Draft -- June 22, 1996
================================================================================
NATIONAL PROPANE CORPORATION,
NATIONAL PROPANE SGP, INC.
AND
NATIONAL PROPANE, L.P.
$125,000,000
8.54% First Mortgage Notes due June 30, 2010
(Private Placement Number: ____________)
-------------------------
NOTE AGREEMENT
-------------------------
Dated as of June __, 1996
================================================================================
TABLE OF CONTENTS
Section Page
1. AUTHORIZATION OF INITIAL NOTES AND NOTES...........................1
2. SALE AND PURCHASE OF INITIAL NOTES AND
ISSUANCE OF NOTES...............................................2
3. CLOSING............................................................3
4. CONDITIONS TO CLOSING..............................................3
4.1. Representations and Warranties..............................3
4.2. Performance; No Default.....................................4
4.3. Compliance Certificates.....................................4
4.4. Opinions of Counsel.........................................4
4.5. Legal Investment............................................5
4.6. Trust Agreement.............................................6
4.7. Security Documents..........................................6
4.8. Conveyance; Recordation; Taxes, etc.........................7
4.9. Operative Agreements........................................8
4.10. Sale of Other Initial Notes; Issuance of Other Notes........8
4.11. Sale of Units...............................................8
4.12. Proceedings and Documents...................................9
4.13. Rating......................................................9
4.14. Insurance Broker's Certificate..............................9
4.15. Title Insurance; Survey.....................................9
4.16. Payment of Closing Fees....................................10
4.17. Private Placement Number...................................10
4.18. Environmental Audit........................................10
4.19. Appraisal..................................................10
4.20. Other Agreements...........................................10
5. REPRESENTATIONS AND WARRANTIES, ETC. OF THE
GENERAL PARTNERS AND THE COMPANY...............................10
5.1. Organization, Standing, etc................................10
i
5.2. Partnership Interests......................................11
5.3. Qualification..............................................11
5.4. Business; Financial Statements.............................12
5.5. Changes, etc...............................................14
5.6. Tax Returns and Payments...................................14
5.7. Indebtedness...............................................14
5.8. Transfer of Assets and Business............................14
5.9. Litigation, etc............................................17
5.10. Compliance with Other Instruments, etc.....................17
5.11. Governmental Consent.......................................18
5.12. Offer of Initial Notes and Notes...........................18
5.13. Use of Proceeds............................................18
5.14. Federal Reserve Regulations................................18
5.15. Investment Company Act.....................................19
5.16. Public Utility Holding Company Act; Federal Power Act......19
5.17. ERISA......................................................19
5.18. Environmental Matters......................................21
5.19. Foreign Assets Control Regulations, etc....................22
5.20. Disclosure.................................................23
5.21. Chief Executive Office.....................................23
5.22. Solvency...................................................23
6. PURCHASER'S REPRESENTATIONS; SOURCE OF FUNDS......................24
7. ACCOUNTING; FINANCIAL STATEMENTS AND OTHER
INFORMATION....................................................26
8. INSPECTION........................................................33
9. PREPAYMENT OF NOTES...............................................34
9.1. Required Prepayments of the Notes..........................34
9.2. Optional Prepayments of the Notes with Make Whole Amount...35
9.3. Prepayment on Change of Control............................35
9.4. Contingent Prepayments on Disposition of Property, Taking
or Destruction...........................................36
9.5. Notice of Prepayments; Officers' Certificate...............37
9.6. Allocation of Partial Prepayments..........................37
9.7. Maturity; Surrender, etc...................................38
9.8. Acquisition of Notes.......................................38
ii
10. BUSINESS AND FINANCIAL COVENANTS OF THE
COMPANY........................................................38
10.1. Indebtedness...............................................38
10.2. Liens, etc.................................................44
10.3. Investments, Guaranties, etc...............................47
10.4. Restricted Payments........................................50
10.5. Transactions with Affiliates...............................50
10.6. Subsidiary Stock and Indebtedness..........................51
10.7. Consolidation, Merger, Sale of Assets, etc.................52
10.8. Partnership or Corporate Existence, etc.; Business.........57
10.9. Payment of Taxes and Claims................................58
10.10. Compliance with ERISA......................................58
10.11. Maintenance of Properties; Insurance.......................59
10.12. Operative Agreements; Security Documents...................60
10.13. Chief Executive Office.....................................61
10.14. Recordation; Opinions......................................61
10.15. Information Required by Rule 144A..........................62
10.16. Covenant to Secure Notes Equally...........................62
10.17. Compliance with Laws.......................................62
10.18. Further Assurances.........................................62
10.19. Subsidiaries...............................................63
10.20. Damage, Destruction, Taking, etc...........................65
10.21. Accounting Changes.........................................65
10.22. Certain Real Property......................................65
10.23. Sale and Lease-Back Transactions...........................67
10.24. Acquisitions...............................................67
10.25. Impairment of Security Interests...........................67
10.26. Limitation on Restrictions on Subsidiary Dividends, etc....68
10.27. No Other Negative Pledges..................................68
10.28. Sales of Receivables.......................................68
10.29. Fixed Price Supply Contracts; Certain Policies.............68
10.30. Certain Operations.........................................69
10.31. Independent Corporate Existence............................70
10.32. Environmental Matters......................................71
10.33. Other Debt.................................................71
11. EVENTS OF DEFAULT; ACCELERATION..................................72
iii
12. REMEDIES ON DEFAULT; RECOURSE, ETC...............................77
13. DEFINITIONS......................................................77
14. REGISTRATION, TRANSFER AND SUBSTITUTION OF
NOTES.........................................................101
14.1. Note Register; Ownership of Notes.........................101
14.2. Transfer and Exchange of Notes............................102
14.3. Replacement of Notes......................................102
14.4. Notes Held by Company, etc., Deemed Not Outstanding.......102
15. PAYMENTS ON NOTES...............................................103
15.1. Place of Payment..........................................103
15.2. Home Office Payment.......................................103
16. EXPENSES, INDEMNIFICATION, ETC..................................103
17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES......................107
18. AMENDMENTS AND WAIVERS..........................................107
19. NOTICES, ETC....................................................108
20. REPRODUCTION OF DOCUMENTS.......................................108
21. MISCELLANEOUS...................................................109
22. SUBMISSION TO JURISDICTION......................................109
23. WAIVER OF JURY TRIAL............................................110
24. GOVERNING LAW...................................................110
25. CONFIDENTIAL INFORMATION........................................110
iv
Schedule A -- Schedule of Purchasers
Schedule 4.15 -- Schedule of Pre-Closing Title Insurance Requirements
Schedule 5.2 -- Subsidiaries and Investments
Schedule 5.3 -- Jurisdiction of Qualification
Schedule 5.7 -- Indebtedness
Schedule 5.8(a) -- List of Assets
Schedule 5.8(b) -- List of Non-Mortgage Jurisdictions; List of Counties
Schedule 5.9 -- Litigation
Schedule 5.18 -- Environmental Notices
Schedule 10.2 -- Liens
Schedule 10.31 -- Schedule on Corporate Matters
Exhibit A1 -- Form of Initial Note
Exhibit A2 -- Form of Note
Exhibit B1 -- Form of Opinion of Company Counsel
Exhibit B2 -- Form of Opinion of Local Counsel for the Company
Exhibit B3 -- Form of Opinion of Trustee's Counsel
Exhibit B4 -- Form of Opinion of Debevoise & Plimpton
Exhibit -- Form of Trust Agreement
Exhibit D1 -- Form of Mortgage, Security Agreement and Fixture Filing
v
Exhibit D2 -- Form of Deed of Trust, Security Agreement and Fixture
Filing
Exhibit E -- Form of Subordination Provisions
Exhibit F -- Form of Cash Collateral Agreement
Exhibit G -- Form of Company Security Agreement
Exhibit H -- Form of General Partner's Guarantee Agreement
Exhibit I -- Form of Intercompany Note
Exhibit J -- Form of Agency Account Agreement
Exhibit K -- Form of Partnership Agreement
Exhibit L -- Form of Partnership Note
Exhibit M -- Form of Partners Security Agreement
Exhibit N -- Form of Perfection Certificate
Exhibit O -- Restricted Subsidiaries
Exhibit P -- Form of Subsidiary Guarantee Agreement
Exhibit Q -- Form of Supplemental Agreement
vi
NATIONAL PROPANE CORPORATION
NATIONAL PROPANE SGP, INC.
NATIONAL PROPANE, L.P.
Suite 1700, IES Tower
200 1st Street, S.E.
P.O. Box 2067
Cedar Rapids, Iowa 52401-2067
8.54% First Mortgage Notes due June 30, 2010
Dated as of June __, 1996
TO EACH OF THE PURCHASERS LISTED
IN THE ATTACHED SCHEDULE A
Dear Purchaser:
National Propane Corporation, a Delaware corporation ("National Propane
Corp."), National Propane SGP, Inc., a Delaware corporation formerly known as
All Seasons Acquisition Corp. ("National Propane SGP," and together with
National Propane Corp., collectively the "General Partners") and National
Propane, L.P., a Delaware limited partnership (the "Company"), having been
formed to acquire from National Propane Corp. and National Propane SGP and to
operate the Assets, hereby agree with you as follows:
SECTION 1. AUTHORIZATION OF INITIAL NOTES AND NOTES.
National Propane Corp. will authorize the issue and sale of $125,000,000
aggregate principal amount of its 8.54% First Mortgage Notes due June 30, 2010
(the "Initial Notes"). The Company will authorize the issue and delivery, in
exchange for the Initial Notes, of $125,000,000 aggregate principal amount of
its 8.54% First Mortgage Notes due June 30, 2010 (the "Notes", such term to
include any Notes issued in substitution therefor or replacement thereof
pursuant to Section 14). The Initial Notes and the Notes shall be substantially
in the form of Exhibit A1 and Exhibit A2, respectively, with such changes
therefrom, if any, as may be approved by you and National Propane Corp. or the
Company, as the case may be. Certain capi-
talized terms used in this Note Agreement (the "Agreement") are defined in
Section 13; references to a "Section" or a "Schedule" or an "Exhibit" are,
unless otherwise specified, to a Section of this Agreement or to a Schedule or
an Exhibit attached to this Agreement.
SECTION 2. SALE AND PURCHASE OF INITIAL NOTES AND
ISSUANCE OF NOTES.
Subject to the terms and conditions of this Agreement, National Propane
Corp. will issue and sell to you and you will purchase from National Propane
Corp., at the Closing provided for in Section 3, Initial Notes in the principal
amount specified opposite your name for purchase by you at the Closing in
Schedule A, at the purchase price of 100% of the principal amount thereof. At
the Closing provided for in Section 3, the General Partners will then convey all
of their assets (other than an existing intercompany note from Triarc to
National Propane Corp. in the principal amount of $[__________], approximately
$59,300,000 in cash and certain other assets of National Propane Corp.
identified in the Conveyance Agreements) to the Company pursuant to the
Conveyance Agreements in exchange for general and limited partner interests in
the Company and the assumption by the Company of substantially all the
liabilities of the General Partners (excluding certain income tax liabilities),
including the Initial Notes and certain intercompany debt. Contemporaneously
therewith, the Company will issue to you and you will accept from the Company,
at the Closing provided for in Section 3, Notes in the principal amount
specified opposite your name in Schedule A in exchange for the Initial Notes you
purchased from National Propane Corp. pursuant to this Agreement. Upon such
exchange, such Initial Notes shall be deemed to be canceled and no longer be
outstanding.
Contemporaneously with entering into this Agreement, the General Partners
and the Company are entering into identical Note Agreements (the "Other
Agreements") with each of the other purchasers named in Schedule A (the "Other
Purchasers"), providing for the sale to the Other Purchasers, at the Closing, of
Initial Notes in the principal amount specified opposite its name in Schedule A
and the issuance to the Other Purchasers, at the Closing, of Notes in the
principal amount specified opposite its name in Schedule A in exchange for such
Initial Notes. The sale of Initial Notes, and the issuance of the Notes in
exchange for the Initial Notes, to you and the Other Purchasers are to be
separate sales, and this Agreement and the Other Agreements constitute separate
agreements.
2
SECTION 3. CLOSING.
The sale of the Initial Notes, and the issuance of the Notes in exchange
for the Initial Notes, to you and the Other Purchasers shall take place at the
offices of Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the
Americas, New York, New York 10019, at 10:00 a.m., New York City time, at a
closing (the "Closing") on July __, 1996, or such later date as may be agreed
upon by the General Partners, the Company, you and the Other Purchasers. At the
Closing, (i) National Propane Corp. will deliver to you Initial Notes in the
principal amount to be purchased by you, in the form of a single Initial Note
(or such greater number of Initial Notes as you may request), each dated the
date of the Closing and registered in your name (or in the name of your nominee
as indicated in Schedule A), against payment of the purchase price therefor on
the date of Closing by transfer of immediately available funds to National
Propane Corp., or as otherwise directed by National Propane Corp. in writing (at
least two days prior to the date of the Closing) and (ii) contemporaneously
therewith, the Company will deliver to you Notes in the principal amount of the
Initial Notes purchased by you, in the form of a single Note (or such greater
number of Notes as you may request), each dated the date of the Closing and
registered in your name (or in the name of your nominee as indicated in Schedule
A), in exchange for the Initial Notes purchased by you under this Agreement. If
at the Closing National Propane Corp. or the Company shall fail to tender such
Initial Notes or Notes, as the case may be, to you as provided above in this
Section 3 or if any of the conditions specified in Section 4 shall not have been
fulfilled to your satisfaction, you shall, at your election, be relieved of all
further obligations under this Agreement, without thereby waiving any other
rights you may have by reason of such failure or such nonfulfillment. If the
Closing shall not have occurred on or prior to July 31, 1996, you will promptly
thereafter instruct the Trustee to release its lien on, and its security
interest in, all of the Mortgaged Property.
SECTION 4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Initial Notes to be sold to
you at the Closing is subject to the fulfillment to your satisfaction, prior to
or at the Closing, of the following conditions:
4.1. Representations and Warranties. The representations and warranties of
the Company and its Affiliates contained in this Agreement, the other Operative
Agreements, and those otherwise made in writing by or on behalf of the Company
or any Affiliate of the Company in connection with the transactions contemplated
by this
3
Agreement, shall be true and correct when made and at the time of the Closing,
except as affected by the consummation of such transactions and except for any
representation and warranty that is expressly stated to relate to a specific
date, in which case any such representation and warranty shall be true and
correct as of such earlier date.
4.2. Performance; No Default. Each of the Company and its Affiliates shall
have performed and complied with all agreements and conditions contained in this
Agreement or any other Operative Agreement required to be performed or complied
with by it prior to or at the Closing, and at the time of the Closing no Event
of Default or Potential Event of Default under this Agreement or default by any
party under any other Operative Agreement shall have occurred and be continuing.
4.3. Compliance Certificates. You shall have received Officers'
Certificates of the Company, Triarc, each General Partner and the Public
Partnership, each dated the date of the Closing and satisfactory in substance
and form to you, certifying that the conditions specified in Sections 4.1 and
4.2 have been fulfilled in all material respects insofar as the relevant
representation or warranty is made by, or the relevant agreement or condition is
required to be performed or complied with by, or the relevant Event of Default,
Potential Event of Default or default has been caused by or relates to, each of
such entities and, with respect to the Officers' Certificate of the Company, its
subsidiaries, and, in the case of the Officers' Certificate of National Propane
Corp. and the Company, certifying that no material adverse change has occurred
in the financial condition of the Business subsequent to the date of the
financial statements delivered pursuant to Section 5.4(c) and, in the case of
the Officers' Certificate of Triarc, certifying that neither the Memorandum nor
the Registration Statement 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 contained therein, in light of the circumstances under which
they were made, not misleading.
4.4. Opinions of Counsel. You shall have received favorable opinions from
(a) Paul, Weiss, Rifkind, Wharton & Garrison, special counsel for the Company
and its Affiliates, substantially in the form of Exhibit B1, (b) Andrews &
Kurth, special tax counsel to the Company and its Affiliates, in form and
substance satisfactory to you and your special counsel, (c) (i) Friday, Eldridge
& Clarke, special Arkansas counsel for the Company and its Affiliates, (ii)
Snell & Wilmer, special Arizona counsel for the Company and its Affiliates,
(iii) Parcel, Mauro, Hultin & Spaanstra, special Colorado counsel for the
Company and its Affiliates, (iv) Pepe & Hazard, spe-
4
cial Connecticut counsel for the Company and its Affiliates, (v) Fowler, White,
Burnett, Hurley, Banick & Strickroot, special Florida counsel for the Company
and its Affiliates, (vi) Keck, Mehin & Cate, special Illinois counsel for the
Company and its Affiliates, (vii) Simmons Perrine Albright & Ellwood, special
Iowa counsel for the Company and its Affiliates, (viii) Pierce, Atwood,
Scribner, Allen, Smith & Lancaster, special Maine counsel for the Company and
its Affiliates, (ix) Palmer & Dodge, L.L.P, special Massachusetts counsel for
the Company and its Affiliates, (x) Jaffe, Raitt, Heuer & Weiss, special
Michigan counsel for the Company and its Affiliates (xi) Gray, Plant, Mooty,
Mooty & Bennett, special Minnesota counsel for the Company and its Affiliates,
(xii) Gray, Plant, Mooty, Mooty & Bennett, special Kansas counsel for the
Company and its Affiliates, (xiii) Sheehan, Phinney, Bass & Green, special New
Hampshire counsel for the Company and its Affiliates, (xiv) Modrall, Sperling,
Roehl, Harris & Sisk, P.A., special New Mexico counsel for the Company and its
Affiliates, (xv) Schupbach, Williams & Pavone, special New York counsel for the
Company and its Affiliates, (xvi) Steven B. McInnis, special Rhode Island
counsel for the Company and its Affiliates, and (xvii) Godfrey & Kahn S.C.,
special Wisconsin counsel for the Company and its Affiliates, each substantially
in the form of Exhibit B2, (d) _______________, counsel for the Trustee,
substantially in the form of Exhibit B3 and (e) Debevoise & Plimpton, your
special counsel in connection with the transactions contemplated by this
Agreement, substantially in the form of Exhibit B4, and in each case covering
such other matters incident to such transactions as you may reasonably request,
each addressed to you, dated the date of the Closing and otherwise reasonably
satisfactory in substance and form to you. You shall have received copies of
each of the opinions delivered pursuant to the Underwriting Agreement (other
than the opinion of counsel to the underwriters), accompanied by letters, dated
the date of the Closing and addressed to you, from the counsel rendering such
opinions, stating that you are entitled to rely on such opinions as if they were
addressed to you. The Company and the General Partners hereby direct each of
their counsel referred to in clauses (a) and (b) of this Section 4.4, and each
of its counsel who deliver opinions pursuant to the Underwriting Agreement, to
deliver to you such opinions and letters to be delivered by it and authorizes
you to rely thereon.
4.5. Legal Investment. On the date of the Closing your purchase of Initial
Notes and acceptance of Notes in exchange therefor shall be permitted by the
laws and regulations of each jurisdiction to which your investments are subject,
but without recourse to provisions (such as section 1404(b) or 1405(a)(8) of the
New York Insurance Law) permitting limited investments by insurance companies in
securities not otherwise legally eligible for investment. If requested by you by
prior written
5
request to the Company or the General Partners, you shall have received, at
least five Business Days prior to the Closing, an Officers' Certificate of the
Company or one or both of the General Partners, as the case may be, certifying
as to such matters of fact as you may reasonably specify to enable you to
determine whether such purchase is so permitted.
4.6. Trust Agreement. The Company, National Propane Corp., the Public
Partnership, the Qualifying Restricted Subsidiaries, if any, and the Trustee
shall have duly authorized, executed and delivered the Trust Agreement. The
Trust Agreement shall be in full force and effect and shall constitute the
valid, binding and enforceable obligation of the Company, National Propane
Corp., the Public Partnership, the Qualifying Restricted Subsidiaries, if any,
and the Trustee, except that such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
application relating to or affecting the rights and remedies of creditors, and
no default on the part of the Company, National Propane Corp., the Public
Partnership or the Qualifying Restricted Subsidiaries shall exist thereunder.
4.7. Security Documents. (a) National Propane Corp., the Company and the
Qualifying Restricted Subsidiaries shall have duly authorized, executed and
delivered the Mortgages relating to the Mortgaged Property located in Arkansas,
Arizona, Colorado, Connecticut, Florida, Illinois, Iowa, Kansas, Massachusetts,
Michigan, Minnesota, Missouri, New Hampshire, New Mexico, New York, Rhode
Island, and Wisconsin substantially in the form of Exhibit D1 or D2, as the case
may be. Each Mortgage shall be in full force and effect and shall (i) constitute
the valid, binding and enforceable obligation of National Propane Corp., the
Company and the Qualifying Restricted Subsidiaries, except that such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws of general application relating to
or affecting the rights and remedies of creditors, and (ii) to the extent duly
recorded pursuant to Section 4.8 (x) constitute a valid first mortgage lien or
deed of trust lien, as the case may be, of record on the real property and all
other interests described therein which may be subjected to a mortgage lien or
deed of trust lien, as the case may be, subject only to Permitted Encumbrances,
and (y) constitute a valid assignment of, and create a valid, presently
effective security interest of record in, equipment and all other interests
(other than real property interests) described therein, subject to no prior
security interest in any such property other than as specifically permitted
therein, and no default on the part of National Propane Corp., the Company or
any Qualifying Restricted Subsidiary shall exist thereunder.
6
(b) Each of the Security Documents shall have been duly authorized,
executed and delivered by each of the Company and/or its Affiliates party
thereto, shall be in full force and effect and shall (i) constitute the valid,
binding and enforceable obligation of each such party, except that such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws of general application relating to
or affecting the rights and remedies of creditors, and (ii) to the extent duly
recorded pursuant to Section 4.8, constitute a valid assignment of, and create a
valid, presently effective security interest of record in, property covered by
such Security Document and all other interests described therein, subject to no
prior security interest in any such personal property other than as specifically
permitted therein, and no default on the part of any such party shall exist
thereunder.
4.8. Conveyance; Recordation; Taxes, etc. Prior to the Closing, the
Conveyance Agreements referred to in clause (b) of the definition of such term,
the Mortgages, the Company Security Agreement, the Partners Security Agreement
and the Partnership Note, or proper notices, statements or other instruments in
respect thereof, covering all of the Assets covered by such Conveyance
Agreements and such Mortgages, shall have been duly recorded, published,
registered and filed, and all other actions deemed necessary by your special
counsel shall have been duly performed or taken, in such manner and in such
places as is required by applicable law (a) to convey to the Company record and
beneficial ownership of the Assets referred to in Section 5.8(c)(ii) purported
to be conveyed by such Conveyance Agreements, (b) to establish, perfect,
preserve and protect the rights and first priority Liens purported to be granted
by each such Security Document to the Trustee with respect to the Assets
referred to in Section 5.8(c)(ii) for the benefit of the holders of the Notes
and their respective successors and assigns, and (c) to establish, perfect,
preserve and protect the rights and first priority Liens purported to be granted
by such Partnership Note to the Company with respect to the assets specified
therein, and all taxes, fees and other charges then due in connection with the
execution, delivery, recording, publishing, registration and filing of such
documents or instruments shall have been paid in full.
4.9. Operative Agreements. Each of the Operative Agreements shall have
been duly authorized, executed and delivered by the respective parties thereto,
in form and substance satisfactory to you, shall be in full force and effect,
and shall constitute the legal, valid and binding obligations of the respective
parties thereto, except that such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
application relating to or affecting the rights and remedies of creditors, and
all actions required to be
7
performed or taken thereunder on or prior to the date of the Closing shall have
been duly taken and no default or accrued right of termination on the part of
any of the parties thereto shall exist thereunder as of the date of the Closing,
and you and the Trustee shall have received a fully executed original, or a true
and correct copy, of each such document.
4.10. Sale of Other Initial Notes; Issuance of Other Notes.
Contemporaneously with the Closing, (i) National Propane Corp. shall sell to the
Other Purchasers the Initial Notes to be purchased by them at the Closing as
specified in Schedule A and (ii) the Company shall issue to each Other
Purchaser, and such Other Purchaser will accept from the Company, the Notes in
the principal amount specified opposite such Other Purchaser's name in Schedule
A in exchange for the Initial Notes such Other Purchaser purchases from National
Propane Corp.
4.11. Sale of Units. At the time of the Closing, (a) the Underwriting
Agreement shall be in full force and effect, (b) all conditions to closing
contained in the Underwriting Agreement shall have been fulfilled or waived in a
manner acceptable to you, (c) your special counsel shall have received a copy of
each agreement, document, opinion (as specified in Section 4.4) and certificate
delivered in connection with the closing under the Underwriting Agreement, and
(d) simultaneously with the receipt of the proceeds of the sale of the Initial
Notes to you and the Other Purchasers at the Closing, (i) the Public Partnership
shall sell to the Underwriters the Units provided to be sold under the
Underwriting Agreement for an aggregate gross purchase price of not less than
[$130,000,000], (ii) National Propane Corp. shall transfer its 97.9798% limited
partner interest in the Company to the Public Partnership in exchange for a
45.1% subordinated general partner interest in the Public Partnership (____%, if
the Overallotment Option is exercised in full) and a 1% unsubordinated general
partner interest in the Public Partnership, and (iii) all transactions
contemplated by the Registration Statement and the Memorandum to be completed by
the General Partners, the Company and their Affiliates prior to or substantially
simultaneously with the issuance of the Notes shall have been completed
substantially as contemplated therein and in a manner acceptable to you.
4.12. Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be satisfactory to you and your special
counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.
8
4.13. Rating. Prior to the Closing, the Notes shall have received a rating
of at least BBB from Fitch Investors Service, Inc., which rating remains in
effect as of the Closing.
4.14. Insurance Broker's Certificate. Insurance complying with the
provisions of Section 15 of the Mortgage and Section 10.11 hereof shall be in
full force and effect and you, the Other Purchasers and the Trustee shall have
received a certificate from Kaye Insurance Associates, Inc. or such other
independent insurance brokers or consultants as shall be reasonably satisfactory
to you, dated the date of the Closing, which certificate shall satisfy the
requirements set forth in Section 15.3 of the Mortgage.
4.15. Title Insurance; Survey. (a) The Trustee shall have received a
mortgagee's policy of title insurance, including mechanic's lien coverage, with
respect to the properties and facilities listed on Schedule 4.15, issued by a
title insurance company or companies authorized to issue title insurance in the
states in which such properties or facilities are located with provisions for
coinsurance or reinsurance satisfactory to you, dated the date of the Closing
and satisfactory in substance and form to you and your special counsel, insuring
the interest of the Trustee under the Security Documents, subject only to
Permitted Encumbrances, such policies to be in an amount at least equal to the
amounts set forth opposite each of the individual properties and facilities
listed on Schedule 4.15.
(b) The Trustee shall have received copies of ALTA surveys with respect to
the properties and facilities listed on Schedule 4.15, certified to the Trustee
and the title company or companies and satisfactory to you and your special
counsel.
4.16. Payment of Closing Fees. The Company shall have paid the fees and
disbursements required by Section 16 to be paid by the Company on the date of
the Closing.
4.17. Private Placement Number. The Company shall have obtained for the
Notes a Private Placement Number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners).
4.18. Environmental Audit. The Company shall have delivered to you, a true
and complete copy of the environmental reports relating to the properties listed
on Schedule 4.15, dated a recent date, prepared by Environmental Strategies
9
Corporation, and the results of such reports shall be satisfactory to you, your
special counsel and your independent environmental consultant.
4.19. Appraisal. The Company shall have delivered to you a true and
complete copy of an appraisal report of Valuation Research, dated as of
_________________, setting forth their appraisal of certain of the Assets, and
the contents of such report shall be satisfactory to you and your special
counsel.
4.20. Other Agreements. The Company shall have delivered to you a true and
complete copy of the Bank Credit Facilities, the Registration Statement and the
Underwriting Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES, ETC. OF THE
GENERAL PARTNERS AND THE COMPANY.
Each of the General Partners and the Company represents and warrants that:
5.1. Organization, Standing, etc. (a) The Company is a limited partnership
duly organized, validly existing and in good standing under the Delaware Revised
Uniform Limited Partnership Act and has all requisite partnership power and
authority to own and operate its properties (including, without limitation, the
Assets), to conduct its business as described in the Registration Statement
after giving effect to the transfer of the Assets, to enter into this Agreement
and the other Operative Agreements to which it is a party, to issue and deliver
the Notes and to carry out the terms of this Agreement, such other Operative
Agreements and the Notes.
(b) Each General Partner is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has all
requisite corporate power and authority to own and operate its properties, to
conduct its business as described in the Registration Statement, to enter into
and carry out the terms of this Agreement and the other Operative Agreements to
which it is a party, and in the case of National Propane Corp., to issue and
sell the Initial Notes, and to execute and deliver as a general partner of the
Company this Agreement, the Notes and the other Operative Agreements to which
the Company is a party.
(c) Each Restricted Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the State of its incorporation
and has all requisite corporate power and authority to own and operate its
properties, to conduct its business as described in the Registration Statement
after giving effect to
10
the transfer of the Assets, and to execute, deliver and perform the other
Operative Agreements to which it is a party.
(d) The Public Partnership is a limited partnership duly organized,
validly existing and in good standing under the Delaware Revised Uniform Limited
Partnership Act and has all requisite partnership power and authority to own and
operate its properties, to conduct its business as described in the Registration
Statement, and to execute, deliver and carry out the terms of the Operative
Agreements to which it is a party.
5.2. Partnership Interests. The only general partners of the Company are
the General Partners, each of which upon the consummation of the Closing will
own a 1.0101% general partner interest in the Company. Upon the consummation of
the Closing the only limited partner of the Company will be the Public
Partnership, which will own a 97.9798% limited partner interest in the Company
acquired as provided in the Registration Statement. The Company will not have
any other partners upon the consummation of the Closing. Except as disclosed in
Schedule 5.2, the Company does not have, and immediately after giving effect to
the transactions contemplated by the Conveyance Agreements will not have, any
Subsidiaries or any Investments in any Person (other than Investments of the
types described in Section 10.3(a)).
5.3. Qualification. The Company is duly qualified or registered and is in
good standing as a foreign limited partnership for the transaction of business,
and each General Partner and each Restricted Subsidiary is qualified or
registered and is in good standing as a foreign corporation for the transaction
of business, in the jurisdictions set forth in Schedule 5.3 which are the only
jurisdictions in which, after giving effect to the conveyance to the Company of
the Assets, the nature of their respective activities or the character of the
properties they own, lease or use makes such qualification or registration
necessary and in which the failure so to qualify or to be so registered would
have a Material Adverse Effect. Each of the General Partners, Triarc, the
Restricted Subsidiaries and the Company has taken all necessary partnership or
corporate action to authorize the execution, delivery and performance by it of
this Agreement, the Initial Notes or the Notes, as the case may be, and each
other Operative Agreement to which it is a party. Each of the General Partners,
Triarc, the Restricted Subsidiaries and the Company has duly executed and
delivered each of this Agreement, the Initial Notes or the Notes, as the case
may be, and the other Operative Agreements to which it is a party, and each of
them constitutes its legal, valid, binding and enforceable obligation in
accordance with its terms, except that such enforceability may be limited by
applicable bankruptcy, insolvency,
11
reorganization, moratorium and similar laws of general application relating to
or affecting the rights and remedies of creditors.
5.4. Business; Financial Statements. (a) The Company has not engaged in
any business or activities prior to the date of this Agreement, except for
activities related to its formation, organization and prospective operations,
and will not have any significant assets or liabilities prior to its acquisition
of the Assets and assumption of liabilities, as contemplated by this Agreement
and the Registration Statement.
(b) The Company has delivered to you complete and correct copies of (i)
the Registration Statement, and (ii) a memorandum dated May 1996 prepared by
Donaldson, Lufkin & Jenrette Securities Corporation and Merrill Lynch & Co. for
use in connection with National Propane Corp.'s private placement of the Initial
Notes and the Notes (the "Memorandum"). The pro forma consolidated financial
statements of the Public Partnership set forth in the Registration Statement
comply in all respects with the applicable accounting requirements of the
Securities Act of 1933, as amended, and the published rules and regulations
thereunder and, in the opinion of the Company, the assumptions on which the pro
forma adjustments to such pro forma consolidated financial statements of the
Public Partnership are based provide a reasonable basis for presenting the
significant effects of the transactions contemplated by such pro forma
consolidated financial statements and such pro forma adjustments give
appropriate effect to such assumptions and are properly applied in such pro
forma consolidated financial statements. The financial statements and schedules
included in the Registration Statement (other than with respect to pro forma
matters) have been prepared in accordance with GAAP applied on a consistent
basis throughout the periods specified and present fairly the financial position
of the corporation or partnership to which they relate as of the respective
dates specified and the results of their operations and cash flows for the
respective periods specified. Since December 31, 1995 to the date of the
Closing, there has been no material adverse change in the business, financial
condition, or results of operations of Triarc, the General Partners and their
consolidated subsidiaries taken as a whole. The financial data included under
the caption "Selected Historical and Pro Forma Consolidated Financial and
Operating Data" for National Propane Corp. and for the Public Partnership in the
Registration Statement present fairly, on the basis stated in the Registration
Statement, the information set forth therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statement. The historical aspects of the financial data included
under the caption "Capitalization" in the Registration Statement present fairly,
on the basis stated in the Registration Statement, the information set forth
therein and have been compiled on a basis
12
consistent with that of the audited financial statements included in the
Registration Statement; the pro forma aspects of such financial data included
under the caption "Capitalization" have been prepared in all material respects
in accordance with all applicable rules and guidelines of the Securities and
Exchange Commission with respect to pro forma financial information; and the
assumptions on which the pro forma adjustments to the pro forma aspects of the
financial data included under the caption "Capitalization" are based provide a
reasonable basis for presenting all of the significant effects of the
transactions contemplated by such pro forma financial data and such pro forma
adjustments give appropriate effect to such assumptions and are properly applied
in such pro forma financial data.
(c) The unaudited pro forma balance sheets of National Propane Corp. as of
March 31, 1996 present fairly the financial condition of National Propane Corp.
as of that date. Since March 31, 1996 to the date of the Closing, there has been
no change or event which could reasonably be expected to have a Material Adverse
Effect. The financial data for National Propane Corp. in the Memorandum present
fairly, on the basis stated in the Memorandum, the information set forth therein
and have been compiled based on the audited financial statements included in
the Registration Statement. The financial data identified as historical included
in the Memorandum present fairly, on the basis stated in the Memorandum, the
information set forth therein and have been compiled on a basis consistent with
that of the audited financial statements included in the Registration Statement;
the pro forma financial data included in the Memorandum represent, in all
material respects and on the basis stated in the Memorandum, National Propane
Corp.'s best estimate at such time with respect to pro forma financial
information; and the assumptions on which the pro forma adjustments to the pro
forma aspects of the financial data included in the Memorandum are based provide
a reasonable basis for presenting all of the significant effects of the
transactions contemplated by such pro forma financial data and such pro forma
adjustments give appropriate effect to such assumptions and are properly applied
in such pro forma financial data.
5.5. Changes, etc. Except as contemplated by this Agreement, the other
Operative Agreements, the Registration Statement or the Memorandum, subsequent
to the respective dates as of which information is given in the Registration
Statement or the Memorandum, the Company and its Affiliates have not incurred
any material liabilities or obligations, direct or contingent, or entered into
any material transaction not in the ordinary course of business, no events have
occurred, which individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect, and there has not been (a) any Restricted
Payment of any kind declared, paid or made by
13
the Company or either General Partner (other than those referred to in Section
5.13) or (b) any incurrence of Indebtedness under the Bank Credit Facilities.
5.6. Tax Returns and Payments. Each of the Company and its Affiliates has
filed all tax returns required by law to be filed by it or, with respect to
those tax returns listed on Schedule 5.6, has properly filed for an extension of
time for the filing thereof and has paid all, taxes, assessments and other
governmental charges levied upon it or any of its properties, assets, income or
franchises which are due and payable, except those which are not past due or are
presently being contested in good faith by appropriate proceedings diligently
conducted for which such reserves or other appropriate provisions, if any, as
shall be required by GAAP have been made. The Company is a limited partnership
that is treated as a pass-through entity for federal income tax purposes.
5.7. Indebtedness. At the time of the Closing, other than the Indebtedness
represented by the Notes and the Indebtedness listed in Schedule 5.7, none of
Company, either General Partner or any Subsidiary will have any secured or
unsecured Indebtedness outstanding. At the time of the Closing, no instrument or
agreement to which the Company or, other than Section 7.5(a) of the MLP
Agreement, either General Partner is a party or by which the Company or either
General Partner is bound or which is applicable to the Company or either General
Partner (other than this Agreement and the Bank Credit Facilities) contains any
restrictions on the incurrence by the Company or either General Partner of
additional Indebtedness.
5.8. Transfer of Assets and Business. (a) The Company and its
Subsidiaries, will at the Closing, after giving effect to the transfer of the
Assets on or prior to the date of the Closing as described in the Registration
Statement, be in possession of and operating in compliance in all respects with
all franchises, grants, authorizations, approvals, licenses, permits, easements,
rights-of-way, consents, certificates and orders required to own, lease or use
its properties (including, without limitation, to own, lease or use the Assets
and to assume certain liabilities relating to the Assets as described in the
Registration Statement and the Operative Agreements) and to permit the conduct
of the Business as now conducted and proposed to be conducted, except for those
franchises, grants, authorizations, approvals, licenses, permits, easements,
rights-of-way, consents, certificates and orders (collectively, "Permitted
Exceptions") (i) which are not required at such time and are routine or
administrative in nature and are expected in the reasonable judgment of National
Propane Corp. to be obtained or given in the ordinary course of business after
the date of the Closing, or (ii) which, if not obtained or given, would not,
individually or in the aggregate, have a Material
14
Adverse Effect. At the time of the Closing and after giving effect to the
transfer of the Assets on or prior to the date of the Closing as described in
the Registration Statement, the Company does not own or lease any real property
in the jurisdictions set forth on Schedule 5.8, other than such owned or leased
property that, in the aggregate, have minimal value and generate only a small
fraction of the Company's revenues and the information in Schedule 5.8(a) is
true and correct as of the date of Closing.
(b) National Propane Corp. has, and upon the consummation of the Closing
the Company will have, (i) good and marketable title to the portion of the
Assets constituting real property owned in fee simple, (ii) good and valid
leasehold interests in the portion of the Assets constituting real property and
leased, other than certain immaterial leased property (constituting not more
than [ ]% of the Assets) subject to the Agency Agreement pursuant to which the
Company shall enjoy undisturbed possession thereof and (iii) good and sufficient
title to the portion of the Assets constituting personal property for the use
and operation of such personal property as it has been used in the past and as
it is proposed to be used in the Business other than certain immaterial personal
property (constituting not more than [__]% of the Assets) which will be subject
to the Agency Agreement, in each case subject to no Liens except Permitted
Encumbrances. The Assets are all of the assets and properties necessary to
enable the Company to conduct the Business in the same manner as previously
conducted by the General Partners and include all options to purchase or rights
of first refusal granted to or for the General Partners with respect to any of
the Assets leased by either General Partner. The Assets constituting an interest
in real property to be conveyed to the Company pursuant to the Conveyance
Agreements are located in the counties listed in Schedule 5.8(b). The General
Partners enjoy, and upon execution and delivery of the Operative Agreements and
the consummation of the Conveyance Agreements the Company will enjoy, peaceful
and undisturbed possession under all leases necessary for the operation of its
properties and assets, other than certain immaterial leased property of which
the Company shall enjoy undisturbed possession, and all such leases are valid
and subsisting and are in full force and effect. Except to perfect and to
protect security interests permitted by Section 10.2, (x) at the time of the
Closing, no effective financing statement under the Uniform Commercial Code
which names the Company, Triarc, any Restricted Subsidiary or either General
Partner as debtor, which individually or in the aggregate relates to any part of
the Assets or other assets pledged pursuant to any Security Document, will be on
file in any jurisdiction and (y) at the time of the Closing, none of the
Company, Triarc, any Restricted Subsidiary or either General Partner will have
signed any effective financing statement (other than financing statements in
favor of
15
The Bank of New York, as administrative agent, for which executed termination
statements will be delivered at the Closing) or any effective security
agreement, which relates to any part of the Assets or other assets pledged
pursuant to any Security Document, authorizing any secured party thereunder to
file any such financing statement, except for financing statements to be
executed and filed in connection with the Closing.
(c) Upon the consummation of the Closing, (i) the General Partners will
have transferred to the Company beneficial and (except in the case of motor
vehicles covered by certificates of title where the certificates of title will
have been duly executed in favor of the Company, the Lien of the Trustee will
have been duly noted thereon and such certificates of title will have been
delivered to the Company and/or the Trustee, but will not have yet been
submitted to the appropriate governmental agency for re-issuance) record
ownership of properties, easements and licenses comprising the Assets, (ii) the
Conveyance Agreements referred to in clause (b) of the definition of such term,
the Mortgages, the Company Security Agreement and the Partners Security
Agreement or proper notices, statements or other instruments in respect thereof,
will have been duly recorded, published, registered and filed as required by
Section 4.8 with respect to 80% of the counties in which Assets constituting
real property are located and covering at least 80% of the value of the personal
property and mortgaged real property included in the Assets, and (iii) the
Partnership Note or proper notices, statements or other instruments in respect
thereof, covering all of the assets covered by such Partnership Note, shall have
been duly executed, and all other actions deemed necessary by your special
counsel shall have been duly performed or taken, in such manner as is required
by applicable law to establish, perfect, preserve and protect the rights and
first priority Liens purported to be granted by such Partnership Note to the
Company and its respective successors and assigns.
5.9. Litigation, etc. Except as set forth on Schedule 5.9, there is no
action, proceeding or investigation pending or, to the best knowledge of the
Company and the General Partners upon reasonable inquiry, threatened (or any
basis therefor known to the Company or either General Partner) which questions
the validity of this Agreement, any other Operative Agreement or the Initial
Notes or any action taken or to be taken pursuant to this Agreement, any other
Operative Agreement or the Initial Notes, or which could reasonably be expected
to have, either in any case or in the aggregate, a Material Adverse Effect.
16
5.10. Compliance with Other Instruments, etc. Neither the Company, any
Restricted Subsidiary nor either General Partner (i) is in violation of any term
of the Partnership Agreement or, in the case of the Restricted Subsidiaries and
the General Partners, of their respective certificates of incorporation or
by-laws, or (ii) is in violation of any term of any other agreement or
instrument to which the Company, any Restricted Subsidiary or either General
Partner is a party or by which any of them or any of their properties is bound
or any term of any applicable law, ordinance, rule or regulation of any
governmental authority or any term of any applicable order, judgment or decree
of any court, arbitrator or governmental authority, the consequences of which,
in the case of clause (ii), would have a Material Adverse Effect; the execution,
delivery and performance by each of the General Partners, the Restricted
Subsidiaries and the Company of this Agreement and the other Operative
Agreements to which it is a party and the Initial Notes or the Notes, as the
case may be, will not result in any violation of or be in conflict with or
constitute a default under any such term or result in the creation of (or impose
any obligation on the Company, any Restricted Subsidiary or either General
Partner to create) any Lien upon any of the properties or assets of the Company,
any Restricted Subsidiary or either General Partner prohibited by any such term,
except for any such term relating to Indebtedness to be repaid in full at the
time of the Closing; and there is no such term the compliance with which would
have, or in the future may in the reasonable judgment of either General Partner
or the Company be likely to have, a Material Adverse Effect.
5.11. Governmental Consent. No consent, approval or authorization of, or
declaration or filing with, any governmental authority is required for the valid
execution, delivery and performance of this Agreement or the other Operative
Agreements (other than Permitted Exceptions), and no such consent, approval,
authorization, declaration or filing is required for the valid offer, issue,
sale and delivery of the Initial Notes and the Notes pursuant to this Agreement
and the Other Agreements.
5.12. Offer of Initial Notes and Notes. Neither the Company nor any of its
Affiliates nor anyone acting on its or their behalf has directly or indirectly
offered the Initial Notes or the Notes or any part thereof or any similar
securities for sale to, or solicited any offer to buy any of the same from, or
otherwise approached or negotiated in respect thereof with, anyone other than
you, the Other Purchasers and not more than [__] other institutional investors.
Neither the General Partners nor the Company nor anyone authorized to act on
their behalf has taken or will take any action which would subject the issuance
and sale of the Initial Notes or issuance and
17
delivery of the Notes to the registration and prospectus delivery provisions of
the Securities Act of 1933, as amended, or to the registration or qualification
provisions of any securities or Blue Sky law of any applicable jurisdiction or
require registration of any Security Document under the Trust Indenture Act of
1939, as amended; provided, however, that it is understood that any action taken
by you or any Other Purchaser shall not have been taken on behalf of the Company
or the General Partners.
5.13. Use of Proceeds. The proceeds of the sale of the Units by the Public
Partnership will be used by the Public Partnership and the Company as
contemplated by the Registration Statement. Of the proceeds of the sale of the
Initial Notes to you and the Other Purchasers, approximately $59,300,000 will be
paid by National Propane Corp. as dividends to Triarc, approximately $3,500,000
will be used to pay transaction costs and expenses and approximately $62,200,000
will be contributed by National Propane Corp. to the Company under the
Conveyance Agreements and will be used by the Company to repay certain
Indebtedness assumed by the Company under the Conveyance Agreements.
5.14. Federal Reserve Regulations. Neither National Propane Corp. nor the
Company will, directly or indirectly, use any of the proceeds of the sale of the
Initial Notes or the Notes for the purpose, whether immediate, incidental or
ultimate, of buying a "margin stock" or of maintaining, reducing or retiring any
indebtedness originally incurred to purchase a stock that is currently a "margin
stock", or for any other purpose which might constitute this transaction a
"purpose credit", in each case within the meaning of Regulation G of the Board
of Governors of the Federal Reserve System (12 C.F.R. 207, as amended), or
otherwise take or permit to be taken any action which would involve a violation
of such Regulation G or of Regulation X (12 C.F.R. 224, as amended) or any other
applicable regulation of such Board. No indebtedness being reduced or retired,
directly or indirectly, out of the proceeds of the sale of the Initial Notes was
incurred for the purpose of purchasing or carrying any stock which is currently
a "margin stock", and none of either General Partner, the Public Partnership or
the Company owns or has any present intention of acquiring with the proceeds
thereof any amount of such "margin stock".
5.15. Investment Company Act. None of the General Partners or the
Company is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
18
5.16. Public Utility Holding Company Act; Federal Power Act. None of the
General Partners or the Company is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended; each of the General
Partners, the Company, the issue and sale of the Initial Notes by National
Propane Corp. and the issue and delivery of the Notes by the Company is not
subject to regulation under such Act; and none of the General Partners or the
Company is a "public utility" as such term is defined in the Federal Power Act,
as amended.
5.17. ERISA. (a) None of the General Partners, the Company, any Subsidiary
of the Company or any Related Person of either of the General Partners or the
Company (other than Triarc and any Subsidiaries of Triarc (except for the
General Partners and any Subsidiary of either of the General Partners that is a
Related Person of the Company)) is obligated to contribute to, and none of the
General Partners, the Company or any Related Person of the Company has any
liability or obligation with respect to, any Plan that is subject to Section 302
or Title IV of ERISA or Section 412 of the Code (other than a Multiemployer
Plan). None of the Company, any Subsidiary of the Company or any Related Person
of the Company has any liability or obligation to provide any amount or type of
compensation or benefit in respect of any employee or former employee of the
Business which relates to periods, services performed or benefits or amounts
accrued prior to the transfer of the Business or the Assets pursuant to the
Operative Agreements and the transactions contemplated thereby (other than
pursuant to a Multiemployer Plan), continuation coverage provided pursuant to
Section 4980B of the Code or Section 601, et seq., of ERISA, or any liability or
obligation for contributions pursuant to a Plan not yet required to be paid.
None of the General Partners, the Company, any Subsidiary of the Company or any
Related Person of the Company has incurred any material liability under Title IV
of ERISA with respect to any such Plan and no event or condition exists or has
occurred as a result of which such a liability would reasonably be expected to
be incurred. None of the General Partners, the Company, any Subsidiary of the
Company or any Related Person has engaged in any transaction, including the
transactions contemplated hereunder which could subject the Company or any
Related Person of the Company to a material liability pursuant to Section
4069(a) or 4212(c) of ERISA. There has been no reportable event (within the
meaning of Section 4043(b) of ERISA other than one for which the applicable
notice requirements have been waived by PBGC regulation) or any other event or
condition with respect to any Plan which presents a risk of the termination of,
or the appointment of a trustee to administer, any such Plan (other than a
Multiemployer Plan) by the PBGC. No
19
prohibited transaction (within the meaning of Section 406(a) of ERISA or Section
4975 of the Code) exists or has occurred with respect to any Plan which has
subjected or could reasonably be expected to subject either General Partner, the
Company or any Subsidiary of the Company to a material liability under Section
502(i) or 502(l) of ERISA or Section 4975 of the Code. No material liability to
the PBGC (other than liability for premiums not yet due) has been or is expected
to be incurred with regard to any Plan by the General Partners, the Company, any
Subsidiary of the Company or any Related Person of the Company. None of the
General Partners, the Company, any Subsidiary of the Company or any Related
Person of the Company contributes or is obligated to contribute or has ever
contributed or been obligated to contribute to any single employer plan that has
at least two contributing sponsors not under common control (other than the
National Propane Corporation 401(k) Plan). Timely payment has been made of all
amounts which the General Partners, the Company, any Subsidiary of the Company
or any Related Person of the Company is required under applicable law, the terms
of each Plan or any collective bargaining agreement to have paid as
contributions to each such Plan except to the extent that failure to do so would
not have a Material Adverse Effect. To the knowledge of the General Partners and
the Company, no Multiemployer Plan has been terminated or presents a material
risk of termination, is insolvent or is in reorganization within the meaning of
Section 4241 or 4245 of ERISA and the transactions contemplated hereby will not
result in a withdrawal from any Multiemployer Plan that would have a Material
Adverse Effect. None of the General Partners, the Company or any Subsidiary of
the Company has any obligation to provide any material amount of post-employment
welfare benefits or coverage (other than continuation coverage provided pursuant
to Section 4980B of the Code or Section 601, et seq., of ERISA).
(b) The execution and delivery of this Agreement and the Other Agreements
and the issue and sale of the Initial Notes, the exchange of the Initial Notes
and the issue and delivery of the Notes hereunder and thereunder will not
involve any non-exempt "prohibited transaction" within the meaning of Section
406 of ERISA or Section 4975 of the Code. The representations by the Company and
the General Partners in the immediately preceding sentence are made in reliance
upon and subject to the accuracy of your representation in Section 6.2 of this
Agreement and the representations of the Other Purchasers in Section 6.2 of the
Other Agreements as to the source of the funds to be used to pay the purchase
price of the Initial Notes to be purchased by you and the Other Purchasers,
respectively. With respect to each employee benefit plan identified to the
Company in accordance with clause (c) of Section 6.2 of this Agreement or of
any of the Other Agreements, none of the General Partners, the Company or any
"affiliate" (as defined in Section V(c) of the QPAM
20
Exemption) of either General Partner or the Company has at this time, and has
not exercised at any time within the one year period preceding the date of the
Closing, the authority to appoint or terminate you or any Other Purchaser as
manager of any of the assets of any such plan or to negotiate the terms of any
management agreement with you or any Other Purchaser on behalf of any such plan.
5.18. Environmental Matters. (a) Except as disclosed in Schedule 5.18 each
of the Company, each Restricted Subsidiary and each General Partner is, and
after giving effect to the transfer to the Company of the Assets will be, in
compliance with all Environmental Laws applicable to it or to the Business or
Assets except where such noncompliance would not have a Material Adverse Effect.
Each of the Company and the Restricted Subsidiaries has timely and properly
applied for renewal of all environmental permits or licenses that have expired
or are about to expire and are necessary for the conduct of the Business as now
conducted and as proposed to be conducted, except where the failure to timely
and properly reapply would not have a Material Adverse Effect. Schedule 5.18
lists (i) all notices from Federal, state or local environmental agencies to the
Company, any Restricted Subsidiary or either General Partner citing
environmental violations that have not been finally resolved and disposed of,
and no such violation, whether or not notice regarding such violation is listed
on Schedule 5.18, if ultimately resolved against the Company, any Restricted
Subsidiary or either General Partner, as the case may be, individually or in the
aggregate, would have a Material Adverse Effect, and (ii) all current reports
filed by the Company, each Restricted Subsidiary or either General Partner with
any Federal, state or local environmental agency having jurisdiction over the
Assets, true and complete copies of which reports have been made available to
you, your special counsel and your environmental advisor. Notwithstanding any
such notice, the Company, each Restricted Subsidiary and each General Partner
are currently operating in all material respects within the limits set forth in
such environmental permits or licenses and any current noncompliance with such
permits or licenses will not result in any material liability or penalty to the
Company, any Restricted Subsidiary or either General Partner or in the
revocation, loss or termination of any such environmental permits or licenses,
the revocation, loss or termination of which would have a Material Adverse
Effect.
(b) Except as disclosed in Schedule 5.18, all facilities located on the
real property included in the Assets which are subject to regulation by RCRA are
and have been operated in compliance with RCRA, except where such noncompliance
would not have a Material Adverse Effect and none of the Company, any Restricted
Subsidiary or either General Partner has received, or, to the knowledge of the
Com-
21
pany and each General Partner been threatened with, a notice of violation of
RCRA regarding such facilities.
(c) Except as disclosed in Schedule 5.18, no hazardous substance (as
defined in CERCLA) or hazardous waste (as defined in RCRA) is located or present
at any of the real property included in the Assets in violation of any
Environmental Law, which violation will have a Material Adverse Effect, and with
respect to such real property there has not occurred (i) any release or
threatened release of any such hazardous substance, (ii) any discharge or
threatened discharge of any substance into ground, surface, or navigable waters
which violates any Federal, state, local or foreign laws, rules or regulations
concerning water pollution, or (iii) any assertion of any Lien pursuant to
Environmental Laws resulting from any use, spill, discharge or clean-up of any
hazardous or toxic substance or waste, which occurrence will have a Material
Adverse Effect.
5.19. Foreign Assets Control Regulations, etc. The issue and sale of the
Initial Notes by National Propane Corp. and its use of the proceeds thereof as
contemplated by this Agreement, and the issue and delivery of the Notes by the
Company, will not violate any of the regulations (other than those regulations,
if any, that are implicated solely as a result of the actions of the purchasers
of the Notes) administered by the Office of Foreign Assets Control, the United
States Department of the Treasury, including, without limitation, the Foreign
Assets Control Regulations, the Transaction Control Regulations, the Cuban
Assets Control Regulations, the Foreign Funds Control Regulations, the Iranian
Assets Control Regulations, the Iranian Transactions Regulations, the Iraqi
Sanctions Regulations, the Libyan Sanctions Regulations, and the Soviet Gold
Coin Regulations of the United States Treasury Department (31 C.F.R., Subtitle
B, Chapter V, as amended) or the restrictions set forth in Executive Orders No.
8389, 9193, 12543 (Libya), 12544 (Libya), 12801 (Libya), 12722 (Iraq), 12724
(Iraq), 12775 (Haiti), 12779 (Haiti), 12808 (Yugoslavia), 12810 (Yugoslavia) or
12831 (Yugoslavia), as amended, of the President of the United States of America
or of any rules or regulations issued thereunder.
5.20. Disclosure. Neither this Agreement, the other Operative Agreements,
the Memorandum, the Registration Statement, nor any other historical financial
statement, document, certificate or instrument delivered to you by or on behalf
of the Company, any Restricted Subsidiary, any General Partner or any of their
Affiliates in connection with the transactions contemplated by this Agreement,
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to
22
make the statements contained therein, in light of the circumstances under which
they were made, not misleading. There is no fact actually known to the Company
or either General Partner which has or in the future would (so far as the
Company or either General Partner can now reasonably foresee) have a Material
Adverse Effect which has not been set forth or referred to in this Agreement,
the Memorandum or the Registration Statement. You and the Other Purchasers shall
be entitled to rely on the statements and disclosures set forth in the
Registration Statement.
5.21. Chief Executive Office. The chief executive office of the Company
and National Propane Corp. and the office where each maintains its records
relating to the transactions contemplated by the Operative Agreements is located
at Suite 1700, IES Tower, 200 1st Street S.E., P.O. Box 2067, Cedar Rapids, Iowa
52401-2067.
5.22. Solvency. Upon the sale of the Initial Notes and the concurrent or
prior consummation of the transactions contemplated hereby, National Propane
Corp. will be Solvent. Upon the exchange of the Notes by the Company and the
concurrent or prior consummation of the transactions contemplated hereby, the
Company and its Restricted Subsidiaries will be solvent. "Solvent" means, with
expect to any Person, that (a) the sum of the assets of such Person, both at a
fair valuation and at present fair saleable value, will exceed the liabilities
of such Person, (b) such Person will have sufficient capital with which to
conduct its business as presently conducted and as proposed to be conducted and
(c) such Person has not incurred debts, and does not intend to incur debts,
beyond its ability to pay such debts as they mature. For purposes of the
foregoing definition, "debts" means any liabilities on claims, and "claim" means
(i) a right to payment, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured or (ii) a right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured. With respect to
any contingent liabilities, such liabilities shall be computed at the amount
which, in light of all the facts and circumstances existing at the time,
represents the amount which can reasonably be expected to become an actual or
matured liability.
SECTION 6. PURCHASER'S REPRESENTATIONS; SOURCE OF FUNDS.
6.1. You represent that you are purchasing the Initial Notes and accepting
the Notes in exchange for the Initial Notes for your own account or for one or
more
23
separate accounts maintained by you or for the account of one or more pension or
trust funds, in each case not with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities Act of 1933, as
amended, or with any present intention of distributing or selling any of the
Notes, provided that the disposition of your property shall at all times be
within your control. If you are purchasing for the account of one or more
pension or trust funds (other than pension or trust funds included in the
general account of an insurance company), you represent that (except to the
extent that you have otherwise advised Debevoise & Plimpton and the Company in
writing) you have sole investment discretion with respect to the acquisition of
the Initial Notes to be issued to you pursuant to this Agreement and the Notes
to be issued upon exchange thereof and the determination and decision on your
behalf to purchase such Initial Notes and the Notes to be issued upon exchange
thereof for such pension or trust funds is being made by the same individual or
group of individuals who customarily pass on such investments.
6.2. You represent that at least one of the following statements is an
accurate representation as to the source of funds to be used by you to pay the
purchase price of the Initial Notes purchased by you hereunder:
(a) if you are an insurance company, no part of such funds constitutes
assets allocated to any separate account maintained by you in which an
employee benefit plan (or its related trust) has any interest; or
(b) if you are an insurance company, to the extent that any of such funds
constitutes assets allocated to any separate account maintained by you, (i)
such separate account is a "pooled separate account" within the meaning of
Prohibited Transaction Class Exemption 90-1, in which case you have
disclosed to the Company the names of each employee benefit plan whose
assets in such separate account exceed 10% of the total assets or are
expected to exceed 10% of the total assets of such account as of the date of
such purchase (and for the purposes of this subdivision (b), all employee
benefit plans maintained by the same employer or employee organization are
deemed to be a single plan), or (ii) such separate account contains only the
assets of a specific employee benefit plan, complete and accurate
information as to the identity of which you have delivered to the Company in
writing; or
(c) if you are a "qualified professional asset manager" or "QPAM" (as
defined in Part V of Prohibited Transaction Class Exemption 84-14, issued
March 13, 1984 (the "QPAM Exemption")), all of such funds constitute assets
of
24
an "investment fund" (as defined in Part V of the QPAM Exemption) managed by
you, no employee benefit plan assets which are included in such investment
fund, when combined with the assets of all other employee benefit plans (i)
established or maintained by the same employer or an affiliate (as defined
in Part V of the QPAM Exemption) of such employer or by the same employee
organization and (ii) managed by you, exceed 20% of the total client assets
managed by you, the conditions of the QPAM Exemption (other than Section
I(a) thereof) are satisfied and you have disclosed to the Company the names
of all employee benefit plans whose assets are included in such investment
fund; or
(d) if you are other than an insurance company, all or a portion of such
funds consists of funds which do not constitute assets of any employee
benefit plan (other than a governmental plan exempt from the coverage of
ERISA) and the remaining portion, if any, of such funds consists of funds
which may be deemed to constitute assets of one or more specific employee
benefit plans, complete and accurate information as to the identity of each
of which you have delivered to the Company in writing; or
(e) if you are an insurance company, the source of the funds is an
insurance company general account in respect of which the reserves and
liabilities for the general account contract(s) held by or on behalf of any
benefit plan (as defined by the annual statement for life insurance
companies approved by the National Association of Insurance Commissioners
(the "NAIC Annual Statement"), determined before reduction for credits on
account of any reinsurance ceded on a coinsurance basis) together with the
amount of the reserves and liabilities for the general account contract(s)
held by or on behalf of any other benefit plans (as defined by the NAIC
Annual Statement) maintained by the same employer (or affiliate thereof as
defined in Prohibited Transaction Class Exemption 95-60) or by the same
employee organization (as defined by the NAIC Annual Statement) in the
general account do not exceed 10% of the total reserves and liabilities of
the general account (exclusive of separate account liabilities) plus surplus
as set forth in the NAIC Annual Statement filed with the state of domicile
of the insurance company.
As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan" and "separate account" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
SECTION 7. ACCOUNTING; FINANCIAL STATEMENTS AND OTHER
25
INFORMATION.
The Company will maintain, and will cause each Restricted Subsidiary to
maintain, a system of accounting established and administered in accordance with
GAAP, and will accrue, and will cause each Restricted Subsidiary to accrue, all
such liabilities as shall be required by GAAP. The Company will deliver (in
duplicate, unless you have advised us otherwise) to you, so long as you shall be
entitled to purchase Initial Notes under this Agreement or you or your nominee
shall be the holder of any Notes, and to each other Institutional Investor
holding any Notes (other than a Competitor (or an Affiliate thereof) of the
Company):
(a) as soon as practicable, but in any event within 50 days after the end
of each of the first three quarterly fiscal periods in each fiscal year of
the Company, consolidated (and (i) if the Restricted Subsidiaries or a
Restricted Subsidiary constitutes a Substantial Portion, then as to the
Restricted Subsidiaries or (ii) if the Restricted Subsidiaries do not or a
Restricted Subsidiary does not constitute a Substantial Portion, but one or
more Restricted Subsidiaries have outstanding Indebtedness owing to Persons
other than the Company or any Restricted Subsidiary and other than pursuant
to any Security Document, then as to the Restricted Subsidiaries,
consolidating) balance sheets of the Company and the Restricted Subsidiaries
as at the end of such period and the related consolidated (and, as to
statements of income and cash flows, if applicable and as appropriate,
consolidating) statements of income, surplus or partners' capital, cash
flows and stockholders' equity of the Company and the Restricted
Subsidiaries (i) for such period and (ii) (in the case of the second and
third quarterly periods) for the period from the beginning of the current
fiscal year to the end of such quarterly period, setting forth in each case
(except in the case of financial statements with respect to the fiscal year
of the Company beginning January 1, 1996 or if consolidating balance sheets
of the Restricted Subsidiaries were not required to be delivered pursuant to
this subdivision (a) for the previous corresponding period) in comparative
form the consolidated and, where applicable and as appropriate,
consolidating figures for the corresponding periods of the previous fiscal
year, all in reasonable detail and certified by the principal financial
officer of the general partner of the Company as presenting fairly, in all
material respects, the information contained therein (subject to changes
resulting from normal year-end adjustments), in accordance with GAAP
applied on a basis consistent with prior fiscal periods, provided that
delivery within the time period specified above of copies of the Company's
Quarterly Report on Form 10-Q prepared in compliance with the requirements
therefor and filed with the Securities and Exchange Commission
26
shall be deemed to satisfy the requirements hereof to the extent such
reports otherwise satisfy such requirements (for purposes of this Section 7,
"Substantial Portion" shall mean that either (x) either (A) the book value
of the assets of the Restricted Subsidiaries exceeds 10% of the book value
of the consolidated assets of the Company and the Restricted Subsidiaries,
or (B) the Restricted Subsidiaries account for more than 10% of the
Consolidated Net Income of the Company and the Restricted Subsidiaries, in
each case in respect of the four fiscal quarters ended as of the date of the
applicable financial statement) or (y) either (A) the book value of the
assets of any Restricted Subsidiary exceeds 5% of the book value of the
consolidated assets of the Company and the Restricted Subsidiaries, or (B)
any Restricted Subsidiary accounts for more than 5% of the Consolidated Net
Income of the Company and its Restricted Subsidiaries, in each case in
respect of the four fiscal quarters ended as of the date of the applicable
financial statement);
(b) as soon as practicable, but in any event within 95 days after the end
of each fiscal year of the Company beginning with the fiscal year beginning
January 1, 1996, consolidated (and (i) if the Restricted Subsidiaries or a
Restricted Subsidiary constitutes a Substantial Portion, then as to the
Restricted Subsidiaries or (ii) if the Restricted Subsidiaries do not or a
Restricted Subsidiary does not constitute a Substantial Portion, but one or
more Restricted Subsidiaries have outstanding Indebtedness owing to Persons
other than the Company or any Restricted Subsidiary and other than pursuant
to any Security Document, then as to the Restricted Subsidiaries,
consolidating) balance sheets of the Company and the Restricted Subsidiaries
and the consolidated balance sheets of each General Partner as at the end of
such year and the related consolidated (and, as to statements of income and
cash flows, if applicable and as appropriate, consolidating) statements of
income, partners' capital, cash flows and stockholders' equity of the
Company and the Restricted Subsidiaries and the consolidated statements of
income, surplus, cash flow and stockholders' equity of each General Partner
for such fiscal year, setting forth in each case (except in the case of the
financial statements with respect to the fiscal year of the Company
beginning January 1, 1996 or if consolidating balance sheets of the
Restricted Subsidiaries were not required to be delivered pursuant to this
subdivision (b) for the preceding corresponding period) in comparative form
the consolidated and, where applicable and as appropriate, consolidating
figures for the previous fiscal year, all in reasonable detail, provided
that delivery within the time periods specified above of copies of the
Company's Annual Report on Form 10-K prepared in compliance with the
requirements therefor and filed with the
27
Securities and Exchange Commission shall be deemed to satisfy the
requirements hereof to the extent such reports otherwise satisfy such
requirements, and (i) in the case of such consolidated financial statements
of the Company, accompanied by a report thereon of Deloitte & Touche LLP or
other independent public accountants of recognized national standing
selected by the Company, which report shall state that such consolidated
financial statements present fairly in all material respects the financial
position of the Company and the Restricted Subsidiaries as at the dates
indicated and the results of their operations and cash flows for the periods
indicated in conformity with GAAP applied on a basis consistent with prior
years and that the audit by such accountants in connection with such
consolidated financial statements has been made in accordance with generally
accepted auditing standards in effect in the United States from time to
time, and (ii) in the case of such consolidated financial statements of the
general partner of the Company and such consolidating financial statements
of the Company, certified by the principal financial officer of the general
partner of the Company, as presenting fairly in all material respects the
information contained therein, in accordance with GAAP applied on a basis
consistent with prior fiscal periods;
(c) together with each delivery of financial statements pursuant to
subdivisions (a) and (b) of this Section 7, an Officers' Certificate of the
Company (i) stating that the signers have reviewed the terms of this
Agreement and the other Operative Agreements and have made, or caused to be
made under their supervision, a review in reasonable detail of the
transactions and condition of the Company and the Restricted Subsidiaries
during the accounting period covered by such financial statements and that
the signers do not have knowledge of the existence and continuance as at the
date of such Officers' Certificate of any condition or event which
constitutes an Event of Default or Potential Event of Default, or, if any
such condition or event exists, specifying the nature and period of
existence thereof and what action the Company has taken or is taking or
proposes to take with respect thereto, (ii) specifying the amount available
at the end of such accounting period for Restricted Payments in compliance
with Section 10.4 and showing in reasonable detail all calculations
required in arriving at such amount, (iii) demonstrating in reasonable
detail, if applicable, compliance during and at the end of such accounting
period with the restrictions contained in Sections 10.1(b), (d), (e), (f),
(g), (h) and (i), 10.3(c), 10.7(a)(ii), 10.7(a)(iii), 10.7(c)(iii), 10.19
and 10.30, (iv) if not specified in the related financial statements being
delivered pursuant to subdivisions (a) and (b) above, specifying the
aggregate amount of interest paid or accrued by the Company and the
28
Restricted Subsidiaries, and the aggregate amount of depreciation, depletion
and amortization charged on the books of the Company and the Restricted
Subsidiaries, during the fiscal period covered by such financial statements
and describing in reasonable detail the number and nature of the parcels of
real property, or rights thereto or interests therein, caused to be released
by the Company from the Liens of the Security Documents pursuant to the
Trust Agreement and in the case of the fee owned property, the value of the
fee owned property caused to be released by the Company during such
accounting period;
(d) together with each delivery of consolidated financial statements
pursuant to subdivision (b) of this Section 7, a written statement by the
independent public accountants giving the report thereon (i) stating that in
connection with their audit examination, the terms of this Agreement and the
other Operative Agreements were reviewed to the extent considered necessary
for the purpose of expressing an opinion on the consolidated financial
statements and for making the statement contained in clause (ii) hereof (it
being understood that no special audit procedures in addition to those
required by generally accepted auditing standards then in effect in the
United States shall be required) and (ii) stating whether, in the course of
their audit examination, they obtained knowledge (and whether, as of the
date of such written statement, they have knowledge) of the existence and
continuance of any condition or event which constitutes an Event of Default
or Potential Event of Default insofar as such Event of Default or Potential
Event of Default relates to accounting or financial matters, and, if so,
specifying the nature and period of existence thereof;
(e) promptly upon their becoming publicly available, copies of (i) all
financial statements, reports, notices and proxy statements sent or made
available by the Company, either General Partner or the Public Partnership
to all of its security holders in compliance with the Securities Exchange
Act of 1934, as amended from time to time, or any comparable Federal or
state laws relating to the disclosure by any Person of information to its
security holders, (ii) all regular and periodic reports and all registration
statements and prospectuses filed by the Company, either General Partner or
the Public Partnership with any securities exchange or with the Securities
and Exchange Commission or any governmental authority succeeding to any of
its functions (other than Registration Statements on Form S-8), and (iii)
all press releases and other statements made available by the Company,
either General Partner or the Public Partnership to the public concerning
material developments in the business of the Company, either General Partner
of the Company or the Public Partnership, as the case may be;
29
(f) promptly, but in any event (i) within five days after any Responsible
Officer of the Company knows or (ii) within ten days after any Responsible
Officer should (in the course of the normal performance of his or her
duties) know, that (x) any condition or event which constitutes an Event of
Default or Potential Event of Default has occurred or exists, or is expected
to occur or exist, (y) the holder of any Note has given any notice or taken
any other action with respect to a claimed Event of Default or Potential
Event of Default under this Agreement or default under any other Operative
Agreement or (z) any Person has given any notice to the Company, either
General Partner or any Restricted Subsidiary or taken any other action with
respect to a claimed default or event or condition of the type referred to
in Section 11(f), an Officers' Certificate of the Company describing the
same and the period of existence thereof and what action the Company has
taken, is taking and proposes to take with respect thereto;
(g) promptly, and in any event within five Business Days after a
Responsible Officer of the Company obtains knowledge of (i) the occurrence
of an adverse development with respect to any litigation or proceeding
involving the Company, any of its Subsidiaries or either General Partner
which in the reasonable judgment of the Company presents a reasonable
likelihood of having a Material Adverse Effect or (ii) the commencement of
any litigation or proceeding involving the Company, any of the Subsidiaries
or either General Partner which in the reasonable judgment of the Company
presents a reasonable likelihood of having a Material Adverse Effect, a
written notice of such Responsible Officer describing in reasonable detail
such commencement of, or adverse development with respect to, such
litigation or proceeding;
(h) promptly, but in any event (i) within five days after any Responsible
Officer of the Company knows, or (ii) within ten days after any Responsible
Officer of the Company should (in the course of the normal performance of
his or her duties) know, that any of the events or conditions specified
below with respect to any Plan has occurred or exists, or is expected to
occur or exist, a statement setting forth details respecting such event or
condition and the action, if any, that the Company or any Related Person has
taken, is taking and proposes to take or cause to be taken with respect
thereto (and a copy of any notice or report filed with or given to or
communication received from the PBGC, the Internal Revenue Service or the
Department of Labor with respect to such event or condition):
30
(A) any reportable event, as defined in Section 4043(b) of ERISA and the
regulations issued thereunder;
(B) the filing under Section 4041 of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan;
(C) a substantial cessation of operations within the meaning of Section
4062(e) of ERISA under circumstances which could result in the treatment
of the Company or any Related Person as a substantial employer under a
"multiple employer plan" or the application of the provisions of Section
4062, 4063 or 4064 of ERISA to the Company or any Related Person;
(D) the taking of any steps by the PBGC or the institution by the PBGC
of proceedings under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the receipt by the
Company or any Related Person of a notice from a Multiemployer Plan that
such action has been taken by the PBGC with respect to such Multiemployer
Plan;
(E) the complete or partial withdrawal by the Company or any Related
Person under Section 4063, 4203 or 4205 of ERISA from a Plan which is a
"multiple employer plan" or a Multiemployer Plan, or the receipt by the
Company or any Related Person of notice from a Multiemployer Plan
regarding any alleged withdrawal or that it intends to impose withdrawal
liability on the Company or any Related Person or that it is in
reorganization or is insolvent within the meaning of Section 4241 or 4245
of ERISA or that it intends to terminate under Section 4041A of ERISA or
from a "multiple employer plan" that it intends to terminate;
(F) the taking of any steps concerning the threat or the institution of
a proceeding against the Company or any Related Person to enforce Section
515 of ERISA;
(G) the occurrence or existence of any event or series of events which
could result in a liability to the Company or any Related Person pursuant
to Section 4069(a) or 4212(c) of ERISA;
(H) the failure to make a contribution to any Plan, which failure,
either alone or when taken together with any other such failure, is
sufficient to result
31
in the imposition of a lien on any property of the Company or any Related
Person pursuant to Section 302(f) of ERISA or Section 412(n) of the Code
or could result in the imposition of a material tax or material penalty
pursuant to Section 4971 of the Code on the Company or any Related Person;
(I) the amendment of any Plan in a manner which would be treated as a
termination of such Plan under Section 4041(e) of ERISA or require the
Company or any Related Person to provide security to such Plan pursuant to
Section 307 of ERISA or Section 401(a)(29) of the Code; or
(J) the incurrence of liability in connection with the occurrence of a
"prohibited transaction" (within the meaning of Section 406 of ERISA or
Section 4975 of the Code);
(i) promptly, but in any event within five days, after an officer of any
of the Company, any Subsidiary or either General Partner receives any notice
or request from any Person (other than any Affiliate or any agent, attorney
or similar party employed by the Company or either General Partner of the
Company) for information, or if the Company, any Subsidiary or either
General Partner provides any notice or information to any such Person (other
than any Affiliate or any agent, attorney or similar party employed by the
Company or either General Partner), concerning the presence or release of
any hazardous substance (as defined in CERCLA) or hazardous waste (as
defined in RCRA) or other contaminants (as defined by any applicable
federal, state, local or foreign laws) within, on, from, relating to or
affecting any property owned, leased, or subleased by the Company, any
Subsidiary or either General Partner, copies of each such notice, request or
information, except such notices or requests for information received or
filings made in the normal course of business which do not pertain to the
violation by the Company, any Subsidiary or either General Partner of an
Environmental Law; and
(j) with reasonable promptness, such other financial reports and
information and data with respect to the Company, any Restricted Subsidiary,
any Subsidiary (to the extent such reports, information and data relate to
environmental matters or any material litigation or proceeding) or either
General Partner as from time to time may be requested by you (so long as you
hold a Note), or by any holder of any Note other than a Competitor (or
Affiliate thereof) of the Company.
SECTION 8. INSPECTION.
32
The Company will permit or cause the general partner of the Company to
permit (a) at any time when an Event of Default or Potential Event of Default
shall have occurred and be continuing, any authorized representatives designated
by you, so long as you shall be entitled to purchase the Initial Notes under
this Agreement or you or your nominee shall be the holder of any Notes, or by
any other institutional holder of any Notes (other than a Competitor (or
Affiliate thereof) of the Company), and (b) at any other time, any authorized
representative designated by any Purchaser or Purchasers holding at least 5% of
the principal amount of the Notes, or by any other holder or holders of at least
5% of the principal amount of the Notes (other than a Competitor (or an
Affiliate thereof) of the Company) then outstanding and an authorized
representative of all of the holders of the Notes, in each case, upon prior
written notice and as may be reasonably requested, to visit during normal
business hours and inspect any of the properties of the Company, any Restricted
Subsidiary and any other Subsidiary (to the extent relating to environmental or
litigation matters) and, to the extent relating to the Business, any properties
of either General Partner or of such General Partner's Subsidiaries, including
the books of account of the Company, the Restricted Subsidiaries, such other
Subsidiaries, the General Partner and such General Partner's Subsidiaries, and
to make copies and take extracts therefrom, and to discuss its and their
affairs, finances and accounts with its and their senior officers and (with
reasonable prior written notice) independent public accountants (and by this
provision each of the Company and each General Partner authorizes such
accountants to discuss with such representatives the affairs, finances and
accounts of the Company, any Restricted Subsidiary, such other Subsidiaries,
such General Partner or any of such General Partner's Subsidiaries, as the case
may be) all at such times and as often as may be requested, provided that you
shall bear the expenses of your authorized representative, except the Company
will bear the expenses of such authorized representatives if an Event of Default
or Potential Event of Default has occurred and is continuing; and the Company
shall at all times bear the expenses of its and its Affiliates' officers and
independent public accountants.
SECTION 9. PREPAYMENT OF NOTES.
9.1. Required Prepayments of the Notes. On each of the dates set forth in
the following table, the Company will prepay the principal amount of the Notes
set forth opposite such date in such table (or such lesser principal amount of
the Notes as shall at the time be outstanding), at the principal amount of the
Notes so prepaid, without premium, together with interest accrued thereon:
33
Principal Amount
Date of Prepayment of Prepayment
- ------------------------------------------ ----------------
June 30, 2003 $15,625,000
June 30, 2004 15,625,000
June 30, 2005 15,625,000
June 30, 2006 15,625,000
June 30, 2007 15,625,000
June 30, 2008 15,625,000
June 30, 2009 15,625,000
Any partial prepayment of the Notes pursuant to Section 9.2, 9.3 or 9.4
(to the extent not applied to satisfy a prepayment required under this Section
9.1) shall be applied to reduce each prepayment thereafter required to be made
pro rata, but no acquisition of the Notes by the Company or any of its
Affiliates, otherwise shall relieve the Company from its obligation to make the
required prepayments provided for in this Section 9.1. The Company shall notify
the holders of the Notes of any application provided for in the immediately
preceding sentence five days prior to such application. On the maturity date,
the Company will pay the then outstanding principal amount of the Notes together
with interest accrued thereon.
9.2. Optional Prepayments of the Notes with Make Whole Amount. The Notes
shall be subject to prepayment, in whole at any time or from time to time in
part (in an amount of not less than $5,000,000), at the option of the Company,
upon notice as provided in Section 9.5 at 100% of the principal amount of the
Notes so prepaid plus interest thereon to the prepayment date and the Make Whole
Amount.
9.3. Prepayment on Change of Control. (a) The Company will, within 90 days
after any Change of Control give written notice of such Change of Control to
each holder of Notes. Such notice shall contain and constitute an offer to
prepay the Notes as described in subdivision (b) of this Section 9.3 and shall
be accompanied by the certificate described in subdivision (e) of this Section
9.3.
(b) The offer to prepay Notes contemplated by subdivision (a) of this
Section 9.3 shall be an offer to prepay, in accordance with and subject to this
Section 9.3, all, but not less than all, the Notes held by each holder (in this
case only, "holder" in respect of any Note registered in the name of a nominee
for a disclosed beneficial owner shall mean such beneficial owner) on a date
specified in such offer
34
(the "Proposed Prepayment Date") that is not less than 20 days and not more than
30 days after the date of such offer (if the Proposed Prepayment Date shall not
be specified in such offer, the Proposed Prepayment Date shall be the 20th day
after the date of such offer).
(c) A holder of Notes may accept the offer to prepay made pursuant to this
Section 9.3 by causing a notice of such acceptance to be delivered to the
Company at least 5 days prior to the Proposed Prepayment Date. A failure by a
holder of Notes to respond to an offer to prepay made pursuant to this Section
9.3 shall be deemed to constitute a rejection of such offer by such holder.
(d) Prepayment of the Notes to be prepaid pursuant to this Section 9.3
shall be at 100% of the principal amount of such Notes, plus a premium equal to
1% of such principal amount (the "Premium Amount"), together with interest on
such Notes accrued to the date of prepayment. The principal amount and the
Premium Amount shall, with respect to all Notes the holder of which accepted the
offer to prepay pursuant to subdivision (c), become due and payable on the
Proposed Prepayment Date.
(e) Each offer to prepay the Notes pursuant to this Section 9.3 shall be
accompanied by an Officers' Certificate, executed by a senior financial officer
and a Responsible Officer of the Company and dated the date of such offer,
specifying: (i) the Proposed Prepayment Date; (ii) that such offer is made
pursuant to this Section 9.3; (iii) the principal amount of each Note offered to
be prepaid; (iv) the premium due in connection with such prepayment; (v) the
interest that would be due on each Note offered to be prepaid, accrued to the
Proposed Prepayment Date; (vi) that the conditions of this Section 9.3 have been
fulfilled; (vii) in reasonable detail, the nature and date of the Change of
Control; and (viii) that a failure to respond to such notice shall be deemed a
rejection of such offer to prepay the Notes.
9.4. Contingent Prepayments on Disposition of Property, Taking or
Destruction. (a) If at any time the Company or any of the Restricted
Subsidiaries disposes of property or such property shall be damaged, destroyed
or taken in eminent domain or there shall be title insurance proceeds with
respect to such property, in any such case, with the result that there are
Excess Proceeds, and the Company does not apply such Excess Proceeds in the
manner described in Section 10.7(c)(iii)(B)(x), and if the next scheduled date
of prepayment of the Notes pursuant to Section 9.1 occurs within 270 days after
receipt of such Excess Proceeds, such Excess Proceeds may be applied to such
prepayment required under Section 9.1 (unless such scheduled
35
prepayment has been paid by the Company). To the extent that there are such
Excess Proceeds remaining after application in accordance with the first
sentence of this Section 9.4(a), the Company shall prepay, upon notice as
provided in Section 9.5 (which notice shall be given not later than 270 days
after the date of such sale of property), a principal amount of the outstanding
Notes equal to the amount of such remaining Excess Proceeds allocable to the
Notes, determined by allocating such remaining Excess Proceeds pro rata among
the holders of all Notes and Parity Debt, if any, outstanding on the date such
prepayment is to be made, according to the aggregate then unpaid principal
amounts of the Notes (and the Make Whole Amount on the principal amount of the
Notes to be prepaid) and Parity Debt, respectively. Each prepayment of Notes
pursuant to this Section 9.4(a) shall be made at 100% of the principal amount of
the Notes to be prepaid, plus interest thereon to the prepayment date plus, to
the extent the prepayment is not made in satisfaction of a required prepayment
in accordance with Section 9.1, the Make Whole Amount thereon.
(b) In the event that damage, destruction or a taking shall occur in
respect of all or a portion of the properties subject to any of the Security
Documents, or there shall be proceeds under title insurance policies with
respect to any real property, all Net Insurance Proceeds (as defined in the
Mortgage), self-insurance amounts, Net Awards (as defined in the Mortgage) or
title insurance proceeds which, as of any date, shall not theretofore have been
applied to the cost of Restoration (as defined in the Mortgage) shall be deemed
to be proceeds of property disposed of voluntarily, shall be subject to the
provisions of Section 10.7(c) and, if subdivision (iii)(B)(y) of Section 10.7(c)
is applicable thereto, shall be subject to the prepayment provisions of Section
9.4(a). Any amounts prepaid pursuant to this Section 9.4(b) on the date on which
a prepayment is required under Section 9.1 may be applied to satisfy such
prepayment required under Section 9.1.
9.5. Notice of Prepayments; Officers' Certificate. The Company will give
each holder of any Notes irrevocable written notice of each prepayment under
Section 9.2 or 9.4 not less than 10 days and not more than 30 days prior to the
date fixed for such prepayment, in each case specifying such prepayment date,
the aggregate principal amount of the Notes and the principal amount of each
Note held by such holder to be prepaid and the Section under which such
prepayment is to be made. Notice of prepayment having been given as aforesaid,
the principal amount of the Notes specified in such notice, together with
interest thereon to the prepayment date and together with the Make Whole Amount,
if any, with respect thereto, shall become due and payable on such prepayment
date. The Company shall, on or before the
36
Business Day next succeeding the date which the Company sends such written
notice, give telephonic notice of the principal amount of the Notes to be
prepaid and the prepayment date to each holder of any Notes which shall have
designated a recipient of such notices in the Schedule of Purchasers attached
hereto or by notice in writing to the Company. Each holder of a Note shall
receive, on the Business Day immediately preceding the date scheduled for any
such prepayment, an Officers' Certificate certifying that the conditions of the
Section under which such prepayment is to be made have been fulfilled and
specifying the particulars of such fulfillment. In the event that there shall
have been a partial prepayment of the Notes under Section 9.2, 9.3 or 9.4, the
Company shall promptly give notice to the holders of the Notes, accompanied by
an Officers' Certificate setting forth the principal amount of each of the Notes
that was prepaid and specifying how each such amount was determined, setting
forth the reduced amount of each required prepayment thereafter becoming due
with respect to the Notes under Section 9.1, and certifying that such reduction
has been computed in accordance with such Section.
9.6. Allocation of Partial Prepayments. Upon any partial prepayment of the
Notes pursuant to Section 9.1, 9.2 or 9.4 the principal amount so prepaid shall
be allocated (in integral multiples of $1,000 as nearly as practicable) to all
Notes at the time outstanding in proportion to the respective outstanding
principal amounts thereof not theretofore called for prepayment, with
adjustments, to the extent practicable, to compensate for any prior prepayments
not made exactly in such proportion.
9.7. Maturity; Surrender, etc. In the case of each prepayment, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make Whole Amount or
other premium, if any. From and after such date, unless the Company shall fail
to pay such principal amount when so due and payable, together with the interest
and Make Whole Amount or other premium, if any, as aforesaid, interest on such
principal amount shall cease to accrue. Any Note paid or prepaid in full shall,
after such payment or prepayment in full, be surrendered to the Company and
canceled and shall not be reissued, and no Note shall be issued in lieu of any
prepaid principal amount of any Note.
9.8. Acquisition of Notes. None of the General Partners or the Company
shall, nor shall any permit any of their respective Subsidiaries or any
Restricted Affiliate to, prepay or otherwise retire in whole or in part prior to
their stated final maturity (other than by prepayment pursuant to Section 9.1,
9.2, 9.3 or 9.4 or upon acceleration of such final maturity pursuant to Section
11), or purchase or otherwise
37
acquire, directly or indirectly, Notes held by any holder, except, pursuant to
an offer to purchase made pro rata to the holders of all of the Notes on the
same terms and conditions. Any Notes prepaid or otherwise retired or purchased
or otherwise acquired by the Company or any of its Subsidiaries or Affiliates
shall not be deemed to be outstanding for any purpose under this Agreement or
any other Operative Agreement. None of the General Partners or the Company
shall, nor shall they permit any of their respective Subsidiaries to, in whole
or in part, prepay or otherwise retire, prior to their stated maturity, or
purchase or otherwise acquire, directly or indirectly, any Parity Debt, other
than (i) refundings or refinancings permitted pursuant to Section 10.1, (ii)
pursuant to scheduled prepayments in accordance with the terms of such Parity
Debt, (iii) prepayments of Indebtedness outstanding under the Working Capital
Facility or other Parity Debt of a similar revolving nature, and (iv) any
prepayment in an amount not exceeding the amount the Company could distribute as
a Restricted Payment pursuant to Section 10.4.
SECTION 10. BUSINESS AND FINANCIAL COVENANTS OF THE
COMPANY.
The Company covenants that from the date of this Agreement through the
Closing and thereafter so long as any of the Notes are outstanding:
10.1. Indebtedness. The Company will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, create, incur, assume or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except that:
(a) the Company may become and remain liable with respect to the
Indebtedness evidenced by the Notes;
(b) the Company and the Restricted Subsidiaries may become and remain
liable with respect to Indebtedness incurred by the Company and the
Restricted Subsidiaries to finance the making of expenditures for the
improvement or repair of or additions to the Assets, provided that (i) the
aggregate principal amount of Indebtedness incurred under this Section
10.1(b) and outstanding at any time shall not exceed an amount equal to the
sum of (x) the net cash proceeds received by the Company from the general
partner of the Company or from the Public Partnership as a capital
contribution or as consideration for the issuance by the Company of
additional partnership interests, in each case for the sole purpose of
financing such expenditures, and (y) the fair market value of (based on a
30-day
38
trailing average closing trading price per unit) Units contributed to the
Company by the Public Partnership or issued directly to the Person selling
such asset or making such repair or improvement by the Public Partnership
for the sole purpose of financing such expenditures, only to the extent,
however, that such Units are used to pay, substantially concurrently with
the date of contribution, at least 50% of the purchase price or cost of such
improvements, repairs or additions, and (ii) if such Indebtedness is to be
secured under the Security Documents as provided in Section 10.2(i), the
agreement or instrument pursuant to which such Indebtedness is incurred (A)
contains no financial or business covenants that are more restrictive on
the Company or its Subsidiaries than or that are in addition to those
contained in this Section 10 (unless prior to or simultaneously with the
incurrence of such Indebtedness this Agreement and the Other Agreements are
amended to provide the benefits of such more restrictive covenants to the
holders of the Notes) and (B) specifies no events of default (other than
with respect to the payment of principal and interest on such Indebtedness
or the accuracy of representations and warranties made in connection with
such agreement or instrument) which are capable of occurring prior to the
occurrence of the Events of Default specified in Section 11 (unless prior to
or simultaneously with the incurrence of such Indebtedness this Agreement
and the Other Agreements are amended to provide the benefit of such events
of default to the holders of the Notes);
(c) any Restricted Subsidiary may become and remain liable with respect to
Indebtedness of such Restricted Subsidiary owing to the Company or to
another Restricted Subsidiary, provided that such Indebtedness is created
and is outstanding under an agreement or instrument pursuant to which such
Indebtedness is subordinated to the Notes and to Indebtedness secured under
the Security Documents at least to the extent provided in the subordination
provisions set forth in Exhibit E and provided further that such
Indebtedness is evidenced by an Intercompany Note pledged to the Trustee;
(d) the Company and the Restricted Subsidiaries may become and remain
liable with respect to unsecured Indebtedness owing to the general partner
of the Company or an Affiliate of the general partner of the Company,
provided that (i) the aggregate principal amount of such Indebtedness of the
Company and the Restricted Subsidiaries outstanding at any time shall not be
in excess of $20,000,000 and (ii) such Indebtedness is created and is
outstanding under an agreement or instrument pursuant to which such
Indebtedness is subordinated to
39
the Notes and to Indebtedness secured under the Security Documents at least
to the extent provided in the subordination provisions set forth in Exhibit
E;
(e) the Company may become and remain liable with respect to Indebtedness
incurred under the Bank Credit Facilities, provided that
(i) the aggregate principal amount outstanding under the Initial
Acquisition Facility, together with amounts outstanding pursuant to
Indebtedness permitted by subdivisions (h)(3)(i) and (o) of Section 10.1,
will be in an aggregate principal amount not in excess of $40,000,000
outstanding at any time, and
(ii) in respect of the Working Capital Facility:
(1) there shall be a period of at least 30 consecutive days during each
fiscal year of the Company on each day of which there shall be no such
Indebtedness outstanding under the Working Capital Facility, and
(2) the aggregate principal amount of loans, exposure under letters of
credit in respect of the Working Capital Facility and the unfunded
commitments thereunder at any time outstanding thereunder shall not be in
excess of $15,000,000;
(f) the Company and the Restricted Subsidiaries may become and remain
liable with respect to Indebtedness, in addition to that otherwise permitted
by the foregoing subdivisions of this Section 10.1, if on the date the
Company or any Restricted Subsidiary becomes liable with respect to any such
additional Indebtedness and immediately after giving effect thereto and to
the substantially concurrent repayment of any other Indebtedness (i) the
ratio of Consolidated Cash Flow to Consolidated Pro Forma Debt Service is
greater than 2.50 to 1.0 and (ii) the ratio of Consolidated Cash Flow to
Maximum Consolidated Pro Forma Debt Service is greater than 1.25 to 1.0,
provided that, in addition to the foregoing, if such Indebtedness is
incurred by the Company or any Restricted Subsidiary to finance the making
of expenditures for the improvement or repair of or additions to the Assets,
and if such Indebtedness is to be secured under the Security Documents as
provided in Section 10.2(i), such Indebtedness shall be incurred pursuant to
an agreement or instrument which complies with the requirements set forth
in clause (ii) of the proviso to Section 10.1(b);
40
(g) the Company may become and remain liable with respect to the
Indebtedness referred to in Schedule 5.7, provided that all the aggregate
principal amount of such Indebtedness at any time outstanding shall not
exceed $1,500,000;
(h) the Company and any Restricted Subsidiary may become and remain liable
with respect to pre-existing Indebtedness relating to any Person, business
or assets acquired by the Company or such Restricted Subsidiary, as the case
may be, provided that (1) no condition or event shall exist which
constitutes an Event of Default or Potential Event of Default, (2) such
Indebtedness was not incurred in anticipation of the acquisition of such
Person, business or assets and (3) after giving effect to such Person
becoming a Restricted Subsidiary, or the acquisition of such business or
assets, either (i) the sum of (A) such Indebtedness, (B) the then aggregate
principal amount of outstanding Indebtedness under the Initial Acquisition
Facility and (C) the then outstanding principal amount of any Indebtedness
permitted by subdivision (o), does not exceed $40,000,000, or (ii) the
Company or such Restricted Subsidiary could incur at least $1 of additional
Indebtedness in compliance with the requirements set forth in clauses (i)
and (ii) of Section 10.1(f);
(i) so long as no Event of Default or Potential Event of Default has
occurred and is continuing, the Company and the Restricted Subsidiaries may
become and remain liable with respect to Indebtedness secured equally and
ratably with the Notes incurred for any extension, renewal, refunding or
refinancing of Indebtedness permitted pursuant to subdivisions (a), (b),
(e)(i) and (f) of this Section 10.1, provided that (i) the principal amount
(including any exposure under letters of credit and any unfunded
commitments) of such Indebtedness shall not exceed the principal amount of
such Indebtedness being extended, renewed, refunded or refinanced together
with any accrued interest and Make Whole Amount or other premium with
respect thereto and any costs and expenses related to such extension,
renewal, refunding or refinancing, (ii) the maturity date of such
Indebtedness shall not be sooner than the maturity date of such Indebtedness
being extended, renewed, refunded or refinanced, (iii) the average life to
maturity of such Indebtedness shall be equal to or greater than the
remaining average life to maturity of such Indebtedness being extended,
renewed, refunded or refinanced and (iv) if such Indebtedness is incurred
for any extension, renewal, refunding or refinancing of Indebtedness
permitted pursuant to (A) subdivision (b) or (f), such Indebtedness
satisfies the conditions specified in clause (ii) of the proviso to
subdivision (b) or (B) subdivision (e)(i), the financial and business
covenants of such Indebtedness are no more restrictive on
41
the Company and its Subsidiaries and there are no additional covenants than
those contained in the Bank Credit Facility as of the date of this Agreement
and complies with clause (ii)(B) of the proviso to Section 10.1(b);
(j) so long as no Event of Default or Potential Event of Default has
occurred and is continuing, the Company and the Restricted Subsidiaries may
become and remain liable with respect to Indebtedness secured equally and
ratably with the Notes, incurred for any extension, renewal, refunding or
refinancing of Indebtedness permitted pursuant to subdivision (e)(ii) of
this Section 10.1, provided that (i) the aggregate principal amount of such
Indebtedness, any exposure under letters of credit issued pursuant to such a
working capital facility and the amount of the unfunded commitments
thereunder, shall not exceed $15,000,000, and (ii) such Indebtedness, any
such letters of credit and commitments shall be incurred pursuant to a
working capital facility (A) which complies with the requirements set forth
in clause (ii)(1) of Section 10.1(e) and (B) the financial and business
covenants of such Indebtedness are no more restrictive on the Company and
its Subsidiaries and there are no additional covenants than those contained
in the Bank Credit Facility as of the date of this Agreement and complies
with clause (ii)(B) of the proviso to Section 10.1(b);
(k) so long as no Event of Default or Potential Event of Default has
occurred and is continuing, the Company and the Restricted Subsidiaries may
become and remain liable with respect to unsecured Indebtedness incurred for
any extension, renewal, refunding or refinancing of Indebtedness otherwise
permitted by this Section 10.1, provided that (i) the principal amount of
such unsecured Indebtedness to be incurred shall not exceed the principal
amount of such Indebtedness being extended, renewed, refunded or refinanced
together with any accrued interest and Make Whole Amount or other premium
with respect thereto and any costs and expenses related to such extension,
renewal, refunding or refinancing, (ii) the maturity date of such unsecured
Indebtedness shall not be sooner than the maturity date of such Indebtedness
being extended, renewed, refunded or refinanced and (iii) the average life
to maturity of such unsecured Indebtedness shall be equal to or greater than
the remaining average life to maturity of such Indebtedness being extended,
renewed, refunded or refinanced;
(l) so long as no Event of Default or Potential Event of Default has
occurred and is continuing, the Company and the Restricted Subsidiaries may
become and remain liable with respect to secured Indebtedness incurred for
any extension, renewal, refunding or refinancing of secured Indebtedness
(other than
42
Indebtedness permitted by subdivisions (a), (b), (e) or (f)) otherwise
permitted pursuant to this Section 10.1, provided that (i) the principal
amount of such Indebtedness to be incurred shall not exceed the principal
amount of such Indebtedness being extended, renewed, refunded or refinanced
together with any accrued interest and premium with respect thereto and any
and all costs and expenses related to such extension, renewal, refunding or
refinancing, (ii) the maturity date of such Indebtedness shall not be sooner
than the maturity date of such Indebtedness being extended, renewed,
refunded or refinanced, and (iii) the average life to maturity of such
Indebtedness to be incurred shall be equal to or greater than the remaining
average life to maturity of such Indebtedness being extended, renewed,
refunded or refinanced;
(m) the Company and any Restricted Subsidiaries may become and remain
liable with respect to any Interest Rate Agreement;
(n) any Restricted Subsidiary may become and remain liable with respect to
Indebtedness evidenced by the Subsidiary Guarantee Agreements; and
(o) the Company may become and remain liable with respect to Indebtedness
issued to a seller of assets or stock purchased by the Company in an amount
not exceeding the sum of (i) $40,000,000, less (ii) the amount of any
Indebtedness outstanding under subdivision (h)(3)(i) and subdivision (e)(i),
provided, if such Indebtedness is to be secured under the Security Documents
as provided in Section 10.2(i), the agreement or instrument pursuant to
which such Indebtedness is incurred (A) contains no financial or business
covenants that are more restrictive on the Company or its Subsidiaries than
or that are in addition to those contained in this Section 10 (unless prior
to or simultaneously with the incurrence of such Indebtedness this Agreement
and the Other Agreements are amended to provide the benefits of such more
restrictive covenants to the holders of the Notes), (B) specifies no events
of default (other than with respect to the payment of principal and interest
on such Indebtedness or the accuracy of representations and warranties made
in connection with such agreement or instrument) which are capable of
occurring prior to the occurrence of the Events of Default specified in
Section 11 (unless prior to or simultaneously with the incurrence of such
Indebtedness this Agreement and the Other Agreements are amended to provide
the benefit of such events of default to the holders of the Notes), and (C)
the financial terms of such Indebtedness are the same as (or more favorable
than) that set forth in the Initial Acquisition Facility.
43
Notwithstanding the foregoing, the aggregate principal amount of all
Indebtedness of all Restricted Subsidiaries at any time outstanding (other than
Indebtedness permitted by Section 10.1(n) or Section 10.1(m) but only to the
extent such Restricted Subsidiary is a party to Interest Rate Agreements with
respect to Indebtedness for which it is directly liable) shall not exceed $10
million. For the purpose of this Section 10.1, any Person becoming a Restricted
Subsidiary after the date of this Agreement shall be deemed to have become
liable with respect to all of its then outstanding Indebtedness at the time it
becomes a Restricted Subsidiary, and any Person extending, renewing or refunding
any Indebtedness shall be deemed to have become liable with respect to such
Indebtedness at the time of such extension, renewal or refunding. The Company or
any Restricted Subsidiary shall be deemed to have become liable with respect to
any Indebtedness securing any real property acquired by the Company or such
Restricted Subsidiary, as the case may be, at the time of such acquisition. Any
amendment of the terms of this Agreement required by clause (ii) of Section
10.1(b) shall provide that such amendment shall only be effective until the date
the Indebtedness (the incurrence of which required the amendment of this
Agreement) is paid in full and all commitments to lend and letters of credit
outstanding under such facility are canceled or terminated. The Company shall
provide written notice to each holder of the repayment in full in cash of such
Indebtedness and the cancellation of all commitments and letters of credit
pursuant to any such facility, which notice shall provide, that the amendments
to this Agreement required by clause (ii) of the proviso to Section 10.2(b) with
respect to such facility, are no longer effective.
10.2. Liens, etc. The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly create, incur, assume or permit to exist
any Lien on or with respect to any property or asset (including any document or
instrument in respect of goods or accounts receivable) of the Company or any
Restricted Subsidiary, whether now owned or held or hereafter acquired, or any
income or profits therefrom (whether or not provision is made for the equal and
ratable securing of the Notes in accordance with the provisions of Section
10.16), except:
(a) Liens for taxes, assessments or other governmental charges the
payment of which is not at the time required by Section 10.9;
(b) Liens of 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 not at the time
required by Section 10.9, in each case not incurred or made in connection
with the
44
borrowing of money, the obtaining of advances or credit or the payment of
the deferred purchase price of property;
(c) Liens (other than any Lien imposed by ERISA) incurred or deposits made
in the ordinary course of business (i) in connection with workers'
compensation, unemployment insurance and other types of social security, or
(ii) 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, the obtaining of advances or credit or the payment
of the deferred purchase price of property;
(d) any attachment or judgment Lien, unless the judgment it secures shall
not, within 60 days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall not have been discharged
within 60 days after expiration of any such stay;
(e) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances, which, in each case
are granted, entered into or created in the ordinary course of the business
of the Company or any Restricted Subsidiary and which do not materially
interfere with the ordinary conduct of the business of the Company or any
Restricted Subsidiary;
(f) Liens on property or assets of any Restricted Subsidiary securing
Indebtedness of such Restricted Subsidiary owing to the Company or any other
Restricted Subsidiary;
(g) Liens existing on the Assets at the time of the acquisition thereof
by the Company and described in Schedule 10.2;
(h) Liens created by any of the Security Documents securing Indebtedness
incurred in accordance with Section 10.1(a) or Section 10.1(e);
(i) Liens created by any of the Security Documents securing Indebtedness
incurred in accordance with Section 10.1(b), Section 10.1(o) or, to the
extent incurred to finance the making of capital improvements, repairs and
additions to the Company's Assets, Section 10.1(f) (but only to the extent
it complies with the requirements thereof), provided that (1) such Liens are
effected through an amendment to the Security Documents to the extent
necessary to provide the
45
holders of such Indebtedness equal and ratable security in the property and
assets subject to the Security Documents with the holders of the Notes and
of other Indebtedness secured under the Security Documents as provided in
Section 10.1(b), 10.1(f) or 10.1(o), (2) the Security Documents are amended
to the extent necessary to extend the Lien thereof to any property or assets
acquired or otherwise financed with the proceeds of such Indebtedness, (3)
the Company has delivered to the Trustee an Officers' Certificate
demonstrating that the principal amount of such Indebtedness does not exceed
the lesser of the cost to the Company of such property or assets and the
fair market value of such property or assets (as determined in good faith by
the general partner of the Company), that such incurrence of Indebtedness
pursuant to Section 10.1(b), 10.1(f) or 10.1(o), as the case may be,
complies in all respects with the requirements of such Section and that the
amendments to the Security Documents required by this Section 10.2(i) and
the filing and recordation of such amendments and related supplements will
not have a Material Adverse Effect, and (4) the Company has delivered to the
Trustee an opinion of counsel reasonably satisfactory to the Trustee to the
effect that the Lien of the Security Documents has attached and is perfected
with respect to such additional property and assets;
(j) Liens existing on any property of any Person at the time it becomes a
Restricted Subsidiary, or existing prior to the time of acquisition (and not
created in anticipation of such acquisition) upon any property acquired by
the Company or any Restricted Subsidiary through purchase, merger or
consolidation or otherwise, whether or not assumed by the Company or such
Restricted Subsidiary, or created to secure Indebtedness incurred under
Section 10.1(f) to pay all or any part of the purchase price ("Purchase
Money Lien") of property acquired by the Company or a Restricted Subsidiary
or to pay the cost of an improvement (other than improvements to property
subject to the Lien of the Security Documents), provided that (i) any such
Lien shall be confined solely to the item or items of property so acquired
and, if required by the terms of the instrument originally creating such
Lien, other property which is an improvement to or is acquired for specific
use in connection with such acquired property, (ii) such item or items of
property so acquired (other than property (which may include stock or other
equity interests) subject to Liens existing prior to the time of acquisition
and not created in anticipation of such acquisition) are not required to
become part of the Mortgaged Property under the terms of the Security
Documents, (iii) the principal amount of the Indebtedness secured by any
such Lien shall at no time exceed an amount equal to the lesser of (A) the
cost of such property to the Company or
46
such Restricted Subsidiary, as the case may be, and (B) the fair market
value of such property (as determined in good faith by the general partner
of the Company) at the time such Person owning such property becomes a
Restricted Subsidiary or at the time of such acquisition by the Company or
such Restricted Subsidiary, as the case may be, (iv) any such Purchase Money
Lien shall be created not later than 90 days after, in the case of property,
its acquisition, or, in the case of improvements, their completion and (v)
any such Lien (other than a Purchase Money Lien) shall not have been created
or assumed in contemplation of such Person's becoming a Restricted
Subsidiary or such acquisition of property by the Company or any Subsidiary;
(k) Liens in amounts not exceeding $100,000 incurred, required or
provided for under state law in connection with self-insurance
arrangements;
(l) Liens arising from or constituting Permitted Encumbrances; and
(m) any Lien securing Indebtedness referred to in Section 10.1(i), (j) or
(l) renewing or extending any Lien permitted by the foregoing subdivisions
of this Section 10.2, provided that (i) the Indebtedness secured by any such
Lien shall not exceed the principal amount of such Indebtedness outstanding
(including any exposure under letters of credit and any unfunded
commitments) immediately prior to the renewal or extension of such Lien,
(ii) no Assets encumbered by any such Lien other than the Assets encumbered
immediately prior to such renewal or extension shall be encumbered thereby
and (iii) the maturity date of the Indebtedness secured by any such Lien
shall not be sooner than the maturity date of such Indebtedness outstanding
immediately prior to the renewal or extension of such Lien.
10.3. Investments, Guaranties, etc. The Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly (i) make or own any
Investment in any Person, or (ii) create or become liable with respect to any
Guaranty, except:
(a) the Company or any Restricted Subsidiary may make and own
Investments in
(1) marketable obligations issued or unconditionally guaranteed by the
United States of America, or issued by any agency thereof and backed by
the
47
full faith and credit of the United States of America in each case
maturing within one year from the date of acquisition thereof,
(2) marketable direct obligations issued by any state of the United
States of America 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 any date of determination the highest
rating obtainable from either Standard & Poor's Ratings Group or Moody's
Investors Service, Inc.,
(3) commercial paper maturing no more than 270 days from the date of
creation thereof and having as at any date of determination one of the two
highest ratings obtainable from either Standard & Poor's Ratings Group or
Moody's Investors Service, Inc.,
(4) 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 of America or any state thereof or the District of
Columbia or Canada, (A) the commercial paper or other short-term unsecured
debt obligations of which are rated either A-2 or better (or comparably if
the rating system is changed) by Standard & Poor's Ratings Group or
Prime-2 or better (or comparably if the rating system is changed) by
Moody's Investors Service, Inc. or (B) the long-term debt obligations of
which are rated either AA- or better (or comparably if the rating system
is changed) by Standard & Poor's Ratings Group or Aa3 or better (or
comparably if the rating system is changed) by Moody's Investors Service,
Inc. ("Permitted Banks"),
(5) bankers' acceptances eligible for rediscount under requirements of
The Board of Governors of the Federal Reserve System and accepted by
Permitted Banks, and
(6) obligations of the type described in clause (1), (2), (3) or (4)
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 Company or a Restricted
Subsidiary by a custodian which is a Permitted Bank and [which is not a
counterparty to the repurchase agreement in question];
48
(b) the Company and any Restricted Subsidiary may make and own Investments
in any Restricted Subsidiary or Investments in capital stock of, or other
equity interests in, any Person which simultaneously therewith becomes a
Restricted Subsidiary, and any Restricted Subsidiary may make and permit to
be outstanding Investments in the Company and may create or become liable
with respect to the Subsidiary Guarantee Agreement in respect of the
Company's obligations under the Notes or under Parity Debt;
(c) the Company or any Restricted Subsidiary may make and own Investments
in the capital stock of, or joint venture, partnership or other equity
interests in, or the contributions to capital in the ordinary course of
business of, any Unrestricted Subsidiary if immediately after giving effect
to the making of any such Investment, (A) the aggregate amount of all such
Investments made and outstanding pursuant to this subdivision (c) shall not
at any time exceed $20,000,000 and (B) the aggregate amount of all
Investments made and outstanding pursuant to this subdivision (c) as at the
end of any fiscal quarter of the Company shall not exceed by more than
$10,000,000 the amount of such Investments outstanding as at the end of the
corresponding fiscal quarter of the immediately preceding fiscal year of the
Company, and in the case of both clauses (A) and (B) of this subdivision
(c), (i) the amounts specified therein may be increased by an amount equal
to the net cash proceeds received by the Company from the general partner of
the Company or from the Public Partnership as a capital contribution or as
consideration for the issuance by the Company of additional partnership
interests, such amount not to exceed $10,000,000 in the aggregate and (ii)
net of cash distributions received from all Unrestricted Subsidiaries for
such period;
(d) the Company or any Restricted Subsidiary may make and own Investments
(x) constituting trade credits or advances to any Person incurred in the
ordinary course of business, (y) arising out of loans and advances to
employees for travel, entertainment and relocation expenses, in each case
incurred in the ordinary course of business or (z) acquired by reason of the
exercise of customary creditors' rights upon default or pursuant to the
bankruptcy, insolvency or reorganization of a debtor;
(e) the Company or any Restricted Subsidiary may create or become liable
with respect to any Guaranty constituting an obligation, warranty or
indemnity,
49
not guaranteeing Indebtedness of any Person, which is undertaken or made in
the ordinary course of business;
(f) the Company or any Restricted Subsidiary may create and become liable
with respect to any Interest Rate Agreements; and
(g) the Company may create and become liable with respect to Commodity
Hedging Agreements.
10.4. Restricted Payments. The Company will not directly or indirectly,
nor will it permit any Subsidiary to, declare, order, pay, make or set apart any
sum for any Restricted Payment, except that (a) the Company may make, pay or set
apart once during each calendar quarter a Restricted Payment if (i) such
Restricted Payment is in an amount not exceeding the sum of (x) Available Cash
for the immediately preceding calendar quarter, less (y) the aggregate amount of
Parity Debt prepaid, retired, purchased or otherwise acquired during the
calendar quarter in which such Restricted Payment is declared, order, paid, made
or set apart pursuant to clause (iv) of the last sentence of Section 9.8, (ii)
prior to and immediately after giving effect to any such proposed action no
condition or event shall exist which constitutes a Potential Event of Default
under Section 11(b) or an Event of Default, (iii) the ratio of Consolidated Cash
Flow to Consolidated Interest Expense is greater than 1.75 to 1.00 and (iv) the
Company shall have given to each holder of a Note written notice thereof on the
date such Restricted Payment is declared, which date shall be at least 10 days
prior to the date such Restricted Payment is made and (b) any Subsidiary may
make, pay or set apart dividends and distributions so long as such dividends or
distributions are made, paid or set apart for each holder of such Person's
capital stock or other equity on a pro-rata basis. The Company will not, in any
event, directly or indirectly declare, order, pay or make any Restricted Payment
except in cash.
10.5. Transactions with Affiliates. Except for the transactions or conduct
effected pursuant to the Operative Agreements as in effect on the date of the
Closing or any other transactions or conduct described in or contemplated by the
Registration Statement, the Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, engage in any transaction with any
Affiliate of the Company, including, without limitation, the purchase, sale or
exchange of assets or the rendering of any service, to the Company's or such
Restricted Subsidiary's business except upon fair and reasonable terms that are
no less favorable to the Company or such Restricted Subsidiary, as the case may
be, than those which might be obtained in an arm's-length transaction at the
time such transaction is agreed upon from Persons
50
which are not such an Affiliate, provided that the foregoing limitations and
restrictions shall not apply to any transaction between the Company and any
Restricted Subsidiary or between Restricted Subsidiaries.
10.6. Subsidiary Stock and Indebtedness. The Company will not:
(a) directly or indirectly sell, assign, pledge or otherwise dispose of
any Indebtedness of or any shares of stock or similar interests of (or
warrants, rights or options to acquire stock or similar interests of) any
Subsidiary, except to a Restricted Subsidiary;
(b) permit any Restricted Subsidiary directly or indirectly to sell,
assign, pledge or otherwise dispose of any Indebtedness of (i) the Company
or (ii) any other Restricted Subsidiary, or any shares of stock or similar
interests of (or warrants, rights or options to acquire stock or similar
interests of) any other Subsidiary, except to, in the case of clause (i),
the Company or, in all other cases, a Restricted Subsidiary;
(c) permit any Restricted Subsidiary to have outstanding any shares of
stock or similar interests which are preferred over any other shares of
stock or similar interests owned by the Company unless such shares of
preferred stock or similar interests are owned by the Company; or
(d) permit any Restricted Subsidiary directly or indirectly to issue or
sell (including, without limitation, in connection with a merger or
consolidation of a Restricted Subsidiary otherwise permitted by Section
10.7(a)) any shares of its stock or similar interests (or warrants, rights
or options to acquire its stock or similar interests) except to the Company
or a Restricted Subsidiary;
provided that, (i) any Restricted Subsidiary may sell, assign or otherwise
dispose of Indebtedness of the Company or a Subsidiary if, assuming such
Indebtedness were incurred immediately after such sale, assignment or
disposition, such Indebtedness would be permitted under Section 10.1 (and if
such Indebtedness is secured, such Lien would be permitted pursuant to Section
10.2) or (ii) subject to compliance with Section 10.7(c), all Indebtedness and
shares of stock or partnership interests of any Restricted Subsidiary owned by
the Company or by another Restricted Subsidiary may be simultaneously sold as an
entirety for consideration at least equal to the fair value thereof (as
determined in good faith by the general partner of the Company) at the time of
such sale if such Restricted Subsidiary does not at the time own (A) any In-
51
debtedness of the Company (other than Indebtedness which, if incurred
immediately after such transaction, would be permitted under Section 10.1) or
(B) any Indebtedness, stock or other interest in any other Restricted
Subsidiary which is not also being simultaneously sold as an entirety in
compliance with this proviso or Section 10.7(b)(ii).
10.7. Consolidation, Merger, Sale of Assets, etc. The Company will not,
and will not permit any Restricted Subsidiary to, directly or indirectly,
(a) consolidate with or merge into any other Person or permit any other
Person to consolidate with or merge into it, except that:
(i) any Restricted Subsidiary may consolidate with or merge into the
Company or a Restricted Subsidiary if, in the case of a consolidation with
or merger into the Company, the Company shall be the surviving Person and
if, immediately after giving effect to such transaction, no condition or
event shall exist which constitutes an Event of Default or Potential Event
of Default; and
(ii) any entity (other than a Restricted Subsidiary) may consolidate
with or merge into the Company or a Restricted Subsidiary if the Company
or such Restricted Subsidiary, as the case may be, shall be the surviving
Person and if, immediately after giving effect to such transaction, (w)
the Company (1) shall not have a Consolidated Net Worth (determined in
accordance with GAAP applied on a basis consistent with the financial
statements of the Company most recently delivered pursuant to Section 7(b)
(but without giving effect to any write-up in assets or amounts
attributable to goodwill pursuant to purchase accounting methods) of less
than the Consolidated Net Worth of the Company immediately prior to the
effectiveness of such transaction, (2) shall not be liable with respect to
any Indebtedness or allow its property to be subject to any Lien which it
could not become liable with respect to or allow its property to become
subject to under this Agreement on the date of such transaction, and (3)
could incur, if the consolidating or merging entity has outstanding
Indebtedness, at least $1 of additional Indebtedness in compliance with
Section 10.1(f) after giving effect to such transaction, (x)
substantially all of the assets of the Company and the Restricted
Subsidiaries shall be located and substantially all of their business
shall be conducted within the United States of America, and (y) no
condition or event shall exist which constitutes an Event of Default or
Potential Event of Default; and
52
(iii) the Company may consolidate with or merge into any other entity
if (v) the surviving entity is a corporation, limited partnership, limited
liability company or business trust organized and existing under the laws
of the United States of America or a state thereof or the District of
Columbia, with substantially all of its properties located and its
business conducted within the United States of America, (w) such
corporation, limited partnership, limited liability company or business
trust expressly and unconditionally assumes the obligations of the Company
under this Agreement and each of the other Operative Agreements and
delivers to each holder of a Note at the time outstanding in connection
with such assumption an opinion of counsel reasonably satisfactory to the
Required Holders with respect to such matters incident to such assumption
as may be reasonably requested by such holders, including, without
limitation, as to the due authorization and execution of the related
agreement of assumption and the enforceability of such agreement against
such corporation, limited partnership, limited liability company or
business trust, (x) immediately after giving effect to such transaction,
such corporation, limited partnership, limited liability company or
business trust (1) shall not have a Consolidated Net Worth (determined in
accordance with GAAP applied on a basis consistent with the financial
statements of the Company most recently delivered pursuant to Section
7(b) but without giving effect to any write-up in assets or amounts
attributable to goodwill pursuant to purchase accounting methods) of less
than the Consolidated Net Worth of the Company immediately prior to the
effectiveness of such transaction, (2) shall not be liable with respect to
any Indebtedness or allow its property to be subject to any Lien which it
could not become liable with respect to or allow its property to become
subject to under this Agreement on the date of such transaction and (3)
could incur, if the consolidating or merging entity had outstanding
Indebtedness, at least $1 of additional Indebtedness in compliance with
Section 10.1(f) after giving effect to such transaction, and (y)
immediately after giving effect to such transaction no condition or event
shall exist which constitutes an Event of Default or a Potential Event of
Default; or
(b) sell, lease, abandon or otherwise dispose of all or substantially all
its assets, except that:
(i) any Restricted Subsidiary may sell, lease or otherwise dispose of
all or substantially all its assets to the Company or to a Restricted
Subsidiary; and
53
(ii) the Company may sell, lease or otherwise dispose of all or
substantially all its assets to any corporation, limited partnership,
limited liability company or business trust into which the Company could
be consolidated or merged in compliance with clause (a)(iii) of this
Section 10.7, provided that each of the conditions set forth in such
subdivision (a)(iii) shall have been fulfilled; or
(c) sell, lease, abandon or otherwise dispose of any property to any
Person other than the Company or any Restricted Subsidiary (except in a
transaction permitted by subdivision (a)(iii) or (b)(ii) of this Section
10.7, an Investment in an Unrestricted Subsidiary permitted by Section
10.3(c), sales of Obsolete Assets during any calendar year having a fair
market value in an aggregate amount not exceeding $150,000 or an abandonment
or other disposition of Inventory in the ordinary course of business)
unless:
(i) at least 80% of the consideration therefor shall be in the form of
cash consideration or marketable securities that are promptly converted
into cash, provided, that the amount of (A) any liabilities (as shown on
the Company's or such Restricted Subsidiary's most recent balance sheet or
in the notes thereto) of the Company or any Restricted Subsidiary (other
than liabilities that are by their terms subordinated in right of payment
to the Notes) that are assumed by the transferee of any such assets and
(B) any notes or other obligations received by the Company or any such
Restricted Subsidiary from such transferee that are promptly converted
into cash (to the extent of the cash received), shall be deemed to be cash
for the purposes of this Section 10.7(c)(i),
(ii) immediately after giving effect to such proposed disposition no
condition or event shall exist which constitutes an Event of Default or
Potential Event of Default,
(iii) either
(A) the aggregate net after-tax proceeds of all property so disposed
of (whether or not leased back) by the Company and all Restricted
Subsidiaries during the current fiscal year (including property disposed
of through dispositions of shares pursuant to Section 10.6 or sales of
assets pursuant to Section 10.7(b) and including all proceeds under
title insurance policies with respect to real property and all Net
Insurance Proceeds (as defined in the Mortgage), self-insurance amounts
and Net Awards (as defined in the
54
Mortgage) with respect to property lost as a result of damage,
destruction or a taking which have not been applied to the cost of
Restoration (as defined in the Mortgage)), less the amount of all such
net after-tax proceeds previously applied in accordance with subdivision
(iii)(B) of this Section 10.7(c) and the amount of such net after-tax
proceeds equal to the purchase price of any assets acquired to the
extent that (1) such assets were acquired within 90 days prior to the
date of such disposal of property, (2) the purchase price of such assets
was not previously applied to reduce the amount of net after-tax
proceeds of property disposed of under this Section 10.7(c), (3) such
assets were acquired for subsequent replacement of the property so
disposed of or may be productively used in the United States of America
in the conduct of the Business, (4) such assets are subject to the Lien
of the Security Documents (except to the extent the same were acquired
to replace disposed property that was not subject to the Lien of the
Security Documents), and (5) to the extent such assets were acquired (in
whole or in part) with borrowed money, such borrowing has been repaid in
full, (x) shall not exceed $5,000,000 during such fiscal year and (y)
when aggregated with such net after-tax proceeds of all prior
transactions under this Section 10.7(c), shall not exceed $20,000,000;
or
(B) in the event that such net after-tax proceeds (less the amount
thereof previously applied in accordance with this subdivision (iii)(B)
and the amount thereof equal to the purchase price of any assets
acquired to the extent that (1) such assets were acquired within 90 days
prior to the date of such disposal of property, (2) the purchase price
of such assets was not previously applied to reduce the amount of net
after-tax proceeds of property disposed of under this Section 10.7(c),
(3) such assets were acquired for subsequent replacement of the property
so disposed of or may be productively used in the United States of
America in the conduct of the Business, (4) such assets are subject to
the Lien of the Security Documents (except to the extent the same were
acquired to replace disposed property that was not subject to the Lien
of the Security Documents), and (5) to the extent such assets were
acquired (in whole or in part) with borrowed money, such borrowing has
been repaid in full) during the current fiscal year exceed $5,000,000
or, when aggregated with such net after-tax proceeds of all prior
transactions under this Section 10.7(c), exceed $20,000,000 (the larger
amount of such excess net after-tax proceeds actually realized being
herein called "Excess Proceeds"), the Company shall promptly pay over to
the Trustee under the Trust Agreement such Excess Proceeds not at the
time held by the Trustee
55
for application by the Trustee (x) within 270 days (or 360 days if the
Company has executed a binding contract for acquisition or replacement
of assets meeting the requirements specified in this clause (iii) within
270 days) of the date of the disposal or loss of property to the
acquisition of assets in replacement of the property so disposed of or
lost or of assets which may be used in the United States of America in
the conduct of the Business (and such newly acquired assets shall be
subjected to the Lien of the Security Documents (except to the extent
the same were acquired to replace disposed property that was not subject
to the Lien of the Security Documents)) or to the cost of Restoration
(as defined in the Mortgage), or (y) to the extent of Excess Proceeds
not applied pursuant to the immediately preceding clause (x), to the
payment and/or prepayment of the Notes and Parity Debt, if any, pursuant
to Section 9.1 and/or 9.4(a), all as provided in Section 4(d) of the
Trust Agreement and such Section 9.1 and/or 9.4(a), and the Trustee
shall have received an Officers' Certificate from the general partner of
the Company certifying that the consideration received for such property
is at least equal to its fair value (as determined in good faith by the
general partner of the Company) and that such consideration has been
applied in accordance with the terms of this Agreement, and
(iv) in the case of any sale, lease or other disposition of Mortgaged
Property which includes real property (or any interest therein), or any
sale, lease or other disposition of Mortgaged Property resulting in the
aggregate net after-tax proceeds of all such sales, leases or other
dispositions exceeding $10,000,000, the Trustee shall have received an
Officers' Certificate from the general partner of the Company certifying
that such sale, lease or other disposition is in the best interest of the
Company and will not have a Material Adverse Effect.
Notwithstanding the foregoing, the Company and any Restricted Subsidiary
may sell or dispose of (i) real property assets sold or disposed of within 12
months of the acquisition of such assets, and (ii) all other assets sold or
disposed of within 6 months of the acquisition of such assets, in each case
constituting a portion of an acquired business, if (y) such assets are
specifically designated to the holders of any Notes in writing prior to such
acquisition or within 30 Business Days thereafter as assets to be disposed of,
and (z) the Trustee shall have received an Officers' Certificate from the
general partner of the Company certifying that the consideration received for
such property is at least equal to its fair value (as determined in good faith
by the general partner of the Company). Such sales under this paragraph will
56
not be applied towards the annual or cumulative limitations in subdivision (c)
of this Section 10.7. In addition, notwithstanding the foregoing, the Company
may, at any time, exchange assets for other like assets which may be used in the
conduct of the Business, provided (1) the fair value of the assets so acquired
is substantially equivalent to the fair value of the assets so exchanged (as
determined in good faith by the general partner of the Company), (2) such
acquired assets are subject to the Lien of the Security Documents and (3) the
total value of the assets so exchanged shall not in the aggregate exceed 15% of
the total assets of the Company. The holders of Notes agree to take all actions
reasonably requested by the Company (and at the expense of the Company) to cause
dispositions of Mortgaged Property made in compliance with this Section 10.7 to
be made free and clear of the Liens created by the Security Documents.
10.8. Partnership or Corporate Existence, etc.; Business. (a) (i) The
Company will at all times preserve and keep in full force and effect its
partnership existence and (subject to the provisions of subdivision (b) of this
Section 10.8) its status as a partnership not taxable as a corporation for
federal income tax purposes; (ii) the Company will cause each Restricted
Subsidiary to keep in full force and effect its partnership or corporate
existence; and (iii) the Company will, and will cause each Restricted Subsidiary
to, at all times preserve and keep in full force and effect all of its material
rights and franchises (in each case except as otherwise specifically permitted
in Sections 10.6 and 10.7 and except that the partnership or corporate existence
of any Restricted Subsidiary, and any right or franchise of the Company or any
Restricted Subsidiary, may be terminated if, in the good faith judgment of the
general partner of the Company, such termination is in the best interest of the
Company, is not disadvantageous to the holders of the Notes in any material
respect and would not have a Material Adverse Effect).
(b) The Company shall not be obligated to preserve its status as a
partnership not taxable as a corporation for federal income tax purposes if (i)
the Company's failure to preserve such status shall be the result of an
amendment to the tax laws enacted by the Congress of the United States and (ii)
after giving effect to the loss of such status the ratio of Consolidated Cash
Flow to Maximum Consolidated Pro Forma Debt Service, determined as of the date
of the loss of such status, would be greater than 1.1 to 1.0, assuming, for the
purposes of the computation of Consolidated Cash Flow, that Consolidated Cash
Flow would be reduced by taxes at the applicable tax rate of the Company for
such period had the Company been taxable as a corporation.
57
(c) The Company will not, and will not permit any Restricted Subsidiary
to, engage in any material lines of business other than the Business as
described in the Registration Statement and other activities incidental or
related to the Business; provided that, the Company will not permit National
Sales and Services, Inc. to exist for any purpose, or to carry on any business
other than the ownership and operation of the Service Assets (as defined in the
Conveyance Agreements).
10.9. Payment of Taxes and Claims. The Company will, and will cause each
Subsidiary to, pay all taxes, assessments and other governmental charges or
levies imposed upon it or any of its properties or assets or in respect of any
of its franchises, business, income or profits when the same become due and
payable, but in any event before any penalty or interest accrues thereon, and
all claims (including, without limitation, claims for labor, services, materials
and supplies) for sums which have become due and payable and which by law have
or might become a Lien upon any of its properties or assets, and promptly
reimburse the holders of the Notes for any such taxes, assessments, charges or
claims paid by them, provided that no such tax, assessment, charge or claim need
be paid or reimbursed if the failure to pay would not have a Material Adverse
Effect or if it is being contested in good faith by appropriate proceedings
promptly initiated and diligently conducted and if such 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 general partner of
the Company.
10.10. Compliance with ERISA. The Company will not, and will not permit
any Subsidiary or Related Person of the Company to:
(a) (i) engage in any transaction in connection with which the Company or
any Subsidiary could be subject to either a civil penalty assessed pursuant
to Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code,
(ii) terminate (within the meaning of Title IV of ERISA) or withdraw from
any Plan in a manner, or take, or fail to take, any other action with
respect to any Plan (including, without limitation, a substantial cessation
of operations within the meaning of Section 4062(e) of ERISA), (iii)
establish, maintain, contribute to or become obligated to contribute to any
welfare benefit plan (as defined in Section 3(1) of ERISA) or other welfare
benefit arrangement which provides post-employment benefits, which cannot be
unilaterally terminated by the Company, (iv) fail to make full payment when
due of all amounts which, under the provisions of any Plan or applicable
law, the Company or any Subsidiary or Related Person of the Company is
required to pay as contributions or permit to exist any
58
material accumulated funding deficiency, whether or not waived, with respect
to any Plan or (v) engage in any transaction in connection with which the
Company, any Subsidiary or any Related Person of the Company could be
subject to liability pursuant to Section 4069(a) or 4212(c) of ERISA, if any
such event, condition or transaction described in clauses (i) through (v)
above, either individually or together with any other such event, condition
or transaction, could reasonably be expected to result in (x) the imposition
of a Lien in a material amount on any assets or property of the Company or
any Subsidiary of the Company pursuant to Section 302(f) of ERISA or Section
412(n) of the Code or (y) any liability to the Company, any Subsidiary of
the Company or any Related Person of the Company, which liability could have
a Material Adverse Effect; or
(b) as of any date of determination (i) permit the amount of unfunded
benefit liabilities under any Plan (other than a Multiemployer Plan)
maintained at such time by the Company or any Subsidiary or Related Persons
of the Company to exceed the current value of the assets of any such Plan by
more than $1,000,000 or (ii) permit the aggregate liability incurred by the
Company and any Subsidiary of the Company and Related Persons of the Company
pursuant to Title IV of ERISA with respect to one or more terminations of,
or one or more complete or partial withdrawals from, any Plan to exceed
$1,000,000.
As used in this Section 10.10, the term "accumulated funding deficiency" has the
meaning specified in Section 302 of ERISA and Section 412 of the Code, the term
"current value" has the meaning specified in Section 3 of ERISA and the terms
"benefit liabilities" and "amount of unfunded benefit liabilities" have the
meanings specified in Section 4001 of ERISA.
10.11. Maintenance of Properties; Insurance. (a) The Company will maintain
or cause to be maintained in working order and condition, in accordance with
normal industry standard, all material properties used or useful in the business
of the normal industry standards, all materials properties used or useful in the
business of the Company and the Restricted Subsidiaries and from time to time
will make or cause to be made all appropriate repairs, renewals and replacements
thereof.
(b) The Company will, and will cause each of the Restricted Subsidiaries
to, keep its insurable properties adequately insured at all times by Permitted
Insurers; maintain such other insurance, to such extent and against such risks,
including fire and other risks insured against by extended coverage, as is
customary with companies in the same or similar businesses, including public
liability insurance against claims
59
for personal injury or death or property damage occurring upon, in, about or in
connection with the use of any properties owned, occupied or controlled by it;
maintain such other insurance policy as may be required by law or any Security
Document; and cause each such insurance policy to name the Trustee, as an
additional insured or loss payee thereunder. The Company will permit the holders
of the Notes and an insurance consultant retained by the Required Holders, at
the expense of the Company, to review the insurance policies maintained by the
Company on an annual basis and will implement any changes to such policies
reasonably recommended by such consultant.
10.12. Operative Agreements; Security Documents. The Company will, and
will cause each Restricted Subsidiary to, perform and comply with all of its
obligations under each of the Operative Agreements to which it is a party, will
enforce each such Operative Agreement against each other party thereto and will
not accept the termination of any such Operative Agreement, unless the taking of
or omitting to take any such action would not have a Material Adverse Effect
(any termination of the Partnership Note other than its prepayment or payment at
maturity of the principal amount thereof as specified in the Partnership Note
shall be deemed a Material Adverse Effect), and will not amend, modify or
supplement any Operative Agreement without the prior written consent of the
Required Holders (or with respect to this Agreement as specified in Section 18),
provided that (i) the MLP Agreement and the Partnership Agreement (other than
Sections ____, ____, ____ and ____ of the Partnership Agreement) may be amended,
modified or supplemented without the prior written consent of the Required
Holders if such amendment, modification or supplement would not have a Material
Adverse Effect and the Company shall have delivered to each holder of any Notes
a copy of such proposed amendment, modification or supplement together with an
Officers' Certificate describing such proposed amendment, modification or
supplement and stating that to the best of the Company's knowledge (after due
inquiry) that such proposed amendment, modification or supplement would not have
a Material Adverse Effect and (ii) the Bank Credit Facilities may be amended,
modified or supplemented without the prior written consent of the Required
Holders if such amendment, modification or supplement may be made without the
written consent of any holders of the Notes under the Trust Agreement.
10.13. Chief Executive Office. The Company will not move its chief
executive office and the office at which it maintains its records relating to
the transactions contemplated by this Agreement and the Security Documents
unless (a) not less than 45 days' prior written notice of its intention to do
so, clearly describing the
60
new location, shall have been given to the Trustee and each holder of a Note and
(b) such action, reasonably satisfactory to the Trustee and each holder of a
Note, to maintain any security interest in the property subject to the Security
Documents at all times fully perfected and in full force and effect shall have
been taken.
10.14. Recordation; Opinions. (a) The Company will promptly, but in any
event within 30 days from the date of the Closing, cause to be duly recorded,
published, registered and filed all Conveyance Agreements (as set forth in
paragraph (b) of the definition of such term) and the Security Documents (in
each case, not previously recorded, published, registered or filed in accordance
with Section 4.8), in such manner and in such places as is required by law to
establish, perfect, preserve and protect the rights and first priority security
interests of the parties thereto and their respective successors and assigns in
all of the Mortgaged Property and shall deliver to the Trustee and your special
counsel within six calendar months of the date of the Closing copies (originals
with respect to certificates of title for motor vehicles and other rolling
stock) of such duly recorded, published, registered and filed Security
Documents. The Company will pay all taxes, fees and other charges then due in
connection with the execution, delivery, recording, publishing, registration and
filing of such documents or instruments in such places.
(b) The Company, at its expense, will furnish to the Trustee and each
holder of a Note during the period commencing April 1 to May 1 of the years 2001
and 2006 and at such other times as the Trustee may reasonably request in
connection with the perfection of Liens granted pursuant to the Security
Documents (as, an opinion of counsel satisfactory to the Trustee stating that in
the opinion of such counsel such action has been taken with respect to the
recording, filing, re-recording and re-filing of the Security Documents and any
financing statements necessary to maintain the Lien or security interest created
thereby and reciting the details of such action or stating that in the opinion
of such counsel no such action is necessary to maintain such lien or security
interest.
10.15. Information Required by Rule 144A. The Company covenants that it
will, upon the prior written request of the holder of any Note, provide such
holder, and any qualified institutional buyer designated by such holder, such
financial and other information as such holder may reasonably determine to be
necessary in order to permit compliance with the information requirements of
Rule 144A under the Securities Act of 1933, as amended, in connection with the
resale of Notes, except at such times as the Company is subject to the reporting
requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended. For the purpose of this
61
Section 10.15, the term "qualified institutional buyer" shall have the meaning
specified in Rule 144A under the Securities Act of 1933, as amended.
10.16. Covenant to Secure Notes Equally. The Company covenants that, if it
or any Restricted Subsidiary shall create or assume any Lien upon any of its
property or assets, whether now owned or hereafter acquired, other than Liens
permitted by the provisions of Section 10.2 (unless prior written consent to the
creation or assumption thereof shall have been obtained pursuant to Section
18), it will make or cause to be made effective provision whereby the Notes will
be secured by such Lien equally and ratably with any and all other Indebtedness
thereby secured so long as any such other Indebtedness shall be so secured, it
being understood that the provision of such equal and ratable security shall not
constitute a cure or waiver of any related Event of Default.
10.17. Compliance with Laws. The Company will, and will cause each
Subsidiary to, comply with all applicable statutes, rules, regulations, and
orders of, and all applicable restrictions imposed by, the United States of
America, foreign countries, states, provinces and municipalities, and of or by
any governmental department, commission, board, regulatory authority, bureau,
agency and instrumentality of the foregoing, and of or by any court, arbitrator
or grand jury, in respect of the conduct of their respective businesses and the
ownership of their respective properties or business (including, without
limitation, Environmental Laws), except such as are being contested in good
faith by appropriate proceedings promptly initiated and diligently conducted and
if such reserve or other appropriate provision, if any, as shall be required by
GAAP shall have been made therefor or the failure to so comply could not
reasonably be expected to have a Material Adverse Effect.
10.18. Further Assurances. At any time and from to time promptly, the
Company shall, at its expense, execute and deliver to each holder of a Note and
to the Trustee such further instruments and documents, and take such further
action, as the holders of the Notes may from time to time reasonably request, in
order to further carry out the intent and purpose of this Agreement and to
establish and protect the rights, interests and remedies created, or intended to
be created, in favor of the holders of the Notes, including, without limitation,
the execution, delivery and recordation and filing of security agreements and
financing statements and continuation statements under the Uniform Commercial
Code of any applicable jurisdiction.
62
10.19. Subsidiaries. (a) The Company may designate any Restricted
Subsidiary or newly acquired or formed Subsidiary as an Unrestricted Subsidiary
or any Unrestricted Subsidiary or newly acquired or formed Subsidiary as a
Restricted Subsidiary, in each case subject to satisfaction of the following
conditions:
(i) immediately before and after giving effect to such designation no
condition or event shall exist which constitutes an Event of Default or
Potential Event of Default;
(ii) immediately after giving effect to such designation, (1) (other
than in the case of a designation of an Unrestricted Subsidiary that does
not have any Indebtedness as a Restricted Subsidiary), the Company would
be permitted to incur at least $1 of additional Indebtedness in compliance
with subdivisions (i) and (ii) of Section 10.1(f), (2) the Company and the
Restricted Subsidiaries would not be liable with respect to Indebtedness
or any Guaranty, would not own any Investments and their property would
not be subject to any Lien which is not permitted by this Agreement and
(3) substantially all of the Company's and the Restricted Subsidiaries'
assets will be located, and substantially all of the Company's and the
Restricted Subsidiaries' business will be conducted, in the United States
of America;
(iii) in the case of a designation as an Unrestricted Subsidiary, if
such designation (and all other prior designations of Restricted
Subsidiaries or newly acquired or formed Subsidiaries as Unrestricted
Subsidiaries during the current fiscal year) were deemed to constitute an
Investment by the Company in respect of all the assets of the Subsidiary
so designated, such Investment would be in compliance with Section
10.3(c), with the amount of such Investment being deemed to equal the fair
market value of such assets (as determined in good faith (after due
inquiry) by the board of directors of the general partner of the Company)
in the case of a Restricted Subsidiary or the cost of acquisition or
formation in the case of a newly acquired or formed Subsidiary, provided,
that this subdivision (iii) of this Section 10.19(a) shall not apply to an
acquisition or formation by the Company or a Restricted Subsidiary of a
newly acquired or formed Unrestricted Subsidiary to the extent such
acquisition or formation (1) is funded solely by the net cash proceeds
received by the Company from the general partner of the Company or from
the Public Partnership as a capital contribution or as consideration for
the issuance by the Company of additional partnership interests or (2) the
assets involved in such acquisition are acquired in exchange for
additional partnership
63
interests of the Company or the Public Partnership provided, further, the
fair market value of the Restricted Subsidiary designated an Unrestricted
Subsidiary and the cost of the acquisition or formation of a newly
acquired or formed Subsidiary (other than cash) shall be deemed proceeds
from the sale of assets of the Company for purposes of Section 10.7 and
Section 9.4.;
(iv) in the case of a designation of a Restricted Subsidiary as an
Unrestricted Subsidiary, such Restricted Subsidiary shall not have been an
Unrestricted Subsidiary prior to being designated a Restricted Subsidiary;
(v) in the case of a designation of an Unrestricted Subsidiary as a
Restricted Subsidiary, such Unrestricted Subsidiary at the time of such
designation has a positive Consolidated Net Worth; and
(vi) the Company shall deliver to each holder of Notes, within 20
Business Days after any such designation, an Officers' Certificate stating
the effective date of such designation and confirming compliance with the
provisions of this Section 10.19.
In the case of the designation of any Unrestricted Subsidiary as a
Restricted Subsidiary, such new Restricted Subsidiary shall be deemed to have
(a) made or acquired all Investments owned by it, and (b) incurred all
Indebtedness owing by it and all Liens to which it or any of its properties are
subject, on the date of such designation.
(b) The Company will cause each Restricted Subsidiary, at the time it is
or is deemed to be designated as a Restricted Subsidiary, to (i) become a party
to the Company Security Agreement, the Trust Agreement and the Subsidiary
Guarantee Agreement by execution of a Supplemental Agreement and (ii) enter into
such documents as may be necessary or as you may request in form and substance
satisfactory to the Required Holders in order to secure such Restricted
Subsidiary's obligations under the Subsidiary Guarantee Agreement with all or
substantially all of the assets of such Restricted Subsidiary. Prior to the
designation of a Subsidiary as a Restricted Subsidiary, the Company shall
deliver to the holders of the Notes an opinion of counsel with respect to the
due execution and delivery of the Supplemental Agreement by such Subsidiary and
as to the enforceability of the Company Security Agreement, the Trust Agreement,
the Supplemental Agreement and the Subsidiary Guarantee Agreement with respect
to such Subsidiary, such opinion to be in form and substance satisfactory to the
Required Holders.
64
(c) The Company will not own as Subsidiaries other than Wholly Owned
Subsidiaries satisfying the requirements in clauses (a), (b) and (c) of the
definition of Restricted Subsidiary.
10.20. Damage, Destruction, Taking, etc.: In the event of any damage,
destruction or a taking in respect of all or a portion of the properties subject
to any of the Security Documents or in the event there shall be proceeds under
title insurance policies with respect to any real property, the Company will not
apply any Net Insurance Proceeds (as defined in the Mortgage), self-insurance
amounts, Net Awards (as defined in the Mortgage) or title insurance proceeds, if
such proceeds (whether resulting from one or a series of events or
circumstances) exceed $25,000,000 in the aggregate, to the cost of Restoration
(as defined in the Mortgage) or to replacements or other assets without the
prior written consent of the Required Holders.
10.21. Accounting Changes. The Company will not, and will not suffer or
permit any Restricted Subsidiary to, make any significant change in accounting
treatment or reporting practices, except as required by GAAP. The Company will,
and will cause each Restricted Subsidiary to, cause its fiscal year to end on
December 31 in each year, except, the Company may change its fiscal year end to
September 30, provided, that (a) the fiscal year end of each Restricted
Subsidiary shall also be September 30 and (b) references in this Agreement which
provide dollar amount limits during a fiscal year shall be reduced by 25% (only
for the year of the change in fiscal years).
10.22. Certain Real Property. Without affecting the obligations of the
Company or any of the Qualifying Restricted Subsidiaries under any of the
Security Documents, in the event that the Company or any Qualifying Restricted
Subsidiary, at any time after the date hereof, whether directly or indirectly,
acquires any interest in any one real property, including any fee or other
ownership interest with an aggregate cost in excess of $50,000, or any interest,
any lease of real property for a term in excess of three years and involving
aggregate average payments in excess of $100,000 per annum (each such interest,
an "After Acquired Property"), the Company will, or will cause such Qualifying
Restricted Subsidiary to, as soon as practical provide written notice thereof to
each holder of a Note, setting forth with specificity a description of such
After Acquired Property, the location of such After Acquired Property, any
structures or improvements thereon and an appraisal or its good-faith estimate
of the current value of such real property ("Current Value"). The Required
Holders may require the Company or the applicable Qualifying Restricted
Subsidiary to grant and record a mortgage or deed of trust in favor of the
Trustee on such After
65
Acquired Property, provided that no new mortgage or deed of trust on such After
Acquired Property shall be required if in the reasonable judgment of the
Company, the costs that would be incurred as a result thereof are excessive in
relation to the benefits that would be conferred thereby. In the event a
mortgage is granted, the Company or such Qualifying Restricted Subsidiary shall
execute and deliver to the Trustee a Mortgage, together with such documents or
instruments as the Required Holders shall require. In no event shall any title
insurance policy for any such After Acquired Property be in an amount which is
less than the Current Value of such After Acquired Property.
If, at any time, the aggregate cost to the Company and the Qualifying
Restricted Subsidiaries of their interests in real property acquired after the
date hereof for which a mortgage in favor of the Trustee is not in effect (the
"Aggregate Cost of Unmortgaged Property") exceeds $500,000, the Company will as
soon as practical provide written notice thereof to each holder of a Note,
setting forth with specificity a description of each such interest in real
property, the location of such real property and an appraisal or its good-faith
estimate of the then current value of each such real property. The Required
Holders may require the Company or the applicable Qualifying Restricted
Subsidiary to grant and record a mortgage or deed of trust in favor of the
Trustee on one or more of such interests in real property so that the Aggregate
Cost of Unmortgaged Property does not exceed $500,000, provided that no new
mortgage on any such real property shall be required if, in the reasonable
judgment of the Company, the costs that would be incurred as a result thereof
are excessive in relation to the benefits that would be conferred thereby. In
the event a mortgage is granted, the Company or such Qualifying Restricted
Subsidiary shall execute and deliver to the Trustee a Mortgage, together with
such documents or instruments as the Required Holders shall require.
Further, with regard to any interest in real property, including any fee
or other ownership interest in real property or any material lease of real
property, currently owned or held by the Company or any Qualifying Restricted
Subsidiary and which is not being encumbered by a mortgage or deed of trust of
even date herewith with a fair market value in excess of $50,000 or any interest
under a lease of real property for a term in excess of three years and involving
aggregate payments in excess of $100,000 per annum (each such interest, an
"Existing Unmortgaged Property"), upon the written request of the Required
Holders, the Company will, or will cause any applicable Qualifying Restricted
Subsidiary to, execute and deliver to the Trustee a mortgage or deed of trust,
together with such documents or instruments as the Required Holders shall
require, provided, that a title insurance policy, survey and
66
environmental report shall only be delivered if the fair market value of such
interest in real property exceeds $250,000. In no event shall the title
insurance policy for any such Existing Unmortgaged Property be in an amount
which is less than the Current Value of such Existing Unmortgaged Property.
The Company shall pay all fees and expenses, including reasonable
attorneys' fees and expenses and expenses of any customary environmental due
diligence, and all title insurance charges and premiums, in connection with the
obligations of the Company and the Qualifying Restricted Subsidiaries under this
Section 10.22.
10.23. Sale and Lease-Back Transactions. The Company will not, and will
not cause or permit any of the Restricted Subsidiaries to, enter into any
arrangement, directly or indirectly, with any Person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred.
10.24. Acquisitions. Except as otherwise permitted by Section 10.7, the
Company will not, and will not cause or permit any of the Restricted
Subsidiaries to, purchase, lease or otherwise acquire (in one transaction or a
series of transactions) all or any substantial part of the assets of any other
Person, except that (a) the Company and any of the Restricted Subsidiaries may
purchase Inventory in the ordinary course of business and (b) the Company or any
Restricted Subsidiary may engage in any such acquisition if no Event of Default
or Potential Event of Default has occurred and is continuing at the time of any
such acquisition or would occur immediately after giving effect thereto.
10.25. Impairment of Security Interests. The Company will not, and will
not permit any of the Subsidiaries to, take or omit to take any action, which
action or omission might or would have the result of materially impairing the
security interests in favor of the Trustee with respect to the Mortgaged
Property, and the Company will not, and will not permit any of the Subsidiaries
to, grant to any Person (other than the Trustee) any interest whatsoever in the
Mortgaged Property.
10.26. Limitation on Restrictions on Subsidiary Dividends, etc. The
Company will not, and will not cause or permit any of the Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary
67
to (a) pay dividends or make any other distributions on or in respect of its
capital stock, or pay any Indebtedness owed to the Company or any Restricted
Subsidiary, (b) make loans or advances to the Company or any Restricted
Subsidiary or (c) transfer any of its properties or assets to the Company or any
Restricted Subsidiary, except for such encumbrances or restrictions existing
under or by reason of (i) customary non-assignment provisions in any lease
governing a leasehold interest or other contract entered into in the ordinary
course of business consistent with past practices, (ii) restrictions on the
payment of dividends and distributions pursuant to the terms of Indebtedness
incurred by such Restricted Subsidiary in accordance with Section 10.1 or (iii)
this Agreement or any other Operative Agreement.
10.27. No Other Negative Pledges. The Company will not, and will not cause
or permit any of the Restricted Subsidiaries to, directly or indirectly, enter
into any agreement prohibiting the creation or assumption of any Lien upon the
properties or assets of the Company or any Restricted Subsidiary, whether now
owned or hereafter acquired, or requiring an obligation to be secured if some
other obligation is secured, except for the this Agreement, the Other Agreements
and the Bank Credit Facilities.
10.28. Sales of Receivables. The Company will not, and will not cause or
permit any of the Restricted Subsidiaries to, sell with recourse, discount or
otherwise sell or dispose of its notes or accounts receivable, except for
accounts receivable consisting of assets of an operating unit sold as a going
concern in accordance with all other provisions of this Agreement.
10.29. Fixed Price Supply Contracts; Certain Policies. (a) The Company
will not, and will not permit any of the Restricted Subsidiaries to, at any time
be a party or subject to any contract for the purchase or supply by such parties
of propane or other product except where (i) the purchase price is set with
reference to a spot index or indices substantially contemporaneously with the
delivery of such product or (ii) delivery of such propane or other product is to
be made no more than one year after the purchase price is agreed to.
(b) The Company will not amend, modify or waive the trading policy or
supply inventory position policy existing as of the date of Closing, except that
the Company may amend its supply inventory position policy such that such policy
provides that neither it nor any of the Restricted Subsidiaries will hold on
hand more than 90 days' of commodities inventory. The Company will provide each
holder of a Note with prompt written notice of any such new commodity hedging
agreement or
68
any such change in such policy. Subject to the foregoing exception, the Company
and the Restricted Subsidiaries will comply in all material respects with such
policies at all times.
10.30. Certain Operations. The Company shall not permit Triarc, any of its
Subsidiaries, any other Persons which Triarc, directly or indirectly, controls,
or any of Triarc's Restricted Affiliates (other than the Company and the
Restricted Subsidiaries) (collectively, the "Triarc Parties") to acquire a
business which derives any revenues from the sale of propane if, after giving
effect to such acquisition, Triarc's Pro Forma Propane Volumes would equal or
exceed the lesser of (a) 15% of the Company's reported propane volumes sold for
the most recently completed four fiscal quarters which ended at least 90 days
prior to the date of such acquisition and (b) 15 million gallons of propane
(such lesser amount, the "maximum permitted amount"). If as a result of an
acquisition, Triarc's Pro Forma Propane Volumes exceeds the maximum permitted
amount, Triarc shall not be in violation of this Section 10.30 if within the
period of 90 days following such acquisition it completes the disposition of
sufficient propane volume (based on the most recently completed four fiscal
quarters of the business sold) to reduce Triarc's Pro Forma Propane Volumes
below the maximum permitted amount. For purposes of this Section 10.30,
"Triarc's Pro Forma Propane Volumes" shall mean the actual propane volumes sold
by the Triarc Parties for the most recently completed four fiscal quarters which
ended at least 90 days prior to the date of determination plus the propane
volumes sold of the propane business to be acquired for the most recently
completed four fiscal quarters which ended at least 90 days prior to the date of
determination. In addition, in the event any Triarc Party owns a propane
business, the Company shall not permit any Triarc party to accept as a customer
(except for de minimis, unintentional and isolated acceptances) any Person who
is (or was during the last billing cycle of the Company and the Restricted
Subsidiaries) a customer of the Company and the Restricted Subsidiaries.
[The Company shall not permit Triarc or any of its Affiliates (other than the
Company and the Restricted Subsidiaries) to engage in the retail sale of propane
to end users in the United States.]
10.31. Independent Corporate Existence. Except as set forth on Schedule
10.31,
(a) the Company shall maintain, and shall cause each of its Subsidiaries
to maintain, books, records and accounts that are separate from the books,
records
69
and accounts of Triarc, either General Partner or any of their respective
Subsidiaries (other than the Company and its Subsidiaries) such that: (i)
the revenues of the Company and its Subsidiaries will be credited to the
accounts of the Company and its Subsidiaries only; (ii) all expenses
incurred by the Company and its Subsidiaries shall be paid only from the
accounts of the Company and its Subsidiaries (other than those paid by
Triarc and allocated to the Company in the manner set forth in subdivision
(c) of this Section); (iii) only officers and employees of the general
partner of the Company, the Company and its Subsidiaries in their capacity
as such shall have the authority to make disbursements with respect to the
accounts of the Company and its Subsidiaries; (iv) there shall occur no
sharing of accounts or funds between the Company and its Subsidiaries, on
the one hand, and Triarc, either General Partner or any of their respective
Subsidiaries (other than the Company and its Subsidiaries), on the other
hand; and (v) all cash and funds of the Company and its Subsidiaries shall
be managed separately from the cash and funds of Triarc, either General
Partner or any of their respective Subsidiaries (other than the Company and
its Subsidiaries), and there shall not occur any commingling, including for
investment purposes, of funds or assets of the Company and its Subsidiaries
with the funds or assets of Triarc, either General Partner or any of their
respective Subsidiaries (other than the Company and its Subsidiaries).
(b) All full-time employees, consultants and agents of the Company and its
Subsidiaries shall be compensated directly from the bank accounts of the
general partner of the Company, the Company and such Subsidiaries for
services provided by such employees, consultants and agents and, to the
extent any employee, consultant or agent is also an employee, consultant or
agent of Triarc, either General Partner or any of their respective
Subsidiaries (other than the Company and its Subsidiaries), the compensation
of such employee, consultant or agent shall be allocated in accordance with
subdivision (c) of this Section among the Company and its Subsidiaries, on
the one hand, and Triarc, either General Partner and any of their respective
Subsidiaries (other than the Company and its Subsidiaries), on the other
hand, on a basis which reasonably reflects the services rendered to the
Company and its Subsidiaries.
(c) All overhead expenses (including telephone and other utility charges)
for items shared by the Company and its Subsidiaries, on the one hand, and
Triarc, either General Partner or any of their respective Subsidiaries
(other than the Company and its Subsidiaries), on the other hand, shall be
allocated on the
70
basis of actual use to the extent practicable and, to the extent such
allocation is not practicable, on a basis reasonably related to actual use.
(d) The Company shall not permit Triarc, either General Partner or any of
their respective Subsidiaries (other than the Company and its Subsidiaries)
to be named as a loss payee or additional insured on the insurance policy
covering the property of the Company or any of its Subsidiaries, or enter
into an agreement with the holder of such policy whereby in the event of a
loss in connection with such property, proceeds are paid to Triarc, either
General Partner and their respective Subsidiaries (other than the Company
and its Subsidiaries).
10.32. Environmental Matters. The Company shall perform all of the
investigatory and remedial work recommended in the Environmental Assessment
Report prepared by [___________________] dated [_______________] (the
"Environmental Report"), covering the properties owned or to be transferred to
the Company. All remedial work and additional investigation recommended by the
Environmental Report shall be commenced within thirty (30) days from the date
hereof, and shall be performed in accordance with applicable laws. The Company
agrees to diligently pursue the completion of such remedial work and additional
investigation. To the extent that any such additional investigation recommended
by the Environmental Report indicates that any additional work or remediation is
required by applicable laws, or if required by the Required Holders in their
reasonable discretion, then the Company agrees to immediately commence such
additional work or remediation and thereafter diligently pursue such additional
work or remediation until completed.
10.33. Other Debt. (a) The Company shall ensure that the lenders from time
to time in respect of any Parity Debt or any other Indebtedness in the aggregate
principal amount of at least $2,500,000 outstanding as permitted by paragraphs
(b) through (f), (i) through (l) and (o) of Section 10.1, in the documents
governing the terms of such Indebtedness, (i) recognize the existence and
validity of the obligations represented by the Notes and (ii) agree to refrain
from making or asserting any claim that this Agreement or the obligations
represented by the Notes are invalid or not enforceable in accordance with its
and their terms as a result of the circumstances surrounding the incurrence of
such obligations.
(b) Each holder of Notes from time to time, as evidenced by its acceptance
of such Notes, (i) acknowledges the existence and validity of the obligations of
the Company under the Bank Credit Facilities (and any extension, renewal,
refunding or
71
refinancing thereof permitted by Section 10.1) and (ii) agrees to refrain from
making or asserting any claim that such obligations or the instruments governing
the terms thereof are invalid or not enforceable in accordance with its and
their terms as a result of the circumstances surrounding the incurrence of such
obligations.
10.34.Restriction on General Partners. SGP shall not engage in any
business or activity (other than the ownership of its general partnership
interest in the Company and the Public Partnership) or incur any Indebtedness or
other liabilities (other than tax liabilities). Neither General Partner shall
sell, transfer, pledge, convey or otherwise dispose of any or all of its
partnership interests in the Company or the Public Partnership without the prior
written consent of the Required Holders, except for the pledge to the Trustee
pursuant to the Partners Security Agreement. National Propane Corp. shall not
sell, transfer, pledge, convey or otherwise dispose of any or all of its
ownership of capital stock of National Propane SGP, except for the pledge to the
Trustee pursuant to the Partners Security Agreement.
SECTION 11. EVENTS OF DEFAULT; ACCELERATION.
If any of the following conditions or events ("Events of Default") shall
occur and be continuing:
(a) the Company shall default in the payment of any principal of or Make
Whole Amount, Premium Amount or premium, if any, on any Note when the same
becomes due and payable, whether at maturity or at a date fixed for
prepayment or by declaration or otherwise; or
(b) the Company shall default in the payment of any interest on any Note
or any amount due and payable under any Operative Agreement for more than 5
Business Days after the same becomes due and payable; or
(c) the Company or any Restricted Subsidiary shall default in the perfor
mance of or compliance with any term contained in Section 7(f), any of
Sections 10.1 through 10.8 (other than Section 10.8(c)), inclusive, or
Section 10.10(b) or the Dedicated Funds are not used to repay Indebtedness
as specified in the pro forma calculations set forth in the definition of
Consolidated Pro Forma Debt Service or the definition of Maximum
Consolidated Pro Forma Debt Service, as the case may be; or
72
(d) the Company, either General Partner, Triarc, the Public Partnership or
any Restricted Subsidiary shall default in the performance of or compliance
with any other term contained in this Agreement or any other Operative
Agreement and such default shall not have been remedied within 30 Business
Days after the earlier of the date such default shall first have become
actually known to any Responsible Officer of such Person or the date written
notice thereof shall have been received by the Company; or
(e) any representation or warranty made in writing by or on behalf of the
Company or any of its Affiliates in this Agreement, any other Operative
Agreement or in any instrument furnished in connection with the transactions
contemplated by this Agreement shall prove to have been false or incorrect
in any material respect on the date as of which made or deemed made; or
(f) the Company or any Restricted Subsidiary (as principal or guarantor or
other surety) shall default (after receiving notice, if any, and/or the
expiration of any applicable grace period) in the payment of any amount of
principal of or premium or interest on the Bank Credit Facilities, or other
Indebtedness which is outstanding (other than the Notes); or any event shall
occur or condition shall exist in respect of the Bank Credit Facilities or
any facility extending, renewing or refinancing the Bank Credit Facilities,
or of any mortgage, indenture or other agreement relating to the Bank Credit
Facilities or any facility extending, renewing or refinancing the Bank
Credit Facilities the effect of which is to cause (or to permit one or more
Persons to cause) such Bank Credit Facilities or any facility extending,
renewing or refinancing the Bank Credit Facilities to become due before its
stated maturity or before its regularly scheduled dates of payment or to
permit the holders thereof to cause the Company or any Restricted Subsidiary
to repurchase or repay such Bank Credit Facilities or any facility
extending, renewing or refinancing the Bank Credit Facilities, and such
default, event or condition shall continue for more than the period of
grace, if any, specified therein and shall not have waived pursuant thereto;
or any event shall occur or condition shall exist in respect of other
Indebtedness which is outstanding in a principal amount of at least
$5,000,000 or under any evidence of any such Indebtedness or of any
mortgage, indenture or other agreement relating to such other Indebtedness
the effect of which is to cause such other Indebtedness to become due before
its stated maturity or before its regularly scheduled dates of payment; or
73
(g) filing by or on the behalf of the Company or the general partner of
the Company of a voluntary petition or an answer seeking reorganization,
arrangement, readjustment of its debts or for any other relief under any
bankruptcy, reorganization, compromise, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar act or law,
state or federal, now or hereafter existing ("Bankruptcy Law"), or any
action by the Company or the general partner of the Company for, or consent
or acquiescence to, the appointment of a receiver, trustee or other
custodian of the Company or the general partner of the Company, or of all or
a substantial part of its property; or the making by the Company or the
general partner of the Company of any assignment for the benefit of
creditors; or the admission by the Company or the general partner of the
Company in writing of its inability to pay its debts as they become due; or
(h) filing of any involuntary petition against the Company or the general
partner of the Company in bankruptcy or seeking reorganization, arrangement,
readjustment of its debts or for any other relief under any Bankruptcy Law
and an order for relief by a court having jurisdiction in the premises shall
have been issued or entered therein; or any other similar relief shall be
granted under any applicable Federal or state law; or a decree or order of a
court having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee or other officer having similar powers
over the Company or the general partner of the Company or over all or a part
of its property shall have been entered; or the involuntary appointment of
an interim receiver, trustee or other custodian of the Company or the
general partner of the Company or of all or a substantial part of its
property; or the issuance of a warrant of attachment, execution or similar
process against any substantial part of the property of the Company or the
general partner of the Company; and continuance of any such event for 60
consecutive days unless dismissed, bonded to the satisfaction of the court
having jurisdiction in the premises or discharged; or
(i) filing by or on the behalf of any Material Restricted Subsidiary of a
voluntary petition or an answer seeking reorganization, arrangement,
readjustment of its debts or for any other relief under any Bankruptcy Law,
or any action by any Material Restricted Subsidiary for, or consent or
acquiescence to, the appointment of a receiver, trustee or other custodian
of such Material Restricted Subsidiary or of all or a substantial part of
its property; or the making by any Material Restricted Subsidiary of any
assignment for the benefit of creditors; or the admission by any Material
Restricted Subsidiary in writing of its inability to pay its debts as they
become due; or
74
(j) filing of any involuntary petition against any Material Restricted
Subsidiary in bankruptcy or seeking reorganization, arrangement,
readjustment of its debts or for any other relief under any Bankruptcy Law
and an order for relief by a court having jurisdiction in the premises shall
have been issued or entered therein; or any other similar relief shall be
granted under any applicable Federal or state law; or a decree or order of a
court having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee or other officer having similar powers
over any Material Restricted Subsidiary or over all or a part of its
property shall have been entered; or the involuntary appointment of an
interim receiver, trustee or other custodian of any Material Restricted
Subsidiary or of all or a substantial part of its property; or the issuance
of a warrant of attachment, execution or similar process against any
substantial part of the property of any Material Restricted Subsidiary; and
continuance of any such event for 60 consecutive days unless dismissed,
bonded to the satisfaction of the court having jurisdiction in the premises
or discharged; or
(k) a final judgment or judgments (which is or are non-appealable or which
has or have not been stayed pending appeal or as to which all rights to
appeal have expired or been exhausted) shall be rendered against the Company
or any Restricted Subsidiary for the payment of money in excess of
$5,000,000 in the aggregate and any one of such judgments shall not be
discharged or execution thereon stayed pending appeal within 60 days after
the date due, or, in the event of such a stay, such judgment shall not be
discharged within 60 days after such stay expires or any action shall be
legally taken by a judgment creditor to levy upon the assets or properties
of the Company or any Restricted Subsidiary to enforce any such judgment; or
(l) any of the Security Documents shall at any time, for any reason, cease
in any material respect to be in full force and effect or shall be declared
to be null and void in whole or in any material part by the final judgment
(which is non-appealable or has not been stayed pending appeal or as to
which all rights to appeal have expired or been exhausted) of any court or
other governmental or regulatory authority having jurisdiction in respect
thereof, or if the validity or the enforceability of any of the Security
Documents shall be contested by or on behalf of the Company, either General
Partner, the general partner of the Company, the Public Partnership, Triarc
or any Restricted Subsidiary, or the Company, either General Partner, the
general partner of the Company, the Public Partnership, Triarc or any
Restricted Subsidiary shall renounce any of the
75
Security Documents or deny that it is bound by the terms of any of the
Security Documents; or
(m) any order, judgment or decree is entered in any proceedings against
the Company or any Restricted Subsidiary decreeing a split-up of the Company
or such Restricted Subsidiary which requires the divestiture of assets
representing a substantial part, or the divestiture of the stock of a
Restricted Subsidiary whose assets represent a substantial part, of the
consolidated assets of the Company and its Restricted Subsidiaries
(determined in accordance with generally accepted accounting principles) or
which requires the divestiture of assets, or stock of a Restricted
Subsidiary, which shall have contributed a substantial part of the
Consolidated Net Income of the Company and its Restricted Subsidiaries
(determined in accordance with GAAP) for any of the three fiscal years then
most recently ended, and such order, judgment or decree shall not be
dismissed or execution thereon stayed pending appeal or review within 30
days after entry thereof, or in the event of such a stay, such order,
judgment or decree shall not be dismissed within 30 days after such stay
expires;
then, (x) upon the occurrence of any Event of Default described in subdivision
(g) or (h) of this Section 11, the unpaid principal amount of and accrued
interest on the Notes shall automatically become due and payable (without Make
Whole Amount), or, (y) upon the occurrence and continuance of any other Event of
Default, any holder or holders of more than 50% in principal amount of the Notes
at the time outstanding, may at any time (unless all defaults shall theretofore
have been remedied in accordance with the terms hereof) at its or their option,
by written notice or notices to the Company, declare all the Notes to be due and
payable, whereupon the same shall forthwith mature and become due and payable,
together with interest accrued thereon and, to the extent permitted by
applicable law, the applicable Make Whole Amount, if any, with respect to such
Notes, all without presentment, demand, protest or further notice, which are
hereby waived, provided that during the existence of an Event of Default
described in subdivision (a) or (b) (insofar as subdivision (b) relates to
interest on any Note) of this Section 11, any holder of the Notes at the time
outstanding may, at its option, by notice in writing to the Company, declare the
Notes then held by such holder to be due and payable, whereupon the Notes then
held by such holder shall forthwith mature and become due and payable, together
with interest accrued thereon and, to the extent permitted by applicable law,
the applicable Make Whole Amount with respect to such Notes.
76
At any time after the principal of, and interest accrued on, all the Notes
are declared due and payable, the Required Holders, by written notice to the
Company, may rescind and annul any such declaration and its consequences (other
than in respect of any Note which has been individually accelerated pursuant to
the proviso contained in the immediately preceding paragraph) if (x) the Company
has paid all overdue interest on the Notes, the principal of and Make Whole
Amount, if any, on any such Notes which have become due otherwise than by reason
of such declaration, and interest on such overdue principal and the applicable
Make Whole Amount and (to the extent permitted by applicable law) overdue
interest, at a rate per annum equal to the rate of interest stated on the face
of the Notes plus 2.0%, (y) all Events of Default, other than nonpayment of
amounts which have become due solely by reason of such declaration, and all
conditions and events which constitute Events of Default or Potential Events of
Default have been cured or waived, and (z) no judgment or decree has been
entered for the payment of any monies due pursuant to the Notes or this
Agreement; but no such rescission and annulment shall extend to or affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon.
SECTION 12. REMEDIES ON DEFAULT; RECOURSE, ETC.
In case any one or more Events of Default or Potential Events of Default
shall occur and be continuing, (i) the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in such Note, or for
an injunction against a violation of any of the terms hereof or thereof, or in
aid of the exercise of any power granted hereby or thereby or by law or
otherwise, and (ii) the Trustee and the holders of the Notes may exercise any
rights or remedies in their respective capacities under the Security Documents
in accordance with the provisions thereof. In case of a default in the payment
or performance of any provision hereof or of the Notes or of the Security
Documents, the Company will pay to the holder of each Note such further amount
as shall be sufficient to cover the cost and expenses of collection, including,
without limitation, reasonable attorneys' fees, expenses and disbursements, and
any out-of-pocket costs and expenses of any such holder incurred in connection
with analyzing, evaluating, protecting, ascertaining, defending or enforcing any
of its rights as set forth herein or in any of the Security Documents. No course
of dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such holder's rights, powers or remedies. No right, power or remedy conferred by
this Agreement or by any Note
77
upon any holder thereof shall be exclusive of any other right, power or remedy
referred to herein or therein or now or hereafter available at law, in equity,
by statute or otherwise.
SECTION 13. DEFINITIONS.
As used herein the following terms have the following respective meanings:
Administrative Agent: The First National Bank of Boston, in its capacity
as administrative agent for the Banks under the Bank Credit Facilities, and its
successors in such capacity.
Affiliate: as applied to any Person, any other Person directly or
indirectly controlling or controlled by or under common control with such
Person, provided that (i) for purposes of this definition, "control" (including,
with correlative meanings, the terms "controlled by" and "under common control
with") as used with respect to any Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether as a general partner or through the ownership
of voting securities or by contract or otherwise, (ii) as applied to the
Company, the term "Affiliate" shall include each General Partner and the Public
Partnership, (iii) neither you nor any other Person which is an institution
shall be deemed to be an Affiliate of the Company solely by reason of ownership
of the Notes or other securities issued in exchange for the Notes or by reason
of having the benefits of any agreements or covenants contained in this
Agreement or the other Operative Agreements, and (iv) neither you nor any other
Person which is an institution shall be deemed an Affiliate of a Competitor
solely by reason of ownership of notes or other instruments evidencing
Indebtedness of such Competitor, either secured or unsecured, or by reason of
having the benefits of any agreements or covenants contained in any agreement or
document pursuant to which such notes or Indebtedness were issued.
Agency Account Agreement: any and all agreements among any bank, in its
capacity as the depository bank, the Company or a Restricted Subsidiary and the
Trustee in substantially the form attached hereto as Exhibit J, as amended from
time to time.
Agreement: the meaning specified in Section 1.
78
Assets: the assets conveyed to the Company pursuant to the Conveyance
Agreements.
Available Cash: with respect to any calendar quarter, (a) the sum of (i)
all cash of the Company and the Restricted Subsidiaries on hand at the end of
such quarter and (ii) all additional cash of the Company and the Restricted
Subsidiaries on hand on the date of determination of Available Cash with respect
to such quarter obtained through available borrowings under the Working Capital
Facility made after the end of such quarter (provided that such borrowings under
the Working Capital Facility shall in no event exceed available borrowings under
the Working Capital Facility as of the end of such quarter), less (b) (i) any
cash reserves in such amounts as the general partner of the Company shall
determine to be necessary or appropriate in its reasonable discretion to (A)
provide for the proper conduct of the business of the Company and the Restricted
Subsidiaries (including, without limitation, cash reserves for future capital
expenditures) or (B) provide funds for distributions under Sections 6.4(a)(i),
(ii), and (iii) or 6.4(b)(i) of the MLP Agreement in respect of any one or more
of next four quarters or (C) comply with applicable law or any loan agreement
(including this Agreement), mortgage, security agreement, debt instrument or
other agreement or obligation to which the Company or any Restricted Subsidiary
is a party or its assets are subject, (including the payment of principal, Make
Whole Amount, Premium Amount or premium, if applicable, and interest) of the
Company in respect of the Notes, (ii) all Dedicated Funds and (iii) all amounts
which a Restricted Subsidiary is prohibited from dividending or distributing to
the Company; provided that Available Cash shall not include amounts received as
prepayments on the Partnership Note other than amounts scheduled to have been
received on or prior to the end of such calendar quarter pursuant to the terms
of the Partnership Note; provided further that Available Cash shall exclude
without duplication (x) in each calendar quarter a [cash] reserve equal to at
least 50% of the aggregate amount of all interest payments in respect of all
Indebtedness of the Company and the Restricted Subsidiaries upon which interest
is due semiannually or less frequently to be made in the next quarter (assuming,
in the case of Indebtedness incurred under the Bank Credit Facilities and other
Indebtedness bearing interest at fluctuating interest rates which cannot be
determined in advance, that the interest rate in effect on the last Business Day
of the immediately preceding calendar quarter will remain in effect until such
Indebtedness is due to be paid), (y) with respect to any Indebtedness secured
equally and ratably with the Notes of which principal is payable annually, in
the third calendar quarter immediately preceding each calendar quarter in which
any scheduled principal payment is due with respect to such Notes and other
Indebtedness (a "principal payment quarter"), a [cash] reserve equal to at least
25% of the aggregate
79
amount of all principal to be paid in respect of such Notes and other such
Indebtedness secured equally and ratably with the Notes in such principal
payment quarter; in the second calendar quarter immediately preceding a
principal payment quarter, a [cash] reserve equal to at least 50% of the
aggregate amount of all principal to be paid in respect of such Notes and other
such Indebtedness in such principal payment quarter; and in the calendar
quarter immediately preceding a principal payment quarter, a [cash] reserve
equal to at least 75% of the aggregate amount of all principal to be paid in
respect of such Notes and other such Indebtedness in such principal payment
quarter, and (z) with respect to the Notes and any other Indebtedness secured
equally and ratably with the Notes of which principal is payable semiannually,
in each calendar quarter which immediately precedes a quarter in which principal
is payable in respect of such Notes and such Indebtedness a [cash] reserve equal
to at least 50% of the aggregate amount of all principal to be paid in respect
of such Notes and other such Indebtedness in the next quarter; provided further
that the amount of such reserve specified in clauses (y) and (z) of this
definition for principal amounts to be paid shall be reduced by the aggregate
principal amount of all binding, irrevocable letters of credit established to
refinance such principal amounts.
Bank Credit Facilities: that Credit Agreement, dated as of the Closing,
among the Company, The First National Bank of Boston, as administrative agent,
BA Securities, Inc., as syndication agent, and the Banks, and any extension,
renewal, refunding or replacement thereof otherwise permitted to be incurred and
outstanding under Section 10.1, pursuant to which the Initial Acquisition
Facility and the Working Capital Facility will be made available to the Company.
Bankruptcy Law: the meaning specified in Section 11(g).
Banks: the financial institutions listed in the signature pages of the
Bank Credit Facilities, each assignee which becomes a lender under the Bank
Credit Facilities pursuant to the terms thereof and their respective successors.
Business: the operation by the Company and its Subsidiaries (and prior to
the consummation of the Conveyance Agreements by National Propane Corp. and its
Affiliates) of the wholesale and retail sale, distribution and storage of
propane gas and related petroleum derivative products, the leasing of propane
storage tanks and the related retail sale of supplies and equipment, including
home appliances, and such other businesses in which the Company and its
Restricted Subsidiaries were engaged on the date of Closing as described in the
Registration Statement.
80
Business Day: any day other than a Saturday, a Sunday or a day on which
commercial banks in New York City are required or authorized by law to be
closed.
Called Principal: with respect to any Note, the principal of such Note
that is to be prepaid pursuant to Section 9.2, 9.3 or 9.4 or becomes or is
declared to be immediately due and payable pursuant to Section 11, as the
context requires.
Capital Lease: as applied to any Person, any lease of any property
(whether real, personal or mixed) by such Person (as lessee or guarantor or
other surety) which would, in accordance with GAAP, be required to be classified
and accounted for as a capital lease on a balance sheet of such Person.
Cash Collateral Agreement: the Cash Collateral Agreement between the
Company, the Trustee and the Administrative Agent, in the form attached hereto
as Exhibit F, as amended from time to time.
CERCLA: the Federal Comprehensive Environmental Response, Compensation and
Liability Act, as amended.
Change of Control: any of the following:
(a) the liquidation or dissolution of the general partner of the Company;
(b) any merger or consolidation of the general partner of the Company with
or into any Person (other than Triarc or any of its Affiliates, including,
without limitation, Nelson Peltz, Peter W. May, DWG Acquisition Group, L.P. or
any of their respective Affiliates (each a "Permitted Holder")) if the general
partner of the Company is not the surviving entity thereof, or any sale, whether
direct or indirect, of all or substantially all of the assets of the general
partner of the Company to any Person or "group" (as used in Section 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended), other than to a
Permitted Holder;
(c) any Person or "group" (other than a Permitted Holder) is or becomes,
directly or indirectly, the beneficial owner of more than 50% of the then
outstanding total voting power of all classes of stock (or other securities) of
the general partner of the Company, the holders of which are ordinarily, in the
absence of contingencies, entitled to elect a majority of the directors (or
Persons performing similar functions) of the general partner of the Company; or
81
(d) during any period of twelve consecutive months after the date of
Closing, individuals who at the beginning of such twelve month period (or
Persons nominated by such members of the Board of Directors of the general
partner of the Company to succeed them) constitute the Board of Directors of the
general partner of the Company cease, for any reason, to constitute a majority
of the Board of Directors of the general partner of the Company then in office;
provided it shall not be a Change of Control pursuant to paragraphs (b), (c) or
(d), if any two of the persons employed for six months, three months and three
months, respectively, as Chief Executive Officer, Chief Financial Officer or
Chief Operating Officer of the Company immediately prior to the events specified
therein, serve as Chief Executive Officer, Chief Financial Officer or Chief
Operating Officer (but not necessarily in the same position as employed prior to
such events) for at least six and three months, respectively, after the
occurrence of such an event.
Closing: the meaning specified in Section 3.
Code: the Internal Revenue Code of 1986, as amended from time to time.
Commodity Hedging Agreement(s): any agreement or arrangement designed
solely to protect the Company against fluctuations in the price of propane with
respect to quantities of propane that the Company reasonably expects to purchase
from suppliers, sell to its customers or need for its inventory during the
period covered by such agreement or arrangement.
Company: the meaning specified in the Introduction and, for the purposes
of calculating any financial test or financial covenant under this Agreement
with respect to the period prior to the date of the Closing, "Company" shall
mean the General Partners and their Affiliates (to the extent that any such
Affiliate operated a portion of the Business).
Company Security Agreement: the Pledge and Security Agreement among the
Company, National Propane Corp., the Restricted Subsidiaries and the Trustee in
the form attached hereto as Exhibit G, as amended from time to time.
Competitor: any Person engaged primarily in the wholesale and retail sale,
distribution and storage of propane gas and related petroleum derivative
products.
Consolidated Cash Flow: at any date of determination, for the period of
four consecutive fiscal quarters most recently completed at least 45 days
(except that, in
82
connection with any calculation required pursuant to Section 10.4, for the
period of four consecutive fiscal quarters most recently completed) prior to
such date of determination,
(a) the sum of, without duplication, the amounts for such period, taken as a
single accounting period, (i) Consolidated Net Income and (ii) all amounts
deducted in the determination of such Consolidated Net Income for such
period in respect of (v) interest charges (including amortization of debt
discount and expense and imputed interest on Capital Lease obligations), (x)
provisions for all taxes and reserves (including reserves for deferred
income taxes), (y) non-cash items, and (z) all fees, cost and expenses with
respect to the retirement or repayment of Indebtedness of the general
partner of the Company existing immediately prior to the Closing, less
(b) (i) without duplication, all amounts added in the determination of such
Consolidated Net Income for such period in respect of (a) non-cash items and
(b) interest income received by the Company in connection with the
Partnership Note.
Consolidated Cash Flow shall be calculated after giving effect, on a pro forma
basis for the four consecutive fiscal quarters most recently completed at least
45 days (except that, in connection with any calculation required pursuant to
Section 10.4, for the period of four consecutive fiscal quarters most recently
completed) prior to such date of determination to, without duplication, any
asset sales or asset acquisitions (including, without limitation, any asset
acquisition giving rise to the need to make such calculation as a result of the
Company or any Restricted Subsidiary (including any Person who becomes a
Restricted Subsidiary as a result of such asset acquisition) incurring, assuming
or otherwise being liable for acquired Indebtedness) occurring during the period
commencing on the first day of such four fiscal quarter period to and including
the date of determination (the "Reference Period"), as if such asset sale or
asset acquisition occurred on the first day of the Reference Period; provided,
that with respect to an acquired business or asset (other than the acquisition
of the Business by the Company), if the applicable Reference Period for any
calculation of Consolidated Cash Flow shall include any fiscal quarters prior to
the date of acquisition (the "Preceding Fiscal Quarters"), Consolidated Cash
Flow generated by such acquired business or asset shall be determined for any
such Preceding Fiscal Quarters on the basis of, without duplication, (a) the
actual gross profit (revenues minus cost of goods sold) of the acquired business
or asset during such Preceding Fiscal Quarters, and (b) the pro forma expenses
that would have been incurred by the
83
Company in the operation of such acquired business or asset during such period
computed on the basis of personnel expenses for employees retained or to be
retained by the Company in the operation of such acquired business or asset and
non-personnel costs and expenses incurred by the Company or the general partner
of the Company in the operation of the Company's business at similarly situated
Company facilities or Restricted Subsidiary facilities. If the applicable
Reference Period for any calculation of Consolidated Cash Flow shall include a
partial period occurring prior to the Closing, then such Consolidated Cash Flow
shall be calculated based upon the Consolidated Cash Flow on a pro forma basis
for such portion of the Reference Period prior to the Closing (giving effect to
the transactions occurring on the date of Closing) and the Consolidated Cash
Flow for the remaining portion of the Reference Period occurring on and after
the Closing, giving pro forma effect, as described in the preceding sentences,
to all applicable transactions occurring on the date of Closing or otherwise.
Consolidated Interest Expense: as of any date of determination, the total
amount payable by the Company and the Restricted Subsidiaries on a consolidated
basis, during the period of twelve consecutive months immediately following such
date of determination in respect of all interest charges (including amortization
of debt discount and expense and imputed interest on payments under Capital
Lease obligations) with respect to Indebtedness of the Company and the
Restricted Subsidiaries outstanding on the date of determination, assuming for
such purpose (a) the amount of such Indebtedness is not reduced or increased
during such twelve month period, and (b) that interest expense for such twelve
month period with respect to Indebtedness of a revolving nature shall equal the
actual interest expense for Indebtedness of a revolving nature during the most
recently completed twelve month period .
Consolidated Net Income: with reference to any period, the net income (or
deficit) of the Company and the Restricted Subsidiaries for such period (taken
as a cumulative whole), after deducting all operating expenses, provisions for
all taxes and reserves (including reserves for deferred income taxes) and all
other proper deductions, all determined in accordance with GAAP on a
consolidated basis, after eliminating all intercompany transactions and after
deducting portions of income properly attributable to minority interests, if
any, in the stock and surplus of Restricted Subsidiaries, provided that there
shall be excluded (a) the income (or deficit) of any Person accrued prior to the
date it becomes a Restricted Subsidiary or is merged into or consolidated with
the Company or a Restricted Subsidiary, (b) the income (or deficit) of any
Person (other than a Restricted Subsidiary) in which the Company or
84
any Restricted Subsidiary has an ownership interest, except to the extent that
any such income has been actually received by the Company or such Restricted
Subsidiary in the form of dividends or similar distributions, (c) the
undistributed earnings of any Restricted Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Restricted
Subsidiary is not at the time permitted by the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to such Restricted Subsidiary, (d) any restoration to
income of any contingency reserve, except to the extent that provision for such
reserve was made out of income accrued during such period, (e) any aggregate net
gain (but not any aggregate net loss) during such period arising from the sale,
exchange or other disposition of capital assets (such term to include all fixed
assets, whether tangible or intangible, all Inventory sold in conjunction with
the disposition of fixed assets, and all securities), (f) any write-up of any
asset, (g) any net gain from the collection of the proceeds of life insurance
policies, (h) any gain arising from the acquisition of any securities, or the
extinguishment, under GAAP, of any Indebtedness, of the Company or any
Restricted Subsidiary, (i) any net income or gain (but not any net loss) during
such period from any change in accounting, from any discontinued operations or
the disposition thereof, from any extraordinary events or from any prior period
adjustments, (j) any deferred credit representing the excess of equity in any
Restricted Subsidiary at the date of acquisition over the cost of the investment
in such Restricted Subsidiary, and (k) in the case of a successor to the Company
by consolidation or merger or as a transferee of its assets, any earnings of the
successor corporation prior to such consolidation, merger or transfer of assets.
Consolidated Net Worth: as to the Company, the amount by which
(i) the total assets of the Company and the Restricted Subsidiaries
appearing on a consolidated balance sheet of the Company and the Restricted
Subsidiaries prepared in accordance with GAAP as of the date of
determination (after eliminating all amounts properly attributable to
minority interests in the stock and surplus, if any, of the Restricted
Subsidiaries) exceeds
(ii) total liabilities of the Company and the Restricted Subsidiaries
appearing on a consolidated balance sheet of the Company and the Restricted
Subsidiaries prepared in accordance with GAAP as of the date of
determination on a consolidated basis,
in each case after eliminating all intercompany transactions; and as to any
other Person, the amount by which
85
(i) the total assets of such Person and its Subsidiaries appearing on a
consolidated balance sheet of such Person and its Subsidiaries prepared in
accordance with GAAP as of the date of determination (after eliminating all
amounts properly attributable to minority interests in the stock and
surplus, if any, of its Subsidiaries) exceeds
(ii) total liabilities of such Person and its Subsidiaries appearing on
a consolidated balance sheet of such Person and its Subsidiaries prepared in
accordance with GAAP as of the date of determination on a consolidated
basis,
in each case after eliminating all intercompany transactions.
Consolidated Pro Forma Debt Service: as of any date of determination, the
total amount payable by the Company and the Restricted Subsidiaries on a
consolidated basis, during the four consecutive calendar quarters next
succeeding the date of determination, in respect of scheduled principal payments
and all cash interest charges with respect to Indebtedness of the Company and
the Restricted Subsidiaries outstanding on such date of determination, after
giving effect to any Indebtedness proposed to be incurred on such date (the
"Incurrence Date") and to any Indebtedness proposed to be repaid from funds of
such newly incurred Indebtedness (x) within 30 days of the Incurrence Date, or
(y) within the twelve months following such Incurrence Date which funds for such
payments have been within 30 days of the Incurrence Date irrevocably placed in
escrow with the Trustee with irrevocable instructions to the Trustee to make
such repayments (such funds pursuant to clauses (x) and (y) collectively, the
"Dedicated Funds") and (a) including actual payments under Capital Lease
obligations, (b) assuming, in the case of Indebtedness (other than Indebtedness
incurred under the Bank Credit Facilities) bearing interest at fluctuating
interest rates which cannot be determined in advance, that the rate in effect on
such date will remain in effect throughout such period, (c) assuming in the case
of In debtedness incurred under the Bank Credit Facilities, that (1) the
interest payments payable during such four consecutive calendar quarters next
succeeding the date of determination will equal the actual interest payments
associated with the Bank Credit Facilities during the most recent four fiscal
quarters, (2) except for the twelve-month period immediately prior to the
termination or final maturity thereof (unless extended, renewed or refinanced),
no principal payments will be made under the Working Capital Facility and (3)
principal payments relating to the Initial Acquisition Facility will (unless
already converted to a fixed amortization schedule) become due based on the
assumption that the conversion to the fixed amortization schedule pursuant to
Sections [___and___] of the Bank Credit Facilities is effected on the dates set
86
forth therein, (d) treating the principal amount of all Indebtedness outstanding
as of such date of determination under a revolving credit or similar agreement
(other than the Bank Credit Facilities) as maturing and becoming due and payable
on the scheduled maturity date or dates thereof (including the maturity of any
payment required by any commitment reduction or similar amortization provision),
without regard to any provision permitting such maturity date to be extended and
(e) including any other designated repayments of Indebtedness due within twelve
months from such date of determination.
Conveyance Agreements: (a) (i) the Contribution and Assumption Agreement,
dated as of the date of the Closing, among the Company and the General Partners
and National Sales and Service, Inc., and (ii) the Conveyance, Contribution and
Assumption Agreement, dated as of the date of the Closing, among the Public
Partnership, the Company and the General Partners, and (b) each of the
individual conveyances, assignments and bills of sale delivered to the Company
pursuant to the Agreements referred to in the foregoing clause (a).
Dedicated Funds: the meaning specified in the definition of "Consolidated
Pro Forma Debt Service."
Discounted Value: with respect to the Called Principal of any Note, the
amount obtained by discounting all Remaining Scheduled Payments with respect to
such Called Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on a semi-annual
basis) equal to the Reinvestment Yield plus 50 basis points with respect to such
Called Principal.
Dollar and sign "$": lawful money of the United States of America.
Environmental Laws: applicable federal, state, local and foreign laws,
rules or regulations relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes into the environment (including, without
limitation, air, surface water, ground water or land), or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes.
ERISA: the Employee Retirement Income Security Act of 1974, as amended
from time to time.
87
Event of Default: the meaning specified in Section 11.
Excess Proceeds: the meaning specified in Section 10.7(c).
GAAP: generally accepted accounting principles in effect in the United
States from time to time.
General Partner(s): the meaning specified in the Introduction.
General Partner's Guarantee Agreement: the General Partner's Guarantee
Agreement among National Propane Corp. and the Trustee in the form attached
hereto as Exhibit H, as amended from time to time.
general partner of the Company: National Propane Corp., so long as it
holds a general partner interest in the Company and shall be the managing
general partner as provided in Section of the Partnership Agreement, and any
successor to such interest or any part thereof, so long as such successor shall
hold such interest or part thereof or, if National Propane Corp. shall no longer
be such managing general partner, then National Propane SGP, so long as it holds
a general partner interest in the Company and shall be the managing general
partner as provided in Section ____ of the Partnership Agreement, and any
successor to such interest or part thereof, so long as such successor shall hold
such interest or part thereof.
Guaranty: as applied to any Person, any direct or indirect liability,
contingent or otherwise, of such Person with respect to any indebtedness, lease
(other than operating leases which the Company or a Restricted Subsidiary is the
lessee thereunder), dividend or other obligation of another, including, without
limitation, any such obligation directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of business) or
discounted or sold with recourse by such Person, or in respect of which such
Person is otherwise directly or indirectly liable or any other obligation under
any contract which, in economic effect, is substantially equivalent to a
guaranty, including, without limitation, any such obligation of a partnership in
which such Person is a general partner or of a joint venture in which such
Person is a joint venturer, and any such obligation in effect guaranteed by such
Person through any agreement (contingent or otherwise) to purchase, repurchase
or otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain the solvency or any balance sheet or other financial condition of the
obligor of such
88
obligation, or to make payment for any products, materials or supplies or for
any transportation or services regardless of the non-delivery or nonfurnishing
thereof, in any such case if the purpose or intent of such agreement is to
provide assurance that such obligation will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected against loss in respect thereof.
Hazardous Materials: any gasoline or petroleum (including crude oil or any
fraction thereof) or petroleum products, polychlorinated biphenyls,
urea-formaldehyde insulation, asbestos or asbestos-containing materials,
pollutants, contaminants, radioactivity, and any other materials or substances
of any kind, whether or not any such substance is defined as hazardous under any
Environmental Law, that is regulated pursuant to any Environmental Law or that
could give rise to liability under any Environmental Law.
Incurrence Date: the meaning specified in the definition of "Consolidated
Pro Forma Debt Service".
Indebtedness: as applied to any Person (without duplication):
(a) any indebtedness for borrowed money which such Person has directly or
indirectly created, incurred or assumed;
(b) any indebtedness, whether or not for borrowed money, with respect to
which such 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 service or business acquired by such Person, whether by
purchase, consolidation, merger or otherwise;
(c) all obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection with
the acquisition or property, assets or businesses;
(d) all indebtedness created or arising under any conditional sale or
other title retention agreement, or incurred as financing, in either case
with respect to property acquired by the Person (even though the rights and
remedies of the seller or bank under such agreement in the event of default
are limited to repossession or sale of such property);
89
(e) any obligations under Capital Leases to the extent such obligations
would, in accordance with GAAP, appear on a balance sheet of such Person;
(f) any indebtedness, whether or not for borrowed money, secured by (or
for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien in respect of property owned by
such Person, whether or not such Person has assumed or become liable for the
payment of such indebtedness, provided that the amount of such Indebtedness
if not so assumed shall in no event be deemed to be greater than the fair
market value from time to time (as determined in good faith by such Person)
of the property subject to such Lien;
(g) all capital stock of such Person redeemable at the option of the
holder prior to the final maturity of the Notes, valued at the greater of
its voluntary or involuntary maximum fixed repurchase price or any mandatory
redemption payment obligations in respect thereon plus, in either case,
accrued dividends thereon;
(h) any preferred stock of any Restricted Subsidiary of such Person
redeemable at the option of the holder prior to the final maturity of the
Notes, valued at the sum of the liquidation preference thereof or any
mandatory redemption payment obligations in respect thereof plus, in either
case, accrued dividends thereon;
(i) all liabilities of such Person in respect of letters of credit or
instruments serving a similar function issued or accepted for its account by
banks and other financial institutions (whether or not representing
obligations for borrowed money);
(j) any indebtedness of the character referred to in clause (a) through
(i) of this definition deemed to be extinguished under GAAP but for which
such Person remains legally liable; and
(k) any indebtedness of any other Person of the character referred to in
clause (a) through (j) of this definition with respect to which the Person
whose Indebtedness is being determined has become liable by way of a
Guaranty.
Notwithstanding the foregoing, in determining the Indebtedness of the Company
and the Restricted Subsidiaries, there shall be excluded all undrawn letters of
credit (not
90
yet due and payable), trade accounts payable, accrued interest and other accrued
expenses and customer credit balances arising in the ordinary course of business
on ordinary terms.
Initial Acquisition Facility: that Initial Acquisition Facility under the
Bank Credit Facilities which shall permit borrowings thereunder in an aggregate
amount at any time no greater than as permitted by Section 10.1(e) and which
shall be secured by the Mortgaged Property pursuant to the Security Documents,
and any extension, renewal, refunding or replacement thereof otherwise permitted
to be incurred and outstanding under Section 10.1.
Initial Notes: the meaning specified in Section 1.
Institutional Investor: means (a) any original purchaser of a Note, (b)
any holder of a Note holding $1,000,000 or more of the aggregate principal
amount of the Notes then outstanding, and (c) any bank, trust company, savings
and loan association or other financial institution, any pension plan, any
investment company, any insurance company, any broker or dealer, or any other
similar financial institution or entity, regardless of legal form.
Intercompany Notes: any and all promissory notes of a Restricted
Subsidiary issued to the Company or to another Restricted Subsidiary, in the
form attached hereto as Exhibit I or such other form as may be satisfactory to
the Required Holders, representing all Indebtedness of such Restricted
Subsidiary to the Company or such other Restricted Subsidiary, as the case may
be.
Interest Rate Agreement: any interest rate swap agreement, interest rate
cap agreement, interest rate collar agreement or other similar agreement or
arrangement designed solely to protect the Company against fluctuations in
interest rates on Indebtedness.
Inventory: goods held by a Person for sale or lease and accounted for as
inventory under GAAP.
Investment: as applied to any Person, any direct or indirect purchase or
other acquisition by such Person of stock or other securities of any other
Person, or any direct or indirect loan, advance or capital contribution by such
Person to any other Person, and any other item which would be classified as an
"investment" on a balance sheet of such Person prepared in accordance with GAAP,
including, without
91
limitation, any direct or indirect contribution by such Person of property or
assets to a joint venture, partnership or other business entity in which such
Person retains an interest. For the purposes of Section 10.3(b), the amount
involved in Investments made during any period shall be the aggregate cost to
the Company of all such Investments made during such period, determined in
accordance with GAAP, but without regard to unrealized increases or decreases in
value, or write-ups, write-downs or write-offs, of such investments and without
regard to the existence of any undistributed earnings or accrued interest with
respect thereto accrued after the respective dates on which such Investments
were made, less any net return of capital realized during such period upon the
sale, repayment or other liquidation of such Investment (determined in
accordance with GAAP, but without regard to any amounts received during such
period as earnings (in the form of dividends not constituting a return of
capital, interest or otherwise) on such Investment or as loans from any Person
in whom such Investments have been made).
Legal Requirement: any law, statute, ordinance, decree, requirement,
order, judgment, rule or regulation (or published official interpretation by any
governmental authority of any of the foregoing) of any governmental authority.
Lien: as to any Person, any mortgage, lien (statutory or otherwise),
pledge, reservation, right of entry, encroachment, easement, right of way,
restrictive covenant, license, charge, security interest or other encumbrance in
or on, or any interest or title of any vendor, lessor, lender or other secured
party to or of such Person under any conditional sale or other title retention
agreement or Capital Lease with respect to, any property or asset owned or held
by such Person, or the signing or filing of a financing statement with respect
to any of the foregoing which names such Person as debtor, or the signing of any
security agreement with respect to any of the foregoing authorizing any other
party as the secured party thereunder to file any financing statement or any
other agreement to give or grant any of the foregoing. For the purposes of this
Agreement, a Person shall be deemed to be the owner of any asset which it has
placed in trust for the benefit of the holders of Indebtedness of such Person
and such trust shall be deemed to be a Lien if such Person remains legally
liable therefor, notwithstanding that such Indebtedness is or may be deemed to
be extinguished under GAAP.
Make Whole Amount: with respect to any Note, an amount equal to the
excess, if any, of the Discounted Value of the Remaining Scheduled Payments of
the Called Principal of such Note over such Called Principal. The Make Whole
Amount shall in no event be less than zero.
92
Material Adverse Effect: a material adverse effect on (a) the business,
operations, property, condition (financial or otherwise) or prospects (financial
or otherwise) of the Company and the Restricted Subsidiaries, taken a whole or
the Business, (b) the ability of the Company, either General Partner or any
Restricted Subsidiary to perform its obligations under this Agreement or any
other Operative Agreement, or (c) the validity, enforceability, perfection or
priority of this Agreement or any other Operative Agreement or of the rights or
remedies of the holder of any Notes or the Trustee.
Material Restricted Subsidiary: with respect to any Restricted Subsidiary,
a Restricted Subsidiary which, at the date of any determination, has assets with
a net book value in excess of 5% of the aggregate net book value of all assets
of the Company and the Restricted Subsidiaries at the end of the most recently
completed fiscal year of the Company, or which is more than 5% of Consolidated
Net Income for such fiscal year.
Maximum Consolidated Pro Forma Debt Service: as of any date of
determination, the highest total amount payable by the Company and the
Restricted Subsidiaries on a consolidated basis, during any period of four
consecutive fiscal quarters, commencing with the fiscal quarter in which such
date of determination occurs and ending on the maturity date of the Notes, in
respect of scheduled principal payments and all cash interest charges with
respect to all Indebtedness of the Company and the Restricted Subsidiaries
outstanding or to be outstanding, after giving effect to any Indebtedness to be
incurred on the Incurrence Date and to any Indebtedness proposed to be repaid
from Dedicated Funds and (a) including actual payments under Capital Lease
obligations, (b) assuming, in the case of Indebtedness (other than Indebtedness
incurred under the Bank Credit Facilities) bearing interest at fluctuating
interest rates which cannot be determined in advance, that the rate in effect on
such date will remain in effect throughout such period, (c) assuming in the case
of Indebtedness incurred under the Bank Credit Facilities, that (1) the interest
payments payable during such four consecutive calendar quarters will equal the
actual interest payments associated with the Bank Credit Facilities during the
most recent four fiscal quarters, (2) except for the twelve-month period
immediately prior to the termination or final maturity thereof (unless extended,
renewed or refinanced) no principal payments will be made under the Working
Capital Facility and (3) principal payments relating to the Initial Acquisition
Facility will (unless already converted to a fixed amortization schedule) become
due based on the assumption that the conversion to the fixed amortization
schedule pursuant to Sections [2.01(c) and 2.01(g)] of the Bank Credit
Facilities is effected on the dates set forth therein, (d) treating the
principal
93
amount of all Indebtedness outstanding as of such date of determination under a
revolving credit or similar agreement (other than the Bank Credit Facilities) as
maturing and becoming due and payable on the scheduled maturity date or dates
thereof (including the maturity of any payment required by any commitment
reduction or similar amortization provision), without regard to any provision
permitting such maturity date to be extended and (e) including any other
designated repayments of Indebtedness.
Memorandum: the meaning specified in Section 5.4(b).
MLP Agreement: the Amended and Restated Agreement of Limited Partnership
of the Public Partnership.
Mortgages: the separate mortgage, security agreement and fixture filings
and the separate deed of trust, security agreement and fixture filings, each
among the Company, National Propane Corp. and the Trustee, dated as of the date
hereof and any mortgage, security agreement and fixture filing or deed of trust,
security agreement and fixture filing between any Restricted Subsidiary,
National Propane Corp. or the Company and the Trustee securing the Company's and
National Propane Corp.'s obligations under the Notes, the Initial Notes and the
Agreements and Parity Debt substantially in the forms of Exhibit D1 or D2, as
the case may be, with any changes therein required to refer to the mortgagor or
trustee thereunder as the respective Restricted Subsidiary.
Mortgaged Property: collectively, the properties referred to as the
"Mortgaged Property" in the Mortgages, as the "Collateral" under the Company
Security Agreement and as the "Security" in the Trust Agreement.
Multiemployer Plan: a Plan which is a "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA.
National Propane Corp.: the meaning specified in the Introduction.
National Propane SGP: the meaning specified in the Introduction.
Non-Related Subsidiaries: Subsidiaries of Triarc other than (i) the
General Partners and (ii) any such Subsidiary which is a Related Person.
Notes: the meaning specified in Section 1.
94
Obsolete Assets:
Officers' Certificate: as to any corporation, a certificate executed on
its behalf by the Chairman of the Board of Directors (if an officer) or its
President or one of its Vice Presidents and its Treasurer, or Controller, or one
of its Assistant Treasurers or Assistant Controllers, and, as to any
partnership, a certificate executed on behalf of such partnership by its general
partner in a manner which would qualify such certificate as an Officers'
Certificate of such general partner hereunder.
Operative Agreements: this Agreement, the Other Agreements, the Notes, the
Bank Credit Facilities, the Security Documents, the Intercompany Notes, the
Partnership Note, the Underwriting Agreement, the Conveyance Agreements, the MLP
Agreement and the Partnership Agreement.
Other Agreements: the meaning specified in Section 2.
Other Purchasers: the meaning specified in Section 2.
Overallotment Option: the overallotment option granted to the Underwriters
by the Public Partnership pursuant to the Underwriting Agreement.
Parity Debt: Indebtedness of the Company incurred in accordance with
Section 10.1(b), 10.1(e), 10.1(f), 10.1(i), 10.1(j) or 10.1(o) and secured by
the lien of the Security Documents in accordance with Section 10.2(h), 10.2(i)
or 10.2(m).
Partnership Agreement: the Amended and Restated Agreement of Limited
Partnership of the Company, as in effect on the date of the Closing, and as the
same may from time to time be amended, modified or supplemented in accordance
with the terms thereof and Section 10.12 hereof, in the form of Exhibit K.
Partnership Note: the note issued by Triarc in favor of the Company in an
amount of approximately $40,700,000, which note is secured by a pledge by Triarc
to the Company of, among other things, all of the shares of National Propane
Corp. owned by Triarc, in the form of Exhibit L.
Partners Security Agreement: the Pledge and Security Agreement among the
Public Partnership, National Propane Corp. and the Trustee in the form attached
hereto as Exhibit M, as amended from time to time.
95
PBGC: the Pension Benefit Guaranty Corporation or any governmental
authority succeeding to any of its functions.
Perfection Certificate: a certificate from the Company in substantially
the form attached hereto as Exhibit N.
Permitted Banks: the meaning specified in Section 10.3(a).
Permitted Encumbrances: the encumbrances and exceptions to title to the
Assets (a) described in the Security Documents or (b) existing on the date of
Closing as permitted by the applicable provisions hereof with respect to real
property owned or leased by the Company and not subject to a Lien of a Mortgage.
Permitted Exceptions: the meaning specified in Section 5.8(a).
Permitted Insurers: insurers with ratings of A or better according to
Best's Insurance Reports or a comparable rating agency for insurance companies
located outside of the United States of America and Canada and with assets of no
less than $500 million.
Person: a corporation, a limited liability company, a firm, a joint
venture, an association, a partnership, an organization, a business, a trust or
other entity or enterprise, an individual, a government or political subdivision
thereof or a governmental agency, department or instrumentality.
Plan: an "employee pension benefit plan" (as defined in Section 3(2) of
ERISA) which is or has been established or maintained, or to which contributions
are or have been made, by either General Partner, the Company or any Related
Person of the Company or the General Partners or to which either General
Partner, the Company or any Related Person of the Company or the General
Partners is or has been obligated to contribute, or an employee benefit plan as
to which either General Partner, the Company or any Related Person could be
treated as a contributory sponsor under Section 4069 or Section 4212 of ERISA if
such plan were terminated.
Potential Event of Default: any condition or event which, with notice or
lapse of time or both, would become an Event of Default.
Premium Amount: the meaning specified in Section 9.3(d).
96
Public Partnership: National Propane Partners, L.P., a Delaware limited
partnership.
Purchase Money Lien: the meaning specified in Section 10.2(j).
QPAM Exemption: the meaning specified in Section 6.2(c).
Qualifying Restricted Subsidiaries: the Restricted Subsidiaries other than
National Sales and Service, Inc.
RCRA: the Federal Resource Conservation and Recovery Act, as amended.
Registration Statement: the Registration Statement on Form S-1 under the
Securities Act of 1933, as amended, of the Public Partnership (Registration
Number 33-2768), as initially filed with the Securities and Exchange Commission
on March 26, 1996, as amended by Amendment No. 1 thereto filed with the
Securities and Exchange Commission on May 14, 1996, Amendment No. 2 thereto
filed with the Securities and Exchange Commission on May 31, 1996, Amendment No.
3 thereto filed with the Securities and Exchange Commission on June 11, 1996,
and Amendment No. 4 thereto filed with the Securities and Exchange Commission on
_______, 1996.
Reinvestment Yield: with respect to the Called Principal of any Note, the
yield to maturity implied by (i) the yields reported, as of 10:00 a.m. (New York
City time) on the Business Day next preceding the Settlement Date with respect
to such Called Principal, on the display designated as "[GovtPX]" on the
Bloomberg Financial Markets (or such other display as may replace [GovtPX] on
the Bloomberg Financial Markets) for actively traded U.S. Treasury securities
having a maturity equal to the Remaining Average Life of such Called Principal
as of such Settlement Date, or if such yields shall not be reported as of such
time or the yields reported as of such time shall not be ascertainable, (ii) the
Treasury constant maturity series yields reported, for the latest day for which
such yields shall have been so reported as of the Business Date next preceding
the Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date. Such
implied yield shall be determined, if necessary, by (a) converting U.S. Treasury
bill quotations to bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between (1) the actively traded U.S.
97
Treasury security with the duration closest to and greater than the Remaining
Average Life and (2) the actively traded U.S. Treasury security with the
duration closest to and less than the Remaining Average Life.
Related Person: with respect to a Person, any trade or business, whether
or not incorporated, which, as of any date of determination, would be treated as
a single employer together with such Person under Section 414 of the Code.
Remaining Average Life: with respect to the Called Principal of any Note,
the number of years (calculated to the nearest one-twelfth year) obtained by
dividing (i) such Called Principal into (ii) the sum of the products obtained by
multiplying (a) each Remaining Scheduled Payment of such Called Principal (but
not of interest thereon) by (b) the number of years (calculated to the nearest
one-twelfth year) which will elapse between the Settlement Date with respect to
such Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
Remaining Scheduled Payments: with respect to the Called Principal of any
Note, all payments of such Called Principal and interest thereon that would be
due on or after the Settlement Date with respect to such Called Principal if no
payment of such Called Principal were made prior to its scheduled due date,
provided that if such Settlement Date is not a date on which interest payments
are due to be made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of interest
accrued to such Settlement Date and required to be paid on such Settlement Date
pursuant to Sections 9 or 11.
Required Holders: the holders of at least 66-2/3% in principal amount of
the Notes at the time outstanding.
Responsible Officer: with respect to any Person, the President, any Senior
Vice President, the Chief Financial Officer, the Treasurer and the Secretary of
such Person and any other officer of such Person who is responsible for
compliance with or performance of any obligation under this Agreement or the
other Operative Agreements, with respect to the Company, any such officer of the
general partner of the Company and, in any case, any employee of the Company
performing any of the above functions.
Restricted Affiliate: any of Triarc, DWG Acquisition Group, L.P. or any of
their respective subsidiaries or Nelson Peltz or Peter W. May as long as any
such Person would otherwise be an Affiliate of the Company.
98
Restricted Payment: as to any Person, (a) any payment, dividend or other
distribution, direct or indirect, in respect of any partnership interest
(general or limited) in, or on account of any shares of any class of stock of,
such Person, except a distribution payable solely in additional partnership
interests in, or shares of stock of, such Person, and (b) any payment, direct or
indirect, on account of the redemption, retirement, purchase or other
acquisition of any partnership interest in, or any shares of any class of stock
of, such Person now or hereafter outstanding or of any warrants, rights or
options to acquire any such shares, except to the extent that the consideration
therefor consists of shares of stock of such Person, provided payments by the
Company or a Restricted Subsidiary of the Company to any General Partner or any
of its Affiliates for services rendered to or on behalf of the Company or any
Restricted Subsidiary of the Company or expenses incurred in connection with the
operation of the business of the Company or any Restricted Subsidiary of the
Company (including, without limitation, reimbursement of expenses incurred under
any employee benefit plan, including plans providing for the issuance of Units
or options to acquire Units in the Public Partnership) shall not be deemed to be
Restricted Payments.
Restricted Subsidiary: any Wholly Owned Subsidiary of the Company (a)
organized under the laws of the United States of America or any state thereof or
the District of Columbia, (b) none of the capital stock or ownership interests
of which is owned by Unrestricted Subsidiaries, (c) substantially all of the
operating assets of which are located in, and substantially all of the business
of which is conducted within the United States of America and which business
consists of the wholesale and retail sale, distribution and storage of propane
gas and related petroleum derivative products and/or the related retail sale of
supplies and equipment, including home appliances, and for the provision of
related services and (d) designated by the Company as a Restricted Subsidiary in
Exhibit O or at a subsequent date, provided that (i) to the extent a newly
formed or acquired Wholly Owned Subsidiary satisfying the requirements of the
foregoing clauses (a), (b) and (c) is not declared either a Restricted
Subsidiary or an Unrestricted Subsidiary within 90 days of its formation or
acquisition, such Wholly Owned Subsidiary shall be deemed a Restricted
Subsidiary and (ii) a Restricted Subsidiary may be designated as an Unrestricted
Subsidiary in accordance with the provisions of Section 10.19(a).
Security Documents: the Trust Agreement, the Mortgage(s), the Company
Security Agreement, the General Partner's Guarantee Agreement, the Subsidiary
Guarantee Agreement, the Partners Security Agreement, the Partnership Note, the
Perfection Certificate, the Agency Account Agreement, the Cash Collateral
99
Agreement, and all other security agreements and documents and instruments
executed and delivered in order to secure the Indebtedness and/or perfect the
Liens referred to in the Trust Agreement or to guarantee the Company's and the
General Partners' obligations hereunder and under the Notes and the Initial
Notes.
Settlement Date: shall mean, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
Section 9.2, 9.3 or 9.4 or is declared to be or becomes immediately due and
payable pursuant to Sec tion 11, as the context requires.
Subsidiary: of any Person, means any corporation, limited liability
company, business trust, association, partnership, joint venture or other
business entity at least a majority (by number of votes) of the stock of any
class or classes (or equivalent interests) of which is at the time owned by such
Person or by one or more Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person, if the holders of the stock of such class
or classes (or equivalent interests) (a) are ordinarily, in the absence of
contingencies, entitled to vote for the election of a majority of the directors
(or Persons performing similar functions) of such business entity, even though
the right so to vote has been suspended by the happening of such a contingency,
or (b) are at the time entitled, as such holders, to vote for the election of
the majority of the directors (or Persons performing similar functions) of such
business entity, whether or not the right so to vote exists by reason of the
happening of a contingency. Unless the context otherwise requires, any reference
to a Subsidiary shall mean a Subsidiary of the Company.
Subsidiary Guarantee Agreement: the Guarantee Agreement among the
Restricted Subsidiaries and the Trustee in the form attached hereto as Exhibit
P, as amended from time to time.
Substantial Portion: the meaning specified in Section 7(a).
Supplemental Agreement: an agreement between a Restricted Subsidiary and
the Trustee in the form attached hereto as Exhibit Q, as amended from time to
time.
Triarc: Triarc Companies, Inc., a Delaware corporation.
Trust Agreement: the Intercreditor and Trust Agreement, dated as of the
date of the Closing, among the Company, the General Partners, the Public
Partnership, the Restricted Subsidiaries, the Trustee, the holders of the Notes,
the Administrative
100
Agent and the Banks, substantially in the form attached hereto as Exhibit C, as
amended from time to time.
Trustee: The Bank of New York, as Trustee under the Trust Agreement and
its successors and assigns thereunder.
Underwriters: the underwriters named in the Underwriting Agreement.
Underwriting Agreement: the Underwriting Agreement, dated June __, 1996,
among the Public Partnership, the General Partners, the Company and the
Underwriters, relating to securities of the Public Partnership registered under
the Registration Statement.
Uniform Commercial Code: the Uniform Commercial Code or similar statute
in effect from time to time in any jurisdiction.
Units: the units to be issued and sold by the Public Partnership pursuant
to the Underwriting Agreement, representing preference limited partnership
interests in the Public Partnership.
Unrestricted Subsidiary: any Subsidiary other than a Restricted Subsidiary
which is organized under the laws of the United States of America or any state
thereof or the District of Columbia and substantially all of the operating
assets of which are located in, and substantially all of the business of which
is conducted within the United States of America and which business consists
principally of the distribution of propane gas or related supplies and
equipment.
Wholly Owned: as applied to any Subsidiary, a Subsidiary all of the
outstanding shares (other than directors' qualifying shares, if required by law)
of every class of stock or other equity interests of which are at the time owned
by the Company or by one or more Wholly Owned Restricted Subsidiaries or by the
Company and one or more Wholly Owned Restricted Subsidiaries.
Working Capital Facility: that Working Capital Facility under the Bank
Credit Facilities which shall permit borrowings thereunder in an aggregate
amount outstanding at any time no greater than as permitted by Section 10.1(e)
and which shall be secured by the Mortgaged Property pursuant to the Security
Documents and any extension, renewal, refunding or replacement thereof otherwise
permitted to be incurred and outstanding under Section 10.1.
101
SECTION 14. REGISTRATION, TRANSFER AND SUBSTITUTION OF
NOTES.
14.1. Note Register; Ownership of Notes. Any Notes issued in substantially
the form of Exhibit A2 are in "registered form". The Company will keep at its
principal office a register in which the Company will provide for the
registration of Notes in registered form and the registration of transfers of
Notes in registered form. The Company may treat the Person in whose name any
Note is registered on such register as the owner thereof for the purpose of
receiving payment of the principal of and the Make Whole Amount or premium, if
any, and interest on such Note and for all other purposes, whether or not such
Note shall be overdue, and the Company shall not be affected by any notice to
the contrary. All references in this Agreement or in a Note to a "holder" of any
Note shall mean the Person in whose name such Note is at the time registered on
such register.
14.2. Transfer and Exchange of Notes. Upon surrender of any Note for
registration of transfer or for exchange to the Company at its principal office,
the Company at its expense will execute and deliver in exchange therefor a new
Note or Notes in denominations of at least $250,000 (except one Note may be
issued in a lesser principal amount if the unpaid principal amount of the
surrendered Note is not evenly divisible by, or is less than, $250,000), as
requested by the holder or transferee, which aggregate the unpaid principal
amount of such surrendered Note. Each such new Note shall be in registered form.
Each such Note shall be dated so that there will be no loss of interest on such
surrendered Note and otherwise of like tenor, and shall be registered in the
name or names of such Person as such holder or transferee may request. Any Note
in lieu of which any such new Note has been executed and delivered shall not be
deemed to be an outstanding Note for any purpose of this Agreement.
14.3. Replacement of Notes. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Note and, in the case of any such loss, theft or destruction of any Note, upon
delivery of an indemnity bond in such reasonable amount as the Company may
determine (or, in the case of any Note held by you or another institutional
holder or your or its nominee, of an unsecured indemnity agreement from you or
such other holder), or, in the case of any such mutilation, upon the surrender
of such Note for cancellation to the Company at its principal office, the
Company at its expense will execute and deliver, in lieu thereof, a new Note in
the unpaid principal amount of such lost, stolen, destroyed or mutilated Note,
dated so that there will be no loss of interest on such
102
Note and otherwise of like tenor. Any Note in lieu of which any such new Note
has been so executed and delivered by the Company shall not be deemed to be an
outstanding Note for any purpose of this Agreement.
14.4. Notes Held by Company, etc., Deemed Not Outstanding. For the
purposes of determining whether the holders of the Notes of the requisite
principal amount at the time outstanding have taken any action authorized by
this Agreement or any other Operative Agreement with respect to the giving of
consents or approvals or with respect to the acceleration upon an Event of
Default, any Notes directly or indirectly owned by the Company, either General
Partner, the general partner of the Company or any of their respective
Affiliates shall be disregarded and deemed not to be outstanding.
SECTION 15. PAYMENTS ON NOTES.
15.1. Place of Payment. Payments of principal, Make Whole Amount, Premium
Amount or premium, if any, and interest becoming due and payable on the Notes
shall be made at the principal office of the Trustee, in the Borough of
Manhattan, the City and State of New York by 12:00 noon, unless the Company, by
written notice to each holder of any Notes, shall designate the principal office
of another bank or trust company in such Borough as such place of payment, in
which case the principal office of such other bank or trust company shall
thereafter be such place of payment.
15.2. Home Office Payment. So long as you or your nominee shall be the
holder of any Note, and notwithstanding anything contained in Section 15.1 or in
such Note to the contrary, the Company will pay all sums becoming due on such
Note for principal, Make Whole Amount or premium, if any, and interest no later
than 12:00 noon (New York City time) and by the method and at the address
specified for such purpose in Schedule A, or by such other reasonable method or
at such other address as you shall have from time to time specified to the
Company in writing for such purpose, without the presentation or surrender of
such Note or the making of any notation thereon, except that any Note paid or
prepaid in full shall, after such payment or prepayment in full, be surrendered
to the Company at its principal office or at the place of payment maintained by
the Company pursuant to Section 15.1 for cancellation. Prior to any sale or
other disposition of any Note held by you or your nominee you will, at your
election, either endorse thereon the amount of principal paid thereon and the
last date to which interest has been paid thereon or surrender such Note to the
Company in exchange for a new Note or Notes pursuant to Sec-
103
tion 14.2. The Company will afford the benefits of this Section 15.2 to any
institutional investor which is the direct or indirect transferee of any Note
purchased by you under this Agreement and which has made the same agreement
relating to such Note as you have made in this Section 15.2.
SECTION 16. EXPENSES, INDEMNIFICATION, ETC.
(a) Whether or not the transactions contemplated hereby shall be
consummated, the Company will pay all expenses in connection with such
transactions and in connection with any amendments or waivers (whether or not
the same become effective) under or in respect of this Agreement, the other
Operative Agreements or the Initial Notes, including, without limitation: (i)
the cost and expenses of preparing and reproducing this Agreement, the other
Operative Agreements and the Initial Notes, of furnishing all opinions by
counsel for the Company, the Restricted Subsidiaries, Triarc or the General
Partners (including any opinions requested by your special counsel, Debevoise &
Plimpton, as to any legal matter arising hereunder) and all certificates on
behalf of the Company, either General Partner, Triarc or any Restricted
Subsidiary, and of the Company's, either General Partner's, Triarc's or any
Restricted Subsidiary's performance of and compliance with all agreements and
conditions contained herein on its part to be performed or complied with; (ii)
the cost of delivering to your principal office, insured to your satisfaction,
the Notes issued in exchange for the Initial Notes sold to you hereunder and any
Notes delivered to you upon any substitution thereof pursuant to Section 14 and
of your delivering any Notes, insured to your satisfaction, upon any such
substitution; (iii) the fees, expenses and disbursements of your special
counsel, Debevoise & Plimpton and your local counsel in connection with such
transactions and any such amendments or waivers; (iv) the costs and expenses,
including attorneys' fees, incurred by you or any subsequent holder of a Note in
enforcing (or determining whether or how to enforce) any rights under this
Agreement, any other Operative Agreement or the Initial Notes or in responding
to any subpoena or other legal process in connection with this Agreement, any
other Operative Agreement or the Initial Notes or the transactions contemplated
hereby or by reason of you or any subsequent holder of Notes having acquired any
Note, including without limitation costs and expenses incurred in any bankruptcy
case; (v) the cost and expenses of obtaining a Private Placement Number for the
Notes; and (vi) the reasonable out-of-pocket expenses incurred by you in
connection with such transactions and any such amendments or waivers, provided
that the Company shall be required to pay the cost and expenses of only one firm
(and any local counsel) retained by the Noteholders in connection with any
waivers or amendments. The Company also will pay, and will save you and each
holder of any
104
Notes harmless from, all claims in respect of the fees, if any, of brokers and
finders (unless engaged by you) and any and all liabilities with respect to any
taxes (including interest and penalties) (other than income taxes) which may be
payable in respect of the execution and delivery hereof, the issue of the
Initial Notes or the Notes hereunder and any amendment or waiver under or in
respect hereof or of the Initial Notes or the Notes. In furtherance of the
foregoing, on the date of the Closing the Company will pay (a) the fees and
disbursements of your special counsel which are reflected as unpaid in the
statement of Debevoise & Plimpton, your special counsel, delivered to the
Company prior to the date of the Closing and (b) the fees and disbursements of
your environmental consultant; and thereafter the Company will pay, promptly
upon receipt of supplemental statements therefor from time to time, addi tional
fees, if any, and disbursements of your special counsel in connection with the
transactions hereby contemplated (including unposted disbursements as of the
date of the Closing).
(b) The Company will protect, indemnify and save harmless the Trustee and
each present, future and former holder of any Note and their respective
officers, directors, trustees, employees, agents and representatives
(individually, an "Indemnified Party" and collectively, the "Indemnified
Parties") from and against all losses, liabilities, obligations, claims,
damages, penalties, causes of action, costs and expenses (including, without
limitation, attorneys' fees and expenses) imposed upon or incurred by or
asserted against any Indemnified Party by reason of (a) ownership of the
Mortgaged Property, or any interest therein, or receipt of any rent or other sum
therefrom, (b) any accident or injury to or death of persons or loss of or
damage to property occurring on or about the Mortgaged Property or any part
thereof, (c) any use, non-use or condition of the Mortgaged Property or any part
thereof, (d) any failure on the part of the Company, either General Partner or
any of their respective Subsidiaries or Affiliates to perform or comply with any
of the terms of this Agreement or any other Operative Agreement, (e) the
performance of any labor or services or the furnishing of any materials or other
property in respect of the Mortgaged Property or any part thereof, (f) any
negligence or tortious act on the part of the Company, either General Partner,
any of their respective Subsidiaries or Affiliates or any of their respective
agents, contractors, sublessees, licensees or invitees, (g) any work in
connection with any alterations, changes or construction of the Mortgaged
Property, (h) any other relationship that has arisen or may arise between the
Company, either General Partner or any of their respective Subsidiaries or
Affiliates and the Indemnified Parties or the Mortgaged Property as a result of
the delivery or performance of this Agreement, any other Operative Agreement or
any action contemplated hereby or thereby or by any other document executed in
105
connection herewith or therewith, (i) the presence or removal, or the discharge,
spillage, leakage, emission, release, threat of release or disposal, of any
Hazardous Substances on, under, about or from the Mortgaged Property or the
noncompliance with any Legal Requirement relating thereto, whether arising prior
to the issuance of the Initial Notes or at any time thereafter and whether or
not the Company, either General Partner or any of their respective Subsidiaries
or Affiliates is responsible therefor or (j) the holding of, or any interest in,
any sum deposited or paid under this Agreement, the Notes or any other Operative
Agreement, provided that nothing contained herein shall be deemed to require
the Company to indemnify the Indemnified Parties for conditions (other than
matters covered by clause (f) above) first occurring subsequent to the earlier
of (x) the taking of exclusive possession and control of the Mortgaged Property
for operational purposes pursuant to Section 21.10 of the Mortgage or Section
6.03 of the Company Security Agreement, (y) the foreclosure of the Lien under
any Security Document and the transfer of title to the Trustee, or (z) for their
respective gross negligence or willful misconduct, or for their breach of their
respective obligations under the Agreement.
In case any action, claim, suit or proceeding is brought against an
Indemnified Party by reason of any such occurrence, the Company may, and upon
the request of such Indemnified Party will, at the Company's expense resist and
defend such action, suit or proceeding or cause the same to be resisted and
defended by counsel for the insurer of the liability or by counsel designated by
the Company and reasonably satisfactory to the Indemnified Party, as the case
may be, provided that any Indemnified Party shall be entitled to participate in
any such action, suit or proceeding with counsel of its own choice but at its
own expense, and provided further that if any Indemnified Party reasonably
determines that a conflict of interest exists with respect to the representation
by such counsel of such Indemnified Party, the Company shall pay the fees and
expenses of counsel selected by such Indemnified Party. In any event, if the
Company fails to assume the defense within a reasonable time after any such
request, the Indemnified Party may assume such defense or other indemnification
obligation and the fees and expenses of its attorney will be paid by the
Company. The obligations of the Company under this Section 16 shall survive any
termination or satisfaction of this Agreement. Any amounts payable to any
Indemnified Party under this Section 16 which are not paid within 15 days after
written demand therefor by any Indemnified Party shall bear interest at the rate
of 10.54% per annum from the date of such demand. In the event that the Company
shall be required to pay any indemnity under this Section 16, the Company shall
pay the Indemnified Party an amount which, after deduction of all taxes required
to be paid by such Indemnified Party in respect of the receipt or accrual
thereof (but not for any taxes payable with
106
respect to amounts received for the payment of income taxes), shall be equal to
the amount of such indemnity.
(c) In connection with the Closing, the General Partner and the Company
are requesting that you make available for funding an amount equal to the
principal amount specified opposite your name in Schedule A. If, for any reason,
on the date scheduled by the General Partners and the Company as the date for
the Closing, (i) the closing conditions are not satisfied by 11:00 a.m. on such
scheduled date, (ii) the General Partners and the Company do not, by 11:00 a.m.
on such scheduled date reschedule such Closing for a subsequent date, and (iii)
the Closing in fact does not occur on such scheduled date, the General Partners
and the Company will protect, indemnify and hold you harmless from and against
any and all losses resulting from your failure or inability to invest on the
scheduled date for the Closing the purchase price of the Initial Notes to be
purchased by you, for the period ending on the next following Business Day at a
rate of interest equal to or greater than the rate of interest on the Initial
Notes.
SECTION 17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties contained in this Agreement or the
other Operative Agreements, or made in writing by or on behalf of either General
Partner, the Company, any Restricted Subsidiary or any of their Affiliates in
connection with the transactions contemplated by this Agreement or the other
Operative Agreements, shall survive the execution and delivery of this Agreement
and the other Operative Agreements, any investigation at any time made by you or
on your behalf, the purchase of the Initial Notes or acceptance of the Notes in
exchange for the Initial Notes by you under this Agreement and any disposition
or payment of the Initial Notes or the Notes. All statements contained in any
certificate or other instrument delivered by or on behalf of the General
Partners, the Company, any Restricted Subsidiary or the general partner of the
Company pursuant to this Agreement and/or the other Operative Agreements or in
connection with any amendment, waiver or modification of this Agreement or any
of the other Operative Agreements shall be deemed representations and warranties
of the Company under this Agreement.
SECTION 18. AMENDMENTS AND WAIVERS.
Any term of this Agreement or of the Notes may be amended and the
observance of any term of this Agreement or of the Notes may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only
107
with the written consent of the Company and the Required Holders, provided that,
without the prior written consent of the holders of all the Notes at the time
outstanding, no such amendment or waiver shall (a) change the maturity or the
principal amount of, or change the rate of interest or the time of payment of
interest on, or change the amount or the time of payment of any principal or
Make Whole Amount or premium payable on any prepayment of, any Note, (b),
subject to other requirements set forth in the Trust Agreement, release any Lien
against the Mortgaged Property for the benefit of the holders of the Notes, (c)
reduce the aforesaid percentage of the principal amount of the Notes the holders
of which are required to consent to any such amendment or waiver or change the
rights of the holders of a Note with respect thereto, (d) change the percentage
of the principal amount of the Notes the holders of which may declare the Notes
to be due and payable as provided in Section 11 or change the rights of the
holders of a Note with respect thereto, (e) decrease the percentage of the
principal amount of the Notes the holders of which may rescind and annul any
such declaration as provided in Section 11 or (f) modify the provisions of
Section 9.8. Any amendment or waiver effected in accordance with this Section 18
shall be binding upon each holder of any Note at the time outstanding, each
future holder of any Note, each General Partner and the Company.
SECTION 19. NOTICES, ETC.
Except as otherwise provided in this Agreement, notices and other
communications under this Agreement shall be in writing and shall be delivered
by hand, by express courier service or by registered or certified mail, return
receipt requested, postage prepaid, addressed, (a) if to you, at the address set
forth in Schedule A or at such other address as you shall have furnished to the
Company in writing, except as otherwise provided in Section 15.2 with respect to
payments on Notes held by you or your nominee, or (b) if to any other holder of
any Note, at such address as such other holder shall have furnished to the
Company in writing, or, until any such other holder so furnishes to the Company
an address, then to and at the address of the last holder of such Note who has
furnished an address to the Company, or (c) if to the Company or either General
Partner, at the address set forth at the beginning of this Agreement to the
attention of Senior Vice President and Chief Financial Officer, or at such other
address, or to the attention of such other officer, as the Company shall have
furnished to you and each such other holder in writing.
SECTION 20. REPRODUCTION OF DOCUMENTS.
108
This Agreement, each Operative Agreement and all documents relating
thereto, including, without limitation, (a) consents, waivers and notifications
which may hereafter be executed, (b) documents received by you at the Closing
(except the Notes themselves), and (c) financial statements, certificates and
other information previously or hereafter furnished to you, may be reproduced by
you by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and you may destroy any original document
so reproduced. Each General Partner and the Company agrees and stipulates that,
to the extent permitted by applicable law, any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and whether or not such
reproduction was made by you in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
SECTION 21. MISCELLANEOUS.
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto,
whether so expressed or not, and, in particular, shall inure to the benefit of
and be enforceable by any holder or holders at the time of the Notes or any part
thereof. Except as stated in Section 17, this Agreement embodies the entire
agreement and understanding among you, the General Partners and the Company and
supersedes all prior agreements and understandings relating to the subject
matter hereof. The headings in this Agreement are for purposes of reference only
and shall not limit or otherwise affect the meaning hereof. This Agreement may
be executed in any number of counterparts, each of which shall be an original,
but all of which together shall constitute one instrument.
SECTION 22. SUBMISSION TO JURISDICTION.
For the purpose of assuring that any holder of Notes may enforce its
rights under this Agreement, the Initial Notes, the Notes and the other
Operative Agreements, each General Partner and the Company, for itself and its
successors and assigns, hereby, to the fullest extent permitted by applicable
law, irrevocably (a) agrees that any legal or equitable action, suit or
proceeding brought against it arising out of or relating to this Agreement, any
other Operative Agreement and the Initial Notes, or any transaction contemplated
hereby or the subject matter of any of the foregoing or for recognition or
enforcement of any judgment rendered in any such action, suit or proceeding may
be instituted in any state or federal court sitting in the
109
Borough of Manhattan in the State of New York, (b) waives any objection which it
may now or hereafter have to the laying of venue of any such action, suit or
proceeding brought in any such court, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim that any such action,
suit or proceeding brought in any such court has been brought in an inconvenient
forum, or any right to require the proceeding to be conducted in any other
jurisdiction by reason of its present or future domicile, (c) irrevocably
submits itself to the non-exclusive jurisdiction of any state or federal court
of competent jurisdiction sitting in the Borough of Manhattan in the State of
New York for purposes of any such action, suit or proceeding, and (d)
irrevocably waives any immunity from jurisdiction to which it might otherwise be
entitled in any such action, suit or proceeding which may be instituted in any
state or federal court sitting in the Borough of Manhattan in the State of New
York, and irrevocably waives any immunity from, or objection to, the maintaining
of an action against it to enforce any judgment for money obtained in any such
action, suit or proceeding and any immunity from execution.
SECTION 23. WAIVER OF JURY TRIAL.
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES THE
RIGHT TO TRIAL BY JURY IN ANY LEGAL OR EQUITABLE ACTION, SUIT OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE INITIAL NOTES, THE NOTES OR
ANY OTHER OPERATIVE AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY
OR THE SUBJECT MATTER OF ANY OF THE FOREGOING.
SECTION 24. GOVERNING LAW.
THIS AGREEMENT HAS BEEN EXECUTED AND DELIVERED IN THE CITY OF NEW YORK,
STATE OF NEW YORK, UNITED STATES OF AMERICA. THIS AGREEMENT AND (UNLESS
OTHERWISE EXPRESSLY PROVIDED) ALL AMENDMENTS AND SUPPLEMENTS TO, AND ALL
CONSENTS AND WAIVERS PURSUANT TO, THIS AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
SECTION 25. CONFIDENTIAL INFORMATION.
110
For the purposes of this Section 25, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Restricted
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by you as
being confidential information of the Company or such Restricted Subsidiary,
provided that such term does not include information that (a) was publicly known
or otherwise known to you prior to the time of such disclosure, (b) subsequently
becomes publicly known through no act or omission by you or any person acting on
your behalf, (c) otherwise becomes known to you other than through disclosure by
the Company or any Restricted Subsidiary or (d) constitutes financial statements
delivered to you under Section 7 that are otherwise publicly available. You will
maintain the confidentiality of such Confidential Information in accordance with
procedures adopted by you in good faith to protect confidential information of
third parties delivered to you, provided that you may deliver or disclose
Confidential Information to (i) your directors, trustees, officers, employees,
agents, attorneys and affiliates (to the extent such disclosure reasonably
relates to the administration of the investment represented by your Notes), (ii)
your financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with the
terms of this Section 25, (iii) any other holder of any Note, (iv) any
Institutional Investor to which you sell or offer to sell such Note or any part
thereof or any participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the provisions of
this Section 25), (v) any Person from which you offer to purchase any security
of the Company (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this Section 25),
(vi) any federal or state regulatory authority having jurisdiction over you,
(vii) the National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires access to
information about your investment portfolio or (viii) any other Person to which
such delivery or disclosure may be necessary or appropriate (w) to effect
compliance with any law, rule, regulation or order applicable to you, (x) in
response to any subpoena or other legal process, (y) in connection with any
litigation to which you are a party or (z) if an Event of Default has occurred
and is continuing, to the extent you may reasonably determine such delivery and
disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under your Notes and this Agreement. Each
holder of a Note, by its acceptance of a Note, will be deemed to have agreed to
be bound by and to be entitled to the benefits of this Section 25 as though it
were a party to this Agreement. On reasonable request by the Company in
connection with the delivery to any holder of a Note of information
111
required to be delivered to such holder under this Agreement or requested by
such holder (other than a holder that is a party to this Agreement or its
nominee), such holder will enter into an agreement with the Company embodying
the provisions of this Section 25.
112
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this Agreement and return the same to
the undersigned, whereupon this Agreement shall become a binding agreement
between you and the undersigned.
Very truly yours,
NATIONAL PROPANE, L.P.
By: NATIONAL PROPANE CORPORATION,
a General Partner
By______________________________________
Name:
Title:
By: NATIONAL PROPANE SGP, INC.,
a General Partner
By______________________________________
Name:
Title:
NATIONAL PROPANE SGP, INC.
By______________________________________
Name:
Title:
113
NATIONAL PROPANE CORPORATION
By______________________________________
Name:
Title:
The foregoing Agreement is
hereby accepted and agreed
to as of the date first
above written.
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By______________________________________
Name:
Title:
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By______________________________________
Name:
Title:
114
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
By: CIGNA INVESTMENTS, INC.
By______________________________________
Name:
Title:
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY, on behalf of its Separate Account 66
By: CIGNA INVESTMENTS, INC.
By______________________________________
Name:
Title:
LIFE INSURANCE COMPANY OF NORTH AMERICA
By: CIGNA INVESTMENTS, INC.
By______________________________________
Name:
Title:
115
SECURITY LIFE OF DENVER INSURANCE COMPANY
By: ING Investment Management, Inc.
By______________________________________
Its: Senior Vice President
and Managing Director
MIDWESTERN UNITED LIFE INSURANCE COMPANY
By: ING Investment Management, Inc.
By______________________________________
Its: Senior Vice President
and Managing Director
PEERLESS INSURANCE COMPANY
By: ING Investment Management, Inc.
By______________________________________
Its: Senior Vice President
and Managing Director
116
JEFFERSON-PILOT LIFE INSURANCE COMPANY
By______________________________________
Name:
Title:
GENERAL AMERICAN LIFE INSURANCE COMPANY
By______________________________________
Name:
Title:
KEYPORT LIFE INSURANCE COMPANY
By Stein Roe & Farnham Incorporated, as agent
By______________________________________
Name:
Title: Senior Vice President
117
PACIFIC MUTUAL LIFE INSURANCE COMPANY
By______________________________________
Name:
Title:
By______________________________________
Name:
Title:
PRINCIPAL MUTUAL LIFE
INSURANCE COMPANY
By______________________________________
Name:
Title:
By______________________________________
Name:
Title:
118
TMG LIFE INSURANCE COMPANY
by The Mutual Group (U.S.),
Inc., its agent
By______________________________________
Name: Robert R. Lapointe
Title: Vice President
By______________________________________
Name: Michael J. Carew
Title: Assistant Vice President
NORTHERN LIFE INSURANCE COMPANY
By______________________________________
Name:
Title:
NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
By______________________________________
Name:
Title:
119