Exhibit 1
June 4, 2004
Ferrellgas Partners, L.P.
Ferrellgas Partners Finance Corp.
Debt Securities
UNDERWRITING AGREEMENT
1. Introductory. Ferrellgas Partners, L.P., a Delaware limited partnership
("Ferrellgas Partners"), and Ferrellgas Partners Finance Corp., a Delaware
corporation ("Ferrellgas Finance" and, together with Ferrellgas Partners,
"Issuers"), propose to issue and sell from time to time certain of their
unsecured debt securities, common units ("Common Stock"), deferred participation
units and warrants registered under the registration statement referred to in
Section 2(a) ("Registered Securities"). The Registered Securities constituting
debt securities will be issued under an indenture, dated as of September 24,
2002 ("Indenture"), among the Issuers and U.S. Bank, N.A., as trustee
("Trustee"), in one or more series, which series may vary as to interest rates,
maturities, redemption provisions, selling prices and other terms. Particular
series or offerings of the Registered Securities will be sold pursuant to a
Terms Agreement referred to in Section 3, for resale in accordance with the
terms of offering determined at the time of sale.
The Registered Securities involved in any such offering are hereinafter
referred to as the "Offered Securities." The firm or firms which agree to
purchase the Offered Securities are hereinafter referred to as the
"Underwriters" of such securities, and the representative or representatives of
the Underwriters, if any, specified in a Terms Agreement referred to in Section
3 are hereinafter referred to as the "Representatives"; provided, however, that
if the Terms Agreement does not specify any representative of the Underwriters,
the term "Representatives," as used in this Agreement (other than in Sections
2(b) and 6 and the second sentence of Section 3), shall mean the Underwriters.
2. Representations and Warranties of the Issuers. Each of the Issuers, as
of the date of each Terms Agreement referred to in Section 3, severally and
jointly, represents and warrants to, and agrees with, each Underwriter that:
(a) A registration statement (Nos. 333-103267 and 333-103267-01),
including a prospectus, relating to the Registered Securities has been
filed with the Securities and Exchange Commission ("Commission") and has
become effective. Such registration statement, as amended at the time of
any Terms Agreement referred to in Section 3, is hereinafter referred to as
the "Registration Statement," and the prospectus included in such
Registration Statement, as supplemented as contemplated by Section 3 to
reflect the terms of the Offered Securities and the terms of offering
thereof, as first filed with the Commission after the date and time this
Agreement is executed and delivered by the parties hereto pursuant to and
in accordance with Rule 424(b) ("Rule 424(b)") under the Securities Act of
1933, as amended ("Act"), including all material incorporated by reference
therein, is hereinafter referred to as the "Prospectus." No document has
been or will be prepared or distributed in reliance on Rule 434 under the
Act.
(b) On the effective date of the registration statement relating to
the Registered Securities, such registration statement conformed in all
material respects to the requirements of the Act, the Trust Indenture Act
of 1939, as amended ("Trust Indenture Act"), and the rules and regulations
of the Commission ("Rules and Regulations") and did not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and on the date of each Terms Agreement referred to in Section
3, the Registration Statement and the Prospectus will conform in all
material respects to the requirements of the Act, the Trust Indenture Act
and the Rules and Regulations, and neither of such documents will include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, in the light of the circumstances under which they were
made, except that the foregoing does not and shall not apply to statements
in or omissions from any of such documents based upon written information
furnished to the Issuers by any Underwriter through the Representatives, if
any, specifically for use therein.
(c) Each of the Issuers has been duly incorporated or formed, as the
case may be, and is an existing corporation or limited partnership, as the
case may be, in good standing under the laws of the State of Delaware, with
power and authority (corporate or partnership, as the case may be) to own
its properties and conduct its business as described in the Prospectus; and
each of the Issuers is duly qualified to do business as a foreign
corporation or limited partnership, as the case may be, in good standing in
all other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except to the extent
that the failure to be so qualified or to be in good standing, considering
all such cases in the aggregate, would not reasonably be expected to have a
material adverse effect on the business, properties, condition (financial
or otherwise) or results of operations of the Issuers and all of their
subsidiaries and affiliates taken as a whole (a "Material Adverse Effect").
(d) Ferrellgas Partners is the sole limited partner of Ferrellgas,
L.P., a Delaware limited partnership (the "Operating Partnership"), with a
limited partner interest of 98.9899%; such limited partner interest has
been duly authorized by the Third Amended and Restated Agreement of Limited
Partnership of the Operating Partnership, dated as of April 7, 2004, and
was validly issued and is fully paid and non-assessable (except as
non-assessability may be affected by certain provisions of the Delaware
Revised Uniform Limited Partnership Act); Ferrellgas Partners owns such
limited partner interest in the Operating Partnership free from liens and
encumbrances (except for such liens and encumbrances as are not,
individually or in the aggregate, material to the ownership, use or value
thereof or as disclosed in the Registration Statement or the Prospectus).
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(e) The Indenture has been duly authorized by each of the Issuers and
has been duly qualified under the Trust Indenture Act; the Offered
Securities have been duly authorized by each of the Issuers; and when the
Offered Securities are delivered and paid for pursuant to the Terms
Agreement on the Closing Date (as defined below), (x) the Indenture will
have been duly executed and delivered, (y) such Offered Securities will
have been duly executed, authenticated, issued and delivered and will
conform to the description thereof contained in the Prospectus, and (z) the
Indenture and such Offered Securities will constitute valid and legally
binding obligations of each of the Issuers (assuming in the case of the
Indenture, the due authorization, execution and delivery thereof by the
Trustee), enforceable in accordance with their terms, except that the
enforceability thereof may be limited by (i) bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other laws now or
hereafter in effect relating to or affecting creditors' rights generally,
(ii) limitations under Federal or state securities laws with respect to the
rights of indemnification or contribution thereunder and (iii) general
principles of equity.
(f) Except as disclosed in the Prospectus, no consent, approval,
authorization, or order of, or filing with, any governmental agency or body
or any court is required for the consummation of the transactions
contemplated by the Terms Agreement (including the provisions of this
Agreement) in connection with the issuance and sale of the Offered
Securities by the Issuers, except such (i) as have been obtained, (ii) to
be made under the Act and the Trust Indenture Act, (iii) as may be required
under state securities laws, or (iv) as the failure to obtain or make would
not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the ability of the Issuers to execute, deliver
and perform the transactions contemplated by the Terms Agreement in
accordance with its terms.
(g) The execution, delivery and performance of the Indenture and the
Terms Agreement (including the provisions of this Agreement) and the
issuance and sale of the Offered Securities and compliance with the terms
and provisions thereof will not (i) conflict with or result in a violation
of any of the provisions of the certificate of incorporation, certificate
or agreement of limited partnership, articles of formation or by-laws, as
the case may be, of the Issuers, (ii) conflict with or violate in any
material respect any law, rule, regulation, order, judgment or decree
applicable to any of the Issuers or their subsidiaries or by which any
property or asset of any of the Issuers or their subsidiaries is or may be
bound or (iii) result in a breach of any of the material terms or
provisions of, or constitute a default (with or without due notice and/or
lapse of time) under, any loan or credit agreement, indenture, mortgage,
note or other agreement or instrument to which any of the Issuers or their
subsidiaries is a party or by which any of them or any of their respective
properties or assets is or may be bound, except, in the case of clauses
(ii) or (iii) where such conflict, violation, breach or default will not
prevent the consummation of the transactions contemplated herein or would
not reasonably be expected to have a Material Adverse Effect.
(h) Each of the Issuers has full power and authority (corporate or
partnership, as the case may be) to authorize, issue and sell the Offered
Securities as contemplated by the Terms Agreement (including the provisions
of this Agreement). The Terms Agreement (including the provisions of this
Agreement) has been duly authorized, executed and delivered by each of the
Issuers.
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(i) Except as described in the Prospectus, each of the Issuers and
their subsidiaries have good and valid title to all real properties and
good title to all personal properties and assets described in the
Prospectus as being owned by them, in each case free from liens, claims,
security interests or other encumbrances that would reasonably be expected
to materially affect the value thereof or materially interfere with the use
made or to be made thereof by them, taken as a whole, including liens,
claims, security interests and other encumbrances pursuant to mortgage
and/or security agreements given as security for certain non-compete
agreements with the prior owners of certain businesses previously acquired
by the Issuers and their subsidiaries; and except as disclosed in the
Prospectus, each of the Issuers and their subsidiaries hold any leased real
property or buildings under valid and enforceable leases with no exceptions
that would reasonably be expected to materially interfere with the use made
by them, taken as a whole.
(j) Except as described in the Prospectus, each of the Issuers and
their subsidiaries possess adequate certificates, authorities or permits
issued by appropriate governmental agencies or bodies necessary to conduct
the business now operated by them, except for those which the failure to
obtain, would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect, and have not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the
Issuers or any of their subsidiaries, would, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(k) No labor dispute with the employees of either of the Issuers or
any subsidiary exists or, to the knowledge of either of the Issuers, is
imminent that would reasonably be expected to have a Material Adverse
Effect.
(l) Each of the Issuers and their subsidiaries own, possess or can
acquire on reasonable terms, adequate trademarks, trade names and other
rights to inventions, know-how, patents, copyrights, confidential
information and other intellectual property (collectively, "intellectual
property rights") necessary to conduct the business now operated by them,
or presently employed by them, and have not received any notice of
infringement of or conflict with asserted rights of others with respect to
any intellectual property rights that, if determined adversely to the
Issuers or any of their subsidiaries, would individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(m) Except as disclosed in the Prospectus, neither of the Issuers nor
any of their subsidiaries is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration
of the environment or human exposure to hazardous or toxic substances
(collectively, "environmental laws"), owns or operates any real property
contaminated such that the clean-up or remediation is required by
applicable environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any
claim relating to any environmental laws, which violation, contamination,
liability or claim would, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; and neither of the Issuers is
aware of any pending investigation which would reasonably be expected to
lead to such a claim.
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(n) Except as disclosed in the Prospectus, there are no actions, suits
or proceedings pending, or to the knowledge of the Issuers, threatened,
against or affecting either of the Issuers, any of their subsidiaries or
any of their respective properties that, if determined adversely to the
Issuers or any of their subsidiaries, would, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, or
would materially and adversely affect the ability of the Issuers to perform
their obligations under the Indenture or the Terms Agreement (including the
provisions of this Agreement).
(o) The financial statements included in the Registration Statement
and Prospectus present fairly in all material respects the financial
position, results of operations and cash flows of the entities purported to
be shown thereby, at the dates and for the periods indicated, and such
financial statements have been prepared in conformity with generally
accepted accounting principles in the United States ("GAAP") applied on a
consistent basis throughout the periods indicated, except as disclosed
therein; and any schedules included in the Registration Statement present
fairly in all material respects the information required to be stated
therein. The assumptions used in preparing the pro forma financial
statements included in the Registration Statement and Prospectus provide a
reasonable basis for presenting the significant effects directly
attributable to the transactions or events described therein, the related
pro forma adjustments give appropriate effect to those assumptions, and the
pro forma columns therein reflect the proper application of those
adjustments to the corresponding historical financial statement amounts.
(p) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus, there has
been no material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, properties or results of operations of Ferrellgas Partners and
its subsidiaries taken as a whole, and, except as disclosed in or
contemplated by the Prospectus or for the regular quarterly distributions
on the common units, senior units and general partner units of Ferrellgas
Partners and the regular quarterly distributions on the general partner and
limited partner interests of the Operating Partnership, there has been no
dividend or distribution of any kind declared, paid or made by either of
the Issuers on any class of their equity interests.
(q) Each of the Issuers is subject to the reporting requirements of
either Section 13 or Section 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and files reports with the Commission on
the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system.
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(r) Each of the Issuers is not and, after giving effect to (i) the
offering and sale of the Offered Securities and (ii) the application of the
proceeds thereof as described in the Prospectus, will not be an open-end
investment company, unit investment trust or face-amount certificate
company that is or is required to be registered under Section 8 of the
United States Investment Company Act of 1940 (the "Investment Company
Act"). Each of the Issuers is, and after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof
as described in the Prospectus, will be exempt from regulation as an
"investment company" as such term is defined in the Investment Company Act.
(s) Except as disclosed in the Prospectus, the proceeds to the Issuers
from the offering of the Offered Securities will not be used to purchase or
carry any security.
(t) The Offered Securities will conform in all material respects to
the description thereof contained in the Prospectus.
(u) None of the Issuers nor any of their respective subsidiaries is
(i) in violation of its certificate of incorporation, certificate or
agreement of limited partnership, limited liability company agreement,
articles of formation or by-laws, as the case may be, or (ii) in default in
the performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument to which the Issuers or any of their respective
subsidiaries is a party or is bound or by which their respective property
is bound, except, in the case of clause (ii) as would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
(v) None of the Issuers nor any of their subsidiaries or any agent
thereof acting on the behalf of them (other than the Purchasers, as to whom
neither the Issuers nor any of their subsidiaries make any representation)
has taken, and none of them will take, any action that would reasonably be
expected to cause this Agreement or the issuance or sale of the Offered
Securities to violate Regulations T, U or X of the Board of Governors of
the Federal Reserve System.
(w) No "nationally recognized statistical rating organization" as such
term is defined for purposes of Rule 436(g)(2) under the Securities Act (i)
has imposed (or has informed the Issuers that it is considering imposing)
any condition (financial or otherwise) on either of the Issuers' retaining
any rating assigned to the Issuers or any of their respective securities,
or (ii) has indicated to the Issuers that it is considering (A) the
downgrading, suspension, or withdrawal of, or any review for a possible
change that does not indicate the direction of the possible change in, any
rating so assigned or (B) any change in the outlook for any rating of the
Issuers or any of their respective securities.
(x) The statistical and market-related data included in the Prospectus
are based on or derived from sources which the Issuers reasonably believe
to be reliable and accurate in all material respects.
(y) Each of the Issuers maintains a system of internal accounting
controls sufficient to provide reasonable assurance that: (i) transactions
are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with its management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect
to any differences.
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(z) Each of the Issuers maintains disclosure controls and procedures
(as defined in Rule 13a-14 of the Exchange Act) designed to ensure that
information required to be disclosed by each of the Issuers in the reports
that it files or submits under the Exchange Act is recorded, processed,
summarized and reported in accordance with the Exchange Act and the rules
and regulations thereunder. Each of the Issuers has carried out
evaluations, under the supervision and with the participation of its
respective management, of the effectiveness of the design and operation of
its respective disclosure controls and procedures in accordance with Rule
13a-15 of the Exchange Act.
(aa) The accountants who certified the financial statements and any
supporting schedules thereto of the Issuers, the Operating Partnership and
their consolidated subsidiaries included in the Prospectus are independent
public accountants as required by the Securities Act, the Exchange Act and
the published rules and regulations promulgated thereunder.
3. Purchase and Offering of Offered Securities. The obligation of the
Underwriters to purchase the Offered Securities will be evidenced by an
agreement or exchange of other written communications ("Terms Agreement") at the
time the Issuers determine to sell the Offered Securities. The Terms Agreement
will incorporate by reference the provisions of this Agreement, except as
otherwise provided therein, and will specify the firm or firms which will be
Underwriters, the names of any Representatives, the principal amount to be
purchased by each Underwriter, the purchase price to be paid by the Underwriters
and the terms of the Offered Securities not already specified in the Indenture,
including, but not limited to, interest rate, maturity, any redemption
provisions and any sinking fund requirements. The Terms Agreement will also
specify the time and date of delivery and payment (such time and date, or such
other time not later than ten full business days thereafter as Credit Suisse
First Boston LLC ("CSFB") and the Issuers agree as the time for payment and
delivery, being herein and in the Terms Agreement referred to as the "Closing
Date"), the place of delivery and payment and any details of the terms of
offering that should be reflected in the prospectus supplement relating to the
offering of the Offered Securities. For purposes of Rule 15c6-1 under the
Securities Exchange Act of 1934, the Closing Date (if later than the otherwise
applicable settlement date) shall be the date for payment of funds and delivery
of securities for all the Offered Securities sold pursuant to the offering. The
obligations of the Underwriters to purchase the Offered Securities will be
several and not joint. It is understood that the Underwriters propose to offer
the Offered Securities for sale as set forth in the Prospectus.
If the Terms Agreement specifies "Book-Entry Only" settlement or otherwise
states that the provisions of this paragraph shall apply, the Issuers will
deliver against payment of the purchase price the Offered Securities in the form
of one or more permanent global securities in definitive form (the "Global
Securities") deposited with the Trustee as custodian for The Depository Trust
Company ("DTC") and registered in the name of Cede & Co., as nominee for DTC.
Interests in any permanent global securities will be held only in book-entry
form through DTC, except in the limited circumstances described in the
Prospectus. Payment for the Offered Securities shall be made by the Underwriters
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in Federal (same day) funds by official check or checks or wire transfer to an
account previously designated by Ferrellgas Partners at a bank acceptable to
CSFB, in each case drawn to the order of Ferrellgas Partners, or as Ferrellgas
Partners may direct, at the place of payment specified in the Terms Agreement on
the Closing Date, against delivery to the Trustee as custodian for DTC of the
Global Securities representing all of the Offered Securities.
Under Rule 15c6-1 under the Exchange Act, the parties hereto agree that
trades in the secondary market may settle in a period in excess of three
business days, which period is currently contemplated to extend until June 10,
2004.
4. Certain Agreements of the Issuers. Each of the Issuers agrees with the
several Underwriters that in connection with each offering of Offered
Securities:
(a) The Issuers will file the Prospectus with the Commission pursuant
to and in accordance with Rule 424(b)(2) (or, if applicable and if
consented to by CSFB, subparagraph (5)) not later than the second business
day following the execution and delivery of the Terms Agreement.
(b) The Issuers will advise CSFB promptly of any proposal to amend or
supplement the Registration Statement or the Prospectus and will afford
CSFB a reasonable opportunity to comment on any such proposed amendment or
supplement; and the Issuers will also advise CSFB promptly of the filing of
any such amendment or supplement and of the institution by the Commission
of any stop order proceedings in respect of the Registration Statement or
of any part thereof and will use every reasonable effort to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of which
the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to
amend the Prospectus to comply with the Act, the Issuers promptly will
notify CSFB of such event and will promptly prepare and file with the
Commission, at their own expense, an amendment or supplement which will
correct such statement or omission or an amendment which will effect such
compliance. Neither CSFB's consent to, nor the Underwriters' delivery of,
any such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 5 hereof.
(d) As soon as practicable, but not later than 18 months, after the
date of each Terms Agreement, each of the Issuers will make generally
available to their securityholders an earnings statement of Ferrellgas
Partners (which need not be audited) covering a period of at least 12
months beginning after the "effective date of the Registration Statement"
(as defined in Rule 158(c) of the Act), which will satisfy the provisions
of Section 11(a) of the Act.
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(e) The Issuers will furnish to CSFB copies of the Registration
Statement, including all exhibits, any related preliminary prospectus, any
related preliminary prospectus supplement, the Prospectus and all
amendments and supplements to such documents, in each case as soon as
available and in such quantities as CSFB reasonably requests. Each of the
Issuers, jointly and severally, will pay the expenses of printing and
distributing to the Underwriters all such documents.
(f) The Issuers will cooperate with the Underwriters and counsel
thereto in connection with the qualification of the Offered Securities for
sale and the determination of their eligibility for investment under the
laws of such jurisdictions as CSFB designates and the continuation of such
qualifications in effect so long as required for the distribution of the
Offered Securities. Notwithstanding the foregoing, the Issuers shall not be
required to qualify as a foreign corporation or partnership, as the case
may be, in any jurisdiction in which they are not so qualified or subject
themselves to taxation in excess of a nominal dollar amount in any such
jurisdiction where they are not then so subject (except service of process
with respect to the offering and sale of the Offered Securities).
(g) Each of the Issuers, jointly and severally, will pay for (i) all
expenses incident to the performance of their obligations under the Terms
Agreement (including the provisions of this Agreement), (ii) any filing
fees or other expenses (including fees and disbursements of counsel) in
connection with qualification of the Registered Securities for sale and any
determination of their eligibility for investment under the laws of such
jurisdictions as CSFB may designate and the printing of memoranda relating
thereto, (iii) any fees charged by investment rating agencies for the
rating of the Offered Securities, (iv) any applicable filing fee incident
to, the review by the National Association of Securities Dealers, Inc. of
the Registered Securities, (v) any travel expenses of the Issuers' officers
and employees and any other expenses of the Issuers in connection with
attending or hosting meetings with prospective purchasers of Registered
Securities and (vi) expenses incurred in distributing the Prospectus, any
preliminary prospectuses, any preliminary prospectus supplements or any
other amendments or supplements to the Prospectus to the Underwriters.
(h) Neither of the Issuers will offer, sell, contract to sell, pledge
or otherwise dispose of, directly or indirectly, nor file with the
Commission a registration statement under the Act relating to United States
dollar-denominated debt securities issued or guaranteed by the Issuers and
having a maturity of more than one year from the date of issue, or publicly
disclose the intention to make any such offer, sale, pledge, disposition or
filing, without the prior written consent of CSFB for a period beginning at
the time of execution of the Terms Agreement and ending the number of days
after the Closing Date specified under "Blackout" in the Terms Agreement.
(i) In connection with the offering of the Offered Securities, until
CSFB shall have notified the Issuers and any Underwriters of the completion
of the initial sale by the Issuers to CSFB of the Offered Securities, none
of the Issuers or any of their affiliates has or will, either alone or with
one or more other persons, bid for or purchase for any account in which it
or any of its affiliates has a beneficial interest any Offered Securities
or attempt to induce any person to purchase any Offered Securities; none of
the Issuers or any of their affiliates will make bids or purchases for the
purpose of creating actual, or apparent, active trading in, or of raising
the price of, the Offered Securities.
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5. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Offered Securities will be
subject to the accuracy of the representations and warranties on the part of the
each of the Issuers herein, to the accuracy of the statements of officers of
each of the Issuers made pursuant to the provisions hereof, to the performance
by each of the Issuers of their obligations hereunder and to the following
additional conditions precedent:
(a) On or prior to the Closing Date, the Representatives shall have
received a letter, dated the date of delivery thereof, of Deloitte & Touche
LLP confirming that they are independent public accountants within the
meaning of the Act and the applicable published Rules and Regulations
thereunder and stating to the effect that:
(i) in their opinion, the financial statements and any schedules
examined by them and included in the Prospectus comply as to form in
all material respects with the applicable accounting requirements of
the Act and the related published Rules and Regulations;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement of Auditing Standards
Nos. 100 and 71, Interim Financial Information, on any unaudited
financial statements included in the Registration Statement;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial statements
of each of the Issuers, inquiries of officials of each of the Issuers
who have responsibility for financial and accounting matters and other
specified procedures, nothing came to their attention that caused them
to believe that:
(A) the unaudited financial statements, if any, included in
the Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the
related published Rules and Regulations or any material
modifications should be made to such unaudited financial
statements and summary of earnings for them to be in conformity
with generally accepted accounting principles;
(B) at the date of the latest available balance sheet read
by such accountants, or at a subsequent specified date not more
than three business days prior to the date of such letter, there
was any change in the capital stock or any increase in short-term
indebtedness or long-term debt of the either of the Issuers and
their consolidated subsidiaries or, at the date of the latest
available balance sheet read by such accountants, there was any
decrease in consolidated net current assets or net assets, as
compared with amounts shown on the latest balance sheet included
in the Prospectus; or
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(C) for the period from the closing date of the latest
income statement included in the Prospectus to the closing date
of the latest available income statement read by such
accountants, there were any decreases, as compared with the
corresponding period of the previous year and with the period of
corresponding length ended the date of the latest income
statement included in the Prospectus, in consolidated net sales
or net operating income;
except in all cases set forth in clauses (B) and (C) above for changes,
increases or decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter;
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information contained
in the Prospectus (in each case to the extent that such dollar amounts,
percentages and other financial information are derived from the general
accounting records of each of the Issuers and their subsidiaries subject to
the internal controls of the Issuers' accounting system or are derived
directly from such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in agreement
with such results, except as otherwise specified in such letter; and
(v) they have (i) read the unaudited pro forma financial information
contained in the Prospectus, (ii) inquired of officials of the Company and
its consolidated subsidiaries who have responsibility for financial and
accounting matters and other specified procedures and (iii) proved the
arithmetic accuracy of the application of the pro forma adjustments to the
historical amounts in the unaudited pro forma financial information; and on
the basis of such review, nothing came to their attention that caused them
to believe that the unaudited pro forma financial information contained in
the Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X, and
that the pro forma adjustments have not been properly applied to the
historical amounts in the unaudited pro forma financial information.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus for
purposes of this subsection.
(b) On or prior to the date of the Closing Date, the Representatives
shall have received a letter, dated the date of delivery thereof, of Ernst
& Young LLP confirming that they are independent public accountants within
the meaning of the Act and the applicable published Rules and Regulations
thereunder and stating to the effect that:
11
(i) in their opinion, the financial statements of Blue Rhino
Corp. and its consolidated subsidiaries and any schedules
(collectively, the "Blue Rhino Corp. Reports") examined by them and
incorporated into the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Securities
Act and the related published Rules and Regulations;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement of Auditing Standards
No. 100, Interim Financial Information, on the unaudited financial
statements of Blue Rhino Corp. and its consolidated subsidiaries;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial statements
of Blue Rhino Corp. and its consolidated subsidiaries, inquiries of
officials of Blue Rhino Corp. and its consolidated subsidiaries who
have responsibility for financial and accounting matters and other
specified procedures, nothing came to their attention that caused them
to believe that:
(A) the unaudited financial statements and summary of
earnings of Blue Rhino Corp. and its consolidated subsidiaries
included in the Blue Rhino Corp. Reports do not comply as to form
in all material respects with the applicable accounting
requirements of the Securities Act and the related published
Rules and Regulations or any material modifications should be
made to such unaudited financial statements and summary of
earnings for them to be in conformity with generally accepted
accounting principles;
(B) at the date of the latest available balance sheet of
Blue Rhino Corp. and its consolidated subsidiaries read by such
accountants, or at April 16, 2004, there was any change in the
capital stock or any increase in long-term debt of Blue Rhino
Corp. and its consolidated subsidiaries or, at the date of the
latest available balance sheet of Blue Rhino Corp. and its
consolidated subsidiaries read by such accountants, there was any
decrease in consolidated net current assets or stockholders'
equity of Blue Rhino Corp. and its consolidated subsidiaries, as
compared with amounts shown on the latest balance sheet of Blue
Rhino Corp. and its consolidated subsidiaries included in the
Blue Rhino Corp. Reports; or
(C) for the period from the closing date of the latest
income statement of Blue Rhino Corp. and its consolidated
subsidiaries included in the Blue Rhino Corp. to the closing date
of the latest available income statement of Blue Rhino Corp. and
its consolidated subsidiaries read by such accountants there were
any decreases, as compared with the corresponding period of the
previous year and with the period of corresponding length ended
the date of the latest income statement included in the Blue
Rhino Corp. Reports, in consolidated net sales or consolidated
net income (loss);
12
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases that the Prospectus or Blue Rhino
Corp. Reports disclose have occurred or may occur or which are
described in such letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Prospectus and the Blue Rhino Corp.
Reports (in each case to the extent that such dollar amounts,
percentages and other financial information are derived from the
general accounting records of Blue Rhino Corp. and its
consolidated subsidiaries subject to the internal controls of
Blue Rhino Corp.'s accounting system or are derived directly from
such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting
records and other procedures specified in such letter and have
found such dollar amounts, percentages and other financial
information to be in agreement with such results, except as
otherwise specified in such letter.
(c) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the
Registration Statement or of any part thereof shall have been issued
and no proceedings for that purpose shall have been instituted or, to
the knowledge of either of the Issuers or any Underwriter, shall be
contemplated by the Commission.
(d) Subsequent to the execution of the Terms Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or other),
business, properties or results of operations of either of the Issuers
and their subsidiaries, taken as one enterprise, which, in the
judgment of CSFB, is so material and adverse as to make it impractical
or inadvisable to proceed with completion of the public offering or
the sale of and payment for the Offered Securities; (ii) any
downgrading in the rating of any debt securities of either of the
Issuers by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) under the Act), or any public
announcement that any such organization has under surveillance or
review its rating of any debt securities of either of the Issuers
(other than an announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of such
rating) or any announcement that either of the Issuers has been placed
on negative outlook; (iii) any change in U.S. or international
financial, political or economic conditions or currency exchange rates
or exchange controls as would, in the judgment of CSFB, be likely to
prejudice materially the success of the proposed issue, sale or
disposition of the Offered Securities, whether in the primary market
or in respect of dealings in the secondary market; (iv) any material
suspension or material limitation of trading in securities generally
on the New York Stock Exchange, or any setting of minimum prices for
trading on such exchange, or any suspension of trading of any
securities of either of the Issuers on any exchange or in the
over-the-counter market; (v) any banking moratorium declared by U.S.
Federal or New York authorities; (vi) any major disruption of
13
settlements of securities or clearance services in the United States;
or (vii) any attack on, outbreak or escalation of hostilities or act
of terrorism involving the United States, any declaration of war by
Congress or any other national or international calamity or emergency
if, in the judgment of CSFB, the effect of any such attack, outbreak,
escalation, act, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities.
(e) (i) The Representatives shall have received an opinion, dated
the Closing Date, of Mayer, Brown, Rowe & Maw LLP, counsel for the
Issuers, to the effect that:
(A) Each of the Issuers has been duly incorporated or
formed, as the case may be, and is an existing corporation or
limited partnership, as the case may be, in good standing under
the laws of the State of Delaware, with corporate or partnership
power, as the case may be, and authority to own its properties
and conduct its business as described in the Prospectus; and each
of the Issuers is in good standing in the State of Missouri; each
of the Issuers has full power and authority (corporate or
partnership, as the case may be) to authorize, issue and sell the
Offered Securities as contemplated by the Terms Agreement
(including the provisions of this Agreement);
(B) The Operating Partnership has been duly formed and is an
existing limited partnership in good standing under the laws of
the State of Delaware with partnership power and authority to own
its properties and conduct its business as described in the
Prospectus; and the Operating Partnership is in good standing in
the State of Missouri;
(C) Each of the Issuers is, and after giving effect to the
offering and sale of the Offered Securities and the application
of the proceeds thereof as described in the Prospectus (assuming
such proceeds are applied as described in the Prospectus), will
be exempt from regulation as an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended;
(D) Except as disclosed in the Prospectus, no consent,
approval, authorization, or order of, or filing with, any
governmental agency or body or any court is required for the
consummation of the transactions contemplated by the Terms
Agreement (including the provisions of this Agreement) in
connection with the issuance and sale of the Offered Securities
by the Issuers, except such (i) as have been obtained, (ii) to be
made under the Act and the Trust Indenture Act, (iii) as may be
required under state securities laws, or (iv) as the failure to
obtain or make would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the
ability of the Issuers to execute, deliver and perform the
transactions contemplated by the Terms Agreement in accordance
with its terms;
14
(E) The execution, delivery and performance by the Issuers
of the Indenture and the Terms Agreement (including the
provisions of this Agreement) and the issuance and sale of the
Offered Securities and compliance by the Issuers with the terms
and provisions thereof will not (i) conflict with or result in a
violation of any of the provisions of the certificate of
incorporation, certificate or agreement of limited partnership,
articles of formation, or by-laws, as the case may be, in effect
on the date hereof of the Issuers, (ii) solely with respect to
the Terms Agreement and to the knowledge of such counsel,
conflict with or violate in any material respect any law, rule,
regulation, order, judgment or decree applicable to the Issuers
or by which any property or asset of any of the Issuers is or may
be bound or (iii) result in a breach of any of the material terms
or provisions of, or constitute a default (with or without due
notice and/or lapse of time) under, any loan or credit agreement,
indenture, mortgage, note or other agreement or instrument
identified in any exhibit list to the filings of the Issuers
incorporated by reference in the Prospectus as of the date
hereof, except, in the case of clause (ii) or (iii) where such
conflict, violation, breach or default will not prevent the
consummation of the transactions contemplated herein and would
not reasonably be expected to have a Material Adverse Effect;
provided, however, that for the purposes of this paragraph (E),
no opinion is expressed with respect to antifraud laws and
fraudulent transfer laws;
(F) The Registration Statement has become effective under
the Act, the Prospectus was filed with the Commission pursuant to
the subparagraph of Rule 424(b) specified in such opinion on the
date specified therein, and, to the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no proceedings
for that purpose have been instituted or are pending or
contemplated under the Act; the Registration Statement and the
Prospectus, as of the date of the Terms Agreement, and any
amendment or supplement thereto, as of its date, (other than the
financial information contained or incorporated by reference
therein, as to which such counsel expresses no opinion) appear on
their face to comply as to form in all material respects with the
requirements of the Act and the Rules and Regulations;
(G) The statements set forth in the Prospectus under the
caption "Tax Consequences," insofar as such statements purport to
constitute a summary of the material United States federal income
tax consequences to holders of Offered Securities, are accurate
in all material respects;
(H) Ferrellgas Partners is properly classified as a
partnership for United States federal income tax purposes and not
as an association (or a publicly traded partnership) taxable as a
corporation;
15
(I) The Terms Agreement (including the provisions of this
Agreement) has been duly authorized, executed and delivered by
each of the Issuers; and
(J) To the knowledge of such counsel, there are no legal or
governmental proceedings pending or threatened against any of the
Issuers or to which any property of any of them is subject that
would be required to be disclosed in the Prospectus and are not
so disclosed.
Such counsel shall also advise that they have participated in
conferences with officers and other representatives of the Issuers,
representatives of the independent public accountants of the Issuers
and representatives and counsel of the Underwriters at which the
contents of the Registration Statement and the Prospectus were
discussed and, based on such participation and review, although such
counsel is not passing upon and does not assume responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus and such counsel has made no
independent check or verification thereof, on the basis of the
foregoing, no facts have come to such counsel's attention that have
caused them to believe that the Registration Statement, as of the date
of the Terms Agreement or as of the Closing Date, or any amendment
thereto, as of its date or as of the Closing Date, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus, as of the date of the
Terms Agreement or as of the Closing Date, or any amendment or
supplement thereto, as of its date or as of the Closing Date,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading (it being understood that such counsel need
express no opinion with respect to the financial information contained
in or incorporated by reference in the Registration Statement and
Prospectus).
(ii) The Representatives shall have received an opinion, dated
the Closing Date, of Bracewell & Patterson, L.L.P., counsel for the
Issuers, to the effect that:
(A) The Indenture has been duly authorized, executed and
delivered by each of the Issuers, and has been qualified under
the Trust Indenture Act; the Indenture constitutes the valid and
legally binding obligation of each of the Issuers enforceable
against each of the Issuers in accordance with its terms, except
that the enforceability thereof may be limited by (i) bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
other laws now or hereafter in effect relating to or affecting
creditors' rights generally, (ii) limitations imposed by public
policy, applicable law relating to fiduciary duties and the
judicial imposition of an implied covenant of good faith and fair
dealing, (iii) limitations under Federal or state securities laws
with respect to the rights of indemnification or contribution
thereunder and (iv) general principles of equity;
16
(B) The Offered Securities have been duly authorized and
executed by each of the Issuers and, when authenticated by the
Trustee and issued and delivered in the manner provided in the
Indenture against payment of the consideration therefore pursuant
to the Terms Agreement, the Offered Securities will constitute
valid and legally binding obligations of each of the Issuers
enforceable against each of the Issuers in accordance with their
terms,
(C) The Offered Securities conform in all material respects
to the description thereof under the caption "Description of Debt
Securities" in the Prospectus, as supplemented by the description
thereof under the caption "Description of the Notes" in the
Prospectus;
(D) The statements set forth in the Prospectus under the
caption "Description of Other Indebtedness and Other Financial
Obligations," insofar as such statements purport to summarize
provisions of contracts or other instruments referred to therein,
fairly summarize such provisions in all material respects;
(E) The execution, delivery and performance by the Issuers
of the Indenture and compliance by the Issuers with the terms and
provisions thereof will not (i) conflict with or violate in any
material respect any provisions of the federal laws of the United
States, the laws of the State of Texas, the Delaware General
Corporation Law or the Delaware Revised Uniform Limited
Partnership Act, or to the knowledge of such counsel, any order,
judgment or decree, in each case applicable to either of the
Issuers or by which any property or asset of either of the
Issuers is or may be bound or (iii) result in a breach of any of
the material terms or provisions of, or constitute a default
(with or without due notice and/or lapse of time) under, any loan
or credit agreement, indenture, mortgage, note or other agreement
or instrument identified in any exhibit list to the Issuers'
Annual Report on Form 10-K for the year ended July 31, 2003 or
any Quarterly Report on Form 10-Q or Current Report on Form 8-K
filed by the Issuers with the Commission since July 31, 2003,
except, in the case of clause (i) or (ii) where such conflict,
violation, breach or default will not prevent the consummation of
the transactions contemplated herein and would not reasonably be
expected to have a Material Adverse Effect; provided, however,
that for the purposes of this paragraph (D), no opinion is
expressed with respect to antifraud laws and fraudulent transfer
laws;
(F) The Registration Statement and the Prospectus, as of the
date of the Terms Agreement, and any amendment or supplement
thereto, as of its date, (other than the financial information
contained or incorporated by reference therein or omitted
therefrom and the Trustee's Statement of Eligibility on Form T-1,
as to which such counsel expresses no opinion) appear on their
face to comply as to form in all material respects with the
requirements of the Trust Indenture Act; and
17
(G) Except as disclosed in the Prospectus, no consent,
approval, authorization or order of, or filing with, any U.S.
federal or Texas governmental agency or body or, to such
counsel's knowledge, any court is required for the issuance of
the Offered Securities by the Issuers in accordance with the
Indenture except (i) as have been obtained, (ii) as may be
required under federal or state securities laws or (iii) as the
failure to obtain or make would not, individually or in the
aggregate, reasonably be expected to have a material adverse
effect on the ability of the Issuers to execute, deliver and
perform the transactions contemplated by the Indenture in
accordance with their terms.
(f) The Representatives shall have received from Latham & Watkins LLP,
counsel for the underwriters, an opinion, dated the Closing Date, with
respect to the incorporation or formation, as the case may be, of each of
the Issuers, the validity of the Offered Securities, the Registration
Statement, the Prospectus and other related matters as the Representatives
may require, and the Issuers shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters.
(g) The Representatives shall have received a certificate, dated the
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of each of the Issuers in which such
officers, to their knowledge after reasonable investigation, shall state
that the representations and warranties of the Issuers in this Agreement
are true and correct, that the Issuers have complied with all agreements
and satisfied all conditions on their part to be performed or satisfied
hereunder at or prior to the Closing Date, that no stop order suspending
the effectiveness of the Registration Statement or of any part thereof has
been issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission and that, subsequent to the date of the most
recent financial statements in the Prospectus, there has been no material
adverse change, nor any development or event involving a prospective
material adverse change, in the condition (financial or other), business,
properties or results of operations of Ferrellgas Partners and its
subsidiaries taken as a whole except as set forth in or contemplated by the
Prospectus or as described in such certificate.
(h) Each of the Issuers will furnish the Representatives with such
conformed copies of such opinions, certificates, letters and documents as
the Representatives reasonably request. CSFB may in its sole discretion
waive on behalf of the Underwriters compliance with any conditions to the
obligations of the Underwriters under this Agreement and the Terms
Agreement.
18
6. Indemnification and Contribution. (a) (a) Each of the Issuers will,
jointly and severally, indemnify and hold harmless each Underwriter, its
partners, directors and officers and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the Act, against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus or preliminary
prospectus supplement, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the indemnity agreement contained in this Section 6(a) with respect to any
preliminary prospectus supplement (or any amendment or supplement thereto) shall
not inure to the benefit of any Underwriter, its partners, officers or directors
(or to the benefit of any person controlling such Underwriter) from whom the
person asserting any such loss, damage, expense, liability or claim purchased
the Offered Securities that are the subject thereof if the final prospectus
supplement corrected any such alleged untrue statement or omission and if such
Underwriter, its partners, officers or directors, failed to send or give a copy
of the final prospectus supplement to such person at or prior to the written
confirmation of the sale of such Offered Securities to such person, unless the
failure is the result of non-compliance by the Issuers with paragraph (c) of
Section 4 hereof; and provided, further that the Issuers will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
in or omission or alleged omission from any of such documents in reliance upon
and in conformity with written information furnished to the Issuers by any
Underwriter through the Representatives, if any, specifically for use therein,
it being understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in the Terms
Agreement.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless each of the Issuers, their partners, directors and officers and
each person, if any, who controls the Issuers within the meaning of Section
15 of the Act, against any losses, claims, damages or liabilities to which
the Issuers may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus or preliminary prospectus supplement, or arise out
of or are based upon the omission or the alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Issuers by such Underwriter
through the Representatives, if any, specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by the Issuers in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred, it being understood and
agreed that the only such information furnished by any Underwriter consists
of the information described as such in the Terms Agreement.
19
(c) Promptly after receipt by an indemnified party under this Section
6 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under subsection (a) or (b) above. In case any such
action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and after notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party under
this Section 6 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of
any pending or threatened action in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement (i) includes an
unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action and (ii) does not include
a statement as to, or an admission of, fault, culpability or a failure to
act by or behalf of an indemnified party.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative
benefits received by each of the Issuers, on the one hand, and the
Underwriters, on the other, from the offering of the Offered Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the relative
fault of each of the Issuers, on the one hand, and the Underwriters, on the
other, in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities as well as any other relevant
equitable considerations. The relative benefits received by each of the
Issuers, on the one hand, and the Underwriters, on the other, shall be
deemed to be in the same proportion as the total net proceeds from the
offering (net of underwriting discounts and commissions but before
deducting expenses) received by each of the Issuers bear to the total
underwriting discounts and commissions received by the Underwriters. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by each of the Issuers or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The amount paid by
an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d) shall
be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any
action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no Underwriter shall
be required to contribute any amount in excess of the amount by which the
total price at which the Offered Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by
20
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (d) to contribute are several
in proportion to their respective underwriting obligations and not joint.
(e) The obligations of each of the Issuers under this Section 6 shall
be in addition to any liability which the Issuers may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any,
who controls any Underwriter within the meaning of the Act; and the
obligations of the Underwriters under this Section 6 shall be in addition
to any liability which the respective Underwriters may otherwise have and
shall extend, upon the same terms and conditions, to each director of the
Issuers, to each officer of the Issuers who has signed the Registration
Statement and to each person, if any, who controls the Issuers within the
meaning of the Act.
7. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities under the Terms Agreement and
the aggregate principal amount of Offered Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of
the total principal amount of Offered Securities, CSFB may make arrangements
satisfactory to the Issuers for the purchase of such Offered Securities by other
persons, including any of the Underwriters, but if no such arrangements are made
by the Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments under the Terms
Agreement (including the provisions of this Agreement), to purchase the Offered
Securities that such defaulting Underwriters agreed but failed to purchase. If
any Underwriter or Underwriters so default and the aggregate principal amount of
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total principal amount of Offered Securities and arrangements
satisfactory to CSFB and the Issuers for the purchase of such Offered Securities
by other persons are not made within 36 hours after such default, the Terms
Agreement will terminate without liability on the part of any non-defaulting
Underwriter or Issuer, except as provided in Section 8. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 7. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of
each of the Issuers and of the several Underwriters set forth in the Terms
Agreement (including the provisions of this Agreement) will remain in full force
and effect, regardless of any investigation, or statement as to the results
thereof, made by or on behalf of any Underwriter, either of the Issuers or any
of their respective representatives, officers or directors or any controlling
person, and will survive delivery of and payment for the Offered Securities. If
the Terms Agreement is terminated pursuant to Section 7 or if for any reason the
purchase of the Offered Securities by the Underwriters is not consummated, each
of the Issuers shall remain responsible for the expenses to be paid or
reimbursed by it pursuant to Section 4 and the respective obligations of each of
the Issuers and the Underwriters pursuant to Section 6 shall remain in effect.
If the purchase of the Offered Securities by the Underwriters is not consummated
for any reason other than solely because of the termination of the Terms
Agreement pursuant to Section 7 or the occurrence of any event specified in
21
clause (iii), (iv), (v), (vi) or (vii) of Section 5(d), each of the Issuers,
jointly and severally, will reimburse the Underwriters for all out-of-pocket
expenses (including fees and disbursements of counsel) reasonably incurred by
them in connection with the offering of the Offered Securities.
9. Notices. All communications hereunder will be in writing and, if sent to
the Underwriters, will be mailed, delivered or telegraphed and confirmed to them
at Credit Suisse First Boston LLC, Eleven Madison Avenue, New York, NY 10010,
Attention: Marc Warm or, if sent to the Issuers, will be mailed, delivered or
telegraphed and confirmed to them at Ferrellgas Partners L.P., One Liberty
Plaza, Liberty, MO 64068, Attention: Kevin T. Kelly.
10. Successors. The Terms Agreement (including the provisions of this
Agreement) will inure to the benefit of and be binding upon each of the Issuers
and such Underwriters as are identified in the Terms Agreement and their
respective successors and the officers and directors and controlling persons
referred to in Section 6, and no other person will have any right or obligation
hereunder.
11. Representation of Underwriters. Any Representatives will act for the
several Underwriters in connection with the financing described in the Terms
Agreement, and any action under such Terms Agreement (including the provisions
of this Agreement) taken by the Representatives jointly or by CSFB will be
binding upon all the Underwriters.
12. Counterparts. The Terms Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
13. Applicable Law. This Agreement and the Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to principles of conflicts of laws.
The Issuers hereby submit to the non-exclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to the Terms Agreement (including the
provisions of this Agreement) or the transactions contemplated thereby.
[remainder of this page left intentionally blank]
22
Ferrellgas Partners, L.P.
Ferrellgas Partners Finance Corp.
(collectively, the "Issuers")
Debt Securities
TERMS AGREEMENT
---------------
June 4, 2004
To: Credit Suisse First Boston LLC
Dear Ladies and Gentlemen:
The undersigned agrees to sell to Credit Suisse First Boston LLC ("CSFB")
for its account, on and subject to the terms and conditions of the Underwriting
Agreement to be filed as an exhibit to the Issuers' Current Report on Form 8-K
to be filed with the SEC on June 10, 2004 and related to the registration
statement of the Issuers on Form S-3 (Nos. 333-103267 and 333-103267-01)
("Underwriting Agreement"), the following securities ("Offered Securities") on
the following terms:
Title: 8 3/4% Senior Notes due 2012.
Principal Amount: $50,000,000.
Interest: 8 3/4% per annum, accruing from December 15, 2003,
payable semiannually on June 15 and December 15, commencing June 15,
2004, to holders of record on the preceding June 1 or December 1, as
the case may be.
Maturity: June 15, 2012.
Optional Redemption: On or after June 15, 2007.
Sinking Fund: None.
Listing: None.
Purchase Price: 102.25% of principal amount, plus accrued
interest from December 15, 2003.
Expected Reoffering Price: 103.25% of principal amount, plus
accrued interest from December 15, 2003, subject to change by CSFB.
Closing: 9:00 A.M. on June 10, 2004 at the offices of Latham &
Watkins LLP, New York, New York, in Federal (same day) funds.
Settlement and Trading: Book-Entry Only via DTC.
Name and Address of the Underwriter:
Credit Suisse First Boston LLC
Eleven Madison Ave.
New York, New York 10010
CSFB agrees to purchase from the Issuers, and the Issuers agree to sell to
it, $50,000,000 in aggregate principal amount of the Offered Securities.
The provisions of the Underwriting Agreement are incorporated herein by
reference. All references to the "Underwriter" or "Underwriters" in the
Underwriting Agreement are understood to refer to CSFB as the sole Underwriter
for the Offered Securities.
The Offered Securities will be made available for checking and packaging at
the offices of Latham & Watkins LLP at least 24 hours prior to the Closing Date.
For purposes of Section 6 of the Underwriting Agreement, the only
information furnished to the Issuers by CSFB for use in the Prospectus consists
of the following information: (i) under the caption "Underwriting" in the
Prospectus and the preliminary prospectus supplement relating thereto, the
second paragraph and the sixth paragraph; and (ii) the second to last paragraph
on the outside front cover page of the Prospectus.
[Signature page to follow]
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Issuers one of the counterparts hereof, whereupon
it will become a binding agreement among the Issuers and CSFB in accordance with
its terms.
Very truly yours,
FERRELLGAS PARTNERS, L.P.
By: Ferrellgas, Inc.,
its general partner
By: /s/ Kevin T. Kelly
-----------------------------
Name: Kevin T. Kelly
Title: Chief Financial Officer
FERRELLGAS PARTNERS FINANCE CORP.
By: /s/ Kevin T. Kelly
-----------------------------
Name: Kevin T. Kelly
Title: Chief Financial Officer
The foregoing Terms Agreement is hereby confirmed
and accepted as of the date first above written.
CREDIT SUISSE FIRST BOSTON LLC
By: /s/ Robert J. McMullen
-----------------------------------
Name: Robert J. McMullen
Title: Managing Director