As filed with the Securities and Exchange Commission on March 19, 2004
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________
EXACT NAME OF REGISTRANT STATE OR OTHER JURISDICTION OF IRS EMPLOYER
AS SPECIFIED IN ITS CHARTER INCORPORATION OR ORGANIZATION IDENTIFICATION NUMBER
Suburban Propane Partners, L.P. Delaware 22-3410353
Suburban Energy Finance Corp. Delaware Not Applicable
______________________
5984
(Primary Standard Industrial Classification Code Number)
______________________
240 Route 10 West
Whippany, New Jersey 07981
(973) 887-5300
(Address, including zip code, and telephone number, including area code, of
registrants' principal executive offices)
______________________
Janice G. Meola, Esq.
General Counsel
Suburban Propane Partners, L.P.
240 Route 10 West
Whippany, New Jersey 07981
(973) 887-5300
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
______________________
Copies to:
Gerald S. Tanenbaum, Esq.
John Schuster, Esq.
Cahill Gordon & Reindel LLP
80 Pine Street
New York, New York 10005
(212) 701-3000
______________________
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after this Registration Statement becomes
effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. |_|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
CALCULATION OF REGISTRATION FEE
=========================================================================================================================
Proposed Proposed Maximum Amount of
Amount to Be Maximum Offering Aggregate Registration
Title of Each Class of Securities to Be Registered Registered Price Per Note Offering Fee(2)
Price(1)
- -------------------------------------------------------------------------------------------------------------------------
6 7/8% Notes due 2013 of Suburban Propane Partners,
L.P. $175,000,000 100% $175,000,000 $22,172.50
and Suburban Energy Finance Corp. ...............
=========================================================================================================================
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(f)(2) under the Securities Act.
(2) Calculated pursuant to Rule 457(f)(2) under the Securities Act.
______________________
The Registrants hereby amend this registration statement on the date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this registration
statement shall become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until this registration statement shall
become effective on such date the Commission, acting pursuant to said Section
8(a), may determine.
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The information in this prospectus is not complete and may be changed. We may
not consummate the exchange offer until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not an
offer to sell or exchange these securities and it is not soliciting an offer to
acquire or exchange these securities in any jurisdiction where the offer, sale
or exchange is not permitted.
SUBJECT TO COMPLETION, DATED MARCH 19, 2004
PROSPECTUS
$175,000,000
SUBURBAN PROPANE PARTNERS, L.P.
SUBURBAN ENERGY FINANCE CORP.
Offer to Exchange
$175,000,000 Aggregate Principal Amount of 6 7/8% Senior Notes due 2013
for
Suburban Propane Partners, L.P.
Suburban Energy Finance Corp.
$175,000,000 Aggregate Principal Amount of 6 7/8% Senior Notes due 2013
Registered Under the Securities Act of 1933, as Amended.
_______________
Material Terms of Exchange Offer:
o Expires 5:00 p.m., New York City time, on , 2004 unless extended.
o Subject to certain customary conditions which may be waived by us.
o All outstanding notes that are validly tendered and not withdrawn will be
exchanged.
o Tenders of outstanding notes may be withdrawn any time prior to the
expiration of this exchange offer.
o The exchange of the outstanding notes for exchange notes will not be a
taxable exchange for U.S. federal income tax purposes.
o We will not receive any cash proceeds from the exchange offer.
o The terms of the exchange notes to be issued in exchange for the
outstanding notes are substantially identical to the outstanding notes,
except that the exchange notes will be registered under the Securities Act
and certain transfer restrictions, registration rights and liquidated
damages relating to the outstanding notes will not apply to the exchange
notes.
o Any outstanding notes not validly tendered will continue to remain
outstanding and accrue interest but will remain subject to existing
transfer restrictions.
o There has not previously been any public market for the exchange notes that
will be issued in the exchange offer. We do not intend to list the exchange
notes on any national stock exchange or on the Nasdaq National Market.
There can be no assurance that an active market for such exchange notes
will develop.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
_______________
The date of this prospectus is , 2004.
TABLE OF CONTENTS
Page
Where You Can Find More Information..........................................i
Incorporation of Certain Documents by Reference..............................i
Forward-Looking Statements..................................................ii
Prospectus Summary...........................................................1
Summary of the Exchange Offer................................................3
Summary of the Exchange Notes................................................7
Risk Factors.................................................................9
Use of Proceeds.............................................................17
Capitalization..............................................................17
Suburban Selected Financial Data and Other Data.............................18
The Exchange Offer..........................................................21
Description of Notes........................................................32
Certain Income Tax Considerations...........................................75
Plan of Distribution........................................................80
Legal Matters...............................................................80
Experts.....................................................................80
Unless the context otherwise requires, references in this prospectus to
"Suburban," "we," "us" and "our" refer to Suburban Propane Partners, L.P., its
subsidiary operating partnership, Suburban Propane, L.P., and its wholly-owned
subsidiaries.
You should not assume that the information contained in, as well as any
information we filed or will file with the Securities and Exchange Commission
(the "SEC") and that is incorporated by reference into this prospectus is
accurate as of any date other than its respective date. Our business, financial
condition, results of operations and prospects may have changed since that date.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended. As a result, we file reports and other information with
the SEC. You may read and copy any materials that we file with the SEC at the
SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549.
You may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. Any information filed by us is also available
on the SEC's EDGAR database at http://www.sec.gov. Our common units are listed
on the New York Stock Exchange, and reports, proxy statements and other
information can be inspected at the offices of the NYSE at 20 Broad Street, New
York, New York 10005.
Suburban Energy Finance Corp. is not required to file periodic and other
documents under the Securities Exchange Act of 1934. Suburban does not intend to
include in its consolidated financial statements any separate financial
information regarding Suburban Energy Finance Corp. Also, Suburban Energy
Finance Corp. does not intend to furnish holders of the notes with separate
financial statements or other reports.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We are incorporating by reference certain documents that we file with the
SEC, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is an
important part of this prospectus. Information we later file with the SEC will
automatically update and supersede this information. We are incorporating by
reference in this prospectus the following documents that we have filed with the
SEC:
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o our Annual Report on Form 10-K for the fiscal year ended September 27,
2003;
o our Quarterly Report on Form 10-Q for the quarter ended December 27,
2003;
o our Current Report on Form 8-K filed March 19, 2004;
o our Current Report on Form 8-K filed December 19, 2003;
o our Current Report on Form 8-K filed December 12, 2003;
o our Current Report on Form 8-K filed December 8, 2003;
o our Current Report on Form 8-K filed December 5, 2003;
o our Current Report on Form 8-K filed December 4, 2003;
o each of our Current Reports on Form 8-K filed November 12, 2003, and
o our Current Report on Form 8-K filed October 14, 2003.
We also incorporate by reference all documents that we may file with the
SEC pursuant to Sections 13(a), 13(b), 14 and 15(d) of the Securities Exchange
Act after the date of this prospectus.
You may request a copy of any of these documents, at no cost, by writing or
telephoning our Investor Relations Department at the following address and
telephone number:
Suburban Propane Partners, L.P.
240 Route 10 West
Whippany, New Jersey 07981
Telephone No.: (973) 887-5300
You should rely on the information provided in this prospectus and the
documents we have incorporated by reference. We have not authorized anyone to
provide you with different information. We are not making an offer of these
securities in any jurisdiction where the offer is not permitted. You should not
assume that the information in this prospectus or any incorporated document is
accurate as of any date other than the date of this prospectus or that document,
as the case may be.
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference contain
forward-looking statements ("Forward-Looking Statements") as defined in the
Private Securities Litigation Reform Act of 1995 and Section 27A of the
Securities Act relating to our future business expectations and predictions and
financial condition and results of operations. Some of these statements can be
identified by the use of forward-looking terminology such as "prospects,"
"outlook," "believes," "estimates," "intends," "may," "will," "should,"
"anticipates," "expects" or "plans" or the negative or other variation of these
or similar words, or by discussion of trends and conditions, strategies or risks
and uncertainties. These Forward-Looking Statements involve certain risks and
uncertainties that could cause actual results to differ materially from those
discussed or implied in such Forward-Looking Statements ("Cautionary
Statements"). The risks and uncertainties and their impact on our operations
include, but are not limited to, the following risks:
o The impact of weather conditions on the demand for propane, fuel oil
and other refined fuels;
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o Fluctuations in the unit cost of propane, fuel oil and other refined
fuels;
o Our ability to compete with other suppliers of propane, fuel oil and
other energy sources;
o The impact on propane, fuel oil and other refined fuel prices and
supply from the political, military and economic instability of the
oil producing nations, global terrorism and other general economic
conditions;
o Our ability to realize fully, or within the expected time frame, the
expected cost savings and synergies from the acquisition of Agway
Energy;
o Our ability to acquire and maintain reliable transportation for our
propane, fuel oil and other refined fuels;
o Our ability to retain customers;
o The impact of energy efficiency and technology advances on the demand
for propane and fuel oil;
o The ability of management to continue to control expenses;
o The impact of changes in applicable statutes and government
regulations, or their interpretations, including those relating to the
environment and global warming and other regulatory developments on
our business;
o The impact of legal proceedings on our business;
o Our ability to implement our expansion strategy into new business
lines and sectors; and
o Our ability to integrate acquired businesses successfully.
On different occasions, we or our representatives have made or may make
Forward-Looking Statements in filings that we make with the SEC, in press
releases or in oral statements made by or with the approval of one of our
authorized executive officers. Readers are cautioned not to place undue reliance
on Forward-Looking or Cautionary Statements, which reflect management's opinions
only as of the date hereof. We undertake no obligation to update any
Forward-Looking or Cautionary Statement. All subsequent written and oral
Forward-Looking Statements attributable to us or persons acting on our behalf
are expressly qualified in their entirety by the Cautionary Statements in this
prospectus. For a more complete discussion of specific factors which could cause
actual results to differ from those in the Forward-Looking or Cautionary
Statements, see the "Risk Factors" section of this prospectus. You should not
put undue reliance on any Forward-Looking or Cautionary Statements.
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PROSPECTUS SUMMARY
The following summary highlights selected information from this prospectus
and may not contain all the information that is important to you. This
prospectus includes the basic terms of the exchange notes we are offering, as
well as information regarding our business. You should carefully read this
entire document and the information incorporated by reference.
Suburban Propane Partners
We are a national retail and wholesale marketer of propane and related
appliances, parts and services. We believe, based on LP/Gas Magazine dated
February 2004, that we are the third largest retail marketer of propane in the
United States, measured by retail gallons sold in 2003. During the fiscal year
ended September 27, 2003, we sold approximately 491.5 million gallons of propane
to retail customers and an additional 31.7 million gallons of propane at
wholesale to other distributors and large industrial end-users. As of September
27, 2003, we served approximately 750,000 active residential, commercial,
industrial and agricultural customers through approximately 320 customer service
centers in 40 states.
Our operations are concentrated primarily in the east and west coast
regions of the United States. Our geographic diversity reduces our exposure to
weather conditions affecting a particular region. We own two propane storage
facilities: a 22 million gallon above-ground facility in Elk Grove, California
and a 60 million gallon underground facility in Tirzah, South Carolina. We are
supplied by approximately 70 oil companies and natural gas processors at more
than 180 supply points located in the United States and Canada. Together with
our predecessor companies, we have been continuously engaged in the retail
propane business since 1928.
In addition, we own Gas Connection, Inc., which operates twelve HomeTown
Hearth & Grill retail stores in the south, northeast and northwest regions of
the United States that sell and install natural gas and propane gas grills,
fireplaces and related accessories and supplies. We also own Suburban @ Home,
Inc., an internally developed heating, ventilation and air conditioning ("HVAC")
installation and service business, which operates five locations in the south,
northeast and northwest regions of the United States.
On December 23, 2003, we closed on the acquisition of substantially all of
the assets and operations of Agway Energy Products, LLC, Agway Energy Services,
Inc. and Agway Energy Services PA, Inc. (collectively, "Agway Energy") (the
"Acquisition") for $206.0 million in cash, subject to certain purchase price
adjustments. Agway Energy was a leading regional marketer of propane, fuel oil,
gasoline and diesel fuel primarily in New York, Pennsylvania, New Jersey and
Vermont. We believe, based on LP/Gas Magazine dated February 2003, that Agway
Energy was the eighth largest retail propane marketer in the United States,
operating through approximately 139 distribution and sales centers. Agway Energy
was also one of the leading marketers and distributors of fuel oil in the
northeast region of the United States. To complement its core marketing and
delivery business, Agway Energy installed and serviced a wide variety of home
comfort equipment, particularly in the area of HVAC. Additionally, to a lesser
extent, Agway Energy marketed natural gas and electricity in New York and
Pennsylvania. For its fiscal year ended June 30, 2003, Agway Energy served more
than 400,000 active customers across all of its lines of business and sold
approximately 106.3 million gallons of propane and approximately 356.8 million
gallons of fuel oil, gasoline and diesel fuel to retail customers for
residential commercial and agricultural applications.
Suburban Energy Finance Corp.
Suburban Energy Finance Corp. was incorporated in November 2003 under the
laws of Delaware. Suburban Energy Finance Corp. is a wholly-owned direct
subsidiary of Suburban Propane Partners, L.P. that was incorporated for the sole
purpose of serving as a co-issuer of the notes to facilitate the initial private
offering of the outstanding notes. Suburban Energy Finance Corp. has only
nominal assets and does not conduct any operations.
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Where You Can Find Us
We maintain our executive offices at 240 Route 10 West, Whippany, New
Jersey 07981 and our telephone number at that address is 973-887-5300. Our
website is www.suburbanpropane.com. The information on our website is not a part
of, and is not incorporated by reference into, this prospectus.
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Summary of the Exchange Offer
On December 23, 2003 we completed the private offering of $175,000,000
aggregate principal amount of 6 7/8% Senior Notes due 2013 (the "outstanding
notes"). As part of the offering, we entered into an exchange and registration
rights agreement with the initial purchasers of the outstanding notes in which
we agreed, among other things, to complete the exchange offer for the
outstanding notes. Below is a summary of the exchange offer.
Securities Offered............................. Up to $175,000,000 aggregate
principal amount of new 6 7/8%
Senior Notes due 2013, which
are issued by Suburban Propane
Partners, L.P. and Suburban
Energy Finance Corp. and have
been registered under the
Securities Act (the "exchange
notes"). The terms of the
exchange notes offered in the
exchange offer are
substantially identical to
those of the outstanding notes,
except that certain transfer
restrictions, registration
rights and liquidated damages
provisions relating to the
outstanding notes do not apply
to the exchange notes. The
issuance of exchange notes in
exchange for outstanding notes
pursuant to the exchange offer
will not result in a repayment
of the indebtedness of Suburban
Propane Partners, L.P. and
Suburban Energy Finance Corp.
which is presently evidenced by
the outstanding notes.
The Exchange Offer............................. Suburban Propane Partners, L.P.
and Suburban Energy Finance
Corp. are offering to exchange
$1,000 principal amount of each
of their 6 7/8% Senior Notes
due 2013, which have been
registered under the Securities
Act, for $1,000 principal
amount of each of their
outstanding notes, which were
issued in a private offering on
December 23, 2003. As of the
date of this prospectus, there
are $175,000,000 principal
amount of outstanding notes.
Suburban Propane Partners, L.P.
and Suburban Energy Finance
Corp. will issue exchange notes
promptly after the expiration
of the exchange offer.
Registration Rights............................ You are entitled to exchange
your outstanding notes for
freely tradeable exchange notes
with substantially identical
terms. The exchange offer is
intended to satisfy your
registration rights. After the
exchange offer is complete, you
will no longer be entitled to
any exchange or registration
rights with respect to your
outstanding notes. Accordingly,
if you do not exchange your
outstanding notes, you will not
be able to reoffer, resell or
otherwise dispose of your
outstanding notes unless you
comply with the registration
and prospectus delivery
requirements of the Securities
Act, or there is an available
and applicable exemption from
registration under the
Securities Act.
Resales........................................ Based on interpretations by the
staff of the SEC, as detailed
in a series of "no-action
letters" issued to third
parties, we believe that the
exchange notes issued in the
exchange offer may be offered
for resale, resold or otherwise
transferred by you without
compliance with the
registration and prospectus
delivery requirements of the
Securities Act, provided that:
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o you are acquiring the
exchange notes in the ordinary
course of your business;
o you are not participating, do
not intend to participate and
have no arrangement or
understanding with any person
to participate in a
distribution of the exchange
notes;
o if you are not a broker or
dealer, you, nor any other
person receiving the exchange
notes from you, have no
arrangement with any person to
distribute the exchange notes
in violation of the Securities
Act; and
o you are not an "affiliate" of
ours.
If you do not meet the above
criteria you will have to
comply with the registration
and prospectus delivery
requirements of the Securities
Act in connection with any
reoffer, resale or other
disposition of your exchange
notes.
Each broker or dealer that
receives exchange notes for its
own account in exchange for
outstanding notes that were
acquired as a result of
market-making or other trading
activities must acknowledge
that it will deliver this
prospectus in connection with
any sale of exchange notes.
Accrued Interest on the Exchange Notes
and Outstanding Notes.......................... The exchange notes will bear
interest from the most recent
date to which interest has been
paid on the outstanding notes
or if no interest has been
paid, from the issue date of
the outstanding notes. If your
outstanding notes are accepted
for exchange, then you will
receive interest on the
exchange notes and not on the
outstanding notes.
Expiration Date of the Exchange Offer.......... 5:00 p.m., New York City time,
on , 2004, unless we extend the
expiration date.
Conditions to the Exchange Offer............... The exchange offer is subject
to certain customary
conditions, which may be waived
by us. The exchange offer is
not conditioned upon receiving
any minimum principal amount of
outstanding notes being
tendered.
Procedures for Tendering Outstanding Notes..... If you wish to tender
outstanding notes for exchange
notes pursuant to the exchange
offer, you must:
o complete, sign and date the
accompanying letter of
transmittal, or a facsimile of
the letter of transmittal, and
mail or otherwise deliver the
letter of transmittal, together
with your outstanding notes, to
the exchange agent at the
address provided in the section
"The Exchange Offer--Exchange
Agent"; or
o arrange for The Depository
Trust Company to transmit
certain required information,
including an agent's message
forming part of a book-entry
transfer in which you
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agree to be bound by the terms
of the letter of transmittal,
to the exchange agent in
connection with a book-entry
transfer.
See "The Exchange
Offer--Procedures for Tendering
Outstanding Notes." By
executing the letter of
transmittal, you will represent
to us that you are acquiring
the exchange notes in the
ordinary course of your
business, that you are not
participating, do not intend to
participate and have no
arrangement or understanding
with any person to participate
in the distribution of exchange
notes, and that you are not an
"affiliate" of ours. See "The
Exchange Offer--Procedures for
Tendering Outstanding Notes."
Special Procedures for Beneficial Holders...... If you are the beneficial
holder of outstanding notes
that are registered in the name
of your broker, dealer,
commercial bank, trust company
or other nominee, and you wish
to tender in the exchange
offer, you should contact the
person in whose name your
outstanding notes are
registered promptly and
instruct such person to tender
on your behalf. See "The
Exchange Offer--Procedures for
Tendering Outstanding Notes."
Guaranteed Delivery Procedures................. If you wish to tender your
outstanding notes and you
cannot deliver such notes, the
letter of transmittal or any
other required documents to the
exchange agent before the
expiration date, you may tender
your outstanding notes
according to the guaranteed
delivery procedures set forth
in "The Exchange
Offer--Guaranteed Delivery
Procedures."
Withdrawal Rights.............................. Tenders may be withdrawn at any
time before 5:00 p.m., New York
City time, on the expiration
date.
Acceptance of Outstanding Notes and
Delivery of Exchange Notes................... Subject to certain conditions,
we will accept for exchange any
and all outstanding notes which
are properly tendered in the
exchange offer before 5:00
p.m., New York City time, on
the expiration date. The
exchange notes will be
delivered promptly after the
expiration date. See "The
Exchange Offer--Terms of the
Exchange Offer."
Certain Income Tax Considerations.............. The exchange of outstanding
notes for exchange notes
generally will not be a taxable
event for United States federal
income tax purposes. See
"Certain Income Tax
Considerations" for more
information.
Use of Proceeds................................ We will not receive any
proceeds from the issuance of
the exchange notes.
Exchange Agent................................. The Bank of New York is serving
as exchange agent in connection
with the exchange offer. The
address, telephone number and
facsimile number of the
exchange agent are set forth in
"The Exchange Offer--Exchange
Agent."
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Please review the information in the section "The Exchange Offer" for more
detailed information concerning the exchange offer.
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Summary of the Exchange Notes
The following summary contains basic information about the exchange notes.
It does not contain all the information that may be important to you. For a more
complete understanding of the exchange notes, please refer to the section of
this document entitled "Description of Notes," particularly those subsections to
which we have referred you.
Issuers........................................ Suburban Propane Partners, L.P.
and Suburban Energy Finance
Corp.
Suburban Energy Finance Corp.
is a wholly-owned direct
subsidiary of Suburban Propane
Partners, L.P. that was
incorporated in Delaware for
the sole purpose of serving as
a co-issuer of the notes.
Suburban Energy Finance Corp.
has only nominal assets and
does not conduct any
operations. As a result, you
should not expect Suburban
Energy Finance Corp. to
participate in servicing the
interest and principal
obligations on the exchange
notes.
Notes Offered.................................. $175,000,000 aggregate
principal amount of 6 7/8%
Senior Notes due 2013.
Maturity Date.................................. December 15, 2013.
Interest Rate.................................. 6 7/8% per year.
Interest Payment Dates......................... Interest will accrue from the
last date on which interest was
paid on the outstanding notes,
or if no interest has been paid
on the outstanding notes, from
December 23, 2003 and will be
payable semiannually on each
June 15 and December 15,
beginning on the first interest
payment date after the issuance
of the exchange notes, or if
there has not been any interest
payment date on the outstanding
notes, on June 15, 2004. The
payment of interest on exchange
notes will constitute payment
of any accrued but unpaid
interest on the outstanding
notes tendered for exchange.
Ranking........................................ The exchange notes will be our
unsecured, senior obligations
and will rank senior in right
of payment to any of our future
subordinated indebtedness and
equally in right of payment to
all of our existing and future
unsecured senior indebtedness.
The exchange notes will be
structurally subordinated to,
which means they rank
effectively behind, the
indebtedness and other
liabilities of the operating
partnership and its
subsidiaries. See "Description
of Notes-- Ranking of Notes."
As of December 27, 2003, our
subsidiaries had an aggregate
of approximately $383.8 million
of total indebtedness and
approximately $307.0 million of
trade payables and other
liabilities. Further,
approximately $93.4 million was
available to our subsidiaries
for additional borrowing under
the operating partnership's
revolving credit facility.
Optional Redemption............................ Prior to December 15, 2006, we
may redeem up to 35% of the
original aggregate amount of
the exchange notes at a redemp-
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tion price equal to 106.875% of
the principal amount of the
exchange notes, including any
additional notes, plus accrued
and unpaid interest, with the
net cash proceeds of certain
offerings of common units as
described in this prospectus.
See "Description of Notes--
Optional Redemption." In
addition, we may redeem some or
all of the exchange notes at
any time or from time to time
on or after December 15, 2008,
as set forth herein.
Change of Control Offer........................ Upon the occurrence of a change
of control, we must offer to
repurchase the exchange notes
at 101% of the principal amount
of the exchange notes
repurchased, plus accrued and
unpaid interest, to the date of
repurchase. See "Description of
Notes--Repurchase at the Option
of Holders--Change of Control."
Certain Covenants.............................. The indenture contains certain
covenants limiting, among other
things, our ability and the
ability of our restricted
subsidiaries, to:
o incur additional debt or
issue preferred stock;
o pay dividends or make other
distributions on, redeem or
repurchase our capital stock;
o make investments or other
restricted payments;
o enter into transactions with
affiliates;
o engage in sale and leaseback
transactions;
o sell, transfer or issue
shares of capital stock of
restricted subsidiaries;
o create liens on our assets;
o transfer or sell assets;
o restrict dividends or other
payments to us; and
o effect a consolidation,
liquidation or merger.
These covenants are subject to
important exceptions and
qualifications that are
described in this prospectus in
"Description of Notes--Certain
Covenants."
Risk Factors
See "Risk Factors" beginning on page 8 for a discussion of certain risks
relating to us, our business and the exchange notes.
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RISK FACTORS
You should carefully consider these risk factors, together with all the
other information included or incorporated by reference in this prospectus. If
any of the events described in these risk factors or elsewhere in this
prospectus actually occur, then our business, results of operations or financial
condition could be materially adversely affected.
Risks Inherent in Our Business
Since weather conditions may adversely affect demand for propane, fuel oil and
other refined fuels, our results of operations and financial condition are
vulnerable to warm winters
Weather conditions have a significant impact on the demand for propane,
fuel oil and other refined fuels for both heating and agricultural purposes.
Many of our customers rely heavily on propane or fuel oil as a heating fuel. The
volume of propane and fuel oil sold is at its highest during the six-month peak
heating season of October through March and is directly affected by the severity
of the winter. Typically, we sell approximately two-thirds of our retail propane
volume and approximately three-fourths of our retail fuel oil volume during the
peak heating season.
Actual weather conditions can vary substantially from year to year,
significantly affecting our financial performance. For example, temperatures
nationwide averaged 1% colder than normal in fiscal year 2003 compared to 13%
warmer than normal temperatures in fiscal year 2002 and 2% colder than normal in
fiscal year 2001 as reported by the National Oceanic and Atmospheric
Administration (NOAA). Nationwide average temperatures, as reported by NOAA,
averaged 7% warmer than normal for the quarter ended December 27, 2003 compared
to 2% colder than normal in the quarter ended December 28, 2002, or 9% warmer
temperatures year-over-year. Furthermore, variations in weather in one or more
regions in which we operate can significantly affect the total volume of
propane, fuel oil and other refined fuels we sell and, consequently, our results
of operations. Variations in the weather in the northeast, where we have a
greater concentration of higher margin residential accounts and substantially
all of our fuel oil operations, generally have a greater impact on our
operations than variations in the weather in other markets. Our ability to pay
distributions to unitholders and principal and interest on our indebtedness
depends on the cash generated by our operating partnership. The operating
partnership's financial performance is affected by weather conditions. As a
result, we cannot assure you that the weather conditions in any quarter or year
will not have a material adverse effect on our operations or that our available
cash will be sufficient to pay distributions to unitholders and principal and
interest on our indebtedness.
The risk of terrorism and political unrest in the Middle East may adversely
affect the economy and the price and availability of propane, fuel oil and other
refined fuels
Terrorist attacks, such as the attacks that occurred in New York,
Pennsylvania and Washington, D.C. on September 11, 2001, and political unrest in
the Middle East may adversely impact the price and availability of propane, fuel
oil and other refined fuels, as well as our results of operations, our ability
to raise capital and our future growth. The impact that the foregoing may have
on our industry in general, and on us in particular, is not known at this time.
An act of terror could result in disruptions of crude oil or natural gas
supplies and markets, the sources of propane and fuel oil, and our
infrastructure facilities could be direct or indirect targets. Terrorist
activity may also hinder our ability to transport propane, fuel oil and other
refined fuels if our means of supply transportation, such as rail or pipeline,
become damaged as a result of an attack. A lower level of economic activity
could result in a decline in energy consumption, which could adversely affect
our revenues or restrict our future growth. Instability in the financial markets
as a result of terrorism could also affect our ability to raise capital.
Terrorist activity could likely lead to increased volatility in prices for
propane, fuel oil and other refined fuels. We have opted to purchase insurance
coverage for terrorist activities within our property and casualty insurance
programs. This additional coverage has resulted in additional insurance
premiums.
-9-
Sudden increases in the price of propane, fuel oil and other refined fuels due
to, among other things, our inability to obtain adequate supplies from our usual
suppliers, may adversely affect our operating results
Our profitability in the retail propane and refined fuels businesses is
largely dependent on the difference between our product cost and retail sales
price. Propane, fuel oil and other refined fuels are commodities, and the unit
price we pay is subject to volatile changes in response to changes in supply or
other market conditions over which we have no control, including the severity of
winter weather and the price and availability of competing alternative energy
sources, including natural gas. In general, product supply contracts permit
suppliers to charge posted prices at the time of delivery or the current prices
established at major supply points, including Mont Belvieu, Texas, and Conway,
Kansas. In addition, our supply from our usual sources may be interrupted due to
reasons that are beyond our control. As a result, the cost of acquiring propane,
fuel oil and other refined fuels from other suppliers might be materially higher
at least on a short-term basis. Since we may not be able to pass on to our
customers immediately, or in full, all increases in our wholesale cost of
propane, fuel oil and other refined fuels, these increases could reduce our
profitability. We engage in transactions to hedge certain product costs from
time to time in an attempt to reduce cost volatility and to help ensure
availability of product during periods of short supply. We cannot assure you
that future volatility in propane and refined fuel supply costs will not have a
material adverse effect on our profitability and cash flow or our available cash
required to pay distributions to unitholders and principal and interest on our
indebtedness.
Because of the highly competitive nature of the retail propane and fuel oil
businesses, we may not be able to retain existing customers or acquire new
customers, which could have an adverse impact on our operating results and
financial condition
The retail propane and fuel oil industries are mature and highly
competitive. We expect overall demand for propane to remain relatively constant
over the next several years, while we expect the overall demand for fuel oil to
be relatively flat to moderately declining during the same period. Year-to-year
industry volumes of propane and fuel oil are expected to be primarily affected
by weather patterns and from competition intensifying during warmer than normal
winters.
Propane and fuel oil compete in the alternative energy sources market with
electricity, natural gas and other existing and future sources of energy, some
of which are or may in the future be less costly for equivalent energy value.
For example, natural gas is a significantly less expensive source of energy than
propane and fuel oil. As a result, except for some industrial and commercial
applications, propane and fuel oil are generally not economically competitive
with natural gas in areas where natural gas pipelines already exist. The gradual
expansion of the nation's natural gas distribution systems has made natural gas
available in many areas that previously depended upon propane or fuel oil.
Propane and fuel oil compete to a lesser extent with each other due to the cost
of converting from one to the other.
In addition to competing with other sources of energy, our propane and fuel
oil businesses compete with other distributors principally on the basis of
price, service, availability and portability. Competition in the retail propane
business is highly fragmented and generally occurs on a local basis with other
large full-service multi-state propane marketers, thousands of smaller local
independent marketers and farm cooperatives. Our fuel oil business competes with
fuel oil distributors offering a broad range of services and prices, from full
service distributors to those offering delivery only. Generally, our existing
fuel oil customers, unlike our existing propane customers, own their own tanks.
As a result, the competition for these customers is more intense than in our
propane business, where our existing customers seeking to switch distributors
may face additional transition costs and delays.
As a result of the highly competitive nature of the retail propane and fuel
oil businesses, our growth within these industries depends on our ability to
acquire other retail distributors, open new customer service centers, add new
customers and retain existing customers. We believe our ability to compete
effectively depends on reliability of service, responsiveness to customers and
our ability to control expenses in order to maintain competitive prices.
-10-
We may not successfully implement our expansion strategy
Our expansion strategy includes internal growth of our existing operations,
including fostering the growth of related retail and service operations, as well
as external growth through the acquisition of businesses to complement or
supplement our core propane operations or to diversify into other energy-related
businesses. We may not be able to fully implement this strategy or realize the
anticipated results. Implementation of our expansion strategy may also be
hindered by factors that are beyond our control, such as operating difficulties,
increased operating costs, general economic conditions or increased competition
for acquisition opportunities. Any material failure to implement this strategy
could have an adverse effect on our business, financial condition and results of
operations.
If we are unable to make acquisitions on economically acceptable terms or
effectively integrate such acquisitions into our operations, our financial
performance may be impacted
The retail propane and fuel oil industries are mature. We foresee only
limited growth in total retail demand for propane and flat to moderately
declining retail demand for fuel oil. With respect to our retail propane
business, because of long-standing customer relationships that are typical in
our industry, the inconvenience of switching tanks and suppliers and propane's
higher cost relative to other energy sources, such as natural gas, it may be
difficult for us to acquire new retail propane customers except through
acquisitions. As a result, we expect the success of our financial performance to
depend in part upon our ability to acquire other retail propane and fuel oil
distributors or other energy-related businesses and to successfully integrate
them into our existing operations and to make cost saving changes. The
competition for acquisitions is intense and we cannot assure you that we will be
able to acquire other propane and fuel oil distributors or other energy-related
businesses on economically acceptable terms. In addition, our ability to incur
debt to finance acquisitions may be restricted by some of the covenants
contained in our debt agreements.
Energy efficiency, general economic conditions and technology advances have
affected and may continue to affect demand for propane and fuel oil by our
retail customers.
The national trend toward increased conservation and technological
advances, including installation of improved insulation and the development of
more efficient furnaces and other heating devices, has adversely affected the
demand for propane and fuel oil by our retail customers which, in turn, has
resulted in lower sales volumes to our customers. In addition, recent economic
conditions may lead to additional conservation by retail customers to further
reduce their heating costs. Future technological advances in heating,
conservation and energy generation may adversely affect our financial condition
and results of operations.
We may not be able to effectively integrate the Agway Energy business into
our operations. We may be unable to realize, or to realize within any particular
timeframe, the revenues, earnings, cost savings and other business synergies
that we anticipate from the Acquisition, and the acquired business may not
perform as expected for a variety of reasons, including:
o difficulties in the integration of the operations, information systems
and personnel;
o potential loss of customers and key employees; and
o unanticipated costs to integrate the assets and operations.
In addition, management's attention and resources may be diverted during
the integration. Any one or a combination of these factors may cause our
revenues or earnings to be negatively impacted.
-11-
Our results of operations and financial condition may be adversely affected by
governmental regulation and associated environmental and health and safety costs
Our business is subject to a wide range of federal, state and local laws
and regulations related to environmental and health and safety matters. We have
implemented environmental and health and safety programs and policies designed
to avoid potential liability and costs. For example, we are subject to
regulations that cover the transportation of hazardous materials. We conduct
ongoing training programs to help ensure that our operations are in compliance
with these and other safety regulations. We maintain various permits that are
necessary to operate some of our facilities, some of which are material to our
operations. It is possible, however, that we will have increased costs due to
stricter pollution control requirements or liabilities resulting from
noncompliance with operating or other regulatory permits. New environmental and
health and safety regulations might adversely impact our operations, storage and
transportation of propane, fuel oil and other refined fuels. It is possible that
material costs and liabilities will be incurred, including those relating to
claims for damages to property and persons.
The operations, properties and assets we acquired in the Acquisition,
including fuel oil tanks and gas stations, are subject to extensive federal,
state and local environmental laws and regulations including those concerning,
among other things, the investigation and remediation of contaminated soil and
groundwater, transportation of hazardous materials, and other matters relating
to the protection of the environment and various health and safety matters.
These requirements are complex, changing and tend to become more stringent over
time. There can be no assurance that the acquired business has been or will be
at all times in complete compliance with all such requirements or that we will
not incur material costs or liabilities in the future relating to such
requirements. Violations could result in penalties, or the curtailment or
cessation of operations. To date, we believe the acquired business has not
incurred significant costs in connection with compliance or remedial obligations
required under environmental laws and regulations.
In connection with the Acquisition, contamination or potential
contamination was identified at a number of the acquired properties and will be
investigated and remediated by us as required. Under the Purchase Agreement,
Agway, Inc. has set aside $15.0 million from the total purchase price in a
separate escrow account to fund certain future environmental remediation costs
and expenses. We cannot predict whether this sum will be sufficient to address
the known and unknown contamination at the acquired properties. Moreover,
currently unknown environmental issues, such as the discovery of additional
contamination, may result in significant additional expenditures, and
potentially significant expenditures also could be required to comply with
future changes to environmental laws and regulations or the interpretation or
enforcement thereof. Such expenditures, if required, could have a material
adverse effect on our business, financial condition or results of operations.
We are subject to operating hazards that could adversely affect our operating
results to the extent not covered by insurance
Our operations are subject to all operating hazards and risks normally
associated with handling, storing and delivering combustible liquids such as
propane, fuel oil and other refined fuels. As a result, we have been, and are
likely to continue to be, a defendant in various legal proceedings arising in
the ordinary course of business. We are self-insured for general, product,
workers' compensation and automobile liabilities up to predetermined amounts
above which third party insurance applies. We cannot guarantee that our
insurance will be adequate to protect us from all material expenses related to
potential future claims for personal injury and property damage or that these
levels of insurance will be available at economical prices.
We are subject to litigation that is not covered by insurance and could
adversely affect our operating results
We are from time to time subject to litigation that is not covered by our
existing insurance policies. At present, our operating partnership is a
defendant in an action brought by Heritage Propane Partners, L.P. The court has
entered an order setting this matter for trial beginning on October 4, 2004. We
believe that the claims
-12-
and proposed additional claims brought against our operating partnership are
without merit and we are defending the action vigorously. However, we cannot
predict the outcome of this or any other trial or, if the trial is before a
jury, what verdict the jury ultimately may reach. As a consequence, this action,
if adversely determined, could result in liability that is material to us. Tax
treatment is dependent on partnership status
Based on certain representations of our general partner and us, Cahill
Gordon & Reindel LLP, our tax counsel, is of the opinion that, under current
law, we will be classified as a partnership for federal income tax purposes.
However, no ruling from the IRS as to this status has been or is expected to be
requested. Instead, we are relying on the opinion of our tax counsel, which is
not binding on the IRS.
If, contrary to the opinion of our tax counsel, we were classified as an
association taxable as a corporation for federal income tax purposes, we would
be required to pay tax on our income at corporate tax rates (currently a 35%
federal rate). Because a tax would be imposed upon us as an entity, the cash
available for payments of interest to the holders of the exchange notes would be
substantially reduced. Treatment of us as a taxable entity would cause a
material reduction in the anticipated cash flow, likely causing a substantial
reduction in the value of the exchange notes.
We have not requested a ruling from the IRS with respect to our
classification as a partnership for federal income tax purposes, whether our
propane operations generate "qualifying income" under Section 7704 of the
Internal Revenue Code or any other matter affecting us. Accordingly, the IRS may
adopt positions that differ from the conclusions of our tax counsel expressed in
this prospectus supplement or the positions taken by us. It may be necessary to
resort to administrative or court proceedings in an effort to sustain some or
all of our tax counsel's conclusions or the positions taken by us. A court may
not concur with some or all of our conclusions. Any contest with the IRS may
materially and adversely impact the market for the exchange notes and the prices
at which they trade.
Risks Relating to the Exchange Notes
The level of our indebtedness could adversely affect our financial health and
prevent us from fulfilling our obligations under these exchange notes
We have now and, after the exchange offering, will continue to have a
significant amount of indebtedness. On December 27, 2003, we had total
indebtedness of approximately $558.8 million (of which $175.0 million consisted
of the outstanding notes and the balance consisted primarily of senior debt of
our subsidiaries).
The level of our indebtedness could have important consequences to you. For
example, it could:
o make it more difficult for us to satisfy our obligations with respect
to these exchange notes;
o increase our vulnerability to general adverse economic and industry
conditions;
o require us to dedicate a substantial portion of our cash flow from
operations to payments on our indebtedness, thereby reducing the
availability of our cash flow to fund working capital, capital
expenditures and other general partnership purposes;
o limit our flexibility in planning for, or reacting to, changes in our
business and the industry in which we operate;
o place us at a competitive disadvantage compared to our competitors
that have less debt; and
-13-
o limit our ability to borrow additional funds.
In addition, the indenture and the operating partnership's debt agreements
contain financial and other restrictive covenants that will limit our ability to
engage in activities that may be in our long-term best interests. Our failure to
comply with those covenants could result in an event of default which, if not
cured or waived, could result in the acceleration of all of our indebtedness.
Despite current indebtedness levels, we and our subsidiaries may still be
able to incur more debt, which could further exacerbate the risks associated
with our substantial leverage.
We and our subsidiaries may be able to incur additional indebtedness in the
future. The terms of the indenture and our other debt agreements do not fully
prohibit us or our subsidiaries from doing so. As of December 27, 2003, the
operating partnership's revolving credit facility would permit additional
borrowing of up to $93.4 million. If new debt is added to our and our
subsidiaries' current debt levels, the related risks that we and they now face
could intensify.
We will require a significant amount of cash to service our indebtedness, and
our ability to generate cash depends on many factors beyond our control
Our ability to make payments on and to refinance our indebtedness,
including these exchange notes, and to fund planned capital expenditures will
depend on our ability to generate cash in the future. This, to a certain extent,
is subject to general weather, economic, financial, competitive, legislative,
regulatory and other factors that are beyond our control.
Based on our current level of operations and anticipated cost savings and
operating improvements, we believe our cash flow from operations, available cash
and available borrowings under the operating partnership's revolving credit
facility, will be adequate to meet our future liquidity needs for the
foreseeable future.
We cannot assure you, however, that our business will generate sufficient
cash flow from operations, that currently anticipated cost savings and operating
improvements will be realized on schedule or that future borrowings will be
available to us under the operating partnership's revolving credit facility in
an amount sufficient to enable us to pay our indebtedness, including these
exchange notes, or to fund our other liquidity needs. We may need to refinance
all or a portion of our indebtedness, including these exchange notes on or
before maturity. We cannot assure you that we will be able to refinance any of
our indebtedness, including these exchange notes or the operating partnership's
revolving credit facility or senior notes, on commercially reasonable terms or
at all.
These exchange notes will be effectively subordinated to the debts of our
subsidiaries
We derive substantially all of our revenue and cash flow from the operating
partnership and its subsidiaries. Neither the operating partnership nor any of
its subsidiaries will guarantee the exchange notes. Creditors of our
subsidiaries (including trade creditors) will generally be entitled to payment
from the assets of those subsidiaries before those assets can be distributed to
us. As a result, these exchange notes will effectively be subordinated to the
prior payment of all of the debts (including trade payables) of our
subsidiaries, including the operating partnership's revolving credit facility
and existing senior notes.
As of December 27, 2003, our subsidiaries had an aggregate of approximately
$383.8 million of total indebtedness and approximately $307.0 million of trade
payables and other liabilities. Further, approximately $93.4 million was
available to our subsidiaries for additional borrowing under the operating
partnership's revolving credit facility. We cannot assure you that our
subsidiaries that have their debt accelerated will be able to repay such
indebtedness. We can also not assure you that our assets and our subsidiaries'
assets will be sufficient to fully repay these notes and our other indebtedness.
-14-
We may not have access to the cash flow and other assets of our subsidiaries
that may be needed to make payments on the exchange notes
Although substantially all of our business is conducted through our
subsidiaries, none of our subsidiaries is obligated to make funds available to
us for payment on the exchange notes. Accordingly, our ability to make payments
on the exchange notes is dependent on the earnings and the distribution of funds
from our subsidiaries. The terms of the operating partnership's revolving credit
facility, senior notes due 2011 and senior notes due 2012 contain financial
covenants that, if not met, could restrict the operating partnership and its
subsidiaries from paying dividends and otherwise transferring assets to us. If a
default exists under these debt agreements, including the maintenance of
specified financial covenants, these debt agreements will prohibit distributions
to us. Furthermore, our subsidiaries will be permitted under the terms of the
indenture to incur additional indebtedness that may severely restrict or
prohibit the making of distributions, the payment of dividends or the making of
loans by such subsidiaries to us. We cannot assure you that the agreements
governing the current and future indebtedness of our subsidiaries will permit
our subsidiaries to provide us with sufficient dividends, distributions or loans
to fund payments on these exchange notes when due.
We may not have the ability to raise the funds necessary to finance the change
of control offer required by the indenture
Upon the occurrence of certain specific kinds of change of control events,
we will be required to offer to repurchase all outstanding exchange notes at
101% of the principal amount thereof plus accrued and unpaid interest and
liquidated damages, if any, to the date of repurchase. However, it is possible
that we will not have sufficient funds at the time of the change of control to
make the required repurchase of exchange notes or that restrictions in our debt
agreements will not allow such repurchases. In addition, certain important
corporate events, such as leveraged recapitalizations that would increase the
level of our indebtedness, would not constitute a "Change of Control" under the
indenture. See "Description of Notes--Repurchase at the Option of Holders."
Since we are a limited partnership, you may not be able to pursue legal claims
against Suburban Propane in U.S. federal courts
Suburban Propane is a limited partnership organized under the laws of the
state of Delaware. Under the rules of federal civil procedure, you may not be
able to sue us in federal court because of lack of complete diversity. Case law
applying diversity jurisdiction deems us to have the citizenship of each of our
limited partners. Because we are a publicly traded limited partnership, it may
be impracticable for you to attempt to sue us in a federal court because, for
practical purposes, we have citizenship in all 50 U.S. states. Accordingly, you
will be limited to bring any claims in state court. The indenture and exchange
and registration rights agreement are governed by New York law, and we have
operations in 35 U.S. states, including New York. In addition, Suburban Energy
Finance Corp., our corporate co-issuer for the notes, has only nominal assets
and no operations. While you may be able to sue the corporate co-issuer in
federal court, you are not likely to be able to realize on any judgment rendered
against it.
If an active trading market does not develop for these exchange notes you may
not be able to resell them
There is currently no established trading market for the exchange notes. We
do not intend to list the exchange notes on any national securities exchange or
seek the admission of the exchange notes for quotation through the National
Association of Securities Dealers Automated Quotation System. The liquidity of
the trading market for the exchange notes will depend in part on the level of
participation of the holders of the outstanding notes in the exchange offer. The
greater the participation in the exchange offer, the greater the liquidity of
the trading market for the exchange notes and the less the liquidity of the
trading market for the outstanding notes not tendered during this exchange
offer. We do not know how many holders of our outstanding notes will accept this
exchange offer and, therefore, do not know what principal amount of exchange
notes will be issued. As a result, we cannot assure you that any market for the
exchange notes will develop,
-15-
or, if one does develop, that it wil be maintained. If an active market for the
exchange notes fails to develop, or be maintained, the trading price and
liquidity of the exchange notes could be adversely affected.
If you fail to exchange your outstanding notes by properly tendering them in the
exchange offer, your outstanding notes will continue to be restricted securities
and may have reduced liquidity
Because we anticipate that most holders of outstanding notes will elect to
exchange their outstanding notes, we expect that the liquidity of the market for
any outstanding notes remaining after the completion of the exchange offer may
be substantially limited. Any outstanding note tendered and exchanged in the
exchange offer will reduce the aggregate principal amount of the outstanding
notes left outstanding. Following the exchange offer, if you did not tender your
outstanding notes you generally will not have any further registration rights
and your outstanding notes will continue to be subject to transfer restrictions.
Accordingly, the liquidity of the market for any outstanding notes could be
adversely affected.
Outstanding notes which you do not tender or we do not accept will,
following the exchange offer, continue to be restricted securities. You may not
offer or sell untendered outstanding notes except pursuant to an exemption from,
or in a transaction not subject to, the Securities Act and applicable state
securities laws. We will issue exchange notes in exchange for the outstanding
notes pursuant to the exchange offer only following the satisfaction of
procedures and conditions described elsewhere in this prospectus. These
procedures and conditions include timely receipt by the exchange agent of the
outstanding notes and of a properly completed and duly executed letter of
transmittal.
-16-
USE OF PROCEEDS
We will not receive any proceeds from the exchange offer. The exchange
offer is intended to satisfy certain of our obligations under the exchange and
registration rights agreement entered into for the benefit of the holders of
outstanding notes in connection with the initial private placement of the
outstanding notes. In consideration for issuing the exchange notes, we will
receive outstanding notes of like principal amount, the terms of which are
substantially identical in all material respects to the exchange notes. The
issuance of exchange notes in exchange for outstanding notes will not result in
a repayment of our outstanding indebtedness which is presently evidenced by the
outstanding notes. The outstanding notes surrendered in exchange for exchange
notes will be retired and canceled and cannot be reissued. Accordingly, issuance
of the exchange notes will not result in any increase or change in the amount of
our indebtedness. We have agreed to pay the expenses of the exchange offer.
The net proceeds that we received from the sale of the outstanding notes on
December 23, 2003 were approximately $170.2 million after deducting the
underwriting discount. A portion of the net proceeds from such sale, along with
the proceeds from our December 2003 issuance of 2,990,000 common units, was used
to fund the purchase price for the Acquisition.
CAPITALIZATION
The following table sets forth our capitalization as of December 27, 2003.
This table should be read in conjunction with the consolidated financial
statements and the notes thereto incorporated by reference in this prospectus.
December 27, 2003
Cash........................................................... $52,646
=========
Liabilities:
Revolving credit facility(a).............................. --
Outstanding 6 7/8% senior notes due 2013.................. 175,000
7.54% senior notes due 2011............................... 340,000
7.37% senior notes due 2012............................... 42,500
Note payable and other debt............................... 1,325
---------
Total debt.................................................. 558,825
Less current portion........................................ 42,910
---------
Total long-term debt........................................ 515,915
Partners' Capital:
Common unitholders.......................................... 260,563
General partner............................................. 1,634
Deferred compensation....................................... (5,954)
Common units held in trust, at cost......................... 5,954
Unearned compensation....................................... (5,378)
Accumulated other comprehensive (loss)...................... (78,641)
---------
Total partners' capital..................................... 178,178
---------
Total capitalization...................................... $737,003
=========
____________________
(a) Our revolving credit facility, which matures on May 31, 2006, provides for
a $75.0 million working capital facility and a $25.0 million acquisition
facility. As of March 1, 2004, we had no outstanding borrowings under the
revolving credit facility.
-17-
SUBURBAN SELECTED FINANCIAL AND OTHER DATA
The following financial data of Suburban, insofar as it relates to each of
the fiscal years 1999 through 2003, has been derived from audited consolidated
financial statements, including the consolidated balance sheets at September 27,
2003 and September 28, 2002 and the related consolidated statements of
operations and of cash flows for the years ended September 27, 2003, September
28, 2002 and September 29, 2001 and the notes thereto incorporated by reference
in this prospectus. The data for the three months ended December 27, 2003 and
December 28, 2002 has been derived from unaudited condensed consolidated
financial statements also incorporated by reference in this prospectus and
which, in the opinion of management, include all adjustments, consisting only of
normal recurring adjustments, necessary for a fair statement of the results for
the unaudited interim periods. This three month data is not necessarily
indicative of the results that can be expected for a full year.
(Amounts in thousands, except per unit amounts)
Fiscal
Year Ended (a) Quarter Ended
----------------------------------------------------- ---------------
Sept. 25, Sept. 30, Sept. 29, Sept. 28, Sept. 27, Dec. 28, Dec. 27,
1999 2000(b) 2001 2002 2003(c) 2002(c) 2003(d)
---- ------- ---- ---- ---- ---- -------
Statement of Operations Data
Revenues............................ $620,207 $841,304 $931,536 $665,105 $766,798 $199,588 $221,111
Costs and expenses.................. 547,579 770,332 838,055 582,321 686,781 167,348 191,226
Recapitalization costs(e)........... 18,903 -- -- -- -- -- --
Gain on sale of assets.............. -- 10,328 -- -- -- -- --
Gain on sale of storage facility.... -- -- -- 6,768 -- -- --
Income before interest expense and
provision for income taxes(f)...... 53,725 81,300 93,481 89,552 80,017 32,240 29,885
Interest expense, net............... 31,218 42,534 39,596 35,325 33,629 8,856 9,711
Provision for income taxes.......... 68 234 375 703 202 130 83
Income from continuing operations(f) 22,439 38,532 53,510 53,524 46,186 23,254 20,091
Discontinued operations:
Gain on sale of customer service
centers(g)....................... -- -- -- -- 2,483 -- --
Net income(f)....................... 22,439 38,532 53,510 53,524 48,669 23,254 20,091
Income from continuing operations per
common unit--basic................. 0.83 1.70 2.14 2.12 1.78 0.92 0.71
Net income per common unit--basic(h) 0.83 1.70 2.14 2.12 1.87 0.92 0.71
Net income per common unit--diluted(h) 0.83 1.70 2.14 2.12 1.86 0.92 0.71
Cash distributions declared per unit $2.03 $2.11 $2.20 $2.28 $2.33 $0.5750 $ 0.5875
Balance Sheet Data (end of period)
Cash and cash equivalents........... $ 8,392 $ 11,645 $ 36,494 $ 40,955 $ 15,765 $ 32,181 $ 52,646
Current assets...................... 78,637 122,160 124,339 116,789 98,912 146,166 288,880
Total assets........................ 659,220 771,116 723,006 700,146 665,630 725,870 1,044,005
Current liabilities, excluding current
portion of long-term borrowings.... 99,953 124,585 119,196 98,606 94,802 114,266 199,394
Total debt.......................... 430,687 524,095 473,177 472,769 383,826 472,706 558,825
Other long-term liabilities......... 60,194 60,607 71,684 109,485 102,924 110,729 107,608
Partners' capital--Common Unitholders 66,342 58,474 105,549 103,680 165,950 113,409 260,563
Partner's capital--General Partner.. $ 2,044 $ 1,866 $ 1,888 $ 1,924 $ 1,567 $ 2,145 $ 1,634
Statement of Cash Flows Data
Cash provided by/(used in):
Operating activities............... $ 81,758 $ 59,467 $101,838 $ 68,775 $ 57,300 $ 8,378 $ 11,561
Investing activities............... (12,241) (99,067) (17,907) (6,851) (4,859) (2,561) (214,995)
Financing activities............... $(120,944) $ 42,853 $(59,082) $(57,463) $(77,631) $(14,591)$ 240,315
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Other Data
Depreciation and amortization(i).... $ 34,453 $ 37,032 $ 36,496 $ 28,355 $ 27,520 $ 6,973 $ 7,229
EBITDA(j)........................... 88,178 118,332 129,977 117,907 110,020 39,213 37,114
Capital expenditures(k):
Maintenance and growth............. 11,033 21,250 23,218 17,464 14,050 3,254 5,164
Acquisitions....................... $ 4,768 $ 98,012 $ -- $ -- $ -- $ -- $ 209,976
Ratio of earnings to fixed charges(l) 1.58x 1.79x 2.13x 2.23x 2.33x 3.13x 2.73x
Retail propane gallons sold......... 524,276 523,975 524,728 455,988 491,451 139,934 131,917
(a) Our 2000 fiscal year contained 53 weeks. All other fiscal years contained
52 weeks.
(b) Includes the results from the November 1999 acquisition of certain
subsidiaries of SCANA Corporation, accounted for under the purchase method,
from the date of acquisition.
(c) Includes reclassifications to remove, from continuing operations, the
financial results of ten customer service centers sold in the second
quarter of fiscal year 2004.
(d) Includes the results from the December 23, 2003 acquisition of
substantially all of the assets and operations of Agway Energy, accounted
for under the purchase method, from the date of the acquisition.
(e) We incurred expenses of $18.9 million in connection with the
recapitalization transaction described in Note 1 to the consolidated
financial statements incorporated by reference in this prospectus. These
expenses included $7.6 million representing cash expenses and $11.3 million
representing non-cash charges associated with the accelerated vesting of
restricted common units.
(f) These amounts include, in addition to the gain on sale of assets and the
gain on sale of storage facility, gains from the disposal of property,
plant and equipment of $0.6 million for fiscal year 1999, $1.0 million for
fiscal year 2000, $3.8 million for fiscal year 2001, $0.5 million for
fiscal year 2002, $0.6 million for fiscal year 2003, $0.3 million for the
first quarter ended December 28, 2002 and $0.1 million for the first
quarter ended December 27, 2003.
(g) Gain on sale of customer service centers consists of nine customer service
centers we sold during fiscal year 2003 for total cash proceeds of
approximately $7.2 million. We recorded a gain on sale of approximately
$2.5 million, which has been accounted for within discontinued operations
pursuant to SFAS No. 144. Prior period results of operations attributable
to these nine customer service centers were not significant and, as such,
prior period results have not been reclassified to remove financial results
from continuing operations.
(h) Basic net income per limited partner unit is computed by dividing net
income, after deducting our general partner's approximate 2.50% interest,
by the weighted average number of outstanding common units. Diluted net
income per limited partner unit is computed by dividing net income, after
deducting our general partner's approximate 2.50% interest, by the weighted
average number of outstanding common units and time vested restricted units
granted under our 2000 Restricted Unit Plan.
(i) Depreciation and amortization expense for the year ended September 28, 2002
reflects the early adoption of SFAS No. 142 as of September 30, 2001 (the
beginning of our 2002 fiscal year). SFAS No. 142 eliminated the requirement
to amortize goodwill and certain intangible assets. Amortization expense
for the year ended September 28, 2002 reflects approximately $7.4 million
lower amortization expense compared to the year ended September 29, 2001 as
a result of the elimination of amortization expense associated with
goodwill.
(j) EBITDA represents net income before deducting interest expense, income
taxes, depreciation and amortization. Our management uses EBITDA as a
measure of liquidity and we are including it because we believe that it
provides our investors and industry analysts with additional information to
evaluate our ability to meet our debt service obligations and to pay our
quarterly distributions to holders of our common units. Moreover, our
existing senior note agreements and our revolving credit agreement require
us to use EBITDA as a component in calculating our leverage and interest
coverage ratios. EBITDA is not a recognized term under GAAP and should not
be considered as an alternative to net income or net cash provided by
operating activities determined in accordance with GAAP. Because EBITDA, as
determined by us excludes some, but not all, items that affect net income,
it may not be comparable to EBITDA or similarly titled measures used by
other companies. The following table sets forth (i) our calculation of
EBITDA and (ii) a reconciliation of EBITDA, as so calculated, to our net
cash provided by operating activities (amounts in thousands):
Fiscal
Year Ended (a) Quarter Ended
----------------------------------------------------- -----------------
Sept. 25, Sept. 30, Sept. 29, Sept. 28, Sept. 27, Dec. 28, Dec. 27,
1999 2000(b) 2001 2002 2003(c) 2002(c) 2003(d)
---- ------- ---- ---- ------- ------- -------
Net income.......................... $ 22,439 $ 38,532 $ 53,510 $ 53,524 $ 48,669 $ 23,254 $ 20,091
Add:
Provision for income taxes......... 68 234 375 703 202 130 83
Interest expense, net.............. 31,218 42,534 39,596 35,325 33,629 8,856 9,711
Depreciation and amortization...... 34,453 37,032 36,496 28,355 27,520 6,973 7,229
EBITDA.............................. 88,178 118,332 129,977 117,907 110,020 39,213 37,114
Add/(subtract):
Provision for income taxes......... (68) (234) (375) (703) (202) (130) (83)
Interest expense, net.............. (31,218) (42,534) (39,596) (35,325) (33,629) (8,856) (9,711)
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Gain on disposal of property, plant and
equipment, net.................... (578) (11,313) (3,843) (546) (636) (346) (82)
Gain on sale of customer service centers -- -- -- -- (2,483) -- --
Gain on sale of storage facility... -- -- -- (6,768) -- -- --
Changes in working capital and other
assets and liabilities............ 25,444 (4,784) 15,675 (5,790) (15,770)(21,503) (15,677)
Net cash provided by operating
activities $ 81,758 $ 59,467 $101,838 $ 68,775 $ 57,300 $ 8,378 $ 11,561
Net cash used in investing activities $ (12,241)$(99,067) $(17,907) $ (6,851) $ (4,859)$(2,561) $(214,995)
Net cash (used in) provided by financing
activities $(120,944)$ 42,853 $(59,082) $(57,463) $(77,631)$(14,591) $240,315
(k) Our capital expenditures fall generally into three categories: (i)
maintenance expenditures, which include expenditures for repair and
replacement of property, plant and equipment, (ii) growth capital
expenditures, which include new propane tanks and other equipment to
facilitate expansion of our customer base and operating capacity; and (iii)
acquisition capital expenditures, which include expenditures related to the
acquisition of propane and other retail operations and a portion of the
purchase price allocated to intangibles associated with such acquired
businesses.
(l) For purposes of determining the ratio of earnings to fixed charges,
earnings are defined as income from continuing operations before income
taxes plus fixed charges. Fixed charges consist of interest expense,
including amortization of debt issuance costs and that portion of rental
expenses on operating leases that management considers to be a reasonable
approximation of interest.
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THE EXCHANGE OFFER
Purpose and Effect of the Exchange Offer
The following is a summary of the exchange and registration rights
agreement. It does not purport to be complete and it does not contain all of the
information you might find useful. For further information you should read the
exchange and registration rights agreement, a copy of which has been filed as an
exhibit to the registration statement of which this prospectus is a part. The
exchange offer is intended to satisfy certain of our obligations under the
exchange and registration rights agreement.
Exchange Offer Registration Statement. Suburban Propane Partners, L.P. and
Suburban Energy Finance Corp. issued the outstanding notes on December 23, 2003.
The initial purchasers have advised us that they subsequently resold the
outstanding notes to "qualified institutional buyers" in reliance on Rule 144A
under the Securities Act and to certain persons in offshore transactions in
reliance on Regulation S under the Securities Act. As a condition to the
offering of the outstanding notes, we entered into an exchange and registration
rights agreement dated December 23, 2003, pursuant to which we agreed, subject
to certain circumstances, for the benefit of all holders of the outstanding
notes, at our own expense, to do the following, unless the exchange offer would
not be permitted by applicable law or SEC policy:
(1) to file the registration statement of which this prospectus is a
part with the SEC on or prior to 90 days after the issue date of the
outstanding notes,
(2) to use all commercially reasonable efforts to cause the
registration statement to be declared effective by the SEC on or prior to
180 days after the issue date of the outstanding notes,
(3) to use all commercially reasonable efforts to commence the
exchange offer and to issue on or prior to 30 business days, or longer, if
required by the federal securities laws, after the date on which the
exchange offer registration statement was declared effective by the SEC,
exchange notes in exchange for all notes tendered prior thereto in the
exchange offer, and
(4) if obligated to file a shelf registration statement, to use all
commercially reasonable efforts to file the shelf registration statement
with the SEC on or prior to 60 days after such filing obligation arises and
to cause the shelf registration statement to be declared effective by the
SEC on or prior to 150 days after such obligation arises.
Further, we agreed to keep the exchange offer open for acceptance for not
less than the minimum period required under applicable Federal and state
securities laws. For each outstanding note validly tendered pursuant to the
exchange offer and not withdrawn, the holder of the outstanding note will
receive an exchange note having a principal amount equal to that of the tendered
outstanding note. Interest on each exchange note will accrue from the last date
on which interest was paid on the tendered outstanding note in exchange therefor
or, if no interest was paid on such outstanding note, from the issue date of the
outstanding notes.
Transferability. Suburban Propane Partners, L.P. and Suburban Energy
Finance Corp. issued the outstanding notes in a transaction exempt from the
registration requirements of the Securities Act and applicable state securities
laws. Accordingly, the outstanding notes may not be offered or sold in the
United States unless registered or pursuant to an applicable exemption under the
Securities Act and applicable state securities laws. Based on no-action letters
issued by the staff of the SEC with respect to similar transactions with third
parties, we believe that the exchange notes issued pursuant to the exchange
offer in exchange for outstanding notes may be offered for resale, resold and
otherwise transferred by holders of notes who are not our affiliates without
further compliance with the registration and prospectus delivery requirements of
the Securities Act, provided that:
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(1) any exchange notes to be received by the holder were acquired in
the ordinary course of the holder's business;
(2) at the time of the commencement of the exchange offer the holder
has no arrangement or understanding with any person to participate in the
distribution (within the meaning of the Securities Act) of the exchange
notes; and
(3) the holder is not an "affiliate" of ours, as defined in Rule 405
under the Securities Act, or, if it is an affiliate, that it will comply
with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable.
However, we have not sought a no-action letter with respect to the exchange
offer and we cannot assure you that the staff of the SEC would make a similar
determination with respect to the exchange offer. Any holder who tenders his
outstanding notes in the exchange offer with any intention of participating in a
distribution of exchange notes or is an affiliate of ours (1) cannot rely on the
interpretation by the staff of the SEC, (2) will not be able to validly tender
outstanding notes in the exchange offer and (3) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any secondary resale transactions.
In addition, each broker-dealer that receives exchange notes for its own
account pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such exchange notes. The letter of
transmittal accompanying this prospectus states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
acting in the capacity of an "underwriter" within the meaning of Section 2(11)
of the Securities Act. This prospectus, as it may be amended or supplemented
from time to time, may be used by a broker-dealer in connection with resales of
exchange notes received in exchange for outstanding notes where the outstanding
notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. Pursuant to the exchange and
registration rights agreement, we agreed to make this prospectus available to
any such broker-dealer for use in connection with any such resale.
Shelf Registration Statement. We will, at our cost, (a) use all
commercially reasonable efforts to file with the SEC a shelf registration
statement covering resales of the outstanding notes on or prior to 60 days after
the date we become obligated to file the shelf registration statement, (b) use
all commercially reasonable efforts to cause the shelf registration statement to
be declared effective under the Securities Act on or prior to 150 days after the
obligation to file such shelf registration statement arises and (c) use all
commercially reasonable efforts to keep the shelf registration statement
continually effective to ensure that it is available for resales of notes by the
holders of transfer restricted notes for a period ending on the earlier of the
second anniversary of the closing date of the initial private offering of the
outstanding notes (or such lesser restrictive period as is then permitted by the
applicable federal securities laws) or such time as there are no longer any
registrable securities outstanding, if:
(1) because of any changes in law, SEC rules or regulations or
applicable interpretations thereof by the staff of the SEC, we are not
permitted to file or effect the exchange offer,
(2) the exchange offer has not been completed within 180 days plus 30
business days following the date of the issuance of the outstanding notes,
or
(3) any holder of outstanding notes notifies us prior to the 20th day
following the consummation of the exchange offer that such holder (x) is
prohibited by law or SEC policy from participating in the exchange offer,
(y) may not resell the exchange notes without delivering a prospectus and
the prospectus contained in the exchange registration statement is not
appropriate or available for such resales or (z) is a broker-dealer and
owns exchange notes acquired directly from us or an affiliate of ours.
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We will, in the event of the filing of the shelf registration statement,
provide to each holder of the outstanding notes copies of the prospectus which
is a part of the shelf registration statement, notify each such holder when the
shelf registration statement for the outstanding notes has become effective and
take certain other action as is required to permit unrestricted resales of the
outstanding notes. A holder of outstanding notes who sells such outstanding
notes pursuant to the shelf registration statement generally will (1) be
required to be named as a selling security holder in the related prospectus, (2)
be required to deliver the prospectus to purchasers, (3) be subject to certain
of the civil liability provisions under the Securities Act in connection with
such sales and (4) be bound by the provisions of the exchange and registration
rights agreement which are applicable to the holder (including certain
indemnification obligations). In addition, each holder of the outstanding notes
will be required to deliver information to be used in connection with the shelf
registration statement and to provide comments on the shelf registration
statement as set forth in the exchange and registration rights agreement in
order to have their outstanding notes included in the shelf registration
statement and to benefit from the provisions regarding liquidated damages.
Liquidated Damages. We will pay liquidated damages in respect of the
outstanding notes (for each outstanding note which has not been exchanged in the
exchange offer) as described below if:
(1) we fail to file any of the registration statements required by the
exchange and registration rights agreement on or before the date specified
for such filing,
(2) any of such registration statements is not declared effective by
the SEC on or prior to the date specified for such effectiveness,
(3) we fail to consummate the exchange offer within 30 business days
of the effectiveness date with respect to the exchange offer registration
statement, or
(4) the shelf registration statement or the exchange offer
registration statement is declared effective but thereafter ceases to be
effective or usable in connection with the exchange offer or resales of
outstanding notes, as the case may be, during the periods specified in the
exchange and registration rights agreement, subject to certain exceptions.
Each such event referred to in clauses (1) through (4) above is a
registration default. We will pay liquidated damages to each holder of
outstanding notes with respect to the first 90-day period (or portion thereof)
while a registration default is continuing immediately following the occurrence
of such registration default in an amount equal to a per week rate of $0.05 per
$1,000 principal amount of the outstanding notes. The amount of liquidated
damages will increase by an additional per week rate of $0.05 per $1,000
principal amount of the outstanding notes with respect to each subsequent 90-day
period until all registration defaults have been cured, up to a maximum amount
of a per week rate of $0.20 per $1,000 principal amount of the outstanding
notes. Liquidated damages with respect to outstanding notes may not accrue at
any one time under more than one registration default listed in clauses (1)
through (4) above. Following the cure of a particular registration default, the
accrual of liquidated damages with respect to such registration default will
cease.
Terms of the Exchange Offer
Upon satisfaction or waiver of all the conditions of the exchange offer, we
will accept any and all outstanding notes properly tendered and not withdrawn
prior to the expiration date and will issue the exchange notes promptly after
acceptance of the outstanding notes. See "--Conditions to the Exchange Offer"
and "--Procedures for Tendering Outstanding Notes." We will issue $1,000
principal amount of exchange notes in exchange for each $1,000 principal amount
of outstanding notes accepted in the exchange offer. As of the date of this
prospectus, $175,000,000 aggregate principal amount of the 6 7/8% senior notes
due 2013 are outstanding. Holders may tender some or all of their outstanding
notes pursuant to the exchange offer. However, outstanding notes may be tendered
only in integral multiples of $1,000.
-23-
The exchange notes are substantially identical to the outstanding notes
except that the exchange notes will not contain certain transfer restrictions,
registration rights and liquidated damages provisions. The issuance of exchange
notes in exchange for outstanding notes pursuant to the exchange offer will not
result in a repayment of our indebtedness which is presently evidenced by the
outstanding notes. The exchange notes will evidence the same debt as the
outstanding notes and will be issued pursuant to, and entitled to the benefits
of, the indenture pursuant to which the outstanding notes were issued and will
be deemed one issue of notes, together with any outstanding notes which remain
outstanding after the exchange offer.
This prospectus, together with the letter of transmittal, is being sent to
all registered holders and to others believed to have beneficial interests in
the outstanding notes. Holders of outstanding notes do not have any appraisal or
dissenters' rights under the indenture in connection with the exchange offer. We
intend to conduct the exchange offer in accordance with the applicable
requirements of the Securities Act, the Exchange Act and the rules and
regulations of the SEC promulgated thereunder.
For purposes of the exchange offer, we will be deemed to have accepted
validly tendered outstanding notes when, and as if, we have given oral or
written notice thereof to the exchange agent. The exchange agent will act as our
agent for the purpose of distributing the exchange notes from us to the
tendering holders. If we do not accept any tendered outstanding notes because of
an invalid tender, the occurrence of certain other events set forth in this
prospectus or otherwise, we will return the unaccepted outstanding notes,
without expense, to the tendering holder thereof as promptly as practicable
after the expiration date.
Holders who tender outstanding notes in the exchange offer will not be
required to pay brokerage commissions or fees or, except as set forth below
under "--Transfer Taxes," transfer taxes with respect to the exchange of
outstanding notes pursuant to the exchange offer. We will pay all charges and
expenses, other than certain applicable taxes, in connection with the exchange
offer. See "--Fees and Expenses."
Expiration Date; Extensions; Amendments
The term "expiration date" shall mean 5:00 p.m., New York City time, on ,
2004, unless we, in our sole discretion, extend the exchange offer, in which
case the term "expiration date" shall mean the latest date and time to which the
exchange offer is extended. In order to extend the exchange offer, we will
notify the exchange agent by oral or written notice and each registered holder
by means of press release or other public announcement of any extension, in each
case, prior to 9:00 a.m., New York City time, on the next business day after the
previously scheduled expiration date. We reserve the right, in our sole
discretion, (1) to delay accepting any outstanding notes, (2) to extend the
exchange offer, (3) to terminate the exchange offer if the conditions set forth
below under "--Conditions to the Exchange Offer" shall not have been satisfied,
or (4) to amend the terms of the exchange offer in any manner. We will notify
the exchange agent of any delay, extension, termination or amendment by oral or
written notice. We will additionally notify each registered holder of any
amendment by means of press release or other public announcement. We will give
to the exchange agent written confirmation of any oral notice.
Exchange Date
As soon as practicable after the close of the exchange offer we will accept
for exchange all outstanding notes properly tendered and not validly withdrawn
prior to 5:00 p.m., New York City time, on the expiration date in accordance
with the terms of this prospectus and the letters of transmittal.
Conditions to the Exchange Offer
Notwithstanding any other provisions of the exchange offer, and subject to
our obligations under the exchange and registration rights agreement, we (i)
shall not be required to accept any outstanding notes for exchange, (ii) shall
not be required to issue exchange notes in exchange for any outstanding notes
and (iii) may
-24-
terminate or amend the exchange offer unless, at any time before the acceptance
of such exchange notes for exchange:
(1) the exchange offer or the making of any exchange by a holder, does
not violate applicable law or any applicable interpretation of the staff of
the SEC,
(2) the due tendering of outstanding notes is in accordance with the
exchange offer,
(3) each holder of outstanding notes exchanged in the exchange offer
shall have represented that (a) any exchange notes acquired in exchange for
outstanding notes tendered are being acquired in the ordinary course of
business of the person receiving such exchange notes, whether or not such
recipient is such holder itself, (b) neither such holder nor, to the actual
knowledge of such holder, any other person receiving exchange notes from
such holder is engaging in or intends to engage in a distribution of the
exchange notes, (c) if such holder is not a broker-dealer, at the time of
the consummation of the exchange offer neither such holder nor, to the
actual knowledge of such holder, any other person receiving exchange notes
from such holder has an arrangement or understanding with any person to
participate in the distribution of the exchange notes in violation of the
federal securities laws, (d) neither such holder nor, to the actual
knowledge of such holder, any other person is an affiliate (as defined by
the federal securities laws) of ours or, if it is an affiliate of ours, it
will comply with the registration and prospectus delivery requirements of
the federal securities laws to the extent applicable and will provide
certain information to be included in any shelf registration statement
filed pursuant to the exchange and registration rights agreement dated
December 23, 2003 entered into by us for the benefit of all holders of the
outstanding notes, in order to have such holder's outstanding notes
included in such shelf registration statement and benefit from the
liquidated damages provisions of the exchange and registration rights
agreement, and (e) if such holder is a broker-dealer, such holder has
acquired the outstanding notes as a result of market-making activities or
other trading activities and that it will comply with the applicable
provisions of the federal securities laws, including the prospectus deliver
requirements,
(4) no action or proceeding shall have been instituted or threatened
in any court or by any governmental agency with respect to the exchange
offer which might materially impair the ability of us to proceed with the
exchange offer, and no material adverse development shall have occurred in
any existing action or proceeding with respect to us
(5) we have obtained all governmental approvals which we deem
necessary for the consummation of the exchange offer, and
(6) each holder of outstanding notes shall not have delivered notice
to us prior to 90 days after the issue date of the outstanding notes with
respect to the exchange registration statement that it is a restricted
holder.
The foregoing conditions are for our sole benefit and may be asserted by us
regardless of the circumstances giving rise to any such condition or may be
waived by us in whole or in part at any time and from time to time in our sole
discretion. Our failure at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and such right shall be deemed an
ongoing right which may be asserted at any time and from time to time.
In addition, we will not accept for exchange any outstanding notes
tendered, and no exchange notes will be issued in exchange for any such
outstanding notes if at such time any stop order shall be threatened by the SEC
or be in effect with respect to the registration statement of which this
prospectus is a part or the qualification of the indenture under the Trust
Indenture Act of 1939, as amended.
-25-
The exchange offer is not conditioned on any minimum aggregate principal
amount of outstanding notes being tendered for exchange.
Consequences of Failure to Exchange
Any outstanding notes not tendered pursuant to the exchange offer will
remain outstanding and continue to accrue interest. The outstanding notes will
remain "restricted securities" within the meaning of the Securities Act.
Accordingly, prior to the date that is two years after the later of the issue
date of the outstanding notes and the last date on which we or any of our
affiliates was the owner of the outstanding notes, the outstanding notes may be
resold only (1) to us, (2) to a person who the seller reasonably believes is a
"qualified institutional buyer" purchasing for its own account or for the
account of another "qualified institutional buyer" in compliance with the resale
limitations of Rule 144A, (3) to an "institutional accredited investor" that,
prior to the transfer, furnishes to the trustee a written certification
containing certain representations and agreements relating to the restrictions
on transfer of the notes (the form of this letter can be obtained from the
trustee), (4) pursuant to the limitations on resale provided by Rule 144 under
the Securities Act, (5) pursuant to the resale provisions of Rule 904 of
Regulation S under the Securities Act, (6) pursuant to an effective registration
statement under the Securities Act, or (7) pursuant to any other available
exemption from the registration requirements of the Securities Act, subject in
each of the foregoing cases to compliance with applicable state securities laws.
As a result, the liquidity of the market for non-tendered outstanding notes
could be adversely affected upon completion of the exchange offer. The foregoing
restrictions on resale will no longer apply after the second anniversary of the
issue date of the outstanding notes or the purchase of the outstanding notes
from us or our affiliate.
Fees and Expenses
We will not make any payments to brokers, dealers or others soliciting
acceptances of the exchange offer. The principal solicitation is being made by
mail; however, additional solicitations may be made in person or by telephone by
our officers and employees.
Expenses incurred in connection with the exchange offer will be paid by us.
Such expenses include, among others, the fees and expenses of the trustee and
the exchange agent, accounting and legal fees, printing costs and other
miscellaneous fees and expenses.
Accounting Treatment
We will not recognize any gain or loss for accounting purposes upon the
consummation of the exchange offer. We will amortize the expenses of the
exchange offer as additional interest expense over the term of the exchange
notes.
Procedures for Tendering Outstanding Notes
The tender of outstanding notes pursuant to any of the procedures set forth
in this prospectus and in the letter of transmittal will constitute a binding
agreement between the tendering holder and us in accordance with the terms and
subject to the conditions set forth in this prospectus and in the letter of
transmittal. The tender of outstanding notes will constitute an agreement to
deliver good and marketable title to all tendered outstanding notes prior to the
expiration date free and clear of all liens, charges, claims, encumbrances,
interests and restrictions of any kind.
Except as provided in "--Guaranteed Delivery Procedures," unless the
outstanding notes being tendered are deposited by you with the exchange agent
prior to the expiration date and are accompanied by a properly completed and
duly executed letter of transmittal, we may, at our option, reject the tender.
Issuance of exchange notes will be made only against deposit of tendered
outstanding notes and delivery of all other required documents. Notwithstanding
the foregoing, DTC participants tendering through its Automated Tender Offer
-26-
Program ("ATOP") will be deemed to have made valid delivery where the exchange
agent receives an agent's message prior to the expiration date.
Accordingly, to properly tender outstanding notes, the following procedures
must be followed:
Notes held through a Custodian. Each beneficial owner holding outstanding
notes through a DTC participant must instruct the DTC participant to cause its
outstanding notes to be tendered in accordance with the procedures set forth in
this prospectus.
Notes held through DTC. Pursuant to an authorization given by DTC to the
DTC participants, each DTC participant holding outstanding notes through DTC
must (1) electronically transmit its acceptance through ATOP, and DTC will then
edit and verify the acceptance, execute a book-entry delivery to the exchange
agent's account at DTC and send an agent's message to the exchange agent for its
acceptance, or (2) comply with the guaranteed delivery procedures set forth
below and in a notice of guaranteed delivery. See "--Guaranteed Delivery
Procedures--Notes held through DTC."
The exchange agent will (promptly after the date of this prospectus)
establish accounts at DTC for purposes of the exchange offer with respect to
outstanding notes held through DTC. Any financial institution that is a DTC
participant may make book-entry delivery of interests in outstanding notes into
the exchange agent's account through ATOP. However, although delivery of
interests in the outstanding notes may be effected through book-entry transfer
into the exchange agent's account through ATOP, an agent's message in connection
with such book-entry transfer, and any other required documents, must be, in any
case, transmitted to and received by the exchange agent at its address set forth
under "--Exchange Agent," or the guaranteed delivery procedures set forth below
must be complied with, in each case, prior to the expiration date. Delivery of
documents to DTC does not constitute delivery to the exchange agent. The
confirmation of a book-entry transfer into the exchange agent's account at DTC
as described above is referred to herein as a "Book-Entry Confirmation."
The term "agent's message" means a message transmitted by DTC to, and
received by, the exchange agent and forming a part of the book-entry
confirmation, which states that DTC has received an express acknowledgment from
each DTC participant tendering through ATOP that such DTC participants have
received a letter of transmittal and agree to be bound by the terms of the
letter of transmittal and that we may enforce such agreement against such DTC
participants.
Cede & Co., as the holder of the global note, will tender a portion of each
global note equal to the aggregate principal amount due at the stated maturity
for which instructions to tender are given by DTC participants.
By tendering, each holder and each DTC participant will represent to us
that, among other things, (1) it is not our affiliate, (2) it is not a
broker-dealer tendering outstanding notes acquired directly from us for its own
account, (3) it is acquiring the exchange notes in its ordinary course of
business and (4) it is not engaged in, and does not intend to engage in, and has
no arrangement or understanding with any person to participate in, a
distribution of the exchange notes.
In addition, each broker-dealer that is to receive exchange notes for its
own account in exchange for outstanding notes must represent that such
outstanding notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities, and must acknowledge that
it will deliver a prospectus that meets the requirements of the Securities Act
in connection with any resale of the exchange notes. The letter of transmittal
states that by so acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
Section 2(11) of the Securities Act. See "Plan of Distribution."
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We will not accept any alternative, conditional, irregular or contingent
tenders (unless waived by us). By executing a letter of transmittal or
transmitting an acceptance through ATOP, as the case may be, each tendering
holder waives any right to receive any notice of the acceptance for purchase of
its outstanding notes.
We will resolve all questions as to the validity, form, eligibility
(including time of receipt) and acceptance of tendered outstanding notes, and
such determination will be final and binding. We reserve the absolute right to
reject any or all tenders that are not in proper form or the acceptance of which
may, in the opinion of our counsel, be unlawful. We also reserve the absolute
right to waive any condition to the exchange offer and any irregularities or
conditions of tender as to particular outstanding notes. Our interpretation of
the terms and conditions of the exchange offer (including the instructions in
the letter of transmittal) will be final and binding. Unless waived, any
irregularities in connection with tenders must be cured within such time as we
shall determine. We, along with the exchange agent, shall be under no duty to
give notification of defects in such tenders and shall not incur liabilities for
failure to give such notification. Tenders of outstanding notes will not be
deemed to have been made until such irregularities have been cured or waived.
Any outstanding notes received by the exchange agent that are not properly
tendered and as to which the irregularities have not been cured or waived will
be returned by the exchange agent to the tendering holder, unless otherwise
provided in the letter of transmittal, as soon as practicable following the
expiration date.
LETTERS OF TRANSMITTAL AND OUTSTANDING NOTES MUST BE SENT ONLY TO THE
EXCHANGE AGENT. DO NOT SEND LETTERS OF TRANSMITTAL OR OUTSTANDING NOTES TO US OR
DTC.
The method of delivery of outstanding notes, letters of transmittal, any
required signature guaranties and all other required documents, including
delivery through DTC and any acceptance through ATOP, is at the election and
risk of the persons tendering and delivering acceptances or letters of
transmittal and, except as otherwise provided in the applicable letter of
transmittal, delivery will be deemed made only when actually received by the
exchange agent. If delivery is by mail, it is suggested that the holder use
properly insured, registered mail with return receipt requested, and that the
mailing be made sufficiently in advance of the expiration date to permit
delivery to the exchange agent prior to the expiration date.
Guaranteed Delivery Procedures
Notes held through DTC. DTC participants holding outstanding notes through
DTC who wish to cause their outstanding notes to be tendered, but who cannot
transmit their acceptances through ATOP prior to the expiration date, may cause
a tender to be effected if:
(1) guaranteed delivery is made by or through a firm or other entity
identified in Rule 17Ad-15 under the Exchange Act, including:
o a bank;
o a broker, dealer, municipal securities dealer, municipal
securities broker, government securities dealer or government
securities broker;
o a credit union;
o a national securities exchange, registered securities association
or clearing agency; or
o a savings institution that is a participant in a Securities
Transfer Association recognized program;
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(2) prior to the expiration date, the exchange agent receives from any
of the above institutions a properly completed and duly executed notice of
guaranteed delivery (by mail, hand delivery, facsimile transmission or
overnight courier) substantially in the form provided with this prospectus;
and
(3) book-entry confirmation and an agent's message in connection
therewith are received by the exchange agent within three Business Days
after the expiration date.
Notes held by Holders. Holders who wish to tender their outstanding notes
but (1) whose outstanding notes are not immediately available and will not be
available for tendering prior to the expiration date, or (2) who cannot deliver
their outstanding notes, the letter of transmittal, or any other required
documents to the exchange agent prior to the expiration date, may effect a
tender if:
o the tender is made by or through any of the above-listed institutions;
o prior to the expiration date, the exchange agent receives from any
above-listed institution a properly completed and duly executed notice
of guaranteed delivery, whether by mail, hand delivery, facsimile
transmission or overnight courier, substantially in the form provided
with this prospectus; and
o a properly completed and executed letter of transmittal, as well as
the certificate(s) representing all tendered outstanding notes in
proper form for transfer, and all other documents required by the
letter of transmittal, are received by the exchange agent within three
Business Days after the expiration date.
Withdrawal Rights
You may withdraw tenders of outstanding notes, or any portion of your
outstanding notes, in integral multiples of $1,000 principal amount due at the
stated maturity, at any time prior to 5:00 p.m., New York City time, on the
expiration date. Any outstanding notes properly withdrawn will be deemed to be
not validly tendered for purposes of the exchange offer.
Notes held through DTC. DTC participants holding outstanding notes who have
transmitted their acceptances through ATOP may, prior to 5:00 p.m., New York
City time, on the expiration date, withdraw the instruction given thereby by
delivering to the exchange agent, at its address set forth under "--Exchange
Agent," a written, telegraphic or facsimile notice of withdrawal of such
instruction. Such notice of withdrawal must contain the name and number of the
DTC participant, the principal amount due at the stated maturity of outstanding
notes to which such withdrawal relates and the signature of the DTC participant.
Receipt of such written notice of withdrawal by the exchange agent effectuates a
withdrawal.
Notes held by Holders. Holders may withdraw their tender of outstanding
notes, prior to 5:00 p.m., New York City time, on the expiration date, by
delivering to the exchange agent, at its address set forth under "--Exchange
Agent," a written, telegraphic or facsimile notice of withdrawal. Any such
notice of withdrawal must (1) specify the name of the person who tendered the
outstanding notes to be withdrawn, (2) contain a description of the outstanding
notes to be withdrawn and identify the certificate number or numbers shown on
the particular certificates evidencing such outstanding notes and the aggregate
principal amount due at the stated maturity represented by such outstanding
notes and (3) be signed by the holder of such outstanding notes in the same
manner as the original signature on the letter of transmittal by which such
outstanding notes were tendered (including any required signature guaranties),
or be accompanied by (x) documents of transfer in a form acceptable to us, in
our sole discretion, and (y) a properly completed irrevocable proxy that
authorized such person to effect such revocation on behalf of such holder. If
the outstanding notes to be withdrawn have been delivered or otherwise
identified to the exchange agent, a signed notice of withdrawal is effective
immediately upon written, telegraphic or facsimile notice of withdrawal even if
physical release is not yet effected.
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All signatures on a notice of withdrawal must be guaranteed by a recognized
participant in the Securities Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Program or the Stock Exchange Medallion
Program; provided, however, that signatures on the notice of withdrawal need not
be guaranteed if the outstanding notes being withdrawn are held for the account
of any of the institutions listed above under "--Guaranteed Delivery
Procedures."
A withdrawal of an instruction or a withdrawal of a tender must be executed
by a DTC participant or a holder of outstanding notes, as the case may be, in
the same manner as the person's name appears on its transmission through ATOP or
letter of transmittal, as the case may be, to which such withdrawal relates. If
a notice of withdrawal is signed by a trustee, partner, executor, administrator,
guardian, attorney-in-fact, agent, officer of a corporation or other person
acting in a fiduciary or representative capacity, such person must so indicate
when signing and must submit with the revocation appropriate evidence of
authority to execute the notice of withdrawal. A DTC participant or a holder may
withdraw an instruction or a tender, as the case may be, only if such withdrawal
complies with the provisions of this prospectus.
A withdrawal of a tender of outstanding notes by a DTC participant or a
holder, as the case may be, may be rescinded only by a new transmission of an
acceptance through ATOP or execution and delivery of a new letter of
transmittal, as the case may be, in accordance with the procedures described
herein.
Exchange Agent
The Bank of New York has been appointed as exchange agent for the exchange
offer. Questions, requests for assistance and requests for additional copies of
this prospectus or of the letter of transmittal should be directed to the
exchange agent addressed as follows:
By Registered or Certified Mail:
The Bank of New York,
as Exchange Agent
Corporate Trust Operations
Reorganization Unit
101 Barclay Stret, Floor 7 East
New York, NY 10286
Attention: Duong Nguyen
By Hand before 4:30 p.m.:
The Bank of New York,
as Exchange Agent
Corporate Trust Operations
Reorganization Unit
101 Barclay Street, Floor 7 East
New York, NY 10286
Attention: Duong Nguyen
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By Hand after 4:30 p.m. or by Overnight Courier:
The Bank of New York,
as Exchange Agent
Corporate Trust Operations
Reorganization Unit
101 Barclay Street, Floor 7 East
New York, NY 10286
Attention: Duong Nguyen
Facsimile: (212) 298-1915
Telephone: (212) 815-3687
The exchange agent also acts as trustee under the Indenture.
Transfer Taxes
Holders of outstanding notes who tender their outstanding notes for
exchange notes will not be obligated to pay any transfer taxes in connection
therewith, except that holders who instruct us to register exchange notes in the
name of, or request that outstanding notes not tendered or not accepted in the
exchange offer be returned to, a person other than the registered tendering
holder will be responsible for the payment of any applicable transfer tax
thereon.
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DESCRIPTION OF NOTES
You can find the definitions of certain terms used in this description
under the subheading "--Certain Definitions." In this description, the term
"Suburban Propane" refers only to Suburban Propane Partners, L.P. and not to any
of its subsidiaries or its general partner. The term "Finance Corp." refers only
to Suburban Energy Finance Corp., a wholly-owned subsidiary of Suburban Propane.
The term "Operating Partnership" refers to Suburban Propane, L.P., a direct
subsidiary of Suburban Propane. The term "Issuers" means Suburban Propane and
Finance Corp., collectively, and does not include any other subsidiary of
Suburban Propane. The term "notes" refers to the outstanding notes and the
exchange notes.
The Issuers jointly issued the outstanding notes under an indenture dated
December 23, 2003 among themselves and The Bank of New York, as trustee, in a
private transaction that was not subject to the registration requirements of the
Securities Act. The terms of the notes include those stated in the indenture and
those made part of the indenture by reference to the Trust Indenture Act of
1939, as amended. The terms of the exchange notes are substantially identical in
all material respects to the outstanding notes, except that the exchange notes
will be registered under the Securities Act and, therefore, will not bear
legends restricting their transfer and will not contain certain provisions
providing for Liquidated Damages under certain circumstances described in the
exchange and registration rights agreement, the provisions of which will
terminate upon the consummation of the exchange offer.
The following description is a summary of the material provisions of the
indenture and the exchange and registration rights agreement. It does not
restate those agreements in their entirety. We urge you to read the indenture
and the exchange and registration rights agreement because they, and not this
description, define your rights as holders of the notes. Copies of the indenture
and the exchange and registration rights agreement are available as set forth
below under "--Additional Information." Certain defined terms used in this
description but not defined below under "--Certain Definitions" have the
meanings assigned to them in the indenture.
The registered holder of a note will be treated as the owner of it for all
purposes. Only registered holders will have rights under the indenture.
Finance Corp.
Finance Corp. is a wholly owned direct subsidiary of Suburban Propane that
was incorporated in Delaware for the purpose of serving as a co-issuer of the
notes in order to facilitate the initial private offering of the outstanding
notes. Finance Corp. has only nominal assets and does not conduct any
operations. As a result, holders of the notes should not expect Finance Corp. to
participate in servicing the interest and principal obligations on the notes.
Brief Description of the Notes
The Notes
The notes:
o are general joint and several obligations of the Issuers;
o are pari passu in right of payment to all existing and future
unsecured senior Indebtedness of the Issuers;
o are senior in right of payment to any future subordinated Indebtedness
of the Issuers; and
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o are structurally subordinated to, which means they rank effectively
behind, the indebtedness and other liabilities of the Operating
Partnership and its subsidiaries.
Neither Suburban Propane nor Finance Corp. has any significant operations.
Our operations are conducted through the Operating Partnership and its
subsidiaries and, therefore, Suburban Propane depends on the cash flow of the
Operating Partnership to meet its obligations, including its obligations under
the notes. Neither the Operating Partnership nor any of the other subsidiaries
of Suburban Propane have guaranteed the notes. As a result, the notes are
effectively subordinated in right of payment to all Indebtedness and other
liabilities and commitments (including trade payables and lease obligations) of
the Operating Partnership and its subsidiaries. Any right of Suburban Propane to
receive assets of any of its subsidiaries upon the subsidiary's liquidation or
reorganization (and the consequent right of the holders of the notes to
participate in those assets) will be effectively subordinated to the claims of
that subsidiary's creditors, except to the extent that Suburban Propane is
itself recognized as a creditor of the subsidiary, in which case the claims of
Suburban Propane would still be subordinate in right of payment to any security
in the assets of the subsidiary and any indebtedness of the subsidiary senior to
that held by Suburban Propane. Moreover, the Operating Partnership is party to a
number of agreements that restrict its ability to make distributions to Suburban
Propane. As a result, we may not be able to cause the Operating Partnership to
distribute sufficient funds to enable us to meet our obligations under the
notes. See "Risk Factors-- We may not have access to the cash flow and other
assets of our subsidiaries that may be needed to make payments on the exchange
notes." As of December 27, 2003, the Operating Partnership and its subsidiaries
had approximately $383.8 million of Indebtedness and $307.0 million of trade
payables and other liabilities outstanding. See "Risk Factors--These exchange
notes will be effectively subordinated to the debts of our subsidiaries." In
addition, Finance Corp. has nominal assets and no direct or indirect interest in
the Operating Partnership or any of its subsidiaries, and therefore does not
have any means independent of Suburban Propane to generate or realize cash flow
to meet its obligations.
As of the date of the indenture, all of our subsidiaries were "Restricted
Subsidiaries." However, under the circumstances described below under the
caption "--Certain Covenants--Designation of Restricted and Unrestricted
Subsidiaries," we are permitted to designate certain of our subsidiaries, other
than Finance Corp. and the Operating Partnership, as "Unrestricted
Subsidiaries." Our Unrestricted Subsidiaries will not be subject to the
restrictive covenants in the indenture.
Principal, Maturity and Interest
The Issuers issued $175.0 million in aggregate principal amount of notes in
the initial private offering of the outstanding notes. The Issuers may issue
additional notes from time to time. Any issuance of additional notes is subject
to all of the covenants in the indenture, including the covenant described below
under the caption "--Certain Covenants--Incurrence of Indebtedness and Issuance
of Preferred Stock." The notes and any additional notes subsequently issued
under the indenture will be treated as a single class for all purposes under the
indenture, including, without limitation, waivers, amendments, redemptions and
offers to purchase. The Issuers issued notes in denominations of $1,000 and
integral multiples of $1,000. The notes will mature on December 15, 2013.
Interest on the notes accrues at the rate of 6 7/8% per annum and is
payable semi-annually in arrears on June 15 and December 15, commencing on June
15, 2004. Interest on overdue principal and interest and Liquidated Damages will
accrue at a rate that is 1% higher than the then applicable interest rate on the
notes. The Issuers will make each interest payment to the holders of record on
the immediately preceding June 1 and December 1.
Interest on the notes will accrue from the date of original issuance or, if
interest has already been paid, from the date it was most recently paid.
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months.
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Methods of Receiving Payments on the Notes
If a holder of notes has given wire transfer instructions to Suburban
Propane, the Issuers will pay all principal, interest and premium and Liquidated
Damages, if any, on that holder's notes in accordance with those instructions.
All other payments on notes will be made at the office or agency of the paying
agent and registrar within the City and State of New York unless Suburban
Propane elects to make interest payments by check mailed to the noteholders at
their address set forth in the register of holders.
Paying Agent and Registrar for the Notes
The trustee will initially act as paying agent and registrar. Suburban
Propane may change the paying agent or registrar without prior notice to the
holders of the notes, and Suburban Propane or any of its subsidiaries may act as
paying agent or registrar.
Transfer and Exchange
A holder may transfer or exchange notes in accordance with the provisions
of the indenture. The registrar and the trustee may require a holder, among
other things, to furnish appropriate endorsements and transfer documents in
connection with a transfer of notes. Holders will be required to pay all taxes
due on transfer. The Issuers are not required to transfer or exchange any note
selected for redemption. Also, the Issuers are not required to transfer or
exchange any note for a period of 15 days before a selection of notes to be
redeemed.
Optional Redemption
At any time prior to December 15, 2006, the Issuers may on any one or more
occasions redeem up to 35% of the aggregate principal amount of notes issued
under the indenture at a redemption price of 106.875% of the principal amount,
plus accrued and unpaid interest and Liquidated Damages, if any, to the
redemption date, with the net cash proceeds of one or more Equity Offerings;
provided that:
(1) at least 65% of the aggregate principal amount of notes originally
issued under the indenture (excluding notes held by Suburban Propane and
its Subsidiaries or by the general partner of Suburban Propane) remains
outstanding immediately after the occurrence of such redemption; and
(2) the redemption occurs within 90 days of the date of the closing of
such Equity Offering.
On or after December 15, 2008, the Issuers may redeem all or a part of the
notes upon not less than 30 nor more than 60 days notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages, if any, on the notes
redeemed, to the applicable redemption date, if redeemed during the twelve-month
period beginning on December 15 of the years indicated below, subject to the
rights of noteholders on the relevant record date to receive interest on the
relevant interest payment date:
Year Percentage
---- ----------
2008................................................ 103.4375%
2009................................................ 102.2917%
2010................................................ 101.1458%
2011 and thereafter................................. 100.0000%
Except pursuant to the preceding paragraphs, the notes will not be
redeemable at the Issuers' option prior to December 15, 2008. Unless the Issuers
default in the payment of the redemption price, interest will cease to accrue on
the notes or portions thereof called for redemption on the applicable redemption
date.
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Mandatory Redemption
The Issuers are not required to make mandatory redemption or sinking fund
payments with respect to the notes.
Repurchase at the Option of Holders
Change of Control
If a Change of Control occurs, each holder of notes will have the right to
require the Issuers to repurchase all or any part (equal to $1,000 or an
integral multiple of $1,000) of that holder's notes pursuant to a Change of
Control Offer on the terms set forth in the indenture. In the Change of Control
Offer, the Issuers will offer a Change of Control Payment in cash equal to 101%
of the aggregate principal amount of notes repurchased plus accrued and unpaid
interest and Liquidated Damages, if any, on the notes repurchased, to the date
of purchase, subject to the rights of noteholders on the relevant record date to
receive interest due on the relevant interest payment date. Within 30 days
following any Change of Control, the Issuers will mail a notice to each holder
describing the transaction or transactions that constitute the Change of Control
and offer to repurchase notes on the Change of Control Payment Date specified in
the notice, which date will be no earlier than 30 days and no later than 60 days
from the date such notice is mailed, pursuant to the procedures required by the
indenture and described in such notice. The Issuers will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent those laws and regulations are
applicable in connection with the repurchase of the notes as a result of a
Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with the Change of Control provisions of the indenture, the
Issuers will comply with the applicable securities laws and regulations and will
not be deemed to have breached their obligations under the Change of Control
provisions of the indenture by virtue of such compliance.
On the Change of Control Payment Date, the Issuers will, to the extent
lawful:
(1) accept for payment all notes or portions of notes properly
tendered pursuant to the Change of Control Offer;
(2) deposit with the paying agent an amount equal to the Change of
Control Payment in respect of all notes or portions of notes properly
tendered; and
(3) deliver or cause to be delivered to the trustee the notes properly
accepted together with an officers' certificate stating the aggregate
principal amount of notes or portions of notes being purchased by the
Issuers.
The paying agent will promptly mail to each holder of notes properly
tendered the Change of Control Payment for such notes, and the trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each holder a new note equal in principal amount to any unpurchased portion of
the notes surrendered, if any; provided that each new note will be in a
principal amount of $1,000 or an integral multiple of $1,000.
The provisions described above that require the Issuers to make a Change of
Control Offer following a Change of Control will be applicable whether or not
any other provisions of the indenture are applicable. Except as described above
with respect to a Change of Control, the indenture does not contain provisions
that permit the holders of the notes to require that the Issuers repurchase or
redeem the notes in the event of a takeover, recapitalization or similar
transaction.
The Issuers will not be required to make a Change of Control Offer upon a
Change of Control if (1) a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in the indenture applicable to a Change of Control Offer made by the Issuers and
pur-
-35-
chases all notes properly tendered and not withdrawn under the Change of Control
Offer, or (2) notice of redemption has been given pursuant to the indenture as
described above under the caption "--Optional Redemption," unless and until
there is a default in payment of the applicable redemption price.
The definition of Change of Control includes a phrase relating to the
direct or indirect sale, lease, transfer, conveyance or other disposition of
"all or substantially all" of the properties or assets of Suburban Propane and
its Restricted Subsidiaries taken as a whole. Although there is a limited body
of case law interpreting the phrase "substantially all," there is no precise
established definition of the phrase under applicable law. Accordingly, the
ability of a holder of notes to require the Issuers to repurchase its notes as a
result of a sale, lease, transfer, conveyance or other disposition of less than
all of the assets of Suburban Propane and its Restricted Subsidiaries taken as a
whole to another Person or group may be uncertain.
Asset Sales
Suburban Propane will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) Suburban Propane (or the Restricted Subsidiary, as the case may
be) receives consideration at the time of the Asset Sale at least equal to
the Fair Market Value of the assets or Equity Interests issued or sold or
otherwise disposed of; and
(2) at least 75% of the consideration received in the Asset Sale by
Suburban Propane or such Restricted Subsidiary is in the form of cash. For
purposes of this provision, each of the following will be deemed to be
cash:
(a) any liabilities, as shown on Suburban Propane's most recent
consolidated balance sheet, of Suburban Propane or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are
by their terms subordinated to the notes) that are assumed by the
transferee of any such assets pursuant to a customary novation
agreement that releases Suburban Propane or such Restricted Subsidiary
from further liability;
(b) any securities, notes or other obligations received by
Suburban Propane or any such Restricted Subsidiary from such
transferee that are converted within 180 days after the date of
consummation of such Asset Sale by Suburban Propane or such Restricted
Subsidiary into cash, to the extent of the cash received in that
conversion; and
(c) any stock or assets of the kind referred to in clauses (2) or
(4) of the next paragraph of this covenant.
The 75% limitation in clause (2) above will not apply to any Asset Sale in
which the cash portion of the consideration received is equal to or greater
than the after-tax proceeds would have been had the Asset Sale complied
with the 75% limitation.
Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
Suburban Propane (or the applicable Restricted Subsidiary, as the case may be)
may apply those Net Proceeds:
(1) to repay Indebtedness of Suburban Propane under a Credit Facility
or to repay any Indebtedness of any Restricted Subsidiary of Suburban
Propane and, if the Indebtedness repaid is revolving credit Indebtedness,
to correspondingly reduce commitments with respect thereto;
(2) to acquire, or commit to acquire within 90 days thereof, all or
substantially all of the assets of, or any Capital Stock of, another
Permitted Business, if, after giving effect to any such acquisi-
-36-
tion of Capital Stock, the Permitted Business is or becomes a Restricted
Subsidiary of Suburban Propane;
(3) to make a capital expenditure; and/or
(4) to acquire, or commit to acquire within 90 days thereof, other
assets that are not classified as current assets under GAAP and that are
used or useful in a Permitted Business.
Pending the final application of any Net Proceeds, Suburban Propane or any
Restricted Subsidiary may temporarily reduce revolving credit borrowings or
otherwise invest the Net Proceeds in any manner that is not prohibited by the
indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph will constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $15.0 million, the Issuers will make
an Asset Sale Offer to all holders of notes and all holders of other
Indebtedness that is pari passu with the notes containing provisions similar to
those set forth in the indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets to purchase the maximum principal amount of
notes and such other pari passu Indebtedness that may be purchased out of the
Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100%
of principal amount plus accrued and unpaid interest and Liquidated Damages, if
any, to the date of purchase, and will be payable in cash. If any Excess
Proceeds remain after consummation of an Asset Sale Offer, the Issuers may use
those Excess Proceeds for any purpose not otherwise prohibited by the indenture.
If the aggregate principal amount of notes and other pari passu Indebtedness
tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the
trustee will select the notes and such other pari passu Indebtedness to be
purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the
amount of Excess Proceeds will be reset at zero.
The Issuers will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with each
repurchase of notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sale
provisions of the indenture, the Issuers will comply with the applicable
securities laws and regulations and will not be deemed to have breached their
obligations under the Asset Sale provisions of the indenture by virtue of such
conflict.
The Issuers do not have any other material Indebtedness that imposes
restrictions on their ability to repurchase notes. However, the Operating
Partnership is the borrower under a credit facility and the issuer of two series
of senior notes, and the agreements governing that Indebtedness contain
prohibitions of certain events, including events that would constitute a Change
of Control or an Asset Sale. Those agreements may require the Operating
Partnership to offer to purchase or repay that Indebtedness before any
distribution may be made to the Issuers so that they may satisfy their
obligations with respect to the notes. Moreover, the same agreements restrict
the ability of the Operating Partnership to make distributions to Suburban
Propane generally. As a result, we may not be able to cause the Operating
Partnership to distribute sufficient funds to enable us to meet our obligations
under the notes. See "Risk Factors--We may not have access to the cash flow and
other assets of our subsidiaries that may be needed to make payment on the
exchange notes." The exercise by the holders of notes of their right to require
the Issuers to repurchase the notes upon a Change of Control or an Asset Sale
could cause a default under these other agreements, even if the Change of
Control or Asset Sale itself does not, due to the financial effect of such
repurchases on the Issuers and the Operating Partnership. In the event a Change
of Control or Asset Sale occurs at a time when the Issuers are unable to
purchase notes due to restrictions on the Operating Partnership, the Issuers and
the Operating Partnership could seek the consent of the lenders under the
Operating Partnership's Indebtedness to allow the purchase of notes, or could
attempt to refinance the borrowings that contain such prohibition. If the
Issuers do not obtain a consent or repay those borrowings, the Issuers will
remain unable to purchase notes. In that case, the Issuers' failure to purchase
tendered notes would constitute an Event of Default under the indenture.
Finally, the Issuers' ability to pay cash to the holders of notes upon
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a repurchase may be limited by the Issuers' then existing financial resources.
See "Risk Factors--We may not have the ability to raise the funds necessary to
finance the change of control offer required by the indenture."
Selection and Notice
If less than all of the notes are to be redeemed at any time, the trustee
will select notes for redemption as follows:
(1) if the notes are listed on any national securities exchange, in
compliance with the requirements of the principal national securities
exchange on which the notes are listed; or
(2) if the notes are not listed on any national securities exchange,
on a pro rata basis, by lot or by such method as the trustee deems fair and
appropriate.
No notes of $1,000 or less can be redeemed in part. Notices of redemption
will be mailed by first class mail at least 30 but not more than 60 days before
the redemption date to each holder of notes to be redeemed at its registered
address, except that redemption notices may be mailed more than 60 days prior to
a redemption date if the notice is issued in connection with a defeasance of the
notes or a satisfaction and discharge of the indenture. Notices of redemption
may not be conditional.
If any note is to be redeemed in part only, the notice of redemption that
relates to that note will state the portion of the principal amount of that note
that is to be redeemed. A new note in principal amount equal to the unredeemed
portion of the original note will be issued in the name of the holder of notes
upon cancellation of the original note. Notes called for redemption become due
on the date fixed for redemption. On and after the redemption date, interest
ceases to accrue on notes or portions of them called for redemption.
Certain Covenants
Restricted Payments
Suburban Propane will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) declare or pay any distribution or make any other payment or
dividend on account of Suburban Propane's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any payment
in connection with any merger or consolidation involving Suburban Propane
or any of its Restricted Subsidiaries) or to the direct or indirect holders
of Suburban Propane's or any of its Restricted Subsidiaries' Equity
Interests in their capacity as such (other than distributions or dividends
payable in Equity Interests (other than Disqualified Stock) of Suburban
Propane or to Suburban Propane or a Restricted Subsidiary of Suburban
Propane);
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving Suburban Propane) any Equity Interests of Suburban
Propane;
(3) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value, any Indebtedness of
Suburban Propane that is contractually subordinated to the notes (excluding
any intercompany Indebtedness between or among Suburban Propane and any of
its Restricted Subsidiaries), except a payment of interest or principal at
the Stated Maturity thereof; or
(4) make any Restricted Investment
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(all such payments and other actions set forth in these clauses (1) through (4)
above being collectively referred to as "Restricted Payments"), unless, at the
time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or
would occur as a consequence of such Restricted Payment; and
(2) the Restricted Payment, together with the aggregate of all other
Restricted Payments made by Suburban Propane and its Restricted
Subsidiaries during the fiscal quarter during which the Restricted Payment
is made (excluding Restricted Payments permitted by clauses (2), (3), (4)
and (6) of the next succeeding paragraph), will not exceed:
(a) if the Consolidated Fixed Charge Coverage Ratio of Suburban
Propane is greater than 1.75 to 1.00, an amount equal to Available
Cash for the immediately preceding fiscal quarter; or
(b) if the Consolidated Fixed Charge Coverage Ratio of Suburban
Propane is equal to or less than 1.75 to 1.00, an amount equal to the
sum of:
(x) $20.0 million, less
(y) the aggregate amount of all Restricted Payments made by
Suburban Propane and its Restricted Subsidiaries in accordance
with this clause (2)(b) during the period ending on the last day
of the fiscal quarter of Suburban Propane immediately preceding
the date of the Restricted Payment and beginning on the date of
the indenture, plus
(z) the aggregate net cash proceeds of capital contributions
to Suburban Propane from any Person other than a Restricted
Subsidiary of Suburban Propane, or issuance and sale of shares of
Capital Stock, other than (i) Disqualified Stock and (ii) Capital
Stock issued concurrently with the offering of the notes, of
Suburban Propane to any entity other than to a Restricted
Subsidiary of Suburban Propane, in any case made during the
period ending on the last day of the fiscal quarter of Suburban
Propane immediately preceding the date of the Restricted Payment
and beginning on the date of the indenture.
So long as no Default has occurred and is continuing or would be caused
thereby, the preceding provisions will not prohibit:
(1) the payment of any distribution or dividend within 60 days after
the date of its declaration, if at the date of declaration the distribution
or dividend payment would have complied with the provisions of the
indenture;
(2) the making of any Restricted Payment in exchange for, or out of
the net cash proceeds of the substantially concurrent sale (other than to a
Subsidiary of Suburban Propane) of, Equity Interests of Suburban Propane
(other than Disqualified Stock) or from the substantially concurrent
contribution of common equity capital to Suburban Propane by any entity
other than a Subsidiary of Suburban Propane; provided, however, that the
amount of any net cash proceeds that are utilized for any such Restricted
Payment will be excluded from the calculation of Available Cash and from
the calculation set forth in clause (2)(b) above;
(3) the defeasance, redemption, repurchase or other acquisition of
Indebtedness of the Issuers that is contractually subordinated to the notes
with the net cash proceeds from a substantially con-
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current incurrence of Permitted Refinancing Indebtedness; provided,
however, that the amount of any net cash proceeds that are utilized for any
such Restricted Payment will be excluded from the calculation of Available
Cash;
(4) the payment of any dividend (or, in the case of any partnership or
limited liability company, any similar distribution) by a Restricted
Subsidiary of Suburban Propane to the holders of its Equity Interests on a
pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of Suburban Propane or any Restricted
Subsidiary of Suburban Propane held by any current or former officer,
director or employee of Suburban Propane or any of its Restricted
Subsidiaries pursuant to any restricted unit plan, equity subscription
agreement, equity option agreement, shareholders' agreement or similar
agreement; provided that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests may not exceed $1.0 million
in any calendar year; and
(6) the repurchase of Equity Interests deemed to occur upon the
exercise of unit or stock options to the extent such Equity Interests
represent a portion of the exercise price of those options.
The amount of all Restricted Payments (other than cash) will be the
Fair Market Value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by Suburban Propane or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The Fair Market Value of any assets or securities that are required to be valued
by this covenant will be determined by the Board of Supervisors whose resolution
with respect thereto will be delivered to the trustee.
Incurrence of Indebtedness and Issuance of Preferred Stock
Suburban Propane will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), and Suburban Propane will not issue any Disqualified Stock and will not
permit any of its Restricted Subsidiaries to issue any shares of Preferred
Stock; provided, however, that Suburban Propane may incur Indebtedness
(including Acquired Debt) or issue Disqualified Stock and Suburban Propane's
Restricted Subsidiaries may incur Indebtedness or issue Preferred Stock, if the
Consolidated Fixed Charge Coverage Ratio for Suburban Propane's most recently
ended four full fiscal quarters for which internal financial statements are
available immediately preceding the date on which such additional Indebtedness
is incurred or such Disqualified Stock or Preferred Stock is issued would have
been at least 2.0 to 1, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred or Disqualified Stock or Preferred Stock had been issued, as
the case may be, at the beginning of such four-quarter period.
The first paragraph of this covenant will not prohibit the incurrence of
any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by Suburban Propane and any of its Restricted
Subsidiaries of additional Indebtedness and letters of credit under Credit
Facilities in an aggregate principal amount at any one time outstanding
under this clause (1) (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of Suburban
Propane and its Restricted Subsidiaries thereunder) not to exceed the
greater of:
(a) $75.0 million less the aggregate amount of all Net Proceeds
of Asset Sales applied by Suburban Propane or any of its Restricted
Subsidiaries since the date of the indenture to repay any term
Indebtedness under a Credit Facility or to repay any revolving credit
Indebtedness under a Credit Facility and effect a corresponding
commitment reduction there-
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under pursuant to the covenant described above under the caption
"--Repurchase at the Option of Holders--Asset Sales"; or
(b) the amount of the Borrowing Base as of the date of such
incurrence;
(2) the incurrence by Suburban Propane and any of its Restricted
Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers of Indebtedness represented by the
notes to be issued on the date of the indenture and the exchange notes to
be issued pursuant to the exchange and registration rights agreement;
(4) Indebtedness of Suburban Propane and any of its Restricted
Subsidiaries (including Capital Lease Obligations and Acquired Debt)
incurred for the making of expenditures for the improvement or repair, to
the extent the improvements or repairs may be capitalized in accordance
with GAAP, or additions, including by way of acquisitions of businesses and
related assets, to the property and assets of Suburban Propane and its
Restricted Subsidiaries, including, without limitation, the acquisition of
assets subject to operating leases or incurred by assumption in connection
with additions, including additions by way of acquisitions or capital
contributions of businesses and related assets, to the property and assets
of Suburban Propane and its Restricted Subsidiaries; provided that the
aggregate principal amount of Indebtedness outstanding at any time pursuant
to this clause (4), may not exceed $100.0 million at any one time
outstanding;
(5) the incurrence by Suburban Propane and any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to refund, refinance, replace, defease or
discharge, Indebtedness that was permitted by the indenture to be incurred
under the first paragraph of this covenant or clause (2), (3) or (5) of
this paragraph;
(6) the incurrence by Suburban Propane and any of its Restricted
Subsidiaries of intercompany Indebtedness between or among Suburban Propane
and any of its Restricted Subsidiaries; provided, however, that:
(a) if an Issuer is an obligor on such Indebtedness and the payee
is not an Issuer, such Indebtedness must be expressly subordinated to
the prior payment in full in cash of all Obligations then due with
respect to the notes; and
(b) any subsequent issuance or transfer of Equity Interests that
results in any such Indebtedness being held by a Person other than
Suburban Propane or a Restricted Subsidiary of Suburban Propane and
(ii) any sale or other transfer of any such Indebtedness to a Person
that is not either Suburban Propane or a Restricted Subsidiary of
Suburban Propane, will be deemed, in each case, to constitute an
incurrence of such Indebtedness by Suburban Propane or such Restricted
Subsidiary, as the case may be, that was not permitted by this clause
(6);
(7) the issuance by any of Suburban Propane's Restricted Subsidiaries
to Suburban Propane or to any of its Restricted Subsidiaries of units or
shares of Preferred Stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that
results in any such Preferred Stock being held by a Person other than
Suburban Propane or a Restricted Subsidiary of Suburban Propane; and
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(b) any sale or other transfer of any such Preferred Stock to a
Person that is not either Suburban Propane or a Restricted Subsidiary
of Suburban Propane
will be deemed, in each case, to constitute an issuance of such Preferred
Stock by such Restricted Subsidiary that was not permitted by this clause
(7);
(8) the incurrence by Suburban Propane and any of its Restricted
Subsidiaries of Hedging Obligations in the ordinary course of business;
(9) the guarantee by the Issuers or any of their Restricted
Subsidiaries of Indebtedness of the Issuers or a Restricted Subsidiary of
the Issuers that was permitted to be incurred by another provision of this
covenant; provided that if the Indebtedness being guaranteed is incurred by
one or both of the Issuers and is subordinated to the notes, then the
guarantee of such Indebtedness by any Restricted Subsidiary of the Issuers
shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by Suburban Propane or any of its Restricted
Subsidiaries of Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn against
insufficient funds, so long as such Indebtedness is covered within five
business days;
(11) the incurrence by Suburban Propane or any of its Restricted
Subsidiaries of Indebtedness arising from performance bonds, bid bonds,
bankers' acceptances, workers' compensation, health, disability or other
employee benefit claims, surety or appeal bonds, payment obligations in
connection with self-insurance or similar obligations and bank overdrafts
(and letters of credit in respect thereof) incurred in the ordinary course
of business;
(12) the incurrence by Suburban Propane or any of its Restricted
Subsidiaries of Indebtedness arising from indemnities or other similar
obligations in respect of purchase price adjustments in connection with the
disposition of property or assets; and
(13) the incurrence by Suburban Propane or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance, replace,
defease or discharge any Indebtedness incurred pursuant to this clause
(13), not to exceed $10.0 million.
The Issuers will not incur any Indebtedness (including Permitted Debt) that
is contractually subordinated in right of payment to any other Indebtedness of
the Issuers unless such Indebtedness is also contractually subordinated in right
of payment to the notes on substantially identical terms; provided, however,
that no Indebtedness will be deemed to be contractually subordinated in right of
payment to any other Indebtedness of the Issuers solely by virtue of being
unsecured or by virtue of being secured on a first or junior Lien basis.
For purposes of determining compliance with this "Incurrence of
Indebtedness and Issuance of Preferred Stock" covenant, in the event that an
item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (13) above, or is
entitled to be incurred pursuant to the first paragraph of this covenant, the
Issuers will be permitted to classify such item of Indebtedness on the date of
its incurrence, or later reclassify all or a portion of such item of
Indebtedness, in any manner that complies with this covenant. Indebtedness under
Credit Facilities outstanding on the date on which the outstanding notes were
originally issued and authenticated under the indenture was deemed to have been
incurred on such date in reliance on the exception provided by clause (1) of the
definition of Permitted Debt. The accrual of interest, the accretion or
amortization of original issue discount, the payment of interest on any
Indebtedness in the form of additional Indebtedness with the same terms, and the
payment of dividends on Disqualified Stock in the form of additional shares of
the same class of Disqualified Stock will not be deemed to be an incurrence of
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Indebtedness or an issuance of Disqualified Stock for purposes of this covenant.
Notwithstanding any other provision of this covenant, the maximum amount of
Indebtedness that Suburban Propane or any Restricted Subsidiary may incur
pursuant to this covenant shall not be deemed to be exceeded solely as a result
of fluctuations in exchange rates or currency values.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other
Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on
the assets of the specified Person, the lesser of:
(a) the Fair Market Value of such asset at the date of
determination, and
(b) the amount of the Indebtedness of the other Person.
Liens
Suburban Propane will not create, incur, assume or suffer to exist any Lien
securing Indebtedness incurred by Suburban Propane of any kind on any asset now
owned or hereafter acquired, except Permitted Liens.
Sale and Leaseback Transactions
Suburban Propane will not, and will not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
Suburban Propane or any Restricted Subsidiary may enter into a sale and
leaseback transaction if Suburban Propane or that Restricted Subsidiary would be
permitted under the indenture to incur Indebtedness secured by a lien on the
property in an amount equal to the Attributable Debt with respect to such sale
and leaseback transaction.
Limitations on Issuances of Guarantees of Indebtedness
Suburban Propane will not permit any of its Restricted Subsidiaries,
directly or indirectly, to Guarantee or pledge any assets to secure the payment
of any other Indebtedness of Suburban Propane unless such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture providing for the
Guarantee of the payment of the notes by such Restricted Subsidiary. The
Subsidiary Guarantee will be (1) senior to such Restricted Subsidiary's
Guarantee of or pledge to secure such other Indebtedness if such other
Indebtedness is subordinated to the notes; or (2) pari passu with such
Restricted Subsidiary's Guarantee of or pledge to secure such other Indebtedness
if such other Indebtedness is not subordinated to the notes.
The Subsidiary Guarantee of a Guarantor will be automatically and
unconditionally released:
(1) in connection with any sale or other disposition of all or
substantially all of the assets of that Guarantor (including by way of
merger or consolidation) to a Person that is not (either before or after
giving effect to such transaction) Suburban Propane or a Restricted
Subsidiary of Suburban Propane, if the sale or other disposition does not
violate the "Asset Sale" provisions of the indenture;
(2) in connection with any sale or other disposition of all of the
Capital Stock of that Guarantor to a Person that is not (either before or
after giving effect to such transaction) Suburban Pro-
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pane or a Restricted Subsidiary of Suburban Propane, if the sale or other
disposition does not violate the "Asset Sale" provisions of the indenture;
(3) if Suburban Propane designates any Restricted Subsidiary that is a
Guarantor to be an Unrestricted Subsidiary in accordance with the
applicable provisions of the indenture;
(4) upon legal defeasance or satisfaction and discharge of the notes
as provided below under the captions "--Legal Defeasance and Covenant
Defeasance" and "--Satisfaction and Discharge;" or
(5) if such Guarantor is released from the underlying guarantee of
Indebtedness giving rise to the execution of a Subsidiary Guarantee.
The form of the Subsidiary Guarantee and the related form of supplemental
indenture will be attached as exhibits to the indenture. Notwithstanding the
foregoing, if one or both of the Issuers Guarantee Indebtedness incurred by any
of their Restricted Subsidiaries, such Guarantee by the Issuers will not require
any Restricted Subsidiary to provide a Subsidiary Guarantee for the notes.
Dividend and Other Payment Restrictions Affecting Subsidiaries
Suburban Propane will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock
to Suburban Propane or any of its Restricted Subsidiaries, or with respect
to any other interest or participation in, or measured by, its profits, or
pay any indebtedness owed to Suburban Propane or any of its Restricted
Subsidiaries;
(2) make loans or advances to Suburban Propane or any of its
Restricted Subsidiaries; or
(3) transfer any of its properties or assets to Suburban Propane or
any of its Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) agreements governing Existing Indebtedness and Credit Facilities
as in effect on the date of the indenture and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of those agreements; provided that the
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are not materially more
restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in those agreements on the date
of the indenture;
(2) the indenture and the notes;
(3) restrictions in other Indebtedness incurred in compliance with the
covenant described under "--Incurrence of Indebtedness and Issuance of
Preferred Stock"; provided such restrictions, taken as a whole, are not
materially more restrictive than those contained in the agreements
described above;
(4) applicable law, rule, regulation or order;
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(5) customary non-assignment provisions in contracts and licenses
entered into in the ordinary course of business;
(6) purchase money obligations for property acquired in the ordinary
course of business and Capital Lease Obligations that impose restrictions
on the property purchased or leased of the nature described in clause (3)
of the preceding paragraph;
(7) any agreement or instrument governing Acquired Debt, which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person or the properties
or assets of the Person so acquired;
(8) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts distributions by that Restricted Subsidiary
pending the sale or other disposition;
(9) Liens permitted to be incurred under the provisions of the
covenant described above under the caption "--Liens" that limit the right
of the debtor to dispose of the assets subject to such Liens;
(10) provisions limiting the disposition or distribution of assets or
property in joint venture agreements, asset sale agreements, sale-leaseback
agreements, stock sale agreements and other similar agreements entered into
with the approval of Suburban Propane's Board of Supervisors, which
limitation is applicable only to the assets that are the subject of such
agreements; and
(11) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business.
Merger, Consolidation or Sale of Assets
Suburban Propane may not, directly or indirectly: (1) consolidate or merge
with or into another Person (whether or not Suburban Propane is the surviving
entity); or (2) sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of Suburban Propane and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person; unless:
(1) either: (a) Suburban Propane is the surviving entity; or (b) the
Person formed by or surviving any such consolidation or merger (if other
than Suburban Propane) or to which such sale, assignment, transfer,
conveyance or other disposition has been made is a corporation, partnership
or limited liability company organized or existing under the laws of the
United States, any state of the United States or the District of Columbia;
(2) the Person formed by or surviving any such consolidation or merger
(if other than Suburban Propane) or the Person to which such sale,
assignment, transfer, conveyance or other disposition has been made assumes
all the obligations of Suburban Propane under the notes, the indenture and
the exchange and registration rights agreement pursuant to agreements
reasonably satisfactory to the trustee;
(3) immediately after such transaction, no Default or Event of Default
exists; and
(4) Suburban Propane or the Person formed by or surviving any such
consolidation or merger (if other than Suburban Propane), or to which such
sale, assignment, transfer, conveyance or other disposition has been made
will, on the date of such transaction after giving pro forma effect thereto
and any related financing transactions as if the same had occurred at the
beginning of the applicable four-quarter period, be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the
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Consolidated Fixed Charge Coverage Ratio test set forth in the first
paragraph of the covenant described above under the caption "--Incurrence
of Indebtedness and Issuance of Preferred Stock."
If Suburban Propane engages in a merger, consolidation or sale of assets in
accordance with the provisions described above, Suburban Propane or the Person
formed by or surviving such transaction will comply with the covenant set forth
under the caption "--Existence of Corporate Co-Issuer." The indenture also
provides that Finance Corp. may not (1) consolidate or merge with or into
another Person (whether or not Finance Corp. is the surviving corporation), or
(2) sell, assign, transfer, convey or otherwise dispose of all or substantially
all of its properties or assets to another entity, except under conditions
similar to those described above; provided that the Person formed by or
surviving any such consolidation or merger with Finance Corp. must be a
corporation organized under the laws of the United States, any state of the
United States or the District of Columbia.
In addition, the Issuers may not, directly or indirectly, lease all or
substantially all of their properties or assets, in one or more related
transactions, to any other Person.
This "Merger, Consolidation or Sale of Assets" covenant will not apply to:
(A) a merger of Suburban Propane with an Affiliate solely for the
purpose of re-forming Suburban Propane in another jurisdiction; and
(B) any sale, transfer, assignment, conveyance, lease or other
disposition of assets between or among Suburban Propane and its Restricted
Subsidiaries.
In addition, the indenture provides that Suburban Propane may reorganize as
a corporation in accordance with the procedures established in the indenture;
provided that Suburban Propane shall have delivered to the trustee an opinion of
counsel reasonably acceptable to the trustee confirming that such reorganization
is not adverse to holders of the notes (it being recognized that such
reorganization shall not be deemed adverse to the holders of the notes solely
because (i) of the accrual of deferred tax liabilities resulting from such
reorganization or (ii) the successor or surviving corporation (a) is subject to
income tax as a corporate entity or (b) is considered to be an "includible
corporation" of an affiliated group of corporations within the meaning of the
Internal Revenue Code of 1986, as amended, or any similar state or local law)
and certain other conditions are satisfied.
Transactions with Affiliates
Suburban Propane will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate of Suburban Propane (each, an "Affiliate Transaction"),
unless:
(1) the Affiliate Transaction is on terms that are no less favorable
to Suburban Propane or the relevant Restricted Subsidiary than those that
would have been obtained in a comparable transaction by Suburban Propane or
such Restricted Subsidiary with an unrelated Person; and
(2) Suburban Propane delivers to the trustee, with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $10.0 million, a resolution of the
Board of Supervisors set forth in an officers' certificate certifying that
such Affiliate Transaction complies with this covenant and that such
Affiliate Transaction has been approved by a majority of the disinterested
members of the Board of Supervisors.
The following items will not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of the prior paragraph:
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(1) any employment agreement, employee benefit plan, officer and
director indemnification agreement or any similar arrangement entered into
by Suburban Propane or any of its Restricted Subsidiaries in the ordinary
course of business;
(2) transactions between or among Suburban Propane and/or its
Restricted Subsidiaries;
(3) transactions with a Person (other than an Unrestricted Subsidiary
of Suburban Propane) that is an Affiliate of Suburban Propane solely
because Suburban Propane owns, directly or through a Restricted Subsidiary,
an Equity Interest in, or controls, such Person;
(4) payment of supervisors' or directors' fees and compensation to
Persons who are not otherwise Affiliates of Suburban Propane;
(5) any issuance of Equity Interests (other than Disqualified Stock)
of Suburban Propane to Affiliates of Suburban Propane;
(6) Restricted Payments that do not violate the provisions of the
indenture described above under the caption "--Restricted Payments;"
(7) loans or advances to employees in the ordinary course of business
not to exceed $1.0 million in the aggregate at any one time outstanding;
(8) any Affiliate Transaction which constitutes a Permitted
Investment;
(9) any arm's-length transaction with a non-Affiliate that becomes an
Affiliate as a result of such transaction; and
(10) the payment of expenses and indemnification or contribution
obligations of any Person pursuant to our partnership agreement or the
partnership agreement of the Operating Partnership, in each case as in
effect on the date of the indenture.
Business Activities
Suburban Propane will not, and will not permit any of its Restricted
Subsidiaries to, engage in any business other than Permitted Businesses, except
to such extent as would not be material to Suburban Propane and its Restricted
Subsidiaries taken as a whole.
Existence of Corporate Co-Issuer
Suburban Propane will always maintain, directly or indirectly, a
wholly-owned Restricted Subsidiary of Suburban Propane organized as a
corporation under the laws of the United States of America, any state thereof or
the District of Columbia that will serve as a co-obligor of the notes unless
Suburban Propane is itself a corporation under the laws of the United States of
America, any state thereof or the District of Columbia.
Designation of Restricted and Unrestricted Subsidiaries
The Board of Supervisors of Suburban Propane may designate any of its
Restricted Subsidiaries, other than the Operating Partnership or Finance Corp.,
to be an Unrestricted Subsidiary if that designation would not cause a Default.
That designation will only be permitted if the Investment would be permitted at
that time and if the Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary. The Board of Supervisors may redesignate any
Unrestricted Subsidiary to be a Restricted Subsidiary if that redesignation
would not cause a Default.
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Any designation of a Subsidiary of Suburban Propane as an Unrestricted
Subsidiary will be evidenced to the trustee by filing with the trustee a
certified copy of the Board Resolution giving effect to such designation and an
officers' certificate certifying that such designation complied with the
preceding conditions. If, at any time, any Unrestricted Subsidiary would fail to
meet the preceding requirements as an Unrestricted Subsidiary, it will
thereafter cease to be an Unrestricted Subsidiary for purposes of the indenture
and any Indebtedness of such Subsidiary will be deemed to be incurred by a
Restricted Subsidiary of Suburban Propane as of such date and, if such
Indebtedness is not permitted to be incurred as of such date under the covenant
described under the caption "--Certain Covenants--Incurrence of Indebtedness and
Issuance of Preferred Stock," Suburban Propane will be in default of such
covenant. The Board of Supervisors of Suburban Propane may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation will be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of Suburban Propane of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation will only be permitted if (1) such
Indebtedness is permitted under the covenant described under the caption
"--Certain Covenants--Incurrence of Indebtedness and Issuance of Preferred
Stock," calculated on a pro forma basis as if such designation had occurred at
the beginning of the four-quarter reference period; and (2) no Default or Event
of Default would be in existence following such designation.
Payments for Consent
Suburban Propane will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any holder of notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of the indenture or the notes unless such consideration is offered to be paid
and is paid to all holders of the notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
Reports
Whether or not required by the Commission's rules and regulations, so long
as any notes are outstanding, the Issuers will furnish to the holders of notes
or cause the trustee to furnish to the holders of notes, within the time periods
specified in the Commission's rules and regulations:
(1) all quarterly and annual reports that would be required to be
filed with the Commission on Forms 10-Q and 10-K if the Issuers were
required to file such reports; and
(2) all current reports that would be required to be filed with the
Commission on Form 8-K if the Issuers were required to file such reports.
All such reports will be prepared in all material respects in accordance
with all of the rules and regulations applicable to such reports. Each
annual report on Form 10-K will include a report on the Issuers'
consolidated financial statements by the Issuers' certified independent
accountants. In addition, the Issuers will file a copy of each of the
reports referred to in clauses (1) and (2) above with the Commission for
public availability within the time periods specified in the rules and
regulations applicable to such reports (unless the Commission will not
accept such a filing) and will post the reports, or links to such reports,
on Suburban Propane's website within those time periods.
If, at any time, either or both of the Issuers are no longer subject to the
periodic reporting requirements of the Exchange Act for any reason, the Issuers
will nevertheless continue filing the reports specified in the preceding
paragraph with the Commission within the time periods specified above unless the
Commission will not accept such a filing. The Issuers agree that they will not
take any action for the purpose of causing the Commission not to accept any such
filings. If, notwithstanding the foregoing, the Commission will not accept the
Issuers' filings for any reason, the Issuers will post the reports referred to
in the preceding paragraph on Suburban
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Propane's website within the time periods that would apply if the Issuers were
required to file those reports with the Commission.
If Suburban Propane has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
the preceding paragraph will include a reasonably detailed presentation, either
on the face of the financial statements or in the footnotes thereto, and in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, of the financial condition and results of operations of Suburban
Propane and its Restricted Subsidiaries separate from the financial condition
and results of operations of the Unrestricted Subsidiaries of Suburban Propane.
In addition, Suburban Propane agrees that, for so long as any notes remain
outstanding, at any time it is not required to file the reports required by the
preceding paragraphs with the Commission, it will furnish to the holders and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
Events of Default and Remedies
Each of the following is an Event of Default:
(1) default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the notes;
(2) default in payment when due of the principal of, or premium, if
any, on the notes,
(3) failure by Suburban Propane or any of its Restricted Subsidiaries
to comply with any other term, covenant or agreement contained in the
notes, the indenture or the escrow and security agreement, other than a
default specified in either clause (1) or (2) above, and the default
continues for a period of 45 days after written notice of default requiring
the Issuers to remedy the same is given to Suburban Propane by the trustee
or by holders of 25% in aggregate principal amount of the notes then
outstanding;
(4) the failure to pay at final maturity (giving effect to any
applicable grace periods and any extensions thereof) the stated principal
amount of any Indebtedness of Suburban Propane or any Restricted Subsidiary
of Suburban Propane, or the acceleration of the final stated maturity of
any such Indebtedness if the aggregate principal amount of such
Indebtedness, together with the principal amount of any other such
Indebtedness in default for failure to pay principal at final stated
maturity or which has been accelerated, aggregates $10.0 million or more at
any time;
(5) a final judgment or judgments, which is or are non-appealable and
non-reviewable or which has or have not been stayed pending appeal or
review or as to which all rights to appeal or review have expired or been
exhausted, shall be rendered against Suburban Propane or any of its
Restricted Subsidiaries; provided such judgment or judgments requires or
require the payment of money in excess of $10.0 million in the aggregate
and is not covered by insurance or discharged or stayed pending appeal or
review within 60 days after entry of such judgment; in the event of a stay,
the judgment shall not be discharged within 30 days after the stay expires;
and
(6) certain events of bankruptcy or insolvency described in the
indenture with respect to Suburban Propane, Finance Corp. or any
Significant Subsidiary of Suburban Propane.
In the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to Suburban Propane, Finance Corp. or any
Significant Subsidiary of Suburban Propane, all outstanding notes will become
due and payable immediately without further action or notice. If any other Event
of Default occurs
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and is continuing, the trustee or the holders of at least 25% in principal
amount of the then outstanding notes may declare all the notes to be due and
payable immediately.
Subject to certain limitations, holders of a majority in principal amount
of the then outstanding notes may direct the trustee in its exercise of any
trust or power. The trustee may withhold from holders of the notes notice of any
continuing Default or Event of Default if it determines that withholding notice
is in their interest, except a Default or Event of Default relating to the
payment of principal or interest or Liquidated Damages.
Subject to the provisions of the indenture relating to the duties of the
trustee, in case an Event of Default occurs and is continuing, the trustee will
be under no obligation to exercise any of the rights or powers under the
indenture at the request or direction of any holders of notes unless such
holders have offered to the trustee reasonable indemnity or security against any
loss, liability or expense. Except to enforce the right to receive payment of
principal, premium (if any) or interest when due, no holder of a note may pursue
any remedy with respect to the indenture or the notes unless:
(1) such holder has previously given the trustee notice that an Event
of Default is continuing;
(2) holders of at least 25% in aggregate principal amount of the
outstanding notes have requested the trustee to pursue the remedy;
(3) such holders have offered the trustee reasonable security or
indemnity against any loss, liability or expense;
(4) the trustee has not complied with such request within 60 days
after the receipt thereof and the offer of security or indemnity; and
(5) holders of a majority in aggregate principal amount of the
outstanding notes have not given the trustee a direction inconsistent with
such request within such 60-day period.
The holders of a majority in aggregate principal amount of the notes then
outstanding by notice to the trustee may, on behalf of the holders of all of the
notes, rescind an acceleration or waive any existing Default or Event of Default
and its consequences under the indenture except a continuing Default or Event of
Default in the payment of interest or Liquidated Damages on, or the principal
of, the notes.
The Issuers are required to deliver to the trustee annually a statement
regarding compliance with the indenture. Upon becoming aware of any Default or
Event of Default, the Issuers are required to deliver to the trustee a statement
specifying such Default or Event of Default.
No Personal Liability of Limited Partners, Directors, Officers, Employees and
Unitholders
No past, present or future limited partner, director, officer, employee,
incorporator, unitholder, stockholder or Affiliate of the Issuers, as such, will
have any liability for any obligations of the Issuers under the notes, the
indenture, or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each holder of notes by accepting a note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the notes. The waiver may not be effective to
waive liabilities under the federal securities laws.
Non-Recourse
The Issuers' obligations under the indenture are payable only out of their
cash flow and assets. The Issuers' obligations under the indenture are
non-
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recourse to the limited partners of Suburban Propane and are non-recourse to
the Operating Partnership and its subsidiaries. The trustee has, and each holder
of a note, by accepting a note, is deemed to have, agreed in the indenture that
the limited partners as well as the Operating Partnership and its subsidiaries
will not be liable for any of our obligations under the indenture.
Legal Defeasance and Covenant Defeasance
The Issuers may, at their option and at any time, elect to have all of
their obligations discharged with respect to the outstanding notes ("Legal
Defeasance") except for:
(1) the rights of holders of outstanding notes to receive payments in
respect of the principal of, or interest or premium and Liquidated Damages,
if any, on such notes when such payments are due from the trust referred to
below;
(2) the Issuers' obligations with respect to the notes concerning
issuing temporary notes, registration of notes, mutilated, destroyed, lost
or stolen notes and the maintenance of an office or agency for payment and
money for security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the trustee,
and the Issuers' obligations in connection therewith; and
(4) the Legal Defeasance provisions of the indenture.
In addition, the Issuers may, at their option and at any time, elect to
have the obligations of the Issuers released with respect to certain covenants
(including their obligation to make Change of Control Offers and Asset Sale
Offers) that are described in the indenture ("Covenant Defeasance") and
thereafter any omission to comply with those covenants will not constitute a
Default or Event of Default with respect to the notes. In the event Covenant
Defeasance occurs, certain events (not including non-payment, bankruptcy,
receivership, rehabilitation and insolvency events) described under "Events of
Default and Remedies" will no longer constitute an Event of Default with respect
to the notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) the Issuers must irrevocably deposit with the trustee, in trust,
for the benefit of the holders of the notes, cash in U.S. dollars,
non-callable Government Securities, or a combination of cash in U.S.
dollars and non-callable Government Securities, in amounts as will be
sufficient, in the opinion of a nationally recognized investment bank,
appraisal firm or firm of independent public accountants, to pay the
principal of, or interest and premium and Liquidated Damages, if any, on
the outstanding notes on the Stated Maturity or on the applicable
redemption date, as the case may be, and the Issuers must specify whether
the notes are being defeased to maturity or to a particular redemption
date;
(2) in the case of Legal Defeasance, the Issuers have delivered to the
trustee an opinion of counsel reasonably acceptable to the trustee
confirming that (a) the Issuers have received from, or there has been
published by, the Internal Revenue Service a ruling or (b) since the date
of the indenture, there has been a change in the applicable federal income
tax law, in either case to the effect that, and based thereon such opinion
of counsel will confirm that, the holders of the outstanding notes will not
recognize income, gain or loss for federal income tax purposes as a result
of such Legal Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;
(3) in the case of Covenant Defeasance, the Issuers have delivered to
the trustee an opinion of counsel reasonably acceptable to the trustee
confirming that the holders of the outstanding notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
Covenant De-
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feasance and will be subject to federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such
Covenant Defeasance had not occurred;
(4) no Default or Event of Default has occurred and is continuing on
the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit and the
grant of any Lien securing such borrowing);
(5) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under, any material
agreement or instrument (other than the indenture) to which Suburban
Propane or any of its Subsidiaries is a party or by which Suburban Propane
or any of its Subsidiaries is bound;
(6) the Issuers must deliver to the trustee an officers' certificate
stating that the deposit was not made by the Issuers with the intent of
preferring the holders of notes over the other creditors of the Issuers
with the intent of defeating, hindering, delaying or defrauding creditors
of the Issuers or others; and
(7) the Issuers must deliver to the trustee an officers' certificate
and an opinion of counsel, each stating that all conditions precedent
relating to the Legal Defeasance or the Covenant Defeasance have been
complied with.
Notwithstanding the foregoing, the opinion of counsel required by clause
(2) above with respect to a Legal Defeasance need not be delivered if all notes
not theretofore delivered to the trustee for cancellation (1) have become due
and payable or (2) will become due and payable on the maturity date within one
year, or are to be called for redemption within one year, under arrangements
reasonably satisfactory to the trustee for the giving of notice of redemption by
the trustee in the name, and at the expense, of the Issuers.
Amendment, Supplement and Waiver
Except as provided in the next two succeeding paragraphs, the indenture or
the notes may be amended or supplemented with the consent of the holders of at
least a majority in principal amount of the notes then outstanding (including,
without limitation, consents obtained in connection with a purchase of, or
tender offer or exchange offer for, notes), and any existing default or
compliance with any provision of the indenture or the notes may be waived with
the consent of the holders of a majority in principal amount of the then
outstanding notes (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, notes).
Without the consent of each noteholder affected, an amendment or waiver may
not (with respect to any notes held by a non-consenting holder):
(1) reduce the principal amount of notes whose holders must consent to
an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any note
or alter the provisions with respect to the redemption of the notes (other
than provisions relating to the covenants described above under the caption
"--Repurchase at the Option of Holders");
(3) reduce the rate of or change the time for payment of interest on
any note;
(4) waive a Default or Event of Default in the payment of principal
of, or interest or premium, or Liquidated Damages, if any, on, the notes
(except a rescission of acceleration of the notes by
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the holders of at least a majority in aggregate principal amount of the
notes and a waiver of the payment default that resulted from such
acceleration);
(5) make any note payable in money other than that stated in the
notes;
(6) make any change in the provisions of the indenture relating to
waivers of past Defaults or the rights of holders of notes to receive
payments of principal of, or interest or premium or Liquidated Damages, if
any, on the notes;
(7) waive a redemption payment with respect to any note (other than a
payment required by one of the covenants described above under the caption
"--Repurchase at the Option of Holders"); or
(8) make any change in the preceding amendment and waiver provisions.
Notwithstanding the preceding, without the consent of any holder of notes,
the Issuers and the trustee may amend or supplement the indenture or the notes:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated notes in addition to or in place of
certificated notes;
(3) to provide for the assumption of the Issuers' obligations to
holders of notes in the case of a merger or consolidation or sale of all or
substantially all of the Issuers' assets;
(4) to make any change that would provide any additional rights or
benefits to the holders of notes or that does not adversely affect the
legal rights under the indenture of any such holder;
(5) to comply with requirements of the Commission in order to effect
or maintain the qualification of the indenture under the Trust Indenture
Act;
(6) to conform the text of the indenture or the notes to any provision
of this Description of Notes to the extent that such provision in this
Description of Notes was intended to be a verbatim recitation of a
provision of the indenture or the notes; or
(7) to provide for the issuance of additional notes in accordance with
the limitations set forth in the indenture as of its date.
Satisfaction and Discharge
The indenture will be discharged and will cease to be of further effect as
to all notes issued thereunder, when:
(1) either:
(a) all notes that have been authenticated, except lost, stolen
or destroyed notes that have been replaced or paid and notes for whose
payment money has been deposited in trust and thereafter repaid to the
Issuers, have been delivered to the trustee for cancellation; or
(b) all notes that have not been delivered to the trustee for
cancellation have become due and payable by reason of the mailing of a
notice of redemption or otherwise or will become due and payable
within one year, or are to be called for redemption within one year
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under arrangements reasonably satisfactory to the trustee for the
giving of notice of redemption by the trustee in the name, and at the
expense, of the Issuers, and the Issuers have irrevocably deposited or
caused to be deposited with the trustee as trust funds in trust solely
for the benefit of the holders, cash in U.S. dollars, non-callable
Government Securities, or a combination of cash in U.S. dollars and
non-callable Government Securities, in amounts as will be sufficient,
without consideration of any reinvestment of interest, to pay and
discharge the entire indebtedness on the notes not delivered to the
trustee for cancellation for principal, premium and Liquidated
Damages, if any, and accrued interest to the date of maturity or
redemption;
(2) no Default or Event of Default has occurred and is continuing on
the date of the deposit (other than a Default or Event of Default resulting
from the borrowing of funds to be applied to such deposit) and the deposit
will not result in a breach or violation of, or constitute a default under,
any other instrument to which the Issuers are a party or by which the
Issuers are bound;
(3) the Issuers have paid or caused to be paid all sums payable by
them under the indenture; and
(4) the Issuers have delivered irrevocable instructions to the trustee
under the indenture to apply the deposited money toward the payment of the
notes at maturity or the redemption date, as the case may be.
In addition, the Issuers must deliver an officers' certificate and an
opinion of counsel to the trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
Concerning the Trustee
If the trustee becomes a creditor of the Issuers, the indenture limits its
right to obtain payment of claims in certain cases, or to realize on certain
property received in respect of any such claim as security or otherwise. The
trustee will be permitted to engage in other transactions; however, if it
acquires any conflicting interest it must eliminate such conflict within 90
days, apply to the Commission for permission to continue (if the indenture has
been qualified under the Trust Indenture Act) or resign.
The holders of a majority in principal amount of the then outstanding notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the trustee, subject to
certain exceptions. The indenture provides that in case an Event of Default
occurs and is continuing, the trustee will be required, in the exercise of its
power, to use the degree of care of a prudent man in the conduct of his own
affairs. Subject to such provisions, the trustee will be under no obligation to
exercise any of its rights or powers under the indenture at the request of any
holder of notes, unless such holder has offered to the trustee security and
indemnity satisfactory to it against any loss, liability or expense.
Additional Information
Anyone who receives this prospectus may obtain a copy of the indenture and
exchange and registration rights agreement without charge by writing to Suburban
Propane Partners, L.P., One Suburban Plaza, 240 Route 10 West, Whippany, NJ
07981, Attention: Investor Relations.
Book-Entry, Delivery and Form
The exchange notes will be issued in registered, global form in minimum
denominations of $1,000 and integral multiples of $1,000 in excess of $1,000.
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The exchange notes will be represented by one or more notes in registered,
global form without interest coupons (collectively, the "Global Notes") and will
be deposited upon issuance with the trustee as custodian for The Depository
Trust Company ("DTC"), in New York, New York, and registered in the name of DTC
or its nominee, in each case for credit to an account of a direct or indirect
participant in DTC as described below.
Except as set forth below, the Global Notes may be transferred, in whole
and not in part, only to another nominee of DTC or to a successor of DTC or its
nominee. Beneficial interests in the Global Notes may not be exchanged for notes
in certificated form except in the limited circumstances described below. See
"--Exchange of Global Notes for Certificated Notes." In addition, transfers of
beneficial interests in the Global Notes will be subject to the applicable rules
and procedures of DTC and its direct or indirect participants (including, if
applicable, those of the Euroclear System ("Euroclear") and Clearstream Banking,
S.A. ("Clearstream")), which may change from time to time.
Depository Procedures
The following descriptions of the operations and procedures of DTC,
Euroclear and Clearstream are provided solely as a matter of convenience. These
operations and procedures are solely within the control of the respective
settlement systems and are subject to changes by them. Suburban Propane takes no
responsibility for these operations and procedures and urges investors to
contact the systems or their participants directly to discuss these matters.
DTC has advised Suburban Propane that DTC is a limited-purpose trust
company created to hold securities for its participating organizations
(collectively, the "Participants") and to facilitate the clearance and
settlement of transactions in those securities between the Participants through
electronic book-entry changes in accounts of its Participants. The Participants
include securities brokers and dealers (including the initial purchasers),
banks, trust companies, clearing corporations and certain other organizations.
Access to DTC's system is also available to other entities such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly (collectively,
the "Indirect Participants"). Persons who are not Participants may beneficially
own securities held by or on behalf of DTC only through the Participants or the
Indirect Participants. The ownership interests in, and transfers of ownership
interests in, each security held by or on behalf of DTC are recorded on the
records of the Participants and Indirect Participants.
DTC has also advised Suburban Propane that, pursuant to procedures
established by it:
(1) upon deposit of the Global Notes, DTC will credit the accounts of
the Participants designated by the initial purchasers with portions of the
principal amount of the Global Notes; and
(2) ownership of these interests in the Global Notes will be shown on,
and the transfer of ownership of these interests will be effected only
through, records maintained by DTC (with respect to the Participants) or by
the Participants and the Indirect Participants (with respect to other
owners of beneficial interest in the Global Notes).
Investors in the Global Notes who are Participants may hold their interests
therein directly through DTC. Investors in the Global Notes who are not
Participants may hold their interests therein indirectly through organizations
(including Euroclear and Clearstream) which are Participants. Participants such
as Euroclear and Clearstream will hold interests in the Global Notes on behalf
of their participants through customers' securities accounts in their respective
names on the books of their respective depositories, which are Euroclear Bank
S.A./N.V., as operator of Euroclear, and Citibank, N.A., as operator of
Clearstream. All interests in a Global Note may be subject to the procedures and
requirements of DTC. Those interests held through Euroclear or Clearstream may
also be subject to the procedures and requirements of such systems. The laws of
some states require that certain Persons take physical delivery in definitive
form of securities that they own. Consequently, the ability to transfer
beneficial interests in a Global Note to such Persons will be limited to that
extent. Because
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DTC can act only on behalf of the Participants, which in turn act on behalf of
the Indirect Participants, the ability of a Person having beneficial interests
in a Global Note to pledge such interests to Persons that do not participate in
the DTC system, or otherwise take actions in respect of such interests, may be
affected by the lack of a physical certificate evidencing such interests.
Except as described below, owners of beneficial interests in the Global Notes
will not have notes registered in their names, will not receive physical
delivery of exchange notes in certificated form and will not be considered the
registered owners or "Holders" thereof under the indenture for any purpose.
Payments in respect of the principal of, and interest and premium, if any,
and Liquidated Damages, if any, on a Global Note registered in the name of DTC
or its nominee will be payable to DTC in its capacity as the registered holder
under the indenture. Under the terms of the indenture, Suburban Propane and the
trustee will treat the Persons in whose names the exchange notes, including the
Global Notes, are registered as the owners of the exchange notes for the purpose
of receiving payments and for all other purposes. Consequently, neither Suburban
Propane, the trustee nor any agent of Suburban Propane or the trustee has or
will have any responsibility or liability for:
(1) any aspect of DTC's records or any Participant's or Indirect
Participant's records relating to or payments made on account of beneficial
ownership interest in the Global Notes or for maintaining, supervising or
reviewing any of DTC's records or any Participant's or Indirect
Participant's records relating to the beneficial ownership interests in the
Global Notes; or
(2) any other matter relating to the actions and practices of DTC or
any of its Participants or Indirect Participants.
DTC has advised Suburban Propane that its current practice, upon receipt of
any payment in respect of securities such as the exchange notes (including
principal and interest), is to credit the accounts of the relevant Participants
with the payment on the payment date unless DTC has reason to believe it will
not receive payment on such payment date. Each relevant Participant is credited
with an amount proportionate to its beneficial ownership of an interest in the
principal amount of the relevant security as shown on the records of DTC.
Payments by the Participants and the Indirect Participants to the beneficial
owners of exchange notes will be governed by standing instructions and customary
practices and will be the responsibility of the Participants or the Indirect
Participants and will not be the responsibility of DTC, the trustee or Suburban
Propane. Neither Suburban Propane nor the trustee will be liable for any delay
by DTC or any of the Participants or the Indirect Participants in identifying
the beneficial owners of the exchange notes, and Suburban Propane and the
trustee may conclusively rely on and will be protected in relying on
instructions from DTC or its nominee for all purposes.
Transfers of beneficial interests in Global Notes between the Participants
will be effected in accordance with DTC's procedures, and will be settled in
same-day funds, and transfers of beneficial interests in Global Notes between
participants in Euroclear and Clearstream will be effected in accordance with
their respective rules and operating procedures.
Cross-market transfers between the Participants, on the one hand, and
Euroclear or Clearstream participants, on the other hand, will be effected
through DTC in accordance with DTC's rules on behalf of Euroclear or
Clearstream, as the case may be, by their respective depositaries; however, such
cross-market transactions will require delivery of instructions to Euroclear or
Clearstream, as the case may be, by the counterparty in such system in
accordance with the rules and procedures and within the established deadlines
(Brussels time) of such system. Euroclear or Clearstream, as the case may be,
will, if the transaction meets its settlement requirements, deliver instructions
to its respective depositary to take action to effect final settlement on its
behalf by delivering or receiving interests in the relevant Global Note in DTC,
and making or receiving payment in accordance with normal procedures for
same-day funds settlement applicable to DTC. Euroclear participants and
Clearstream participants may not deliver instructions directly to the
depositories for Euroclear or Clearstream.
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DTC has advised Suburban Propane that it will take any action permitted to
be taken by a holder of exchange notes only at the direction of one or more
Participants to whose account DTC has credited the interests in the Global Notes
and only in respect of such portion of the aggregate principal amount of the
exchange notes as to which such Participant or Participants has or have given
such direction. However, if there is an Event of Default under the exchange
notes, DTC reserves the right to exchange the Global Notes for definitive
exchange notes in certificated form, and to distribute such notes to its
Participants.
Although DTC, Euroclear and Clearstream have agreed to the foregoing
procedures to facilitate transfers of interests in the Global Notes among
participants in DTC, Euroclear and Clearstream, they are under no obligation to
perform or to continue to perform such procedures, and may discontinue such
procedures at any time. Neither Suburban Propane nor the trustee nor any of
their respective agents will have any responsibility for the performance by DTC,
Euroclear or Clearstream or their respective participants or indirect
participants of their respective obligations under the rules and procedures
governing their operations.
Exchange of Global Notes for Certificated Notes
A Global Note is exchangeable for definitive exchange notes in registered
certificated form ("Certificated Notes") if:
(1) DTC (a) notifies Suburban Propane that it is unwilling or unable
to continue as depositary for the Global Notes or (b) has ceased to be a
clearing agency registered under the Exchange Act and, in either case,
Suburban Propane fails to appoint a successor depositary within 90 days of
its delivery of such notice;
(2) Suburban Propane, at its option, notifies the trustee in writing
that it elects to cause the issuance of the Certificated Notes; or
(3) there has occurred and is continuing a Default or Event of Default
with respect to the exchange notes and the registrar has received a written
request from DTC to issue Certificated Notes.
In addition, beneficial interests in a Global Note may be exchanged for
Certificated Notes upon prior written notice given to the trustee by or on
behalf of DTC in accordance with the indenture. In all cases, Certificated Notes
delivered in exchange for any Global Note or beneficial interests in Global
Notes will be registered in the names, and issued in any approved denominations,
requested by or on behalf of the depositary (in accordance with its customary
procedures).
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Same Day Settlement and Payment
Suburban Propane will make payments in respect of the notes represented by
the Global Notes (including principal, premium, if any, interest and Liquidated
Damages, if any) by wire transfer of immediately available funds to DTC in its
capacity as the registered holder under the indenture. Suburban Propane will
make, or will cause the paying agent to make, all payments of principal,
interest and premium, if any, and Liquidated Damages, if any, with respect to
Certificated Notes by wire transfer of immediately available funds to the
accounts specified by the holders of the Certificated Notes or, if no such
account is specified, by mailing a check to each such holder's registered
address. The exchange notes represented by the Global Notes are eligible to
trade in DTC's Same-Day Funds Settlement System, and any permitted secondary
market trading activity in such notes will, therefore, be required by DTC to be
settled in immediately available funds. Suburban Propane expects that secondary
trading in any Certificated Notes will also be settled in immediately available
funds.
Because of time zone differences, the securities account of a Euroclear or
Clearstream participant purchasing an interest in a Global Note from a
Participant will be credited, and any such crediting will be reported to the
relevant Euroclear or Clearstream participant, during the securities settlement
processing day (which must be a business day for Euroclear and Clearstream)
immediately following the settlement date of DTC. DTC has advised Suburban
Propane that cash received in Euroclear or Clearstream as a result of sales of
interests in a Global Note by or through a Euroclear or Clearstream participant
to a Participant will be received with value on the settlement date of DTC but
will be available in the relevant Euroclear or Clearstream cash account only as
of the business day for Euroclear or Clearstream following DTC's settlement
date.
Certain Definitions
Set forth below are certain defined terms used in the indenture. Reference
is made to the indenture for a full disclosure of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such specified
Person, whether or not such Indebtedness is incurred in connection with, or
in contemplation of, such other Person merging with or into, or becoming a
Restricted Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person.
"Acquisition" means the acquisition by the Operating Partnership of all or
substantially all of the assets of Agway Energy pursuant to the Asset Purchase
Agreement, dated as of November 7, 2003, by and among the Operating Partnership
and Agway Energy Products, LLC, Agway Energy Services, Inc. and Agway Energy
Services PA, Inc.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control. A Person shall not be
deemed an "Affiliate" of Suburban Propane or any of its Restricted Subsidiaries
solely as a result of such Person being a joint venture partner of Suburban
Propane or any of its Restricted Subsidiaries. For purposes of this definition,
the terms "controlling," "controlled by" and "under common control with" have
correlative meanings.
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"Asset Acquisition" means the following:
(1) an Investment by Suburban Propane or any Restricted Subsidiary of
Suburban Propane in any other Person pursuant to which the Person shall
become a Restricted Subsidiary of Suburban Propane, or shall be merged with
or into Suburban Propane or any Restricted Subsidiary of Suburban Propane;
(2) the acquisition by Suburban Propane or any Restricted Subsidiary
of Suburban Propane of the assets of any Person, other than a Restricted
Subsidiary of Suburban Propane, which constitute all or substantially all
of the assets of such Person; or
(3) the acquisition by Suburban Propane or any Restricted Subsidiary
of Suburban Propane of any division or line of business of any Person,
other than a Restricted Subsidiary of Suburban Propane.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights; provided that the sale, conveyance or other disposition of all or
substantially all of the assets of Suburban Propane and its Restricted
Subsidiaries taken as a whole will be governed by the provisions of the
indenture described above under the caption "--Repurchase at the Option of
Holders--Change of Control" and/or the provisions described above under the
caption "--Certain Covenants--Merger, Consolidation or Sale of Assets" and
not by the provisions of the Asset Sale covenant; and
(2) the issuance of Equity Interests in any of Suburban Propane's
Restricted Subsidiaries or the sale of Equity Interests in any of its
Restricted Subsidiaries.
Notwithstanding the preceding, none of the following items will be deemed
to be an Asset Sale:
(1) any single transaction or series of related transactions that
involves assets having a Fair Market Value of less than $1.0 million;
(2) a transfer of assets between or among Suburban Propane and its
Restricted Subsidiaries,
(3) an issuance of Equity Interests by a Restricted Subsidiary of
Suburban Propane to Suburban Propane or to a Restricted Subsidiary of
Suburban Propane;
(4) the sale or lease of inventory, products, services, accounts
receivable or other current assets in the ordinary course of business and
any sale or other disposition of damaged, worn-out or obsolete assets in
the ordinary course of business;
(5) the good faith surrender or waiver of contract rights or the
settlement, release or surrender of claims of any kind, not to exceed the
Fair Market Value of $5.0 million in the aggregate from the date of the
indenture;
(6) the sale or other disposition of cash or Cash Equivalents; and
(7) a Restricted Payment that does not violate the covenant described
above under the caption "--Certain Covenants--Restricted Payments" or a
Permitted Investment.
"Asset Sale Offer" has the meaning assigned to that term in the indenture
governing the notes.
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"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
sale and leaseback transaction including any period for which such lease has
been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP; provided,
however, that if such sale and leaseback transaction results in a Capital Lease
Obligation, the amount of Indebtedness represented thereby will be determined in
accordance with the definition of "Capital Lease Obligation."
"Available Cash" as to any quarter means:
(1) the sum of:
(a) all cash receipts of Suburban Propane during such quarter
from all sources other than Asset Sales (including, without
limitation, distributions of cash received from the Operating
Partnership and cash proceeds received by or distributed to Suburban
Propane from Interim Capital Transactions, but excluding cash proceeds
from Termination Capital Transactions); and
(b) any reduction with respect to such quarter in a cash reserve
previously established pursuant to clause (2)(b) below (either by
reversal or utilization) from the level of such reserve at the end of
the prior quarter;
(2) less the sum of:
(a) all cash disbursements of Suburban Propane during such
quarter, including, without limitation, disbursements for operating
expenses, taxes, if any, debt service (including, without limitation,
the payment of principal, premium and interest), redemption of Capital
Stock of Suburban Propane (including Common Units), capital
expenditures, contributions, if any, to the Operating Partnership and
cash distributions to partners of Suburban Propane (but only to the
extent that such cash distributions to partners exceed Available Cash
for the immediately preceding quarter); and
(b) any cash reserves established with respect to such quarter,
and any increase with respect to such quarter in a cash reserve
previously established pursuant to this clause (2)(b) from the level
of such reserve at the end of the prior quarter, in such amounts as
the general partner of Suburban Propane determines in its reasonable
discretion to be necessary or appropriate (1) to provide for the
proper conduct of the business of Suburban Propane or the Operating
Partnership (including, without limitation, reserves for future
capital expenditures), (2) to provide funds for distributions with
respect to Capital Stock of Suburban Propane in respect of any one or
more of the next four quarters or (3) because the distribution of such
amounts would be prohibited by applicable law or by any loan
agreement, security agreement, mortgage, debt instrument or other
agreement or obligation to which Suburban Propane is a party or by
which it is bound or its assets are subject;
(3) plus the aggregate maximum amount of working capital Indebtedness
available to Suburban Propane or its Restricted Subsidiaries under Credit
Facilities on the date of such Restricted Payment.
Notwithstanding the foregoing, "Available Cash" shall not include any cash
receipts or reductions in reserves or take into account any disbursements made
or reserves established in each case after the date of liquidation of Suburban
Propane. Taxes paid by Suburban Propane on behalf of, or amounts withheld with
respect to, all or less than all of the partners shall not be considered cash
disbursements of Suburban Propane that reduce
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Available Cash, but the payment or withholding thereof shall be deemed to be a
distribution of Available Cash to the partners. Alternatively, in the discretion
of the Board of Supervisors of Suburban Propane, such taxes (if pertaining to
all partners) may be considered to be cash disbursements of Suburban Propane
which reduce Available Cash, but the payment or withholding thereof shall not be
deemed to be a distribution of Available Cash to such partners.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only after the passage of time. The terms "Beneficially Owns" and
"Beneficially Owned" have a corresponding meaning.
"Board of Supervisors" means:
(1) with respect to a corporation, the board of directors of the
corporation or any committee thereof duly authorized to act on behalf of
such board;
(2) with respect to a partnership, the board of directors of the
general partner of the partnership; provided that in the case of Suburban
Propane, it means the board of supervisors of Suburban Propane;
(3) with respect to a limited liability company, the managing member
or members or any controlling committee of managing members thereof; and
(4) with respect to any other Person, the board or committee of such
Person serving a similar function.
"Borrowing Base" means, as of any date, an amount equal to:
(1) 85% of the face amount of all accounts receivable (net of
reserves) owned by Suburban Propane and its Restricted Subsidiaries as of
the end of the most recent fiscal quarter preceding such date that were not
more than 60 days past due; plus
(2) 60% of the book value of all inventory (net of reserves) owned by
Suburban Propane and its Restricted Subsidiaries as of the end of the most
recent fiscal quarter preceding such date.
"Capital Lease Obligation" means, at the time any determination is to be
made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP, and the Stated Maturity thereof shall be the date of the last payment of
rent or any other amount due under such lease prior to the first date upon which
such lease may be prepaid by the lessee without payment of a penalty.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
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(3) in the case of a partnership or limited liability company,
partnership interests (whether general or limited), membership interests,
units, incentive distribution rights or any similar equity right to
distributions; and
(4) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person, but excluding from all of the foregoing any
debt securities convertible into Capital Stock, whether or not such debt
securities include any right of participation with Capital Stock.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is pledged in
support of those securities) having maturities of not more than one year
from the date of acquisition;
(3) marketable direct obligations issued by any state of the United
States or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of
acquisition thereof and having as at such date the highest rating
obtainable from either S&P and its successors or Moody's and its
successors;
(4) commercial paper having one of the two highest ratings obtainable
from S&P or Moody's and in each case maturing within 270 days after the
date of creation;
(5) certificates of deposit maturing one year or less from the date of
acquisition thereof issued by commercial banks incorporated under the laws
of the United States or any state thereof or the District of Columbia or
Canada:
(a) the commercial paper or other short term unsecured debt
obligations of which are as at such date rated either "A-2" or better
(or comparably if the rating system is changed) by S&P or "Prime-2" or
better (or comparably if the rating system is changed) by Moody's; and
(b) the long-term debt obligations of which are, as at such date,
rated either "A" or better (or comparably if the rating system is
changed) by either S&P or Moody's (such commercial banks, "Permitted
Banks");
(6) eurodollar time deposits having a maturity of less than 270 days
from the date of acquisition thereof purchased directly from any Permitted
Bank;
(7) bankers' acceptances eligible for rediscount under requirements of
the Board of Governors of the Federal Reserve System and accepted by
Permitted Banks;
(8) obligations of the type described in clauses (1) through (7) 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 Suburban Propane or one of its
Restricted Subsidiaries by a custodian which is a Permitted Bank and which
is not a counterparty to the repurchase agreement in question; and
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(9) money market funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (1) through (8) of this
definition.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets of Suburban Propane and its Subsidiaries taken as a
whole to any "person" (as that term is used in Section 13(d) of the
Exchange Act) other than a Principal or a Related Party of a Principal;
(2) the adoption of a plan relating to the liquidation or dissolution
of Suburban Propane or its general partner;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than the Principals and their Related
Parties, becomes the Beneficial Owner, directly or indirectly, of more than
50% of the Voting Stock of the general partner of Suburban Propane,
measured by voting power rather than number of units or shares;
(4) Suburban Energy Services Group LLC ceases to be the general
partner of Suburban Propane;
(5) Suburban Propane consolidates with, or merges with or into, any
Person (other than the Principals and their Related Parties), or any Person
(other than the Principals and their Related Parties) consolidates with, or
merges with or into, Suburban Propane, other than any such transaction
where the Voting Stock of Suburban Propane outstanding immediately prior to
such transaction constitutes, or is converted into or exchanged for Voting
Stock (other than Disqualified Stock) of the surviving or transferee Person
constituting, a majority of the outstanding shares of such Voting Stock of
such surviving or transferee Person (immediately after giving effect to
such issuance);
(6) the first day on which a majority of the members of the Board of
Supervisors of Suburban Propane are not Continuing Directors; and
(7) the first day on which Suburban Propane fails to own, directly or
indirectly, 100% of the issued and outstanding Equity Interests of Finance
Corp.
"Change of Control Offer" has the meaning assigned to it in the indenture
governing the notes.
"Commission" means the Securities and Exchange Commission.
"Common Units" means the units representing limited partner interests of
Suburban Propane, having the rights and obligations specified with respect to
common units of Suburban Propane.
"Consolidated Cash Flow Available for Fixed Charges" means, with respect to
Suburban Propane and its Restricted Subsidiaries for any period, the sum of,
without duplication, the following amounts for that period, taken as single
accounting period:
(1) Consolidated Net Income;
(2) Consolidated Non-Cash Charges (to the extent Consolidated Net
Income was reduced thereby);
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(3) Consolidated Interest Expense (to the extent Consolidated Net
Income was reduced thereby); and
(4) Consolidated Income Tax Expense (to the extent Consolidated Net
Income was reduced thereby).
"Consolidated Fixed Charge Coverage Ratio" means, with respect to Suburban
Propane and its Restricted Subsidiaries, the ratio of (a) the aggregate amount
of Consolidated Cash Flow Available for Fixed Charges of Suburban Propane and
its Restricted Subsidiaries for the four full fiscal quarters for which internal
financial statements are available immediately preceding the date of the
transaction (the "Transaction Date") giving rise to the need to calculate the
Consolidated Fixed Charge Coverage Ratio (the "Four Quarter Period"), to (b) the
aggregate amount of Consolidated Fixed Charges of Suburban Propane and its
Restricted Subsidiaries for the Four Quarter Period. In addition to and without
limitation of the foregoing, for purposes of this definition, "Consolidated Cash
Flow Available for Fixed Charges" and "Consolidated Fixed Charges" shall be
calculated after giving effect on a pro forma basis (in accordance with
Regulation S-X under the Securities Act) for the period of the calculation to,
without duplication:
(1) the incurrence or repayment of any Indebtedness, Disqualified
Stock or Preferred Stock, excluding revolving credit borrowings and
repayments of revolving credit borrowings (other than any revolving credit
borrowings the proceeds of which are used for Asset Acquisitions or Growth
Related Capital Expenditures of Suburban Propane or any of its Restricted
Subsidiaries and in the case of any incurrence, the application of the net
proceeds thereof) during the period commencing on the first day of the Four
Quarter Period to and including the Transaction Date (the "Reference
Period"), including, without limitation, the incurrence of the Indebtedness
giving rise to the need to make the calculation (and the application of the
net proceeds thereof), as if the incurrence (and application) occurred on
the first day of the Reference Period; and
(2) any Asset Sales or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make the
calculation as a result of Suburban Propane or one of its Restricted
Subsidiaries, including any Person who becomes a Restricted Subsidiary as a
result of the Asset Acquisition, incurring, assuming or otherwise being
liable for Acquired Debt) occurring during the Reference Period, as if the
Asset Sale or Asset Acquisition occurred on the first day of the Reference
Period; provided, however, that:
(a) any Person that is a Restricted Subsidiary on the Transaction
Date will be deemed to have been a Restricted Subsidiary at all times
during the Reference Period; and
(b) any Person that is an Unrestricted Subsidiary on the
Transaction Date will be deemed to have been an Unrestricted
Subsidiary at all times during the Reference Period.
Furthermore, subject to the following paragraph, in calculating
"Consolidated Fixed Charges" for purposes of determining the "Consolidated Fixed
Charge Coverage Ratio":
(1) interest on outstanding Indebtedness, other than Indebtedness
referred to in clause (2) below, determined on a fluctuating basis as of
the Transaction Date and that will continue to be so determined thereafter
shall be deemed to have accrued at a fixed rate per annum equal to the rate
of interest on such Indebtedness in effect on that date;
(2) with respect to Indebtedness incurred in accordance with clause
(1) of the definition of Permitted Debt, only actual interest payments
associated with such Indebtedness during the Four Quarter Period shall be
included in the calculation; and
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(3) if interest on any Indebtedness actually incurred on the
Transaction Date may optionally be determined at an interest rate based
upon a factor of a prime or similar rate, a eurocurrency interbank offered
rate, or other rates, then the interest rate in effect on the Transaction
Date will be deemed to have been in effect during the period.
"Consolidated Fixed Charges" means, with respect to Suburban Propane and
its Restricted Subsidiaries for any period, the sum, without duplication, of the
following amounts for that period, taken as a single accounting period:
(1) Consolidated Interest Expense; and
(2) the product of:
(a) the aggregate amount of distributions and other dividends or
payments paid in cash (other than to Suburban Propane or its
Restricted Subsidiaries) during the period in respect of Preferred
Stock and Disqualified Stock of Suburban Propane and its Restricted
Subsidiaries on a consolidated basis; and
(b) a fraction, the numerator of which is one and the denominator
of which is one less the then applicable current combined federal,
state and local statutory tax rate, expressed as a percentage.
"Consolidated Income Tax Expense" means, with respect to Suburban Propane
and its Restricted Subsidiaries for any period, the provision for federal,
state, local and foreign income taxes of Suburban Propane and its Restricted
Subsidiaries for the period as determined on a consolidated basis in accordance
with GAAP.
"Consolidated Interest Expense" means, for any period, the aggregate
interest expense of Suburban Propane and its Restricted Subsidiaries for that
period, determined on a consolidated basis in accordance with GAAP, including,
without limitation or duplication:
(1) any amortization of debt discount;
(2) the net cost under interest rate agreements described in
clauses (1) and (2) of the definition of Hedging Obligations;
(3) the interest portion of any deferred payment obligation;
(4) all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing;
(5) all accrued interest for all instruments evidencing
Indebtedness;
(6) the interest component of Capital Lease Obligations paid or
accrued or scheduled to be paid or accrued by Suburban Propane and its
Restricted Subsidiaries during the period;
(7) the consolidated interest that was capitalized during such
period; and
(8) any interest accruing on Indebtedness of another Person that
is Guaranteed by Suburban Propane or one of its Restricted
Subsidiaries or secured by a Lien on assets of Suburban Propane or one
of its Restricted Subsidiaries, whether or not such Guarantee or Lien
is called upon.
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"Consolidated Net Income" means, for any period, the net income of Suburban
Propane and its Restricted Subsidiaries for that period, determined on a
consolidated basis in accordance with GAAP, and as adjusted to exclude:
(1) net after-tax extraordinary gains or losses;
(2) net after-tax gains or losses attributable to Asset Sales;
(3) other cash restructuring charges in an aggregate amount not
to exceed $5.0 million in the aggregate from the date of the
indenture;
(4) all unrealized gains and losses reported under Financial
Accounting Standards Board Statement No. 133 in connection with
forward contracts, futures contracts or other derivatives or commodity
hedging agreements related to a Permitted Business in accordance with
Suburban Propane's commodity hedging policy as in effect from time to
time;
(5) the net income or loss of any Person that is not a Restricted
Subsidiary and which is accounted for by the equity method of
accounting; provided, that Consolidated Net Income shall include the
amount of dividends or distributions actually paid to Suburban Propane
or any Restricted Subsidiary;
(6) the net income of any Restricted Subsidiary to the extent
that dividends or distributions of that net income are not at the date
of determination permitted by the terms of its charter or any
judgment, decree, order, statute, rule or other regulation; and
(7) the cumulative effect of any changes in accounting
principles.
"Consolidated Non-Cash Charges" means, with respect to Suburban Propane and
its Restricted Subsidiaries for any period, the sum, without duplication, of:
(1) depreciation, (2) amortization, (3) non-cash employee compensation expenses
and (4) any non-cash charges resulting from write-downs of non-current assets,
in each case to the extent that the Consolidated Net Income of Suburban Propane
for that period was reduced thereby. For the avoidance of doubt, Consolidated
Non-Cash Charges will not include unrealized gains and losses reported under
Financial Accounting Standards Board Statement No. 133.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Supervisors of Suburban Propane who:
(1) was a member of such Board of Supervisors on the date of the
indenture;
(2) was appointed by the General Partner in accordance with the
provisions of Suburban Propane's partnership agreement as in effect on
the date of the indenture; or
(3) was nominated for election or elected to such Board of
Supervisors with the approval of a majority of the Continuing
Directors who were not appointed by the General Partner and who were
members of such Board at the time of such nomination or election.
"Credit Agreement" means the Second Amended and Restated Credit Agreement,
dated as of May 8, 2003, by and among the Operating Partnership, as borrower,
the lenders referred to therein, Wachovia Bank, National Association, as
administrative agent, Fleet National Bank, as syndication agent, and The Bank of
New York, as documentation agent, as amended, restated, modified, renewed,
refunded, replaced or refinanced (including by means of sales of debt securities
to institutional investors) in whole or in part from time to time.
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"Credit Facilities" means one or more debt facilities (including, without
limitation, the Credit Agreement) or commercial paper facilities, in each case
with banks or other institutional lenders providing for revolving credit loans,
term loans, receivables financing (including through the sale of receivables to
such lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced (including by
means of sales of debt securities to institutional investors) in whole or in
part from time to time.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the date on which the notes mature. Notwithstanding the
preceding sentence, (1) any Capital Stock that would constitute Disqualified
Stock solely because the holders of the Capital Stock have the right to require
Suburban Propane to repurchase such Capital Stock upon the occurrence of a
change of control or an asset sale will not constitute Disqualified Stock if the
terms of such Capital Stock provide that Suburban Propane may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such repurchase
or redemption complies with the covenant described above under the caption
"--Certain Covenants--Restricted Payments" and (2) any Capital Stock issued
pursuant to any plan for the benefit of one or more employees will not
constitute Disqualified Stock solely because it may be required to be
repurchased by Suburban Propane in order to satisfy applicable contractual,
statutory or regulatory obligations. The amount of Disqualified Stock deemed to
be outstanding at any time for purposes of the indenture will be the maximum
amount that Suburban Propane and its Restricted Subsidiaries may become
obligated to pay upon the maturity of, or pursuant to any mandatory redemption
provisions of, such Disqualified Stock, exclusive of accrued dividends.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means any public or private offer and sale of Common
Units of Suburban Propane.
"Existing Indebtedness" means Indebtedness of Suburban Propane and its
Restricted Subsidiaries in existence on the date of the indenture.
"Fair Market Value" means the value that would be paid by a willing buyer
to an unaffiliated willing seller in a transaction not involving distress or
necessity of either party, determined in good faith by the Board of Supervisors
of Suburban Propane.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"General Partner" means Suburban Energy Services Group LLC, a Delaware
limited liability company, as the general partner of Suburban Propane.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America (including any agency or
instrumentality thereof) for the payment of which obligations or guarantees the
full faith and credit of the United States of America is pledged and which are
not callable or redeemable at the issuer's option.
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"Growth Related Capital Expenditures" means, with respect to any Person,
all capital expenditures by such Person made to improve or enhance the existing
capital assets or to increase the customer base of such Person or to acquire or
construct new capital assets (but excluding capital expenditures made to
maintain, up to the level thereof that existed at the time of such expenditure,
the operating capacity of the capital assets of such Person as such assets
existed at the time of such expenditure).
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take or pay or to maintain financial statement
conditions or otherwise).
"Guarantor" means any subsidiary that executes a Subsidiary Guarantee in
accordance with the provisions of the indenture and its successors and assigns.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements (whether from fixed to floating
or from floating to fixed), interest rate cap agreements and interest
rate collar agreements;
(2) other agreements or arrangements designed to manage interest
rates or interest rate risk; and
(3) other agreements or arrangements designed to protect such
Person against fluctuations in currency exchange rates or commodity
prices.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses and trade payables),
whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments
or letters of credit (or reimbursement agreements in respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations or Attributable Debt
in respect of sale and leaseback transactions;
(5) representing the balance deferred and unpaid of the purchase
price of any property, except any such balance that constitutes an
accrued expense or trade payable in the ordinary course of business;
or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit,
Attributable Debt and Hedging Obligations) would appear as a liability upon a
balance sheet of the specified Person prepared in accordance with GAAP. In
addition, the term "Indebtedness" includes all Indebtedness of others secured by
a Lien on any asset of the specified Person (whether or not such Indebtedness is
assumed by the specified Person) and, to the extent not otherwise included, the
Guarantee by the specified Person of any Indebtedness of any other Person.
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"Interim Capital Transactions" means (1) borrowings, refinancings or
refundings of Indebtedness and sales of debt securities (other than for working
capital purposes and other than for items purchased on open account in the
ordinary course of business) by Suburban Propane or the Operating Partnership
and (2) sales of Capital Stock of Suburban Propane by Suburban Propane or the
Operating Partnership, in each case prior to the commencement of the dissolution
and liquidation of Suburban Propane.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations but excluding Guarantees
permitted to be incurred pursuant to clause (9) of the second paragraph of the
covenant described under the caption "--Certain Covenants--Incurrence of
Indebtedness and Issuance of Preferred Stock"), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If Suburban
Propane or any Restricted Subsidiary of Suburban Propane sells or otherwise
disposes of any Equity Interests of any direct or indirect Restricted Subsidiary
of Suburban Propane such that, after giving effect to any such sale or
disposition, such Person is no longer a Restricted Subsidiary of Suburban
Propane, Suburban Propane will be deemed to have made an Investment on the date
of any such sale or disposition equal to the Fair Market Value of Suburban
Propane's Investments in such Restricted Subsidiary that were not sold or
disposed of in an amount determined as provided in the final paragraph of the
covenant described above under the caption "--Certain Covenants--Restricted
Payments." The acquisition by Suburban Propane or any Restricted Subsidiary of
Suburban Propane of a Person that holds an Investment in a third Person will be
deemed to be an Investment by Suburban Propane or such Restricted Subsidiary in
such third Person in an amount equal to the Fair Market Value of the Investments
held by the acquired Person in such third Person in an amount determined as
provided in the final paragraph of the covenant described above under the
caption "--Certain Covenants--Restricted Payments." Except as otherwise provided
in the indenture, the amount of an Investment will be determined at the time the
Investment is made and without giving effect to subsequent changes in value.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Liquidated Damages" means all liquidated damages then owing pursuant to
the registration rights agreement.
"Moody's" means Moody's Investors Service, Inc.
"Net Proceeds" means the aggregate cash proceeds received by Suburban
Propane or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result of the Asset Sale, taxes paid or
payable as a result of the Asset Sale, in each case, after taking into account
any available tax credits or deductions and any tax sharing arrangements,
amounts required to be applied to the repayment of Indebtedness secured by a
Lien on such asset or assets and any reserve for adjustment in respect of the
sale price of such asset or assets established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither Suburban Propane nor any of its
Restricted Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would
consti-
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tute Indebtedness), (b) is directly or indirectly liable as a
guarantor or otherwise, or (c) constitutes the lender;
(2) no default with respect to which (including any rights that
the holders of the Indebtedness may have to take enforcement action
against an Unrestricted Subsidiary) would permit upon notice, lapse of
time or both any holder of any other Indebtedness of Suburban Propane
or any of its Restricted Subsidiaries to declare a default on such
other Indebtedness or cause the payment of the Indebtedness to be
accelerated or payable prior to its Stated Maturity; and
(3) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of Suburban
Propane or any of its Restricted Subsidiaries.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Operating Partnership" means Suburban Propane, L.P., a Delaware limited
partnership and a direct Subsidiary of Suburban Propane.
"Permitted Business" means any business that is the same as or related,
ancillary or complementary to any of the businesses of Suburban Propane or any
of its Restricted Subsidiaries as conducted as of the date of the indenture,
after giving effect to the Acquisition.
"Permitted Investments" means:
(1) any Investment in Suburban Propane or in a Restricted
Subsidiary of Suburban Propane;
(2) any Investment in Cash Equivalents;
(3) any Investment by Suburban Propane or any Restricted
Subsidiary of Suburban Propane in a Person, if as a result of such
Investment:
(a) such Person becomes a Restricted Subsidiary of Suburban
Propane; or
(b) such Person is merged, consolidated or amalgamated with
or into, or transfers or conveys substantially all of its assets
to, or is liquidated into, Suburban Propane or a Restricted
Subsidiary of Suburban Propane;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the covenant described above under the caption
"--Repurchase at the Option of Holders--Asset Sales";
(5) any acquisition of assets or Capital Stock to the extent made in
exchange for the issuance of Equity Interests (other than Disqualified
Stock) of Suburban Propane;
(6) any Investments received in compromise or resolution of (A)
obligations of trade creditors or customers that were incurred in the
ordinary course of business of Suburban Propane or any of its Restricted
Subsidiaries, including pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of any trade creditor or
customer; or (B) litigation, arbitration or other disputes;
(7) Investments represented by Hedging Obligations;
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(8) loans or advances to employees made in the ordinary course of
business of Suburban Propane or a Restricted Subsidiary of Suburban Propane
in an aggregate principal amount not to exceed $1.0 million at any one time
outstanding;
(9) repurchases of the notes; and
(10) other Investments in any Person having an aggregate Fair Market
Value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (10) that are at the time
outstanding, not to exceed $10.0 million.
"Permitted Liens" means:
(1) Liens on assets of Suburban Propane securing Indebtedness and
other Obligations under Credit Facilities and Existing Indebtedness that
was permitted by the terms of the indenture to be incurred and/or securing
Hedging Obligations related thereto;
(2) Liens in favor of the Issuers;
(3) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with Suburban Propane; provided that
such Liens were in existence prior to the contemplation of such merger or
consolidation and do not extend to any assets other than those of the
Person merged into or consolidated with Suburban Propane;
(4) Liens on property (including Capital Stock) existing at the time
of acquisition of the property by Suburban Propane; provided that such
Liens were in existence prior to, such acquisition, and not incurred in
contemplation of, such acquisition;
(5) Liens to secure Indebtedness permitted to be incurred pursuant to
clause (11) of the second paragraph of the covenant entitled "--Certain
Covenants--Incurrence of Indebtedness and Issuance of Preferred Stock";
(6) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (4) of the second paragraph of the covenant entitled
"--Certain Covenants--Incurrence of Indebtedness and Issuance of Preferred
Stock" covering only the assets acquired with or financed by such
Indebtedness;
(7) Liens existing on the date of the indenture;
(8) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded;
provided that any reserve or other appropriate provision as is required in
conformity with GAAP has been made therefor;
(9) Liens imposed by law, such as carriers', warehousemen's,
landlord's and mechanics' Liens, in each case, incurred in the ordinary
course of business;
(10) survey exceptions, easements or reservations of, or rights of
others for, licenses, rights-of-way, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other restrictions
as to the use of real property that were not incurred in connection with
Indebtedness and that do not in the aggregate materially adversely affect
the value of said properties or materially impair their use in the
operation of the business of such Person;
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(11) Liens created for the benefit of (or to secure) the notes;
(12) Liens to secure any Permitted Refinancing Indebtedness permitted
to be incurred under the indenture; provided, however, that:
(A) the new Lien shall be limited to all or part of the same
property and assets that secured or, under the written agreements
pursuant to which the original Lien arose, could secure the original
Lien (plus improvements and accessions to, such property or proceeds
or distributions thereof); and
(B) the Indebtedness secured by the new Lien is not increased to
any amount greater than the sum of (1) the outstanding principal
amount or, if greater, committed amount, of the Permitted Refinancing
Indebtedness and (2) an amount necessary to pay any fees and expenses,
including premiums, related to such refinancings, refunding,
extension, renewal or replacement; and
(13) Liens incurred in the ordinary course of business of Suburban
Propane with respect to obligations that do not exceed $5.0 million at any
one time outstanding.
"Permitted Refinancing Indebtedness" means any Indebtedness of Suburban
Propane or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to refund, refinance, replace, defease or discharge
other Indebtedness of Suburban Propane or any of its Restricted Subsidiaries;
provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness extended, refinanced,
renewed, replaced, defeased or refunded (plus all accrued interest on the
Indebtedness and the amount of all fees, expenses and premiums incurred in
connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of,
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
(3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the notes, such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to, the
notes on terms at least as favorable to the holders of notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by the Issuers or by the
Restricted Subsidiary that is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Preferred Stock" as applied to the Capital Stock of any Person, means
Capital Stock of any class or classes, however designated, that is preferred as
to the payment of distributions or dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over shares of Capital Stock of any other class of such Person.
"Principals" means the Persons owning the Capital Stock of the General
Partner as of the date of the indenture.
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"Related Party" means:
(1) any controlling stockholder, 80% (or more) owned Subsidiary, or
immediate family member (in the case of an individual) of any Principal; or
(2) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially
holding an 80% or more controlling interest of which consist of any one or
more Principals and/or such other Persons referred to in the immediately
preceding clause (1).
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Group.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the documentation governing
such Indebtedness as of the date of the indenture, and will not include any
contingent obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency and after giving
effect to any voting agreement or stockholders' agreement that effectively
transfers voting power) to vote in the election of directors, managers or
trustees of the corporation, association or other business entity is at the
time owned or controlled, directly or indirectly, by that Person or one or
more of the other Subsidiaries of that Person (or a combination thereof);
and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are that Person or one or more
Subsidiaries of that Person (or any combination thereof).
"Subsidiary Guarantee" means the Guarantee by each Guarantor of Suburban
Propane's obligations under the indenture and on the notes, executed pursuant to
the provisions of the indenture.
"Termination Capital Transactions" means any sale, transfer or other
disposition of property of Suburban Propane or the Operating Partnership
occurring upon or incident to the liquidation and winding up of Suburban Propane
and the Operating Partnership.
"Unrestricted Subsidiary" means any Subsidiary of Suburban Propane (other
than Finance Corp., the Operating Partnership or any successor to any of them)
that is designated by the Board of Supervisors as an Unrestricted Subsidiary
pursuant to a Board Resolution, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
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(2) except as permitted by the covenant described above under the
caption "--Certain Covenants--Affiliate Transactions," is not party to any
agreement, contract, arrangement or understanding with Suburban Propane or
any Restricted Subsidiary of Suburban Propane unless the terms of any such
agreement, contract, arrangement or understanding are no less favorable to
Suburban Propane or such Restricted Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of Suburban
Propane;
(3) is a Person with respect to which neither Suburban Propane nor any
of its Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of Suburban Propane or any of its
Restricted Subsidiaries.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Supervisors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of
each then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect of the Indebtedness, by (b) the number of years (calculated to the
nearest one-twelfth) that will elapse between such date and the making of
such payment; by
(2) the then outstanding principal amount of such Indebtedness.
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CERTAIN INCOME TAX CONSIDERATIONS
The following is a general discussion of certain United States federal
income tax consequences associated with the exchange of outstanding notes for
exchange notes and the beneficial ownership and disposition of the exchange
notes. This discussion is based on the Internal Revenue Code of 1986, as amended
(the "Code"), Treasury regulations promulgated thereunder and administrative and
judicial interpretations thereof, all as in effect on the date hereof and all of
which are subject to change, possibly with retroactive effect, or different
interpretations. This discussion only addresses tax considerations for
beneficial owners of the notes that hold the notes as "capital assets" within
the meaning of the Code. Moreover, this discussion is for general information
only and does not address all of the tax consequences that may be relevant to
specific beneficial owners of the notes in light of their particular
circumstances or to beneficial owners of the notes subject to special treatment
under U.S. federal income tax laws (such as banks, insurance companies,
tax-exempt entities, retirement plans, dealers in securities, brokers,
expatriates, partnerships or other pass-through entities, persons who hold their
notes as part of a straddle, hedge, conversion transaction or other integrated
investment, persons whose functional currency is not the U.S. dollar, persons
subject to the alternative minimum tax or persons deemed to sell the notes under
the constructive sale provisions of the Code). This discussion does not address
any U.S. state and local or non-U.S. tax considerations relating to the
purchase, ownership and disposition of the notes.
As used in this discussion, the term "U.S. Holder" means a beneficial owner
of a note that is, for U.S. federal income tax purposes:
o an individual who is a citizen or resident of the U.S.;
o a corporation created or organized in or under the laws of the U.S. or
of any State or political subdivision thereof or therein, including
the District of Columbia;
o an estate the income of which is subject to U.S. federal income tax
regardless of the source thereof; or
o a trust with respect to which a court within the U.S. is able to
exercise primary supervision over its administration and one or more
U.S. persons have the authority to control all of its substantial
decisions, or certain trusts that have made a valid election to be
treated as a U.S. person.
The term "Non-U.S. Holder" means a beneficial owner of a note that is, for
U.S. federal income tax purposes, a nonresident alien or a corporation, trust or
estate that is not a U.S. Holder.
Exchange of Notes
The exchange of outstanding notes for exchange notes pursuant to this
exchange offer will not constitute a taxable event for U.S. federal income tax
purposes. Consequently, no gain or loss will be recognized by a holder of the
outstanding notes upon receipt of an exchange note. A holder's adjusted tax
basis of the exchange note will be the same as the adjusted tax basis of the
outstanding note exchanged therefor. A holder's holding period of the exchange
note will include the holding period of the outstanding note exchanged therefor.
Consequences to U.S. Holders of Owning Exchange Notes
Payment of Interest
In general, interest payable on a note will be taxable to a U.S. Holder as
ordinary interest income at the time it is received or accrued, in accordance
with such U.S. Holder's method of accounting for U.S. federal income tax
purposes.
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Market Discount
Under the market discount rules of the Code, a U.S. Holder who purchases a
note at a market discount will generally be required to treat any gain
recognized on the sale, exchange, retirement or other taxable disposition of the
note as ordinary income to the extent of the accrued market discount that has
not been previously included in income. Market discount is generally defined as
the amount by which a U.S. Holder's purchase price for a note is less than the
note's stated redemption price at maturity (generally, the note's principal
amount) of the note on the date of purchase, subject to a statutory de minimis
exception. In general, market discount accrues on a ratable basis over the
remaining term of the note unless a U.S. Holder makes an irrevocable election to
accrue market discount on a constant yield to maturity basis.
A U.S. Holder who acquires a note at a market discount may be required to
defer a portion of any interest expense that otherwise may be deductible on any
indebtedness incurred or continued to purchase or carry such note until the U.S.
Holder disposes of the note in a taxable transaction. A U.S. Holder who has
elected under applicable Code provision to include market discount in income
annually as such discount accrues will not, however, be required to treat any
gain recognized as ordinary income or to defer any deductions for interest
expense under these rules. This election to include market discount in income
currently, once made, applies to all market discount obligations acquired on or
after the first day of the taxable year to which the election applies and may
not be revoked without the consent of the IRS.
Holders should consult their tax advisors as to the portion of any gain
that would be taxable as ordinary income under the market discount rules and any
other consequences of the market discount rules that may apply to them in
particular.
Amortizable Bond Premium
A U.S. Holder who purchases a note for an amount in excess of its principal
amount will be considered to have purchased the note at a premium. A U.S. Holder
may elect to amortize the premium over the remaining term of the note on a
constant yield method. The amount amortized in any year will be treated as a
reduction of the U.S. Holder's interest income from the note. A U.S. Holder who
elects to amortize the premium on a note must reduce its tax basis in the note
by the amount of the premium amortized in any year. An election to amortize bond
premium applies to all taxable debt obligations then owned and thereafter
acquired by the U.S. Holder and may be revoked only with the consent of the IRS.
Bond premium on a note held by a U.S. Holder who does not make such an election
will decrease the capital gain or increase the capital loss otherwise recognized
on the disposition of the note.
Sale, Exchange, Retirement or Other Disposition of the Notes
Upon the sale, exchange, retirement or other disposition of a note, a U.S.
Holder will generally recognize taxable gain or loss equal to the difference
between the sum of cash plus the fair market value of all other property
received on such disposition (except to the extent such cash or property is
attributable to accrued and unpaid interest, which will be taxable as interest
income (as described above)) and such U.S. Holder's adjusted tax basis in the
note. Subject to the market discount rules summarized above, such gain or loss
generally will be capital gain or loss and will be long-term capital gain or
loss if, at the time of the disposition, the U.S. Holder's holding period for
the note is more than one year. Long-term capital gains recognized by an
individual or non-corporate U.S. Holder are generally subject to a reduced U.S.
federal income tax rate. Capital losses are subject to limits on deductibility.
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Information Reporting and Backup Withholding
In general, payments made on the notes and proceeds from the sale or other
disposition of the notes may be subject to backup withholding, currently at a
rate of 28% (increased to 31% beginning in 2011). In general, backup withholding
will apply to a non-corporate U.S. Holder if such U.S. Holder:
o fails to furnish, under penalties of perjury, its Taxpayer
Identification Number, or TIN (which for an individual is the holder's
Social Security number);
o furnishes an incorrect TIN;
o is notified by the IRS that it has failed to properly report payments
of interest and dividends; or
o under certain circumstances, fails to certify, under penalties of
perjury, that it has furnished a correct TIN and is a U.S. person and
has not been notified by the IRS that it is subject to backup
withholding due to underreporting of interest or dividends, or
otherwise fails to comply with applicable requirements of the backup
withholding rules.
Any amounts withheld under the backup withholding rules from a payment to a
U.S. Holder generally will be allowed as a refund or a credit against such U.S.
Holder's U.S. federal income tax liability, provided that the required
procedures are followed.
A U.S. Holder will also be subject to information reporting with respect to
payments on the notes and proceeds from the sale or other disposition of the
notes, unless such U.S. Holder is a corporation or other exempt recipient and
appropriately establishes an exemption.
Consequences to Non-U.S. Holders of Owning Exchange Notes
For purposes of the following discussion, interest on the notes, and gain
on the sale, exchange, retirement or other disposition of the notes, will be
considered "U.S. trade or business income" of a Non-U.S. Holder if such income
or gain is effectively connected with the conduct of a trade or business in the
United States by such Non-U.S. Holder.
Payment of Interest
Subject to the discussion below concerning backup withholding, a Non-U.S.
Holder will not be subject to U.S. federal income or withholding tax in respect
of interest paid on the notes if the interest qualifies for the "portfolio
interest exemption." This will be the case if each of the following requirements
is satisfied:
o the interest is not U.S. trade or business income;
o the Non-U.S. Holder does not actually or constructively own 10% or
more of the voting stock of the issuer;
o the Non-U.S. Holder is not a controlled foreign corporation, within
the meaning of the Code, that is actually or constructively related to
the issuer; and
o the Non-U.S. Holder provides the withholding agent with the
appropriate certification.
The certification requirement generally will be satisfied if the Non-U.S. Holder
provides the withholding agent with a statement on IRS Form W-8BEN (or suitable
substitute or successor form), together with all appropriate attachments, signed
under penalties of perjury, identifying the Non-U.S. Holder and stating, among
other things,
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that the Non-U.S. Holder is not a U.S. person. Prospective Non-U.S. Holders
should consult their tax advisors regarding alternative methods for satisfying
the certification requirement.
If the portfolio interest exemption is not satisfied with respect to a
Non-U.S. Holder, a 30% withholding tax will apply to interest paid on the notes
to such Non-U.S. Holder, unless another exemption is applicable. For example, an
applicable income tax treaty may reduce or eliminate such tax, in which event a
Non-U.S. Holder claiming the benefit of such treaty must provide the withholding
agent with a properly executed IRS Form W-8BEN (or suitable substitute or
successor form). Alternatively, an exemption applies if the interest is U.S.
trade or business income and the Non-U.S. Holder provides an appropriate
statement to that effect on IRS Form W-8ECI (or suitable substitute or successor
form). In the latter case, such Non-U.S. Holder generally will be subject to
U.S. federal income tax with respect to all income from the notes in the same
manner as U.S. Holders, as described above, unless an applicable income tax
treaty provides otherwise. Additionally, Non-U.S. Holders that are corporations
could be subject to a branch profits tax with respect to any such U.S. trade or
business income at a rate of 30% (or at a reduced rate under an applicable
income tax treaty).
Sale, Exchange, Retirement or Other Disposition of the Notes
Generally, a Non-U.S. Holder will not be subject to U.S. federal income tax
on gain realized upon the sale, exchange, retirement or other disposition of a
note, unless (i) such Non-U.S. Holder is an individual present in the United
States for 183 days or more in the taxable year of the sale, exchange,
retirement or other disposition and certain other conditions are met or (ii) the
gain is U.S. trade or business income. If the first exception applies, the
Non-U.S. Holder generally will be subject to U.S. federal income tax at a rate
of 30% (or at a reduced rate under an applicable income tax treaty) on the
amount by which capital gains allocable to U.S. sources (including gains from
the sale, exchange, retirement or other disposition of the note) exceed capital
losses allocable to U.S. sources. If the second exception applies, the Non-U.S.
Holder generally will be subject to U.S. federal income tax with respect to such
gain in the same manner as U.S. Holders, as described above, unless an
applicable income tax treaty provides otherwise. Additionally, Non-U.S. Holders
that are corporations could be subject to a branch profits tax with respect to
gain that is U.S. trade or business income at a rate of 30% (or at a reduced
rate under an applicable income tax treaty).
Information Reporting and Backup Withholding
Certain Non-U.S. Holders may be subject to information reporting and backup
withholding with respect to interest payments on the notes. Treasury regulations
provide that such information reporting and backup withholding generally will
not apply to interest payments on the notes to a Non-U.S. Holder if such
Non-U.S. Holder certifies that it is not a U.S. person under penalties of
perjury or otherwise establishes an exemption.
Additional information reporting and backup withholding requirements with
respect to the payment of the proceeds from the disposition of a note (including
a redemption) by a Non-U.S. Holder are as follows:
o If the proceeds are paid to or through the U.S. office of a broker,
they generally will be subject to information reporting and backup
withholding unless the Non-U.S. Holder certifies that it is not a U.S.
person under penalties of perjury or otherwise establishes an
exemption.
o If the proceeds are paid to or through a non-U.S. office of a broker
that is not a U.S. person and is not a foreign person with certain
specified U.S. connections (a "U.S. related person"), they will not be
subject to information reporting or backup withholding.
o If the proceeds are paid to or through a non-U.S. office of a broker
that is a U.S. person or a U.S. related person, they generally will be
subject to information reporting (but not backup withholding) unless
the Non-U.S. Holder certifies that it is not a U.S. person under
penalties of perjury or otherwise establishes an exemption.
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Any amounts withheld under the backup withholding rules from a payment to a
Non-U.S. Holder generally will be allowed as a refund or a credit against such
Non-U.S. Holder's U.S. federal income tax liability, provided that the required
procedures are followed.
In addition to the foregoing, the amount of interest paid on or with
respect to the notes held by each Non-U.S. Holder during each calendar year and
the amount of tax, if any, withheld from such payments must be reported to such
Non-U.S. Holder and the IRS. Copies of the information returns reporting such
interest and withholding also may be made available by the IRS to the tax
authorities in the country in which a Non-U.S. Holder is a resident under the
provisions of an applicable income tax treaty.
THE FOREGOING SUMMARY DOES NOT DISCUSS ALL ASPECTS OF U.S. FEDERAL INCOME
TAXATION THAT MAY BE RELEVANT TO A PARTICULAR HOLDER IN LIGHT OF ITS PARTICULAR
CIRCUMSTANCES AND TAX SITUATION. A HOLDER SHOULD CONSULT SUCH HOLDER'S TAX
ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES TO SUCH HOLDER OF THE OWNERSHIP AND
DISPOSITION OF THE NOTES, INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange notes for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such exchange notes. This
prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of exchange notes received in
exchange for outstanding notes where such outstanding notes were acquired by
such broker-dealer as a result of market-making activities or other trading
activities. We have agreed that for a period beginning when exchange notes are
first issued in the exchange offer and ending upon the earlier of the expiration
of the 120th day after the exchange offer has been completed or such time as no
broker-dealer owns any registrable securities, we will make this prospectus, as
amended or supplemented, available to any broker-dealer for use in connection
with any such resale.
We will not receive any proceeds from any sale of exchange notes. Exchange
notes received by broker-dealers for their own account pursuant to the exchange
offer may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of
options on the exchange notes or a combination of such methods of resale, at
market prices prevailing at the time of resale, at prices related to such
prevailing market prices or at negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such exchange notes. Any
broker-dealer that resells exchange notes that were received by it for its own
account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of such exchange notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit of any
such resale of exchange notes and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The letter of transmittal states that, by acknowledging that it will
deliver and by delivering a prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
For a period beginning when exchange notes are first issued in the exchange
offer and ending upon the earlier of the expiration of the 120th day after the
exchange offer has been completed or such time as no broker-dealer owns any
registrable securities, we will promptly upon request send additional copies of
this prospectus and any amendment or supplement thereto to any broker-dealer
that requests such documents in the letter of transmittal. We have agreed to pay
all expenses incident to the exchange offer (including the expenses of any one
counsel for the holders of the outstanding notes) other than commissions or
concessions of any brokers or dealers and will indemnify the holders of the
outstanding notes participating in the exchange offer (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
Certain legal matters with respect to the exchange notes offered hereby
will be passed upon for us by Cahill Gordon & Reindel LLP, New York, New York.
EXPERTS
The financial statements of Suburban Propane Partners, L.P. incorporated in
this prospectus by reference to our Annual Report on Form 10-K for the fiscal
year ended September 27, 2003 have been so incorporated in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting. The financial
statements of Suburban Energy Services Group LLC incorporated in this prospectus
by reference to our Annual Report on Form 10-K for the fiscal year ended
September 27, 2003 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting. The combined financial
statements of Agway Energy Group (Agway Energy Products LLC, Agway Energy
Services, Inc. and Agway Energy Services PA, Inc.) incorporated in this
prospectus by reference to our current report on Form 8-K filed December 5, 2003
have been so incorporated in reliance on the report (which contains an
explanatory paragraph relating to Agway Energy Group's ability to continue as a
going concern as described in Note 3 to the
-80-
combined financial statements) of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
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================================================================================
$175,000,000
SUBURBAN PROPANE PARTNERS, L.P.
SUBURBAN ENERGY FINANCE CORP.
Offer to Exchange
$175,000,000 Aggregate Principal Amount of 6 7/8% Senior Notes due 2013
for
Suburban Propane Partners, L.P.
Suburban Energy Finance Corp.
$175,000,000 Aggregate Principal Amount of 6 7/8% Senior Notes due 2013
Registered Under the Securities Act of 1933, as Amended.
- --------------------------------------------------------------------------------
PROSPECTUS
- --------------------------------------------------------------------------------
, 2004
================================================================================
We have not authorized any dealer, salesperson or other person to give any
information or represent anything not contained in this prospectus. You must not
rely on unauthorized information. This prospectus is not an offer to sell or buy
any securities in any jurisdiction where it is unlawful. The information in this
prospectus is current as of the date hereof.
Until , 2004, all dealers that effect transactions in the exchange notes,
whether or not participating in this distribution, may be required to deliver a
prospectus. This is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS.
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Suburban Propane Partners, L.P.
Our partnership agreement provides that Suburban will indemnify (i) the
members of the Board of Supervisors or the members of the Board of Supervisors
of its subsidiary operating partnership, Suburban Propane, L.P., or any
subsidiary of Suburban Propane, L.P., (ii) the general partner, (iii) any
departing partner, (iv) any person who is or was an affiliate of the general
partner or any departing partner, (v) any person who is or was a member,
partner, director, officer, employee, agent or trustee of Suburban, Suburban
Propane, L.P. or any subsidiary of Suburban Propane, L.P., (vi) any person who
is or was a member, partner, officer, director, employee, agent or trustee of
the general partner or any departing partner or any affiliate of the general
partner or any departing partner, or (vii) any person who is or was serving at
the request of the Board of Supervisors, the general partner or any departing
partner or any affiliate of the general partner or any departing partner as a
member, partner, director, officer, employee, agent, fiduciary or trustee of
another person ("Indemnitees"), to the fullest extent permitted by law, from and
against any and all losses, claims, damages, liabilities (joint or several),
expenses (including legal fees, expenses and other disbursements), judgments,
fines, penalties, interest, settlements or other amounts arising from any and
all claims, demands, actions, suits or proceedings, whether civil, criminal,
administrative or investigative, in which any Indemnitee may be involved, or is
threatened to be involved, as a party or otherwise, by reason of its status as
an Indemnitee; provided that in each case the Indemnitee acted in good faith and
in a manner that such Indemnitee reasonably believed to be in or not opposed to
the best interests of Suburban and, with respect to any criminal proceeding, had
no reasonable cause to believe its conduct was unlawful. Any indemnification
under these provisions will be only out of the assets of Suburban, and the
general partner shall not be personally liable for, or have any obligation to
contribute or loan funds or assets to Suburban to enable it to effectuate, such
indemnification. Suburban is authorized to purchase (or to reimburse the general
partner or its affiliates for the cost of) insurance against liabilities
asserted against and expenses incurred by such persons in connection with
Suburban's activities, regardless of whether Suburban would have the power to
indemnify such persons against such liabilities under the provisions described
above.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and/or persons controlling the
registrant pursuant to the foregoing provision, or otherwise, the registrant has
been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
Suburban Energy Finance Corp.
Delaware Law.
Section 145 of the Delaware General Corporation Law, or the DGCL, provides
that a corporation may indemnify a director or officer by a provision contained
in the certificate of incorporation or by-laws or by a duly authorized
resolution of its stockholders or directors or by agreement, provided that no
indemnification may be made to or on behalf of any director or officer if a
judgment or other final adjudication adverse to the director or officer
establishes that his acts were committed in bad faith or were the result of
active and deliberate dishonesty and material to the cause of action, or that
such director or officer personally gained in fact a financial profit or other
advantage to which he was not legally entitled.
II-1
Section 145(a) of the DGCL provides that a corporation may indemnify a
director or officer made, or threatened to be made, a party to any threatened,
pending or completed action other than a derivative action, whether civil or
criminal, against expenses (including attorneys' fees), judgments, fines,
amounts paid in settlement actually and reasonably incurred as a result of such
action, if such director or officer acted, in good faith, for a purpose which he
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, in criminal actions or proceedings, in addition, has no
reasonable cause to believe that his conduct was unlawful.
Section 145(b) of the DGCL provides that a corporation may indemnify a
director or officer, made or threatened to be made a party in a derivative
action, against expenses (including attorneys fees) actually and reasonably
incurred by such person in connection with the defense or settlement of such
action, if such director or officer acted, in good faith, and in a manner such
person reasonably believed to be in, or not opposed to, the best interests of
the corporation, except that no indemnification will be made in respect of any
claim as to which such director or officer shall have been adjudged liable to
the corporation, unless and only to the extent that the Court of Chancery or the
court in which the action was brought determines, upon application, that, in
view of all the circumstances of the case, the director or officer is fairly and
reasonably entitled to indemnity for such expenses as the Court of Chancery or
such other court deems proper
Section 145(d) of the DGCL specifies the manner in which payment of
indemnification under Section 145(a) of the DGCL or indemnification permitted
under Section 145(b) of the DGCL may be authorized by the corporation. Section
145(c) of the DGCL provides that indemnification by a corporation is mandatory
in any case in which a present or former director or officer has been
successful, whether on the merits or otherwise, in defending an action. In the
event that the director or officer has not been successful or the action is
settled, indemnification must be authorized by the appropriate corporate action
as set forth in Section 145(d).
Section 145(g) of the DGCL authorizes the purchase and maintenance of
insurance to indemnify (1) a corporation for any obligation which it incurs as a
result of the indemnification of directors and officers under the above section
or (2) directors and officers in instances in which they may be indemnified by a
corporation under such section.
Suburban Energy Finance Corp.'s Certificate of Incorporation and Bylaws.
Article Eighth of the Certificate of Incorporation and Article 24 of the
Bylaws of Suburban Energy Finance Corp. provide for Suburban Energy Finance
Corp. to indemnify its corporate personnel, directors and officers to the
fullest extent permitted by the DGCL, as the same may be supplemented or amended
from time to time.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and/or persons controlling the
registrants pursuant to the foregoing provisions, or otherwise, the registrants
have been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrants of expenses incurred or
paid by a director, officer or controlling person of the registrants in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrants will, unless in the opinion of their counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
Item 21. EXHIBITS.
2.1* -- Recapitalization Agreement dated as of November 27, 1998
by and among the Partnership, the Operating Partnership, the
General Partner, Millenium and Suburban Energy Services
Group LLC (filed as Exhibit 2.1 to Suburban's Current Report
on Form 8-K filed December 3, 1998).
3.1* -- Second Amended and Restated Agreement of Limited
Partnership of the Partnership dated as of May 26, 1999
(incorporated by reference to Suburban's Proxy Statement
filed pursuant to Sec-
II-2
tion 14(a) of the Securities Exchange Act of 1934 on
April 22, 1999).
3.2* -- Second Amended and Restated Agreement of Limited
Partnership of the Operating Partnership dated as of May 26,
1999 (incorporated by reference to Suburban's Proxy
Statement filed pursuant to Section 14(a) of the Securities
Exchange Act of 1934 on April 22, 1999).
3.3** -- Certificate of Incorporation of Suburban Energy Finance
Corp. dated as of November 26, 2003.
3.4** -- Bylaws of Suburban Energy Finance Corp.
4.1* -- Indenture, dated as of December 23, 2003, between Suburban
Propane Partners, L.P., Suburban
Energy Finance Corp. and The Bank of New York, as Trustee
(including Form of Senior Global Exchange Note) (filed as
Exhibit 10.28 to Suburban's Quarterly Report on Form 10-Q
for the fiscal quarter ended December 27, 2003).
4.2** -- Exchange and Registration Rights Agreement, dated December
23, 2003 among Suburban Propane Partners, L.P., Suburban
Energy Finance Corp., Wachovia Capital Markets, LLC and
Goldman, Sachs & Co.
4.3** -- Senior Global Outstanding Notes
4.4** -- Purchase Agreement, dated December 18, 2003 among Suburban
Propane Partners, L.P., Suburban Energy Finance Corp.,
Wachovia Capital Markets, LLC and Goldman, Sachs & Co.
5.1** -- Opinion of Cahill Gordon & Reindel LLP
10.3* -- Note Agreement dated as of February 28, 1996 among
certain investors and the Operating Partnership relating to
$425 million aggregate principal amount of 7.54% Senior
Notes due June 30, 2011 (filed as Exhibit 10.3 to Suburban's
Current Report on Form 8-K filed April 29, 1996).
10.4* -- Amendment No. 1 to the Note Agreement dated May 13, 1998
among certain investors and the Operating Partnership
relating to $425 million aggregate principal amount of 7.54%
Senior Notes due June 30, 2011 (filed as Exhibit 10.4 to
Suburban's Annual Report on Form 10-K for the fiscal year
ended September 28, 2002).
10.5* -- Amendment No. 2 to the Note Agreement dated March 29,
1999 among certain investors and the Operating Partnership
relating to $425 million aggregateprincipal amount of 7.54%
Senior Notes due June 30, 2011 (filed as Exhibit 10.5 to
Suburban's Annual Report on Form 10-K for the fiscal year
ended September 28, 2002).
10.6* -- Amendment No. 3 to the Note Agreement dated December 6,
2000 among certain investors and the Operating Partnership
relating to $425 million aggregate principal amount of 7.54%
Senior Notes due June 30, 2011 (filed as Exhibit 10.6 to
Suburban's Annual Report on Form 10-K for the fiscal year
ended September 28, 2002).
10.7* -- Amendment No. 4 to the Note Agreement dated March 21,
2002 among certain investors and the Operating Partnership
relating to $425 million aggregate principal amount of 7.54%
Senior Notes due June 30, 2011 (Incorporated by reference to
Suburban's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 30, 2002).
10.8* -- Amendment No. 5 to the Note Agreement dated November 20,
2002 among certain investors and the Operating Partnership
relating to $425 million aggregate principal amount of 7.54%
Senior Notes due June 30, 2011 (filed as Exhibit 10.8 to
Suburban's Annual Report on Form 10-K for the fiscal year
ended September 28, 2002).
10.9* -- Guaranty Agreement dated as of April 11, 2002 provided by
four direct subsidiaries of Suburban Propane, L.P. for the
7.54% Senior Notes due June 30, 2011 (Incorporated by
reference to Suburban's Quarterly Report on Form 10-Q for
the fiscal quarter ended March 30, 2002).
10.10* -- Intercreditor Agreement dated March 21, 2002 between
First Union National Bank, the Lenders under the Operating
Partnership's Amended and Restated Credit Agreement and the
Noteholders of the Operating Partnership's 7.54% Senior
Notes due June 30, 2011 (Incorporated by reference to
Suburban's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 30, 2002).
10.11* -- Note Agreement dated as of April 19, 2002 among certain
investors and the Operating Partnership relating to $42.5
million aggregate principal amount of 7.37% Senior Notes due
June 30, 2012 (Incorporated by reference to the
Partnership's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 29, 2002).
10.12* -- Guaranty Agreement dated as of July 1, 2002 provided by
certain subsidiaries of Suburban Propane, L.P. for the 7.37%
Senior Notes due June 30, 2012 (Incorporated by reference to
the Partnership's Quarterly Report on Form 10-Q for the
fiscal quarter ended June 29, 2002).
II-3
10.13* -- Employment Agreement dated as of March 5, 1996 between
the Operating Partnership and Mr. Alexander (filed as
Exhibit 10.13 to Suburban's Current Report on Form 8-K filed
April 29, 1996).
10.14* -- First Amendment to Employment Agreement dated as of March
5, 1996 between the Operating Partnership and Mr. Alexander
entered into as of October 23, 1997 (filed as Exhibit 10.14
to Suburban's Annual Report on Form 10-K for the fiscal year
ended September 27, 1997).
10.15* -- Second Amendment to Employment Agreement dated as of
March 5, 1996 between the Operating Partnership and Mr.
Alexander entered into as of April 14, 1999 (Incorporated by
reference to Suburban's Quarterly Report on Form 10-Q for
fiscal quarter ended June 26, 1999).
10.16* -- The Partnership's 1996 Restricted Unit Plan (filed as
Exhibit 10.16 to Suburban's Current Report on Form 8-K filed
April 29, 1996).
10.17* -- Suburban Propane Partners, L.P. 2000 Restricted Unit Plan
(filed as Exhibit 10.16 to Suburban's Annual Report on Form
10-K for the fiscal year ended September 30, 2000).
10.18* -- The Partnership's Severance Protection Plan dated
September 1996 (filed as Exhibit 10.18 to Suburban's Annual
Report on Form 10-K for the fiscal year ended September 28,
1996).
10.19* -- Suburban Propane L.P. Long-Term Incentive Plan as amended
and restated effective October 1, 1999 (filed as Exhibit
10.19 to Suburban's Annual Report on Form 10-K for the
fiscal year ended September 28, 2002).
10.20* -- Benefits Protection Trust dated May 26, 1999 by and
between Suburban Propane Partners, L.P. and First Union
National Bank (Incorporated by reference to Suburban's
Quarterly Report on Form 10-Q for the fiscal quarter ended
June 26, 1999).
10.21* -- Compensation Deferral Plan of Suburban Propane Partners,
L.P. and Suburban Propane, L.P. dated May 26, 1999
(Incorporated by reference to Suburban's Quarterly Report on
Form 10-Q for the fiscal quarter ended June 26, 1999).
10.22* -- First Amendment to the Compensation Deferral Plan of
Suburban Propane Partners, L.P. and Suburban Propane, L.P.
dated November 5, 2001 (filed as Exhibit 10.22 to Suburban's
Annual Report on Form 10-K for the fiscal year ended
September 29, 2001).
10.23* -- Amended and Restated Supplemental Executive Retirement
Plan of the Partnership (effective as of January 1, 1998)
(filed as Exhibit 10.23 to Suburban's Annual Report on Form
10-K for the fiscal year ended September 29, 2001).
10.24* -- Amended and Restated Retirement Savings and Investment
Plan of Suburban Propane (effective as of January 1, 1998)
(filed as Exhibit 10.24 to Suburban's Annual Report on Form
10-K for the fiscal year ended September 29, 2001).
10.25* -- Amendment No. 1 to the Retirement Savings and Investment
Plan of Suburban Propane (effective January 1, 2002) (filed
as Exhibit 10.25 to Suburban's Annual Report on Form 10-K
for the fiscal year ended September 28, 2002).
10.26* -- Second Amended and Restated Credit Agreement dated May 8,
2003 (filed as Exhibit 10.26 to Suburban's Quarterly Report
on Form 10-Q for the fiscal quarter ended March 29, 2003).
10.27* -- First Amendment to Second Amended and Restated Credit
Agreement dated November 4, 2003 (filed as Exhibit 10.27 to
Suburban's Annual Report on Form 10-K for the fiscal year
ended September 27, 2003).
10.28* -- Asset Purchase Agreement by and Among Agway Energy Products,
LLC, Agway Energy Services, Inc., Agway Energy Services PA,
Inc., Agway, Inc. and Suburban Propane, L.P., dated as of
November 10, 2003 (filed as Exhibit 10.28 to Suburban's
Current Report on Form 8-K filed December 5, 2003).
12.1** -- Statement Regarding Computation of Ratio of Earnings to
Fixed Charges
21.1* -- Listing of Subsidiaries of the Partnership (filed as Exhibit
21.1 to Suburban's Annual Report on Form 10-K for the fiscal
year ended September 27, 2003).
23.1** -- Consent of Independent Accountants-- PricewaterhouseCoopers
LLP
23.2** -- Consent of Cahill Gordon & Reindel LLP (included as part of
Exhibit 5.1)
23.3** -- Consent of Independent Accountants (Agway Financials) --
PricewaterhouseCoopers LLP
24.1** -- Powers of Attorney authorizing execution of Registration
Statement on Form S-4 on behalf of certain officers and
directors of Suburban Propane Partners, L.P. and Suburban
Energy Finance Corp. (set forth on pages II-7 and II-9 to
this registration statement)
25.1** -- Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 on Form T-1 of The Bank of New York as
Trustee under the Indenture.
II-4
99.1** -- Form of Letter of Transmittal
99.2** -- Form of Notice of Guaranteed Delivery
____________________
* Incorporated herein by reference.
** Filed herewith.
ITEM 22. UNDERTAKINGS.
a) The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
a Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
b) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Registrants pursuant to the foregoing provisions, or otherwise, the
Registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the Registrants of expenses incurred or paid by a director, officer or
controlling person of the Registrants in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrants will, unless in the opinion of their counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by them is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
c) The undersigned Registrants hereby undertake to respond to requests for
information that is incorporated by reference into the prospectus pursuant
to Items 4, 10(b), 11, or 13 of this Form, within one business day of
receipt of such request, and to send the incorporated documents by first
class mail or equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration
statement through the date of responding to the request.
d) The undersigned Registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Whippany, State of New
Jersey, on March 19, 2004.
SUBURBAN PROPANE PARTNERS, L.P.
By: /s/ Michael J. Dunn, Jr.
----------------------------------
Name: Michael J. Dunn, Jr.
Title: Senior Vice President -
Corporate Development
II-6
SUBURBAN PROPANE PARTNERS, L.P.
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes
Janice G. Meola as attorney-in-fact, with full power of substitution, to execute
in the name and on behalf of such person, individually and in each capacity
stated below, and to file, any and all amendments to this Registration
Statement, including any and all post-effective amendments as well as any new
Registration Statement pursuant to Rule 462(b) of the Securities Act of 1933.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on the 19th day of March, 2004.
Signature Title
/s/ Mark A. Alexander
- -------------------------- President and Chief Executive Officer; Appointed
Mark A. Alexander Member of the Board of Supervisors (Principal
Executive Officer)
/s/ Robert M. Plante
- -------------------------- Vice President and Chief Financial Officer
Robert M. Plante
/s/ Michael J. Dunn, Jr.
- -------------------------- Senior Vice President - Corporate Development;
Michael J. Dunn, Jr. Appointed Member of the Board of Supervisors
/s/ Michael A. Stivala
- -------------------------- Controller (Principal Accounting Officer)
Michael A. Stivala
/s/ John Hoyt Stookey
- -------------------------- Elected Member and Chairman of the Board of
John Hoyt Stookey Supervisors
/s/ Harold R. Logan, Jr.
- -------------------------- Elected Member of the Board of Supervisors
Harold R. Logan, Jr.
/s/ Dudley C. Mecum
- -------------------------- Elected Member of the Board of Supervisors
Dudley C. Mecum
II-7
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant and
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Whippany, State of New
Jersey, on March 19, 2004.
SUBURBAN ENERGY FINANCE CORP.
By: /s/ Michael J. Dunn, Jr.
--------------------------------
Name: Michael J. Dunn, Jr.
Title: President
II-8
SUBURBAN ENERGY FINANCE CORP.
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes
Janice G. Meola as attorney-in-fact, with full power of substitution, to execute
in the name and on behalf of such person, individually and in each capacity
stated below, and to file, any and all amendments to this Registration
Statement, including any and all post-effective amendments as well as any new
Registration Statement pursuant to Rule 462(b) of the Securities Act of 1933.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on the 19th day of March, 2004.
Signature Title
/s/ Micahel J. Dunn, Jr.
- ----------------------------- President; Director
Michael J. Dunn, Jr.
/s/ Robert M. Plante
- ----------------------------- Vice President and Chief Financial Officer;
Robert M. Plante Director
II-9