OMNIBUS AMENDMENT AGREEMENT NO. 2
Dated as of April 18, 2000
in respect of
THERMOGAS TRUST NO. 1999-A
PARTICIPATION AGREEMENT
LEASE INTENDED AS SECURITY
LOAN AGREEMENT
Each dated as of December 15, 1999
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TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. AMENDMENT OF ORIGINAL AGREEMENTS.......................................................2
Section 1.1. Amendments to Participation Agreement..................................................2
ARTICLE V COVENANTS OF LESSEE AND GUARANTOR......................................................6
Section 5.1. Financial Statements...................................................................6
Section 5.2. Certificates; Other Information........................................................7
Section 5.3. Notices................................................................................8
Section 5.4. Preservation of Corporate or Partnership Existence, Etc................................9
Section 5.5. Maintenance of Property................................................................9
Section 5.6. Insurance..............................................................................9
Section 5.7. Payment of Obligations.................................................................9
Section 5.8. Compliance with Laws..................................................................10
Section 5.9. Inspection of Property and Books and Records..........................................10
Section 5.10. Environmental Laws....................................................................10
Section 5.11. Use of Proceeds.......................................................................10
Section 5.12. Financial Covenants...................................................................10
Section 5.13. Trading and Supply Policies...........................................................11
Section 5.14. Other General Partner Obligations.....................................................11
Section 5.15. Monetary Judgments....................................................................12
Section 5.16. Designation With Respect to Subsidiaries..............................................12
Section 5.17. Limitation on Liens...................................................................13
Section 5.18. Asset Sales...........................................................................15
Section 5.19. Consolidations and Mergers............................................................16
Section 5.20. Acquisitions..........................................................................17
Section 5.21. Limitation on Indebtedness............................................................17
Section 5.22. Transactions with Affiliates..........................................................18
Section 5.23. Use of Proceeds.......................................................................19
Section 5.24. Use of Proceeds - Ineligible Securities...............................................19
Section 5.25. Contingent Obligations................................................................19
Section 5.26. Joint Ventures........................................................................19
Section 5.27. Lease Obligations.....................................................................19
Section 5.28. Restricted Payments...................................................................20
Section 5.29. Prepayments of Subordinated Indebtedness..............................................22
Section 5.30. Dividend and Other Payment Restrictions Affecting Subsidiaries........................22
Section 5.31. Change in Business....................................................................23
Section 5.32. Accounting Changes....................................................................23
Section 5.33. Limitation on Sale and Leaseback Transactions.........................................23
Section 5.34. [Intentionally Omitted]...............................................................23
Section 5.35. Amendments of Organization Documents or Certain Debt Agreements.......................23
Section 5.37. Operations through Subsidiaries.......................................................24
Section 5.38. Operations of MLP.....................................................................24
Section 5.39. Miscellaneous.........................................................................24
Section 5.40. Accounting Principles.................................................................25
Section 1.2. Amendments to Loan Agreement..........................................................37
Section 1.3. Amendments to Loan Agreement..........................................................40
SECTION 2. REPRESENTATIONS OF THE LESSEE.........................................................40
SECTION 3. AUTHORIZATION AND DIRECTION...........................................................40
SECTION 4. EFFECTIVENESS.........................................................................40
SECTION 5. FEES AND EXPENSES.....................................................................41
SECTION 6. MISCELLANEOUS.........................................................................41
Section 6.1. Construction..........................................................................41
Section 6.2. References............................................................................41
Section 6.3. Headings and Table of Contents........................................................41
Section 6.4. Counterparts..........................................................................42
Section 6.5. Governing Law.........................................................................42
OMNIBUS AMENDMENT AGREEMENT NO. 2
THIS OMNIBUS AMENDMENT AGREEMENT NO. 2 dated as of April 18, 2000 (this
"Amendment") is among FERRELLGAS, LP, a Delaware limited partnership (as
successor in interest to Thermogas L.L.C., a Delaware limited liability company
("Thermogas"), pursuant to the hereinafter defined Assumption Agreement) (the
"Lessee"), FERRELLGAS, INC., a Delaware corporation (the "General Partner"),
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, in
its individual capacity and in its capacity as certificate trustee under the
Trust Agreement referred to below (the "Certificate Trustee"), FIRST SECURITY
TRUST COMPANY OF NEVADA, a Nevada banking corporation (the "Agent"), the Persons
named on Schedule I hereto, as Certificate Purchasers (the "Certificate
Purchasers") and the Persons named on Schedule II hereto, as Lenders (the
"Lenders").
RECITALS:
A. Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Participation Agreement (as
hereinafter defined and as amended hereby).
B. Thermogas, The Williams Companies, Inc., a Delaware corporation,
the Certificate Trustee, the Agent, Banc of America Leasing & Capital, LLC, as
the original Certificate Purchaser and the original Lender, have heretofore
entered into that certain Participation Agreement dated as of December 15, 1999,
as amended by that certain Omnibus Amendment Agreement dated as of February 4,
2000 ("Amendment No. 1") (as so amended by Amendment No. 1, the "Participation
Agreement").
C. Thermogas and the Certificate Trustee have heretofore entered into
that certain Lease Intended as Security dated as of December 15, 1999 (the
"Lease").
D. The Certificate Trustee, the Agent and Banc of America Leasing &
Capital, LLC, as the original Lender, have heretofore entered into that certain
Loan Agreement dated as of December 15, 1999, as amended by Amendment No. 1 (as
so amended by Amendment No. 1, the "Loan Agreement").
E. Pursuant to that certain Assumption Agreement dated as of December
15, 1999 (the "Assumption Agreement"), the Lessee has assumed all of the
obligations of Thermogas under the Operative Documents.
F. The Lessee, the General Partner, the Certificate Trustee, the
Agent, the Certificate Purchasers and the Lenders now desire to amend the
Participation Agreement, the Lease and the Loan Agreement (collectively, the
"Agreements") in the respects, but only in the respects, hereinafter set forth.
NOW, THEREFORE, the Lessee, the General Partner, the Certificate
Trustee, the Agent, the Certificate Purchasers and the Lenders, in consideration
of good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, do hereby agree as follows:
SECTION 1. AMENDMENT OF AGREEMENTS.
Section 1.1. Amendments to Participation Agreement. (a) Section 4.1 of the
Participation Agreement shall be and is hereby amended as follows:
(i) Section 4.1(a) shall be and is hereby amended and restated to read as
follows:
"(a) Corporate or Partnership Existence and Power. The General Partner, the
MLP, Lessee and each of the Restricted Subsidiaries:
(i) is a corporation or partnership duly organized, validly existing and in
good standing under the laws of the jurisdiction of its formation;
(ii) has the power and authority and all
governmental licenses, authorizations, consents and
approvals to own its assets, carry on its business as
now being or as proposed to be conducted and to
execute, deliver, and perform its obligations under
the Operative Documents;
(iii) is duly qualified as a foreign
corporation or partnership and is licensed and in
good standing under the laws of each jurisdiction
where its ownership, lease or operation of property
or the conduct of its business requires such
qualification or license or where the failure so to
qualify could reasonably be expect to have a Material
Adverse Effect; and
(iv) is in compliance with all material
Requirements of Law, except where the failure to so
comply could not reasonably be expected to have a
Material Adverse Effect."
(ii) Sections 4.1(b), (c), (d), (i) and (n) shall be and are
hereby amended by deleting all references therein to the term
"Subsidiary" and substituting in place thereof the term "Restricted
Subsidiary".
(iii) Section 4.1(g)(iv) shall be and is hereby amended and restated in its
entirety to read as follows:
"(iv) No pension Plan has any Unfunded Pension
Liability that could reasonably be expected to have a Material
Adverse Effect."
(iv) Section 4.1(k) shall be and is hereby amended and restated in its
entirety to read as follows:
"(k) Financial Condition. (i) The audited
consolidated financial statements of the General Partner,
Lessee, the MLP and their respective Subsidiaries dated July
31, 1999 and the unaudited consolidated financial statements
of the General Partner, Lessee, the MLP and their respective
Subsidiaries dated January 31, 2000, in each case together
with the related consolidated statements of income or
operations, shareholders' equity and cash flows for the fiscal
periods ended on those respective dates:
(A) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein, subject to
ordinary, good faith year end audit adjustments;
(B) fairly present the financial condition of Lessee
and its Subsidiaries as of the date thereof and results of
operations for the period covered thereby; and
(C) show all material indebtedness and other
liabilities, direct or contingent, of Lessee and its
consolidated Subsidiaries as of the date thereof, including
liabilities for taxes, material commitments and Contingent
Obligations (except that since such date Lessee (x) issued
$184,000,000 aggregate principal amount of the 2000 Notes
and (y) repaid in full and irrevocably terminated the
commitments under its $183,000,000 credit facility with
BofA).
(ii) Since January 31, 2000, there has been
no Material Adverse Effect.
(iii) The General Partner, the MLP, Lessee
and each of the other Subsidiaries of Lessee are
each Solvent, both before and after giving effect
to the consummation of each of the transactions
contemplated by the Operative Documents."
(v) Section 4.1(o) shall be and is hereby amended and restated in its
entirety to read as follows:
"(o) Copyrights, Patents, Trademarks and
Licenses, Etc. Lessee and the Restricted
Subsidiaries own or are licensed or otherwise have
the right to use all of the patents, trademarks,
service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that
are reasonably necessary for the operation of their
respective businesses, without conflict with the
rights of any other Person, except for those
patents, trademarks, service marks, trade names,
copyrights, contractual franchises, authorizations
and other rights the failure of which to obtain
could not reasonably be expected to have a Material
Adverse Effect. To the best knowledge of Lessee, no
slogan or other advertising device, product,
process, method, substance, part or other material
now employed, or now contemplated to be employed,
by Lessee or any Restricted Subsidiary infringes
upon any rights held by any other Person. No claim
or litigation regarding any of the foregoing is
pending or, to the best knowledge of Lessee,
threatened, and no patent, invention, device,
application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the
knowledge of Lessee, proposed, which, in either
case, could reasonably be expected to have a
Material Adverse Effect."
(vi) Section 4.1(p) shall be and is hereby amended and restated in its
entirety to read as follows:
"(p) Subsidiaries and Affiliates. Lessee (i)
has no Subsidiaries or other Affiliates except (A)
those specifically disclosed in Schedule IV of
Ominibus Amendment Agreement No. 2 as of the
Effective Date (B) one or more SPEs established in
connection with Accounts Receivable Securitizations
permitted by Section 5.21, (C) Restricted and
Unrestricted Subsidiaries established in compliance
with Section 5.37 and (D) Joint Ventures
established in compliance with Section 5.26
subsequent to the Effective Date, and (ii) has no
equity investments in any corporation or entity
other than (A) Subsidiaries and Affiliates
disclosed in subsection (i) above and (B) other
Permitted Lessee Investments."
(vii) Section 4.1(q) shall be and is hereby amended and restated in its
entirety to read as follows:
"(q) Insurance. The properties of Lessee and
the Restricted Subsidiaries are insured with
financially sound and reputable insurance companies
not Affiliates of Lessee, in such amounts, with
such deductibles and covering such risks as are
customarily carried by companies engaged in similar
businesses and owning similar properties in
localities where Lessee or each such Subsidiary
operates and consistent with the practice of the
Lessee and the Restricted Subsidiaries as of the
Effective Date."
(viii) Section 4.1(t) shall be and is hereby amended and restated in its
entirety to read as follows:
"(t) Fixed Price Supply Contracts. None of
Lessee and its Subsidiaries (other than
Non-Recourse Subsidiaries) is a party to any
contract for the supply of propane or other product
except where (a) the purchase price is set with
reference to a spot index or indices substantially
contemporaneously with the delivery of such product
or (b) delivery of such propane or other product is
to be made no more than two years after the
purchase price is agreed to."
(ix) Section 4.1(w) shall be and is hereby amended and restated in its
entirety to read as follows:
"(w) Year 2000. Lessee and its Subsidiaries
have reviewed the areas within their business and
operations which could have been or could continue
to be adversely affected by the "Year 2000 Problem"
(that is, the risk that computer applications used
by Lessee and its Subsidiaries may be unable to
recognize and perform properly date-sensitive
functions involving certain dates prior to and any
date on or after December 31, 1999). Accordingly,
Lessee and its Subsidiaries have developed a
program to address such related problems, and have
made related appropriate inquiry of material
suppliers and vendors. To date, no problems
connected with the Year 2000 Problem have occurred
which have had a Material Adverse Effect on Lessee
or its Subsidiaries. Although some problems related
to the Year 2000 Problem may remain as yet
undetected, the Borrower believes that, based on
such review and program, the "Year 2000 Problem"
will not have a Material Adverse Effect."
(b) Article V of the Participation Agreement shall be and is hereby
amended and restated in its entirety to read as follows:
"ARTICLE V
COVENANTS OF LESSEE
Section 5.1. Financial Statements. Lessee shall deliver to Agent, in
form and detail satisfactory to Agent and the Required Participants and
consistent with the form and detail of financial statements and projections
provided to Agent by Lessee and its Affiliates prior to the Delivery Date, with
sufficient copies for each Participant:
(a) as soon as available, but not later than 100 days after
the end of each fiscal year (commencing with the fiscal year ended July
31, 2000), a copy of the audited consolidated balance sheet of Lessee
and its Subsidiaries as at the end of such year and the related
consolidated statements of income or operations, partners' or
shareholders' equity and cash flows for such year, setting forth in
each case in comparative form the figures for the previous fiscal year,
and accompanied by the opinion of a nationally-recognized independent
public accounting firm ("Independent Auditor") which report shall state
that such consolidated financial statements present fairly the
financial position for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years. Such opinion shall not
be qualified or limited in any manner, including on account of any
limitation on it because of a restricted or limited examination by the
Independent Auditor of any material portion of Lessee's or any
Subsidiary's records;
(b) as soon as available, but not later than 45 days after
the end of each of the first three fiscal quarters of each fiscal year
(commencing with the fiscal quarter ended April 30, 2000), a copy of
the unaudited consolidated balance sheet of Lessee and its Subsidiaries
as of the end of such quarter and the related consolidated statements
of income, partners' or shareholders' equity and cash flows for the
period commencing on the first day and ending on the last day of such
quarter, and certified by a Responsible Officer as fairly presenting,
in accordance with GAAP (subject to ordinary, good faith year-end audit
adjustments), the financial position and the results of operations of
Lessee and the Subsidiaries;
(c) as soon as available, but not later than 100 days after
the end of each fiscal year (commencing with the first fiscal year
during all or any part of which Lessee had one or more Significant
Subsidiaries), a copy of an unaudited consolidating balance sheet of
Lessee and its Subsidiaries as at the end of such year and the related
consolidating statement of income, partners' or shareholders' equity
and cash flows for such year, certified by a Responsible Officer as
having been developed and used in connection with the preparation of
the financial statements referred to in subsection 5.1(a);
(d) as soon as available, but not later than 45 days after
the end of each of the first three fiscal quarters of each fiscal year
(commencing with the first fiscal quarter during all or any part of
which Lessee had one or more Significant Subsidiaries), a copy of the
unaudited consolidating balance sheets of Lessee and its Subsidiaries,
and the related consolidating statements of income, partners' or
shareholders' equity and cash flows for such quarter, all certified by
a Responsible Officer as having been developed and used in connection
with the preparation of the financial statements referred to in
subsection 5.1(b);
(e) as soon as available, but not later than 60 days after
the end of each fiscal year (commencing with the fiscal year ended July
31, 2000), projected consolidated balance sheets of Lessee and its
Subsidiaries as at the end of each of the current and following two
fiscal years and related projected consolidated statements of income,
partners' or shareholders' equity and cash flows for each such fiscal
year, including therein a budget for the current fiscal year, certified
by a Responsible Officer as having been developed and prepared by
Lessee in good faith and based upon Lessee's best estimates and best
available information; and
(f) as soon as available, but not later than 100 days after
the end of each fiscal year of the General Partner (commencing with the
fiscal year ended July 31, 2000), a copy of the unaudited (or audited,
if available) consolidated balance sheets of the General Partner as of
the end of such fiscal year and the related consolidated statements of
income, shareholders' equity and cash flows for such fiscal year,
certified by a Responsible Officer as fairly presenting, in accordance
with GAAP, the financial position and the results of operations of the
General Partner and its Subsidiaries (or, if available, accompanied by
an opinion of an Independent Auditor as described in subsection
5.1(a)).
Section 5.2. Certificates; Other Information. Lessee shall furnish to
Agent, with sufficient copies for each Participant:
(a) concurrently with the delivery of the financial
statements referred to in subsection 5.1(a), a certificate of the
Independent Auditor stating that in making the examination necessary
therefor no knowledge was obtained of any Lease Default or Lease Event
of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial
statements referred to in subsections 5.1(a) and (b), a Compliance
Certificate executed by a Responsible Officer with respect to the
periods covered by such financial statements together with supporting
calculations and such other supporting detail as Agent and the Required
Participants shall require;
(c) promptly, copies of all financial statements and reports
that Lessee, the General Partner, the MLP or any Subsidiary sends to
its partners or shareholders, and copies of all financial statements
and regular, periodic or special reports (including Forms 10-K, 10-Q
and 8-K) that Lessee or any Affiliate of Lessee, the General Partner,
the MLP or any Subsidiary may make to, or file with, the SEC; and
(d) promptly, such additional information regarding the
business, financial or corporate affairs of Lessee, the General
Partner, the MLP or any Subsidiary as Agent, at the request of any
Participant, may from time to time request.
Section 5.3. Notices. Lessee shall promptly notify Agent:
(a) of the occurrence of any Lease Default or Lease Event of Default;
(b) of any matter that has resulted or may reasonably be
expected to result in a Material Adverse Effect, including (i) breach
or non-performance of, or any default under, a Contractual Obligation
of Lessee, the General Partner, the MLP or any Subsidiary; (ii) any
dispute, litigation, investigation, proceeding or suspension between
Lessee, the General Partner, the MLP or any Subsidiary and any
Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting Lessee, the
General Partner, the MLP or any Subsidiary, including pursuant to any
applicable Environmental Laws, in each case to the extent that any of
the foregoing has resulted or may reasonably be expected to result in a
Material Adverse Effect;
(c) of any of the following events affecting Lessee, the
General Partner, the MLP or any Subsidiary, together with a copy of any
notice with respect to such event that may be required to be filed with
a Governmental Authority and any notice delivered by a Governmental
Authority to such Person with respect to such event:
(i) an ERISA Event;
(ii) if any of the representations and warranties in Section 4.1(g) ceases
to be true and correct;
(iii) the adoption of any new Pension Plan or other Plan subject to Section
412 of the Code;
(iv) the adoption of any amendment to a Pension Plan
or other Plan subject to Section 412 of the Code, if such
amendment results in a material increase in contributions or
Unfunded Pension Liability; or
(v) the commencement of contributions to any Pension Plan or other Plan
subject to Section 412 of the Code; and
(d) of any material change in accounting policies or
financial reporting practices by Lessee or any of its consolidated
Subsidiaries.
Each notice under this Section shall be accompanied by a written
statement by a Responsible Officer setting forth details of the occurrence
referred to therein, and stating what action Lessee or any affected Affiliate
proposes to take with respect thereto and at what time. Each notice under
subsection 5.3(a) shall describe with particularity any and all clauses or
provisions of this Agreement or other Operative Document that have been breached
or violated.
Section 5.4. Preservation of Corporate or Partnership Existence, Etc. The
General Partner and Lessee shall, and Lessee shall cause each Restricted
Subsidiary to:
(a) preserve and maintain in full force and effect its
partnership or corporate existence and good standing under the laws of
its state or jurisdiction of organization or incorporation except in
connection with transactions permitted by Section 5.19;
(b) preserve and maintain in full force and effect all
material governmental rights, privileges, qualifications, permits,
licenses and franchises necessary or desirable in the normal conduct of
its business except in connection with transactions permitted by
Section 5.19 and sales of assets permitted by Section 5.18, except
where the failure to so preserve or maintain such governmental rights,
privileges, qualifications, permits, licenses and franchises could not
reasonably be expected to have a Material Adverse Effect;
(c) preserve its business organization and goodwill, except
where the failure to so preserve its business organization or goodwill
could not reasonably be expected to have a Material Adverse Effect; and
(d) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of
which could reasonably be expected to have a Material Adverse Effect.
Section 5.5. Maintenance of Property. Lessee shall maintain, and shall
cause each Restricted Subsidiary to maintain, and preserve all its property
which is used or useful in its business in good working order and condition,
ordinary wear and tear excepted. Lessee and each Restricted Subsidiary shall use
the standard of care typical in the industry in the operation and maintenance of
its facilities. Lessee shall maintain the Units in accordance with the Lease.
Section 5.6. Insurance. Lessee shall maintain, and shall cause each
Restricted Subsidiary to maintain, with financially sound and reputable
independent insurers, insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar business, of such types and in such amounts as
are customarily carried under similar circumstances by such other Persons.
Lessee shall insure the Units in accordance with the Lease.
Section 5.7. Payment of Obligations. Lessee and the General Partner
shall, and shall cause each Restricted Subsidiary to, pay and discharge as the
same shall become due and payable (except to the extent the failure to so pay
and discharge could not reasonably be expected to have a Material Adverse
Effect), all their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges
or levies upon it or its properties or assets, unless the same are
being contested in good faith by appropriate proceedings and adequate
reserves in accordance with GAAP are being maintained by Lessee, the
General Partner or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a
Lien upon its property, unless such claims are being contested in good
faith by appropriate proceedings and adequate reserves in accordance
with GAAP are being maintained by Lessee, the General Partner or such
Subsidiary; and
(c) all Indebtedness, as and when due and payable, but
subject to any subordination provisions contained in any instrument or
agreement evidencing such Indebtedness.
Section 5.8. Compliance with Laws. Lessee shall comply, and shall cause
each Restricted Subsidiary to comply with all Requirements of Law of any
Governmental Authority having jurisdiction over it or its business (including
the Federal Fair Labor Standards Act), except such as may be contested in good
faith or as to which a bona fide dispute may exist or the failure of which to
comply with could not reasonably be expected to have a Material Adverse Effect..
Section 5.9. Inspection of Property and Books and Records. Lessee shall
maintain and shall cause each Subsidiary to maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of Lessee and such Subsidiary. Lessee shall
permit, and shall cause each Subsidiary to permit, representatives and
independent contractors of Agent or any Participant to visit and inspect any of
their respective properties, to examine their respective corporate, financial
and operating records, and make copies thereof or abstracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
directors, officers, and independent public accountants, all at the expense of
Lessee and at such reasonable times during normal business hours and as often as
may be reasonably desired, upon reasonable advance notice to Lessee; provided,
however, when a Lease Event of Default exists Agent or any Participant may do
any of the foregoing at the expense of Lessee at any time during normal business
hours and without advance notice.
Section 5.10. Environmental Laws. Lessee shall, and shall cause each
Restricted Subsidiary to, conduct its operations and keep and maintain its
property in material compliance with all Environmental Laws, except where
failure to comply with such Environmental Laws could not reasonably be expected
to have a Material Adverse Effect.
Section 5.11. Use of Proceeds. Lessee shall use the proceeds of the sale
of the Units, the Certificates and the Notes for working capital purposes and
other general partnership purposes, in each case not in contravention of any
Requirement of Law or of any Operative Document.
Section 5.12. Financial Covenants.
(a) Leverage Ratio. Lessee shall maintain as of the last day of each
fiscal quarter a Leverage Ratio equal to or less than (i) 5.10 to 1.00 as of the
last day of each fiscal quarter ending on or prior to July 31, 2000, (ii) 5.25
to 1.00 as of the last day of each fiscal quarter ending after July 31, 2000 and
on or prior to January 31, 2001, and (iii) 4.75 to 1.00 as of the last day of
each fiscal quarter ending after January 31, 2001. For purposes of this Section
5.12(a), (x) Funded Debt and Synthetic Lease Obligations shall be calculated as
of the last day of such fiscal quarter and (y) Consolidated Cash Flow shall be
calculated for the most recently ended four consecutive fiscal quarters,
provided, however, that prior to or concurrently with each delivery of a
Compliance Certificate pursuant to Section 5.02(b), Lessee may elect to
calculate Consolidated Cash Flow for the most recently ended eight consecutive
fiscal quarters (in which case Consolidated Cash Flow shall be divided by two).
(b) Interest Coverage Ratio. Lessee shall maintain, as of the last day
of each fiscal quarter of Lessee, an Interest Coverage Ratio for the fiscal
period consisting of such fiscal quarter and the three immediately preceding
fiscal quarters of at least (i) 2.25 to 1.00 for each such period of four fiscal
quarters ending on or prior to January 31, 2001 and (ii) 2.50 to 1.00 each such
period of four fiscal quarters ending after January 31, 2001.
Section 5.13. Trading and Supply Policies. Lessee and its Affiliates
shall comply with Lessee's trading position policy and supply inventory position
policy as in effect as of the Effective Date; provided, however, that Lessee and
its Affiliates may, during any period of four consecutive fiscal quarters, (a)
increase the loss limits specified in either the trading position or supply
inventory position policy by up to 100% of the amount of such limit as in effect
as of the Effective Date and (b) increase the volume limits specified in either
of such policies on the number of barrels of a single product or of all products
in the aggregate by up to 100% of each such number as in effect as of the
Effective Date.
Section 5.14. Other General Partner Obligations. (a) The General Partner
shall cause Lessee to pay and perform each of its Obligations when due. The
General Partner acknowledges and agrees that it is executing this Agreement as a
principal as well as the general partner on behalf of Lessee, and that its
obligations hereunder as general partner are full recourse obligations to the
same extent as those of Lessee.
(b) The General Partner represents, warrants and covenants that it is
Solvent, both before and after giving effect to the consummation of the
transactions contemplated by the Operative Documents, and that it will remain
Solvent until all Obligations hereunder and under the other Operative Documents
shall have been repaid in full.
(c) The General Partner, for so long as it is the general partner of
Lessee, (i) agrees that its sole business will be to act as the general partner
of Lessee, the MLP and any further limited partnership of which Lessee or the
MLP is, directly or indirectly, a limited partner and to undertake activities
that are ancillary or related thereto (including being a limited partner in
Lessee), (ii) shall not enter into or conduct any business or incur any debts or
liabilities except in connection with or incidental to (A) its performance of
the activities required or authorized by the partnership agreement of the MLP or
the Partnership Agreement or described in or contemplated by the MLP
Registration Statement, and (B) the acquisition, ownership or disposition of
partnership interests in Lessee or partnership interests in the MLP or any
further limited partnership of which Lessee or the MLP is, directly or
indirectly, a limited partner, except that, notwithstanding the foregoing,
employees of the General Partner may perform services for Ferrell Companies,
Inc. and its Affiliates.
(d) The General Partner agrees that, until all Obligations hereunder
and under the other Operative Documents shall have been repaid in full and all
commitments shall have terminated, it will not exercise any rights it may have
(at law, in equity, by contract or otherwise) to terminate, limit or otherwise
restrict (whether through repurchase or otherwise and whether or not the General
Partner shall remain a general partner in Lessee) the ability of Lessee to use
the name "Ferrellgas".
(e) The General Partner shall not take any action or refuse to take any
reasonable action the effect of which, if taken or not taken, as the case may
be, would be to cause Lessee to be treated as an association taxable as a
corporation or otherwise to be taxed as an entity other than a partnership for
federal income tax purposes.
Section 5.15. Monetary Judgments. If one or more judgments, orders,
decrees or arbitration awards is entered against Lessee or any Restricted
Subsidiary involving in the aggregate a material liability (to the extent not
covered by independent third-party insurance as to which the insurer does not
dispute coverage other than through a standard reservation of rights letter) as
to any single or related series of transactions, incidents or conditions, then
Lessee shall maintain adequate reserves for such amount in accordance with GAAP.
Such amount so reserved shall be treated as establishment of a reserve for
purposes of calculating Available Cash hereunder.
Section 5.16. Designation With Respect to Subsidiaries. (a) Lessee may
designate any Restricted Subsidiary or newly acquired or formed Subsidiary as an
Unrestricted Subsidiary or any Unrestricted Subsidiary or newly acquired or
formed Subsidiary as a Restricted Subsidiary, in each case subject to
satisfaction of each of the following conditions:
(i) immediately before and after giving effect to such
designation, no Default or Event of Default shall exist and be continuing;
(ii) after giving effect to such designation, Lessee would be
permitted to incur at least $1 of additional Indebtedness in accordance with the
provisions of Section 5.21;
(iii) in the case of a designation of a Restricted Subsidiary,
such Restricted Subsidiary shall have executed and delivered to Agent a Guaranty
and Lessee shall otherwise be in compliance with Section 5.37;
(iv) in the case of a designation as an Unrestricted Subsidiary
(including the designation of a Restricted Subsidiary as an Unrestricted
Subsidiary), (x) if such designation were deemed to constitute a sale by Lessee
or any Restricted Subsidiary of all the assets of the Subsidiary so designated,
such sale would be in compliance with of Section 5.18 and (y) if such
designation (and all other prior designations of Restricted Subsidiaries or
newly acquired or formed Subsidiaries as Unrestricted Subsidiaries) were deemed
to constitute an Investment by Lessee or any Restricted Subsidiary in respect of
all the assets of the Subsidiary so designated, such Investment would be a
Permitted Lessee Investment, in each case with the net proceeds of such sale or
the amount of such Investment being deemed to equal the net book value of such
assets in the case of a Restricted Subsidiary or the cost of acquisition or
formation in the case of a newly acquired or formed Subsidiary; and
(v) in the case of a designation of a Restricted Subsidiary as
an Unrestricted Subsidiary, such Restricted Subsidiary shall not have been an
Unrestricted Subsidiary prior to being designated a Restricted Subsidiary.
(b) Lessee shall deliver to Agent and each Participant, within 20
Business Days after any such designation, a certificate of a Responsible Officer
stating the effective date of such designation and stating that the foregoing
conditions have been satisfied. Such certificate shall be accompanied by a
schedule setting forth in reasonable detail the calculations demonstrating
compliance with such conditions, where appropriate.
(c) In the case of the designation of any Unrestricted Subsidiary as a
Restricted Subsidiary, such new Restricted Subsidiary shall be deemed to have
made or acquired all Investments owned by it and incurred all Indebtedness and
other obligations owing by it and all Liens to which it or any of its properties
are subject, on the date of such designation.
Section 5.17. Limitation on Liens. Lessee shall not, and shall not
suffer or permit any Restricted Subsidiary to, directly or indirectly, make,
create, incur, assume or suffer to exist any Lien upon or with respect to any
part of its property or sell any of its accounts receivable, whether now owned
or hereafter acquired, other than (x) in the case of the Units or the other
Lessee Collateral, Permitted Liens, and (y) in the case of any other property of
Lessee or such Subsidiary, the following ("Permitted Encumbrances"):
(a) Liens existing on the Effective Date set forth in Schedule III to
Omnibus Amendment Agreement No. 2;
(b) Liens in favor of Lessee or Liens to secure Indebtedness
of a Restricted Subsidiary to Lessee or a Wholly-Owned Subsidiary;
(c) Liens on property of a Person existing at the time such
Person is merged into or consolidated with Lessee or any Restricted
Subsidiary, provided that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with
Lessee;
(d) Liens on property existing at the time acquired by Lessee
or any Restricted Subsidiary, provided that such Liens were in
existence prior to the contemplation of such acquisition and do not
extend to any assets other than those of the Person acquired;
(e) Liens on any property or asset acquired by Lessee or any
Restricted Subsidiary in favor of the seller of such property or asset
and construction mortgages on property, in each case, created within
six months after the date of acquisition, construction or improvement
of such property or asset by Lessee or such Subsidiary to secure the
purchase price or other obligation of Lessee or such Subsidiary to the
seller of such property or asset or the construction or improvement
cost of such property in an amount up to 80% of the total cost of the
acquisition, construction or improvement of such property or asset;
provided that in each case such Lien does not extend to any other
property or asset of Lessee and its Subsidiaries;
(f) Liens incurred or pledges and deposits made in connection
with worker's compensation, unemployment insurance and other social
security benefits and Liens to secure the performance of statutory
obligations, surety or appeal bonds, performance bonds or other
obligations of a like nature, in each case, incurred in the ordinary
course of business;
(g) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good
faith by appropriate proceedings promptly instituted and diligently
concluded, provided that any reserve or other appropriate provision as
shall be required in conformity with GAAP shall have been made
therefor;
(h) Liens imposed by law, such as mechanics', carriers',
warehousemen's, materialmen's, and vendors' Liens, incurred in good
faith in the ordinary course of business with respect to amounts not
yet delinquent or being contested in good faith by appropriate
proceedings if a reserve or other appropriate provisions, if any, as
shall be required by GAAP shall have been made therefor;
(i) zoning restrictions, easements, licenses, covenants,
reservations, restrictions on the use of real property or minor
irregularities of title incident thereto that do not, in the aggregate,
materially detract from the value of the property or the assets of
Lessee or any of its Subsidiaries or impair the use of such property in
the operation of the business of Lessee or any of its Subsidiaries;
(j) Liens of landlords or mortgages of landlords, arising
solely by operation of law, on fixtures and movable property located on
premises leased by Lessee or any of its Subsidiaries in the ordinary
course of business;
(k) Liens incurred and financing statements filed or
recorded, in each case with respect to personal property leased by
Lessee and its Subsidiaries in the ordinary course of business to the
owners of such personal property which are either (i) operating leases
(including, without limitation, Synthetic Leases) or (ii) capital
leases to the extent (but only to the extent) permitted by Section
5.21; provided, that in each case such Lien does not extend to any
other property or asset of Lessee and its Subsidiaries;
(l) judgment Liens to the extent that such judgments do not
cause or constitute a Lease Default or Lease Event of Default;
(m) Liens incurred in the ordinary course of business of
Lessee or any Restricted Subsidiary with respect to obligations that do
not exceed $5,000,000 in the aggregate at any one time outstanding and
that (i) are not incurred in connection with the borrowing of money or
the obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (ii) do not in the aggregate
materially detract from the value of the property or materially impair
the use thereof in the operation of business by Lessee or such
Subsidiary;
(n) Liens securing Indebtedness incurred to refinance
Indebtedness that has been secured by a Lien otherwise permitted under
this Agreement, provided that (i) any such Lien shall not extend to or
cover any assets or property not securing the Indebtedness so
refinanced and (ii) the refinancing Indebtedness secured by such Lien
shall have been permitted to be incurred under Section 5.21 hereof and
shall not have a principal amount in excess of the Indebtedness so
refinanced;
(o) any extension or renewal, or successive extensions or
renewals, in whole or in part, of Liens permitted pursuant to the
foregoing clauses (a) through (n); provided that no such extension or
renewal Lien shall (i) secure more than the amount of Indebtedness or
other obligations secured by the Lien being so extended or renewed or
(ii) extend to any property or assets not subject to the Lien being so
extended or renewed;
(p) Liens in favor of the Administrative Agent under the
Credit Agreement, any Issuing Bank and the Credit Agreement Banks
relating to the Cash Collateralization of Lessee's obligations under
the Credit Agreement or Liens created by the Operative Documents; and
(q) Liens securing Indebtedness of an SPE in connection with
an Accounts Receivable Securitization permitted by Section 5.21
(including the filing of any related financing statements naming Lessee
as the debtor thereunder in connection with the sale of accounts
receivable by Lessee to such SPE in connection with any such permitted
Accounts Receivable Securitization); provided that the aggregate amount
of accounts receivable subject to all such Liens shall at no time
exceed 133% of the amount of Accounts Receivable Securitizations
permitted to be outstanding under such Section 5.21.
Section 5.18. Asset Sales. Lessee shall not, and shall not permit any of
the Restricted Subsidiaries to, (i) sell, lease, convey or otherwise dispose of
any assets (including by way of a sale-and-leaseback) other than sales of
inventory in the ordinary course of business consistent with past practice
(provided that the sale, lease, conveyance or other disposition of all or
substantially all of the assets of Lessee shall be governed by the provisions of
Section 5.19 hereof and not by the provisions of this Section 5.18), or (ii)
issue or sell Equity Interests of any of its Subsidiaries, in the case of either
clause (i) or (ii) above, whether in a single transaction or a series of related
transactions, (A) that have a fair market value in excess of the lesser of
$10,000,000 or the amount (which amount is equal to $5,000,000 as of the
Effective Date) specified in Section 4.10 of the 1996 Indenture as amended from
time to time (such lesser amount, the "Applicable Amount"), or (B) for net
proceeds in excess of the "Applicable Amount" (each of the foregoing, an "Asset
Sale"), unless (X) Lessee (or the Restricted Subsidiary, as the case may be)
receives consideration at the time of such Asset Sale at least equal to the fair
market value (evidenced by a resolution of the board of directors of the General
Partner (and, if applicable, the audit committee of such board of directors) set
forth in a certificate signed by a Responsible Officer and delivered to Agent)
of the assets sold or otherwise disposed of and (Y) at least 80% of the
consideration therefor received by Lessee or such Subsidiary is in the form of
cash; provided, however, that the amount of (1) any liabilities (as shown on
Lessee's or such Subsidiary's most recent balance sheet or in the notes
thereto), of Lessee or any Subsidiary (other than liabilities that are by their
terms subordinated in right of payment to the Obligations hereunder and under
the other Operative Documents) that are assumed by the transferee of any such
assets and (2) any notes or other obligations received by Lessee or any such
Subsidiary from such transferee that are immediately converted by Lessee or such
Subsidiary into cash (to the extent of the cash received), shall be deemed to be
cash for purposes of this provision; and provided, further, that the 80%
limitation referred to in this clause (Y) shall not apply to any Asset Sale in
which the cash portion of the consideration received therefrom, determined in
accordance with the foregoing proviso, is equal to or greater than what the
after-tax proceeds would have been had such Asset Sale complied with the
aforementioned 80% limitation. Notwithstanding the foregoing, Asset Sales shall
not be deemed to include (w) sales or transfers of accounts receivable by Lessee
to an SPE and by an SPE to any other Person in connection with any Accounts
Receivable Securitization permitted by Section 5.21 (provided that the aggregate
amount of such accounts receivable that shall have been transferred to and held
by all SPEs at any time shall not exceed 133% of the amount of Accounts
Receivable Securitizations permitted to be outstanding under Section 5.21), (x)
any transfer of assets by Lessee or any of its Subsidiaries to Lessee or a
Restricted Subsidiary, (y) any transfer of assets by Lessee or any of its
Subsidiaries to any Person in exchange for other assets used in a line of
business permitted under Section 5.31 and having a fair market value not less
than that of the assets so transferred and (z) any transfer of assets pursuant
to a Permitted Lessee Investment or any sale-leaseback (including
sale-leasebacks involving Synthetic Leases) permitted by Section 5.33.
Notwithstanding the foregoing, Lessee may not sell, lease, convey or otherwise
dispose of any Unit except as permitted by the Lease.
Section 5.19. Consolidations and Mergers. (a) Lessee shall not
consolidate or merge with or into (whether or not Lessee is the surviving
Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions, to another Person unless (i) Lessee is the surviving Person, or
the Person formed by or surviving any such consolidation or merger (if other
than Lessee) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation or partnership organized
or existing under the laws of the United States, any state thereof or the
District of Columbia; and (ii) the Person formed by or surviving any such
consolidation or merger (if other than Lessee) or Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made assumes all the Obligations of Lessee under this Agreement and the other
Operative Documents pursuant to an assumption agreement in a form reasonably
satisfactory to Agent; (iii) immediately after such transaction no Lease Default
or Lease Event of Default exists; and (iv) Lessee or any Person formed by or
surviving any such consolidation or merger, or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made (A) shall
have Consolidated Net Worth (immediately after the transaction but prior to any
purchase accounting adjustments resulting from the transaction) equal to or
greater than the Consolidated Net Worth of Lessee immediately preceding the
transaction and (B) shall, at the time of such transaction and after giving
effect thereto, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Leverage Ratio test set forth in Section 5.12(a).
(b) Lessee shall deliver to Agent prior to the consummation of the
proposed transaction pursuant to the foregoing paragraph (a) an officers'
certificate to the foregoing effect signed by a Responsible Officer and an
opinion of counsel satisfactory to Agent stating that the proposed transaction
complies with this Agreement. Agent, Certificate Trustee and the Participants
shall be entitled to conclusively rely upon such officer's certificate and
opinion of counsel.
(c) Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of Lessee in accordance with this Section 5.19, the successor Person
formed by such consolidation or into or with which Lessee is merged or to which
such sale, assignment, transfer, lease, conveyance or other disposition is made
shall succeed to, and be substituted for (so that from and after the date of
such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Agreement and the other Operative Documents referring to the
"Lessee" shall refer to or include instead the successor Person and not Lessee),
and may exercise every right and power of Lessee under this Agreement with the
same effect as if such successor Person had been named as Lessee herein;
provided, however, that the predecessor Lessee shall not be relieved from the
obligation to pay Rent or perform the other Obligations except in the case of a
sale of all of such Lessee's assets that meets the requirements of this Section
5.19 hereof.
Section 5.20. Acquisitions. Without limiting the generality of any other
provision of this Agreement, neither Lessee nor any Restricted Subsidiary shall
consummate any Acquisition unless (i) the acquiree is primarily a retail propane
distribution business; (ii) such Acquisition is undertaken in accordance with
all applicable Requirements of Law; (iii) the prior, effective written consent
or approval to such Acquisition of the board of directors or equivalent
governing body of the acquiree is obtained; and (iv) immediately after giving
effect thereto, no Lease Default or Lease Event of Default will occur or be
continuing and each of the representations and warranties of Lessee herein is
true on and as of the date of such Acquisition, both before and after giving
effect thereto. Nothing in Section 5.38 shall prohibit (x) the making by Lessee
of a Permitted Acquisition indirectly through the General Partner, the MLP or
any of its or their Affiliates in a series of substantially contemporaneous
transactions in which Lessee shall ultimately own the assets that are the
subject of such Permitted Acquisition or (y) the assumption of Acquired Debt in
connection therewith to the extent such Acquired Debt is (if not otherwise
permitted to be incurred by Lessee pursuant to this Agreement) upon such
assumption immediately repaid (with the proceeds of Revolving Loans or
otherwise).
Section 5.21. Limitation on Indebtedness. Lessee shall not, and shall
not permit any of the Restricted Subsidiaries to, directly or indirectly,
create, incur, issue, assume, suffer to exist, guarantee or otherwise become
directly or indirectly liable with respect to any Indebtedness (including
Acquired Debt) or any Synthetic Leases and Lessee shall not issue any
Disqualified Interests and shall not permit any of the Restricted Subsidiaries
to issue any shares of preferred stock; provided, however, that Lessee and any
Restricted Subsidiary of Lessee may create, incur, issue, assume, suffer to
exist, guarantee or otherwise become directly or indirectly liable with respect
to any Indebtedness (including Acquired Debt) or any Synthetic Lease to the
extent that the Leverage Ratio is maintained in accordance with Section 5.12(a),
both before and after giving effect to the incurrence of such Indebtedness or
such Synthetic Lease, as the case may be, and, provided, further, that (x) the
aggregate principal amount of (1) all Capitalized Lease Obligations and all
Synthetic Lease Obligations (other than Capitalized Lease Obligations and
Synthetic Lease Obligations in respect of Growth-Related Capital Expenditures)
of Lessee and the Restricted Subsidiaries and (2) all Indebtedness for which
Lessee and any Restricted Subsidiary of Lessee become liable in connection with
Acquisitions of retail propane businesses in favor of the sellers of such
businesses and secured by any Lien on any property of Lessee or any of the
Restricted Subsidiaries, shall not exceed $65,000,000 at any one time
outstanding, and (y) the principal amount of any Indebtedness for which Lessee
or any Restricted Subsidiary of Lessee becomes liable in connection with
Acquisitions of retail propane businesses in favor of the sellers of such
businesses shall not exceed the fair market value of the assets so acquired, and
(z) the aggregate amount of Indebtedness of Lessee and its Subsidiaries through
one or more SPEs in connection with Accounts Receivable Securitizations shall
not exceed $60,000,000 at any one time outstanding.
Section 5.22. Transactions with Affiliates. Lessee shall not, and shall
not permit any of the Restricted Subsidiaries to, sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into any contract, agreement, understanding,
loan, advance or guarantee with, or for the benefit of, any Affiliate, including
any Non-Recourse Subsidiary (each of the foregoing, an "Affiliate Transaction"),
unless (a) such Affiliate Transaction is on terms that are no less favorable to
Lessee or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by Lessee or such Restricted Subsidiary
with an unrelated Person and (b) with respect to (i) any Affiliate Transaction
with an aggregate value in excess of $500,000, a majority of the directors of
the General Partner having no direct or indirect economic interest in such
Affiliate Transaction determines by resolution that such Affiliate Transaction
complies with clause (a) above and approves such Affiliate Transaction and (ii)
any Affiliate Transaction involving the purchase or other acquisition or sale,
lease, transfer or other disposition of properties or assets other than in the
ordinary course of business, in each case, having a fair market value or for net
proceeds in excess of $15,000,000, Lessee delivers to Agent and the Participants
an opinion as to the fairness to Lessee or such Restricted Subsidiary from a
financial point of view issued by an investment banking firm of national
standing; provided, however, that (i) any employment agreement or stock option
agreement entered into by Lessee or any of the Restricted Subsidiaries in the
ordinary course of business and consistent with the past practice of Lessee (or
the General Partner) or such Restricted Subsidiary, Restricted Payments
permitted by the provisions of Section 5.28, and transactions entered into by
Lessee in the ordinary course of business in connection with reinsuring the
self-insurance programs or other similar forms of retained insurable risks of
the retail propane businesses operated by Lessee, the Restricted Subsidiaries
and its Affiliates, in each case, shall not be deemed Affiliate Transactions,
and (ii) nothing herein shall authorize the payments by Lessee to the General
Partner or any other Affiliate of Lessee for administrative expenses incurred by
such Person other than such out-of-pocket administrative expenses as such Person
shall incur and Lessee shall pay in the ordinary course of business; and
provided, further, that the foregoing provisions of this Section 5.22 shall not
apply to transfers of accounts receivable of Lessee to an SPE in connection with
any Accounts Receivable Securitization permitted by Section 5.21.
Section 5.23. Use of Proceeds. Lessee shall not, and shall not suffer or
permit any Restricted Subsidiary to, use any portion of the proceeds of the sale
of the Units, the Certificates or the Notes, directly or indirectly, (i) to
purchase or carry Margin Stock, (ii) to repay or otherwise refinance
indebtedness of Lessee or others incurred to purchase or carry Margin Stock,
(iii) to extend credit for the purpose of purchasing or carrying any Margin
Stock, or (iv) to acquire any security in any transaction that is subject to
Section 13 or 14 of the Exchange Act.
Section 5.24. Use of Proceeds - Ineligible Securities. Lessee shall not,
directly or indirectly, use any portion of the proceeds of the sale of the
Units, the Certificates or the Notes (i) knowingly to purchase Ineligible
Securities from the Credit Agreement Arranger during any period in which the
Credit Agreement Arranger makes a market in such Ineligible Securities, (ii)
knowingly to purchase during the underwriting or placement period Ineligible
Securities being underwritten or privately placed by the Credit Agreement
Arranger, or (iii) to make payments of principal or interest on Ineligible
Securities underwritten or privately placed by the Credit Agreement Arranger and
issued by or for the benefit of Lessee or any Affiliate of Lessee.
Section 5.25. Contingent Obligations. Lessee shall not, and shall not
suffer or permit any Restricted Subsidiary to, create, incur, assume or suffer
to exist any Contingent Obligations except:
(a) endorsements for collection or deposit in the ordinary course of
business;
(b) subject to compliance with the trading policies in effect
from time to time as submitted to Agent, Hedging Obligations entered
into in the ordinary course of business as bona fide hedging
transactions;
(c) the Guaranties under the Credit Agreement and the Operative Documents;
(d) Guaranty Obligations to the extent not prohibited by Section 5.21; and
(e) indemnities not guaranteeing Indebtedness or Synthetic Lease
Obligations of any Person.
Section 5.26. Joint Ventures. Lessee shall not, and shall not suffer or
permit any Restricted Subsidiary to enter into any Joint Venture unless the same
shall be a Permitted Lessee Investment.
Section 5.27. Lease Obligations. The aggregate obligations of Lessee and
the Restricted Subsidiaries for the payment of rent for any property under lease
or agreement to lease (excluding obligations of Lessee and its Subsidiaries
under or with respect to Synthetic Leases) for any fiscal year shall not exceed
the greater of (a) $40,000,000 or (b) 20% of (i) Consolidated Cash Flow of
Lessee for the most recently ended eight consecutive fiscal quarters divided by
(ii) two; provided, however, that any payment of rent for any property under
lease or agreement to lease for a term of less than one year (after giving
effect to all automatic renewals) shall not be subject to this Section 5.27. For
purposes of this Section 5.27, the calculation of Consolidated Cash Flow shall
give pro forma effect to Acquisitions (including all mergers and
consolidations), Asset Sales and other dispositions and discontinuances of
businesses or assets that have been made by Lessee or any of the Restricted
Subsidiaries during the reference period or subsequent to such reference period
and on or prior to the date of calculation of Consolidated Cash Flow assuming
that all such Acquisitions, Asset Sales and other dispositions and
discontinuances of businesses or assets had occurred on the first day of the
reference period.
Section 5.28. Restricted Payments. Lessee shall not and shall not permit
any of the Restricted Subsidiaries to, directly or indirectly (i) declare or pay
any dividend or make any distribution on account of Lessee's or any Restricted
Subsidiary's Equity Interests (other than (x) dividends or distributions payable
in Equity Interests (other than Disqualified Interests) of Lessee, (y) dividends
or distributions payable to Lessee or a Wholly-Owned Subsidiary that is a
Restricted Subsidiary and a Guarantor or (z) distributions or dividends payable
pro rata to all holders of Capital Interests of any such Subsidiary); (ii)
purchase, redeem, call or otherwise acquire or retire for value any Equity
Interests of Lessee or any Restricted Subsidiary or other Affiliate of Lessee
(other than, subject to compliance with Section 5.37, any such Equity Interests
owned by a Wholly-Owned Subsidiary of Lessee that is a Restricted Subsidiary and
a Guarantor); (iii) make any Investment other than a Permitted Lessee
Investment; or (iv) prepay, purchase, redeem, retire, defease or refinance the
1998 Fixed Rate Senior Notes or the 2000 Notes (all payments and other actions
set forth in clauses (i) through (iv) above being collectively referred to as
"Restricted Payments"), except to the extent that, at the time of such
Restricted Payment:
(a) no Lease Default or Lease Event of Default shall have
occurred and be continuing or would occur as a consequence thereof and
each of the representations and warranties of Lessee set forth herein
is true on and as of the date of such Restricted Payment both before
and after giving effect thereto; and
(b) the Fixed Charge Coverage Ratio for Lessee's most
recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such
Restricted Payment is made, calculated on a pro forma basis as if such
Restricted Payment had been made at the beginning of such four-quarter
period, would have been more than (i) 2.15 to 1.00 for each such period
of four fiscal quarters ending on or prior to January 31, 2001 and (ii)
2.25 to 1.00 for each such period of four fiscal quarters ending after
January 31, 2001; and
(c) such Restricted Payment (the amount of any such payment,
if other than cash, to be determined by the Board of Directors, whose
determination shall be conclusive and evidenced by a resolution in an
officer's certificate signed by a Responsible Officer and delivered to
Agent), together with the aggregate of all other Restricted Payments
(other than any Restricted Payments permitted by the provisions of
clause (ii) of the penultimate paragraph of this Section 5.28) made by
Lessee and its Subsidiaries in the fiscal quarter during which such
Restricted Payment is made shall not exceed an amount equal to (x)
Available Cash of Lessee for the immediately preceding fiscal quarter
plus (y) the lesser of (i) the amount of any Available Cash of Lessee
during the first 45 days of such fiscal quarter and (ii) the excess of
the aggregate amount of Credit Agreement Loans that Lessee could have
borrowed over the actual amount of Credit Agreement Loans outstanding,
in each case as of the last day of the immediately preceding fiscal
quarter; and
(d) such Restricted Payment (other than (x) Restricted
Payments described in clause (i) of the first paragraph of this Section
5.28 made during the fiscal quarter ending January 31, 1997 that do not
exceed $26,000,000 in the aggregate or (y) any Restricted Payments
described in clauses (iii) or (iv) of the first paragraph of this
Section 5.28) the amount of which (to be determined in accordance with
clause (c) of this Section 5.28 if made other than with cash) shall not
exceed an amount equal to (1) Consolidated Cash Flow of Lessee and the
Restricted Subsidiaries for the period from and after October 31, 1996
through and including the last day of the fiscal quarter ending
immediately preceding the date of the proposed Restricted Payment (the
"Determination Period"), minus (2) the sum of Consolidated Interest
Expense of Lessee and the Restricted Subsidiaries for the Determination
Period plus all capital expenditures (other than Growth-Related Capital
Expenditures and net of capital asset sales in the ordinary course of
business) made by Lessee and the Restricted Subsidiaries during the
Determination Period plus the aggregate of all other Restricted
Payments (other than (x) Restricted Payments described in clause (i) of
the first paragraph of this Section 5.28 made during the fiscal quarter
ending January 31, 1997 that do not exceed $26,000,000 in the aggregate
or (y) any Restricted Payments described in clauses (iii) or (iv) of
the first paragraph of this Section 5.28) made by Lessee and the
Restricted Subsidiaries during the period from and after October 31,
1996 through and including the date of the proposed Restricted Payment,
plus (3) $30,000,000, plus (4) the excess, if any, of consolidated
working capital of Lessee and the Restricted Subsidiaries at July 31,
1996 over consolidated working capital of Lessee and the Restricted
Subsidiaries at the end of the fiscal year immediately preceding the
date of the proposed Restricted Payment, minus (5) the excess, if any,
of consolidated working capital of Lessee and the Restricted
Subsidiaries at the end of the fiscal year immediately preceding the
date of the proposed Restricted Payment over consolidated working
capital of Lessee and the Restricted Subsidiaries at July 31, 1996. For
purposes of this subsection 5.28(d), the calculation of Consolidated
Cash Flow shall give pro forma effect to Acquisitions (including all
mergers and consolidations), Asset Sales and other dispositions and
discontinuances of business or assets that have been made by such
Person or any of the Restricted Subsidiaries during the reference
period or subsequent to such reference period and on or prior to the
date of calculation of Consolidated Cash Flow assuming that all such
Acquisitions, Asset Sales and other dispositions and discontinuances of
businesses or assets had occurred on the first day of the reference
period.
The foregoing provisions will not prohibit (i) the payment of any
distribution within 60 days after the date on which Lessee becomes committed to
make such distribution, if at said date of commitment such payment would have
complied with the provisions of this Agreement; and (ii) the redemption,
repurchase, retirement or other acquisition of any Equity Interests of Lessee in
exchange for, or out of the proceeds of, the substantially concurrent sale
(other than to a Subsidiary of Lessee) of other Equity Interests of Lessee
(other than any Disqualified Interests).
Not later than the date of making any Restricted Payment, the General
Partner shall deliver to Agent an officer's certificate signed by a Responsible
Officer stating that such Restricted Payment is permitted and setting forth the
basis upon which the calculations required by this Section 5.28 were computed,
which calculations may be based upon Lessee's latest available financial
statements.
Section 5.29. Prepayments of Subordinated Indebtedness. Lessee shall
not, and shall not permit any of the Restricted Subsidiaries to, (a) purchase,
redeem, retire or otherwise acquire for value, or set apart any money for a
sinking, defeasance or other analogous fund for, the purchase, redemption,
retirement or other acquisition of, or make any payment or prepayment of the
principal of or interest on, or any other amount owing in respect of, any
Indebtedness that is subordinated to the Obligations, except for regularly
scheduled payments of interest in respect of such Indebtedness required pursuant
to the instruments evidencing such Indebtedness that are not made in
contravention of the terms and conditions of subordination set forth on part II
of Schedule 5.21 or (b) directly or indirectly, make any payment in respect of,
or set apart any money for a sinking, defeasance or other analogous fund on
account of, Guaranty Obligations subordinated to the Obligations. The foregoing
provisions will not prohibit the defeasance, redemption or repurchase of
subordinated Indebtedness with the proceeds of Permitted Refinancing
Indebtedness.
Section 5.30. Dividend and Other Payment Restrictions Affecting
Subsidiaries. Lessee shall not, and shall not permit any of the Restricted
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
Restricted Subsidiary to (a) pay dividends or make any other distributions to
Lessee or any of the Restricted Subsidiaries (1) on its Capital Interests or (2)
with respect to any other interest or participation in, or interest measured by,
its profits, (b) pay any indebtedness owed to Lessee or any of the Restricted
Subsidiaries, (c) make loans or advances to Lessee or any of the Restricted
Subsidiaries or (d) transfer any of its properties or assets to Lessee or any of
the Restricted Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of (i) Existing Indebtedness, (ii) the Operative
Documents, the Credit Agreement, the 1998 Note Purchase Agreement, the 1998
Fixed Rate Senior Notes, the 2000 Note Purchase Agreement and the 2000 Notes,
(iii) applicable law, (iv) any instrument governing Indebtedness or Capital
Interests of a Person acquired by Lessee or any of the Restricted Subsidiaries
as in effect at the time of such Acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of such
Acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that the Consolidated
Cash Flow of such Person to the extent that dividends, distributions, loans,
advances or transfers thereof is limited by such encumbrance or restriction on
the date of acquisition is not taken into account in determining whether such
acquisition was permitted by the terms of this Agreement, (v) customary
non-assignment provisions in leases entered into in the ordinary course of
business and consistent with past practices, (vi) purchase money obligations for
property acquired in the ordinary course of business that impose restrictions of
the nature described in clause (d) above on the property so acquired, (vii)
Permitted Refinancing Indebtedness of any Existing Indebtedness, provided that
the restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive than those contained in the
agreements governing the Indebtedness being refinanced or (viii) other
Indebtedness permitted to be incurred subsequent to the Effective Date pursuant
to the provisions of Section 5.21 hereof, provided that such restrictions are no
more restrictive than those contained in this Agreement.
Section 5.31. Change in Business. Lessee shall not, and shall not suffer
or permit any Restricted Subsidiary to, engage in any material line of business
substantially different from those lines of business carried on by Lessee and
the Restricted Subsidiaries on the date hereof.
Section 5.32. Accounting Changes. Lessee shall not, and shall not suffer
or permit any Restricted Subsidiary to, make any significant change in
accounting treatment or reporting practices, except as required by GAAP, or
change the fiscal year of Lessee or of any Restricted Subsidiary except as
required by the Code.
Section 5.33. Limitation on Sale and Leaseback Transactions. Lessee will
not, and will not permit any of the Restricted Subsidiaries to, enter into any
arrangement with any Person providing for the leasing by Lessee or such
Restricted Subsidiary of any property that has been or is to be sold or
transferred by Lessee or such Restricted Subsidiary to such Person in
contemplation of such leasing; provided, however, that Lessee or such Restricted
Subsidiary may enter into such sale and leaseback transaction if: (i) Lessee
could have (A) incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction pursuant to the Leverage Ratio
test set forth in Section 5.12(a) and (B) secured a Lien on such Indebtedness
pursuant to Section 5.17; (ii) the lease in such sale and leaseback transaction
is for a term not in excess of the lesser of (A) three years and (B) 60% of the
remaining useful life of such property; or (iii) such sale and leaseback
transaction is otherwise permitted by the last sentence of Section 4.17 of the
1996 Indenture as in effect as of the date hereof.
Section 5.34. [Intentionally Omitted].
Section 5.35. Amendments of Organization Documents or Certain Debt
Agreements. Lessee shall not modify, amend, supplement or replace, nor permit
any modification, amendment, supplement or replacement of the Organization
Documents of the General Partner, Lessee or any Subsidiary of Lessee, the MLP
Senior Notes, the 1996 Indenture, the 1998 Fixed Rate Senior Notes, the 1998
Note Purchase Agreement, the 2000 Notes or the 2000 Note Purchase Agreement or
any document executed and delivered in connection with any of the foregoing, in
any respect that would adversely affect the Participants, Lessee's ability to
perform the Obligations, any Guarantor's ability to perform its obligations
under the Guaranty, in each such case without the prior written consent of Agent
and the Required Participants. Furthermore, the Lessee shall not permit any
modification, amendment, supplement or replacement of the Organization Documents
of the MLP that would have a material effect on Lessee without the prior written
consent of Agent and the Required Participants.
Section 5.36. [Intentionally Omitted].
Section 5.37. Operations through Subsidiaries. Lessee shall not conduct
any of its operations through Restricted Subsidiaries unless: (a) such
Restricted Subsidiary executes a Guaranty guaranteeing payment of the
Obligations, accompanied by an opinion of counsel to the Restricted Subsidiary
addressed to Agent and the Participants as to the due authorization, execution,
delivery and enforceability of the Guaranty; (b) such Restricted Subsidiary
agrees not to incur any Indebtedness other than (i) trade debt, (ii) debt owed
to Lessee or any other Restricted Subsidiary and (iii) Acquired Debt otherwise
permitted by this Agreement; (c) the Consolidated Cash Flow of such Restricted
Subsidiary, when added to Consolidated Cash Flow of all other Restricted
Subsidiaries for any fiscal year, shall not exceed 10% of the Consolidated Cash
Flow of Lessee and the Restricted Subsidiaries for such fiscal year; and (d) the
value of the assets of such Restricted Subsidiary, when added to the value of
the assets of all other Restricted Subsidiaries for any fiscal year, shall not
exceed 10% of the consolidated value of the assets of Lessee and the Restricted
Subsidiaries for such fiscal year, as determined in accordance with GAAP;
provided that the requirements of subsections (c) and (d) above shall not apply
as to any Restricted Subsidiary if the aggregate Indebtedness of such Restricted
Subsidiary, when added to the Indebtedness of all other Restricted Subsidiaries
at such time (excluding, in each case, debt of any such Restricted Subsidiary
owed to Lessee or another Restricted Subsidiary), shall not exceed $5 million.
Lessee shall not conduct any of its operations through, and shall not establish,
create or otherwise invest in, any Unrestricted Subsidiary unless the same shall
be a Permitted Lessee Investment.
Section 5.38. Operations of MLP. Except in connection with an indirect
Acquisition permitted by Section 5.20, the General Partner and Lessee shall not
permit the MLP or any of its Affiliates (including any Non-Recourse Subsidiary
or any Unrestricted Subsidiary) to operate or conduct any business substantially
similar to that conducted by Lessee and the Restricted Subsidiaries within a 25
mile radius of any business conducted by Lessee and the Restricted Subsidiaries.
In order to comply with this Section 5.38, Lessee may enter into one or more
transactions by which its assets and properties are "swapped" or "exchanged" for
assets and properties of another Person prior to or concurrently with another
transaction which, but for such swap or exchange would violate this Section;
provided, that (i) if the value of the MLP's assets or units to be so swapped or
exchanged exceeds $15 million, as determined by the audit committee of the Board
of Directors of the General Partner, Lessee shall have first obtained at its
expense an opinion from a nationally recognized investment banking firm,
addressed to it, Agent and the Participants and opining without material
qualification and based on assumptions that are realistic at the time, that the
exchange or swap transactions are fair to Lessee and the Restricted
Subsidiaries, and (ii) if the value of the MLP's assets or units to be so
swapped or exchanged exceeds $50 million, as determined by the audit committee
of the Board of Directors of the General Partner, at the option of the Required
Participants, Agent shall have first retained, at Lessee's expense, an
investment banking firm on behalf of the Participants who shall also have
rendered an opinion containing the statements and content referred to in clause
(i).
Section 5.39. Miscellaneous.
(a) Further Assurances. The Lessee, at its cost and expense, will cause
to be promptly and duly taken, executed, acknowledged and delivered all such
further acts, documents and assurances as Certificate Trustee or Agent
reasonably may request from time to time in order to carry out more effectively
the intent and purposes of this Agreement and the other Operative Documents and
the Overall Transaction. The Lessee, at its cost and expense, will cause all
financing statements (including precautionary financing statements), fixture
filings, mortgages and other documents, to be recorded or filed at such places
and times in such manner, and will take all such other actions or cause such
actions to be taken, as may be necessary or as may be reasonably requested by
Agent or Certificate Trustee in order to establish, preserve, protect and
perfect the title and Lien of Agent in the Units, the Lessee Collateral and the
Lessor Collateral and Certificate Trustee's, Agent's and/or any Participant's
rights under this Agreement and the other Operative Documents.
(b) Change of Name or Address. Lessee shall provide Agent thirty (30)
days' prior written notice of any change in name, or the address of its chief
executive office and principal place of business or the office where it keeps
its records concerning its accounts and the Units.
(c) Securities. Lessee shall not, nor shall it permit anyone authorized
to act on its behalf to, take any action which would subject the issuance or
sale of the Notes or Certificates, the Units, the Trust Estate or the Operative
Documents, or any security or lease the offering of which, for purposes of the
Securities Act or any state securities laws, would be deemed to be part of the
same offering as the offering of the aforementioned items to the registration
requirements of Section 5 of the Securities Act or any state securities laws.
(d) Rates. With respect to each determination of Interest and Yield
pursuant to this Agreement, the Loan Agreement, the Trust Agreement and Basic
Rent under the Lease, Lessee agrees to be bound by Sections 2.6 and 2.7 of the
Loan Agreement, Sections 2.4 and 2.5 of the Trust Agreement, and Sections 2.8
and 2.9 hereof and the applicable definitions in Appendix 1.
Section 5.40. Accounting Principles. (a) Unless the context otherwise
clearly requires, all accounting terms not expressly defined herein shall be
construed, and all financial computations required under this Agreement shall be
made in accordance with GAAP consistently applied. In the event that GAAP
changes during the term of the Lease such that the covenants contained in
Section 5.12 would then be calculated in a different manner or with different
components, (i) Lessee and the Participants agree to amend this Agreement in
such respects as are necessary to conform those covenants as criteria for
evaluating Lessee's financial condition to substantially the same criteria as
were effective prior to such change in GAAP and (ii) Lessee shall be deemed to
be in compliance with the covenants contained in Section 5.12 during the 90-day
period following any such change in GAAP if and to the extent that Lessee would
have been in compliance therewith under GAAP as in effect immediately prior to
such change.
(b) Except as otherwise specified, references herein to "fiscal year"
and "fiscal quarter" refer to such fiscal periods of Lessee."
(c) The following definitions set forth in Appendix I to the
Participation Agreement shall be and are hereby added as new defined terms or
amended and restated, as the case may be, to read as follows:
"Acquisition" means any transaction or series of
related transactions for the purpose of or resulting, directly
or indirectly, in (a) the acquisition of all or substantially
all of the assets of a Person, or of any business or division
of a Person, (b) the acquisition of in excess of 50% of the
capital stock, partnership interests or equity of any Person
or otherwise causing any Person to become a Subsidiary of the
acquiring Person, or (c) a merger or consolidation or any
other combination with another Person (other than a Person
that is a Subsidiary of the acquiring Person) provided that
Lessee or the Subsidiary of the acquiring entity is the
surviving Person.
"Available Cash" has the meaning given to such term
in the Partnership Agreement, as amended to October 14, 1998;
provided, that (a) Available Cash shall not include any amount
of Net Proceeds of Asset Sales until the 270-day period
following the consummation of the applicable Asset Sale, (b)
investments, loans and other contributions to a Non-Recourse
Subsidiary, Unrestricted Subsidiary or Joint Venture are to be
treated as "cash disbursements" when made for purposes of
determining the amount of Available Cash and (c) cash receipts
of a Non-Recourse Subsidiary, Unrestricted Subsidiary or Joint
Venture shall not constitute cash receipts of Lessee for
purposes of determining the amount of Available Cash until
cash is actually distributed by such Non-Recourse Subsidiary,
Unrestricted Subsidiary or Joint Venture to Lessee or a
Restricted Subsidiary.
"Capital Interests" means, (a) with respect to any
corporation, any and all shares, participations, rights or
other equivalent interests in the capital of the corporation,
(b) with respect to any partnership or limited liability
company, any and all partnership interests (whether general or
limited) or limited liability company interests, respectively,
and other interests or participations that confer on a Person
the right to receive a share of the profits and losses of, or
distributions of assets of, such partnership or limited
liability company, and (c) with respect to any other Person,
ownership interests of any type in such Person.
"Consolidated Cash Flow" means, with respect to
Lessee and the Restricted Subsidiaries for any period, the
Consolidated Net Income 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 Lessee and
the Restricted Subsidiaries for such period, to the extent
such provision for taxes was deducted in computing
Consolidated Net Income, plus (c) Consolidated Interest
Expense 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
Lessee and the Restricted Subsidiaries for such period, to the
extent such depreciation and amortization were deducted in
computing Consolidated Net Income, plus (e) non-cash employee
compensation expenses of Lessee and the Restricted
Subsidiaries for such period, plus (f) the Synthetic Lease
Principal Component of Lessee and the Restricted Subsidiaries
for such period; in each case, for such period without
duplication on a consolidated basis and determined in
accordance with GAAP.
"Consolidated Interest Expense" means, with respect
to Lessee and the Restricted Subsidiaries for any fiscal
period, on a consolidated basis, the sum of (a) all interest,
fees (including Letter of Credit fees), charges and related
expenses paid or payable (without duplication) by Lessee and
the Restricted Subsidiaries for that fiscal period to the
Banks hereunder or to any other lender in connection with
borrowed money or the deferred purchase price of assets that
are considered "interest expense" under GAAP, plus (b) the
portion of rent paid or payable (without duplication) by
Lessee and the Restricted Subsidiaries for that fiscal period
under Capital Lease Obligations that should be treated as
interest in accordance with Financial Accounting Standards
Board Statement No. 13, on a consolidated basis, plus (c) the
Synthetic Lease Interest Component of Lessee and the
Restricted Subsidiaries for that fiscal period.
"Consolidated Net Income" means, with respect to
Lessee and the Restricted Subsidiaries for any period, the
aggregate of the Net Income of Lessee and the Restricted
Subsidiaries for such period, on a consolidated basis,
determined in accordance with GAAP; provided, that (a) the Net
Income of any Person that is not a Restricted 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 Lessee or a Wholly-Owned Subsidiary of
Lessee, (b) the Net Income of any Person that is a Restricted
Subsidiary (other than a Wholly-Owned Subsidiary) shall be
included only to the extent of the amount of dividends or
distributions paid to Lessee or a Wholly-Owned Subsidiary of
Lessee, (c) the Net Income of any Person acquired in a pooling
of interests transaction for any period prior to the date of
such acquisition shall be excluded except to the extent
otherwise includable under clause (a) above and (d) the
cumulative effect of a change in accounting principles shall
be excluded.
"Consolidated Net Worth" means, with respect to
Lessee and the Restricted Subsidiaries as of any date, the sum
of (a) the consolidated equity of the common stockholders or
partners of Lessee and the Restricted Subsidiaries as of such
date, plus (b) the respective amounts reported on the balance
sheet of Lessee and the Restricted Subsidiaries 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 Lessee and the Restricted Subsidiaries upon
issuance of such preferred stock, less (x) all write-ups
(other than write-ups resulting from foreign currency
translations and write-ups of tangible assets of a going
concern business made within 12 months after the acquisition
of such business) subsequent to the Effective Date in the book
value of any asset owned by Lessee and the Restricted
Subsidiaries, (y) all Investments as of such date in
unconsolidated Subsidiaries and in Persons that are not
Restricted Subsidiaries (except, in each case, Permitted
Lessee 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.
"Credit Agreement" means the Third Amended and
Restated Credit Agreement dated as of April 18, 2000 among
Lessee, the General Partner, the Administrative Agent, the
Credit Agreement Banks and the Documentation Agent.
"Credit Agreement Arranger" means Banc of America Securities LLC.
"Credit Agreement Bank" means the financial
institutions defined as "Banks" in the introductory clause to
the Credit Agreement.
"Documentation Agent" has the meaning specified in the introductory
clause to the Credit Agreement.
"Effective Date" means the first date on which all
conditions precedent set forth in Section 5 of Omnibus
Amendment Agreement No. 2 are satisfied or waived by the
Certificate Purchasers or the Lenders.
"Existing Credit Agreement" means the Second Amended
and Restated Credit Agreement, dated as of July 2, 1998, as
amended prior to the Effective Date, among Lessee, the General
Partner, the several financial institutions from time to time
party thereto and Bank of America, N.A., as Administrative
Agent.
"Existing Indebtedness" means Indebtedness and
Synthetic Lease Obligations of Lessee and its Subsidiaries
(other than the "Obligations" as defined in the Credit
Agreement) and certain Indebtedness of the General Partner
with respect to which Lessee has assumed the General Partner's
repayment obligations, in each case in existence on the
Restatement Effective Date and as more fully set forth on
Schedule V to Omnibus Amendment Agreement No. 2.
"Fixed Charge Coverage Ratio" means with respect to
Lessee and the Restricted Subsidiaries for any period, the
ratio of Consolidated Cash Flow for such period to Fixed
Charges for such period. In the event that Lessee or any of
the Restricted Subsidiaries (a) incurs, assumes or guarantees
any Indebtedness or Synthetic Lease Obligations (other than
revolving credit borrowings including, with respect to Lessee,
the Loans) or (b) redeems or repays any Indebtedness or
Synthetic Lease Obligations (other than revolving credit
borrowings that are properly classified as a current liability
for GAAP including, with respect to Lessee, the Loans to the
extent that such Loans are so classified and excluding,
regardless of classification, any Loans or other Indebtedness
or Synthetic Lease Obligations the proceeds of which are used
for Acquisitions or Growth Related Capital Expenditures), in
any case 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 "Fixed Charge
Ratio 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 or Synthetic Lease Obligations, 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), Asset Sales and
other dispositions and discontinuances of businesses or assets
that have been made by Lessee or any of the Restricted
Subsidiaries during the reference period or subsequent to such
reference period and on or prior to the Fixed Charge Ratio
Calculation Date assuming that all such Acquisitions, Asset
Sales and other dispositions and discontinuances of businesses
or assets had occurred on the first day of the reference
period; provided, however, that with respect to Lessee and the
Restricted Subsidiaries, (a) Fixed Charges shall be reduced by
amounts attributable to businesses or assets that are so
disposed of or discontinued only to the extent that the
obligations giving rise to such Fixed Charges would no longer
be obligations contributing to the Fixed Charges of Lessee or
the Restricted Subsidiaries subsequent to Fixed Charge Ratio
Calculation Date and (b) Consolidated Cash Flow generated by
an acquired business or asset of Lessee or the Restricted
Subsidiaries shall be determined by the actual gross profit
(revenues minus costs of goods sold) of such acquired business
or asset during the immediately preceding number of full
fiscal quarters as are in the reference period minus the pro
forma expenses that would have been incurred by Lessee and the
Restricted Subsidiaries in the operation of such acquired
business or asset during such period computed on the basis of
(i) personnel expenses for employees retained by Lessee and
the Restricted Subsidiaries in the operation of the acquired
business or asset and (ii) non-personnel costs and expenses
incurred by Lessee and the Restricted Subsidiaries on a per
gallon basis in the operation of Lessee's business at
similarly situated Lessee facilities.
"Fixed Charges" means, with respect to Lessee and the
Restricted Subsidiaries for any period, the sum, without
duplication, of (a) Consolidated Interest Expense for such
period, whether paid or accrued, to the extent such expense
was deducted in computing Consolidated Net Income (including
amortization of original issue discounts, non-cash interest
payments, the interest component of all payments associated
with Capital Lease Obligations and net payments (if any)
pursuant to Hedging Obligations permitted under this
Agreement), (b) commissions, discounts and other fees and
charges incurred with respect to letters of credit, (c) any
interest expense on Indebtedness of another Person that is
guaranteed by Lessee and the Restricted Subsidiaries or
secured by a Lien on assets of any such Person, and (d) the
product of (i) all cash dividend payments on any series of
preferred stock of Lessee and the Restricted Subsidiaries,
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 Lessee,
expressed as a decimal, determined, in each case, on a
consolidated basis and in accordance with GAAP.
"Funded Debt" means all Indebtedness of Lessee and
the Restricted Subsidiaries, excluding all Contingent
Obligations of Lessee and the Restricted Subsidiaries under or
in connection with Letters of Credit outstanding from time to
time.
"Guaranty" means a continuing guaranty of the
Obligations in favor of the Agent on behalf of the
Participants, in form and substance satisfactory to the Agent.
"Interest Coverage Ratio" means with respect to
Lessee and the Restricted Subsidiaries for any period, the
ratio of Consolidated Cash for such period to Consolidated
Interest Expense for such period. In the event that Lessee or
any of the Restricted Subsidiaries (a) incurs, assumes or
guarantees any Indebtedness or Synthetic Lease Obligations
(other than revolving credit borrowings including, with
respect to Lessee, the Loans) or (b) redeems or repays any
Indebtedness or Synthetic Lease Obligations (other than
revolving credit borrowings that are properly classified as a
current liability under GAAP including, with respect to
Lessee, the Loans, to the extent such Loans are so classified
and excluding, regardless of classification, any Loans or
other Indebtedness or Synthetic Lease Obligations the proceeds
of which are used for Acquisitions or Growth Related Capital
Expenditures), in any case subsequent to the commencement of
the period for which the Interest Coverage Ratio is being
calculated, but prior to the date on which the calculation of
the Interest Coverage Ratio is made (the "Interest Coverage
Ratio Calculation Date"), then the Interest Coverage Ratio
shall be calculated giving pro forma effect to such
incurrence, assumption, guarantee, redemption or repayment of
Indebtedness or Synthetic Lease Obligations, as if the same
had occurred at the beginning of the applicable reference
period. The foregoing calculation of the Interest Coverage
Ratio shall also give pro forma effect to Acquisitions
(including all mergers and consolidations), Asset Sales and
other dispositions and discontinuances of businesses or assets
that have been made by Lessee or any of the Restricted
Subsidiaries during the reference period or subsequent to such
reference period and on or prior to the Interest Coverage
Ratio Calculation Date assuming that all such Acquisitions,
Asset Sales and other dispositions and discontinuances of
businesses or assets had occurred on the first day of the
reference period; provided, however, that with respect to
Lessee and the Restricted Subsidiaries, (a) Consolidated
Interest Expense shall be reduced by amounts attributable to
businesses or assets that are so disposed of or discontinued
only to the extent that the Indebtedness or Synthetic Lease
Obligations giving rise to such Consolidated Interest Expense
would no longer be Indebtedness or Synthetic Lease Obligations
contributing to the Consolidated Interest Expense of Lessee or
the Restricted Subsidiaries subsequent to the Interest
Coverage Ratio Calculation Date and (b) Consolidated Cash Flow
generated by an acquired business or asset of Lessee and the
Restricted Subsidiaries shall be determined by the actual
gross profit (revenues minus costs of goods sold) of such
acquired business or asset during the immediately preceding
number of full fiscal quarters as in the reference period
minus the pro forma expenses that would have been incurred by
Lessee and the Restricted Subsidiaries in the operation of
such acquired business or asset during such period computed on
the basis of (i) personnel expenses for employees retained by
Lessee and the Restricted Subsidiaries in the operation of the
acquired business or asset and (ii) non-personnel costs and
expenses incurred by Lessee and the Restricted Subsidiaries on
a per gallon basis in the operation of Lessee's business at
similarly situated facilities of Lessee.
"Investment" means, relative to any Person, any
direct or indirect purchase or other acquisition by such
Person of stock or other securities of any other Person, or
any direct or indirect loan, advance or capital contribution
by such Person to any other Person, and any other item which
would be classified as an "investment" on a balance sheet of
such Person prepared in accordance with GAAP, including,
without limitation, any direct or indirect contribution by
such Person of property or assets to a joint venture,
partnership or other business entity in which such Person
retains an interest. For purposes of the Operative Documents,
the amount involved in Investments made during any period
shall be the aggregate cost to Lessee of all such Investments
made during such period, determined in accordance with GAAP,
but without regard to unrealized increases or decreases in
value, or write-ups, write-downs or write-offs, of such
Investments and without regard to the existence of any
undistributed earnings or accrued interest with respect
thereto accrued after the respective dates on which such
Investments were made, less any net return of capital realized
during such period upon the sale, repayment or other
liquidation of such Investment (determined in accordance with
GAAP, but without regard to any amounts received during such
period as earnings (in the form of dividends not constituting
a return of capital, interest or otherwise) on such Investment
or as loans from any Person in whom such Investment has been
made).
"Leverage Ratio" means, with respect to Lessee and
the Restricted Subsidiaries for any period, the ratio of
Funded Debt plus Synthetic Lease Obligations, in each case of
Lessee and the Restricted Subsidiaries as of the last day of
such period, to Consolidated Cash Flow for such period. In the
event that Lessee or any of the Restricted Subsidiaries (a)
incurs, assumes or guarantees any Indebtedness or Synthetic
Lease Obligations (other than revolving credit borrowings
including, with respect to Lessee, the Loans) or (b) redeems
or repays any Indebtedness or Synthetic Lease Obligations
(other than revolving credit borrowings that are properly
classified as a current liability under GAAP including, with
respect to Lessee, the Loans to the extent such Loans are so
classified and excluding, regardless of classification, any
Loans or other Indebtedness or Synthetic Lease Obligations the
proceeds of which are used for Acquisitions or Growth Related
Capital Expenditures), in any case subsequent to the
commencement of the period for which the Leverage Ratio is
being calculated but prior to the date on which the
calculation of the Leverage Ratio is made (the "Leverage Ratio
Calculation Date"), then the Leverage Ratio shall be
calculated giving pro forma effect to such incurrence,
assumption, guarantee, redemption or repayment of Indebtedness
or Synthetic Lease Obligations, as if the same had occurred at
the beginning of the applicable reference period. The
foregoing calculation of the Leverage Ratio shall also give
pro forma effect to Acquisitions (including all mergers and
consolidations), Asset Sales and other dispositions and
discontinuances of businesses or assets that have been made by
Lessee or any of the Restricted Subsidiaries during the
reference period or subsequent to such reference period and on
or prior to the Leverage Ratio Calculation Date assuming that
all such Acquisitions, Asset Sales and other dispositions and
discontinuances of businesses or assets had occurred on the
first day of the reference period; provided, however, that
with respect to Lessee and the Restricted Subsidiaries, (a)
Funded Debt and Synthetic Lease Obligations shall be reduced
by amounts attributable to businesses or assets that are so
disposed of or discontinued only to the extent that the
Indebtedness or Synthetic Leases included within such Funded
Debt and Synthetic Lease Obligations would no longer be an
obligation of Lessee or the Restricted Subsidiaries subsequent
to the Leverage Ratio Calculation Date and (b) Consolidated
Cash Flow generated by an acquired business or asset of Lessee
or the Restricted Subsidiaries shall be determined by the
actual gross profit (revenues minus costs of goods sold) of
such acquired business or asset during the immediately
preceding number of full fiscal quarters as in the reference
period minus the pro forma expenses that would have been
incurred by Lessee and the Restricted Subsidiaries in the
operation of such acquired business or asset during such
period computed on the basis of (i) personnel expenses for
employees retained by Lessee and the Restricted Subsidiaries
in the operation of the acquired business or asset and (ii)
non-personnel costs and expenses incurred by Lessee and the
Restricted Subsidiaries on a per gallon basis in the operation
of Lessee's business at similarly situated facilities of
Lessee.
"Net Income" means, with respect to Lessee and the
Restricted Subsidiaries, the net income (loss) of such
Persons, 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 Lessee
or any of the Restricted 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 redemption of the 1994 Fixed Rate Senior Notes, 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 Lessee,
the General Partner or the Restricted Subsidiaries to the
extent that they were deducted from such Net Income in
accordance with GAAP.
"Net Proceeds of Asset Sale" means the aggregate cash
proceeds received by Lessee or any of the Restricted
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), and amounts
required to be applied to the repayment of Indebtedness
secured by a Lien on the asset or assets the subject of such
Asset Sale.
"1994 Fixed Rate Senior Notes" means the 10% Series A
Fixed Rate Senior Notes due 2001 that were issued by Lessee
and Ferrellgas Finance Corp. pursuant to that certain
Indenture dated as of July 5, 1994 among Lessee, Ferrellgas
Finance Corp. and Norwest Bank Minnesota, National
Association. All of the 1994 Fixed Rate Senior Notes were
redeemed prior to the Effective Date.
"Omnibus Amendment Agreement No. 2" means Omnibus Amendment Agreement No. 2
in respect of the Participation Agreement and the Lease, dated as of April 18,
2000, between the Lessee, the General Partner, the Certificate Trustee, the
Agent, the Certificate Purchasers and the Lender.
"Organization Documents" means, (a) for any
corporation, the certificate or articles of incorporation, the
bylaws, any certificate of determination or instrument
relating to the rights of preferred shareholders of such
corporation, any shareholder rights agreement, and all
applicable resolutions of the board of directors (or any
committee thereof) of such corporation, (b) for any general or
limited partnership, the partnership agreement of such
partnership and all amendments thereto and any agreements
otherwise relating to the rights of the partners thereof, and
(c) for any limited liability company, the limited liability,
operating or similar agreement and all amendments thereto and
any agreements otherwise relating to the rights of the members
thereof.
"Partnership Agreement" shall mean the Second Amended
and Restated Agreement of Limited Partnership of Lessee dated
October 14, 1998, as amended from time to time in accordance
with the terms of the Participation Agreement.
"Permitted Lessee Investments" means (a) any
Investments in Cash Equivalents; (b) any Investments in Lessee
or(subject to the provisions of Section 5.37) in a Restricted
Subsidiary of Lessee that is a Guarantor; (c) Investments by
Lessee or any Restricted Subsidiary of Lessee in a Person in
compliance with the other provisions of this Agreement, if as
a result of such Investment (i) such Person becomes a
Restricted Subsidiary of Lessee 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, Lessee or a Restricted Subsidiary of Lessee
that is a Guarantor; and (d) Investments by Lessee or any
Restricted Subsidiary in Unrestricted Subsidiaries and Joint
Ventures; provided that the amount of cash or property
contributed, loaned or otherwise advanced by Lessee or such
Restricted Subsidiaries in respect of such Investments may not
exceed at any time an aggregate amount equal to the greater of
(i) $15,000,000 and (ii) 10% of Consolidated Cash Flow for the
most recently ended four fiscal quarters of Lessee.
"Person" means an individual, partnership,
corporation, limited liability company, business trust, joint
stock company, trust, unincorporated association, Joint
Venture or Governmental Authority.
"Quarterly Payment Period" shall mean successive
calendar quarters commencing on the Interim Term Expiration
Date and thereafter on the last business day in March, June,
September and December in each year; provided, however, that
no Quarterly Payment Period may end later than the last day of
the Lease Term.
"Restricted Subsidiary" means any Subsidiary of
Lessee (a) of which 80% or more of the voting Capital
Interests are beneficially owned, directly or indirectly, by
Lessee and none of which Capital Interests are owned, directly
or indirectly, by Unrestricted Subsidiaries, (b) which is
engaged in the same or substantially the same line of business
as Lessee, (c) which is organized under the laws of the United
States or any State thereof, (d) which maintains substantially
all of its assets and conducts substantially all of its
business within the United States and (e) which is designated
as a Restricted Subsidiary in Schedule IV to Omnibus Amendment
Agreement No. 2 as of the Effective Date or which shall be
designated as a Restricted Subsidiary by Lessee at a
subsequent date pursuant to Section 5.16; provided, however,
that (x) to the extent a newly formed or acquired Subsidiary
meeting the foregoing requirements is not declared a
Restricted Subsidiary or an Unrestricted Subsidiary within 90
days of its formation or acquisition, such Subsidiary shall be
deemed to have been designated by Lessee as a Restricted
Subsidiary (in which event Lessee shall comply, and shall
cause such Restricted Subsidiary to comply, with Section 5.37)
and (b) a Restricted Subsidiary may be designated as an
Unrestricted Subsidiary in accordance with the provisions of
Section 5.16.
"2000 Note Purchase Agreement" means the Note
Purchase Agreement, dated as of February 1, 2000 among Lessee
and the Purchasers named therein, pursuant to which the 2000
Notes were issued, as it may be amended, modified or
supplemented from time to time.
"2000 Notes" means, collectively, (a) the $21,000,000
8.68% Senior Notes, Series A, due August 1, 2006, (b) the
$90,000,000 8.78% Senior Notes, Series B, due August 1, 2007
and (c) the $73,000,000 8.87% Senior Notes, Series C, due
August 1, 2009, in each case issued by Lessee pursuant to the
2000 Note Purchase Agreement.
"Unrestricted Subsidiary" means any Subsidiary which is not a Restricted
Subsidiary."
Section 1.2. Amendments to Lease. (a) Section 8.1 of the Lease shall be and
is hereby amended and restated in its entirety to read as follows:
"Section 8.1. Events of Default. The following shall constitute events of
default (each a "Lease Event of Default") hereunder:
(a) Non-Payment. Lessee fails to pay, (i) when and as
required to be paid herein, any payment of Basic Rent or any amount
payable pursuant to Section 6.1(a), or Article IX, or (ii) within 5
days after the same becomes due, any Supplemental Rent (other than
Supplemental Rent described in clause (i)); or
(b) Representation or Warranty. Any representation or
warranty by Lessee or the General Partner made or deemed made herein,
in any other Operative Document, or which is contained in any
certificate, document or financial or other statement by Lessee, the
General Partner, or any Responsible Officer, furnished at any time
under this Lease, or in or under any other Operative Document, is
incorrect in any material respect on or as of the date made or deemed
made; or
(c) Specific Defaults. (i) Lessee fails to maintain the
insurance required by Section 6.2 or Lessee fails to perform or observe
any term, covenant or agreement contained in any of (A) Section 5.2
hereof or (B) Section 5.3 (other than subsection (d) thereof), 5.12,
5.13 or 5.17 through 5.38, inclusive, of the Participation Agreement;
or (ii) Lessee shall fail to sell all of the Units on the Termination
Date in accordance with and satisfaction of each of the terms,
covenants, conditions and agreements set forth under Article IX in
connection with and following its exercise of the Sale Option; or
(d) Other Defaults. Lessee, the General Partner or any
Subsidiary fails to perform or observe any other term or covenant
contained in this Lease or any other Operative Document, and such
default shall continue unremedied for a period of 30 days after the
earlier of (i) the date upon which a Responsible Officer knew of such
failure or (ii) the date upon which written notice thereof is given to
Lessee by the Lessor or Agent; provided that if (i) such default is not
curable by the payment of money and cannot be cured within such 30 day
period, and (ii) Lessee, the General Partner or such Subsidiary is
diligently pursuing the cure of such default, then the period for cure
of such default will be extended for the period necessary for Lessee,
the General Partner or such Subsidiary to effect such cure, but in no
event longer than 90 days from the date of such notice or knowledge; or
(e) Cross-Default. Lessee, the General Partner or any
Restricted Subsidiary (i) fails to make any payment in respect of any
Indebtedness, Synthetic Lease Obligation or Contingent Obligation
having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under
any combined or syndicated credit arrangement) of more than $10,000,000
when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) and such failure continues after the
applicable grace or notice period, if any, specified in the relevant
document on the date of such failure or (ii) fails to perform or
observe any other condition or covenant, or any other event (including
any termination or similar event in respect of any Accounts Receivable
Securitization) shall occur or condition exist, under any agreement or
instrument relating to any such Indebtedness, Synthetic Lease
Obligation or Contingent Obligation, and such failure continues after
the applicable grace or notice period, if any, specified in the
relevant document on the date of such failure if the effect of such
failure, event or condition is to cause, or to permit the holder or
holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness or Synthetic Lease Obligation (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to
cause such Indebtedness or Synthetic Lease Obligation to be declared to
be due and payable prior to its stated maturity or to cause such
Indebtedness, Synthetic Lease Obligation or Contingent Obligation to be
prepaid, purchased or redeemed by Lessee, the MLP, the General Partner
or any Restricted Subsidiary, or such Contingent Obligation to become
payable or cash collateral in respect thereof to be demanded; or
(f) Insolvency; Voluntary Proceedings. The General Partner,
the MLP, Lessee or any Restricted Subsidiary (i) ceases or fails to be
solvent, or generally fails to pay, or admits in writing its inability
to pay, its debts as they become due, subject to applicable grace
periods, if any, whether at stated maturity or otherwise, (ii)
voluntarily ceases to conduct its business in the ordinary course,
(iii) commences any Insolvency Proceeding with respect to itself, or
(iv) takes any action to effectuate or authorize any of the foregoing;
or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the General Partner, the MLP,
Lessee or any Restricted Subsidiary, or any writ, judgment, warrant of
attachment, execution or similar process is issued or levied against a
substantial part of any such Person's properties, and any such
proceeding or petition shall not be dismissed, or such writ, judgment,
warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within 60 days after commencement,
filing or levy, (ii) the General Partner, the MLP, Lessee or any
Restricted Subsidiary admits the material allegations of a petition
against it in any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S. law) is ordered in any Insolvency
Proceeding or (iii) the General Partner, the MLP, Lessee or any
Restricted Subsidiary acquiesces in the appointment of a receiver,
trustee, custodian, conservator, liquidator, mortgagee in possession
(or agent therefor) or other similar Person for itself or a substantial
portion of its property or business; or
(h) ERISA. (i) An ERISA Event occurs with respect to a
Pension Plan which has resulted or could reasonably be expected to
result in liability of Lessee or the General Partner under Title IV of
ERISA to the Pension Plan or the PBGC in an aggregate amount in excess
of $10,000,000 or (ii) the commencement or increase of contributions
to, or the adoption of or the amendment of a Pension Plan by Lessee,
the General Partner or any of their Affiliates which has resulted or
could reasonably be expected to result in an increase in Unfunded
Pension Liability among all Pension Plans in an aggregate amount in
excess of $10,000,000.
(i) Monetary Judgments. One or more judgments, orders,
decrees or arbitration awards is entered against Lessee, the General
Partner or any Restricted Subsidiary involving in the aggregate a
liability (to the extent not covered by independent third-party
insurance as to which the insurer does not dispute coverage) as to any
single or related series of transactions, incidents or conditions, of
more than $10,000,000; or
(j) Non-Monetary Judgments. Any non-monetary judgment, order
or decree is entered against Lessee, the General Partner or any
Restricted Subsidiary which does or would reasonably be expected to
have a Material Adverse Effect, and there shall be any period of 60
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(k) [Intentionally Omitted.]
(l) Adverse Change. There occurs a Material Adverse Effect; or
(m) Certain Indenture Defaults, Etc. (i) To the extent not
otherwise within the scope of subsection (e) above, any "Event of
Default" shall occur and be continuing under and as defined in the 1998
Note Purchase Agreement or the 2000 Note Purchase Agreement or (ii) any
of the following shall occur under or with respect to the 1996
Indenture or any other Indebtedness guaranteed by Lessee or its
Subsidiaries (collectively, the "Guaranteed Indebtedness"): (A) any
demand for payment shall be made under any such Guaranty Obligation
with respect to the Guaranteed Indebtedness or (B) so long as any such
Guaranty Obligation shall be in effect (x) Lessee or any such
Subsidiary shall fail to pay principal of or premium, if any, or
interest on such Guaranteed Indebtedness after the expiration of any
applicable notice or cure periods or (y) any "Event of Default"
(however defined) shall occur and be continuing under such Guaranteed
Indebtedness which results in the acceleration of such Guaranteed
Indebtedness; or
(n) Guarantor Defaults. Any Guarantor fails in any material
respect to perform or observe any term, covenant or agreement in its
Guaranty, or any Guaranty is for any reason partially (including with
respect to future advances) or wholly revoked or invalidated, or
otherwise ceases to be in full force and effect, or any Guarantor or
any other Person contests in any manner the validity or enforceability
thereof or denies that it has any further liability or obligation
thereunder or any event described at subsections (f) or (g) of this
Section 8.1 occurs with respect to any Guarantor; or
(o) Operative Documents. Any Operative Document shall (except
in accordance with its terms), in whole or in part, terminate, cease to
be effective or cease to be the legally valid, binding and enforceable
obligation of Lessee, or Lessee or any of its Affiliates shall,
directly or indirectly, contest in any manner in any court the
effectiveness, validity, binding nature or enforceability thereof, or
the Lien securing Lessee's obligations under the Operative Documents
shall, in whole or in part, cease to be a perfected first priority Lien
free and clear of all Liens (other than Permitted Liens), or, in any
case, Lessee or any of its Affiliates shall, at any time, directly or
indirectly, contest in any manner in any court the validity or
enforceability thereof; or
(p) Other Lease. A "Lease Event of Default" shall occur under
the Other Lease.
(q) Change of Control. A Change of Control occurs."
(b) Section 8.2 shall be and is hereby amended by deleting the
reference to "Section 8.1(e) or Section 8.1(f)" contained in the fourth
paragraph thereof and substituting in place thereof the phrase "Section 8.1(f)
or Section 8.1(g)".
Section 1.3. Amendment to Loan Agreement. Schedule II to the Loan Agreement
shall be and is hereby amended in its entirety to read as Exhibit A attached
hereto.
SECTION 2. REPRESENTATIONS OF THE LESSEE.
As of the date hereof, Lessee represents and warrants as follows:
(a) all representations and warranties set forth in the Participation
Agreement and Lease, as amended by this Amendment, are true and correct as of
the date hereof and are incorporated herein by reference with the same force and
effect as though herein set forth in full; and
(b) no Lease Default or Lease Event of Default exists.
SECTION 3. AUTHORIZATION AND DIRECTION.
The Certificate Purchaser, by its execution hereof, authorizes the
Certificate Trustee to execute and deliver this Amendment.
SECTION 4. EFFECTIVENESS.
This Amendment shall not become effective until, and shall become
effective when, each and every one of the following conditions shall have been
satisfied:
(a) The Lessee, the General Partner, the Certificate Trustee, the
Agent, the Certificate Purchasers and the Lenders shall have executed this
Amendment;
(b) The Certificate Trustee, the Certificate Purchasers and the Lenders
shall have received (i) certificates of existence and good standing with respect
to Lessee and the General Partner from the Secretary of State of the state of
its organization dated no earlier than the 30th day prior to the Effective Date,
(ii) copies of Lessee's Certificate of Limited Partnership, certified by the
Secretary of State of the state of its organization dated no earlier than the
30th day prior to the Effective Date, (iii) certificates of the Secretary or
Assistant Secretary of the general partner of Lessee, in form and substance
satisfactory to Agent and the Participants, and attaching and certifying as to
(A) the Lessee's limited partnership agreement, (B) the directors' resolutions
in respect of the execution, delivery and performance by Lessee of this
Amendment, (C) the general partner's articles of incorporation and bylaws and
(D) the incumbency and signatures of persons authorized to execute and deliver
documents on behalf of Lessee, and (iv) a legal opinion of Bracewell & Patterson
L.L.P., satisfactory in form and substance to the Certificate Trustee, the
Certificate Purchasers and the Lenders;
(c) The reasonable fees and expenses of the Certificate Purchasers
(including the fees and expenses of their special counsel) shall have been paid
in accordance with Section 5 hereof; and
(d) All proceedings taken in connection with this Amendment and any
documents relating thereto shall be reasonably satisfactory to Agent,
Certificate Trustee, the Certificate Purchasers, the Lenders and their
respective counsel, and each such Person shall have received copies of such
documents as they may reasonably request in connection therewith, all in form
and substance reasonably satisfactory to each such Person.
SECTION 5. FEES AND EXPENSES.
Lessee agrees to pay all the reasonable fees and expenses of the
Certificate Purchasers in connection with the negotiation, preparation,
approval, execution and delivery of this Amendment (including the fees and
expenses of their special counsel).
SECTION 6. MISCELLANEOUS.
Section 6.1. Construction. This Amendment shall be construed in
connection with and as part of the Agreements, and except as modified and
expressly amended by this Amendment, all terms, conditions and covenants
contained in the Agreements are hereby ratified and shall be and remain in full
force and effect.
Section 6.2. References. Any and all notices, requests, certificates
and other instruments executed and delivered after the execution and delivery of
this Amendment may refer to the Agreements without making specific reference to
this Amendment but nevertheless all such references shall be deemed to include
this Amendment unless the context otherwise requires.
Section 6.3. Headings and Table of Contents. The headings of the
Sections of this Amendment and the Table of Contents are inserted for purposes
of convenience only and shall not be construed to affect the meaning or
construction of any of the provisions hereof and any reference to numbered
Sections, unless otherwise indicated, are to Sections of this Amendment.
Section 6.4. Counterparts. This Amendment may be executed in any number of
counterparts, each executed counterpart constituting an original but all
together only one Amendment.
SECTION 6.5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (EXCLUDING
CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE
APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE).
IN WITNESS WHEREOF, the Lessee, the General Partner, the Certificate
Trustee, the Agent, the Certificate Purchasers and the Lenders have caused this
instrument to be executed, all as of the day and year first above written.
Lessee: FERRELLGAS, LP, as Lessee
By Ferrellgas, Inc., its General Partner
By:
Name:
Title:
General Partner: FERRELLGAS, INC.
By:
Name:
Title:
Certificate Trustee: FIRST SECURITY BANK, NATIONAL ASSOCIATION,
in its individual capacity and as
Certificate Trustee
By:
Name:
Title:
Agent: FIRST SECURITY TRUST COMPANY OF NEVADA,
not in its individual capacity except as
expressly stated
herein, but solely as Agent
By:
Name:
Title:
Certificate Purchaser: [_____________________], as Certificate Purchaser
By:
Name:
Title:
Certificate Purchaser: [_____________________], as Certificate Purchaser
By:
Name:
Title:
Certificate Purchaser: [_____________________], as Certificate Purchaser
By:
Name:
Title:
Lender: [_____________________], as Lender
By:
Name:
Title:
Lender: [_____________________], as Lender
By:
Name:
Title:
Lender: [_____________________], as Lender
By:
Name:
Title:
Lender: [_____________________], as Lender
By:
Name:
Title:
SCHEDULE I
[CERTIFICATE PURCHASERS]
SCHEDULE II
[LENDERS]
SCHEDULE III
[LIENS]
SCHEDULE IV
[SUBSIDIARIES AND AFFILIATES]
SCHEDULE V
[EXISTING INDEBTEDNESS]
EXHIBIT A
SCHEDULE II
(TO LOAN AGREEMENT)
AMORTIZATION OF CLASS A NOTE
Payment Loan
Year Date* Principal Balance
100.000000%
1 3/30/00 0.303030% 99.696970%
6/30/00 0.303030% 99.393939%
9/30/00 0.303030% 99.090909%
12/30/00 0.303030% 98.787879%
2 3/30/01 0.303030% 98.484848%
6/30/01 0.303030% 98.181818%
9/30/01 0.303030% 97.878788%
12/30/01 0.303030% 97.575758%
3 3/30/02 0.303030% 97.272727%
6/30/02 0.303030% 96.969697%
9/30/02 0.303030% 96.666667%
12/30/02 0.303030% 96.363636%
4 3/30/03 0.303030% 96.060606%
6/30/03 0.303030% 95.757576%
9/30/03 0.303030% 95.454545%
12/30/03 0.303030% 95.151515%
5 3/30/04 0.303030% 94.848485%
6/30/04 0.303030% 94.545455%
9/30/04 0.303030% 94.242424%
12/30/04 0.303030% 93.939394%
6 3/30/05 0.303030% 93.636364%
6/30/05 93.636364% 0.000000%
*last Business Day of calendar quarter