Exhibit 4.1
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FERRELLGAS ESCROW LLC
FERRELLGAS FINANCE ESCROW CORPORATION
6 3/4% SENIOR NOTES DUE 2014
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INDENTURE
Dated as of April 20, 2004
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U.S. Bank National Association
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1)........................................... 7.10
(a)(2)......................................... 7.10
(a)(3)......................................... N.A.
(a)(4)......................................... N.A.
(a)(5)......................................... 7.10
(b)............................................ 7.10
(c)............................................ N.A.
311(a).............................................. 7.11
(b)............................................ 7.11
(c)............................................ N.A.
312(a).............................................. 2.05
(b)............................................ 11.03
(c)............................................ 11.03
313(a).............................................. 7.06
(b)(1)......................................... N.A.
(b)(2)......................................... 7.06; 7.07
(c)............................................ 7.06; 11.02
(d)............................................ 7.06
314(a).............................................. 4.03;11.02; 11.05
(b)............................................ N.A.
(c)(1)......................................... 11.04
(c)(2)......................................... 11.04
(c)(3)......................................... N.A.
(d)............................................ N.A.
(e)............................................ 11.05
(f)............................................ N.A.
315(a).............................................. 7.01
(b)............................................ 7.05, 11.02
(c)............................................ 7.01
(d)............................................ 7.01
(e)............................................ 6.11
316(a) (last sentence).............................. 2.09
(a)(1)(A)...................................... 6.05
(a)(1)(B)...................................... 6.04
(a)(2)......................................... N.A.
(b)............................................ 6.07
(c)............................................ 2.12
317(a)(1)........................................... 6.08
(a)(2)......................................... 6.09
(b)............................................ 2.04
318(a).............................................. 11.01
(b)............................................ N.A.
(c)............................................ 11.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions............................................2
Section 1.02 Other Definitions.....................................24
Section 1.03 Incorporation by Reference of Trust Indenture Act.....24
Section 1.04 Rules of Construction.................................24
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating.......................................25
Section 2.02 Execution and Authentication..........................25
Section 2.03 Registrar and Paying Agent............................26
Section 2.04 Paying Agent to Hold Money in Trust...................26
Section 2.05 Holder Lists..........................................26
Section 2.06 Transfer and Exchange.................................27
Section 2.07 Replacement Notes.....................................38
Section 2.08 Outstanding Notes.....................................39
Section 2.09 Treasury Notes........................................39
Section 2.10 Temporary Notes.......................................39
Section 2.11 Cancellation..........................................39
Section 2.12 Defaulted Interest....................................40
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee....................................40
Section 3.02 Selection of Notes to Be Redeemed or Purchased........40
Section 3.03 Notice of Redemption..................................41
Section 3.04 Effect of Notice of Redemption........................41
Section 3.05 Deposit of Redemption or Purchase Price...............41
Section 3.06 Notes Redeemed or Purchased in Part...................42
Section 3.07 Optional Redemption...................................42
Section 3.08 Mandatory Redemption..................................43
Section 3.09 Special Mandatory Redemption..........................43
Section 3.10 Offer to Purchase by Application of Excess Proceeds...43
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes......................................45
Section 4.02 Maintenance of Office or Agency.......................45
Section 4.03 Reports...............................................46
Section 4.04 Compliance Certificate................................46
Section 4.05 Taxes.................................................47
Section 4.06 Stay, Extension and Usury Laws........................47
Section 4.07 Restricted Payments...................................47
Section 4.08 Dividend and Other Payment Restrictions
Affecting Subsidiaries...............................49
Section 4.09 Incurrence of Indebtedness............................50
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Section 4.10 Asset Sales...........................................51
Section 4.11 Transactions with Affiliates..........................53
Section 4.12 Liens.................................................54
Section 4.13 Corporate Existence...................................54
Section 4.14 Offer to Repurchase Upon Change of Control............54
Section 4.15 Limitation on Sale and Leaseback Transactions.........55
Section 4.16 Limitation on Finance Corp. and Escrow Finance Corp...56
Section 4.17 Limitation on Other Activities........................56
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets..............56
Section 5.02 Successor Corporation Substituted.....................57
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.....................................57
Section 6.02 Acceleration..........................................59
Section 6.03 Other Remedies........................................59
Section 6.04 Waiver of Past Defaults...............................59
Section 6.05 Control by Majority...................................59
Section 6.06 Limitation on Suits...................................60
Section 6.07 Rights of Holders of Notes to Receive Payment.........60
Section 6.08 Collection Suit by Trustee............................60
Section 6.09 Trustee May File Proofs of Claim......................60
Section 6.10 Priorities............................................61
Section 6.11 Undertaking for Costs.................................61
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee.....................................61
Section 7.02 Rights of Trustee.....................................62
Section 7.03 Individual Rights of Trustee..........................63
Section 7.04 Trustee's Disclaimer..................................63
Section 7.05 Notice of Defaults....................................63
Section 7.06 Reports by Trustee to Holders of the Notes............64
Section 7.07 Compensation and Indemnity............................64
Section 7.08 Replacement of Trustee................................65
Section 7.09 Successor Trustee by Merger, etc......................65
Section 7.10 Eligibility; Disqualification.........................66
Section 7.11 Preferential Collection of Claims Against the
Issuers..............................................66
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant
Defeasance...........................................66
Section 8.02 Legal Defeasance and Discharge........................66
Section 8.03 Covenant Defeasance...................................67
Section 8.04 Conditions to Legal or Covenant Defeasance............67
Section 8.05 Deposited Money and Government Securities to
be Held in Trust; Other Miscellaneous Provisions.... 68
Section 8.06 Repayment to the Issuers..............................69
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Section 8.07 Reinstatement.........................................69
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes...................69
Section 9.02 With Consent of Holders of Notes......................70
Section 9.03 Compliance with Trust Indenture Act...................71
Section 9.04 Revocation and Effect of Consents.....................71
Section 9.05 Notation on or Exchange of Notes......................71
Section 9.06 Trustee to Sign Amendments, etc.......................71
ARTICLE 10.
SATISFACTION AND DISCHARGE
Section 10.01 Satisfaction and Discharge............................72
Section 10.02 Application of Trust Money............................73
ARTICLE 11.
MISCELLANEOUS
Section 11.01 Trust Indenture Act Controls..........................73
Section 11.02 Notices...............................................73
Section 11.03 Communication by Holders of Notes with Other
Holders of Notes.....................................74
Section 11.04 Certificate and Opinion as to Conditions Precedent....74
Section 11.05 Statements Required in Certificate or Opinion.........74
Section 11.06 Rules by Trustee and Agents...........................75
Section 11.07 Non-Recourse..........................................75
Section 11.08 No Personal Liability of Directors, Officers,
Employees and Stockholders...........................75
Section 11.09 Governing Law.........................................75
Section 11.10 Successors............................................75
Section 11.11 Severability..........................................76
Section 11.12 Counterpart Originals.................................76
Section 11.13 Table of Contents, Headings, etc......................76
EXHIBIT
Exhibit A1 FORM OF NOTE
Exhibit A2 FORM OF REGULATION S TEMPORARY GLOBAL NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
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This INDENTURE dated as of April 20, 2004 among Ferrellgas Escrow LLC, a
Delaware limited liability company ("Escrow LLC"), Ferrellgas Finance Escrow
Corporation, a Delaware corporation ("Escrow Finance Corp."), U.S. Bank National
Association, as trustee (the "Trustee"), and on and after the Merger Date (as
defined below), Ferrellgas, L.P., a Delaware limited partnership ("Ferrellgas,
L.P."), and Ferrellgas Finance Corp., a Delaware corporation ("Finance Corp.").
Unless specifically indicated otherwise, the term "Issuers" means (i) Escrow LLC
and Escrow Finance Corp. prior to the Merger Date and (ii) Ferrellgas, L.P. and
Finance Corp. on and after the Merger Date.
Pursuant to the Agreement and Plan of Merger, dated as of February 8, 2004
(the "Acquisition Merger Agreement"), by and among FCI Trading Corp., a Delaware
corporation ("FCI"), Diesel Acquisition LLC, a Delaware limited liability
company and a wholly-owned subsidiary of FCI ("Diesel"), Ferrell Companies,
Inc., a Kansas corporation, and Blue Rhino Corporation, a Delaware corporation
("Blue Rhino Corp."), Diesel will merge with and into Blue Rhino Corp. with Blue
Rhino Corp. being the surviving entity (the "Acquisition Merger").
Upon the consummation of the Acquisition Merger and the occurrence of
certain other conditions, it is expected that the net proceeds of the offering
of the Notes (as defined below) that will be deposited into the escrow account
pursuant to an Escrow and Security Agreement, dated as of the date hereof (the
"Escrow and Security Agreement"), among Escrow LLC and Escrow Finance Corp., the
Trustee and LaSalle Bank National Association, as escrow agent and securities
intermediary (the "Escrow Agent"), will be released to Escrow LLC and Escrow
Finance Corp. pursuant thereto. In accordance with the terms of the Acquisition
Merger Agreement, such funds, together with additional funds sufficient to pay
the consideration for the Acquisition Merger (such consideration, the "Merger
Consideration"), will be deposited into another escrow account pursuant to the
terms of an escrow agreement (the "Acquisition Escrow Agreement"), to be dated
as of or prior to the date of the consummation of the Acquisition Merger, by and
among FCI, Blue Rhino Corp. and the Escrow Agent. Pursuant to the Acquisition
Escrow Agreement, it is expected that all such funds will be released to the
Paying Agent (as defined below) for payment of the Merger Consideration
simultaneously with the effectiveness of the merger of Blue Rhino LLC with and
into Ferrellgas, L.P. and the Escrow Mergers (as defined below) (the date and
time of the effectiveness of the Escrow Mergers being referred to herein as the
"Merger Date").
Pursuant to the Contribution Agreement, dated as of February 8, 2004, by
and among FCI, the General Partner, Ferrellgas Partners and Ferrellgas, L.P.
(the "Contribution Agreement"), FCI has agreed to convert Blue Rhino Corp. into
a limited liability company. Upon such conversion, FCI will contribute to
Ferrellgas Partners a portion of the membership interests in Blue Rhino LLC and
Ferrellgas Partners will assume FCI's obligations under the Acquisition Merger
Agreement to pay the Merger Consideration, together with specific other
obligations. After that contribution, Ferrellgas Partners will contribute to
Ferrellgas, L.P. its membership interests in Blue Rhino LLC and Ferrellgas, L.P.
will assume Ferrellgas Partners' obligations to pay the Merger Consideration,
together with specific other obligations. Blue Rhino LLC will then be merged
with and into Ferrellgas, L.P. with Ferrellgas, L.P. being the surviving entity.
On the Merger Date, Escrow LLC will merge with and into Ferrellgas, L.P.
with Ferrellgas, L.P. being the surviving entity and Escrow Finance Corp. will
merge with and into Finance Corp. with Finance Corp. being the surviving entity
(together, the "Escrow Mergers"); and Ferrellgas, L.P. and Finance Corp. will
succeed to the obligations of Escrow LLC and Escrow Finance Corp. under this
Indenture, the Notes and a registration rights agreement, dated as of the date
hereof, among Escrow LLC, Escrow Finance Corp. and the Initial Purchasers and on
and after the Merger Date, Ferrellgas, L.P. and Finance Corp.
1
The Issuers and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders (as defined below) of the 6
3/4% Senior Notes due 2014 (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
"144A Global Note" means a Global Note substantially in the form of Exhibit
A1 hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.
"Accounts Receivable Securitization" means a financing arrangement
involving the transfer or sale of accounts receivable of the Partnership and its
Restricted Subsidiaries in the ordinary course of business through one or more
SPEs, the terms of which arrangement do not impose (a) any recourse or
repurchase obligations upon the Partnership and its Restricted Subsidiaries or
any Affiliate of the Partnership and its Restricted Subsidiaries (other than any
such SPE) except to the extent of the breach of a representation or warranty by
the Partnership and its Restricted Subsidiaries in connection therewith or (b)
any negative pledge or Lien on any accounts receivable not actually transferred
to any such SPE in connection with such arrangement.
"Additional Notes" means additional notes (other than the Initial Notes and
the Exchange Notes) issued from time to time under this Indenture in accordance
with Sections 2.02 and 4.09 hereof, as part of the same series as the Initial
Notes.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, will mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
voting securities of a Person shall be deemed to be control. For purposes of
this definition, the terms "controlling," "controlled by" and "under common
control with" will have correlative meanings.
"Agent" means any Registrar, co-registrar, Paying Agent or additional
paying agent.
"Applicable Procedures" means, with respect to any transfer or exchange of,
or for beneficial interests in, any Global Note, the rules and procedures of the
Depositary, Euroclear and Clearstream that apply to such transfer or exchange.
"Asset Acquisition" means the following (in all cases, including assets
acquired through a Flow-Through Acquisition):
(1) an Investment by the Partnership or any Restricted Subsidiary of
the Partnership in any other Person pursuant to which the Person shall
become a Restricted Subsidiary of the Partnership, or shall be merged with
or into the Partnership or any Restricted Subsidiary of the Partnership;
2
(2) the acquisition by the Partnership or any Restricted Subsidiary of
the Partnership of the assets of any Person, other than a Restricted
Subsidiary of the Partnership, which constitute all or substantially all of
the assets of such Person; or
(3) the acquisition by the Partnership or any Restricted Subsidiary of
the Partnership of any division or line of business of any Person, other
than a Restricted Subsidiary of the Partnership.
"Asset Sale" means either of the following, whether in a single transaction
or a series of related transactions:
(1) the sale, lease, conveyance or other disposition of any assets
other than (a) sales, leases or transfers of assets in the ordinary course
of business (including but not limited to the sales of inventory in the
ordinary course of business), and (b) sales of accounts receivable under
any Accounts Receivable Securitization; or
(2) the issuance or sale of Capital Stock of any direct Subsidiary.
Notwithstanding the preceding, none of the following items will be deemed to be
an Asset Sale:
(1) any sale, lease or transfer of assets or Capital Stock by the
Partnership or any of its Restricted Subsidiaries to the Issuers or a
Restricted Subsidiary;
(2) any sale or transfer of assets or Capital Stock by the Partnership
or any of its Restricted Subsidiaries to any entity in exchange for other
assets used in a related business and/or cash (provided, that such cash
portion is at least 75% of the difference between the value of the assets
being transferred and the value of the assets being received) and having a
fair market value, as determined in good faith by an authorized financial
officer of the General Partner, reasonably equivalent to the fair market
value of the assets so transferred;
(3) any sale, lease or transfer of assets in accordance with Permitted
Investments;
(4) the sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Partnership; provided, that the
sale, lease, conveyance or other disposition of all or substantially all of
the assets of the Partnership will be governed by Section 4.14 hereof
and/or Section 5.01 hereof and not Section 4.10 hereof;
(5) the transfer or disposition of assets that are permitted
Restricted Payments;
(6) any sale, lease or transfer of assets pursuant to a Sale and
Leaseback Transaction otherwise permitted by this Indenture; and
(7) sales or transfers of accounts receivable under an Accounts
Receivable Securitization.
"Attributable Debt" means, with respect to any Sale and Leaseback
Transactions not involving a Capital Lease, as of any date of determination, the
total obligation, discounted to present value at the rate of interest implicit
in the lease included in the transaction, of the lessee for rental payments
during the remaining portion of the term of the lease, including extensions
which are at the sole option of the lessor, of the lease included in the
transaction. For purposes of this definition, the rental payments shall not
include amounts required to be paid on account of property taxes, maintenance,
repairs, insurance, assessments, utilities, operating and labor costs and other
items which do not constitute payments for property rights. In the case of any
lease which is terminable by the lessee upon the payment of a penalty, the
rental obligation shall also include the amount of the penalty, but no rent
shall be considered as required to be paid under such lease subsequent to the
first date upon which it may be so terminated.
3
"Available Cash" as to any quarter means:
(1) the sum of:
(a) all cash receipts of the Partnership during such quarter from
all sources (including, without limitation, distributions of cash
received from Subsidiaries of the Partnership, cash proceeds from
Interim Capital Transactions, but excluding cash proceeds from
Termination Capital Transactions, and borrowings made under the Credit
Facilities); and
(b) any reduction with respect to such quarter in a cash reserve
previously established pursuant to clause (2)(b) below (either by
reversal or utilization) from the level of such reserve at the end of
the prior quarter;
(2) less the sum of:
(a) all cash disbursements of the Partnership during such
quarter, including, without limitation, disbursements for operating
expenses, taxes, if any, debt service (including, without limitation,
the payment of principal, premium and interest), redemption of Capital
Stock of the Partnership, capital expenditures, contributions, if any,
to a Subsidiary and cash distributions to partners of the Partnership
(but only to the extent that such cash distributions to partners
exceed Available Cash for the immediately preceding quarter); and
(b) any cash reserves established with respect to such quarter,
and any increase with respect to such quarter in a cash reserve
previously established pursuant to this clause (2)(b) from the level
of such reserve at the end of the prior quarter, in such amounts as
the General Partner determines in its reasonable discretion to be
necessary or appropriate (i) to provide for the proper conduct of the
business of the Partnership (including, without limitation, reserves
for future capital expenditures), (ii) to provide funds for
distributions with respect to Capital Stock of the Partnership in
respect of any one or more of the next four quarters or (iii) because
the distribution of such amounts would be prohibited by applicable law
or by any loan agreement, security agreement, mortgage, debt
instrument or other agreement or obligation to which the Partnership
is a party or by which it is bound or its assets are subject;
(3) plus the lesser of (a) an amount as calculated in accordance with
clauses (1) and (2) above for the Partnership or its Restricted Subsidiaries for
the first 45 days of the quarter during which such Restricted Payment is made
(rather than the quarter for which clauses (1) and (2) were calculated) and (b)
an amount of working capital Indebtedness that the Partnership or its Restricted
Subsidiaries could have incurred on or before the 45th day after the last day of
the quarter used to calculate clauses (1) and (2) above;
provided, however, that Available Cash attributable to any Restricted Subsidiary
of the Partnership will be excluded to the extent dividends or distributions of
Available Cash by the Restricted Subsidiary are not at the date of determination
permitted by the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or other regulation.
4
Notwithstanding the foregoing, (x) disbursements (including, without
limitation, contributions to a Subsidiary or disbursements on behalf of a
Subsidiary) made or reserves established, increased or reduced after the end of
any quarter but on or before the date on which any Restricted Payment requiring
a determination of Available Cash for such quarter is made shall be deemed to
have been made, established, increased or reduced, for purposes of determining
Available Cash, with respect to such quarter if the General Partner so
determines, and (y) "Available Cash" shall not include any cash receipts or
reductions in reserves or take into account any disbursements made or reserves
established in each case after the date of liquidation of the Partnership. Taxes
paid by the Partnership on behalf of, or amounts withheld with respect to, all
or less than all of the partners shall not be considered cash disbursements of
the Partnership that reduce Available Cash, but the payment or withholding
thereof shall be deemed to be a distribution of Available Cash to the partners.
Alternatively, in the discretion of the General Partner, such taxes (if
pertaining to all partners) may be considered to be cash disbursements of the
Partnership which reduce Available Cash, but the payment or withholding thereof
shall not be deemed to be a distribution of Available Cash to such partners.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "Person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "Person" will be deemed to have beneficial ownership
of all securities that such "Person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the
corporation;
(2) with respect to a partnership, the Board of Directors of the
general partner of the partnership; and
(3) with respect to any other Person, the board or committee of such
Person serving a similar function.
"Borrowing Base" means, as of any date, an amount equal to:
(1) 80% of the face amount of all accounts receivable owned by the
Partnership and its Subsidiaries as of the end of the most recent month
preceding such date that were not more than 90 days past due; plus
(2) 70% of the value of all inventory owned by the Partnership and its
Subsidiaries as of the end of the most recent month preceding such date,
in each case, calculated on a consolidated basis and in accordance with GAAP.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" means of any Person any capital stock, partnership
interest, membership interest, or equity interest of any kind.
5
"Change of Control" means
(1) the sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Partnership to any entity other than
to a Related Party;
(2) the liquidation or dissolution of the Partnership or the General
Partner, or a successor to the General Partner; or
(3) any transaction or series of transactions that results in a Person
other than a Related Party beneficially owning in the aggregate, directly
or indirectly, more than 35% of the voting stock of the General Partner or
a successor to the General Partner and such percentage is more than the
percentage of voting stock that is owned by the Related Party or a
successor to the Related Party.
"Consolidated Cash Flow Available for Fixed Charges" means, with respect to
the Partnership and its Restricted Subsidiaries, for any period, the sum of,
without duplication, the amounts for the period, taken as single accounting, of:
(1) Consolidated Net Income;
(2) Consolidated Non-cash Charges;
(3) Consolidated Interest Expense; and
(4) Consolidated Income Tax Expense.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to the
Partnership and its Restricted Subsidiaries, the ratio of (y) the aggregate
amount of Consolidated Cash Flow Available for Fixed Charges of the Person for
the four full fiscal quarters immediately preceding the date of the transaction
(the "Transaction Date") giving rise to the need to calculate the Consolidated
Fixed Charge Coverage Ratio (the "Four Quarter Period"), to (z) the aggregate
amount of Consolidated Fixed Charges of the Person for the Four Quarter Period.
In addition to and without limitation of the foregoing, for purposes of this
definition, "Consolidated Cash Flow Available for Fixed Charges" and
"Consolidated Fixed Charges" shall be calculated after giving effect on a pro
forma basis for the period of the calculation to, without duplication:
(1) the incurrence or repayment of any Indebtedness, excluding the
incurrence of revolving credit borrowings and repayments of revolving
credit borrowings (other than the incurrence and repayment of any revolving
credit borrowings the proceeds of which are used for Asset Acquisitions or
Growth Related Capital Expenditures of the Partnership or any of its
Restricted Subsidiaries and, in the case of any incurrence or revolving
credit borrowings, the application of the net proceeds thereof) during the
period commencing on the first day of the Four Quarter Period to and
including the Transaction Date (the "Reference Period"), including, without
limitation, the incurrence of the Indebtedness giving rise to the need to
make the calculation (and the application of the net proceeds thereof), as
if the incurrence (and application) occurred on the first day of the
Reference Period; and
(2) any Asset Sales or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make the
calculation as a result of the Partnership or one of its Restricted
Subsidiaries, including any Person who becomes a Restricted Subsidiary as a
result of the Asset Acquisition, incurring, assuming or otherwise being
liable for Acquired Indebtedness) occurring during the Reference Period, as
if the Asset Sale or Asset Acquisition occurred on the first day of the
Reference Period; provided, however, that:
6
(a) Consolidated Fixed Charges will be reduced by amounts
attributable to businesses or assets that are so disposed of only to
the extent that the obligations giving rise to such Consolidated Fixed
Charges would no longer be obligations contributing to the
Consolidated Fixed Charges subsequent to the date of determination of
the Consolidated Fixed Charge Coverage Ratio;
(b) Consolidated Cash Flow Available for Fixed Charges generated
by an acquired business or asset shall be determined by the actual
gross profit, which is equal to revenues minus cost of goods sold, of
the acquired business or asset during the immediately available
preceding four full fiscal quarters occurring in the Reference Period,
minus the pro forma expenses that would have been incurred by the
Partnership and its Restricted Subsidiaries in the operation of the
acquired business or asset during the period computed on the basis of
personnel expenses for employees retained or to be retained by the
Partnership and its Restricted Subsidiaries in the operation of the
acquired business or asset and non-personnel costs and expenses
incurred by or to be incurred by the Partnership and its Restricted
Subsidiaries based upon the operation of the Partnership's business,
all as determined in good faith by an authorized financial officer of
the General Partner; and
(c) Consolidated Cash Flow Available for Fixed Charges shall not
include the impact of any nonrecurring cash charges incurred in
connection with a restructuring, reorganization or other similar
transaction, as determined in good faith by an authorized financial
officer of the General Partner.
Furthermore, subject to the following paragraph, in calculating
"Consolidated Fixed Charges" for purposes of determining the "Consolidated Fixed
Charge Coverage Ratio":
(1) interest on outstanding Indebtedness, other than Indebtedness
referred to in the point below, determined on a fluctuating basis as of the
last day of the Four Quarter Period and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per
annum equal to the rate of interest on such Indebtedness in effect on that
date;
(2) only actual interest payments associated with Indebtedness
incurred in accordance with clause (4) of the definition of Permitted
Indebtedness and all Permitted Refinancing Indebtedness in respect thereof,
during the Four Quarter Period shall be included in the calculation; and
(3) if interest on any Indebtedness actually incurred on the date may
optionally be determined at an interest rate based upon a factor of a prime
or similar rate, a eurocurrency interbank offered rate, or other rates,
then the interest rate in effect on the last day of the Four Quarter Period
will be deemed to have been in effect during the period.
"Consolidated Fixed Charges" means, with respect to the Partnership and its
Restricted Subsidiaries for any period, the sum of, without duplication:
(1) the amounts for such period of Consolidated Interest Expense; and
(2) the product of:
(a) the aggregate amount of dividends and other distributions
paid or accrued during the period in respect of Preferred Stock and
Redeemable Capital Stock of the Partnership and its Restricted
Subsidiaries on a consolidated basis; and
7
(b) a fraction, the numerator of which is one and the denominator
of which is one less the then applicable current combined federal,
state and local statutory tax rate, expressed as a percentage.
"Consolidated Income Tax Expense" means, with respect to the Partnership
and its Restricted Subsidiaries for any period, the provision for federal,
state, local and foreign income taxes of the Partnership and its Restricted
Subsidiaries for the period as determined on a consolidated basis in accordance
with GAAP.
"Consolidated Interest Expense" means, with respect to the Partnership and
its Restricted Subsidiaries, for any period, without duplication, the sum of:
(1) the interest expense of the Partnership and its Restricted
Subsidiaries for the period as determined on a consolidated basis in
accordance with GAAP, including, without limitation:
(2) any amortization of debt discount;
(3) the net cost under Interest Rate Agreements;
(4) the interest portion of any deferred payment obligation;
(5) all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing;
(6) all accrued interest for all instruments evidencing Indebtedness;
and
(7) the interest component of Capital Leases paid or accrued or
scheduled to be paid or accrued by the Partnership and its Restricted
Subsidiaries during the period as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Income" means the net income of the Partnership and its
Restricted Subsidiaries, as determined on a consolidated basis in accordance
with GAAP and as adjusted to exclude:
(1) net after-tax extraordinary gains or losses;
(2) net after-tax gains or losses attributable to Asset Sales or sales
of receivables under any Accounts Receivable Securitization;
(3) the net income or loss of any Person which is not a Restricted
Subsidiary and which is accounted for by the equity method of accounting;
provided, that Consolidated Net Income shall include the amount of
dividends or distributions actually paid to the Partnership or any
Restricted Subsidiary;
(4) the net income or loss prior to the date of acquisition of any
Person combined with the Partnership or any Restricted Subsidiary in a
pooling of interest;
(5) the net income of any Restricted Subsidiary to the extent that
dividends or distributions of that net income are not at the date of
determination permitted by the terms of its charter or any judgment,
decree, order, statute, rule or other regulation; and
(6) the cumulative effect of any changes in accounting principles.
8
"Consolidated Non-Cash Charges" means, with respect to the Partnership and
its Restricted Subsidiaries for any period, the aggregate (1) depreciation, (2)
amortization, (3) non-cash employee compensation expenses of the Partnership or
its Restricted Subsidiaries for such period, and (4) any non-cash charges
resulting from writedowns of non-current assets, in each case which reduces the
Consolidated Net Income of the Partnership and its Restricted Subsidiaries for
the period, as determined on a consolidated basis in accordance with GAAP.
"Corporate Trust Office of the Trustee" will be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which the
Trustee may give notice to the Issuers.
"Credit Agreement" means that Fourth Amended and Restated Credit Agreement,
dated as of December 10, 2002, among the Partnership, the General Partner, Bank
of America N.A. (formerly known as Bank of America National Trust and Savings
Association), as agent, and the other financial institutions party thereto.
"Credit Facilities" means, one or more debt facilities (including, without
limitation, the facilities evidenced by the Credit Agreement) or commercial
paper facilities, in each case with banks or other institutional lenders
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
of credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time.
"Custodian" means the Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.
"Default" means any event that is, or after notice or with the passage of
time or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06 hereof, substantially
in the form of Exhibit A hereto except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Designation Amount" means, with respect to the designation of a Restricted
Subsidiary or a newly acquired or formed Subsidiary as an Unrestricted
Subsidiary, an amount equal to the sum of:
(1) the net book value of all assets of the Subsidiary at the time of
the designation in the case of a Restricted Subsidiary; and
(2) the cost of acquisition or formation in the case of a newly
acquired or formed Subsidiary.
"Equity Offering" means a public offering or private placement of
partnership interests (other than interests that are mandatorily redeemable) of:
(1) any entity that directly or indirectly owns equity interests in
the Partnership, to the extent the net proceeds are contributed to the
Partnership;
9
(2) any Subsidiary of the Partnership to the extent the net proceeds
are distributed, paid, lent or otherwise transferred to the Partnership
that results in the net proceeds to the Partnership of at least $20
million; or
(3) the Partnership.
A private placement of partnership interests will not be deemed an Equity
Offering unless net proceeds of at least $20 million are received.
"Escrow Account" has the meaning set forth in the Escrow and Security
Agreement.
"Escrow Property" has the meaning set forth in the Escrow and Security
Agreement.
"Euroclear" means Euroclear Bank, S.A./N.V., as operator of the Euroclear
system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued in the Exchange Offer pursuant to
Section 2.06(f) hereof.
"Existing Notes" means the Partnership's (1) $109,000,000 principal amount
of 6.99% Senior Notes, Series A, due August 1, 2005, (2) $37,000,000 principal
amount of 7.08% Senior Notes, Series B, due August 1, 2006, (3) $52,000,000
principal amount of 7.12% Senior Notes, Series C, due August 1, 2008, (4)
$82,000,000 principal amount of 7.24% Senior Notes, Series D, due August 1,
2010, (5) $70,000,000 principal amount of 7.42% Senior Notes, Series E, due
August 1, 2013, (6) $21,000,000 principal amount of 8.68% Senior Notes, Series
A, due August 1, 2006, (7) $90,000,000 principal amount of 8.78% Senior Notes,
Series B, due August 1, 2007, and (8) $73,000,000 principal amount of 8.87%
Senior Notes, Series C, due August 1, 2009.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Ferrellgas Partners" means Ferrellgas Partners, L.P.
"Flow-Through Acquisition" means an acquisition by the General Partner or
its parent from a Person that is not an Affiliate of the General Partner, its
parent or the Partnership, of property (real or personal), assets or equipment
(whether through the direct purchase of assets or the Capital Stock of the
Person owning such assets) in a permitted line of business, which is promptly
sold, transferred or contributed by the General Partner or its parent to the
Partnership or one of its Subsidiaries.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, in each case, which are in effect on the date of this Indenture.
"General Partner" means Ferrellgas, Inc.
"Global Notes" means, individually and collectively, each of the Restricted
Global Notes and the Unrestricted Global Notes deposited with or on behalf of
and registered in the name of the Depositary or its nominee, substantially in
the form of Exhibit A1 hereto and that bears the Global Note Legend and that has
the "Schedule of Exchanges of Interests in the Global Note" attached thereto,
issued in accordance with Section 2.01, 2.06(b)(3), 2.06(b)(4), 2.06(d)(2) or
2.06(g)(2) hereof.
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"Global Note Legend" means the legend set forth in Section 2.06(g)(2),
which is required to be placed on all Global Notes issued under this Indenture.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Growth Related Capital Expenditures" means, with respect to any Person,
all capital expenditures by such Person made to improve or enhance the existing
capital assets or to increase the customer base of such Person or to acquire or
construct new capital assets (but excluding capital expenditures made to
maintain, up to the level thereof that existed at the time of such expenditure,
the operating capacity of the capital assets of such Person as such assets
existed at the time of such expenditure).
"Holder" means a Person in whose name a Note is registered.
"IAI Global Note" means a Global Note substantially in the form of Exhibit
A1 hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold to Institutional Accredited Investors.
"Indebtedness" means, as applied to any Person, without duplication:
(1) (a) any indebtedness for borrowed money and (b) all obligations
evidenced by any (i) bond, note, debenture or other similar instrument or
(ii) letter of credit, or reimbursement agreements in respect thereof, but
only for any drawings that are not reimbursed within five Business Days
after the date of such drawings, which in each case the Person has,
directly or indirectly, created, incurred or assumed;
(2) any indebtedness for borrowed money and all obligations evidenced
by any bond, note, debenture or other similar instrument secured by any
Lien in respect of property owned by the Person, whether or not the Person
has assumed or become liable for the payment of the indebtedness; provided,
that the amount of the indebtedness, if the Person has not assumed the same
or become liable therefor, shall in no event be deemed to be greater than
the fair market value from time to time, as determined in good faith by the
Person of the property subject to the Lien;
(3) any indebtedness, whether or not for borrowed money (excluding
trade payables and accrued expenses arising in the ordinary course of
business) with respect to which the Person has become directly or
indirectly liable and which represents the deferred purchase price, or a
portion thereof, or has been incurred to finance the purchase price, or a
portion thereof, of any property or business acquired by, or service
performed on behalf of, the Person, whether by purchase, consolidation,
merger or otherwise;
(4) the principal component of any obligations under Capital Leases to
the extent the obligations would, in accordance with GAAP, appear on the
balance sheet of the Person;
(5) all Attributable Debt of the Person in respect of Sale and
Leaseback Transactions not involving a Capital Lease;
11
(6) any indebtedness of any other Person of the character referred to
in the foregoing clauses (1)-(5) of this definition with respect to which
the Person whose indebtedness is being determined has become liable by way
of a guarantee; and
(7) all Redeemable Capital Stock of the Person valued at the greater
of its voluntary or involuntary maximum fixed repurchase price plus accrued
dividends.
For purposes hereof, the "maximum fixed repurchase price" of any Redeemable
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of the Redeemable Capital Stock as if it were
purchased on any date on which Indebtedness shall be required to be determined
pursuant to this Indenture and if the price is based upon, or measured by, the
fair market value of the Redeemable Capital Stock, the fair market value shall
be determined in good faith by the Board of Directors of the issuer of the
Redeemable Capital Stock. For purposes hereof, the term "Indebtedness" shall not
include (x) accrual of interest, the accretion of accreted value and the payment
of interest or any other similar incurrence by the Partnership or its Restricted
Subsidiaries related to Indebtedness otherwise permitted in this Indenture, (y)
Indebtedness under any hedging arrangement which provides for the right or
obligation to purchase, sell or deliver any currency, commodity or security at a
future date for a specified price entered into to protect such Person from
fluctuations in prices or rates, including currencies, interest rates, commodity
prices, and securities prices, including without limitation indebtedness under
any interest rate or commodity price swap agreement, interest rate cap
agreement, interest rate collar agreement or any forward sales arrangements,
calls, options, swaps, or other similar transactions or any combination thereof,
including, or (z) any Accounts Receivable Securitization.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Note through a Participant.
"Initial Notes" means the first $250,000,000 aggregate principal amount of
Notes issued under this Indenture on the date hereof.
"Initial Purchasers" means Credit Suisse First Boston LLC, Banc of America
Securities LLC, ABN AMRO Incorporated, Banc One Capital Markets, Inc., BNP
Paribas Securities Corp., Piper Jaffray & Co., SG Cowen Securities Corporation,
and Wells Fargo Securities, LLC.
"Interim Capital Transactions" means (1) borrowings, refinancings or
refundings of Indebtedness and sales of debt securities (other than for working
capital purposes and other than for items purchased on open account in the
ordinary course of business) by the Partnership, (2) sales of Capital Stock of
the Partnership by the Partnership and (3) sales or other voluntary or
involuntary dispositions of any assets of the Partnership (other than (x) sales
or other dispositions of inventory in the ordinary course of business, (y) sales
or other dispositions of other current assets including, without limitation,
receivables and accounts and (z) sales or other dispositions of assets as a part
of normal retirements or replacements), in each case prior to the commencement
of the dissolution and liquidation of the Partnership.
"Investment" means as applied to any Person:
(1) any direct or indirect purchase or other acquisition by the Person
of stock or other securities of any other Person; or
(2) any direct or indirect loan, advance or capital contribution by
the Person to any other Person and any other item which would be classified
as an "investment" on a balance sheet of the Person prepared in accordance
with GAAP, including without limitation any direct or indirect contribution
by the Person of property or assets to a joint venture, partnership or
other business entity in which the Person retains an interest, it being
understood that a direct or indirect purchase or other acquisition by the
Person of assets of any other Person, other than stock or other securities,
shall not constitute an "Investment" for purposes of this Indenture.
12
The amount classified as Investments made during any period will be the
aggregate cost to the Partnership and its Restricted Subsidiaries of all the
Investments made during the 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 the Investments and without regard to the
existence of any undistributed earnings or accrued interest with respect thereto
accrued after the respective dates on which the Investments were made, less any
net return of capital realized during the period upon the sale, repayment or
other liquidation of the Investments, determined in accordance with GAAP, but
without regard to any amounts received during the period as earnings (in the
form of dividends not constituting a return of capital, interest or otherwise)
on the Investments or as loans from any Person in whom the Investments have been
made.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien (statutory or
otherwise), pledge, charge, security interest, hypothecation, assignment for
security or other encumbrance of any kind in respect of such asset. A Person
shall be deemed to own subject to a Lien any asset which such Person has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement.
"Net Amount of Unrestricted Investment" means, without duplication, the sum
of:
(1) the aggregate amount of all Investments made after the date of
this Indenture pursuant to clause (3) of the definition of Permitted
Investment hereto, computed as provided in the last sentence of the
definition of Investment herein; and
(2) the aggregate of all Designation Amounts in connection with the
designation of Unrestricted Subsidiaries, less all Designation Amounts in
respect of Unrestricted Subsidiaries which have been designated as
Restricted Subsidiaries and otherwise reduced in a manner consistent with
the provisions of the last sentence of the definition of Investment herein.
"Net Proceeds" means, with respect to any asset sale or sale of Capital
Stock, the proceeds therefrom in the form of cash or cash equivalents including
payments in respect of deferred payment obligations when received in the form of
cash or cash equivalents, except to the extent that the deferred payment
obligations are financed or sold with recourse to the Partnership or any of its
Restricted Subsidiaries, net of:
(1) brokerage commissions and other fees and expenses related to the
Asset Sale, including, without limitation, fees and expenses of legal
counsel and accountants and fees, expenses, discounts or commissions of
underwriters, placement agents and investment bankers;
(2) provisions for all taxes payable as a result of the Asset Sale;
13
(3) amounts required to be paid to any Person, other than the
Partnership or any Restricted Subsidiary of the Partnership, owning a
beneficial interest in the assets subject to the Asset Sale;
(4) appropriate amounts to be provided by the Partnership or any
Restricted Subsidiary of the Partnership, as the case may be, as a reserve
required in accordance with GAAP against any liabilities associated with
the Asset Sale and retained by the Partnership or any Restricted Subsidiary
of the Partnership, as the case may be, after the Asset Sale, including,
without limitation, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with the Asset Sale; and
(5) amounts applied to the repayment of Indebtedness in connection
with the asset or assets acquired in the Asset Sale, including any
transaction costs and expenses associated therewith and any make-whole or
other premium owed in connection with such repayment.
"Notes" has the meaning assigned to it in the preamble to this Indenture.
The Initial Notes, the Additional Notes and the Exchange Notes shall be treated
as a single class for all purposes under this Indenture, and unless the context
otherwise requires, all references to the Notes shall include the Initial Notes,
any Additional Notes and the Exchange Notes.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the Issuers
by two Officers of the Issuers, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Issuers, that meets the requirements of Section 11.05
hereof.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 11.05 hereof.
The counsel may be an employee of or counsel to the Issuers, any Subsidiary of
the Issuers or the Trustee.
"Participant" means, with respect to the Depositary, a Person who has an
account with the Depositary.
"Partnership" means Ferrellgas, L.P., without its consolidated
subsidiaries.
"Permitted Investments" means any of the following:
(1) Investments made or owned by the Partnership or any Restricted
Subsidiary in:
(a) marketable obligations issued or unconditionally guaranteed
by the United States, or issued by any agency thereof and backed by
the full faith and credit of the United States, in each case maturing
one year or less from the date of acquisition thereof;
(b) marketable direct obligations issued by any state of the
United States or any political subdivision of any such state or any
public instrumentality thereof maturing within one year from the date
of acquisition thereof and having as at such date the highest rating
obtainable from either Standard & Poor's Ratings Group ("S&P") and its
successors or Moody's Investors Service, Inc. ("Moody's") and its
successors;
14
(c) commercial paper maturing no more than 270 days from the date
of creation thereof and having as at the date of acquisition thereof
one of the two highest ratings obtainable from either S&P or Moody's;
(d) certificates of deposit maturing one year or less from the
date of acquisition thereof issued by commercial banks incorporated
under the laws of the United States or any state thereof or the
District of Columbia or Canada;
(e) the commercial paper or other short term unsecured debt
obligations of which are as at such date rated either "A-2" or better
(or comparably if the rating system is changed) by S&P or "Prime-2" or
better (or comparably if the rating system is changed) by Moody's;
(f) the long-term debt obligations of which are, as at such date,
rated either "A" or better (or comparably if the rating system is
changed) by either S&P or Moody's ("Permitted Banks");
(g) eurodollar time deposits having a maturity of less than 270
days from the date of acquisition thereof purchased directly from any
Permitted Bank;
(h) bankers' acceptances eligible for rediscount under
requirements of the Board of Governors of the Federal Reserve System
and accepted by Permitted Banks; and
(i) obligations of the type described in clauses (a) through (e)
above purchased from a securities dealer designated as a "primary
dealer" by the Federal Reserve Bank of New York or from a Permitted
Bank as counterparty to a written repurchase agreement obligating such
counterparty to repurchase such obligations not later than 14 days
after the purchase thereof and which provides that the obligations
which are the subject thereof are held for the benefit of the
Partnership or a Restricted Subsidiary by a custodian which is a
Permitted Bank and which is not a counterparty to the repurchase
agreement in question;
(2) the acquisition by the Partnership or any Restricted Subsidiary of
Capital Stock or other ownership interests, whether in a single transaction
or in a series of related transactions, of a Person located in the United
States, Mexico or Canada and engaged in substantially the same business as
the Partnership such that, upon the completion of such transaction or
series of transactions, the Person becomes a Restricted Subsidiary;
(3) the making or ownership by the Partnership or any Restricted
Subsidiary of Investments (in addition to any other Permitted Investments)
in any Person incorporated or otherwise formed pursuant to the laws of the
United States, Mexico or Canada or any state thereof which is engaged in
the United States, Mexico or Canada; provided, that the aggregate amount of
all such Investments made by the Partnership and its Restricted
Subsidiaries following the date of this Indenture and outstanding pursuant
to this third clause shall not at any date of determination exceed 7.5% of
Total Assets;
(4) the making or ownership by the Partnership or any Restricted
Subsidiary of Investments:
(a) arising out of loans and advances to employees incurred in
the ordinary course of business;
15
(b) arising out of extensions of trade credit or advances to
third parties in the ordinary course of business; or
(c) acquired by reason of the exercise of customary creditors'
rights upon default or pursuant to the bankruptcy, insolvency or
reorganization of a debtor;
(5) the creation or incurrence of liability by the Partnership or any
Restricted Subsidiary, with respect to any guarantee constituting an
obligation, warranty or indemnity, not guaranteeing Indebtedness of any
Person, which is undertaken or made in the ordinary course of business;
(6) the creation or incurrence of liability by the Partnership or any
Restricted Subsidiary with respect to any hedging agreements or
arrangements;
(7) the making by any Restricted Subsidiary of Investments in the
Partnership or another Restricted Subsidiary and the making by the
Partnership of Investments in any Restricted Subsidiary;
(8) the present value, determined on the basis of the implicit
interest rate, of all basic rental obligations under all synthetic leases
of the Partnership or any Restricted Subsidiary; and
(9) the creation or incurrence of liability by the Partnership or any
Restricted Subsidiary or the making or ownership by the Partnership or any
Restricted Subsidiary of Investments in any Person with respect to any
Accounts Receivable Securitization.
"Permitted Liens" means any of the following:
(1) Liens for taxes, assessments or other governmental charges, the
payment of which is not yet due or the payment of which is being contested
in good faith by appropriate proceedings promptly initiated and diligently
conducted and as to which reserves or other appropriate provision, if any,
as shall be required by GAAP, shall have been made therefor and be adequate
in the good faith judgment of the obligor;
(2) Liens of lessors, landlords and carriers, vendors, warehousemen,
mechanics, materialmen, repairmen and other like Liens incurred in the
ordinary course of business for sums not yet due or the payment of which is
being contested in good faith by appropriate proceedings promptly initiated
and diligently conducted and as to which reserves or other appropriate
provisions, if any, as shall be required by GAAP, shall have been made
therefor and be adequate in the good faith judgment of the obligor, in each
case:
(a) not incurred or made in connection with the borrowing of
money, the obtaining of advances or credit or the payment of the
deferred purchase price of property; or
(b) incurred in the ordinary course of business securing the
unpaid purchase price of property or services constituting current
accounts payable;
(3) Liens, other than any Lien imposed by the Employee Retirement
Income Security Act of 1974, as may be amended from time to time, incurred
or deposits made in the ordinary course of business:
(a) in connection with workers' compensation, unemployment
insurance and other types of social security; or
16
(b) to secure or to obtain letters of credit that secure the
performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, performance bonds, purchase, construction or
sales contracts and other similar obligations, in each case not
incurred or made in connection with the borrowing of money;
(4) other deposits made to secure liability to insurance carriers
under insurance or self-insurance arrangements;
(5) Liens securing reimbursement obligations under letters of credit,
provided in each case that such Liens cover only the title documents and
related goods and any proceeds thereof covered by the related letter of
credit;
(6) any attachment or judgment Lien, unless the judgment it secures
shall not, within 60 days after the entry thereof, have been discharged or
execution thereof stayed pending appeal or review, or shall not have been
discharged within 60 days after expiration of any such stay;
(7) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances, which, in each case
either are granted, entered into or created in the ordinary course of the
business of the Partnership or any Restricted Subsidiary or do not
materially impair the value or intended use of the property covered
thereby;
(8) Liens on property or assets of any Restricted Subsidiary securing
Indebtedness of the Restricted Subsidiary owing to the Partnership or a
Restricted Subsidiary;
(9) Liens on assets of the Partnership or any Restricted Subsidiary
existing on the date of this Indenture;
(10) Liens on personal property leased under leases entered into by
the Partnership or its Restricted Subsidiaries which are accounted for as
operating leases in accordance with GAAP;
(11) Liens securing Indebtedness arising under an Accounts Receivable
Securitization (including the filing of any related financing statements
naming the Partnership or any Restricted Subsidiary as the debtor
thereunder in connection with the sale of accounts receivable by the
Partnership, Ferrellgas, L.P. or any Restricted Subsidiary to an SPE in
connection with any such permitted Accounts Receivable Securitization);
(12) Liens securing Indebtedness incurred in accordance with:
(a) clauses (3) and (6) of the definition of Permitted
Indebtedness; and
(b) Indebtedness otherwise permitted to be incurred under Section
4.09 hereof to the extent incurred:
(i) to finance the making of expenditures for the
improvement or repair (to the extent the improvements and repairs
may be capitalized on the books of the Partnership and the
Restricted Subsidiaries in accordance with GAAP) of, or additions
including additions by way of acquisitions of businesses and
related assets to, the assets and property of the Partnership and
its Restricted Subsidiaries; or
17
(ii) by assumption in connection with additions including
additions by way of acquisition or capital contributions of
businesses and related assets to the property and assets of the
Partnership and its Restricted Subsidiaries;
provided, that, in the case of Indebtedness incurred in accordance with clauses
(i) and (ii) above, the principal amount of the Indebtedness does not exceed the
lesser of the cost to the Partnership and its Restricted Subsidiaries of the
additional property or assets and the fair market value of the additional
property or assets at the time of the acquisition thereof, as determined in good
faith by an authorized financial officer of the General Partner;
(13) Liens existing on any property of any Person at the time it
becomes a Subsidiary of the Partnership, or existing at the time of
acquisition upon any property acquired by the Partnership or any Subsidiary
through purchase, merger or consolidation or otherwise, whether or not
assumed by the Partnership or the Subsidiary, or created to secure
Indebtedness incurred to pay all or any part of the purchase price (a
"Purchase Money Lien") of property including, without limitation, Capital
Stock and other securities acquired by the Partnership or a Restricted
Subsidiary; provided, that:
(a) the Lien shall be confined solely to the item or items of
property and, if required by the terms of the instrument originally
creating the Lien, other property which is an improvement to or is
acquired for use specifically in connection with the acquired
property;
(b) in the case of a Purchase Money Lien, the principal amount of
the Indebtedness secured by the Purchase Money Lien shall at no time
exceed an amount equal to the lesser of:
(A) the cost to the Partnership and the Restricted
Subsidiaries of the property; and
(B) the fair market value of the property at the time of the
acquisition thereof as determined in good faith by an authorized
financial officer of the General Partner;
(c) the Purchase Money Lien shall be created not later than 360
days after the acquisition of the property; and
(d) the Lien, other than a Purchase Money Lien, shall not have
been created or assumed in contemplation of the Person's becoming a
Subsidiary of the Partnership or the acquisition of property by the
Partnership or any Subsidiary;
(14) easements, exceptions or reservations in any property of the
Partnership or any Restricted Subsidiary granted or reserved for the
purpose of pipelines, roads, the removal of oil, gas, coal or other
minerals, and other like purposes, or for the joint or common use of real
property, facilities and equipment, which are incidental to, and do not
materially interfere with, the ordinary conduct of the business of the
Partnership or any Restricted Subsidiary;
(15) Liens arising from or constituting permitted encumbrances under
the agreements and instruments securing the obligations under the Existing
Notes and the Credit Agreement; and
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(16) any Lien renewing or extending any Lien permitted by clauses (9)
through (13) and (15) above; provided, that, the principal amount of the
Indebtedness secured by any such Lien shall not exceed the principal amount
of the Indebtedness outstanding immediately prior to the renewal or
extension of the Lien, and no assets encumbered by the Lien other than the
assets encumbered immediately prior to the renewal or extension shall be
encumbered thereby.
"Permitted Refinancing Indebtedness" means Indebtedness incurred by the
Partnership or any Restricted Subsidiary to substantially and concurrently
(excluding any notice period on redemptions) repay, refund, renew, replace,
extend or refinance, in whole or in part, any Permitted Indebtedness of the
Partnership or any Restricted Subsidiary or any other Indebtedness incurred by
the Partnership or any Restricted Subsidiary pursuant to Section 4.09, to the
extent:
(1) the principal amount of the Permitted Refinancing Indebtedness
does not exceed the principal or accreted amount plus the amount of accrued
and unpaid interest of the Indebtedness so repaid, refunded, renewed,
replaced, extended or refinanced (plus the amount of all expenses and
premiums incurred in connection therewith);
(2) with respect to the repayment, refunding, renewal, replacement,
extension or refinancing of the Issuers' Indebtedness, the Permitted
Refinancing Indebtedness ranks no more favorably in right of payment with
respect to the Notes than the Indebtedness so repaid, refunded, renewed,
replaced, extended or refinanced; and
(3) with respect to the repayment, refunding, renewal, replacement,
extension or refinancing of the Issuers' Indebtedness, the Permitted
Refinancing Indebtedness has a Weighted Average Life to Stated Maturity and
stated maturity equal to, or greater than, and has no fixed mandatory
redemption or sinking fund requirement in an amount greater than or at a
time prior to the amounts set forth in, the Indebtedness so repaid,
refunded, renewed, replaced, extended or refinanced;
provided, however, that Permitted Refinancing Indebtedness shall not include
Indebtedness incurred by a Restricted Subsidiary to repay, refund, renew,
replace, extend or refinance Indebtedness of the Partnership.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Preferred Stock," as applied to the Capital Stock of any Person, means
Capital Stock of any class or classes (however designated), which is preferred
as to the payment of distributions, dividends, or upon any voluntary or
involuntary liquidation or dissolution of such Person, over shares or units of
Capital Stock of any other class of such Person; provided, that any limited
partnership interest of the Partnership will not be considered Preferred Stock.
"Principal" means James E. Ferrell.
"Private Placement Legend" means the legend set forth in Section 2.06(g)(1)
hereof to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Redeemable Capital Stock" means any shares of any class or series of
Capital Stock, that, either by the terms thereof, by the terms of any security
into which it is convertible or exchangeable or by contract or otherwise, is or
upon the happening of an event or passage of time would be, required to be
redeemed prior to the stated maturity of the principal of the Notes or is
redeemable at the option of the holder thereof at any time prior to the stated
maturity of the principal of the Notes, or is convertible into or exchangeable
for debt securities at any time prior to the stated maturity of the principal of
the Notes.
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"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of April 20, 2004, among the Escrow LLC, Escrow Finance Corp. and the
Initial Purchasers, and on and after the Merger Date, Ferrellgas, L.P. and
Finance Corp., as such agreement may be amended, modified or supplemented from
time to time.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Regulation S Temporary Global Note or
Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent Global Note in the
form of Exhibit A1 hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary Global Note in the
form of Exhibit A2 hereto deposited with or on behalf of and registered in the
name of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Notes initially sold in reliance on Rule 903
of Regulation S.
"Related Party" means any of the following:
(1) any immediate family member or lineal descendant of the Principal;
(2) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially
holding an 80% or more controlling interest of which consist of any one or
more Principals and/or such other Persons referred to in the immediately
preceding clause (1);
(3) the Ferrell Companies, Inc. Employee Stock Ownership Trust ("FCI
ESOT");
(4) any participant in the FCI ESOT whose account has been allocated
shares of Ferrell Companies, Inc.;
(5) Ferrell Companies, Inc.; or
(6) any Subsidiary of Ferrell Companies, Inc.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Period" means the 40-day distribution compliance period as
defined in Regulation S.
"Restricted Subsidiary" means a Subsidiary of the Partnership, which, as of
the date of determination, is not an Unrestricted Subsidiary of the Partnership.
20
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
"Sale and Leaseback Transaction" means any arrangement (other than between
the Partnership and a Restricted Subsidiary or between Restricted Subsidiaries)
whereby property has been or will be disposed of by a transferor to another
entity with the intent of taking back a lease on the property pursuant to which
the rental payments are calculated to amortize the purchase price of the
property over its life.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date of
this Indenture.
"SPE" means any special purpose Unrestricted Subsidiary established in
connection with any Accounts Receivable Securitization.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees of the corporation, association
or other business entity is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are that Person or one or more
Subsidiaries of that Person (or any combination thereof).
"Termination Capital Transactions" means any sale, transfer or other
disposition of property of the Partnership occurring upon or incident to the
liquidation and winding up of the Partnership.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA.
"Total Assets" means, as of any date of determination, the consolidated
total assets of the Partnership and the Restricted Subsidiaries as would be
shown on a consolidated balance sheet of the Partnership and the Restricted
Subsidiaries prepared in accordance with GAAP as of that date.
"Trustee" means the party named as such in the preamble to this Indenture
until a successor replaces it in accordance with the applicable provisions of
this Indenture and thereafter means the successor serving hereunder.
21
"Unrestricted Global Note" means a permanent global Note substantially in
the form of Exhibit A attached hereto that bears the Global Note Legend and that
has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary.
"Unrestricted Definitive Note" means one or more Definitive Notes.
"Unrestricted Subsidiary" means (a) Ferrellgas Receivables, LLC, (b) R-4
Technical Center - North Carolina, LLC, (c) Uni-Asia, Ltd. and (d) any other
Person (other than Finance Corp.) that is designated as such by the General
Partner; provided, that no portion of the Indebtedness of such Person:
(1) is guaranteed by the Partnership or any Restricted Subsidiary;
(2) is recourse to or obligates the Partnership or any Restricted
Subsidiary in any way; or
(3) subjects any property or assets of the Partnership or any
Restricted Subsidiary, directly or indirectly, contingently or otherwise,
to the satisfaction thereof.
Notwithstanding the foregoing, the Partnership or a Restricted Subsidiary
may guarantee or agree to provide funds for the payment or maintenance of, or
otherwise become liable with respect to Indebtedness of an Unrestricted
Subsidiary, but only to the extent that the Partnership or a Restricted
Subsidiary would be permitted to:
(1) make an Investment in the Unrestricted Subsidiary pursuant to the
third clause of the definition of Permitted Investments; and
(2) incur the Indebtedness represented by the guarantee or agreement
pursuant to Section 4.09(a) hereto. The Board of Directors may designate an
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, that
immediately after giving effect to the designation there exists no Event of
Default or event which after notice or lapse or time or both would become
an Event of Default, and if the Unrestricted Subsidiary has, as of the date
of the designation, outstanding Indebtedness other than Permitted
Indebtedness, the Partnership could incur at least $1.00 of Indebtedness
other than Permitted Indebtedness.
Notwithstanding the foregoing, no Subsidiary may be designated an
Unrestricted Subsidiary if the Subsidiary, directly or indirectly, holds Capital
Stock of a Restricted Subsidiary.
"U.S. Person" means a U.S. Person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Stated Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying:
(a) the amount of each then remaining installment, sinking fund,
serial maturity or other required payments of principal, including
payment at final maturity, in respect thereof, by
22
(b) the number of years, calculated to the nearest one-twelfth,
that will elapse between such date and the making of such payment, by
(2) the then outstanding principal amount of such Indebtedness;
provided, however, that with respect to any revolving Indebtedness, the
foregoing calculation of Weighted Average Life to Stated Maturity shall be
determined based upon the total available commitments and the required
reductions of commitments in lieu of the outstanding principal amount and the
required payments of principal, respectively.
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Section 1.02 Other Definitions.
Defined in
Term Section
---- ----------
"Affiliate Transaction".................................. 4.11
"Asset Sale Offer"....................................... 3.10
"Authentication Order"................................... 2.02
"Blue Rhino LLC"......................................... Preamble
"Change of Control Offer"................................ 4.14
"Change of Control Payment".............................. 4.14
"Change of Control Payment Date"......................... 4.14
"Contribution Agreement"................................. Preamble
"Covenant Defeasance".................................... 8.03
"DTC".................................................... 2.03
"Escrow and Security Agreement".......................... Preamble
"Event of Default"....................................... 6.01
"Excess Proceeds"........................................ 4.10
"incur".................................................. 4.09
"Issuers"................................................ Preamble
"Legal Defeasance"....................................... 8.02
"Offer Amount"........................................... 3.10
"Offer Period"........................................... 3.10
"Paying Agent"........................................... 2.03
"Permitted Indebtedness"................................. 4.09
"Purchase Date".......................................... 3.10
"Registrar".............................................. 2.03
"Restricted Payments"..................................... 4.07
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes means the Issuers and any successor obligor upon the
Notes.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
24
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) "will" shall be interpreted to express a command;
(6) provisions apply to successive events and transactions; and
(7) references to sections of or rules under the Securities Act will
be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee's certificate of authentication will
be substantially in the form of Exhibit A hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. Each Note
will be dated the date of its authentication. The Notes shall be in
denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes will constitute, and are
hereby expressly made, a part of this Indenture and the Issuers and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby. However, to the extent any provision of
any Note conflicts with the express provisions of this Indenture, the provisions
of this Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form will be substantially in the
form of Exhibit A attached hereto (including the Global Note Legend thereon and
the "Schedule of Exchanges of Interests in the Global Note" attached thereto).
Notes issued in definitive form will be substantially in the form of Exhibit A
attached hereto (but without the Global Note Legend thereon and without the
"Schedule of Exchanges of Interests in the Global Note" attached thereto). Each
Global Note will represent such of the outstanding Notes as will be specified
therein and each shall provide that it represents the aggregate principal amount
of outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby will be made by the Trustee or the Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.06 hereof.
Section 2.02 Execution and Authentication.
An Officer must sign the Notes for the Issuers by manual or facsimile
signature.
25
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual or facsimile
signature of the Trustee. The signature will be conclusive evidence that the
Note has been authenticated under this Indenture.
On the date of this Indenture, the Trustee shall, upon a written order of
the Issuers signed by an Officer (an "Authentication Order"), authenticate the
Initial Notes for original issue up to $250,000,000 in aggregate principal
amount and, upon delivery of any Authentication Order at any time and from time
to time thereafter, the Trustee shall authenticate Additional Notes for original
issue in an aggregate principal amount specified in such Authentication Order.
The Trustee may appoint an authenticating agent acceptable to the Issuers
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Issuers.
Section 2.03 Registrar and Paying Agent.
The Issuers will maintain an office or agency where Notes may be presented
for registration of transfer or for exchange ("Registrar") and an office or
agency where Notes may be presented for payment ("Paying Agent"). The Registrar
will keep a register of the Notes and of their transfer and exchange. The
Issuers may appoint one or more co-registrars and one or more additional paying
agents. The term "Registrar" includes any co-registrar and the term "Paying
Agent" includes any additional paying agent. The Issuers may change any Paying
Agent or Registrar without notice to any Holder. The Issuers will notify the
Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Issuers fail to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Partnership or any
of its Subsidiaries may act as Paying Agent or Registrar.
The Issuers initially appoint The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Notes.
The Issuers initially appoint the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
The Issuers will require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal,
premium or interest on the Notes, and will notify the Trustee of any default by
the Issuers in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
The Issuers at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other
than the Issuers or a Subsidiary) will have no further liability for the money.
If the Partnership or a Subsidiary acts as Paying Agent, it will segregate and
hold in a separate trust fund for the benefit of the Holders all money held by
it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating
to the Issuers, the Trustee will serve as Paying Agent for the Notes.
26
Section 2.05 Holder Lists.
The Trustee will preserve in as current a form as is reasonably practicable
the most recent list available to it of the names and addresses of all Holders
and shall otherwise comply with TIA ss. 312(a). If the Trustee is not the
Registrar, the Issuers will furnish to the Trustee at least seven Business Days
before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of the Holders of Notes and the
Issuers shall otherwise comply with TIA ss. 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred except as a whole by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Issuers for Definitive Notes if:
(1) the Issuers deliver to the Trustee notice from the Depositary that
it is unwilling or unable to continue to act as Depositary or that it is no
longer a clearing agency registered under the Exchange Act and, in either
case, a successor Depositary is not appointed by the Issuers within 120
days after the date of such notice from the Depositary;
(2) the Issuers in their sole discretion determine that the Global
Notes (in whole but not in part) should be exchanged for Definitive Notes
and delivers a written notice to such effect to the Trustee; provided that
in no event shall the Regulation S Temporary Global Note be exchanged by
the Issuers for Definitive Notes prior to (A) the expiration of the
Restricted Period and (B) the receipt by the Registrar of any certificates
required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act; or
(3) there has occurred and is continuing a Default or Event of Default
with respect to the Notes.
Upon the occurrence of either of the preceding events in (1) or (2) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee. Global Notes also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Note. A
Global Note may not be exchanged for another Note other than as provided in this
Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The
transfer and exchange of beneficial interests in the Global Notes will be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes will be subject to restrictions on transfer comparable to those set
forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also will require compliance with
either subparagraph (1) or (2) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period, transfers of
beneficial interests in the Regulation S Temporary Global Note may not be
made to a U.S. Person or for the account or benefit of a U.S. Person (other
than an Initial Purchaser). Beneficial interests in any Unrestricted Global
Note may be transferred to Persons who take delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to effect
the transfers described in this Section 2.06(b)(1).
27
(2) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.06(b)(1) above, the transferor
of such beneficial interest must deliver to the Registrar either:
(A) both:
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or cause
to be credited a beneficial interest in another Global Note in an
amount equal to the beneficial interest to be transferred or
exchanged; and
(ii) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant
account to be credited with such increase; or
(B) both:
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be
issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged; and
(ii) instructions given by the Depositary to the Registrar
containing information regarding the Person in whose name such
Definitive Note shall be registered to effect the transfer or
exchange referred to in (1) above;
provided that in no event shall Definitive Notes be issued upon
the transfer or exchange of beneficial interests in the
Regulation S Temporary Global Note prior to (A) the expiration of
the Restricted Period and (B) the receipt by the Registrar of any
certificates required pursuant to Rule 903 under the Securities
Act.
Upon consummation of an Exchange Offer by the Issuers in accordance with Section
2.06(f) hereof, the requirements of this Section 2.06(b)(2) shall be deemed to
have been satisfied upon receipt by the Registrar of the instructions contained
in the Letter of Transmittal delivered by the Holder of such beneficial
interests in the Restricted Global Notes. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in Global Notes
contained in this Indenture and the Notes or otherwise applicable under the
Securities Act, the Trustee shall adjust the principal amount of the relevant
Global Note(s) pursuant to Section 2.06(h) hereof.
(3) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(2) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
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(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Temporary Global Note or the
Regulation S Permanent Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item
(3) thereof, if applicable.
(4) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in an Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(2) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution of the
Exchange Notes or (iii) a Person who is an affiliate (as defined in
Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof; or
(ii) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
29
If any such transfer is effected pursuant to subparagraph (B) or (D) above
at a time when an Unrestricted Global Note has not yet been issued, the Issuers
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or (D)
above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(1) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder in the form
of Exhibit C hereto, including the certifications in item (2)(a)
thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities Act
in accordance with Rule 144, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such beneficial interest is being transferred to the
Issuers or any of their Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(b)
thereof; or
(G) if such beneficial interest is being transferred pursuant to
an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
30
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Issuers shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(2) Beneficial Interests in Regulation S Temporary Global Note to
Definitive Notes. Notwithstanding Sections 2.06(c)(1)(A) and (C) hereof, a
beneficial interest in the Regulation S Temporary Global Note may not be
exchanged for a Definitive Note or transferred to a Person who takes
delivery thereof in the form of a Definitive Note prior to (A) the
expiration of the Restricted Period and (B) the receipt by the Registrar of
any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the
Securities Act, except in the case of a transfer pursuant to an exemption
from the registration requirements of the Securities Act other than Rule
903 or Rule 904.
(3) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global
Note may exchange such beneficial interest for an Unrestricted Definitive
Note or may transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution of the
Exchange Notes or (iii) a Person who is an affiliate (as defined in
Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for an Unrestricted Definitive Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (1)(b) thereof; or
(ii) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of an Unrestricted Definitive Note, a certificate from such
holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in
form reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.
31
(4) Beneficial Interests in Unrestricted Global Notes to Unrestricted
Definitive Notes. If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a Definitive
Note or to transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Definitive Note, then, upon satisfaction of the
conditions set forth in Section 2.06(b)(2) hereof, the Trustee will cause
the aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.06(h) hereof, and the Issuers will
execute and the Trustee will authenticate and deliver to the Person
designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(4) will be registered in such
name or names and in such authorized denomination or denominations as the
holder of such beneficial interest requests through instructions to the
Registrar from or through the Depositary and the Participant or Indirect
Participant. The Trustee will deliver such Definitive Notes to the Persons
in whose names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.06(c)(4) will
not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(1) Restricted Definitive Notes to Beneficial Interests in Restricted
Global Notes. If any Holder of a Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global Note or
to transfer such Restricted Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in a Restricted Global Note,
then, upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global
Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a
QIB in accordance with Rule 144A, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (1)
thereof;
(C) if such Restricted Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in
item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
32
(F) if such Restricted Definitive Note is being transferred to
the Issuers or any of their Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof; or
(G) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,
the Trustee will cancel the Restricted Definitive Note, increase or
cause to be increased the aggregate principal amount of, in the case
of clause (A) above, the appropriate Restricted Global Note, in the
case of clause (B) above, the 144A Global Note, in the case of clause
(C) above, the Regulation S Global Note, and in all other cases, the
IAI Global Note.
(2) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Restricted Definitive Note to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note
only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (i) a Broker-Dealer, (ii) a Person participating in the
distribution of the Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the Unrestricted
Global Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (1)(c)
thereof; or
(ii) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof
in the form of a beneficial interest in the Unrestricted Global
Note, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
33
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.06(d)(2), the Trustee will cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Definitive Notes to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the
Trustee will cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of one of
the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (2)(B), (2)(D) or
(3) above at a time when an Unrestricted Global Note has not yet been
issued, the Issuers will issue and, upon receipt of an Authentication Order
in accordance with Section 2.02 hereof, the Trustee will authenticate one
or more Unrestricted Global Notes in an aggregate principal amount equal to
the principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.06(e), the Registrar will register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder must present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(1) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the name
of Persons who take delivery thereof in the form of a Restricted Definitive
Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable.
(2) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
Restricted Definitive Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:
34
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (i) a Broker-Dealer, (ii) a Person participating in the
distribution of the Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of the Issuers;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(d) thereof; or
(ii) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Note,
a certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.
(3) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A
Holder of Unrestricted Definitive Notes may transfer such Notes to a Person
who takes delivery thereof in the form of an Unrestricted Definitive Note.
Upon receipt of a request to register such a transfer, the Registrar shall
register the Unrestricted Definitive Notes pursuant to the instructions
from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance
with the Registration Rights Agreement, the Issuers will issue and, upon receipt
of an Authentication Order in accordance with Section 2.02 hereof, the Trustee
will authenticate:
(1) one or more Unrestricted Global Notes in an aggregate principal
amount equal to the principal amount of the beneficial interests in the
Restricted Global Notes accepted for exchange in the Exchange Offer by
Persons that certify in the applicable Letters of Transmittal that (A) they
are not Broker-Dealers, (B) they are not participating in a distribution of
the Exchange Notes and (C) they are not affiliates (as defined in Rule 144)
of the Issuers; and
(2) Unrestricted Definitive Notes in an aggregate principal amount
equal to the principal amount of the Restricted Definitive Notes accepted
for exchange in the Exchange Offer by Persons that certify in the
applicable Letters of Transmittal that (A) they are not Broker-Dealers, (B)
they are not participating in a distribution of the Exchange Notes and (C)
they are not affiliates (as defined in Rule 144) of the Issuers.
35
Concurrently with the issuance of such Notes, the Trustee will cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Issuers will execute and the Trustee will
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.
(g) Legends. The following legends will appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
(1) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global Note
and each Definitive Note (and all Notes issued in exchange therefor or
substitution thereof) shall bear the legend in substantially the following
form:
"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF
THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF FERRELLGAS ESCROW LLC,
FERRELLGAS FINANCE ESCROW CORPORATION, FERRELLGAS, L.P. AND FERRELLGAS FINANCE
CORP. THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Note or Definitive Note
issued pursuant to subparagraphs (b)(4), (c)(3), (c)(4), (d)(2), (d)(3),
(e)(2), (e)(3) or (f) of this Section 2.06 (and all Notes issued in
exchange therefor or substitution thereof) will not bear the Private
Placement Legend.
(2) Global Note Legend. Each Global Note will bear a legend in
substantially the following form:
36
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE ISSUERS OR THEIR
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(3) Regulation S Temporary Global Note Legend. The Regulation S Temporary
Global Note will bear a Legend in substantially the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note will be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note will be
reduced accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note will be increased accordingly and
an endorsement will be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, the Issuers
will execute and the Trustee will authenticate Global Notes and Definitive
Notes upon receipt of an Authentication Order in accordance with Section
2.02 hereof or at the Registrar's request.
37
(2) No service charge will be made to a Holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Issuers may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.06, 3.10, 4.10, 4.15 and 9.05 hereof).
(3) The Registrar will not be required to register the transfer of or
exchange of any Note selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part.
(4) All Global Notes and Definitive Notes issued upon any registration
of transfer or exchange of Global Notes or Definitive Notes will be the
valid obligations of the Issuers, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Global Notes or Definitive
Notes surrendered upon such registration of transfer or exchange.
(5) Neither the Registrar nor the Issuers will be required:
(A) to issue, to register the transfer of or to exchange any
Notes during a period beginning at the opening of business 15 days
before the day of any selection of Notes for redemption under Section
3.02 hereof and ending at the close of business on the day of
selection;
(B) to register the transfer of or to exchange any Note selected
for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note between a
record date and the next succeeding interest payment date.
(6) Prior to due presentment for the registration of a transfer of any
Note, the Trustee, any Agent and the Issuers may deem and treat the Person
in whose name any Note is registered as the absolute owner of such Note for
the purpose of receiving payment of principal of and interest on such Notes
and for all other purposes, and none of the Trustee, any Agent or the
Issuers shall be affected by notice to the contrary.
(7) The Trustee will authenticate Global Notes and Definitive Notes in
accordance with the provisions of Section 2.02 hereof.
All certifications, certificates and Opinions of Counsel required to be
submitted to the Registrar pursuant to this Section 2.06 to effect a
registration of transfer or exchange may be submitted by facsimile.
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Issuers and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Issuers will issue and the Trustee, upon receipt of an
Authentication Order, will authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Issuers, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Issuers to protect the Issuers, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Issuers may charge for their expenses in replacing a Note.
38
Every replacement Note is an additional obligation of the Issuers and will
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section as
not outstanding. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Issuers or an Affiliate of the Issuers holds
the Note; however, Notes held by the Issuers or a Subsidiary of the Issuers
shall not be deemed to be outstanding for purposes of Section 3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Issuers, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes will
be deemed to be no longer outstanding and will cease to accrue interest.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Issuers, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Issuers, will be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee will be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned will be so disregarded.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the Issuers
may prepare and the Trustee, upon receipt of an Authentication Order, will
authenticate temporary Notes. Temporary Notes will be substantially in the form
of certificated Notes but may have variations that the Issuers consider
appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without unreasonable delay, the Issuers will prepare and the Trustee
will authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes will be entitled to all of the benefits of this
Indenture.
Section 2.11 Cancellation.
The Issuers at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent will forward to the Trustee any Notes surrendered
to them for registration of transfer, exchange or payment. The Trustee and no
one else will cancel all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and will destroy canceled Notes
(subject to the record retention requirement of the Exchange Act). Certification
of the destruction of all canceled Notes will be delivered to the Issuers. The
Issuers may not issue new Notes to replace Notes that they have paid or that
have been delivered to the Trustee for cancellation.
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Section 2.12 Defaulted Interest.
If the Issuers default in a payment of interest on the Notes, they will pay
the defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Issuers will notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Issuers will fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
may be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Issuers (or, upon
the written request of the Issuers, the Trustee in the name and at the expense
of the Issuers) will mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Issuers elect to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, they must furnish to the Trustee, at least 30
days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth:
(1) the clause of this Indenture pursuant to which the redemption
shall occur;
(2) the redemption date;
(3) the principal amount of Notes to be redeemed; and
(4) the redemption price.
Section 3.02 Selection of Notes to Be Redeemed or Purchased.
If less than all of the Notes are to be redeemed or purchased in an offer
to purchase at any time, the Trustee will select Notes for redemption or
purchase as follows:
(1) if the Notes are listed on any national securities exchange, in
compliance with the requirements of the principal national securities
exchange on which the Notes are listed; or
(2) if the Notes are not listed on any national securities exchange,
on a pro rata basis, by lot or in accordance with a method which the
Trustee shall deem fair and appropriate.
In the event of partial redemption or purchase by lot, the particular Notes
to be redeemed or purchased will be selected, unless otherwise provided herein,
not less than 30 nor more than 60 days prior to the redemption or purchase date
by the Trustee from the outstanding Notes not previously called for redemption
or purchase.
The Trustee will promptly notify the Issuers in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected will be in amounts of $1,000 or
whole multiples of $1,000; except that if all of the Notes of a Holder are to be
redeemed or purchased, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed or purchased. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Notes called for redemption or purchase also apply to portions of Notes
called for redemption or purchase.
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Section 3.03 Notice of Redemption.
Subject to the provisions of Sections 3.09 and 3.10 hereof, at least 10
days but not more than 60 days before a redemption date, the Issuers will mail
or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address, except that
redemption notices may be mailed more than 60 days prior to a redemption date if
the notice is issued in connection with a defeasance of the Notes or a
satisfaction and discharge of this Indenture pursuant to Articles 8 or 10 of
this Indenture.
The notice will identify the Notes to be redeemed and will state:
(1) the redemption date;
(2) the redemption price;
(3) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion will be issued upon cancellation of the
original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(6) that, unless the Issuers default in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(7) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Issuers' request, the Trustee will give the notice of redemption in
the Issuers' name and at their expense; provided, however, that the Issuers have
delivered to the Trustee, at least 45 days prior to the redemption date, an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding
paragraph.
Section 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03 hereof,
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price. A notice of redemption may not be conditional.
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Section 3.05 Deposit of Redemption or Purchase Price.
One Business Day prior to or on the redemption or purchase price date, the
Issuers will deposit with the Trustee or with the Paying Agent money sufficient
to pay the redemption or purchase price of and accrued interest on all Notes to
be redeemed or purchased on that date. The Trustee or the Paying Agent will
promptly return to the Issuers any money deposited with the Trustee or the
Paying Agent by the Issuers in excess of the amounts necessary to pay the
redemption or purchase price of, and accrued interest on, all Notes to be
redeemed or purchased.
If the Issuers comply with the provisions of the preceding paragraph, on
and after the redemption or purchase date, interest will cease to accrue on the
Notes or the portions of Notes called for redemption or purchase. If a Note is
redeemed or purchased on or after an interest record date but on or prior to the
related interest payment date, then any accrued and unpaid interest shall be
paid to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption or purchase is
not so paid upon surrender for redemption or purchase because of the failure of
the Issuers to comply with the preceding paragraph, interest shall be paid on
the unpaid principal, from the redemption or purchase date until such principal
is paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01
hereof.
Section 3.06 Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part, the Issuers
will issue and, upon receipt of an Authentication Order, the Trustee will
authenticate for the Holder at the expense of the Issuers a new Note equal in
principal amount to the unredeemed or unpurchased portion of the Note
surrendered.
Section 3.07 Optional Redemption.
(a) At any time on or before May 1, 2007, the Partnership may on any one or
more occasions redeem up to 35% of the aggregate principal amount of Notes
issued under this Indenture at a redemption price of 106.750% of the principal
amount thereof, plus accrued and unpaid interest to the applicable redemption
date, with the net cash proceeds of one or more Equity Offerings completed by
the Partnership; provided that:
(1) at least 65% of the aggregate principal amount of Notes issued
under this Indenture (including any Additional Notes), are outstanding
immediately following the redemption; and
(2) the redemption must occur within 90 days of the closing of such
Equity Offering.
(b) Except pursuant to the preceding paragraph, the Notes are not
redeemable at the Issuers' option prior to May 1, 2009.
(c) On and after May 1, 2009, the Issuers may redeem the Notes, in whole or
in part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed in percentages of principal amount) listed in the table below,
plus accrued and unpaid interest on the Notes to the applicable redemption date,
if redeemed during the twelve months beginning on May 1 of the years indicated
below:
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Year Percentage
- ---- ----------
2009.......................................................... 103.375%
2010.......................................................... 102.250%
2011.......................................................... 101.125%
2012 and thereafter 100.000%
(d) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Section 3.01 through 3.06 hereof.
Section 3.08 Mandatory Redemption.
Except as described in Section 3.09, the Issuers are not required to make
any mandatory redemption or sinking fund payments with respect to the Notes. The
Issuers may at any time and from time to time purchase Notes in the open market
or otherwise.
Section 3.09 Special Mandatory Redemption.
(a) The Escrow Property, in an aggregate amount of $254,921,875.00,
representing the gross proceeds from the issuance and sale of the Notes, after
deducting discounts and commissions but before other expenses, of
$243,487,918.75 together with $11,433,956.25 deposited by the Issuers, will be
held by the Escrow Agent in the Escrow Account pursuant to the Escrow and
Security Agreement. The Escrow Property will be invested as provided in the
Escrow and Security Agreement.
(b) Pursuant to the Escrow and Security Agreement, if (i) the conditions
contained in Section I.4(b) of the Escrow and Security Agreement have not been
satisfied by August 5, 2004 or (ii) the Contribution Agreement is terminated
prior to August 5, 2004, the Issuers will cause a notice of special mandatory
redemption to be mailed not later than the next Business Day following August 5,
2004 or following the date the Contribution Agreement is terminated, as
applicable, and will redeem the Notes not later than five Business Days
following the date of the notice of the special mandatory redemption, at a
redemption price equal to 100% of the principal amount of Notes, plus accrued
and unpaid interest, to, but not including the redemption date.
(c) Immediately upon receipt by the Paying Agent of the Escrow Property,
the Trustee will notify the Holders of the date fixed for special mandatory
redemption pursuant to this Section 3.09.
(d) Other than as specifically provided in this Section 3.09, any
redemption pursuant to this Section 3.09 will be made pursuant to the provisions
of Section 3.04 through 3.05 hereof.
Section 3.10 Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Issuers are
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), they will follow the procedures specified below.
The Asset Sale Offer shall be made to all Holders and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to
those set forth in this Indenture with respect to offers to purchase or redeem
with the proceeds of sales and assets. The Asset Sale Offer will remain open for
a period of at least 20 Business Days following its commencement and not more
than 30 Business Days, except to the extent that a longer period is required by
applicable law (the "Offer Period"). No later than three Business Days after the
termination of the Offer Period (the "Purchase Date"), the Issuers will apply
all Excess Proceeds (the "Offer Amount") to the purchase of Notes and such other
pari passu Indebtedness (on a pro rata basis, if applicable) or, if less than
the Offer Amount has been tendered, all Notes and other Indebtedness tendered in
response to the Asset Sale Offer. Payment for any Notes so purchased will be
made in the same manner as interest payments are made.
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If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest will
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest will be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Issuers will send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice will contain all instructions and materials necessary
to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The
notice, which will govern the terms of the Asset Sale Offer, will state:
(1) that the Asset Sale Offer is being made pursuant to this Section
3.10 and Section 4.10 hereof and the length of time the Asset Sale Offer
will remain open;
(2) the Offer Amount, the purchase price and the Purchase Date;
(3) that any Note not tendered or accepted for payment will continue
to accrue interest;
(4) that, unless the Issuers default in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer will cease to accrue
interest after the Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may elect to have Notes purchased in integral multiples of
$1,000 only;
(6) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer will be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry transfer, to the Issuers, a
Depositary, if appointed by the Issuers, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;
(7) that Holders will be entitled to withdraw their election if the
Issuers, the Depositary or the Paying Agent, as the case may be, receives,
not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such Note
purchased;
(8) that, if the aggregate principal amount of Notes and other pari
passu Indebtedness surrendered by Holders exceeds the Offer Amount, the
Issuers will select the Notes and other pari passu Indebtedness to be
purchased on a pro rata basis based on the principal amount of Notes and
such other pari passu Indebtedness surrendered (with such adjustments as
may be deemed appropriate by the Issuers so that only Notes in
denominations of $1,000, or integral multiples thereof, will be purchased);
and
(9) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
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On or before the Purchase Date, the Issuers will, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and will
deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Issuers in accordance with the
terms of this Section 3.10. The Issuers, the Depositary or the Paying Agent, as
the case may be, will promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Notes tendered by such Holder and accepted by the
Issuers for purchase, and the Issuers will promptly issue a new Note, and the
Trustee, upon written request from the Issuers will authenticate and mail or
deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Issuers to the Holder thereof. The Issuers
will publicly announce the results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.10, any purchase
pursuant to this Section 3.10 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes.
The Issuers will pay or cause to be paid the principal of, premium, if any,
and interest on the Notes on the dates and in the manner provided in the Notes.
Principal, premium, if any, and interest will be considered paid on the date due
if the Paying Agent, if other than the Issuers or a Subsidiary thereof, holds as
of 10:00 a.m. Eastern Time on the due date money deposited by the Issuers in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due.
The Issuers will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; they will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
Section 4.02 Maintenance of Office or Agency.
The Issuers will maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Issuers in respect of the Notes and this Indenture may be served. The
Issuers will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Issuers
fail to maintain any such required office or agency or fails to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Issuers may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission will in any manner relieve the Issuers of
their obligation to maintain an office or agency in the Borough of Manhattan,
the City of New York for such purposes. The Issuers will give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
The Issuers hereby designate the Corporate Trust Office of the Trustee as
one such office or agency of the Issuers in accordance with Section 2.03 hereof.
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Section 4.03 Reports.
(a) Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Issuers will furnish to the Holders of
Notes, within the time periods specified in the SEC's rules and regulations:
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if
the Issuers were required to file such forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
and, with respect to the annual financial information only, a report
thereon by the Issuers' certified independent accountants; and
(2) all current reports that would be required to be filed with the
SEC on Form 8-K if the Issuers were required to file such reports.
In addition, whether or not required by the rules and regulations of the
SEC, the Issuers will file a copy of all of the information and reports referred
to in clauses (1) and (2) above with the SEC for public availability within the
time periods specified in the SEC's rules and regulations (unless the SEC will
not accept such a filing) and make such information available to investors who
request it in writing. The Issuers will promptly furnish to Holders of Notes
notices of (a) any Payment Default under any instrument evidencing Indebtedness
for borrowed money, and (b) any acceleration of such Indebtedness prior to its
express maturity. The Issuers will at all times comply with TIA ss. 314(a).
Section 4.04 Compliance Certificate.
(a) The Issuers shall deliver to the Trustee, within 90 days after the end
of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Issuers and their Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Issuers has kept, observed, performed and fulfilled
their obligations under this Indenture, and further stating, as to each such
Officer signing such certificate, that, to the best of his or her knowledge, the
Issuers have kept, observed, performed and fulfilled each and every covenant
contained in this Indenture and are not in default in the performance or
observance of any of the terms, provisions and conditions of this Indenture (or,
if a Default or Event of Default has occurred, describing all such Defaults or
Events of Default of which he or she may have knowledge and what action the
Issuers are taking or propose to take with respect thereto) and that, to the
best of his or her knowledge, no event has occurred and remains in existence by
reason of which payments on account of the principal of or interest, if any, on
the Notes is prohibited or if such event has occurred, a description of the
event and what action the Issuers are taking or propose to take with respect
thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Issuers' independent public accountants (who shall be a
firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Issuers have violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
46
(c) So long as any of the Notes are outstanding, the Issuers will deliver
to the Trustee, forthwith upon any Officer becoming aware of any Default or
Event of Default, an Officers' Certificate specifying such Default or Event of
Default and what action the Issuers are taking or propose to take with respect
thereto.
Section 4.05 Taxes.
The Issuers will pay, and will cause each of their Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
Section 4.06 Stay, Extension and Usury Laws.
The Issuers covenant (to the extent that they may lawfully do so) that they
will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Issuers (to the extent that they may
lawfully do so) hereby expressly waive all benefit or advantage of any such law,
and covenant that they will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law has been
enacted.
Section 4.07 Restricted Payments.
(a) The Partnership will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, (all such payments and other actions
set forth in these clauses (1) through (4) below being collectively referred to
as a "Restricted Payment"):
(1) declare or pay any dividend or any other distribution or payment
on or with respect to Capital Stock of the Partnership or any of its
Restricted Subsidiaries or any payment made to the direct or indirect
holders, in their capacities as such, of Capital Stock of the Partnership
or any of its Restricted Subsidiaries other than (a) dividends or
distributions payable solely in Capital Stock of the Partnership (excluding
Redeemable Capital Stock), or in options, warrants or other rights to
purchase Capital Stock of the Partnership (excluding Redeemable Capital
Stock); (b) dividends or other distributions to the extent declared or paid
to the Partnership or any Restricted Subsidiary of the Partnership; or (c)
dividends or other distributions by any Restricted Subsidiary of the
Partnership to all holders of Capital Stock of that Restricted Subsidiary
on a pro rata basis, including to the General Partner of the Partnership;
(2) purchase, redeem, defease or otherwise acquire or retire for value
any Capital Stock of the Partnership or any of its Restricted Subsidiaries,
other than any Capital Stock owned the Partnership or a Restricted
Subsidiary of the Partnership;
(3) make any principal payment on, or purchase, defease, repurchase,
redeem or otherwise acquire or retire for value, prior to any scheduled
maturity, scheduled repayment, scheduled sinking fund payment or other
stated maturity, any subordinated Indebtedness, other than any such
Indebtedness owned by the Partnership or a Restricted Subsidiary of the
Partnership; or
(4) make any investment, other than a Permitted Investment, in any
entity,
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing; and
47
(2) the Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Partnership and its Restricted Subsidiaries
during the fiscal quarter during which the Restricted Payment is made will
not exceed:
(A) if the Consolidated Fixed Charge Coverage Ratio of the
Partnership is greater than 1.75 to 1.00, an amount equal to Available
Cash for the immediately preceding fiscal quarter; or
(B) if the Consolidated Fixed Charge Coverage Ratio of the
Partnership is equal to or less than 1.75 to 1.00, an amount equal to
the sum of $50 million, less the aggregate amount of all Restricted
Payments made by the Partnership and its Restricted Subsidiaries in
accordance with this clause during the period ending on the last day
of the fiscal quarter of the Partnership immediately preceding the
date of the Restricted Payment and beginning on the first day of the
sixteenth full fiscal quarter immediately preceding the date of the
Restricted Payment plus the aggregate net cash proceeds of capital
contributions to the Partnership from any Person other than a
Restricted Subsidiary of the Partnership, or issuance and sale of
shares of Capital Stock, other than Redeemable Capital Stock, of the
Partnership to any entity other than to a Restricted Subsidiary of the
Partnership, in any case made during the period ending on the last day
of the fiscal quarter of the Partnership immediately preceding the
date of the Restricted Payment and beginning on the first day of the
sixteenth full fiscal quarter immediately preceding the date of the
Restricted Payment.
(b) The provisions of Section 4.07(a) will not prohibit:
(1) the payment of any dividend or distribution within 60 days after
the date of its declaration if, at the date of declaration, the payment
would be permitted as stated above;
(2) the redemption, repurchase or other acquisition or retirement of
any shares of any class of Capital Stock of the Partnership or any
Restricted Subsidiary of the Partnership in exchange for, or out of the net
cash proceeds of, a substantially concurrent capital contribution to the
Partnership from any entity other than a Restricted Subsidiary of the
Partnership; or issuance and sale of other Capital Stock, other than
Redeemable Capital Stock, of the Partnership to any entity other than to a
Restricted Subsidiary of the Partnership; provided, however, that the
amount of any net cash proceeds that are utilized for any redemption,
repurchase or other acquisition or retirement will be excluded from the
calculation of Available Cash; or
(3) any redemption, repurchase or other acquisition or retirement of
subordinated Indebtedness in exchange for, or out of the net cash proceeds
of, a substantially concurrent capital contribution to the Partnership from
any entity other than a Restricted Subsidiary of the Partnership; or
issuance and sale of Indebtedness of the Partnership issued to any entity
other than a Restricted Subsidiary or the Partnership, so long as the
Indebtedness is Permitted Refinancing Indebtedness; provided, however, that
the amount of any net cash proceeds that are utilized for any redemption,
repurchase or other acquisition or retirement will be excluded from the
calculation of Available Cash.
In computing the amount of Restricted Payments in Section 4.07(a) above,
the Restricted Payments permitted by clause (1) of this paragraph (b) will be
included and the Restricted Payments permitted by clauses (2) and (3) of this
paragraph (b) will not be included.
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The amount of all Restricted Payments (other than cash) will be the fair
market value on the date of the Restricted Payment of the assets proposed to be
transferred by the Partnership or such Restricted Subsidiary, as the case may
be, pursuant to the Restricted Payment. The fair market value of any assets that
are required to be valued by this Section 4.07 will be determined in good faith
by an authorized financial officer of the General Partner on the date of the
Restricted Payment of the assets proposed to be transferred.
Section 4.08 Dividend and Other Payment Restrictions Affecting
Subsidiaries.
(a) The Partnership will not, and will not permit any of its Restricted
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to:
(1) pay dividends, in cash or otherwise, or make any other
distributions on or with respect to its Capital Stock or any other interest
or participation in, or measured by, its profits;
(2) pay any Indebtedness owed to the Partnership or any other
Restricted Subsidiary;
(3) make loans or advances to, or any investment in, the Partnership
or any other Restricted Subsidiary;
(4) transfer any of its properties or assets to the Partnership or any
other Restricted Subsidiary; or
(5) guarantee any Indebtedness of the Partnership or any other
Restricted Subsidiary.
All such restrictions and other actions set forth in these clauses (1)
through (5) above being collectively referred to as "Payment Restrictions."
(b) The provisions of Section 4.08(a) will not apply to (and therefore the
following are permitted) encumbrances or restrictions existing under or by
reason of:
(1) applicable law;
(2) any agreement in effect at or entered into on the date of this
Indenture or any agreement relating to any Indebtedness permitted to be
incurred under this Indenture (including agreements or instruments
evidencing Indebtedness incurred after the date of this Indenture);
provided, however, that the encumbrances and restrictions contained in the
agreements governing such permitted Indebtedness are no more restrictive
with respect to the Payment Restrictions than those set forth in the
agreements governing the Partnership's existing Indebtedness as in effect
on the date of this Indenture;
(3) customary non-assignment provisions of any contract or any lease
governing a leasehold interest of the Partnership or any Restricted
Subsidiary;
(4) specific purchase money obligations or Capital Leases for property
subject to such obligations;
(5) any agreement of an entity (or any it its Restricted Subsidiaries)
acquired by the Partnership or any Restricted Subsidiary, in existence at
the time of the acquisition but not created in contemplation of the
acquisition, which encumbrance or restriction is not applicable to any
third party other than the entity; or
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(6) provisions contained in instruments relating to Indebtedness which
prohibit the transfer of all or substantially all of the assets of the
obligor of the Indebtedness unless the transferee shall assume the
obligations of the obligor under the agreement or instrument.
Section 4.09 Incurrence of Indebtedness.
(a) The Partnership will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or in any manner become directly or indirectly liable, contingently or
otherwise, for the payment, in each case, to "incur," any Indebtedness, unless
at the time of the incurrence and after giving pro forma effect to the receipt
and application of the proceeds of the Indebtedness, the Consolidated Fixed
Charge Coverage Ratio of the Partnership is greater than 2.00 to 1.00.
(b) The provisions of Section 4.09(a) will not prohibit the incurrence by
the Partnership and its Restricted Subsidiary of any of the following items of
Indebtedness (collectively, "Permitted Indebtedness"):
(1) Indebtedness outstanding as of the date of this Indenture;
(2) Indebtedness of the Partnership or a Restricted Subsidiary
incurred for the making of expenditures for the improvement or repair, to
the extent the improvements or repairs may be capitalized in accordance
with GAAP, or additions, including by way of acquisitions of businesses and
related assets, to the property and assets of the Partnership and its
Restricted Subsidiaries, including, without limitation, the acquisition of
assets subject to operating leases, Indebtedness incurred under the Credit
Facilities, or incurred by assumption in connection with additions,
including additions by way of acquisitions or capital contributions of
businesses and related assets, to the property and assets of the
Partnership and its Restricted Subsidiaries; provided, that the aggregate
principal amount of this Indebtedness outstanding at any time may not
exceed $75 million;
(3) Indebtedness of the Partnership or a Restricted Subsidiary (a)
incurred for any purpose permitted under the Credit Facilities, or (b)
owing in respect of any Accounts Receivable Securitization, operating
lease, or other off-balance sheet obligation existing on the date of this
Indenture that arises because, after the date of this Indenture, such
off-balance sheet obligations are refinanced with Indebtedness, provided,
that the aggregate principal amount of this Indebtedness outstanding under
this clause at any time may not exceed an amount equal to the sum of (x)
$400 million plus (y) the amount, if any, by which the Borrowing Base as of
the date of calculation exceeds the amount of the Borrowing Base as of
December 31, 2003;
(4) Indebtedness of the Partnership owed to the General Partner or an
Affiliate of the General Partner that is unsecured and that is subordinated
in right of payment to the Notes; provided, that the aggregate principal
amount of this Indebtedness outstanding at any time under this clause may
not exceed $50 million and this Indebtedness has a final maturity date
later than the final maturity date of the Notes;
(5) Indebtedness owed by the Partnership to any Restricted Subsidiary
or owed by any Restricted Subsidiary to the Partnership or to any other
Restricted Subsidiary;
(6) Permitted Refinancing Indebtedness (including, for the avoidance
of doubt, Indebtedness incurred as permitted under the Consolidated Fixed
Charge Coverage Ratio set forth in Section 4.09(a) above);
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(7) the incurrence by the Partnership or a Restricted Subsidiary of
Indebtedness owing directly to its insurance carriers, without duplication,
in connection with the Partnership's, its Subsidiaries' or its Affiliates'
self-insurance programs or other similar forms of retained insurable risks
for their respective businesses, consisting of reinsurance agreements and
indemnification agreements, and guarantees of the foregoing, secured by
letters of credit; provided, that any Consolidated Fixed Charges associated
with the Indebtedness evidenced by the reinsurance agreements,
indemnification agreements, guarantees and letters of credit will be
included, without duplication, in any determination of the Consolidated
Fixed Charge Coverage Ratio test set forth in Section 4.09(a) above;
(8) Indebtedness of the Partnership and its Restricted Subsidiaries in
respect of Capital Leases, meaning, generally, any lease of any property
which would be required to be classified and accounted for as a capital
lease on a balance sheet of the lessor; provided, that the aggregate amount
of this Indebtedness outstanding at any time may not exceed $15 million;
(9) Indebtedness of the Partnership and its Restricted Subsidiaries
represented by letters of credit supporting (a) obligations under workmen's
compensation laws, (b) obligations to suppliers of propane or energy
commodity derivative providers in the ordinary course of business
consistent with past practices not to exceed $10 million at any one time
outstanding and (c) the repayment of Indebtedness permitted to be incurred
under this Indenture;
(10) surety bonds and appeal bonds required in the ordinary course of
business or in connection with the enforcement of rights or claims of the
Partnership or any of its Subsidiaries or in connection with judgments that
do not result in a Default or Event of Default;
(11) Indebtedness of the Partnership or its Restricted Subsidiaries
incurred in connection with acquisitions of retail propane businesses in
favor of the sellers of such businesses in an aggregate principal amount
not to exceed $15 million in any fiscal year and not to exceed $60 million
at any one time outstanding; provided, that the principal amount of such
Indebtedness incurred in connection with any such acquisition shall not
exceed the fair market value of the assets so acquired and, to the extent
issued by the Partnership, such Indebtedness is expressly subordinated to
the Notes; and
(12) the Notes (other than Additional Notes) and the Exchange Notes.
For purposes of determining compliance with this Section 4.09, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness described in clauses (1) through (12) above
or is entitled to be incurred in compliance with the Consolidated Fixed Charge
Coverage Ratio pursuant to Section 4.09(a) above, the Partnership, may, in its
sole discretion, classify (or later reclassify) in whole or in part such items
of Indebtedness in any manner that complies with this Section 4.09, and such
item of Indebtedness or a portion thereof may be classified (or later
reclassified) in whole or in part as having been incurred under more than one of
the applicable clauses of Permitted Indebtedness or in compliance with the
Consolidated Fixed Charge Coverage Ratio set forth in Section 4.09(a) above.
Section 4.10 Asset Sales.
The Partnership will not, and will not permit any of its Restricted
Subsidiaries to, complete an Asset Sale unless:
(1) the Partnership or its Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the
fair market value, as determined in good faith by an authorized financial
officer of the General Partner, of the assets sold or otherwise disposed
of; and
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(2) at least 75% of the consideration therefor received by the
Partnership or such Restricted Subsidiary is in the form of cash.
For purposes of determining the amount of cash received in an Asset Sale,
each of the following shall be deemed to be cash:
(1) the amount of any liabilities on the Partnership's or any
Restricted Subsidiary's balance sheet that are assumed by the transferee of
the assets; and
(2) the amount of any notes or other obligations received by the
Partnership or the Restricted Subsidiary from the transferee that is
converted within 180 days by the Partnership or the Restricted Subsidiary
into cash, to the extent of the cash received.
Furthermore, the 75% limitation will not apply to any Asset Sale in which
the cash portion of the consideration received is equal to or greater than the
after-tax proceeds would have been had the Asset Sale complied with the 75%
limitation.
If the Partnership or any of its Restricted Subsidiaries receives Net
Proceeds exceeding $10 million from one or more Asset Sales in any fiscal year,
then within 340 days after the date the aggregate amount of Net Proceeds exceeds
$10 million, the Partnership must apply the amount of such Net Proceeds either:
(1) to reduce Indebtedness of the Partnership or any of its Restricted
Subsidiaries, with a permanent reduction of availability in the case of
revolving Indebtedness; or
(2) to make an investment in assets or capital expenditures useful to
the Partnership's or any of its Subsidiaries' business as in effect on the
date of this Indenture or business related or ancillary thereto.
Pending the final application of any such Net Proceeds, the Partnership or any
Restricted Subsidiary may temporarily reduce borrowings under the Credit
Facilities or otherwise invest such Net Proceeds in any manner that is not
prohibited by this Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided above will be considered "Excess Proceeds." When the aggregate amount
of Excess Proceeds exceeds $10 million, within 15 days thereof, the Issuers will
make an Asset Sale Offer to all Holders of Notes and all holders of other
Indebtedness outstanding that is pari passu with the Notes containing provisions
similar to those set forth in this Indenture with respect to offers to purchase
or redeem with the proceeds of sales of assets in accordance with Section 3.10
hereof to purchase for cash the maximum principal amount of Notes and such other
pari passu Indebtedness that may be purchased out of the Excess Proceeds. The
offer price in any Asset Sale Offer will be equal to 100% of principal amount
plus accrued and unpaid interest to the date of purchase. To the extent that the
aggregate amount of Notes tendered in response to the Issuers' purchase offer is
less than the Excess Proceeds, the Partnership or any Restricted Subsidiary may
use such deficiency for general business purposes. If the aggregate principal
amount of Notes and such other pari passu Indebtedness tendered into such Asset
Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the
Notes and such other pari passu Indebtedness to be purchased on pro rata basis
in proportion to the aggregate principal amount of Notes and such other pari
passu Indebtedness tendered. Upon completion of each Asset Sale Offer, the
amount of Excess Proceeds shall be reset at zero.
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The Issuers will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
Sections 3.10 or 4.10 of this Indenture, the Issuers will comply with the
applicable securities laws and regulations and will not be deemed to have
breached their obligations under those provisions of this Indenture by virtue of
such conflict.
Section 4.11 Transactions with Affiliates.
(a) The Partnership will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions, including the sale, transfer,
disposition, purchase, exchange or lease of assets, property or services, other
than as provided for in the partnership agreement or other organizational
documents, as applicable, and the other agreements entered into between the
Partnership and any of its Affiliates, with, or for the benefit of, any
Affiliates of the Partnership (each an "Affiliate Transaction"), unless:
(1) the transaction or series of related transactions are between the
Partnership and its Restricted Subsidiaries or between two Restricted
Subsidiaries; or
(2) the transaction or series of related transactions are on terms
that are no less favorable to the Partnership or the Restricted Subsidiary,
as the case may be, than those which would have been obtained in a
comparable transaction at such time from an entity that is not an Affiliate
of the Partnership or Restricted Subsidiary, and, with respect to
transaction(s) involving aggregate payments or value equal to or greater
than $20 million, the Partnership delivers an Officers' Certificate to the
Trustee certifying that the transaction(s) is on terms that are no less
favorable to the Partnership or the Restricted Subsidiary than those which
would have been obtained from an entity that is not an Affiliate of the
Partnership or Restricted Subsidiary and has been approved by a majority of
the Board of Directors of the General Partner, including a majority of the
disinterested directors.
(b) The following items will not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of Section 4.11(a) or
otherwise be restricted by this Indenture or the Notes:
(1) any employment agreement, stock option agreement, restricted stock
agreement, employee stock ownership plan related agreements, or similar
agreement and arrangements, in the ordinary course of business;
(2) transactions permitted by Section 4.07 hereof;
(3) transactions 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 business operated by the Partnership,
its Subsidiaries and Affiliates;
(4) any Accounts Receivable Securitization;
(5) any affiliate trading transactions done in the ordinary course of
business;
(6) any transaction that is a Flow-Through Acquisition;
53
(7) transactions entered into in connection with the Escrow Mergers
and the merger of Blue Rhino LLC into the Partnership; and
(8) transactions contemplated by the Contribution Agreement.
Section 4.12 Liens.
The Partnership will not, and will not permit any of its Restricted
Subsidiaries to incur any Liens or other encumbrance, unless the Lien is a
Permitted Lien or the Notes are directly secured equally and ratably with the
obligation or liability secured by such Lien.
Section 4.13 Corporate Existence.
Subject to Article 5 hereof, the Partnership shall do or cause to be done
all things necessary to preserve and keep in full force and effect:
(1) its partnership existence, and the corporate, partnership or other
existence of each of its Restricted Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from time
to time) of the Partnership or any such Restricted Subsidiary; and
(2) the rights (charter and statutory), licenses and franchises of the
Partnership and its Restricted Subsidiaries; provided, however, that the
Partnership shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any of its
Restricted Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business
of the Partnership and its Restricted Subsidiaries, taken as a whole, and
that the loss thereof is not adverse in any material respect to the Holders
of the Notes.
Section 4.14 Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Issuers will make an
offer (a "Change of Control Offer") to each Holder to repurchase, in cash, all
or any part (equal to $1,000 or an integral multiple of $1,000) of that Holder's
Notes at a purchase price equal to 101% of the aggregate principal amount of the
Notes or portion of Notes validly tendered for payment thereof plus accrued and
unpaid interest on the Notes repurchased, if any, to the date of purchase (the
"Change of Control Payment"). Within 30 days following any Change of Control,
the Issuers will mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control and stating:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.14 and that all Notes tendered will be accepted for payment;
(2) the purchase price and the purchase date, which shall be no later
than 30 Business Days from the date such notice is mailed (the "Change of
Control Payment Date");
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Issuers defaults in the payment of the Change of
Control Payment, all Notes accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest after the Change of Control
Payment Date;
54
(5) that Holders electing to have any Notes purchased pursuant to a
Change of Control Offer will be required to surrender the Notes, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day preceding the
Change of Control Payment Date;
(6) that Holders will be entitled to withdraw any election to have
their Notes purchased if the Paying Agent receives, not later than the
close of business on the second Business Day preceding the Change of
Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes
delivered for purchase, and a statement that such Holder is withdrawing his
election to have the Notes purchased; and
(7) that Holders whose Notes are being purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof.
The Issuers will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change in Control. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of Sections 3.10 or 4.14 of this Indenture, the Issuers will comply
with the applicable securities laws and regulations and will not be deemed to
have breached their obligations under Section 3.10 or this Section 4.14 by
virtue of such conflict.
(b) On the Change of Control Payment Date, the Issuers will, to the extent
lawful:
(1) accept for payment all Notes or portions thereof properly tendered
in accordance with the Change of Control Offer;
(2) deposit an amount equal to the Change of Control Payment for the
Notes with the Paying Agent in respect of all Notes or portions of Notes
properly tendered; and
(3) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions of Notes being tendered to the
Issuers.
The Paying Agent will promptly mail to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each new Note will be in a
principal amount of $1,000 or an integral multiple thereof. The Issuers will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
(c) Notwithstanding anything to the contrary in this Section 4.14, the
Issuers will not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section 4.14 and Section 3.10 hereof and purchases all Notes properly tendered
and not withdrawn under the Change of Control Offer.
55
Section 4.15 Limitation on Sale and Leaseback Transactions.
The Partnership will not, and will not permit any of its Restricted
Subsidiaries to, enter into any Sale and Leaseback Transaction with respect to
their properties unless the Partnership or the Restricted Subsidiary is
permitted under this Indenture to incur Indebtedness secured by a Lien on the
property in an amount equal to the Attributable Debt with respect to the Sale
and Leaseback Transaction.
Section 4.16 Limitation on Finance Corp. and Escrow Finance Corp.
In addition to the restrictions set forth under Section 4.09 hereof,
Finance Corp. and Escrow Finance Corp. will not incur any Indebtedness unless:
(1) the Partnership is a co-obligor or guarantor of the Indebtedness;
or
(2) the net proceeds of the Indebtedness are either lent to the
Partnership, used to acquire outstanding debt securities issued by the
Partnership, or used, directly or indirectly, to refinance or discharge
Indebtedness permitted under the limitation of this Section 4.16.
Finance Corp. and Escrow Finance Corp. will not engage in any business not
related, directly or indirectly, to obtaining money or arranging financing for
the Partnership.
Section 4.17 Limitation on Other Activities.
Notwithstanding anything in this Indenture to the contrary, prior to the
consummation of the Escrow Mergers, Escrow LLC and Escrow Finance Corp. will not
engage in any business operations or other activities, other than those
contemplated in connection with the Notes, the Escrow Mergers and the Escrow and
Security Agreement.
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets.
The Partnership shall not consolidate or merge with or into, 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
entity unless:
(1) the Partnership is the surviving entity or the entity formed by or
surviving the transaction, if other than the Partnership, or the entity to
which the sale was made is a corporation or partnership organized or
existing under the laws of the United States, any state thereof or the
District of Columbia;
(2) the entity formed by or surviving the transaction, if other than
the Partnership, or the entity to which the sale was made assumes all the
obligations of the Partnership in accordance with a supplemental indenture
in a form reasonably satisfactory to the Trustee, under the Notes and this
Indenture;
(3) immediately after the transaction, no Default or Event of Default
exists; and
(4) at the time of the transaction and after giving pro forma effect
to it as if the transaction had occurred at the beginning of the applicable
four-quarter period, the Partnership or such other entity or survivor is
permitted to incur at least $1.00 of additional Indebtedness in accordance
with the Consolidated Fixed Charge Coverage Ratio described in Section
4.09(a) hereof.
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This Section 5.01 will not apply to a sale, assignment, transfer,
conveyance or other disposition of assets between or among the Partnership and
any of its Restricted Subsidiaries. Finance Corp. will not consolidate or merge
with or into, whether or not it is the surviving entity, 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 entity
except under conditions similar to those described in the paragraph above.
Notwithstanding the foregoing, clauses (3) and (4) of the first paragraph
of this covenant will not apply to the Escrow Mergers.
Section 5.02 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of the
Partnership or Finance Corp. in a transaction that is subject to, and that
complies with the provisions of, Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Partnership or Finance
Corp., as applicable, is merged or to which such sale, assignment, transfer,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for (so that from and after the date of such consolidation, merger,
sale, lease, conveyance or other disposition, the provisions of this Indenture
referring to the "Partnership" or "Finance Corp.," as applicable, shall refer
instead to the successor corporation and not to Partnership or Finance Corp., as
applicable), and may exercise every right and power of the Partnership or
Finance Corp., as applicable, under this Indenture with the same effect as if
such successor Person had been named as the Partnership or Finance Corp., as
applicable, herein; provided, however, that Partnership or Finance Corp., as
applicable, shall not be relieved from the obligation to pay the principal of
and interest on the Notes except in the case of a sale of all of assets of the
Partnership or Finance Corp., as applicable, in a transaction that is subject
to, and that complies with the provisions of, Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
Each of the following is an "Event of Default":
(1) default in the payment of the principal of or premium, if any, on
any Note when the same becomes due and payable, upon stated maturity,
acceleration, optional redemption, required purchase, scheduled principal
payment or otherwise;
(2) default in the payment of an installment of interest on any of the
Notes, when the same becomes due and payable, which default continues for a
period of 30 days;
(3) failure to perform or observe any other term, covenant or
agreement contained in the Notes or this Indenture, other than a default
specified in either Section 6.01(1) or (2) above, and the default continues
for a period of 45 days after written notice of the default requiring the
Issuers to remedy the same will have been given to the Partnership by the
Trustee or to the Issuers and the Trustee by Holders of at least 25% in
aggregate principal amount of the Notes then outstanding;
(4) failure to perform or observe any material term, covenant or
agreement contained in the Escrow and Security Agreement;
57
(5) default or defaults under one or more agreements, instruments,
mortgages, bonds, debentures or other evidences of Indebtedness under which
the Partnership or any Restricted Subsidiary of the Partnership then has
outstanding Indebtedness in excess of $10 million, if the default:
(a) is caused by a failure to pay principal of or premium, if
any, or interest on to such Indebtedness within the applicable grace
period, if any, provided with respect to such Indebtedness; or
(b) results in the acceleration of such Indebtedness prior to its
stated maturity;
(6) the Escrow and Security Agreement or any other security document
or any Lien purported to be granted thereby on the Escrow Account or the
cash or escrow investments therein is held in any judicial proceeding to be
unenforceable or invalid, in whole or in part, or ceases for any reason
(other than pursuant to a release that is delivered or becomes effective as
set forth in the Escrow and Security Agreement or this Indenture) to be
fully enforceable and perfected;
(7) a final judgment or judgments, which is or are non-appealable and
non-reviewable or which has or have not been stayed pending appeal or
review or as to which all rights to appeal or review have expired or been
exhausted, shall be rendered against the Partnership, any Restricted
Subsidiary, or the General Partner provided such judgment or judgments
requires or require the payment of money in excess of $10 million in the
aggregate and is not covered by insurance or discharged or stayed pending
appeal or review within 60 days after entry of such judgment; in the event
of a stay, the judgment shall not be discharged within 30 days after the
stay expires; or
(8) the Issuers or any of their Significant Subsidiaries pursuant to
or within the meaning of Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a custodian of it or for all
or substantially all of its property,
(D) makes a general assignment for the benefit of its creditors,
or
(E) generally is not paying its debts as they become due; or
(9) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Issuers or any of their Significant
Subsidiaries in an involuntary case;
(B) appoints a custodian of the Issuers or any of their
Significant Subsidiaries or for all or substantially all of the
property of the Issuers or any of their Significant Subsidiaries; or
(C) orders the liquidation of the Issuers or any of their
Significant Subsidiaries;
58
and the order or decree remains unstayed and in effect for 60 consecutive
days.
Section 6.02 Acceleration.
In the case of an Event of Default specified in clause (8) or (9) of
Section 6.01 hereof, with respect to the Partnership, Finance Corp. or any
Significant Subsidiary, all outstanding Notes will become due and payable
immediately without further action or notice. If any other Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the applicable series of Notes then outstanding may declare
all the Notes of that series to be due and payable immediately.
Upon any such declaration, the Notes shall become due and payable
immediately. The Holders of a majority in aggregate principal amount of a series
of Notes issued under this Indenture and then outstanding by notice to the
Trustee may on behalf of all of the Holders of that series rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal, interest or premium that has become due solely because of the
acceleration) have been cured or waived.
If an Event of Default by reason of any action (or inaction) taken (or not
taken) by or on behalf of the Issuers with the willful intention of avoiding
payment of the premium that the Issuers would have had to pay if the Issuers
then had elected to redeem the Notes pursuant to Section 3.07 hereof, then, upon
acceleration of the Notes, an equivalent premium shall also become and be
immediately due and payable, to the extent permitted by law, anything in this
Indenture or in the Notes to the contrary notwithstanding.
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal, premium, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder of a Note in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of a
series of Notes issued under this Indenture and then outstanding by notice to
the Trustee for those Notes may on behalf of the Holders of the Notes of that
series waive any existing Default or Event of Default and its consequences
hereunder, except a continuing Default or Event of Default in the payment of the
principal of, premium, if any, or interest on, the Notes; provided, however,
that the Holders of a majority in aggregate principal amount of the then
outstanding Notes may rescind an acceleration and its consequences, including
any related payment default that resulted from such acceleration. Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
Section 6.05 Control by Majority.
Holders of a majority in principal amount of the then outstanding Notes may
direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee of that series of Notes or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Notes or that may
subject the Trustee to personal liability.
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Section 6.06 Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:
(1) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(3) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any
loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(5) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium, if any, and interest
on the Note, on or after the respective due dates expressed in the Note
(including in connection with an offer to purchase), or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Issuers for the whole amount of
principal of, premium, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
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Section 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Issuers
(or any other obligor upon the Notes), their creditors or their property and
shall be entitled and empowered to collect, receive and distribute any money or
other property payable or deliverable on any such claims and any custodian in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof out
of the estate in any such proceeding, shall be denied for any reason, payment of
the same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties that the
Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium, if any, and interest, ratably, without preference
or priority of any kind, according to the amounts due and payable on the
Notes for principal, premium, if any and interest, respectively; and
Third: to the Issuers or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant
to Section 6.07 hereof, or a suit by Holders of more than 10% in principal
amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee will
exercise such of the rights and powers vested in it by this Indenture, and, in
the exercise of its power, use the same degree of care and skill in its
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs.
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(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee will be determined solely by the express
provisions of this Indenture and the Trustee need perform only those duties
that are specifically set forth in this Indenture and no others, and no
implied covenants or obligations shall be read into this Indenture against
the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee will examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;
(2) the Trustee will not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(3) the Trustee will not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), and (c) of this Section 7.01.
(e) No provision of this Indenture will require the Trustee to expend or
risk its own funds or incur any liability. The Trustee will be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder has offered to the Trustee security
and indemnity satisfactory to it against any loss, liability or expense.
(f) The Trustee will not be liable for interest on any money received by it
except as the Trustee may agree in writing with the Issuers. Money held in trust
by the Trustee need not be segregated from other funds except to the extent
required by law.
Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee will not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel will be
full and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
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(c) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of Indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit and shall incur no liability or
additional liability of any kind by reason of such inquiry or investigation.
(d) Except with respect to Section 4.01 hereof, the Trustee shall have no
duty to inquire as to the performance of the Issuers' covenants in Article 4
hereof. In addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (i) any Event of Default occurring pursuant
to Sections 6.01(1), 6.01(2) and 4.01 hereof or (ii) any Default or Event of
Default of which the Trustee shall have received written notification in the
manner set forth in this Indenture or an Officer in the Corporate Trust Office
of the Trustee shall have obtained actual knowledge. Delivery of reports,
information and documents to the Trustee under Section 4.03 is for informational
purposes only and the Trustee's receipt of the foregoing shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Issuers' compliance with any of
their covenants thereunder (as to which the Trustee is entitled to rely
exclusively on an Officers' Certificate.)
(e) The Trustee may act through its attorneys and agents and will not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(f) The Trustee will not be liable for any action it takes or omits to take
in good faith that it believes to be authorized or within the rights or powers
conferred upon it by this Indenture.
(g) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Issuers will be sufficient if signed by an
Officer of the Issuers.
(h) The Trustee will be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities that might be incurred
by it in compliance with such request or direction.
Section 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Issuers or any Affiliate of the
Issuers with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the SEC for permission to continue as
trustee or resign. Any Agent may do the same with like rights and duties. The
Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04 Trustee's Disclaimer.
The Trustee will not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Issuers' use of the proceeds from the Notes or any money
paid to the Issuers or upon the Issuers' direction under any provision of this
Indenture, it will not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it will not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
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Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee will mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note, the Trustee may withhold the notice if the Trustee
determines in good faith determines that withholding the notice is in the
interests of the Holders of the Notes.
Section 7.06 Reports by Trustee to Holders of the Notes.
(a) Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee will mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA ss. 313(a) (but if no event described in
TIA ss. 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also will comply with TIA ss.
313(b)(2). The Trustee will also transmit by mail all reports as required by TIA
ss. 313(c).
(b) A copy of each report at the time of its mailing to the Holders of
Notes will be mailed by the Trustee to the Issuers and filed by the Trustee with
the SEC and each stock exchange on which the Notes are listed in accordance with
TIA ss. 313(d). The Issuers will promptly notify the Trustee when the Notes are
listed on any stock exchange.
Section 7.07 Compensation and Indemnity.
(a) The Issuers will pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation will not be limited by any law on compensation of a
trustee of an express trust. The Issuers will reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses will
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
(b) The Issuers will indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Issuers (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Issuers or any Holder or any other Person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its
negligence or bad faith. The Trustee will notify the Issuers promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Issuers will not relieve the Issuers of their obligations hereunder. The Issuers
will defend the claim and the Trustee will cooperate in the defense. The Trustee
may have separate counsel and the Issuers will pay the reasonable fees and
expenses of such counsel. The Issuers need not pay for any settlement made
without its consent, which consent will not be unreasonably withheld.
(c) The obligations of the Issuers under this Section 7.07 will survive the
satisfaction and discharge of this Indenture.
(d) To secure the Issuers' payment obligations in this Section 7.07, the
Trustee will have a claim prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such claim will survive the satisfaction and
discharge of this Indenture.
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(e) When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(6) or (7) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
(f) The Trustee will comply with the provisions of TIAss. 313(b)(2) to the
extent applicable.
Section 7.08 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a successor
Trustee will become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
(b) The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Issuers. The Holders of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Issuers in writing. The Issuers may remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a custodian or public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Issuers will promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuers.
(d) If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers, or
the Holders of at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(e) If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its succession
to Holders. The retiring Trustee will promptly transfer all property held by it
as Trustee to the successor Trustee, provided all sums owing to the Trustee
hereunder have been paid and subject to the claim provided for in Section 7.07
hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Issuers' obligations under Section 7.07 hereof will continue for the
benefit of the retiring Trustee.
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Section 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act will be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
There will at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $50 million
as set forth in its most recent published annual report of condition.
This Indenture will always have a Trustee who satisfies the requirements of
TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA ss. 310(b).
Section 7.11 Preferential Collection of Claims Against the Issuers.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Issuers may, at the option of the Board of Directors of the General
Partner, on the Issuers' behalf, and the Board of Directors of Finance Corp.,
and at any time, elect to have Section 8.02 hereof be applied to all outstanding
Notes upon compliance with the conditions set forth below in this Article 8. The
Issuers may, at their option and at any time, elect to have Section 8.03 hereof
be applied to all outstanding Notes upon compliance with the conditions set
forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge.
Upon the Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Issuers will, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from their obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Issuers will be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which will thereafter be deemed to be "outstanding" only for
the purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in clauses (1) and (2) below, and to have satisfied all their other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Issuers, shall execute proper instruments
acknowledging the same), except for the following provisions which will survive
until otherwise terminated or discharged hereunder:
(1) the rights of Holders of outstanding Notes to receive payments in
respect of the principal of, or interest or premium, if any, on such Notes
when such payments are due from the trust referred to in Section 8.04
hereof;
(2) the Issuers' obligations with respect to the Notes concerning
issuing temporary Notes, registration of Notes or mutilated, destroyed,
lost or stolen Notes under Article 2;
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(3) the Issuers' obligation to maintain an office or agency for
payment under Section 4.02 hereof and money for security payments held in
trust;
(4) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Issuers' obligations in connection therewith; and
(5) the legal defeasance and covenant defeasance provisions of this
Article 8.
Subject to compliance with this Article 8, the Issuers may exercise their
option under this Section 8.02 notwithstanding the prior exercise of their
option under Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
Upon the Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Issuers will, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from each of
their obligations under the covenants contained in Sections 4.07, 4.08, 4.09,
4.10, 4.11, 4.12, 4.14, 4.15 and 4.16 hereof and clause (4) of Section 5.01
hereof with respect to the outstanding Notes on and after the date the
conditions set forth in Section 8.04 hereof are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes will thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but will continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Notes will not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Notes, the Issuers may omit to comply with and will
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply will not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes will be unaffected thereby. In addition, upon the
Issuers' exercise under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, Sections 6.01(3) through 6.01(4) hereof will not constitute
Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance under
either Section 8.02 or 8.03 hereof:
(1) the Issuers must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, premium, if any, and interest
on the outstanding Notes on the stated maturity date for payment thereof or
on the applicable redemption date, as the case may be;
(2) the Issuers will deliver to the Trustee an Opinion of Counsel
stating that:
(a) after the 91st day following the deposit the trust funds will
not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally,
and all conditions precedent provided for or relating to the Legal
Defeasance or the Covenant Defeasance have been complied with and
confirming other matters;
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(b) in the case of an election under Section 8.02 hereof, that
the Issuers have received from, or there has been published by, the
Internal Revenue Service a ruling, or since the date of this
Indenture, there shall have been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon,
the Holders of the outstanding Notes will not recognize income, gain
or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred; and
(c) in the case of an election under Section 8.03 hereof, that
the Holders of the outstanding Notes will not recognize income, gain
or loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such Covenant Defeasance had not occurred;
(3) the Issuers must deliver to the Trustee an Officers' Certificate
stating that the deposit was not made by the Issuers with the intent of
preferring the Holders of Notes over the other creditors of the Issuers or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Issuers;
(4) no Event of Default shall have occurred and be continuing on the
date of such deposit or insofar as Events of Default described in Section
6.01(6) or (7) hereof are concerned, at any time in the period ending on
the 91st day after the date of deposit; and
(5) such Legal Defeasance or Covenant Defeasance will not result in a
breach, violation of, or constitute a default under, any material agreement
or instrument (other than this Indenture) to which the Issuers or any of
their Restricted Subsidiaries is a party or by which the Issuers or any of
their Restricted Subsidiaries is bound.
Section 8.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
will be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Issuers or any of their Restricted
Subsidiaries acting as Paying Agent) as the Trustee may determine, to the
Holders of such Notes of all sums due and to become due thereon in respect of
principal, premium, if any, and interest, but such money need not be segregated
from other funds except to the extent required by law.
The Issuers will pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the Trustee
will deliver or pay to the Issuers from time to time upon the request of the
Issuers any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(1) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
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Section 8.06 Repayment to the Issuers.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Issuers, in trust for the payment of the principal of, premium, if any, or
interest on any Note and remaining unclaimed for two years after such principal,
premium, if any, or interest has become due and payable shall be paid to the
Issuers on their request or (if then held by the Issuers) will be discharged
from such trust; and the Holder of such Note will thereafter be permitted to
look only to the Issuers for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Issuers as trustee thereof, will thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Issuers cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which will not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Issuers.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States dollars
or non-callable Government Securities in accordance with Section 8.02 or 8.03
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Issuers' obligations under this Indenture and the Notes
will be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Issuers make any
payment of principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Issuers will be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Issuers and the Trustee
may amend or supplement this Indenture or the Notes without the consent of any
Holder of a Note to:
(1) cure any ambiguity, defect or inconsistency;
(2) provide for uncertificated Notes in addition to or in place of
certificated Notes;
(3) provide for the assumption of the Issuers' obligations to Holders
of Notes in the case of a merger or consolidation;
(4) make any change that could provide any additional rights or
benefits to the Holders of Notes that does not adversely affect the legal
rights under this Indenture of any such Holder;
(5) comply with requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the TIA; or
69
(6) to provide security for or add guarantees with respect to the
Notes.
Upon the request of the Partnership accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee will join with the Issuers in the execution of any
amended or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee will not be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
Section 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Issuers and the Trustee
may amend or supplement this Indenture (including, without limitation, Sections
3.10, 4.10 and 4.14 hereof) and the Notes with the consent of the Holders of at
least a majority in principal amount of the Notes then outstanding (including,
without limitation, consents obtained in connection with a tender offer or
exchange offer for the Notes), and, subject to Sections 6.04 and 6.07 hereof,
any existing Default or Event of Default (other than a continuing Default or
Event of Default in the payment of the principal of, premium, if any, or
interest on the Notes, except a payment default resulting from an acceleration
that has been rescinded) may be waived for all Holders of Notes of a series and
its consequences under this Indenture with the consent of the Holders of a
majority in aggregate principal amount of that series of Notes (including
Additional Notes, if any) issued under this Indenture and then outstanding
(including, without limitation, consents obtained in connection with a tender
offer or exchange offer for the Notes), by notice to the Trustee. Section 2.08
hereof shall determine which Notes are considered to be "outstanding" for
purposes of this Section 9.02.
Upon the request of the Partnership accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee will
join with the Issuers in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but will not be obligated to, enter into such
amended or supplemental Indenture.
It is not be necessary for the consent of the Holders of Notes under this
Section 9.02 to approve the particular form of any proposed amendment or waiver,
but it is sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Issuers will mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Issuers to mail such notice, or any defect therein, will not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, with the consent
of the Holders of a majority in principal amount of the Notes (including,
without limitation, Additional Notes, if any) then outstanding (including
consents obtained in connection with a tender offer or exchange offer for Notes)
may waive any existing default or compliance with any provision of this
Indenture or the Notes. However, without the consent of each Holder affected, an
amendment or waiver under this Section 9.02 may not (with respect to any Notes
held by a non-consenting Holder):
70
(1) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes other
than as provided above with respect to Sections 3.10, 4.10 and 4.14 hereof;
(3) reduce the rate of or change the time for payment of interest on
any Note;
(4) waive a Default in the payment of principal or interest on the
Notes;
(5) make any Note payable in money other than that stated in the
Notes;
(6) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal, premium, if any, or interest on the Notes; or
(7) make any change in the foregoing amendment and waiver provisions.
Without the consent of the Holders of 90% of the principal amount of the
Notes then outstanding (including consents obtained in connection with a tender
offer or exchange offer for Notes), an amendment or waiver may not:
(1) change the provisions applicable to the redemption of any Note as
described in Section 3.09; or
(2) make any change in the Escrow and Security Agreement that would
adversely affect the Holders.
Section 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes will be set
forth in an amended or supplemental Indenture that complies with the TIA as then
in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Issuers in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note will not
affect the validity and effect of such amendment, supplement or waiver.
71
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee will sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The
Partnership may not sign an amendment or supplemental Indenture until the Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee will be entitled to receive and (subject to Section 7.01 hereof)
will be fully protected in relying upon, in addition to the documents required
by Section 11.04 hereof, an Officers' Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental Indenture is
authorized or permitted by this Indenture.
ARTICLE 10.
SATISFACTION AND DISCHARGE
Section 10.01 Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further effect as
to all Notes issued hereunder, when:
(1) either:
(a) all Notes that have been authenticated (except lost, stolen
or destroyed Notes that have been replaced or paid and Notes for whose
payment money has theretofore been deposited in trust and thereafter
repaid to the Issuers) have been delivered to the Trustee for
cancellation; or
(b) all Notes that have not been delivered to the Trustee for
cancellation have become due and payable by reason of the making of a
notice of redemption or otherwise or will become due and payable
within one year and the Issuers has irrevocably deposited or caused to
be deposited with the Trustee as trust funds in trust solely for the
benefit of the Holders, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be
sufficient without consideration of any reinvestment of interest, to
pay and discharge the entire indebtedness on the Notes not delivered
to the Trustee for cancellation for principal, premium, if any, and
accrued interest to the date of maturity or redemption;
(2) no Default or Event of Default has occurred and is continuing on
the date of such deposit or will occur as a result of such deposit and such
deposit will not result in a breach or violation of, or constitute a
default under, any other instrument to which the Issuers are a party or by
which the Issuers are bound;
(3) the Issuers have paid or caused to be paid all sums payable by
them under this Indenture; and
(4) the Issuers have delivered irrevocable instructions to the Trustee
under this Indenture to apply the deposited money toward the payment of the
Notes at maturity or the redemption date, as the case may be.
In addition, the Issuers must deliver an Officers' Certificate and an
Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if money
has been deposited with the Trustee pursuant to subclause (b) of clause (1) of
this Section, the provisions of Section 10.02 and Section 8.06 will survive. In
addition, nothing in this Section 10.01 will be deemed to discharge those
provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.
72
Section 10.02 Application of Trust Money.
Subject to the provisions of Section 8.06, all money deposited with the
Trustee pursuant to Section 10.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Issuers acting as
their own Paying Agent) as the Trustee may determine, to the Persons entitled
thereto, of the principal (and premium, if any) and interest for whose payment
such money has been deposited with the Trustee; but such money need not be
segregated from other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or Government
Securities in accordance with Section 10.01 by reason of any legal proceeding or
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Issuers'
obligations under this Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 10.01; provided that if
the Issuers has made any payment of principal of, premium, if any, or interest
on any Notes because of the reinstatement of their obligations, the Issuers
shall be subrogated to the rights of the Holders of such Notes to receive such
payment from the money or Government Securities held by the Trustee or Paying
Agent.
ARTICLE 11.
MISCELLANEOUS
Section 11.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA ss.318(c), the imposed duties will control.
Section 11.02 Notices.
Any notice or communication by the Issuers or the Trustee to the others is
duly given if in writing and delivered in Person or mailed by first class mail
(registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others' address:
If to the Issuers:
Ferrellgas, L.P.
One Liberty Plaza
Liberty, MO 64068
Telecopier No.: (816) 792-6979
Attention: Kevin T. Kelly
With a copy to:
Bracewell & Patterson, LLP
711 Louisiana Street
South Tower Pennzoil Place, Suite 2900
Houston, TX 77002
Telecopier No.: (713) 221-2121
Attention: Dewey J. Gonsoulin, Jr., Esq.
73
If to the Trustee:
U.S. Bank National Association
Corporate Trust Services
60 Livingston Avenue
St. Paul, MN 55107-2292
Telecopier No.: (651) 495-8097
Attention: Frank Leslie
The Issuers or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) will be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder will be mailed by first class mail,
certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery to its address shown on the register kept by the
Registrar. Any notice or communication will also be so mailed to any Person
described in TIA ss. 313(c), to the extent required by the TIA. Failure to mail
a notice or communication to a Holder or any defect in it will not affect its
sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Issuers mails a notice or communication to Holders, they will mail a
copy to the Trustee and each Agent at the same time.
Section 11.03 Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Issuers, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
Section 11.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuers to the Trustee to take any
action under this Indenture, the Issuers shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which must include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which must include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
74
Section 11.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) must comply with the provisions of TIA ss. 314(e)
and must include:
(1) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
Section 11.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 11.07 Non-Recourse.
The obligations of the Issuers under this Indenture are non-recourse to
Ferrellgas Partners and its Affiliates, other than the Issuers and, after the
Escrow Mergers, the General Partner, and are payable only out of the Issuers'
cash flow and assets and, after the Escrow Mergers, the cash flow and assets of
the General Partner. The Trustee agrees, and each Holder of a Note, by accepting
a Note, agrees in this Indenture that Ferrellgas Partners and its other
Affiliates will not be liable for any of the Issuers' obligations under this
Indenture or the Notes.
Section 11.08 No Personal Liability of Directors, Officers, Employees and
Stockholders.
No limited partner of the Partnership or director, officer, employee,
incorporator or stockholder of the General Partner, Finance Corp., Escrow LLC or
Escrow Finance Corp., as such, will have any liability for any obligations of
the Issuers under the Notes or this Indenture or any claim based on, in respect
of, or by reason of, such obligations. Each Holder of Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to
waive liabilities under the federal securities laws and it is the view of the
SEC that such waiver is against public policy.
Section 11.09 Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE AND THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
75
Section 11.10 Successors.
All agreements of the Issuers in this Indenture and the Notes will bind
their successors. All agreements of the Trustee in this Indenture will bind its
successors.
Section 11.11 Severability.
In case any provision in this Indenture or in the Notes is invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions will not in any way be affected or impaired thereby.
Section 11.12 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy will be an original, but all of them together represent the same agreement.
Section 11.13 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and will in no way
modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
76
SIGNATURES
Dated as of April 20, 2004
Very truly yours,
FERRELLGAS ESCROW LLC
By: Ferrellgas, L.P., its sole member
By: Ferrellgas, Inc., its general partner
By: /s/ Kevin T. Kelly
-------------------------------------
Name: Kevin T. Kelly
Title: Senior Vice President and
Chief Financial Officer
FERRELLGAS FINANCE ESCROW CORPORATION
By: /s/ Kevin T. Kelly
----------------------------------------------------
Name: Kevin T. Kelly
Title: Senior Vice President and Chief Financial Officer
On and after the Merger
Date, FERRELLGAS, L.P.
By: Ferrellgas, Inc., its general partner
By: /s/ Kevin T. Kelly
----------------------------------------------------
Name: Kevin T. Kelly
Title: Senior Vice President and Chief Financial Officer
On and after the Merger Date,
FERRELLGAS FINANCE CORP.
By: /s/ Kevin T. Kelly
----------------------------------------------------
Name: Kevin T. Kelly
Title: Senior Vice President and Chief Financial Officer
U.S. Bank national association, as Trustee
By: /s/ Frank P. Leslie III
----------------------------------------
Name: Frank P. Leslie III
Title: Vice President
77
EXHIBIT A1
[Face of Note]
- --------------------------------------------------------------------------------
CUSIP/CINS
-------------------------------
6 3/4% Senior Notes due 2014
No. ___ $____________
FERRELLGAS ESCROW LLC
FERRELLGAS FINANCE ESCROW CORPORATION
promises to pay to CEDE & CO.
----------
or registered assigns,
the principal sum of
-----------------------------------------------------------
Dollars on May 1, 2014.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
Dated:
-------------
FERRELLGAS ESCROW LLC
By: Ferrellgas, L.P., its sole member
By: Ferrellgas, Inc.,
its General Partner
By:
----------------------------------------------------
Name: Kevin T. Kelly
Title: Senior Vice President and Chief Financial Officer
FERRELLGAS FINANCE ESCROW CORPORATION
By:
----------------------------------------------------
Name: Kevin T. Kelly
Title: Senior Vice President and Chief Financial Officer
This is one of the Notes referred to
in the within-mentioned Indenture:
U.S. BANK NATIONAL ASSOCIATION
as Trustee
By:
--------------------------------------------
Authorized Signatory
- --------------------------------------------------------------------------------
A1-1
[Back of Note]
6 3/4% Senior Notes due 2014
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]
[Insert Private Placement Legend, if applicable pursuant to the provisions of
the Indenture]
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. Ferrellgas Escrow LLC, a Delaware limited liability
company ("Escrow LLC"), and Ferrellgas Finance Escrow Corporation, a
Delaware corporation ("Escrow Finance Corp." and together with Escrow LLC,
the "Issuers"), promise to pay interest on the principal amount of this
Note at 6 3/4% per annum from April 20, 2004 until maturity. The Issuers
will pay interest semi-annually in arrears on May 1 and November 1 of each
year, or if any such day is not a Business Day, on the next succeeding
Business Day (each, an "Interest Payment Date"). Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance; provided that if there
is no existing Default in the payment of interest, and if this Note is
authenticated between a record date referred to on the face hereof and the
next succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first
Interest Payment Date shall be November 1, 2004. The Issuers will pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time
on demand at a rate that is 1% per annum in excess of the rate then in
effect; they will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. Interest will be computed on
the basis of a 360-day year of twelve 30-day months.
(2) METHOD OF PAYMENT. The Issuers will pay interest on the Notes to
the Persons who are registered Holders of Notes at the close of business on
the April 15 or October 15 next preceding the Interest Payment Date, even
if such Notes are canceled after such record date and on or before such
Interest Payment Date, except as provided in Section 2.12 of the Indenture
with respect to defaulted interest. The Notes will be payable as to
principal, premium, if any, and interest at the office or agency of the
Issuers maintained for such purpose within the City and State of New York,
or, at the option of the Issuers, payment of interest may be made by check
mailed to the Holders at their addresses set forth in the register of
Holders; provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest, premium
on, all Global Notes the Holders of which will have provided wire transfer
instructions to the Issuers or the Paying Agent. Such payment will be in
such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
(3) PAYING AGENT AND REGISTRAR. Initially, U.S. Bank National
Association, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Issuers may change any Paying Agent or Registrar without
notice to any Holder. The Issuers or any of their Subsidiaries may act in
any such capacity.
A1-2
(4) INDENTURE. The Issuers issued the Notes under an Indenture dated
as of April 20, 2004 (the "Indenture") among the Issuers and the Trustee.
The terms of the Notes include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes are subject to all
such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. To the extent any provision of this Note conflicts
with the express provisions of the Indenture, the provisions of the
Indenture shall govern and be controlling. Except to the extent provided in
the Escrow and Security Agreement dated as of the date of the Indenture
(the "Escrow and Security Agreement"), among Escrow LLC, Escrow Finance
Corp., the Trustee and LaSalle Bank National Association, as escrow agent,
the Notes are unsecured obligations of the Issuers.
(5) Optional Redemption.
(a) Except as set forth in subparagraph (b) of this Paragraph 5,
the Issuers will not have the option to redeem the Notes prior to May
1, 2009. Thereafter, the Issuers will have the option to redeem the
Notes, in whole or in part, upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest
thereon to the applicable redemption date, if redeemed during the
twelve months beginning on May 1 of the years indicated below:
Year Percentage
---- ----------
2009............................................. 103.375%
2010............................................. 102.250%
2011............................................. 101.125%
2012 and thereafter.............................. 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time on or prior to May 1, 2007, the Issuers may
redeem Notes with the net proceeds of one or more Equity Offerings at
a redemption price equal to 106.750% of the aggregate principal amount
thereof, plus accrued and unpaid interest to the applicable redemption
date; provided that at least 65% in aggregate principal amount of the
Notes already issued, together with the Notes and any Additional Notes
sold under the Indenture, remain outstanding immediately after the
occurrence of such redemption and that such redemption occurs within
90 days of the date of the closing of such Equity Offering.
(6) Mandatory Redemption.
Except as described below, the Issuers will not be required to make
mandatory redemption payments with respect to the Notes.
If (i) the conditions contained in Section I.4(b) of the Escrow and
Security Agreement have not been satisfied by August 5, 2004 or (ii) the
Contribution Agreement is terminated prior to August 5, 2004, the Issuers will
cause a notice of special mandatory redemption to be mailed not later than the
next Business Day following August 5, 2004 or following the date the
Contribution Agreement is terminated, as applicable, and will redeem the Notes
not later than five Business Days following the date of the notice of the
special mandatory redemption, at a redemption price equal to 100% of the
principal amount of Notes, plus accrued and unpaid interest, to, but not
including the redemption date. Immediately upon receipt by the Paying Agent of
the Escrow Property (as defined in the Escrow and Security Agreement), the
Trustee will notify the Holders of the date fixed for special mandatory
redemption.
(7) Repurchase at Option of Holder.
A1-3
(a) If there is a Change of Control, the Issuers will be required
to make an offer (a "Change of Control Offer") to repurchase, in cash,
all or any part (equal to $1,000 or an integral multiple thereof) of
each Holder's Notes at a purchase price equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest thereon, if
any, to the date of purchase ( the "Change of Control Payment").
Within 30 days following any Change of Control, the Issuers will mail
a notice to each Holder setting forth the procedures governing the
Change of Control Offer as required by the Indenture.
(b) If the Partnership or any of its Restricted Subsidiary
consummates any Asset Sales, within 15 days of each date on which the
aggregate amount of Excess Proceeds exceeds $10 million, the Issuers
will commence an offer to all Holders of Notes and all holders of
other Indebtedness that are pari passu with the Notes containing
provisions similar to those set forth in this Indenture with respect
to offers to purchase or redeem with the proceeds of sales of assets
(an "Asset Sale Offer") pursuant to Section 3.10 of the Indenture to
purchase the maximum principal amount of Notes and other pari passu
Indebtedness that may be purchased out of the Excess Proceeds at an
offer price in cash in an amount equal to 100% of the principal amount
thereof plus accrued and unpaid interest thereon, if any, to the date
fixed for the closing of such offer, in accordance with the procedures
set forth in the Indenture. To the extent that the aggregate amount of
Notes and other pari passu Indebtedness tendered pursuant to an Asset
Sale Offer is less than the Excess Proceeds, the Partnership or any
Restricted Subsidiary may use such deficiency for general business
purposes. If the aggregate principal amount of Notes and other pari
passu Indebtedness surrendered by holders thereof exceeds the amount
of Excess Proceeds, the Trustee shall select the Notes and other pari
passu Indebtedness to be purchased on a pro rata basis. Holders of
Notes that are the subject of an offer to purchase will receive an
Asset Sale Offer from the Issuers prior to any related purchase date
and may elect to have such Notes purchased by completing the form
entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes.
(8) NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
10 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on
Notes or portions thereof called for redemption.
(9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged
as provided in the Indenture. The Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Issuers may require a Holder to pay any taxes
and fees required by law or permitted by the Indenture. The Issuers need
not exchange or register the transfer of any Note or portion of a Note
selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, the Issuers need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes
to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
(10) PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
A1-4
(11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent
of the Holders of at least a majority in principal amount of the then
outstanding Notes (including, consents obtained in connection with a tender
offer or exchange offer for Notes), and any existing default or compliance
with any provision of the Indenture or the Notes may be waived with the
consent of the Holders of a majority in aggregate principal amount of the
then outstanding Notes (including, consents obtained in connection with a
tender offer or exchange offer for Notes). Without the consent of any
Holder of a Note, the Indenture or the Notes may be amended or supplemented
to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Issuers' obligations to Holders of the
Notes in case of a merger or consolidation, to make any change that could
provide any additional rights or benefits to the Holders of the Notes that
does not adversely affect the legal rights under the Indenture of any such
Holder, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act,
or to provide for security for or add guarantees with respect to the Notes.
(12) DEFAULTS AND REMEDIES. Events of Default include: Each of the
following is an "Event of Default": (i) default in the payment of the
principal of or premium, if any, on any Note when the same becomes due and
payable, upon stated maturity, acceleration, optional redemption, required
purchase, scheduled principal payment or otherwise; (ii) default in the
payment of an installment of interest on any of the Notes, when the same
becomes due and payable, which default continues for a period of 30 days;
(iii) failure of the Issuers to perform or observe any other term, covenant
or agreement contained in the Notes or the Indenture, other than a default
specified in either (i) or (ii) above, and the default continues for a
period of 45 days after written notice of the default requiring the Issuers
to remedy the same has been given to the Partnership by the Trustee or to
the Issuers and the Trustee by Holders of at least 25% in aggregate
principal amount of the Notes then outstanding; (iv) failure of the Issuers
to perform or observe any material term, covenant or agreement contained in
the Escrow and Security Agreement; (v) default or defaults under certain
other agreements, instruments, mortgages, bonds, debentures or other
evidences of Indebtedness under which the Partnership or any Restricted
Subsidiary of the Partnership has outstanding Indebtedness in excess of $10
million if the default (x) is caused by a failure to pay principal of or
premium, if any, or interest on to such Indebtedness within the applicable
grace period, if any, provided with respect to such Indebtedness or (y)
results in the acceleration of such Indebtedness prior to its stated
maturity; (vi) the Escrow and Security Agreement or any other security
document or any Lien purported to be granted thereby on the Escrow Account
or the case or escrow investments therein is held in any judicial
proceeding to be unenforceable or invalid, in whole or in part, or ceases
for any reason (other than pursuant to a release that is delivered or
becomes effective as set forth in the Escrow and Security Agreement or
Indenture) to be fully enforceable and perfected; (vii) certain final
judgment or judgments, which is or are non-appealable and non-reviewable or
which has or have not been stayed pending appeal or review or as to which
all rights to appeal or review have expired or been exhausted, shall have
been rendered against the Partnership, any Restricted Subsidiary or the
General Partner provided such judgment or judgments requires or require the
payment of money in excess of $10 million in the aggregate and is not
covered by insurance or discharged or stayed pending appeal or review
within 60 days after entry of such judgment or in the event of a stay,
within 30 days after the stay expires; or (viii) specified events of
bankruptcy, insolvency, or reorganization with respect to the Issuers or
any of their Significant Subsidiaries as more fully set forth in the
Indenture. If any Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount of the applicable series of
Notes then outstanding Notes may declare all the Notes of that series to be
due and payable. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, with
respect to the Partnership, Finance Corp. or any Significant Subsidiary,
all outstanding Notes will become due and payable without further action or
notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of a series of then outstanding Notes may
direct the Trustee of that series of Notes in its exercise of any trust or
power. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of
Default relating to the payment of principal or interest) if it determines
in good faith that withholding notice is in their interest. The Holders of
a majority in aggregate principal amount of a series of Notes then
outstanding by notice to the Trustee for those Notes may on behalf of all
Holders of Notes of that series waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing
Default or Event of Default in the payment of interest on, or the principal
of, the Notes. The Issuers are required to deliver to the Trustee annually
a statement regarding compliance with the Indenture, and the Issuers are
required upon becoming aware of any Default or Event of Default, to deliver
to the Trustee a statement specifying such Default or Event of Default.
A1-5
(13) TRUSTEE DEALINGS WITH ISSUERS. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Issuers or their Affiliates, and may otherwise deal with
the Issuers or their Affiliates, as if it were not the Trustee.
(14) NO RECOURSE AGAINST OTHERS. A limited partner of the Partnership
or director, officer, employee, incorporator or stockholder of the General
Partner, Finance Corp., Escrow LLC or Escrow Finance Corp., as such, will
not have any liability for any obligations of the Issuers under the Notes
or the Indenture or for any claim based on, in respect of, or by reason of,
such obligations. Each Holder by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for
the issuance of the Notes.
(15) AUTHENTICATION. This Note will not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
(16) ABBREVIATIONS. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
(17) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders
of Notes under the Indenture, Holders of Restricted Global Notes and
Restricted Definitive Notes will have all the rights set forth in the
Registration Rights Agreement dated as of April 20, 2004, among the
Issuers, and on and after the Merger Date (as defined therein), Ferrellgas,
L.P. and Ferrellgas Finance Corp. and the other parties named on the
signature pages thereof or, in the case of Additional Notes, Holders of
Restricted Global Notes and Restricted Definitive Notes will have the
rights set forth in one or more registration rights agreements, if any,
among the Issuers, and on and after the Merger Date (as defined therein),
Ferrellgas, L.P. and Ferrellgas Finance Corp. and the other parties
thereto, relating to rights given by the Issuers to the purchasers of any
Additional Notes (collectively, the "Registration Rights Agreement").
(18) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have
caused CUSIP numbers to be printed on the Notes and the Trustee may use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed
on the Notes or as contained in any notice of redemption and reliance may
be placed only on the other identification numbers placed thereon.
(19) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
GOVERN AND BE USED TO CONSTRUE THE INDENTURE AND THIS NOTE WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
A1-6
The Issuers will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
Ferrellgas, L.P.
One Liberty Plaza
Liberty, Missouri 64068
Attention: Investor Relations
(816) 792-0203
A1-7
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:___________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Issuers. The agent may substitute
another to act for him.
Date: _______________
Your Signature:______________________________________
(Sign exactly as your name appears on
the face of this Note)
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A1-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers pursuant to
Section 4.10 or 4.14 of the Indenture, check the appropriate box below:
---Section 4.10 ----Section 4.14
If you want to elect to have only part of the Note purchased by the Issuers
pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you
elect to have purchased:
$_______________________
Date: _______________
Your Signature:______________________________________
(Sign exactly as your name appears on
the face of this Note)
Tax Identification No.:______________________________
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A1-9
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
Principal Amount
Amount of decrease of this Global Note Signature of
in Principal Amount Amount of increase in following such authorized officer
of Principal Amount of decrease of Trustee or
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- ------------------- --------------------- ------------------ ------------------
* This schedule should be included only if the Note is issued in global form.
A1-10
EXHIBIT A2
[Face of Regulation S Temporary Global Note]
- --------------------------------------------------------------------------------
CUSIP/CINS
----------------
6 3/4% Senior Notes due 2014
No. ___ $__________
FERRELLGAS ESCROW LLC
FERRELLGAS FINANCE ESCROW CORPORATION
promises to pay to CEDE & CO..
or registered assigns,
the principal sum of ____________________________________DOLLARS on May 1, 2014.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
Dated:
----------------------
FERRELLGAS ESCROW LLC
By: Ferrellgas, L.P., its sole member
By: Ferrellgas, Inc.,
its General Partner
By:
----------------------------------------------------
Name: Kevin T. Kelly
Title: Senior Vice President and Chief Financial Officer
FERRELLGAS FINANCE ESCROW CORPORATION
By:
----------------------------------------------------
Name: Kevin T. Kelly
Title: Senior Vice President and Chief Financial Officer
This is one of the Notes referred to
in the within-mentioned Indenture:
U.S. BANK NATIONAL ASSOCIATION
as Trustee
By:
--------------------------------------------
Authorized Signatory
- --------------------------------------------------------------------------------
A2-1
[Back of Regulation S Temporary Global Note]
6 3/4% Senior Notes due 2014
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON.
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE ISSUERS OR THEIR
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF
THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF FERRELLGAS ESCROW LLC,
FERRELLGAS FINANCE ESCROW CORPORATION, FERRELLGAS, L.P. AND FERRELLGAS FINANCE
CORP. THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE
A2-2
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. Ferrellgas Escrow LLC, a Delaware limited liability
company ("Escrow LLC"), and Ferrellgas Finance Escrow Corporation, a
Delaware corporation ("Escrow Finance Corp." and together with Escrow LLC,
the "Issuers"), promise to pay interest on the principal amount of this
Note at 6 3/4% per annum from April 20, 2004 until maturity. The Issuers
will pay interest semi-annually in arrears on May 1 and November 1 of each
year, or if any such day is not a Business Day, on the next succeeding
Business Day (each, an "Interest Payment Date"). Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance; provided that if there
is no existing Default in the payment of interest, and if this Note is
authenticated between a record date referred to on the face hereof and the
next succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first
Interest Payment Date shall be November 1, 2004. The Issuers will pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time
on demand at a rate that is 1% per annum in excess of the rate then in
effect; they will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. Interest will be computed on
the basis of a 360-day year of twelve 30-day months.
Until this Regulation S Temporary Global Note is exchanged for one or more
Regulation S Permanent Global Notes, the Holder hereof shall not be entitled to
receive payments of interest hereon; until so exchanged in full, this Regulation
S Temporary Global Note shall in all other respects be entitled to the same
benefits as other Notes under the Indenture.
(2) METHOD OF PAYMENT. The Issuers will pay interest on the Notes to
the Persons who are registered Holders of Notes at the close of business on
the April 15 or October 15 next preceding the Interest Payment Date, even
if such Notes are canceled after such record date and on or before such
Interest Payment Date, except as provided in Section 2.12 of the Indenture
with respect to defaulted interest. The Notes will be payable as to
principal, premium, if any, and interest at the office or agency of the
Issuers maintained for such purpose within the City and State of New York,
or, at the option of the Issuers, payment of interest may be made by check
mailed to the Holders at their addresses set forth in the register of
Holders; provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest, premium
on, all Global Notes the Holders of which will have provided wire transfer
instructions to the Issuers or the Paying Agent. Such payment will be in
such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
A2-3
(3) PAYING AGENT AND REGISTRAR. Initially, U.S. Bank National
Association, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Issuers may change any Paying Agent or Registrar without
notice to any Holder. The Issuers or any of their Subsidiaries may act in
any such capacity.
(4) INDENTURE. The Issuers issued the Notes under an Indenture dated
as of April 20, 2004 (the "Indenture") among the Issuers and the Trustee.
The terms of the Notes include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes are subject to all
such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. To the extent any provision of this Note conflicts
with the express provisions of the Indenture, the provisions of the
Indenture shall govern and be controlling. Except to the extent provided in
the Escrow and Security Agreement dated as of the date of the Indenture
(the "Escrow and Security Agreement"), among Escrow LLC, Escrow Finance
Corp., the Trustee and LaSalle Bank National Association, as escrow agent,
the Notes are unsecured obligations of the Issuers.
(5) Optional Redemption.
(a) Except as set forth in subparagraph (b) of this Paragraph 5,
the Issuers will not have the option to redeem the Notes prior to May
1, 2009. Thereafter, the Issuers will have the option to redeem the
Notes, in whole or in part, upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest
thereon to the applicable redemption date, if redeemed during the
twelve months beginning on May 1 of the years indicated below:
Year Percentage
---- ----------
2009....................................................... 103.375%
2010....................................................... 102.250%
2011....................................................... 101.125%
2012 and thereafter........................................ 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time on or prior to May 1, 2007, the Issuers may
redeem Notes with the net proceeds of one or more Equity Offerings at
a redemption price equal to 106.750% of the aggregate principal amount
thereof, plus accrued and unpaid interest to the applicable redemption
date; provided that at least 65% in aggregate principal amount of the
Notes already issued, together with the Notes and any Additional Notes
sold under the Indenture, remain outstanding immediately after the
occurrence of such redemption and that such redemption occurs within
90 days of the date of the closing of such Equity Offering.
(6) Mandatory Redemption.
Except as described below, the Issuers will not be required to make
mandatory redemption payments with respect to the Notes.
If (i) the conditions contained in Section I.4(b) of the Escrow and
Security Agreement have not been satisfied by August 5, 2004 or (ii) the
Contribution Agreement is terminated prior to August 5, 2004, the Issuers will
cause a notice of special mandatory redemption to be mailed not later than the
next Business Day following August 5, 2004 or following the date the
Contribution Agreement is terminated, as applicable, and will redeem the Notes
not later than five Business Days following the date of the notice of the
special mandatory redemption, at a redemption price equal to 100% of the
principal amount of Notes, plus accrued and unpaid interest, to, but not
including the redemption date. Immediately upon receipt by the Paying Agent of
the Escrow Property (as defined in the Escrow and Security Agreement), the
Trustee will notify the Holders of the date fixed for special mandatory
redemption.
A2-4
(7) Repurchase at Option of Holder.
(a) If there is a Change of Control, the Issuers will be required to
make an offer (a "Change of Control Offer") to repurchase, in cash, all or
any part (equal to $1,000 or an integral multiple thereof) of each Holder's
Notes at a purchase price equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest thereon, if any, to the date of
purchase ( the "Change of Control Payment"). Within 30 days following any
Change of Control, the Issuers will mail a notice to each Holder setting
forth the procedures governing the Change of Control Offer as required by
the Indenture.
(b) If the Partnership or any of its Restricted Subsidiary consummates
any Asset Sales, within 15 days of each date on which the aggregate amount
of Excess Proceeds exceeds $10 million, the Issuers will commence an offer
to all Holders of Notes and all holders of other Indebtedness that are pari
passu with the Notes containing provisions similar to those set forth in
this Indenture with respect to offers to purchase or redeem with the
proceeds of sales of assets (an "Asset Sale Offer") pursuant to Section
3.10 of the Indenture to purchase the maximum principal amount of Notes and
other pari passu Indebtedness that may be purchased out of the Excess
Proceeds at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest thereon, if any,
to the date fixed for the closing of such offer, in accordance with the
procedures set forth in the Indenture. To the extent that the aggregate
amount of Notes and other pari passu Indebtedness tendered pursuant to an
Asset Sale Offer is less than the Excess Proceeds, the Partnership or any
Restricted Subsidiary may use such deficiency for general business
purposes. If the aggregate principal amount of Notes and other pari passu
Indebtedness surrendered by holders thereof exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes and other pari passu
Indebtedness to be purchased on a pro rata basis. Holders of Notes that are
the subject of an offer to purchase will receive an Asset Sale Offer from
the Issuers prior to any related purchase date and may elect to have such
Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes.
(8) NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 10
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
(9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Issuers may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Issuers need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Issuers
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
A2-5
(10) PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated
as its owner for all purposes.
(11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding Notes
(including, consents obtained in connection with a tender offer or exchange
offer for Notes), and any existing default or compliance with any provision of
the Indenture or the Notes may be waived with the consent of the Holders of a
majority in aggregate principal amount of the then outstanding Notes (including,
consents obtained in connection with a tender offer or exchange offer for
Notes). Without the consent of any Holder of a Note, the Indenture or the Notes
may be amended or supplemented to cure any ambiguity, defect or inconsistency,
to provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Issuers' obligations to Holders of
the Notes in case of a merger or consolidation, to make any change that could
provide any additional rights or benefits to the Holders of the Notes that does
not adversely affect the legal rights under the Indenture of any such Holder, to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act, or to provide for
security for or add guarantees with respect to the Notes.
(12) DEFAULTS AND REMEDIES. Events of Default include: Each of the
following is an "Event of Default": (i) default in the payment of the principal
of or premium, if any, on any Note when the same becomes due and payable, upon
stated maturity, acceleration, optional redemption, required purchase, scheduled
principal payment or otherwise; (ii) default in the payment of an installment of
interest on any of the Notes, when the same becomes due and payable, which
default continues for a period of 30 days; (iii) failure of the Issuers to
perform or observe any other term, covenant or agreement contained in the Notes
or the Indenture, other than a default specified in either (i) or (ii) above,
and the default continues for a period of 45 days after written notice of the
default requiring the Issuers to remedy the same has been given to the
Partnership by the Trustee or to the Issuers and the Trustee by Holders of at
least 25% in aggregate principal amount of the Notes then outstanding; (iv)
failure of the Issuers to perform or observe any material term, covenant or
agreement contained in the Escrow and Security Agreement; (v) default or
defaults under certain other agreements, instruments, mortgages, bonds,
debentures or other evidences of Indebtedness under which the Partnership or any
Restricted Subsidiary of the Partnership has outstanding Indebtedness in excess
of $10 million if the default (x) is caused by a failure to pay principal of or
premium, if any, or interest on to such Indebtedness within the applicable grace
period, if any, provided with respect to such Indebtedness or (y) results in the
acceleration of such Indebtedness prior to its stated maturity; (vi) the Escrow
and Security Agreement or any other security document or any Lien purported to
be granted thereby on the Escrow Account or the case or escrow investments
therein is held in any judicial proceeding to be unenforceable or invalid, in
whole or in part, or ceases for any reason (other than pursuant to a release
that is delivered or becomes effective as set forth in the Escrow and Security
Agreement or Indenture) to be fully enforceable and perfected; (vii) certain
final judgment or judgments, which is or are non-appealable and non-reviewable
or which has or have not been stayed pending appeal or review or as to which all
rights to appeal or review have expired or been exhausted, shall have been
rendered against the Partnership, any Restricted Subsidiary or the General
Partner provided such judgment or judgments requires or require the payment of
money in excess of $10 million in the aggregate and is not covered by insurance
or discharged or stayed pending appeal or review within 60 days after entry of
A2-6
such judgment or in the event of a stay, within 30 days after the stay expires;
or (viii) specified events of bankruptcy, insolvency, or reorganization with
respect to the Issuers or any of their Significant Subsidiaries as more fully
set forth in the Indenture. If any Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the applicable
series of Notes then outstanding Notes may declare all the Notes of that series
to be due and payable. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, with respect to
the Partnership, Finance Corp. or any Significant Subsidiary, all outstanding
Notes will become due and payable without further action or notice. Holders may
not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of a
series of then outstanding Notes may direct the Trustee of that series of Notes
in its exercise of any trust or power. The Trustee may withhold from Holders of
the Notes notice of any continuing Default or Event of Default (except a Default
or Event of Default relating to the payment of principal or interest) if it
determines in good faith that withholding notice is in their interest. The
Holders of a majority in aggregate principal amount of a series of Notes then
outstanding by notice to the Trustee for those Notes may on behalf of all
Holders of Notes of that series waive any existing Default or Event of Default
and its consequences under the Indenture except a continuing Default or Event of
Default in the payment of interest on, or the principal of, the Notes. The
Issuers are required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Issuers are required upon becoming aware
of any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
(13) TRUSTEE DEALINGS WITH ISSUERS. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Issuers or their Affiliates, and may otherwise deal with the Issuers or
their Affiliates, as if it were not the Trustee.
(14) NO RECOURSE AGAINST OTHERS. A limited partner of the Partnership or
director, officer, employee, incorporator or stockholder of the General Partner,
Finance Corp., Escrow LLC or Escrow Finance Corp., as such, will not have any
liability for any obligations of the Issuers under the Notes or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations. Each
Holder by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for the issuance of the Notes.
(15) AUTHENTICATION. This Note will not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
(16) ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
(17) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED
DEFINITIVE NOTES. In addition to the rights provided to Holders of Notes under
the Indenture, Holders of Restricted Global Notes and Restricted Definitive
Notes will have all the rights set forth in the Registration Rights Agreement
dated as of April 20, 2004, among the Issuers, and on and after the Merger Date
(as defined therein), Ferrellgas, L.P. and Ferrellgas Finance Corp. and the
other parties named on the signature pages thereof or, in the case of Additional
Notes, Holders of Restricted Global Notes and Restricted Definitive Notes will
have the rights set forth in one or more registration rights agreements, if any,
among the Issuers, and on and after the Merger Date (as defined therein),
Ferrellgas, L.P. and Ferrellgas Finance Corp. and the other parties thereto,
relating to rights given by the Issuers to the purchasers of any Additional
Notes (collectively, the "Registration Rights Agreement").
A2-7
(18) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
(19) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN
AND BE USED TO CONSTRUE THE INDENTURE AND THIS NOTE WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The Issuers will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
Ferrellgas, L.P.
One Liberty Plaza
Liberty, Missouri 64068
Attention: Investor Relations
(816) 792-0203
A2-8
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:______________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Issuers. The agent may substitute
another to act for him.
Date: _______________
Your Signature:_________________________________
(Sign exactly as your name
appears on the face of this Note)
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A2-9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers pursuant to
Section 4.10 or 4.14 of the Indenture, check the appropriate box below:
----Section 4.10 ---Section 4.14
If you want to elect to have only part of the Note purchased by the Issuers
pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you
elect to have purchased:
$_____________________
Date: _______________
Your Signature:_________________________________
(Sign exactly as your name
appears on the face of this Note)
Tax Identification No.:_________________________
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A2-10
SCHEDULE OF EXCHANGES OF INTERESTS IN THE REGULATION S TEMPORARY GLOBAL NOTE
The following exchanges of a part of this Regulation S Temporary Global
Note for an interest in another Global Note, or exchanges of a part of another
other Restricted Global Note for an interest in this Regulation S Temporary
Global Note, have been made:
Principal Amount
Amount of decrease Amount of increase in of this Global Note Signature of
in Principal Amount Principal Amount following such authorized officer
of of decrease of Trustee or
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- ------------------- --------------------- ------------------ ------------------
A2-11
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Ferrellgas, L.P.
One Liberty Plaza
Liberty, Missouri 64068
Attention: Investor Relations
U.S. Bank National Association
Corporate Trust Services
60 Livingston Avenue St.
Paul, MN 55107-2292
Re: 6 3/4% Senior Notes due 2014
Reference is hereby made to the Indenture, dated as of April 20, 2004 (the
"Indenture"), among Ferrellgas Escrow LLC and Ferrellgas Escrow Finance
Corporation (together, the "Issuers"), as Issuers, and on and after the Merger
Date (as defined therein), Ferrellgas, L.P. and Ferrellgas Finance Corp. and
U.S. Bank National Association, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. ____ Check if Transferee will take delivery of a beneficial interest in
the 144A Global Note or a Restricted Definitive Note pursuant to Rule 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the Securities Act of 1933, as amended (the "Securities Act"), and, accordingly,
the Transferor hereby further certifies that the beneficial interest or
Definitive Note is being transferred to a Person that the Transferor reasonably
believes is purchasing the beneficial interest or Definitive Note for its own
account, or for one or more accounts with respect to which such Person exercises
sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A, and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Restricted Definitive Note and
in the Indenture and the Securities Act.
2. ____ Check if Transferee will take delivery of a beneficial interest in
the Regulation S Temporary Global Note, the Regulation S Permanent Global Note
or a Restricted Definitive Note pursuant to Regulation S. The Transfer is being
effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and, accordingly, the Transferor hereby further certifies that
(i) the Transfer is not being made to a Person in the United States and (x) at
the time the buy order was originated, the Transferee was outside the United
States or such Transferor and any Person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (y)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the United
B-1
States, (ii) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities
Act, (iii) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act and (iv) if the proposed
transfer is being made prior to the expiration of the Restricted Period, the
transfer is not being made to a U.S. Person or for the account or benefit of a
U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed
transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
Transfer enumerated in the Private Placement Legend printed on the Regulation S
Permanent Global Note, the Regulation S Temporary Global Note and/or the
Restricted Definitive Note and in the Indenture and the Securities Act.
3. ____ Check and complete if Transferee will take delivery of a beneficial
interest in the IAI Global Note or a Restricted Definitive Note pursuant to any
provision of the Securities Act other than Rule 144A or Regulation S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) ____ such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b) ____ such Transfer is being effected to the Issuers or a
subsidiary thereof;
or
(c) ____ such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) ____ such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144, Rule 903
or Rule 904, and the Transferor hereby further certifies that it has not
engaged in any general solicitation within the meaning of Regulation D
under the Securities Act and the Transfer complies with the transfer
restrictions applicable to beneficial interests in a Restricted Global Note
or Restricted Definitive Notes and the requirements of the exemption
claimed, which certification is supported by (1) a certificate executed by
the Transferee in the form of Exhibit D to the Indenture and (2) if such
Transfer is in respect of a principal amount of Notes at the time of
transfer of less than $250,000, an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has attached
to this certification), to the effect that such Transfer is in compliance
with the Securities Act. Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the IAI Global Note
and/or the Restricted Definitive Notes and in the Indenture and the
Securities Act.
B-2
4. ____ Check if Transferee will take delivery of a beneficial interest in
an Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) ____ Check if Transfer is pursuant to Rule 144. (i) The Transfer
is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained
in the Indenture and any applicable blue sky securities laws of any state
of the United States and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will no longer be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Global Notes, on Restricted Definitive
Notes and in the Indenture.
(b) ____ Check if Transfer is Pursuant to Regulation S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky
securities laws of any state of the United States and (ii) the restrictions
on transfer contained in the Indenture and the Private Placement Legend are
not required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will no
longer be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(c) ____ Check if Transfer is Pursuant to Other Exemption. (i) The
Transfer is being effected pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act other than Rule
144, Rule 903 or Rule 904 and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of
any State of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will not
be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Notes or Restricted
Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Issuers.
---------------------------
[Insert Name of Transferor]
By:
----------------------------------------
Name:
Title:
Dated:
-----------------
B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) ____ a beneficial interest in the:
(i) ____ 144A Global Note (CUSIP ), or
(ii) ____ Regulation S Global Note (CUSIP ), or
(iii) ____ IAI Global Note (CUSIP _________); or
(b) ____ a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) ____ a beneficial interest in the:
(i) ____ 144A Global Note (CUSIP ), or
(ii) ____ Regulation S Global Note (CUSIP ), or
(iii) ____ IAI Global Note (CUSIP _________); or
(iv) ____ Unrestricted Global Note (CUSIP _________); or
(b) ____ a Restricted Definitive Note; or
(c) ____ an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Ferrellgas, L.P.
One Liberty Plaza
Liberty, Missouri 64068
Attention: Investor Relations
U.S. Bank National Association
Corporate Trust Services
60 Livingston Avenue St.
Paul, MN 55107-2292
Re: 6 3/4% Senior Notes due 2014
Reference is hereby made to the Indenture, dated as of April 20, 2004 (the
"Indenture"), among Ferrellgas Escrow LLC and Ferrellgas Escrow Finance
Corporation (together, the "Issuers"), as Issuers, and on and after the Merger
Date (as defined therein), Ferrellgas, L.P. and Ferrellgas Finance Corp. and
U.S. Bank National Association, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
__________________________, (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a
Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests
in an Unrestricted Global Note
(a) ____ Check if Exchange is from beneficial interest in a Restricted
Global Note to beneficial interest in an Unrestricted Global Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(b) ____ Check if Exchange is from beneficial interest in a Restricted
Global Note to Unrestricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
C-1
(c) ____ Check if Exchange is from Restricted Definitive Note to beneficial
interest in an Unrestricted Global Note. In connection with the Owner's Exchange
of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) ____ Check if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests
in Restricted Global Notes
(a) ____ Check if Exchange is from beneficial interest in a Restricted
Global Note to Restricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) ____ Check if Exchange is from Restricted Definitive Note to beneficial
interest in a Restricted Global Note. In connection with the Exchange of the
Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
144A Global Note, Regulation S Global Note, IAI Global Note with an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Issuers.
---------------------------
[Insert Name of Transferor]
C-2
By:
---------------------------------
Name:
Title:
Dated:
--------------------
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Ferrellgas, L.P.
One Liberty Plaza
Liberty, Missouri 64068
Attention: Investor Relations
U.S. Bank National Association
Corporate Trust Services
60 Livingston Avenue St.
Paul, MN 55107-2292
Re: 6 3/4% Senior Notes due 2014
Reference is hereby made to the Indenture, dated as of April 20, 2004 (the
"Indenture"), among Ferrellgas Escrow LLC and Ferrellgas Escrow Finance
Corporation (together, the "Issuers"), as Issuers, and on and after the Merger
Date (as defined therein), Ferrellgas, L.P. and Ferrellgas Finance Corp. and
U.S. Bank National Association, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) ____ a beneficial interest in a Global Note, or
(b) ____ a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any interest
therein is subject to certain restrictions and conditions set forth in the
Indenture and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Notes or any interest therein except in compliance
with, such restrictions and conditions and the Securities Act of 1933, as
amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Issuers or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Issuers a signed letter
substantially in the form of this letter and, if such transfer is in respect of
a principal amount of Notes, at the time of transfer of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Issuers to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any Person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
D-1
3. We understand that, on any proposed resale of the Notes or beneficial
interest therein, we will be required to furnish to you and the Issuers such
certifications, legal opinions and other information as you and the Issuers may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased by
us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Issuers are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
------------------------------------
[Insert Name of Accredited Investor]
By:
---------------------------------
Name:
Title:
Dated:
------------------
D-2