanding Notes by written notice to the Trustee may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default (except nonpayment of principal or
interest that has become due solely because of the acceleration) have been cured
or waived.
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal of, premium, if any,
and interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of the
Notes then outstanding by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium, if any, or interest on, the Notes
(including in connection with an offer to purchase) (provided, however, that the
Holders of a majority in aggregate principal amount of the then outstanding
Notes may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration). Upon any such waiver,
such Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured for every
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purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 6.05. Control by Majority.
Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or that the Trustee determines may be
unduly prejudicial to the rights of other Holders of Notes or that may involve
the Trustee in personal liability.
Section 6.06. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default or the Trustee receives such notice from either
Issuer;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any
loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request; provided, however, that such provision does
not affect the right of a Holder of a Note to sue for enforcement of any
overdue payment thereon.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal of, premium, if any, and
interest on the Note, on or after the respective due dates expressed in the Note
(including in connection with an Asset Sale Offer or a Change of Control Offer),
or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) hereof occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Issuers for the whole amount of
principal of, premium, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be
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sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Issuers
(or any other obligor upon the Notes, including the Guarantors), its creditors
or its property and shall be entitled and empowered to collect, receive and
distribute any money or other property payable or deliverable on any such claims
and any custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding shall be denied for
any reason, payment of the same shall be secured by a Lien on, and shall be paid
out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expenses and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes
for principal, premium, if any, and interest, respectively; and
Third: to the Partnership or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in
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its discretion may assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in the suit, having due regard to the merits
and good faith of the claims or defenses made by the party litigant. This
Section does not apply to a suit by the Trustee, a suit by a Holder of a Note
pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only those
duties that are specifically set forth in this Indenture and no others, and
no implied covenants or obligations shall be read into this Indenture against
the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received
by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
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(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Issuers. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require from
either Issuer an Officers' Certificate or an Opinion of Counsel or both. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel. The
Trustee may consult with counsel and the written advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from either Issuer shall be sufficient if signed by
an Officer of the General Partner (in the case of the Partnership) or by an
Officer of Finance Corp. (in the case of Finance Corp.)
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with either Issuer, any Guarantor or
any Affiliate of either Issuer or any Guarantor with the same rights it would
have if it were not Trustee. However, in the event that the Trustee acquires
any conflicting interest it must eliminate such conflict within 90 days, apply
to the SEC for permission to continue as trustee or resign. Any Agent may do
the same with like rights and duties. The Trustee is also subject to Sections
7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Issuers' use of the proceeds from the Notes or any money
paid to the Issuers or upon the Issuers' direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any
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statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note (including any failure to make any mandatory redemption
payment required hereunder), the Trustee may withhold the notice if and so long
as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders of the Notes.
Section 7.06. Reports by Trustee to Holders of the Notes.
Within 60 days after each November 1 beginning with the November 1
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA (S) 313(a) (but if no
event described in TIA (S) 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA (S) 313(b)(2). The Trustee shall also transmit by mail
all reports as required by TIA (S) 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Issuers and filed with the SEC and each stock exchange on
which the Notes are listed in accordance with TIA (S) 313(d). The Issuers shall
promptly notify the Trustee when the Notes are listed on any stock exchange.
Section 7.07. Compensation and Indemnity.
The Issuers and the Guarantors, if any, shall pay to the Trustee from time
to time reasonable compensation for its acceptance of this Indenture and its
services hereunder. The Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Issuers and the
Guarantors, if any, shall reimburse the Trustee promptly upon request for all
reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.
The Issuers and the Guarantors, if any, shall indemnify the Trustee
against any and all losses, liabilities or expenses incurred by it arising out
of or in connection with the acceptance or administration of its duties under
this Indenture, including the costs and expenses of enforcing this Indenture
against the Issuers and the Guarantors (including this Section 7.07), and
defending itself against any claim (whether asserted by either Issuer, any
Guarantor or any Holder or any other person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder, except to the
extent any such loss, liability or expense may be attributable to its negligence
or bad faith. The Trustee shall notify the Issuers promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Issuers
shall not relieve the Issuers and the Guarantors, if any, of their obligations
hereunder. The Issuers and the Guarantors, if any, shall defend the claim and
the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Issuers and the Guarantors, if any, shall pay the reasonable
fees and expenses of such counsel. The Issuers and the Guarantors, if any, need
not pay for any settlement made without their consent, which consent shall not
be unreasonably withheld.
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The obligations of the Issuers and the Guarantors, if any, under this
Section 7.07 shall survive the satisfaction and discharge of this Indenture.
To secure the Issuers' and the Guarantors' payment obligations in this
Section, the Trustee shall have a Lien prior to the Notes on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(h) or (i) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA (S) 313(b)(2) to the
extent applicable.
Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Issuers. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Issuers in writing. The Issuers may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Issuers shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuers.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers, any
Guarantor, or the Holders of Notes of at least 10% in principal amount of the
then outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who has been
a Holder of a Note for at least six months, fails to comply with Section 7.10
hereof, such Holder of a Note may petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.
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A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Issuers. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Notes. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Issuers' and the Guarantors' obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA (S) 310(a)(1), (2) and (5). The Trustee is subject to TIA (S) 310(b).
Section 7.11. Preferential Collection of Claims Against Issuers.
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.
The Issuers may, at the option of the Board of Directors and the Board of
Directors of Finance Corp. evidenced in each case by a resolution set forth in
an Officers' Certificate, at any time elect to have either Section 8.02 or 8.03
hereof be applied to all outstanding Notes upon compliance with the conditions
set forth below in this Article 8.
Section 8.02. Legal Defeasance and Discharge.
Upon the Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, each of the Issuers and each of the Guarantors,
if any, shall, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, be deemed to have been discharged from its obligations with
respect to all outstanding Notes and Note Guarantees on the date the conditions
set forth below are
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satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance
means that the Issuers shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes, which shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.05 hereof and the
other Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all their other obligations under such Notes and this Indenture (and
the Trustee, on demand of and at the expense of the Issuers, shall execute
proper instruments acknowledging the same), except for the following provisions
which shall survive until otherwise terminated or discharged hereunder: (a) the
rights of Holders of outstanding Notes to receive solely from the trust fund
described in Section 8.04 hereof, and as more fully set forth in such Section,
payments in respect of the principal of, premium, if any, and interest on such
Notes when such payments are due, (b) the Issuers' and Guarantors' obligations
with respect to such Notes under Article 2 and Section 4.02 hereof, (c) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and the
Issuers' and the Guarantors' obligations in connection therewith and (d) this
Article 8. Subject to compliance with this Article 8, the Issuers may exercise
their option under this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 hereof.
Section 8.03. Covenant Defeasance.
Upon the Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, each of the Issuers and each of the Guarantors,
if any, shall, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, be released from its obligations under the covenants
contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.16,
4.17, 4.18 and 5.01 hereof with respect to the outstanding Notes and Note
Guarantees on and after the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and the Notes shall thereafter be deemed
not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Issuers may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Indenture, such Notes and the Note Guarantees, if
any, shall be unaffected thereby. In addition, upon the Issuers' exercise under
Section 8.01 hereof of the option applicable to this Section 8.03 hereof,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
Sections 6.01(e) and 6.01(f) hereof shall not constitute Events of Default.
Section 8.04. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either Section
8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Issuers shall irrevocably have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of making
the following payments, specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of such Notes, (i) cash in U.S. Dollars
in an amount, or (ii) non-callable Government Securities which through the
scheduled payment of principal and interest in respect thereof in accordance
with their terms will provide, not
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later than one day before the due date of any payment, cash in U.S. Dollars
in an amount, or (iii) a combination thereof, in such amounts, as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge and which shall be applied by the Trustee
(or other qualifying trustee) to pay and discharge (A) the principal of,
premium, if any, and interest on the outstanding Notes on the stated maturity
or on the applicable redemption date, as the case may be, of such principal
or installment of principal, premium, if any, or interest and (B) any
mandatory sinking fund payments or analogous payments applicable to the
outstanding Notes on the day on which such payments are due and payable in
accordance with the terms of the Indenture and of such Notes; provided that
the Trustee shall have been irrevocably instructed to apply such money or the
proceeds of such non-callable Government Securities to said payments with
respect to the Notes;
(b) in the case of an election under Section 8.02 hereof, the Issuers
shall have delivered to the Trustee an Opinion of Counsel (which counsel may
be an employee of either Issuer or any Subsidiary of either Issuer)
reasonably acceptable to the Trustee confirming that (i) the Issuers have
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the date of this Indenture, there has been a change in
the applicable federal income tax law, in either case to the effect that, and
based thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Issuers
shall have delivered to the Trustee an Opinion of Counsel (which counsel may
be an employee of either Issuer or any Subsidiary of either Issuer)
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such Covenant Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not
occurred;
(d) no Event of Default shall have occurred and be continuing on the
date of such deposit or, insofar as Sections 6.01(h) or 6.01(i) hereof is
concerned, at any time in the period ending on the 91st day after the date of
deposit (or greater period of time in which any such deposit of trust funds
may remain subject to Bankruptcy Law insofar as those apply to the deposit by
the Issuers);
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement
or instrument (other than this Indenture) to which either Issuer or any of
their Subsidiaries is a party or by which either Issuer or any of their
Subsidiaries is bound;
(f) the Issuers shall have delivered to the Trustee an opinion of
counsel to the effect that after the 91st day following the deposit, the
trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally;
(g) the Issuers shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuers with the
intent of preferring the Holders over any other
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creditors of the Issuers or the Guarantors, if any, or with the intent of
defeating, hindering, delaying or defrauding any other creditors of the
Issuers or others; and
(h) the Issuers shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with as contemplated hereby.
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including either Issuer acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Issuers and the Guarantors, if any, shall pay and indemnify the
Trustee against any tax, fee or other charge imposed on or assessed against the
cash or non-callable Government Securities deposited pursuant to Section 8.04
hereof or the principal and interest received in respect thereof other than any
such tax, fee or other charge which by law is for the account of the Holders of
the outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Issuers from time to time upon the request
of the Issuers any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
Section 8.06. Repayment to Issuers.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Issuers, in trust for the payment of the principal of, premium, if any, or
interest, if any, on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest, if any, have become due and payable
shall be paid to the Issuers on its request or (if then held by the Issuers)
shall be discharged from such trust; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuers for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Issuers as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Issuers cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Issuers.
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Section 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Issuers' and the Guarantors' obligations under this
Indenture, the Notes and the Note Guarantees shall be revived and reinstated as
though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,
however, that, if the Issuers and the Guarantors make any payment of principal
of, premium, if any, or interest, if any, on any Note following the
reinstatement of its obligations, the Issuers and the Guarantors shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Issuers, the
Guarantors, if any, and the Trustee may amend or supplement this Indenture or
the Notes without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(c) to provide for the assumption of the Partnership's, Finance
Corp.'s or any Guarantor's obligations to the Holders of the Notes in the
case of a merger or consolidation pursuant to Article 5 or Article 10 hereof,
as the case may be;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes (including providing for Note Guarantees
pursuant to Section 4.13 hereof) or that does not adversely affect the legal
rights hereunder of any Holder of the Note; or
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Issuers accompanied by a resolution of the Board
of Directors of each of the General Partner and Finance Corp. authorizing the
execution of any such amended or supplemental Indenture, and upon receipt by the
Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Issuers and the Guarantors in the execution of any amended or
supplemental Indenture authorized or permitted by the terms of this Indenture
and make any further appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to enter into such amended or
supplemental Indenture that affects its own rights, duties or immunities under
this Indenture or otherwise.
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Section 9.02. With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Issuers, the
Guarantors, if any, and the Trustee may amend or supplement this Indenture or
the Notes with the written consent of the Holders of at least a majority in
principal amount of the Notes then outstanding (including consents obtained in
connection with a tender offer or exchange offer for the Notes), and, subject to
Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other
than a Default or Event of Default in the payment of the principal of, premium,
if any, or interest on the Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision of this
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for the Notes).
Upon the request of the Issuers accompanied by a resolution of the Board
of Directors of each of the General Partner and Finance Corp. authorizing the
execution of any such amended or supplemental Indenture, and upon the filing
with the Trustee of evidence satisfactory to the Trustee of the consent of the
Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents
described in Section 7.02 hereof, the Trustee shall join with the Issuers and
the Guarantors, if any, in the execution of such amended or supplemental
Indenture unless such amended or supplemental Indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Issuers shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Issuers to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
compliance in a particular instance by the Issuers or any Guarantor with any
provision of this Indenture, the Note or the Note Guarantees. However, without
the consent of each Holder affected, an amendment or waiver may not (with
respect to any Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or alter any of the provisions with respect to the redemption of the Notes
(other than provisions of Section 4.10 and Section 4.15 hereof);
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least
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a majority in aggregate principal amount of the then outstanding Notes and a
waiver of the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in Section 6.04 or 6.07 hereof or in the
provisions of this Indenture relating to the rights of Holders of Notes to
receive payments of principal of or premium, if any, or interest on the
Notes;
(g) waive a redemption payment with respect to any Note (other than a
payment required by Section 4.10 or Section 4.14 hereof);
(h) make any change to the subordination provisions of Article 10
hereof that adversely affects Holders;
(i) except pursuant to Article 8 and Article 10 hereof, release any
Guarantor from its obligations under its Note Guarantee, or change any Note
Guarantee in any manner that would adversely affect the Holders; or
(j) make any change in this sentence of this Section 9.02.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be set
forth in an amended or supplemental Indenture that complies with the TIA as then
in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Issuers in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
(accompanied by a notation of the Note Guarantees duly endorsed by the
Guarantors) that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
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Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The
Issuers and the Guarantors may not sign an amendment or supplemental Indenture
until the Board of Directors of each of the General Partner and Finance Corp.
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, an Officer's Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
ARTICLE 10
NOTE GUARANTEES
Section 10.01. Note Guarantee.
Each Subsidiary of the Partnership which in accordance with Section 4.13
hereof has guaranteed the obligations of the Issuers under the Notes, upon
execution of a counterpart of this Indenture, hereby jointly and severally
unconditionally guarantees to each Holder of a Note authenticated and delivered
by the Trustee irrespective of the validity or enforceability of this Indenture,
the Notes or the obligations of the Issuers under this Indenture or the Notes,
that: (i) the principal of and interest on the Notes will be paid in full when
due, whether at the maturity or interest payment or mandatory redemption date,
by acceleration, call for redemption or otherwise, and interest on the overdue
principal of and interest, if any, on the Notes and all other obligations of the
Issuers to the Holders or the Trustee under this Indenture or the Notes will be
promptly paid in full or performed, all in accordance with the terms of this
Indenture and the Notes; and (ii) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, they will be paid in full
when due or performed in accordance with the terms of the extension or renewal,
whether at maturity, by acceleration or otherwise. Failing payment when due of
any amount so guaranteed for whatever reason, each Guarantor will be obligated
to pay the same whether or not such failure to pay has become an Event of
Default which could cause acceleration pursuant to Section 6.02 hereof. Each
Guarantor agrees that this is a guarantee of payment not a guarantee of
collection.
Each Guarantor hereby agrees that its obligations with regard to this Note
Guarantee shall be joint and several, unconditional, irrespective of the
validity or enforceability of the Notes or the obligations of the Issuers under
this Indenture, the absence of any action to enforce the same, the recovery of
any judgment against either Issuer or any other obligor with respect to this
Indenture, the Notes or the obligations of the Issuers under this Indenture or
the Notes, any action to enforce the same or any other circumstances (other than
complete performance) which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor. Each Guarantor further, to the extent
permitted by law, waives and relinquishes all claims, rights and remedies
accorded by applicable law to guarantors and agrees not to assert or take
advantage of any such claims, rights or remedies, including but not limited to:
(a) any right to require the Trustee, the Holders or the Issuers (each, a
"Benefitted Party") to proceed against the Issuers or any other Person or to
proceed against or exhaust any security held by a Benefitted Party at any time
or to pursue any other remedy in any Benefitted Party's power before proceeding
against such Guarantor; (b) the defense of the statute of limitations in any
action hereunder or in any action for the collection of any Indebtedness or the
performance of any obligation hereby guaranteed; (c) any defense that may arise
by reason of the incapacity, lack of authority, death or disability of any
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other Person or the failure of a Benefitted Party to file or enforce a claim
against the estate (in administration, bankruptcy or any other proceeding) of
any other Person; (d) demand, protest and notice of any kind including but not
limited to notice of the existence, creation or incurring of any new or
additional Indebtedness or obligation or of any action or non-action on the part
of such Guarantor, either Issuer, any Benefitted Party, any creditor of such
Guarantor, either Issuer or on the part of any other Person whomsoever in
connection with any Indebtedness or obligations hereby guaranteed; (e) any
defense based upon an election of remedies by a Benefitted Party, including but
not limited to an election to proceed against such Guarantor for reimbursement;
(f) any defense based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in other respects
more burdensome than that of the principal; (g) any defense arising because of a
Benefitted Party's election, in any proceeding instituted under the Federal
Bankruptcy Code, of the application of Section 1111(b)(2) of the Federal
Bankruptcy Code; or (h) any defense based on any borrowing or grant of a
security interest under Section 364 of the Federal Bankruptcy Code. Each
Guarantor hereby covenants that its Note Guarantees will not be discharged
except by complete performance of the obligations contained in its Note
Guarantees and this Indenture.
If any Holder or the Trustee is required by any court or otherwise to
return to either the Partnership, Finance Corp. or any Guarantor, or any
Custodian acting in relation to any of the Partnership, Finance Corp. or such
Guarantor, any amount paid by the Partnership, Finance Corp. or such Guarantor
to the Trustee or such Holder, the applicable Note Guarantees, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each
Guarantor agrees that it will not be entitled to any right of subrogation in
relation to the Holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby.
Each Guarantor further agrees that, as between such Guarantor, on the one
hand, and the Holders and the Trustee, on the other hand, (i) the maturity of
the obligations guaranteed hereby may be accelerated as provided in Section 6.02
hereof for the purposes of this Note Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration as to the Issuers
or any other obligor on the Notes of the obligations guaranteed hereby, and (ii)
in the event of any declaration of acceleration of those obligations as provided
in Section 6.02 hereof, those obligations (whether or not due and payable) will
forthwith become due and payable by such Guarantor for the purpose of this Note
Guarantee.
Section 10.02. Limitation of Guarantor's Liability.
Each Guarantor and by its acceptance hereof, each beneficiary hereof,
hereby confirm that it is its intention that the Note Guarantees by such
Guarantor not constitute a fraudulent transfer or conveyance for purposes of the
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to any
Note Guarantees. To effectuate the foregoing intention, each such person hereby
irrevocably agrees that the obligation of such Guarantor under its Note
Guarantees under this Article 10 shall be limited to the maximum amount as will,
after giving effect to such maximum amount and all other (contingent or
otherwise) liabilities of such Guarantor that are relevant under such laws, and
after giving effect to any collections from, rights to receive contribution from
or payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under this Article 10, result in the
obligations of such Guarantor in respect of such maximum amount not constituting
a fraudulent conveyance. Each beneficiary under the Note Guarantees, by
accepting the benefits hereof, confirms its intention that, in the event of a
bankruptcy, reorganization or other similar proceeding of either Issuer or any
Guarantor in which concurrent claims are made upon such Guarantor hereunder, to
the extent such
51
<PAGE>
claims will not be fully satisfied, each such claimant with a valid claim
against such Issuer shall be entitled to a ratable share of all payments by such
Guarantor in respect of such concurrent claims.
Section 10.03. Guarantors May Consolidate, etc., on Certain Terms.
No Guarantor shall consolidate with or merge with or into (whether or not
such Guarantor is the surviving Person), another corporation, Person or entity
whether or not it is affiliated with such Guarantor unless (i) subject to the
provisions of the following paragraph and Section 10.4 hereof, the Person formed
by or surviving any such consolidation or merger (if other than such Guarantor)
assumes all the obligations of such Guarantor pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee, under its Note
Guarantee, the Notes and this Indenture, (ii) immediately after giving effect to
such transaction, no Default or Event of Default exists, and (iii) such
Guarantor, or any Person formed by or surviving any such consolidation or
merger, (A) shall have Consolidated Net Worth (immediately after giving effect
to such transaction), equal to or greater than the Consolidated Net Worth of
such Guarantor immediately preceding the transaction and (B) will be permitted
by virtue of the Partnership pro forma Fixed Charge Coverage Ratio to incur,
immediately after giving effect to such transaction, at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in the Section 4.09 hereof. In case of any such consolidation, merger,
sale or conveyance and upon the assumption by the successor corporation, by
supplemental indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the Note Guarantee in this Indenture and the due and
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed by the Guarantor, such successor corporation
shall succeed to and be substituted for the Guarantor with the same effect as if
it had been named herein as a Guarantor.
Notwithstanding the foregoing, (A) a Guarantor may consolidate with or
merge with or into the Partnership or Finance Corp. (subject to the provisions
of Section 5.01 hereof) and (B) a Guarantor may consolidate with or merge with
or into any other Guarantor.
Section 10.04. Releases Following Sale of Assets.
Upon a sale or other disposition of all or substantially all of the assets
of any Guarantor, by way of merger, consolidation or otherwise, or a sale or
other disposition of all of the capital stock of any Guarantor, then such
Guarantor (in the event of a sale or other disposition, by way of such a merger,
consolidation or otherwise, of all of the Capital Interests of such Guarantor)
or the corporation acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor) shall
be released and relieved of its obligations under its Note Guarantees; provided
that the Net Proceeds of such sale or other disposition are applied in
accordance with Section 4.10 hereof. The Trustee will deliver to such Guarantor
a signed acknowledgment of such release.
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA (S)318(c), the imposed duties shall control.
52
<PAGE>
Section 11.02. Notices.
Any notice or communication by the Issuers, the Guarantors or the Trustee
to the others is duly given if in writing and delivered in Person or mailed by
first class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Issuers or any Guarantor:
Ferrellgas, L.P.
One Liberty Plaza
Liberty, Missouri 64068
Telecopier No.: (816) 792-6979
Attention: Danley K. Sheldon
With a copy to:
Smith, Gill, Fisher, & Butts, P.C.
One Kansas City Place
1200 Main Street
Kansas City, Missouri 64105
Telecopier No.: (816) 391-7600
Attention: Kendrick T. Wallace
If to the Trustee:
Norwest Bank Minnesota,
National Association
6th Street & Marquette Ave.
Minneapolis, MN 55479
Telecopier No.: (612) 677-9875
Attention: Ray Haverstock
The Issuers, the Guarantors or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA (S) 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
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<PAGE>
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the either Issuer or any Guarantor mails a notice or communication to
Holders, it shall mail a copy to the Trustee and each Agent at the same time.
Section 11.03. Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA (S)312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Issuers, the
Guarantors, if any, the Trustee, the Registrar and anyone else shall have the
protection of TIA (S)312(c).
Section 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuers or the Guarantors, if any,
to the Trustee to take any action under this Indenture, each of the Issuers or
the Guarantors, if any, shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
Section 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA (S)314(a)(4)) shall comply with the provisions of TIA (S)
314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether such covenant or condition has been
satisfied; and
(d) a statement as to whether, in the opinion of such Person, such
condition or covenant has been satisfied.
Section 11.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
54
<PAGE>
Section 11.07. No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee, incorporator or
stockholder of either Issuer or any Guarantor, as such, shall have any liability
for any obligations of the Issuers or any Guarantor under the Notes, the Note
Guarantees, this Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note and the related Note Guarantees waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.
Section 11.08. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES.
Section 11.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Issuers or their Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 11.10. Successors.
All agreements of the Issuers and the Guarantors, if any, in this
Indenture and the Notes and the Note Guarantees, as the case may be, shall bind
their respective successors. All agreements of the Trustee in this Indenture
shall bind its successors.
Section 11.11. Severability.
In case any provision in this Indenture, in the Notes or in the Note
Guarantees, if any, shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 11.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 11.13. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
55
<PAGE>
SIGNATURES
Dated as of July 5, 1994 FERRELLGAS, L.P.
By: Ferrellgas, Inc.
General Partner
By:
--------------------------------------
Name:
Title:
(SEAL)
Dated as of July 5, 1994 FERRELLGAS FINANCE CORP.
By:
-----------------------------------------
Name:
Title:
(SEAL)
Dated as of July 5, 1994 NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
-----------------------------------------
Name:
Title:
(SEAL)
56
<PAGE>
Exhibit A
(Face of Series A Fixed Rate Senior Note)
10% Series A Fixed Rate Senior Note due 2001
No. $__________
FERRELLGAS, L.P.
FERRELLGAS FINANCE CORP.
promise to pay to
or registered assigns,
the principal sum of
Dollars on August 1, 2001.
Interest Payment Dates: February 1 and August 1.
Record Dates: January 15 and July 15.
Dated: July 5, 1994
FERRELLGAS, L.P.
By: Ferrellgas, Inc.
General Partner
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
FERRELLGAS FINANCE CORP.
By:
-------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
A-1
<PAGE>
This is one of the Notes
referred to in the
within-mentioned Indenture:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee
By:__________________________________
A-2
<PAGE>
(Back of Note)
10% SERIES A FIXED RATE SENIOR NOTE
DUE AUGUST 1, 2001
Capitalized terms used herein have the meanings assigned to them in
the Indenture (as defined below) unless otherwise indicated.
1. Interest. Ferrellgas L.P., a Delaware limited partnership (the
"Partnership"), and Ferrellgas Finance Corp., a Delaware corporation ("Finance
Corp." and, together with the Partnership, the "Issuers") promise to pay
interest on the principal amount of this Note at the rate and in the manner
specified below. The Issuers shall pay interest in cash on the principal amount
of this Note at the rate per annum of 10%. The Issuers will pay interest semi-
annually in arrears on February 1 and August 1 of each year, commencing on
February 1, 1995, to Holders of record on the immediately preceding January 15
and July 15, or if any such day is not a Business Day (as defined in the
Indenture), on the next succeeding Business Day (each a "Fixed Rate Interest
Payment Date"). Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months. Interest shall accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
date of the original issuance of the Notes. To the extent lawful, the Issuers
shall pay interest on overdue principal at the rate of 1% per annum in excess of
the then applicable interest rate on the Notes; it shall pay interest on overdue
installments of interest (without regard to any applicable grace periods) at the
same rate to the extent lawful.
2. Method of Payment. The Issuers will pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the record date next preceding the Fixed Rate
Interest Payment Date, even if such Notes are cancelled after such record date
and on or before such Fixed Rate Interest Payment Date. The Holder hereof must
surrender this Note to a Paying Agent to collect principal payments. The
Issuers will pay principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
The Issuers, however, may pay principal, premium, if any, and interest by check
payable in such money. The Notes will be payable both as to principal and
interest at the office or agency of the Issuers maintained for such purpose
within the City and State of New York or, at the option of the Issuers, payment
of interest may be made by check mailed to the Holders of Notes at their
respective addresses set forth in the register of Holders. Unless otherwise
designated by the Issuers, the Issuers' office or agency in New York, New York
will be the office of the Trustee maintained for such a purpose.
3. Paying Agent and Registrar. Initially, the Trustee will act as
Paying Agent and Registrar. The Issuers may change any Paying Agent, Registrar
or co-registrar without notice to any Holder. Either Issuer or any Guarantor
may act in any such capacity.
4. Indenture. The Issuers issued the Notes under an Indenture dated
as of July 5, 1994 (the "Indenture") between Partnership, Finance Corp. and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S. Code (S)(S) 77aaa-77bbbb) as in effect on the date of the Indenture. The
Notes are subject to all such terms, and Holders of the Notes are referred to
the Indenture and such act for a statement of such terms. The terms of the
Indenture shall govern any inconsistencies between the Indenture and the Notes.
The Notes are unsecured general obligations of the Issuers limited to
A-3
<PAGE>
$250,000,000 in aggregate principal amount. The Fixed Rate Senior Notes are
limited to $200,000,000 in aggregate principal amount.
5. Optional Redemption. The Issuers shall not have the option to
redeem the Notes pursuant to Section 3.07 of the Indenture prior to August 1,
1998. Thereafter, the Issuers shall have the option to redeem the Notes, in
whole or in part, upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of the principal amount) set forth
below, plus accrued and unpaid interest thereon to the applicable redemption
date, if redeemed during the 12 month period beginning on August 1 of the years
indicated below:
<TABLE>
<CAPTION>
Year Percentage
<S> <C>
1998 ....................... 105.00%
1999 ....................... 102.50%
2000 ....................... 100.00%
</TABLE>
6. Mandatory Redemption. Except as described in paragraph 7 below,
the Issuers shall not be required to make mandatory redemption or sinking fund
payments with respect to the Notes.
7. Redemption or Repurchase at Option of Holder. (a) If there is a
Change of Control (as defined in the Indenture), the Issuers shall be required
to offer to purchase all Notes at 101% of the aggregate principal amount
thereof, plus accrued and unpaid interest, if any, to the date of purchase.
Holders of Notes that are subject to an offer to purchase will receive a notice
therefor from the Issuers prior to any related purchase date, and may elect to
have such Notes purchased by completing the form entitled "Option of Holder to
Elect Purchase" appearing below.
(b) When the aggregate amount of Excess Proceeds from Asset Sales (as
defined in the Indenture) exceeds $15 million, the Issuers shall be required to
purchase the maximum principal amount of Notes that may be purchased out of the
Excess Proceeds at 100% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date fixed for the closing of such offer. If the
aggregate principal amount of Notes surrendered by Holders thereof exceeds the
amount of Excess Proceeds, the Notes to be redeemed shall be selected pursuant
to the terms of Section 3.02 of the Indenture (with such adjustments as may be
deemed appropriate by the Issuers so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased). To the extent that the
aggregate amount of Notes tendered by Holders thereof is less than the Excess
Proceeds, the Issuers may use such deficiency for general business purposes.
Holders of Notes which are the subject of an offer to purchase will receive a
notice therefor from the Issuers prior to any related purchase date, and may
elect to have such Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" appearing below.
8. Notice of Redemption. Notice of redemption shall be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder of Notes to be redeemed at its registered address. Notes may be redeemed
in part but only in whole multiples of $1,000, unless all of the Notes held by a
Holder are to be redeemed. On and after the redemption date, interest ceases to
accrue on Notes or portions of them called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and
A-4
<PAGE>
to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not exchange or register the transfer of any Note or portion of a
Note selected for redemption. Also, it need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes to be
redeemed, during the period between a record date and the corresponding Fixed
Rate Interest Payment Date.
10. Persons Deemed Owners. Prior to due presentment to the Trustee
for registration of the transfer of this Note, the Trustee, any Agent, the
Issuers and the Guarantors may deem and treat the Person in whose name this Note
is registered as its absolute owner for the purpose of receiving payment of
principal of and interest on this Note and for all other purposes whatsoever,
whether or not this Note is overdue, and neither the Trustee, any Agent, the
Issuers nor any Guarantor shall be affected by notice to the contrary. The
registered holder of a Note shall be treated as its owner for all purposes.
11. Amendments and Waivers. Subject to certain exceptions, the
Indenture or the Notes may be amended with the consent of the Holders of at
least a majority in principal amount of the then outstanding Notes (including
consents obtained in connection with a tender offer or exchange offer for
Notes), and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for Notes).
Without the consent of any Holder, the Indenture or the Notes may be amended to
cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes
in addition to or in place of certificated Notes, to provide for assumption of
the Issuers' or any Guarantor's obligations to Holders in the case of a merger
or consolidation or to make any change that would provide any additional rights
or benefits to the Holders or that does not adversely affect the rights of any
Holder under the Indenture or to comply with the requirements of the Commission
in order to effect or maintain the qualification of the Indenture under the
Trust Indenture Act. Without the consent of each Holder affected, an amendment
or waiver may not (with respect to any Notes held by a non-consenting Holder of
Notes): (i) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver, (ii) reduce the principal of or change the
fixed maturity of any Note or alter the provisions with respect to the
redemption of the Notes (other than provisions relating to the covenants
described above under the caption "Redemption or Repurchase at the Option of
Holders"), (iii) reduce the rate of or change the time for payment of interest
on any Note, (iv) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Notes (except a rescission
of acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of the Notes and a waiver of the payment default that resulted
from such acceleration), (v) make any Note payable in money other than that
stated in the Notes, (vi) make any change in the provisions of the Indenture
relating to waivers of past Defaults or the rights of Holders of Notes to
receive payments of principal of or premium, if any, or interest on the Notes,
(vii) waive a redemption payment with respect to any Note (other than a payment
required by one of the covenants described above under the caption "Redemption
or Repurchase at the Option of Holders"), (viii) except as otherwise permitted
in the Indenture, release any Guarantor from its obligations under its Note
Guarantee or change any Note Guarantee in any manner that would adversely affect
the rights of the Holders of Senior Notes or (ix) make any change in the
foregoing amendment and waiver provisions.
12. Defaults and Remedies. Events of Default include: default for
30 days in the payment when due of interest on the Notes; default in payment
when due of principal of or premium, if any, on the Notes at maturity, upon
redemption or otherwise; failure for 20 days by the Partnership to comply with
Sections 4.07, 4.09, 4.14 or 5.01 of the Indenture; failure by the Partnership
or the Guarantors for 60 days after notice from the Trustee or the Holder of at
least 25% in principal amount of the Notes then outstanding to comply with any
of its other agreements in the Indenture or the Notes; default under any
mortgage, indenture or instrument under which there may be issued or by which
there
A-5
<PAGE>
may be secured or evidenced any Indebtedness for money borrowed by the
Partnership or any of its Subsidiaries (or the payment of which is guaranteed by
the Partnership or any of its Subsidiaries) whether such Indebtedness or
Guarantee now exists, or is created after the date of the Indenture, which
default (a) is caused by a failure to pay principal of or premium, if any, or
interest on such Indebtedness prior to the expiration of the grace period
provided in such Indebtedness (a "Payment Default") or (b) results in the
acceleration of such Indebtedness prior to its express maturity and, in each
case, the principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a Payment
Default or the maturity of which has been so accelerated, aggregates $10 million
or more, excluding any acceleration of maturity of the Indebtedness represented
by the General Partner's Existing Floating Rate Notes and Existing Fixed Rate
Notes to the extent that such Indebtedness shall be redeemed on or prior to the
40th day after the date of this Indenture; failure by the Partnership or any of
its Subsidiaries to pay final judgments aggregating in excess of $10 million,
which judgments are not paid, discharged or stayed for a period of 60 days;
except as permitted by the Indenture, any Note Guarantee shall be held in any
judicial proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect or any Guarantor, or any Person acting on behalf
of any Guarantor, shall deny or disaffirm its obligations under its Note
Guarantees; and certain events of bankruptcy or insolvency with respect to the
Partnership or any of its Subsidiaries. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable
immediately; except that in the case of an Event of Default arising from certain
events of bankruptcy or insolvency, relating to the Partnership, any Significant
Subsidiary or any group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary, all outstanding Notes will become due and payable
without further action or notice. Holders of the Notes may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding, by notice to the Trustee, may on behalf of the Holders of all
of the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of principal of, premium, if any, and interest on the Notes. The
Issuers are required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Issuers are required upon becoming aware
of any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
13. Trustee Dealings with Issuers. The Trustee under the Indenture,
in its individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Issuers, any Guarantor or their respective
Affiliates, and may otherwise deal with the Issuers, any Guarantor or their
respective Affiliates, as if it were not Trustee; however, if the Trustee
acquires any conflicting interest it must eliminate such conflict within 90
days, apply to the Commission for permission to continue as Trustee or resign.
14. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator or stockholder, as such, of either Issuer or any
Guarantor, as such, shall have any liability for any obligations of the Issuers
or any Guarantor under the Notes, the Note Guarantees or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. Each Holder by accepting a Note and the related Note Guarantees, if
any, waives and releases all such liability. The waiver and release are part of
the consideration for the issuance of the Notes.
A-6
<PAGE>
15. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have caused
CUSIP numbers to be printed on the Notes and has directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
18. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THE NOTES AND THE NOTE GUARANTEES,
IF ANY.
The Issuers will furnish to any Holder upon written request and
without charge a copy of the Indenture. Request may be made to:
Ferrellgas, L.P.
One Liberty Plaza
Liberty, Missouri 64068
Telecopier No.: (816) 792-6979
Attention: Danley K. Sheldon
A-7
<PAGE>
Assignment Form
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- -------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Note on the books of the Issuers. The agent may substitute
another to act for him.
- -------------------------------------------------------------------------------
Date:
-------------------------------
Your Signature:
--------------------------------------------
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee.
A-8
<PAGE>
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Issuers pursuant
to Section 4.10 or 4.14 of the Indenture, check the box below:
[_] Section 4.10 [_] Section 4.14
If you want to elect to have only part of the Note purchased by the
Issuers pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased: $___________
Date: Your Signature:
--------------------- -------------------------------
(Sign exactly as your name appears on the Note)
Tax Identification No.:
--------------------
Signature Guarantee.
A-9
<PAGE>
Exhibit B
(Face of Floating Rate Senior Note)
Floating Rate Senior Note due 2001
No. $__________
FERRELLGAS, L.P.
FERRELLGAS FINANCE CORP.
promise to pay to
or registered assigns,
the principal sum of
Dollars on August 1, 2001.
Interest Payment Dates: February 1, May 1, August 1 and November 1.
Record Dates: January 15, April 15, July 15 and October 15.
Dated: July 5, 1994
FERRELLGAS, L.P.
By: Ferrellgas, Inc.
General Partner
By:
-----------------------------------------
Name:
Title:
By:
-----------------------------------------
Name:
Title:
B-1
<PAGE>
FERRELLGAS FINANCE CORP.
By:____________________________________
Name:
Title:
By:____________________________________
Name:
Title:
This is one of the Floating Rate Senior
Notes referred to in the
within-mentioned Indenture:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
Trustee
By:__________________________________
B-2
<PAGE>
(Back of Note)
SERIES B FLOATING RATE SENIOR NOTE
DUE AUGUST 1, 2001
Capitalized terms used herein have the meanings assigned to them in the
Indenture (as defined below) unless otherwise indicated.
1. Interest. Ferrellgas L.P., a Delaware limited partnership (the
"Partnership"), and Ferrellgas Finance Corp., a Delaware corporation ("Finance
Corp." and, together with the Partnership, the "Issuers") promise to pay
interest on the principal amount of this Note at a rate equal to the Applicable
LIBOR Rate. The Issuers will pay interest quarterly on February 1, May 1,
August 1 and November 1 of each year, or if any such day is not a Business Day,
on the next succeeding Business Day (each, a "Floating Rate Interest Payment
Date"), commencing on November 1, 1994, to Holders of record on the immediately
preceding January 15, April 15, July 15 and October 15. Interest on this Note
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of the original issuance of this Note.
Interest on this Note shall accrue to, but not including, the date of repayment
of such principal; provided, however, that if such repayment occurs after 12:00
noon, New York City time, interest shall be deemed to accrue until the following
Business Day. To the extent lawful, the Issuers shall pay interest on overdue
principal at the rate of 1% per annum in excess of the then applicable interest
rate on this Note; they shall pay interest on overdue installments of interest
(without regard to any applicable grace periods) at the same rate to the extent
lawful. On each Floating Rate Interest Payment Date, interest on this Note will
be paid for the Initial Quarterly Period or the immediately preceding Quarterly
Period, as applicable. Interest shall be calculated on a formula basis in
respect of the Initial Quarterly Period and each Quarterly Period by multiplying
the principal amount of this Note by the Applicable LIBOR Rate, and multiplying
such product by the LIBOR Fraction. Anything to the contrary in this Note
notwithstanding, the interest rate on this Note shall in no event be in excess
of the maximum rate permitted by the law of any state of applicable
jurisdiction, as the same may be modified by Federal law.
The "Applicable LIBOR Rate" means for each Quarterly Period during which
any Floating Rate Senior Note is outstanding subsequent to the Initial Quarterly
Period, 312.5 basis points over the rate determined by the Partnership (notice
of such rate to be sent to the Trustee by the Company on the date of
determination thereof) equal to the average (rounded upwards, if necessary, to
the nearest 1/16 of 1%) of the offered rates for deposits in U.S. dollars for a
period of three months, as set forth on the Reuters Screen LIBO Page as of 11:00
a.m., London time, on the Interest Rate Determination Date for such Quarterly
Period; provided, however, that if only one such offered rate appears on the
Reuters Screen LIBO Page, the Applicable LIBOR Rate for such Quarterly Period
shall mean such offered rate. If such rate is not available at 11:00 a.m.,
London time, on the Interest Rate Determination Date for such Quarterly Period,
then the Applicable LIBOR Rate for such Quarterly Period shall mean the
arithmetic mean (rounded upwards, if necessary, to the nearest 1/16 of 1%) of
the interest rates per annum at which deposits in amounts equal to $1 million in
U.S. dollars are offered by the Reference Banks to leading banks in the London
Interbank Market for a period of six months as of 11:00 a.m., London time, on
the Interest Rate Determination Date for such Quarterly Period. If on any
Interest Rate Determination Date, at least two of the Reference Banks provide
such offered quotations, then the Applicable LIBOR Rate for such Quarterly
Period shall be determined in accordance with the preceding sentence on the
basis of the offered quotation of those Reference Banks providing such
quotations; provided, however that if fewer than two of the Reference Banks are
so quoting such interest rates as mentioned above, the Applicable LIBOR Rate for
such Quarterly Period shall be deemed to be the Applicable LIBOR Rate for the
next
B-3
<PAGE>
preceding Quarterly Period and in the case of the Quarterly Period next
succeeding the Initial Quarterly Period, the Applicable LIBOR Rate shall be 7
7/8%. Notwithstanding the foregoing, the Applicable LIBOR Rate for the Initial
Quarterly Period shall be 7 7/8%.
"Interest Rate Determination Date" means, with respect to the Initial
Quarterly Period and each Quarterly Period, the second Working Day prior to the
first day of such Initial Quarterly Period or Quarterly Period, as applicable.
"LIBOR Fraction" means the actual number of days in the Initial Quarterly
Period or Quarterly period, as applicable, divided by 360; provided, however,
that the number of days in the Initial Quarterly Period and each Quarterly
Period shall be calculated by including the first day of such Initial Quarterly
Period or Quarterly Period and excluding the last.
"Initial Quarterly Period" means the period from and including July 5,
1994 through and including October 31, 1994.
"Quarterly Period" means the period from and including a scheduled
Floating Rate Interest Payment Date through the day next preceding the following
scheduled Floating Rate Interest Payment Date.
"Reference Banks" means each of Barclays Bank PLC, London Branch, the Bank
of Tokyo, Ltd, London Branch, Bankers Trust Company, London Branch, and National
Westminster Bank PLC, London Branch, and any such replacement bank thereof as
listed on the Reuters Screen LIBO Page and their respective successors, and if
any of such banks are not at the applicable time providing interest rates as
contemplated within the definition of the "Applicable LIBOR Rate," Reference
Banks shall mean the remaining bank or banks so providing such rates. In the
event that less than two of such banks are providing such rates, the Issuers
shall use reasonable efforts to appoint additional Reference Banks so that there
are at least two such banks providing such rates; provided, however, that such
banks appointed by the Issuers shall be London offices of leading banks engaged
in the Eurodollar Market.
"Reuters Screen LIBO Page" means the display designated as page "LIBO" on
the Reuter Monitor Money Rates Service (or such other page as may replace the
LIBO page on that service for the purpose of displaying London Interbank Offered
Rates of major banks).
"Working Day" means any day which is not a Saturday, Sunday or a day on
which banking institutions in New York, New York or London, England are
authorized or obligated by law or executive order to close.
2. Method of Payment. The Issuers will pay interest on this Note (except
defaulted interest) to the Person who is the registered Holder of such Note at
the close of business on the record date next preceding the Floating Rate
Interest Payment Date, even if such Note is cancelled after such record date and
on or before such Floating Rate Interest Payment Date. The Holder hereof must
surrender this Note to a Paying Agent to collect principal payments. The
Issuers will pay principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
The Issuers, however, may pay principal, premium, if any, and interest by check
payable in such money. The Notes will be payable both as to principal and
interest at the office or agency of the Issuers maintained for such purpose
within the City and State of New York or, at the option of the Issuers, payment
of interest may be made by check mailed to the Holders of Notes at their
respective addresses set forth in the register of Holders. Unless otherwise
designated by the Issuers, the Issuers' office or agency in New York, New York
will be the office of the Trustee maintained for such a purpose.
B-4
<PAGE>
3. Paying Agent and Registrar. Initially, the Trustee will act as Paying
Agent and Registrar. The Issuers may change any Paying Agent, Registrar or co-
registrar without notice to any Holder. Either Issuer or any Guarantor may act
in any such capacity.
4. Indenture. The Issuers issued the Notes under an Indenture dated as of
July 5, 1994 (the "Indenture") between Partnership, Finance Corp. and the
Trustee. The terms Notes include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.
Code (S)(S) 77aaa-77bbbb) as in effect on the date of the Indenture. The Notes
are subject to all such terms, and Holders of the Notes are referred to the
Indenture and such act for a statement of such terms. The terms of the
Indenture shall govern any inconsistencies between the Indenture and the Notes.
The Notes are unsecured general obligations of the Issuers limited to
$250,000,000 in aggregate principal amount. The Floating Rate Senior Notes are
limited to $50,000,000 in aggregate principal amount.
5. Optional Redemption. The Issuers may redeem all or any portion of the
Floating Rate Senior Notes on any Floating Rate Interest Payment Date on or
after August 1, 1995, on not less than 30 nor more than 60 days' notice to each
Holder, at a redemption price equal to 100% of the outstanding principal amount
then redeemed, plus accrued and unpaid interest to the redemption date.
6. Mandatory Redemption. The Issuers shall redeem $5,000,000 principal
amount of Floating Rate Senior Notes on each of August 1, 1999 and August 1,
2000 at a redemption price equal to 100% of principal amount thereof, plus
accrued and unpaid interest to the redemption date. The Issuers may reduce the
principal amount of Floating Rate Senior Notes to be redeemed pursuant to this
paragraph 6 by subtracting 100% of the principal amount of any Floating Rate
Senior Notes that the Issuers have delivered to the Trustee for cancellation or
that the Issuers have redeemed other than pursuant to this paragraph 6. The
Issuers may so subtract the principal amount of a Floating Rate Senior Note only
once.
Except as described in this paragraph 6 and in paragraph 7 below, the
Issuers shall not be required to make mandatory redemption or sinking fund
payments with respect to the Notes.
7. Redemption or Repurchase at Option of Holder. (a) If there is a
Change of Control (as defined in the Indenture), the Issuers shall be required
to offer to purchase all Notes at 101% of the aggregate principal amount thereof
plus accrued and unpaid interest. Holders of Notes that are subject to an offer
to purchase will receive a notice therefor from the Issuers prior to any related
purchase date, and may elect to have such Notes purchased by completing the form
entitled "Option of Holder to Elect Purchase" appearing below.
(b) When the aggregate amount of Excess Proceeds from Asset Sales (as
defined in the Indenture) exceeds $15 million, the Issuers shall be required to
purchase the maximum principal amount of Notes that may be purchased out of the
Excess Proceeds at 100% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date fixed for the closing of such offer. If the
aggregate principal amount of Notes surrendered by Holders thereof exceeds the
amount of Excess Proceeds, the Notes to be redeemed shall be selected pursuant
to the terms of Section 3.02 of the Indenture (with such adjustments as may be
deemed appropriate by the Issuers so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased). To the extent that the
aggregate amount of Notes tendered by Holders thereof is less than the Excess
Proceeds, the Issuers may use such deficiency for general business purposes.
Holders of Notes which are the subject of an offer to purchase will receive a
notice therefor from the Issuers prior to any related purchase date, and may
elect to have such Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" appearing below.
B-5
<PAGE>
8. Notice of Redemption. Notice of redemption shall be mailed at least
30 days but not more than 60 days before the redemption date to each Holder of
Notes to be redeemed at its registered address. Notes may be redeemed in part
but only in whole multiples of $1,000, unless all of the Notes held by a Holder
are to be redeemed. On and after the redemption date, interest ceases to accrue
on Notes or portions of them called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000.
The transfer of Notes may be registered and Notes may be exchanged as provided
in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not exchange or register the transfer of any Note or portion of a
Note selected for redemption. Also, it need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes to be
redeemed, during the period between a record date and the corresponding Floating
Rate Interest Payment Date.
10. Persons Deemed Owners. Prior to due presentment to the Trustee for
registration of the transfer of this Note, the Trustee, any Agent, the Issuers
and the Guarantors may deem and treat the Person in whose name this Note is
registered as its absolute owner for the purpose of receiving payment of
principal of and interest on this Note and for all other purposes whatsoever,
whether or not this Note is overdue, and neither the Trustee, any Agent, the
Issuers nor any Guarantor shall be affected by notice to the contrary. The
registered holder of a Note shall be treated as its owner for all purposes.
11. Amendments and Waivers. Subject to certain exceptions, the Indenture
or the Notes may be amended with the consent of the Holders of at least a
majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for Notes), and any
existing default or compliance with any provision of the Indenture or the Notes
may be waived with the consent of the Holders of a majority in principal amount
of the then outstanding Notes (including consents obtained in connection with a
tender offer or exchange offer for Notes). Without the consent of any Holder,
the Indenture or the Notes may be amended to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to provide for assumption of the Issuers' or any Guarantor's
obligations to Holders in the case of a merger or consolidation or to make any
change that would provide any additional rights or benefits to the Holders or
that does not adversely affect the rights of any Holder under the Indenture or
to comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act. Without the
consent of each Holder affected, an amendment or waiver may not (with respect to
any Notes held by a non-consenting Holder of Notes): (i) reduce the principal
amount of Notes whose Holders must consent to an amendment, supplement or
waiver, (ii) reduce the principal of or change the fixed maturity of any Note or
alter the provisions with respect to the redemption of the Notes (other than
provisions relating to the covenants described above under the caption
"Redemption or Repurchase at the Option of Holders"), (iii) reduce the rate of
or change the time for payment of interest on any Note, (iv) waive a Default or
Event of Default in the payment of principal of or premium, if any, or interest
on the Notes (except a rescission of acceleration of the Notes by the Holders of
at least a majority in aggregate principal amount of the Notes and a waiver of
the payment default that resulted from such acceleration), (v) make any Note
payable in money other than that stated in the Notes, (vi) make any change in
the provisions of the Indenture relating to waivers of past Defaults or the
rights of Holders of Notes to receive payments of principal of or premium, if
any, or interest on the Notes, (vii) waive a redemption payment with respect to
any Note (other than a payment required by one of the covenants described above
under the caption "Redemption or Repurchase at the Option of Holders"), (viii)
except as otherwise permitted in the Indenture, release any Guarantor from its
obligations under its
B-6
<PAGE>
Note Guarantee or change any Note Guarantee in any manner that would adversely
affect the rights of the Holders of Senior Notes or (ix) make any change in the
foregoing amendment and waiver provisions.
12. Defaults and Remedies. Events of Default include: default for 30
days in the payment when due of interest on the Notes; default in payment when
due of principal of or premium, if any, on the Notes at maturity, upon
redemption or otherwise; failure for 20 days by the Partnership to comply with
Sections 4.07, 4.09, 4.14 or 5.01 of the Indenture; failure by the Partnership
or the Guarantors for 60 days after notice from the Trustee or the Holder of at
least 25% in principal amount of the Notes then outstanding to comply with any
of its other agreements in the Indenture or the Notes; default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Partnership or any of its Subsidiaries (or the payment of which is guaranteed by
the Partnership or any of its Subsidiaries) whether such Indebtedness or
Guarantee now exists, or is created after the date of the Indenture, which
default (a) is caused by a failure to pay principal of or premium, if any, or
interest on such Indebtedness prior to the expiration of the grace period
provided in such Indebtedness (a "Payment Default") or (b) results in the
acceleration of such Indebtedness prior to its express maturity and, in each
case, the principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a Payment
Default or the maturity of which has been so accelerated, aggregates $10 million
or more, excluding any acceleration of maturity of the Indebtedness represented
by the General Partner's Existing Floating Rate Notes and Existing Fixed Rate
Notes to the extent that such Indebtedness shall be redeemed on or prior to the
40th day after the date of this Indenture; failure by the Partnership or any of
its Subsidiaries to pay final judgments aggregating in excess of $10 million,
which judgments are not paid, discharged or stayed for a period of 60 days;
except as permitted by the Indenture, any Note Guarantee shall be held in any
judicial proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect or any Guarantor, or any Person acting on behalf
of any Guarantor, shall deny or disaffirm its obligations under its Note
Guarantees; and certain events of bankruptcy or insolvency with respect to the
Partnership or any of its Subsidiaries. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable
immediately; except that in the case of an Event of Default arising from certain
events of bankruptcy or insolvency, relating to the Partnership, any Significant
Subsidiary or any group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary, all outstanding Notes will become due and payable
without further action or notice. Holders of the Notes may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding, by notice to the Trustee, may on behalf of the Holders of all
of the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of principal of, premium, if any, and interest on the Notes. The
Issuers are required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Issuers are required upon becoming aware
of any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
13. Trustee Dealings with Issuers. The Trustee under the Indenture, in
its individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Issuers, any Guarantor or their respective
Affiliates, and may otherwise deal with the Issuers, any Guarantor or their
respective Affiliates, as if it were not Trustee; however, if the Trustee
acquires any conflicting interest
B-7
<PAGE>
it must eliminate such conflict within 90 days, apply to the Commission for
permission to continue as Trustee or resign.
14. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator or stockholder, as such, of either Issuer or any
Guarantor, as such, shall have any liability for any obligations of the Issuers
or any Guarantor under the Notes, the Note Guarantees or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. Each Holder by accepting a Note and the related Note Guarantees, if
any, waives and releases all such liability. The waiver and release are part of
the consideration for the issuance of the Notes.
15. Authentication. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have caused
CUSIP numbers to be printed on the Notes and has directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
18. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THE NOTES AND THE NOTE GUARANTEES,
IF ANY.
The Issuers will furnish to any Holder upon written request and without
charge a copy of the Indenture. Request may be made to:
Ferrellgas, L.P.
One Liberty Plaza
Liberty, Missouri 64068
Telecopier No.: (816) 792-6979
Attention: Danley K. Sheldon
B-8
<PAGE>
Assignment Form
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- -------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Note on the books of the Issuers. The agent may substitute
another to act for him.
Date:
------------------------
Your Signature:
--------------------------------------------
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee.
B-9
<PAGE>
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Issuers pursuant
to Section 4.10 or 4.14 of the Indenture, check the box below:
[_] Section 4.10 [_] Section 4.14
If you want to elect to have only part of the Note purchased by the
Issuers pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased: $___________
Date: Your Signature:
---------------------- -------------------------------
(Sign exactly as your name appears on the Note)
Tax Identification No.:
--------------------
Signature Guarantee.
B-10
<PAGE>
EXHIBIT C
Form of Supplemental Indenture to Be Delivered by Future Guarantors
Supplemental Indenture (this "Supplemental Indenture"), dated as of
________________, between __________________ (the "Guarantor"), a subsidiary of
Ferrellgas, L.P., (or its successor), a Delaware limited partnership (the
"Partnership"), and Norwest Bank Minnesota, National Association, a national
banking association, as trustee under the Indenture referred to below (the
"Trustee").
W I T N E S S E T H
WHEREAS, the Partnership and Ferrellgas Finance Corp., a Delaware
corporation ("Finance Corp." and, together with the Partnership, the "Issuers")
have heretofore executed and delivered to the Trustee an indenture (the
"Indenture"), dated as of July 5, 1994, providing for the issuance of an
aggregate principal amount of $200,000,000 of 10% Fixed Rate Senior Notes (the
"Fixed Rate Senior Notes") and an aggregate principal amount of $50,000,000 of
Floating Rate Senior Notes (the "Floating Rate Senior Notes" and, together with
the Fixed Rate Senior Notes, the "Senior Notes";
WHEREAS, Section 4.13 of the Indenture provides that under certain
circumstances the Partnership may cause the Guarantor to execute and deliver to
the Trustee a supplemental indenture pursuant to which the Guarantor shall
unconditionally guarantee all of the Issuers' obligations under the Notes
pursuant to a Note Guarantee on the terms and conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guarantor and the Trustee mutually covenant and agree for the equal and ratable
benefit of the Holders of the Notes as follows:
1. Capitalized Terms. Capitalized terms used herein without definition shall
have the meanings assigned to them in the Indenture.
2. Agreement to Guarantee. The Guarantor hereby agrees that its obligations
to the Holder and the Trustee pursuant to this Note Guarantee shall be as
expressly set forth in Article 10 of the Indenture and in such other provisions
of the Indenture as are applicable to Guarantors, and reference is made to the
Indenture for the precise terms of this Supplemental Indenture. The terms of
Article 10 of the Indenture and such other provisions of the Indenture as are
applicable to Guarantors are incorporated herein by reference.
3. Execution and Delivery of Note Guarantees.
(a) To evidence its Note Guarantee set forth in this Supplemental
Indenture, the Guarantor hereby agrees that a notation of such Note Guarantee
substantially in the form of Exhibit C to the Indenture shall be endorsed by
an Officer of such Guarantor on each Note authenticated and delivered by the
Trustee after the date hereof.
(b) Notwithstanding the foregoing, the Guarantor hereby agrees that its
Note Guarantee set forth herein shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such Note
Guarantee.
C-1
<PAGE>
(c) If an Officer whose signature is on this Supplemental Indenture or on
the Note Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which a Note Guarantee is endorsed, the Note
Guarantee shall be valid nevertheless.
(d) The delivery of any Note by the Trustee, after the authentication
thereof under the Indenture, shall constitute due delivery of the Note
Guarantee set forth in this Supplemental Indenture on behalf of the
Guarantor.
6. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator or stockholder of the Guarantor, as such, shall
have any liability for any obligations of the Issuers or any Guarantor under the
Notes, any Note Guarantees, the Indenture or this Supplemental Indenture or for
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of the Notes by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Notes.
7. New York Law to Govern. The internal law of the State of New York shall
govern and be used to construe this Supplemental Indenture and the Note
Guarantee.
8. Counterparts The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
9. Effect of Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: ____________, ____ [Guarantor]
By: ___________________________
Name:
Title:
Dated: ____________, ____ _________________________________,
as Trustee
By: ___________________________
Name:
Title:
C-2
<PAGE>
EXHIBIT D
FORM OF NOTATION ON SENIOR NOTE
RELATING TO NOTE GUARANTEE
Each Guarantor set forth below and each Subsidiary of the Partnership
which in accordance with Section 4.13 of the Indenture has guaranteed the
obligations of the Issuers under the Notes upon execution of a counterpart of
the Indenture, has jointly and severally unconditionally guaranteed (i) the due
and punctual payment of the principal of and interest on the Notes, whether at
the maturity or interest payment or mandatory redemption date, by acceleration,
call for redemption or otherwise, and of interest on the overdue principal of
and interest, if any, on the Notes and all other obligations of the Issuers to
the Holders or the Trustee under the Indenture or the Notes and (ii) in case of
any extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at maturity,
by acceleration or otherwise.
The obligations of each Guarantor to the Holder and to the Trustee
pursuant to this Note Guarantee and the Indenture are as expressly set forth in
Article 10 of the Indenture and in such other provisions of the Indenture as are
applicable to Guarantors, and reference is hereby made to such Indenture for the
precise terms of this Note Guarantee. The terms of Article 10 of the Indenture
and such other provisions of the Indenture as are applicable to Guarantors are
incorporated herein by reference.
This is a continuing guarantee and shall remain in full force and effect
and shall be binding upon each Guarantor and its successors and assigns until
full and final payment of all of the Issuers' obligations under the Notes and
the Indenture and shall inure to the benefit of the successors and assigns of
the Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges herein conferred
upon that party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof. This is a
guarantee of payment and not a guarantee of collection.
This Note Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Note upon which this Note Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
By:__________________________________________
Name:
Title:
D-1
