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400,000 Common Units
NATIONAL PROPANE PARTNERS, L.P.
(a Delaware partnership)
Common Units
Representing Limited Partner Interests
PURCHASE AGREEMENT
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
November 7, 1996
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400,000 Common Units
NATIONAL PROPANE PARTNERS, L.P.
(a Delaware limited partnership)
Common Units
(representing limited partner interests)
PURCHASE AGREEMENT
November 7, 1996
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
National Propane Partners, L.P., a Delaware limited partnership (the
"Partnership"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated (collectively, "Merrill Lynch"), with
respect to the sale by the Partnership and the purchase by Merrill Lynch, of
400,000 common units representing limited partner interests in the Partnership
(the "Common Units"). The Common Units to be purchased hereunder are referred to
herein as the "Units".
(Capitalized terms used but not defined herein shall have the meaning
ascribed to them in the Registration Statement (as defined herein) which is a
part of the Disclosure Document (as defined herein)).
The Partnership (through the Operating Partnership (as hereinafter
defined)) was formed to acquire and operate substantially all of the business
and assets of National Propane Corporation. National Propane Corporation serves
as the managing general partner (the "General Partner") of both the Partnership
and National Propane, L.P., a Delaware limited partnership (the "Operating
Partnership"). National Propane SGP, Inc. serves as the non-managing general
partner (the "Special General Partner") of both the Partnership and the
Operating Partnership. The Partnership, the Operating Partnership, the General
Partner and the Special General Partner are collectively referred to herein as
the "Propane Entities." Triarc Companies, Inc. is referred to herein as
"Triarc."
Merrill Lynch will have the registration rights with respect to the
Units set forth in the Registration Agreement in the form of Exhibit A hereto
(the "Registration Agreement").
SECTION 1. Representations and Warranties.
(a) The Propane Entities jointly and severally represent and warrant to
you as follows (except as set forth in the Disclosure Document):
(i) The Registration Statement on Form S-1 (Registration No.
333-2768), including the exhibits and schedules thereto, filed by the
Partnership with the Securities and Exchange Commission (the
"Commission") on March 26, 1996, as amended on May 14, 1996, May 31,
1996, June 11, 1996 and June 25, 1996 and including such information
deemed to be incorporated therein pursuant to Rule 430A of the 1933 Act
Regulations (as defined below) (the "Registration Statement"), as the
information in such Registration Statement has been amended,
supplemented or modified by the Form 10-Q (the "Form 10-Q") of the
Partnership dated August 19, 1996 and by the press release of the
Partnership dated July 2, 1996 and the press releases of Triarc dated
July 8, 1996, July 9, 1996, August 12, 1996, September 5, 1996 and
October 29, 1996 (collectively, the "Press Releases"), the Form 8-K/A of
Triarc (the "Form 8-K/A"), dated July 2, 1996, the Form 8-K of Triarc
(the "Form 8-K"), dated October 29, 1996, the Form 8-K of RC/Arby's
Corporation (the "RC-8-K"), dated October 29, 1996 and the Form 10-Q of
Triarc (the "Triarc 10-Q") dated August 14, 1996 (the Registration
Statement as so amended, supplemented and modified by the Form 10-Q, the
Press Releases, the Form 8-K/A, the Form 8-K, the RC-8-K, the Triarc
10-Q and Schedule I to this Agreement, being referred to herein
collectively as the "Disclosure Document"), does not contain an untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection
shall not apply to statements in or omissions from the Disclosure
Document made in reliance upon and in conformity with information
furnished to the Partnership in writing by Merrill Lynch or, in the case
of the Registration Statement, any other underwriter named therein,
expressly for use in the Disclosure Document.
(ii) Each of the statements made in the Disclosure Document (as
of the date when made) within the coverage of Rule 175(b) of the rules
and regulations (the "1933 Act Regulations") of the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933,
as amended (the "1933 Act"), including (but not limited to) any
statements with respect to future available cash or future cash
distributions of the Partnership, was made or will be made by the
General Partner or the Partnership, as the case may be, with a
reasonable basis and in good faith; provided, however, that the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Disclosure Document made in reliance
upon and in conformity with information furnished to the Partnership in
writing by Merrill Lynch or, in the case of the Registration Statement,
any other underwriter named therein, expressly for use in the Disclosure
Document.
(iii) The accountants who certified the financial statements
included in the Disclosure Document are independent public accountants
as contemplated by the 1933 Act and the 1933 Act Regulations.
(iv) The financial statements included in the Disclosure Document
together with any related schedules and notes, present fairly in all
material respects the financial position of the entities purported to be
shown thereby as of the dates indicated and the results of their
operations and cash flows for the periods specified; except as otherwise
stated in the Disclosure Document said financial statements have been
prepared in conformity with accounting principles generally accepted in
the United States ("GAAP") applied on a consistent basis throughout the
periods involved; the summary and selected financial data included in
the Disclosure Document have been compiled on a basis consistent with
that of the audited and unaudited historical
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financial statements and pro forma financial statements from which they
have been derived; the pro forma financial statements and the related
notes thereto included in the Disclosure Document with respect to the
Propane Entities present fairly in all material respects the information
shown therein, have been prepared in accordance with the Commission's
rules and guidelines with respect to pro forma financial statements
(including the applicable accounting requirements of Rule 11-02 of
Regulation S-X) and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are, in the
judgment of the management of the Propane Entities, reasonable and the
adjustments used therein are, in the opinion of the judgment of the
Propane Entities, appropriate to give effect to the transactions and
circumstances referred to therein; provided, however, that such pro
forma financial statements and certain other financial statements are at
and for the period ended March 31, 1996 or June 30, 1996 and have not
been revised to reflect any events or circumstances since such date; and
any other financial and statistical information and data (other than
projections to the extent such projections are within the scope of
Section 1(a)(ii) hereof) included in the Disclosure Document are, in the
judgment of management of the Propane Entities, accurate in all material
respects and present in accordance with GAAP (to the extent applicable)
and on a basis consistent with the books and records of the General
Partner and the Partnership, the information required to be stated
therein.
(v) Since the respective dates as of which information is given
in the Disclosure Document, except as otherwise stated therein or
contemplated thereby, (A) none of the Propane Entities has sustained any
material loss or interference with its business from fire, explosion,
flood, accident or other calamity, whether or not covered by insurance,
(B) there has been no change, or any development involving a prospective
change, in the partners' capital or capital stock or any material change
in long-term or short-term debt of the Propane Entities, whether or not
arising in the ordinary course of business, (C) there have been no
transactions entered into by the Propane Entities, other than those in
the ordinary course of business, which are material with respect to the
Propane Entities taken as a whole, (D) there has been no dividend or
distribution of any kind declared, paid or made by any of the Propane
Entities on any class of their capital stock or units, as the case may
be, and (E) there are no liabilities or obligations of the Propane
Entities, direct or indirect, contingent or matured, which are material
to the Propane Entities taken as a whole, other than those reflected in
the Disclosure Document.
(vi) Each of the Partnership and the Operating Partnership (A)
has been duly formed and is validly existing as a limited partnership in
good standing under the Delaware Revised Uniform Limited Partnership Act
(the "Delaware Act"), with all partnership power and authority to (x)
own, lease and operate its properties and conduct its business in each
case as described in the Disclosure Document and (y) enter into and
perform its obligations under this Agreement and, with respect to the
Partnership, the Registration Agreement and issue and sell the Units as
provided herein and (B) is duly qualified or registered as a foreign
limited partnership authorized to do business and in good standing under
the laws of each jurisdiction in which the nature of its business or its
leasing or ownership of property requires such qualification or
registration, except where the failure to qualify or register would not
have a Material Adverse Effect. As used herein, a "Material Adverse
Effect" means (i) any material adverse effect on the business, condition
(financial or other), earnings, assets, liabilities, results of
operations or business prospects of the Propane Entities taken as a
whole or (ii) any event or occurrence which subjects the Propane
Entities to a liability or disability that is material to the Propane
Entities taken as a whole.
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(vii) The Special General Partner (A) has been duly incorporated
and is validly existing as a corporation in good standing under the laws
of its state of incorporation, with all corporate power and authority to
(x) own its properties and act as non-managing general partner of the
Partnership and the Operating Partnership, in each case as described in
the Disclosure Document and (y) enter into and perform its obligations
under this Agreement, and (B) is duly qualified as a foreign corporation
authorized to do business and in good standing under the laws of each
jurisdiction in which the nature of its activities or its ownership of
property requires such qualification, except where the failure to
qualify would not have a Material Adverse Effect.
(viii) National Sales & Service, Inc., a subsidiary of the
Operating Partnership ("National Sales") (A) has been duly incorporated
and is validly existing as a corporation in good standing under the laws
of its state of incorporation, with all corporate power and authority to
own, lease and operate its properties and conduct its business, in each
case as described in the Disclosure Document and (B) is duly qualified
as a foreign corporation authorized to do business and in good standing
under the laws of each jurisdiction in which the nature of its business
or its leasing or ownership of property requires such qualification,
except where the failure to qualify would not have a Material Adverse
Effect.
(ix) The General Partner (A) has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
state of incorporation, with all corporate power and authority to (x)
own, lease and operate its properties, conduct its business and act as
general partner of the Partnership and the Operating Partnership, in
each case as described in the Disclosure Document and (y) enter into and
perform its obligations under this Agreement and (B) is duly qualified
as a foreign corporation authorized to do business and in good standing
in each jurisdiction in which the nature of its business or its leasing
or ownership of property requires such qualification, except where the
failure to qualify would not have a Material Adverse Effect.
(x) All of the shares of issued and outstanding capital stock of
the General Partner have been duly authorized and validly issued and are
fully paid and nonassessable, and, are owned by Triarc, directly or
through subsidiaries of Triarc, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity interest
(collectively, "Encumbrances"), other than Encumbrances in favor of the
Operating Partnership; at March 31, 1996, the Partnership would have had
on a pro forma basis the capitalization as set forth in the Prospectus
included in the Registration Statement which is part of the Disclosure
Document in the column entitled "Partnership Pro Forma" under the
caption "Capitalization."
(xi) The General Partner and the Special General Partner are the
sole general partners of the Partnership, each with a 1.0%
unsubordinated general partner interest in distributions from the
Partnership (other than upon liquidation) and, in the case of the
General Partner, the related incentive distribution rights in respect
thereof (the "GP Incentive Distribution Rights") pursuant to the Amended
and Restated Agreement of Limited Partnership of National Propane
Partners, L.P., dated as of July 2, 1996, among the General Partner, the
Special General Partner and Triarc, as organizational limited partner
(the "Partnership Agreement"); the General Partner and the Special
General Partner are the sole general partners of the Operating
Partnership, each with a 1.0101% unsubordinated general partner interest
in distributions from the Operating Partnership (other than upon
liquidation) pursuant to the Amended and Restated Agreement of Limited
Partnership of National Propane, L.P., dated as
4
of July 2, 1996, among the General Partner, the Special General Partner
and the Partnership (as such agreement may have been amended prior to
the date hereof, the "Operating Partnership Agreement" and together with
the Partnership Agreement, the "Partnership Agreements"); all such
general partner interests have been duly authorized and have been
validly issued to the General Partner and the Special General Partner,
and are owned by the General Partner and the Special General Partner
free and clear of all Encumbrances, except for Encumbrances securing
obligations under the Operating Partnership's bank credit facility (the
"Bank Credit Facility"), the Note Agreements in respect of the First
Mortgage Notes due 2010 (the "Note Agreements") and other Parity Debt
(as defined in the Bank Credit Facility); and the GP Incentive
Distribution Rights have been duly authorized and have been validly
issued to the General Partner, and are owned by the General Partner, as
applicable, free and clear of all Encumbrances.
(xii) The Partnership is the sole limited partner of the
Operating Partnership with an approximately 97.9798% limited partner
interest in distributions from the Operating Partnership (other than
upon liquidation); such limited partner interest has been duly
authorized and validly issued in accordance with the Operating
Partnership Agreement, is fully paid (to the extent required by the
Operating Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in the Disclosure
Document under the caption "The Partnership Agreement -- Limited
Liability") and is owned by the Partnership free and clear of all
Encumbrances, except for Encumbrances securing obligations under the
Bank Credit Facility, the Note Agreements and other Parity Debt.
(xiii) All of the shares of issued and outstanding capital stock
of the Special General Partner and National Sales have been duly
authorized and validly issued and are fully paid and nonassessable, and
are owned by the General Partner and the Operating Partnership,
respectively, free and clear of all Encumbrances, except for
Encumbrances securing obligations under the Bank Credit Facility, the
Note Agreements and other Parity Debt.
(xiv) Upon consummation of the sale of the Units contemplated
hereby, the only outstanding limited partner interests of the
Partnership will be 6,701,550 Common Units (the 4,533,638 subordinated
units representing subordinated general partner interests in the
Partnership (the "Subordinated Units") held by the General Partner
representing a subordinated general partner interest which is
convertible pursuant to the Partnership Agreement); the outstanding
Common Units and the Subordinated Units, evidencing limited partner and
subordinated general partner interests, respectively, have been duly
authorized by the Partnership Agreement and validly issued and in the
case of the outstanding Common Units are fully paid (to the extent
required under the Partnership Agreement) and nonassessable (except as
such nonassessability may be affected by matters described in the
Prospectus included in the Registration Statement which is part of the
Disclosure Document under the caption "The Partnership Agreement --
Limited Liability"); the Units to be sold hereunder, when issued and
delivered by the Partnership against payment of the consideration set
forth herein, will be duly authorized by the Partnership Agreement, will
be validly issued to Merrill Lynch and will be fully paid (to the extent
required by the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in the Prospectus
included in the Registration Statement which is part of the Disclosure
Document under the caption "The Partnership Agreement -- Limited
Liability"); the Subordinated Units are owned by the General Partner
free and clear of all Encumbrances other than Encumbrances in favor of
the Operating Partnership; and the Units to be issued and delivered to
Merrill Lynch will be acquired by
5
Merrill Lynch free and clear of all Encumbrances created by the
Partnership other than restrictions on transfer under the Partnership
Agreement.
(xv) Except as described in the Disclosure Document, there are no
preemptive rights or other rights to subscribe for or to purchase, nor
any restriction upon the voting or transfer of, any partnership
interests or shares of capital stock of any of the Propane Entities
pursuant to the provisions of the certificate of incorporation, bylaws,
agreement of limited partnership or other governing documents or any
agreement or other instrument to which any of the Propane Entities is a
party or by which any of them may be bound. The Units, when issued and
delivered by the Partnership against payment of the consideration set
forth herein, the outstanding Common Units, the Subordinated Units, the
unsubordinated general partner interests in the Partnership and the GP
Incentive Distribution Rights, conform in all material respects to the
description thereof contained in the Disclosure Document. Except as
described in the Disclosure Document, there are no outstanding options,
warrants, or other rights calling for the issuance of, and no
commitments, plans or arrangements to issue, any Common Units or
Subordinated Units or any security convertible into or exercisable or
exchangeable for Common Units or Subordinated Units.
(xvi) This Agreement and the Registration Agreement have been
duly authorized, executed and delivered by the Propane Entities, as
applicable, and are the valid and legally binding agreements of the
Propane Entities, as applicable, enforceable against each of them in
accordance with their terms, except as (A) the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium, or similar laws relating to or affecting
creditors' rights generally and by general equitable principles
(regardless of whether such enforceability is considered in a proceeding
in equity or at law) and (B) rights to indemnity or contribution may be
limited by federal or state securities laws or the public policy
underlying such laws.
(xvii) The Partnership Agreement has been duly authorized,
executed and delivered by the General Partner, the Special General
Partner and Triarc as the organizational limited partner and is a valid
and legally binding agreement of the General Partner, the Special
General Partner and Triarc as the organizational limited partner,
enforceable against each of them in accordance with its terms; the
Operating Partnership Agreement has been duly authorized, executed and
delivered by the General Partner, the Special General Partner and the
Partnership and is a valid and legally binding agreement of the General
Partner, the Special General Partner and the Partnership, enforceable
against each of them in accordance with its terms; provided that, with
respect to each agreement described in this paragraph (xvii), the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, or similar laws
relating to or affecting creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(xviii) At or prior to Closing Time, all material actions
required to be taken by any of the Propane Entities for the
authorization, issuance, sale and delivery of the Units and the
consummation of the transactions contemplated by this Agreement shall
have been validly taken.
6
(xix) The Partnership, the Operating Partnership and National
Sales have, (1) good and marketable title to the real properties owned
by them in fee simple, other than certain real properties not material
to the business or operations of the Partnership, the Operating
Partnership or National Sales, title to which has not yet been conveyed
to them, (2) good and valid leasehold interests in the real property
leased by them, other than certain immaterial leased property subject to
the Agency Agreement, dated as of July 2, 1996, between the Special
General Partner and the Operating Partnership, and certain other
immaterial leased property as to which the Partnership, the Operating
Partnership or National Sales shall otherwise enjoy undisturbed
possession thereof and (3) good and sufficient title to the personal
property owned by them 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 by such entities, other than certain immaterial personal property
which will be subject to the Agency Agreement, in each case free and
clear of all Encumbrances except such as (A) are described in the
Disclosure Document, (B) do not materially affect the use made or
proposed to be made of such properties taken as a whole, (C) secure
obligations under the Bank Credit Facility and the Note Agreements, (D)
are set forth in the title policies in respect of certain properties
securing obligations under the Bank Credit Facility and the Note
Agreements or (E) are otherwise permitted under the Bank Credit Facility
and the Note Agreements; all of the material leases and subleases under
which the Partnership, the Operating Partnership or National Sales holds
the properties described in the Disclosure Document are valid and
subsisting and in full force and effect with such exceptions as do not
materially interfere with the use made or proposed to be made of such
properties taken as a whole; none of the Partnership, the Operating
Partnership or National Sales has any notice of any claim of any sort
that has been asserted by anyone adverse to the rights of or affecting
or questioning the rights of the Partnership, the Operating Partnership
or National Sales, as applicable, to the continued possession of the
leased or subleased premises under any such lease or sublease with such
exceptions as do not materially interfere with the use made or proposed
to be made of such properties taken as a whole. After giving effect to
the Agency Agreement, the Partnership, the Operating Partnership and
National Sales have succeeded in all material respects to the business,
assets, property and operations reflected in the pro forma financial
statements of the Partnership, except as disclosed in the Disclosure
Document.
(xx) None of the Propane Entities is (A) in breach or violation
of the provisions of its certificate of incorporation, bylaws, agreement
of limited partnership or other governing documents, (B) in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other instrument to which any
of such entities is a party or by which any of them may be bound, or to
which any of the property or assets of any of them is subject
(collectively, the "Agreements and Instruments") or (C) in violation of
any applicable law or statute or any rule or regulation or judgment,
order, writ or decree of any court, domestic or foreign, or governmental
agency or body having jurisdiction over them or any of their properties,
except in each case, for such breaches, violations or defaults which
would not, either singly or in the aggregate, have a Material Adverse
Effect; to the knowledge of the Propane Entities, no event has occurred
which with notice or lapse of time or both would constitute such a
breach, violation or default.
(xxi) None of the execution and delivery by the Propane Entities
of and the performance of their obligations under this Agreement and the
Registration Agreement, as applicable, and the issuance and sale of the
Units as contemplated herein or therein (including
7
the use of the proceeds from the sale of the Units), will (in each case,
whether or not with notice or lapse of time or both) (i) result in any
breach or violation of the provisions of the certificate of
incorporation, bylaws, agreement of limited partnership or other
governing documents of any of the Propane Entities, (ii) conflict with
or constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any Encumbrance
upon any property or assets of the Propane Entities pursuant to any
Agreements and Instruments, except for (A) Encumbrances described in the
Disclosure Document or (B) conflicts, breaches, Repayment Events or
Encumbrances that would not, singly or in the aggregate, have a Material
Adverse Effect or (iii) result in the violation of any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over any of the Propane Entities or any of their
assets or properties, except where such violations would not, singly or
in the aggregate, have a Material Adverse Effect. As used herein, a
"Repayment Event" means any event or condition which gives the holder of
any note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Propane Entities.
(xxii) No filing with, permit, consent, approval, license,
registration, qualification, authorization or order or decree
(collectively, the "Consents") of any court, governmental agency or body
or financial institution, is required of any of the Propane Entities in
connection with the execution, delivery and performance of this
Agreement and the Registration Agreement and the issuance and sale of
the Units as contemplated herein and therein, except such Consents (A)
as are required under the 1933 Act, the 1933 Act Regulations, the
Securities Exchange Act of 1934 (the "1934 Act"), the rules and
regulations of the Commission under the 1934 Act (the "1934 Act
Regulations"), or the securities or "blue sky" laws of certain
jurisdictions pursuant to the Registration Agreement and (B) which, if
not obtained, would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(xxiii) No labor dispute with the employees of the Propane
Entities exists or, to the knowledge of the Propane Entities, is
imminent, in either case, which could reasonably be expected to have a
Material Adverse Effect, and to the knowledge of the Propane Entities
(without independent inquiry), there is no existing or imminent labor
disturbance by the employees of any of the principal suppliers,
manufacturers, customers or contractors of the Propane Entities which
could reasonably be expected to have a Material Adverse Effect.
(xxiv) There is no action, suit, proceeding, inquiry or
investigation before or by any court or governmental agency or body,
domestic or foreign, now pending or, to the knowledge of the Propane
Entities, threatened against or affecting the Propane Entities, which is
required to be disclosed in the Disclosure Document (other than as
disclosed therein), or which might reasonably be expected to result in a
Material Adverse Effect (other than as disclosed in the Disclosure
Document); all pending legal or governmental proceedings to which any of
the Propane Entities is a party or of which any of their respective
property or assets is the subject are described in the Disclosure
Document, other than those proceedings (including ordinary routine
litigation incidental to the business) that could not reasonably be
expected to have a Material Adverse Effect.
(xxv) The Partnership, the Operating Partnership and National
Sales own or possess, or are able to acquire on reasonable terms, the
patents, patent rights, licenses, inventions,
8
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names described in the
Disclosure Document as being owned by them or necessary for the conduct
of their respective businesses (collectively, "patent and proprietary
rights"); no such entity has received or is aware of any notice of any
infringement of or conflict with asserted rights of others with respect
to any patent or proprietary rights, or any facts which would render any
patent and proprietary rights invalid or inadequate to protect the
interest of such entities therein, and which infringement or conflict or
invalidity or inadequacy, singly or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
(xxvi) The Partnership, the Operating Partnership and National
Sales possess such certificates, authorities or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies as
are necessary to conduct the business operated by them except for any of
the foregoing the absence of which would not have a Material Adverse
Effect, and no such entity has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority or permit which, singly or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.
(xxvii) None of the Propane Entities or Triarc is (a) deemed to
be a "gas utility company" within the meaning of Section 2(a)(4) of the
Public Utility Holding Company Act of 1935, as amended ("PUHCA"), (b) a
"holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" thereof, within the meaning of PUHCA or (c) an "investment
company" or a company "controlled by" an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, and the rules
and regulations thereunder.
(xxviii)Except as set forth in the Disclosure Document, the
Propane Entities are in material compliance with all applicable existing
federal, state, local and foreign laws and regulations relating to
protection of human health or the environment or imposing liability or
standards of conduct concerning any Hazardous Material (as hereinafter
defined) ("Environmental Laws"), except, in each case, where such
noncompliance, singly or in the aggregate, would not have a Material
Adverse Effect. The term "Hazardous Material" means (A) any "hazardous
substance" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, (B) any "hazardous
waste" as defined by the Resource Conservation and Recovery Act, as
amended, (C) any petroleum or petroleum product, (D) any polychlorinated
biphenyl, and (E) any pollutant or contaminant or hazardous or toxic
chemical, material, waste or substance regulated under or within the
meaning of any other Environmental Law.
(xxix) There is no alleged liability, or to the knowledge of the
Propane Entities, circumstance or condition which is reasonably likely
to result in any liability (including, in either case, without
limitation, liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property
damages, personal injuries, or penalties), of the Propane Entities
arising out of, based on or resulting from (A) the presence or release
into the environment of any Hazardous Material at any location, whether
or not owned by the Propane Entities or (B) any violation or alleged
violation of any Environmental Law, which liability is not disclosed in
the Disclosure Document and which liability, singly or in the aggregate,
would have a Material Adverse Effect.
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(xxx) Each of the Propane Entities is in compliance in all
material respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to
any "pension plan" (as defined in ERISA) for which the Propane Entities
could reasonably be expected to have any material liability under Title
IV of ERISA; the Propane Entities have not incurred and, to the
knowledge of the Propane Entities, there is no pending or threatened
material liability of the Propane Entities under (A) Title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan"
or (B) Sections 412 or 4971 of the Internal Revenue Code of 1986, as
amended, including the regulations and published interpretations
thereunder (the "Code"); and each "pension plan" for which the Propane
Entities would have any material liability that is intended to be
qualified under Section 401(a) of the Code has been determined by the
Internal Revenue Service to be so qualified in all material respects and
to the knowledge of the Propane Entities nothing has occurred, whether
by action or by failure to act, which would cause the loss of such
qualification.
(xxxi) Each of the Propane Entities has filed all federal income
tax returns and all other material tax returns, domestic or foreign,
required to be filed by it through the date hereof and has paid all
federal taxes and assessments shown to be due on such returns and all
other material taxes and assessments, domestic and foreign, in each case
payable by it which have become due, other than those not yet delinquent
and except for those contested in good faith and for which adequate
reserves have been provided in accordance with GAAP.
(xxxii) Assuming the accuracy of your representations and
warranties contained in Section 2, the issuance and delivery of the
Units to Merrill Lynch is exempt from the registration requirements of
the 1933 Act and the securities laws of any state having jurisdiction
with respect thereto, and none of the Propane Entities has taken or will
take any action that would cause the loss of such exemption.
(xxxiii)The General Partner has (excluding its interests in the
Partnership and the Operating Partnership and any notes or receivables
from or payable to the Partnership and the Operating Partnership) a net
worth of at least $15,000,000. For purposes of this representation,
assets will be valued at fair market value, and the General Partner's
interest in the Partnership and the Operating Partnership (as general
partner, limited partner and creditor) shall not be taken into account
except as an offset to the Partnership's or the Operating Partnership's
liabilities that are taken into account in computing such net worth.
(b) Any certificate signed by any officer of any of the Propane Entities
and delivered to you or your counsel on or after the date hereof in connection
with this Agreement shall be deemed a representation and warranty by the Propane
Entities to you as to the matters covered thereby.
SECTION 2. Merrill Lynch's Representations; Legends.
(a) You represent that you are purchasing the Units for your own account
and not with a view to, or for offer or sale in connection with, any
distribution thereof (within the meaning of the 1933 Act) that would be in
violation of the 1933 Act, without prejudice, however, to your right at all
times to sell or otherwise dispose of all or any part of the Units under a
registration under the 1933 Act or
10
under an exemption from such registration available under the 1933 Act, and
subject, nevertheless, to the disposition of your property being at all times
within your control.
You further represent that you are knowledgeable, sophisticated and
experienced in business and financial matters and are capable of evaluating the
merits and risks of the acquisition of the Units; that you have previously
invested in securities similar to the Units and fully understand the limitations
on transfer described in Section 2(b) hereof; that you are able to bear the
economic risk of your investment in the Units and are presently able to afford
the complete loss of such investment.
You understand that the Units have not been registered under the 1933
Act and may not be sold or otherwise disposed of except pursuant to an effective
registration statement or pursuant to an available exemption from such
registration requirements.
You further represent that you are an "accredited investor" (as such
term is defined in Rule 501(a) of Regulation D under the 1933 Act).
You acknowledge receipt of the Disclosure Document and further
acknowledge that you have been afforded the opportunity to ask such questions as
you have deemed necessary of, and to receive answers from, representatives of
the Partnership concerning the terms and conditions of the offering of the Units
and the merits and risks of investing in the Units.
You also understand that the Partnership and, for purposes of the
opinions to be delivered pursuant to Section 5 hereof, Paul, Weiss, Rifkind,
Wharton & Garrison, will rely upon the accuracy and truth of the foregoing
representations and you hereby consent to such reliance.
(b) Upon original issuance thereof, and until such time as the same is
no longer required under the applicable requirements of the 1933 Act, the Units
shall bear the following legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT COVERING SUCH SECURITIES OR THE PARTNERSHIP RECEIVES AN OPINION
OF COUNSEL FOR THE HOLDER OF SUCH SECURITIES REASONABLY SATISFACTORY TO THE
PARTNERSHIP STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT."
SECTION 3. Sale and Delivery to Merrill Lynch Closing.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Partnership agrees
to sell to Merrill Lynch, and Merrill Lynch agrees to purchase from the
Partnership, 400,000 Units at the price of $21.00 per Unit, for an aggregate
purchase price of $8,400,000.
(b) Concurrently with the closing of the transactions contemplated by
this Agreement, the Partnership will pay to Merrill Lynch a fee in an amount
equal to $588,000.
11
(c) Payment of the purchase price for, and delivery of certificates for,
the Units and payment of the fee referred to in Section 3(b) hereof shall be
made at the office of Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of
the Americas, New York, New York 10019, at 10:00 A.M. on November 7, 1996, or at
such other place and time as shall be agreed upon by you and the Partnership
(such time and date of payment and delivery being herein called "Closing Time").
Payment shall be made to the Partnership by same-day funds payable to the order
of the Partnership, in an amount equal to the purchase price in respect of the
Units ($8,400,000) less the fee referred to in Section 3(b) hereof ($588,000)
for a net payment of $7,812,000, against delivery to you of the Units to be
purchased by you. Certificates for the Units shall be in such denominations and
registered in your name or the name of such nominee or nominees as you may
request.
(d) The Units will share equally with the outstanding Common Units in
all distributions by the Partnership, including any distribution in respect of
the quarterly period ending December 31, 1996.
SECTION 4. Payment of Expenses. The Propane Entities will pay all
expenses incident to the transactions contemplated by this Agreement, including
(i) the preparation of the Disclosure Document, (ii) the preparation of this
Agreement, the Registration Agreement and such other documents as may be
required in connection with the purchase, sale and delivery of the Units, (iii)
the preparation, issuance and delivery of the certificates for the Units to
Merrill Lynch, including any transfer taxes or duties payable upon the sale of
the Units to Merrill Lynch, (iv) the fees and disbursements of counsel for the
Propane Entities, accountants and other advisors, (v) the out-of-pocket expenses
of Merrill Lynch in connection with the transactions contemplated by this
Agreement, including the reasonable fees and disbursements of counsel for
Merrill Lynch and (vi) the performance by the Propane Entities of their other
obligations under this Agreement and the Registration Agreement; provided, that
the amount payable by the Partnership in respect of the out-of-pocket fees and
expenses incurred by Merrill Lynch in connection with this Agreement, and
incurred by Merrill Lynch or its affiliates in connection with the Registration
Agreement and the transactions contemplated thereby, including, without
limitation, the fees and expenses of counsel for such persons, shall not exceed
$125,000.
SECTION 5. Conditions of Merrill Lynch's Obligations.
(a) The obligations of Merrill Lynch hereunder are subject to the
accuracy of the representations and warranties of the Propane Entities herein
contained, to the performance in all material respects by the Propane Entities
of their obligations hereunder to be performed prior to the Closing Time, and to
the following further conditions:
(i) At the Closing Time you shall have received:
(1) The favorable opinion, dated as of Closing Time, of
Paul, Weiss, Rifkind Wharton & Garrison, counsel for the Propane
Entities, in form and substance reasonably satisfactory to your
counsel, to the effect that:
A. Each of the Partnership and the Operating
Partnership has been duly formed and is validly existing
as a limited partnership in good standing under the
Delaware Act, with all partnership power and authority to
(x) own, lease and operate its properties and conduct its
business, in each case as described in the Registration
Statement and (y) enter into and perform its
12
obligations under this Agreement and, with respect to the
Partnership, the Registration Agreement and with respect
to the Partnership, issue and sell the Units as provided
herein and therein.
B. The Special General Partner has been duly
incorporated and is validly existing as a corporation in
good standing under the laws of its state of
incorporation, with all corporate power and authority to
(x) own its properties and act as non-managing general
partner of the Partnership and the Operating Partnership,
in each case as described in the Registration Statement
and (y) enter into and perform its obligations under this
Agreement.
C. National Sales has been duly incorporated and is
validly existing as a corporation in good standing under
the laws of its state of incorporation, with all corporate
power and authority to own, lease and operate its
properties and conduct its business in each case as
described in the Registration Statement.
D. The General Partner has been duly incorporated
and is validly existing as a corporation in good standing
under the laws of its state of incorporation, with all
corporate power and authority to (x) own, lease and
operate its properties, conduct its business and act as
general partner of the Partnership and the Operating
Partnership, in each case as described in the Registration
Statement and (y) enter into and perform its obligations
under this Agreement.
E. All of the shares of issued and outstanding
capital stock of the General Partner have been duly
authorized and validly issued and are fully paid and
nonassessable, and are owned of record and to such
counsel's knowledge beneficially, by Triarc, directly or
through subsidiaries of Triarc, free and clear of all
Encumbrances (i) in respect of which a financing statement
under the Uniform Commercial Code of the State of Delaware
naming Triarc as a debtor is on file in the office of the
Secretary of State of the State of Delaware or (ii)
otherwise known to such counsel without independent
inquiry, except for Encumbrances created by or arising
under the General Corporation Law of the State of Delaware
(the "DGCL") or Encumbrances in favor of the Operating
Partnership created under the Triarc Note.
F. All of the unsubordinated general partner
interests in the Partnership and the Operating Partnership
are owned of record and to such counsel's knowledge
beneficially, by the General Partner and the Special
General Partner, and the GP Incentive Distribution Rights
are owned of record and, to such counsel's knowledge,
beneficially, by the General Partner, in each case, free
and clear of all Encumbrances (i) in respect of which a
financing statement under the Uniform Commercial Code of
the State of Delaware naming the General Partner or the
Special General Partner, as the case may be, as a debtor
is on file in the office of the Secretary of State of the
State of Delaware or (ii) otherwise known to such counsel
without independent inquiry, except for Encumbrances
created by or arising under the Delaware Act or
restrictions on transfer under the Partnership Agreement,
and except for
13
Encumbrances securing obligations under the Bank Credit
Facility, the Note Agreements and other Parity Debt with
respect to the unsubordinated general partner interests
held by the General Partner and the Special General
Partner.
G. All of the limited partner interests in the
Operating Partnership are owned of record and to such
counsel's knowledge beneficially, by the Partnership free
and clear of all Encumbrances (i) in respect of which a
financing statement under the Uniform Commercial Code of
the State of Delaware naming the Partnership as debtor is
on file in the office of the Secretary of State of the
State of Delaware or (ii) otherwise known to such counsel
without independent inquiry, except for Encumbrances
created by or arising under the Delaware Act or
restrictions on transfer under the Operating Partnership
Agreement, and except for Encumbrances securing
obligations under the Bank Credit Facility, the Note
Agreements and other Parity Debt.
H. All of the shares of issued and outstanding
capital stock of the Special General Partner and National
Sales have been duly authorized and validly issued and are
fully paid and nonassessable, and are owned of record and
to such counsel's knowledge beneficially, by the General
Partner and the Operating Partnership, respectively, free
and clear of all Encumbrances (i) in respect of which a
financing statement under the Uniform Commercial Code of
the State of Delaware naming the General Partner or the
Operating Partnership, respectively, as a debtor is on
file in the office of the Secretary of State of the State
of Delaware or (ii) otherwise known to such counsel
without independent inquiry, except for Encumbrances
created by or arising under the DGCL, and except for
Encumbrances securing obligations under the Bank Credit
Facility, the Note Agreements and other Parity Debt.
I. The Units, when issued and delivered by the
Partnership against payment of the consideration set forth
herein, will be acquired by Merrill Lynch free and clear
of all Encumbrances created by the Partnership, other than
restrictions on transfer under the Partnership Agreement.
J. The Subordinated Units are owned by the General
Partner, free and clear of all Encumbrances (i) in respect
of which a financing statement under the Uniform
Commercial Code of the State of Delaware naming the
General Partner is on file in the office of the Secretary
of State of the State of Delaware or (ii) otherwise known
to such counsel without independent inquiry, except for
Encumbrances created by or arising under the Delaware Act
or under the Triarc Note or restrictions on transfer under
the Partnership Agreement.
K. Except as described in the Disclosure Document,
there are no preemptive rights or other rights to
subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any partnership interests in the
Partnership or the Operating Partnership pursuant to the
provisions of the Partnership Agreements or any Agreement
or Instrument to which any of the Propane Entities is a
party or by which any of them may be bound that is filed
as an exhibit to the Registration Statement. Except as
described in the
14
Disclosure Document, 9 to such counsel's knowledge, as of
July 2, 1996 there were no outstanding options, warrants
or other rights calling for the issuance of, and no
commitments, plans or arrangements to issue, any Common
Units or Subordinated Units or any security convertible
into or exercisable or exchangeable for Common Units or
Subordinated Units.
L. This Agreement and the Registration Agreement
have each been duly authorized, executed and delivered by
the Propane Entities, as applicable, and the Registration
Agreement is the valid and legally binding agreement of
the Partnership, enforceable against the Partnership in
accordance with its terms, except as (A) the
enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws relating to or affecting
creditors' rights generally and by general equitable
principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and (B)
rights to indemnity or contribution may be limited by
federal or state securities laws or the public policy
underlying such laws.
M. None of the execution and delivery by the
Propane Entities of and the performance of their
obligations under this Agreement and the Registration
Agreement and the issuance and sale of the Units as
contemplated herein or therein will (in each case, whether
or not with notice or lapse of time or both) (i) result in
any breach or violation of the provisions of the
certificate of incorporation or bylaws of any of the
General Partner, the Special General Partner or National
Sales, (ii) conflict with or constitute a breach of, or
default or Repayment Event under, or result in the
creation or imposition of any Encumbrance upon any
property or assets of the Propane Entities pursuant to any
material Agreements and Instruments in effect on the date
of the opinion that have been filed as exhibits to the
Registration Statement, except for (A) Encumbrances
described in the Disclosure Document and (B) conflicts,
breaches, Repayment Events or Encumbrances that would not,
singly or in the aggregate, have a Material Adverse Effect
or (iii) result in the violation of (A) the DGCL or any
applicable New York State law, statute, rule or regulation
(except with respect to permits and approvals required in
New York State for the operation of the business of the
Propane Entities) or Federal law, statute, rule or
regulation or (B) any judgment, order, writ or decree
known to such counsel (it being understood that such
counsel has not conducted any inquiry subsequent to July
2, 1996 in respect of such judgments, orders, writs or
decrees) of any New York State or Federal government,
government instrumentality or court, having jurisdiction
over any of the Propane Entities or any of their assets or
properties, except where such violations would not, singly
or in the aggregate, have a Material Adverse Effect.
N. No Consent of any New York or Federal court,
governmental agency or body or under the DGCL or the
Delaware Act is required of any of the Propane Entities in
connection with the execution, delivery and performance of
this Agreement and the Registration Agreement and the
issuance and sale of the Units as contemplated herein and
therein, except such Consents (A) as are
15
required in the State of New York for the operation of the
business of the Propane Entities, (B) as are required
under the 1933 Act, the 1933 Act Regulations, the 1934
Act, the 1934 Act Regulations or securities or "blue sky"
laws of certain jurisdictions pursuant to the Registration
Agreement, or (C) which, if not obtained, would not,
individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
O. Assuming the accuracy of Merrill Lynch's
representations and warranties in Section 2 of the
Agreement, the issuance and delivery of the Units to
Merrill Lynch pursuant hereto is exempt from the
registration requirements of the 1933 Act.
P. To such counsel's knowledge, as of July 2, 1996,
there was no action, suit, proceeding, inquiry or
investigation before or by any court or governmental
agency or body, domestic or foreign, pending or threatened
against or affecting the Propane Entities, which was
required to be disclosed in the Registration Statement
(other than as disclosed therein), or which might
reasonably be expected to result in a Material Adverse
Effect (except as disclosed in the Registration
Statement).
Q. To such counsel's knowledge, as of July 2, 1996
none of the Propane Entities was in breach or violation of
the provisions of its certificate of incorporation,
bylaws, agreement of limited partnership or other
governing documents.
R. The statements in the Prospectus included in the
Registration Statement which is part of the Disclosure
Document under the captions "Cash Distribution Policy --
Partnership Loan", "Management's Discussion and Analysis
of Financial Condition and Results of Operations --
Contingencies" (other than the second paragraph thereof),
"-- Description of Indebtedness", "Business and Properties
-- Government Regulation" and "-- Litigation and
Contingent Liabilities", insofar as such statements
constitute a summary of the debt instruments or legal
matters or proceedings referred to therein, fairly and
accurately presented in all material respects the
information set forth therein with respect to such
documents, legal matters and proceedings as of July 2,
1996.
S. As of July 2, 1996, Triarc was not an
"investment company" within the meaning of the Investment
Company Act of 1940, as amended, and the rules and
regulations thereunder.
In rendering such opinion, counsel may rely as to factual
matters upon certificates or written statements from officers or other
appropriate representatives of the Propane Entities or Triarc or upon
certificates of public officials and need not express any opinion with
regard to the laws of any jurisdiction other than the federal law of the
United States (except that such counsel need not opine on the Federal
Motor Safety Carrier Act and, except in paragraph S, the 1940 Act and
PUHCA), the law of the State of New York (except
16
that such counsel need not opine on state and municipal fire safety
codes and permits), the DGCL and the Delaware Act.
(2) The favorable opinion, dated as of Closing Time, of
Andrews & Kurth L.L.P., counsel for the Propane Entities, in form
and substance reasonably satisfactory to your counsel, to the
effect that:
A. The Partnership Agreement has been duly
authorized, executed and delivered by the General Partner,
the Special General Partner and Triarc, as the
organizational limited partner, and is a valid and legally
binding agreement of the General Partner, the Special
General Partner and Triarc, as the organizational limited
partner, enforceable against each of them in accordance
with its terms; the Operating Partnership Agreement has
been duly authorized, executed and delivered by the
General Partner, the Special General Partner and the
Partnership and is a valid and legally binding agreement
of the General Partner, the Special General Partner and
the Partnership, enforceable against each of them in
accordance with its terms; provided that, enforceability
of the Partnership Agreements may be limited by (i)
bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or similar laws relating to or
affecting creditors' rights generally, (ii) public policy,
applicable law relating to fiduciary duties and the
judicial imposition of an implied covenant of good faith
and fair dealing and (iii) general equitable principles
(regardless of whether such enforceability is considered
in a proceeding in equity or at law).
B. The General Partner and the Special General
Partner are the sole general partners of the Partnership
and the Operating Partnership, each with a 1.0%
unsubordinated general partner interest in distributions
from the Partnership (other than upon liquidation)
pursuant to the Partnership Agreement and a 1.0101%
unsubordinated general partner interest in distributions
from the Operating Partnership (other than upon
liquidation) pursuant to the Operating Partnership
Agreement; all such general partner interests and the GP
Incentive Distribution Rights have been duly authorized by
the Partnership Agreements and were validly issued to the
General Partner and the Special General Partner, as the
case may be, in accordance with the Partnership
Agreements.
C. The Partnership is the sole limited partner of
the Operating Partnership with an approximately 97.9798%
limited partner interest in distributions from the
Operating Partnership (other than upon liquidation); such
limited partner interest in the Operating Partnership has
been duly authorized by the Operating Partnership
Agreement, was validly issued in accordance with the
Operating Partnership Agreement, and is fully paid (to the
extent required by the Operating Partnership Agreement)
and nonassessable (except as such nonassessability may be
affected by matters described in the Prospectus included
in the Registration Statement which is a part of the
Disclosure Document under the caption "The Partnership
Agreement -- Limited Liability").
D. The Units to be issued and sold to Merrill Lynch
by the Partnership and the limited partner interest
represented thereby are duly
17
authorized by the Partnership Agreement and, when issued
and delivered by the Partnership against payment of the
consideration set forth in this Agreement, will be validly
issued to Merrill Lynch in accordance with the Partnership
Agreement, fully paid (to the extent required by the
Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in
the Prospectus included in the Registration Statement
which is a part of the Disclosure Document under the
caption "The Partnership Agreement -- Limited Liability");
on the date hereof, the Units, together with 6,301,550
outstanding Common Units, are the only limited partner
interests of the Partnership.
E. The 4,533,638 Subordinated Units and the GP
Incentive Distribution Rights issued to the General
Partner and the subordinated general partner interests
represented thereby have been duly authorized by the
Partnership Agreement and were validly issued to the
General Partner in accordance with the Partnership
Agreement.
F. None of the execution and delivery by the
Propane Entities of and the performance of their
obligations under this Agreement and the Registration
Agreement and the issuance and sale of the Units as
contemplated herein or therein will (in each case, whether
or not with notice or lapse of time or both) (i) result in
any breach or violation of the provisions of the
Partnership Agreements or (ii) result in the violation of
the Delaware Act.
G. The statements in the Prospectus included in the
Registration Statement which is a part of the Disclosure
Document under the captions "Conflicts of Interest and
Fiduciary Responsibility", "Cash Distribution Policy"
(other than (i) the table under the subsection "--
Incentive Distributions -- Hypothetical Annualized Yield"
and (ii) the statements under the subsection "-- Cash
Available for Distribution," as to which such counsel need
not express any opinion), "Description of the Common
Units" and "The Partnership Agreement," insofar as such
statements constitute descriptions of the Partnership
Agreements, or refer to statements of law or legal
conclusions, were accurate and complete in all material
respects as of July 2, 1996.
H. As of July 2, 1996, none of the Propane Entities
was (a) deemed to be a "gas utility company" within the
meaning of Section 2(a)(4) of PUHCA, (b) a "holding
company", within the meaning of PUHCA or (c) an
"investment company" within the meaning of the Investment
Company Act of 1940, as amended, and the rules and
regulations thereunder. As of July 2, 1996, Triarc was not
(a) deemed to be a "gas utility company" within the
meaning of Section 2(a)(4) of PUHCA or (b) a "holding
company" within the meaning of PUHCA.
I. The Units, when issued and delivered by the
Partnership against payment of the consideration set forth
herein, the outstanding Common Units, the Subordinated
Units, the unsubordinated general partner interests in the
Partnership and the GP Incentive Distribution Rights,
conform or will conform in all material respects to the
description thereof contained in the Prospectus
18
included in the Registration Statement which is a part of
the Disclosure Document.
J. The opinion of Andrews & Kurth L.L.P. filed as
Exhibit 8.1 to the Registration Statement is confirmed as
of July 2, 1996, and Merrill Lynch may rely upon such
opinion as if it were addressed to it.
In rendering such opinion, counsel may rely as to factual
matters upon certificates or written statements from officers or other
appropriate representatives of the Propane Entities or Triarc or upon
certificates of public officials and need not express any opinion with
regard to the laws of any jurisdiction other than the federal law of the
United States, the Delaware Act and the DGCL.
(3) A statement, dated as of Closing Time, of the General Counsel
of the General Partner, in form and substance reasonably satisfactory to
your counsel, to the effect that although such counsel is not passing
upon, and does not assume responsibility for the accuracy, completeness
or fairness of, any portion of the Disclosure Document, such counsel has
no reason to believe that the Disclosure Document, as of its date and at
the Closing Time, contains an untrue statement of a material fact or
omits to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that such counsel need not make any statement with
respect to the financial statements or other financial or statistical
data contained in the Disclosure Document.
In giving the opinions required by subsection (i)(1) of this Section
5(a), Paul, Weiss, Rifkind, Wharton & Garrison shall additionally state that
although such counsel is not passing upon, and does not assume responsibility
for the accuracy, completeness or fairness of, any portion of the Registration
Statement (except to the extent specified in such counsel's opinion and that
such counsel has not conducted any due diligence investigation of the Propane
Entities subsequent to July 2, 1996), such counsel had no reason to believe that
the Registration Statement, at the time of the closing of the initial public
offering of Common Units on July 2, 1996, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, except that such
counsel need not make any statement with respect to the financial statements or
other financial or statistical data contained in the Registration Statement or
the statements in the Registration Statement under the captions "Prospectus
Summary -- Tax Risks", "-- Summary of Tax Considerations", "Risk Factors -- Tax
Risks", "Cash Distribution Policy" (except for the subsection " -- Partnership
Loan"), "Description of the Common Units", "The Partnership Agreement", "Tax
Considerations", "Investment in the Partnership by Employee Benefit Plans."
In giving the opinion required by subsection (i)(2) of this Section
5(a), Andrews & Kurth L.L.P. shall additionally state that although such counsel
is not passing upon, and does not assume responsibility for the accuracy,
completeness or fairness of, any portion of the Registration Statement (except
to the extent specified in such counsel's opinion and without conducting any due
diligence investigation of the Propane Entities subsequent to July 2, 1996),
such counsel has no reason to believe that at the time of the closing of the
initial public offering of Common Units on July 2, 1996, the statements in the
Prospectus included in the Registration Statement which is a part of the
Disclosure Document under the captions "Prospectus Summary -- Tax Risks", "--
Summary of Tax Considerations", "Cash Distribution Policy" (other than (i) the
table under the subsection "-- Incentive Distributions-Hypothetical Annualized
Yield", (ii) the statements under the subsection "-- Cash
19
Available for Distribution", and (iii) the statements under the subsection "--
Partnership Loan", as to which such counsel need express no opinion),
"Description of Common Units", "Tax Considerations", "Investment in the
Partnership by Employee Benefit Plans" and "The Partnership Agreement" (other
than the financial data and other statistical data included therein, as to which
such counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(ii) Except as contemplated by the Disclosure Document, at the
Closing Date there shall not have been, since the respective dates as of
which information is given in the Disclosure Document, (i) any material
change in the partners' capital, capital stock, short-term or long-term
debt of any of the Propane Entities, taken as a whole, or Triarc, (ii)
any liabilities or obligations incurred by the Propane Entities or
Triarc, direct or indirect, contingent or matured, which are material to
the Propane Entities, taken as a whole, or Triarc other than such
liabilities or obligations as are reflected in the Disclosure Document
or incurred in the ordinary course of business or (iii) any other event
or development that may reasonably be expected, either singly or in the
aggregate, to result in a Material Adverse Effect.
(iii) You shall have received a certificate signed on behalf of
the Partnership and the Operating Partnership by the President, or a
Vice President of the General Partner and by the principal financial or
principal accounting officer of the General Partner, dated as of Closing
Time, to the effect that (i) the representations and warranties of the
Partnership and the Operating Partnership in Section 1 hereof are true
and correct with the same force and effect as though expressly made at
and as of Closing Time (except to the extent any relate to a specific
date), (ii) the Partnership and the Operating Partnership have complied
in all material respects with all agreements and satisfied all
conditions on their part to be performed or satisfied pursuant to the
Agreement, the Registration Agreement, or otherwise at or prior to
Closing Time, (iii) such persons have carefully examined the Disclosure
Document and to such persons' knowledge such document does not include
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading and (v) no event of the type contemplated in subsection
(ii) of this Section 5(a) in respect of the Partnership or the Operating
Partnership has occurred.
(iv) You shall have received a certificate signed on behalf of
the General Partner and the Special General Partner by the Chairman, the
President or a Vice President and the chief financial or accounting
officer of the General Partner and the Special General Partner to the
effect that (i) the representations and warranties of such entity
contained in Section 1 hereof are true and correct with the same force
and effect as though expressly made at and as of Closing Time (except to
the extent any may relate to a specific date), (ii) such entity has
complied in all material respects with all agreements and satisfied all
conditions on its part to be performed or satisfied pursuant to the
Agreement, the Registration Agreement or otherwise at or prior to
Closing Time, (iii) such persons have carefully examined the Disclosure
Document and to such persons' knowledge, such document does not include
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading and (iv) no event of the type contemplated in subsection
(iii) of this Section 5(a) in respect of such entity has occurred.
20
(v) The Partnership shall have entered into the Registration
Agreement and you shall have received an original, duly executed by the
Partnership, of the Registration Agreement.
(vi) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the
Registration Agreement, the Disclosure Document and all other legal
matters relating to this Agreement shall be reasonably satisfactory in
all material respects to your counsel, and the Propane Entities shall
have furnished to such counsel all documents and information that they
may reasonably request to enable them to pass upon such matters.
(b) The obligations of the Propane Entities hereunder are subject to
Merrill Lynch furnishing to the General Partner evidence of its acceptance of
the terms and conditions of the Partnership Agreement as contemplated by Section
10.4(a)(i) thereof.
(c) If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by you by notice to the Partnership or by the Partnership by notice to you at
any time at or prior to Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 6 and 7 shall survive any such termination and remain in
full force and effect.
SECTION 6. Indemnification.
(a) The Propane Entities jointly and severally agree to indemnify and
hold harmless you and each person, if any, who controls you within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each of your
officers and directors and of any such controlling person as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Disclosure
Document, or the omission or alleged omission therefrom of a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, if such settlement is
effected with the written consent of the Partnership; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the reasonable fees and
disbursements of counsel chosen by you), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
21
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or alleged omission made in
reliance upon and in conformity with written information furnished to the
Partnership by Merrill Lynch or, in the case of the Registration Statement, any
other underwriter named therein, expressly for use in the Disclosure Document.
The parties hereby agree that for all purposes of this Agreement, the only
written information furnished to the Partnership by Merrill Lynch or, in the
case of the Registration Statement, any other underwriter named therein,
expressly for use in the Disclosure Document is the last paragraph on the cover
page of the Prospectus included in the Registration Statement, the stabilization
legend on page 2 of the Prospectus included in the Registration Statement and
the information under the caption "Underwriting" contained in the first
paragraph following the chart on page 152 of the Prospectus included in the
Registration Statement.
(b) Each indemnified party shall give prompt written notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it may
have otherwise than on account of this indemnity agreement except to the extent
the indemnifying party is materially prejudiced thereby. An indemnifying party
may participate at its own expense in the defense of such action if it so elects
within a reasonable time after receipt of such notice. An indemnifying party,
jointly with any other indemnifying parties receiving such notice, may assume
the defense of such action with counsel chosen by it, unless such indemnified
parties reasonably object to such assumption on the ground that such indemnified
party shall have been advised by its counsel that representation of such
indemnified party and the indemnifying party by the same counsel would be
inappropriate under applicable standards of appropriate conduct due to actual or
potential differing interests between them. If an indemnifying party assumes the
defense of such action, the indemnifying parties shall not be liable for any
fees and expenses of counsel for the indemnified parties incurred thereafter in
connection with such action. In no event shall the indemnifying parties be
liable for the fees and expenses of more than one counsel (in addition to local
counsel) for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is a party and indemnity has been sought hereunder by such
indemnified party (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement includes a release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding. No indemnifying party shall be liable for any settlement of any
such action effected without its prior written consent, but if settled with its
prior written consent, the indemnifying party agrees to indemnify and hold
harmless any indemnified party from and against any loss or liability by reason
of such settlement.
(c) If any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(b) hereof effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
22
(d) If an indemnified party is reimbursed hereunder for any expenses,
the amount so paid shall be refunded to the indemnifying party if it is finally
judicially determined that the indemnifying party was not obligated to indemnify
the indemnified party regarding the claim, demand, action or proceeding with
respect to which such expense was incurred.
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Propane Entities
and Merrill Lynch shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by Merrill Lynch, as incurred, in such proportion as is appropriate to
reflect the relative fault of the indemnifying parties and the indemnified
parties in connection with the actions that resulted in such losses,
liabilities, claims, damages and expenses as well as any other relevant
equitable considerations. The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding sentence.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. Notwithstanding the provisions
of this Section 7, Merrill Lynch shall not be required to contribute any amount
in excess of the total purchase price of the Units. For purposes of this
Section, each person, if any, who controls Merrill Lynch or the Propane Entities
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
and each officer and director of Merrill Lynch or the Propane Entities and of
any such controlling person shall have the same rights to contribution as
Merrill Lynch or the Propane Entities, as the case may be.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties, indemnities and agreements contained
in this Agreement and the Registration Agreement, or contained in certificates
of officers of the Propane Entities submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of Merrill Lynch or any controlling person, or by or on behalf of
the Partnership, and shall survive delivery of and payment for the Units.
SECTION 9. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to Merrill Lynch
shall be directed to Merrill Lynch at North Tower, World Financial Center, New
York, New York 10281-1209, attention of Theodore D. Sands, or by telecopy to
(212) 449-3150 or to such other address or telecopy number designated in a
notice so delivered; notices to the Partnership shall be directed to it at Suite
1700, IES Tower, 200 1st Street, S.E., P.O. Box 2067, Cedar Rapids, Iowa,
52401-2067, attention of Secretary or by telecopy to 319-365-3672, (with a copy
to Triarc Companies, Inc., 900 Third Avenue, New York, New York 10022, (and
after November 30, 1996, 280 Park Avenue, New York, New York, 10017) attention
of Secretary or by telecopy to 212-230-3216 (and after November 30, 1996,
212-451-3216) or to such other address or telecopy number designated in a notice
so delivered.
SECTION 10. Parties. This Agreement shall inure to the benefit of and be
binding upon Merrill Lynch and the Propane Entities and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than Merrill
Lynch and the Propane Entities and their respective successors and the
controlling persons and
23
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of Merrill Lynch, the Propane Entities, and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Units from Merrill Lynch who is not an affiliate of
Merrill Lynch shall be deemed to be a successor by reason merely of such
purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE. EXCEPT AS OTHERWISE SET FORTH
HEREIN SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
24
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Partnership a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between Merrill Lynch and the Propane Entities in accordance with its
terms.
Very truly yours,
NATIONAL PROPANE CORPORATION
By: /s/ Ronald R. Rominiecki
-------------------------------
Name:
Title: Senior Vice President
NATIONAL PROPANE SGP, INC.
By: /s/ Ronald R. Rominiecki
-------------------------------
Name:
Title: Senior Vice President
NATIONAL PROPANE PARTNERS, L.P.
By: National Propane Corporation,
its Managing General Partner
By: /s/ Ronald R. Rominiecki
-------------------------------
Name:
Title: Senior Vice President
NATIONAL PROPANE, L.P.
By: National Propane Corporation,
its Managing General Partner
By: /s/ Ronald R. Rominiecki
------------------------------
Name:
Title: Senior Vice President
25
CONFIRMED AND ACCEPTED
as of the date first above written
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By: /s/ Theodore D. Sands
-----------------------------------
Name:
Title: Managing Director
26