REPRESENTATIONS AGREEMENT
Dated as of December 17, 1999
by and among
FERRELLGAS PARTNERS, L.P.,
FERRELLGAS, INC.,
FERRELLGAS, L.P.,
and
XXXXXXXX NATURAL GAS LIQUIDS, INC.
RELATING TO
4,375,000
SENIOR CONVERTIBLE UNITS
REPRESENTING LIMITED PARTNER INTERESTS
of
FERRELLGAS PARTNERS, L.P.
TABLE OF CONTENTS
SECTION 1. Representations and Warranties 2
SECTION 2. Delivery of the Units 6
SECTION 3. Certain Covenants 7
SECTION 4. Opinion of Purchaser's Counsel 7
SECTION 5. Restrictions on Transfer; Representations and
Warranties and Covenants of the Seller 10
SECTION 6. Survival and Indemnification 13
SECTION 7. Allocation 17
SECTION 8. Notices 17
SECTION 9. Governing Law 18
SECTION 10. Entire Agreement; Amendment and Waivers 19
SECTION 11. Binding Effect and Assignment 19
SECTION 12. Severability 19
SECTION 13. Parties in Interest 20
SECTION 14. Headings; Survival of Covenants 20
SECTION 15. Execution 20
REPRESENTATIONS AGREEMENT
This Representations Agreement ("Representations Agreement") is made
and entered into as of December 17, 1999, by and among Ferrellgas Partners,
L.P., a Delaware limited partnership (the "Purchaser"), Ferrellgas, L.P., a
Delaware limited partnership (the "Subsidiary OLP"), Ferrellgas, Inc., a
Delaware corporation (the "General Partner"), and Xxxxxxxx Natural Gas Liquids,
Inc., a Delaware corporation (the "Seller").
The Purchaser, the Subsidiary OLP and the Seller have entered into a
Purchase Agreement dated as of November 7, 1999, as amended by the First
Amendment to the Purchase Agreement dated as of December 17, 1999, by and among
the Purchaser, the Subsidiary OLP and the Seller (as amended, the "Thermogas
Purchase Agreement"), that provides for the Purchaser's acquisition (the
"Acquisition") of the Seller's equity interest in Thermogas L.L.C., a Delaware
limited liability company (the "Company") (formerly, Thermogas Company, a
Delaware corporation). Pursuant to Section 1.2 of the Thermogas Purchase
Agreement, the Purchaser agreed, as partial consideration for the Acquisition,
to issue and sell to the Seller an aggregate of 4,375,000 of the Purchaser's
senior convertible units representing limited partner interests, $40.00
liquidation preference per unit (the "Senior Units").
The parties hereto believe it is in their respective best interests to
make certain representations and warranties and agree to certain covenants in
connection with the issuance, sale and delivery of the Senior Units in
accordance with the terms of the Thermogas Purchase Agreement, specifically the
delivery by the Purchaser as set forth in Section 1.7(b)(i) thereof.
The offer and sale of the Senior Units by Purchaser pursuant to the
terms of the Thermogas Purchase Agreement has not been registered under the
Securities Act of 1933, as amended (together with the rules and regulations of
the Securities and Exchange Commission (the "Commission") promulgated
thereunder, the "Securities Act"), in reliance on an exemption therefrom.
The execution of this Representations Agreement shall be concurrent
with the consummation of the Acquisition. Concurrent with the execution of this
Representations Agreement, the Seller and the Purchaser shall enter into a
Registration Rights Agreement (the "Registration Rights Agreement" and together
with this Representations Agreement and the Thermogas Purchase Agreement, the
"Operative Agreements") pursuant to which the Purchaser will agree, among other
things and subject to the terms thereof, to file one or more registration
statements with the Commission registering under the Securities Act the sale of
the Senior Units and the common units of the Purchaser (the "Common Units")
issuable upon conversion of the Senior Units. The transactions contemplated by
the Operative Agreements to the extent such transactions are contemplated to be
completed as of the date hereof are collectively referred to herein as the
"Transactions."
NOW, THEREFORE, in consideration of the mutual representations,
warranties and covenants set forth herein, the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. SECTION Representations and Warranties .
Each of the Purchaser, the Subsidiary OLP and the General Partner
represents and warrants to, and agrees with, the Seller that:
(a) The capitalization of the Purchaser is as set forth in the Purchaser's
Annual Report on Form 10-K filed by the Purchaser with the Commission on October
28, 1999 (the "Form 10-K"); the audited consolidated balance sheet of the
Purchaser included in the Form 10-K presents fairly the financial position of
the Purchaser as of the date indicated; the audited historical consolidated
financial statements of the Purchaser included in the Form 10-K present fairly
the consolidated financial position of the Purchaser and the subsidiaries of the
Purchaser set forth in Exhibit A hereto (the "Subsidiaries") as of the dates
indicated and their results of operations and cash flows for the periods
specified; the supplemental schedules included in the Form 10-K, when considered
in relation to the audited consolidated financial statements of the Purchaser,
present fairly the information shown therein; such audited consolidated
financial statements and supplemental schedules included in the Form 10-K have
been prepared in conformity with generally accepted accounting principles
applied on a substantially consistent basis, except to the extent disclosed
therein; the other financial and statistical information and data included in
the Form 10-K are accurately presented and prepared on a basis consistent with
such financial statements and the books and records of the Purchaser and the
General Partner;
(b) All of the Purchaser's outstanding Common Units and incentive distribution
rights (the "Incentive Distribution Rights") have been duly authorized and
validly issued, are fully paid and non-assessable (except as such
non-assessability may be affected by the Delaware Revised Uniform Limited
Partnership Act (the "Delaware Act")) and are free of any preemptive or similar
rights; there are no subordinated units of the Purchaser ("Subordinated Units")
issued; other than the Common Units and the Incentive Distribution Rights, on
the date hereof, the Senior Units are the only limited partner interests of the
Purchaser issued;
(c) The Senior Units, and the limited partner interests represented thereby, and
any additional Senior Units issued as distributions in respect of the Senior
Units in accordance with the terms of the Purchaser Partnership Agreement (as
defined below) (the "Distribution Units"), and the limited partner interests
represented thereby, have been duly authorized (including due authorization
under the Agreement of Limited Partnership of the Purchaser (as it may be
amended or restated at or prior to the date hereof, the "Purchaser Partnership
Agreement")) and, when issued and delivered to the Seller in accordance with the
terms of the Thermogas Purchase Agreement and the Purchaser Partnership
Agreement will be validly issued, fully paid and nonassessable (except as such
nonassessability may be affected by the Delaware Act) and free of any preemptive
or similar rights; the Common Units issuable upon conversion of the Senior Units
pursuant to the terms of the Purchaser Partnership Agreement, and the limited
partner interests represented thereby, have been duly authorized (including due
authorization under the Purchaser Partnership Agreement) and when issued and
delivered to the Seller upon such conversion, will be validly issued, fully paid
and nonassessable (except as such nonassessability may be affected by the
Delaware Act) and free of any preemptive or similar rights;
(d) The Subsidiary OLP has been duly formed and is validly existing as a limited
partnership under the Delaware Act, with full partnership power and authority to
own or lease the properties it owns or leases and conduct the business it
conducts, as described in the Form 10-K, and has been duly qualified or
registered as a foreign limited partnership for the transaction of business
under the laws of each jurisdiction in which the character of the properties and
assets now owned or held by it or the nature of the business now conducted by it
requires it to be so licensed or qualified;
(e) The General Partner has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own or lease its properties, to conduct its
business and to act as general partner of the Purchaser and of the Subsidiary
OLP, in each case as described in the Form 10-K, and has been duly qualified as
a foreign corporation for the transaction of business and is in good standing
under the laws of each jurisdiction in which the character of the properties and
assets now owned or held by it or the nature of the business now conducted by it
(as described in the Form 10-K) requires it to be so licensed or qualified;
(f) There are no preemptive rights or other rights to subscribe for or to
purchase, nor any restriction upon the voting or transfer of, any limited
partner interest in the Purchaser or the Subsidiary OLP pursuant to either the
Purchaser Partnership Agreement or the Agreement of Limited Partnership of the
Subsidiary OLP (as it may be amended or restated at or prior to the date hereof,
the "Subsidiary OLP Agreement," and, together with the Purchaser Partnership
Agreement, the "Partnership Agreements") or any agreement or other instrument to
which the Purchaser or the Subsidiary OLP is a party or by which either of them
may be bound (other than pursuant to the Operative Agreements, pursuant to the
Amended and Restated Ferrellgas, Inc. Unit Option Plan listed as Exhibit 10.2 to
the Form 10-K, as limited by the pledge and debt documents identified in the
exhibit list to the Form 10-K or the restriction on voting by any Person or
Group (as defined in the Purchaser Partnership Agreement) (other than the
Purchaser or its affiliates) who owns beneficially 20% or more of all Common
Units as set forth in the definition of "Outstanding" set forth in Article II of
the Purchaser Partnership Agreement);
(g) All of the issued and outstanding shares of capital stock of, or other
ownership interests in, each of the Subsidiaries or the General Partner have
been duly and validly authorized and issued, and all of the shares of capital
stock of, or other ownership interests in, each of the Subsidiaries are owned,
directly or through other Subsidiaries, by the Purchaser, the Subsidiary OLP or
the General Partner, as the case may be; all such shares of capital stock are
fully paid and nonassessable (except as such non-assessability may be affected
by the Delaware Act), and are owned free and clear of all liens, security
interests, mortgages, pledges, encumbrances, equities or claims (each a "Lien"),
other than Liens pursuant to the Pledge and Security Agreement dated as of April
16, 1996, made by the Purchaser and the General Partner in favor of American
Bank National Association, as collateral agent;
(h) The Purchaser, the Subsidiary OLP and the General Partner each have the
requisite partnership and corporate power and authority, as applicable, to
execute, deliver and perform their respective obligations under the Partnership
Agreements, this Representations Agreement and the Registration Rights
Agreement, as applicable; this Representations Agreement has been duly
authorized, executed and delivered by each of the Purchaser, the Subsidiary OLP
and the General Partner and is a valid and legally binding agreement of the
Purchaser, the Subsidiary OLP and the General Partner, enforceable against the
Purchaser, the Subsidiary OLP and the General Partner in accordance with its
terms subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights (ii) the
remedy of specific performance and injunctive and other forms of equitable
relief and (iii) to the discretion of the court before which any proceeding
thereof may be brought (collectively, the "Enforceability Exceptions"); the
Purchaser Partnership Agreement has been duly authorized, executed and delivered
by the General Partner and is a valid and legally binding agreement of the
General Partner, enforceable against the General Partner in accordance with its
terms, subject to the Enforceability Exceptions; the Subsidiary OLP Agreement
has been duly authorized, executed and delivered by the General Partner and the
Purchaser and is a valid and legally binding agreement of the General Partner
and the Purchaser, enforceable against the General Partner and the Purchaser in
accordance with its terms, subject to the Enforceability Exceptions; the
Registration Rights Agreement has been duly authorized, executed and delivered
by the Purchaser and is a valid and legally binding agreement of the Purchaser
enforceable against the Purchaser in accordance with its terms, subject to the
Enforceability Exceptions and except as any rights to indemnity and contribution
thereunder may be limited by federal and state securities laws and public policy
considerations;
(i) The issuance and sale of the Senior Units, the Common Units issuable upon
conversion of the Senior Units and the Distribution Units by the Purchaser, and
the execution and delivery of this Representations Agreement and the
Registration Rights Agreement do not, and the fulfillment and compliance with
the terms and conditions hereof and thereof and the consummation of the
Transactions will not (i) conflict with any of, or require the consent of any
person or entity under, the terms, conditions or provisions of the Partnership
Agreements or the charter or bylaws of the General Partner, (ii) violate any
provision of, or require any consent, authorization or approval under, any law
or administrative regulation or any judicial, administrative or arbitration
order, award, judgment, writ, injunction or decree applicable to the Purchaser,
the Subsidiary OLP or the General Partner, (iii) conflict with, result in a
breach of, constitute a default under (whether with notice or the lapse of time
or both) or accelerate or permit the acceleration of the performance required
by, or require any consent, authorization or approval under, any indenture,
mortgage, loan or any material agreement, contract, commitment or instrument to
which the Purchaser, the Subsidiary OLP or the General Partner is a party or by
which the Purchaser, the Subsidiary OLP or the General Partner is bound or to
which any asset of the Purchaser, the Subsidiary OLP or the General Partner is
subject, or (iv) result in the creation of any Lien on the assets or properties
of the Purchaser, the Subsidiary OLP or the General Partner under any such
indenture, mortgage, loan, agreement, contract or instrument; and no consent,
approval, authorization or other order of or registration or filing with, any
court, regulatory body, administrative agency or other governmental body, agency
or official is required for the issuance and sale of the Senior Units by the
Purchaser to the Seller or the consummation by the Purchaser, the Subsidiary OLP
or the General Partner, as the case may be, of the Transactions, except such
consents, approvals, authorizations, orders, registrations or qualifications (i)
as have been obtained prior to the date hereof, (ii) as may be required in
connection with the registration under the Securities Act pursuant to the
Registration Rights Agreement of the Senior Units or the Common Units issuable
upon conversion of the Senior Units and the compliance with securities or Blue
Sky laws of various jurisdictions or (iii) as may be required in connection with
obtaining the unitholder approval for the conversion feature of the Senior Units
and the issuance of Common Units upon conversion of the Senior Units as
contemplated in the Purchaser Partnership Agreement (the "Unitholder Approval");
(j) None of the Purchaser, the General Partner or any of the Subsidiaries is in
breach or violation of the provisions of its agreement of limited partnership or
of its charter or bylaws, as the case may be;
(k) Except as set forth in the Form 10-K, none of the Purchaser, the General
Partner or any of the Subsidiaries has (i) violated any law or regulation
applicable to its business relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("Environmental Laws"), (ii) lacks any permits, licenses or
other approvals required of them under applicable Environmental Laws to own,
lease and operate their respective properties and to conduct their business as
currently conducted; is violating any terms and conditions of any such permit,
license or approval, or (iii) has permitted to occur any event that allows, or
after notice or lapse of time would allow, revocation, termination of any such
permit, license or approval or results in any other impairment of their rights
thereunder;
(l) Except as set forth in the Form 10-K, none of the Purchaser, the General
Partner or any of the Subsidiaries has violated any federal, state or local law
relating to discrimination in the hiring, promotion or pay of employees pursuant
to any applicable wage or hour laws, nor any provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA") or the rules and regulations
promulgated thereunder; except as set forth in the Form 10-K, there is (i) no
unfair labor practice charge or complaint against the business of the Purchaser,
the General Partner or any of the Subsidiaries pending (for which notice has
been provided) or, to the knowledge of the Purchaser, the Subsidiary OLP or the
General Partner, threatened before the National Labor Relations Board, (ii) no
labor strike, dispute, slowdown, stoppage or lockout actually pending (for which
notice has been provided) against the Purchaser, the General Partner or any of
the Subsidiaries or, to the knowledge of the Purchaser, the Subsidiary OLP or
the General Partner, threatened against or affecting the business of the
Purchaser, the General Partner or any of the Subsidiaries and (iii) neither the
Purchaser, the Subsidiary OLP nor the General Partner has received notice of the
intent of any federal or state governmental authority responsible for the
enforcement of labor or employment laws to conduct an investigation with respect
to or relating to their respective business and no such investigation is in
progress;
(m) Except as set forth in the Form 10-K, all tax returns required to be filed
by the Purchaser, the General Partner or any of the Subsidiaries in any
jurisdiction have been filed, other than those filings being contested in good
faith, and all taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due or claimed to be due from such entities
have been paid, other than those being contested in good faith and for which
adequate reserves have been provided or those currently payable without penalty
or interest;
(n) Neither the Purchaser, the General Partner nor any of the Subsidiaries is
(i) an "investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act") or (ii) a "holding company" or a "subsidiary company"
of a holding company, or an "affiliate" thereof within the meaning of the Public
Utility Holding Company Act of 1935, as amended;
(o) Neither the Purchaser, the Subsidiary OLP nor the General Partner or any of
their respective Affiliates (as defined in Rule 501(b) of Regulation D under the
Securities Act), directly or through any agent, (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of any "security" (as
defined in the Securities Act) which is or would reasonably be expected to be
integrated with the sale of the Senior Units or the Common Units issuable upon
conversion of the Senior Units in a manner that would require registration under
the Securities Act of the Senior Units or the Common Units issuable upon
conversion of the Senior Units or (ii) engaged in any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) in connection with the offering of the Senior Units or
the Common Units issuable upon conversion of the Senior Units or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act. Assuming the accuracy of the representations and warranties of the Seller
in Section 5 hereof, it is not necessary in connection with the offer, sale and
delivery of the Senior Units and the Common Units issuable upon conversion of
the Senior Units to Seller in the manner contemplated in this Representations
Agreement, the Thermogas Purchase Agreement or the Purchaser Partnership
Agreement, as applicable, to register any of the Senior Units and the Common
Units issuable upon conversion of the Senior Units under the Securities Act; and
(p) No securities of the Purchaser are of the same class (within the meaning of
Rule 144A under the Securities Act) as the Senior Units and listed on a national
securities exchange registered under Section 6 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or quoted in a U.S. automated
inter-dealer quotation system.
2. SECTION Delivery of the Units .
In connection with the delivery of the Equity Consideration (as defined
in the Thermogas Purchase Agreement) pursuant to Section 1.7(b)(i) of the
Thermogas Purchase Agreement, the Purchaser has delivered on the date hereof a
certificate or certificates in definitive form representing the Senior Units to
be issued pursuant thereto, in the form attached as Exhibit B to the Purchaser
Partnership Agreement, registered in the name of the Seller.
1. SECTION Certain Covenants .
Each of the Purchaser, the Subsidiary OLP and the General Partner
covenants and agrees with the Seller:
(a) For so long as the Senior Units remain outstanding, to furnish to the
holders of Senior Units any reports delivered by the Purchaser to its holders of
Common Units simultaneously with the delivery thereof to such holders;
(b) To pay or cause to be paid the following:
NYC:70941.9
(c) (i) the fees, disbursements and expenses of the Purchaser's counsel and
accountants in connection with the issuance of the Senior Units hereunder; (ii)
the cost of preparing certificates representing the Senior Units, the Common
Units issuable upon conversion of the Senior Units and the Distribution Units;
and (iii) the cost and charges of any transfer agent; and
(d) Neither the Purchaser, the Subsidiary OLP nor the General Partner nor any of
their Affiliates (as defined in Rule 501(b) of Regulation D under the Securities
Act), will sell, offer for sale or solicit offers to buy or otherwise negotiate
in respect of any "security" (as defined in the Securities Act) which would
reasonably be expected to be integrated with the sale of the Senior Units, the
Common Units issuable upon conversion of the Senior Units or the Distribution
Units in a manner which would require the registration under the Securities Act
of the Senior Units, the Common Units issuable upon conversion of the Senior
Units or the Distribution Units.
2. SECTION Opinion of Purchaser's Counsel .
Xxxxxxxxx & Xxxxxxxxx LLP, special counsel for the Purchaser, the
General Partner and the Subsidiary OLP, shall have furnished to the Seller its
written opinion or opinions, dated the date hereof, in form and substance
satisfactory to the Seller, to the effect that:
(a) Each of the Purchaser and the Subsidiary OLP is validly existing as a
limited partnership under the Delaware Act;
(b) The General Partner is duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware;
(c) The Senior Units and Distribution Units, and limited partner interests
represented thereby, have been duly authorized (including due authorization
under the Purchaser Partnership Agreement) and, when issued and delivered to the
Seller in accordance with the terms of the Thermogas Purchase Agreement and
based on the representations and warranties in this Representations Agreement,
in the case of the Senior Units, and in accordance with the Purchaser
Partnership Agreement, in the case of the Distribution Units, will be validly
issued, fully paid and nonassessable (except as such nonassessability may be
affected by the Delaware Act) and free of any preemptive or similar rights; the
Common Units issuable upon conversion of the Senior Units pursuant to the terms
of the Purchaser Partnership Agreement, and limited partner interests
represented thereby, have been duly authorized (including due authorization
under the Purchaser Partnership Agreement) and, when issued and delivered to the
Seller upon such conversion in accordance with the terms of the Purchaser
Partnership Agreement, will be validly issued, fully paid and nonassessable
(except as such nonassessability may be affected by the Delaware Act) and free
of any preemptive or similar rights; to the knowledge of such counsel, there are
no Subordinated Units outstanding; to the knowledge of such counsel, other than
the Common Units and the Incentive Distribution Rights, the Senior Units are the
only limited partner interests of the Purchaser outstanding;
(d) To the knowledge of such counsel, there are no preemptive rights or other
rights to subscribe for or to purchase, nor any restriction upon the voting or
transfer of, any limited partner interests in the Purchaser or the Subsidiary
OLP pursuant to the Partnership Agreements or any agreement or other instrument
to which the Purchaser or the Subsidiary OLP is a party or by which either of
them is bound (other than pursuant to the Operative Agreements, pursuant to the
Amended and Restated Ferrellgas, Inc. Unit Option Plan listed as Exhibit 10.2 to
the Form 10-K, as limited by the pledge and debt documents identified in the
exhibit list to the Form 10-K or the restriction on voting by any Person or
Group (as defined in the Purchaser Partnership Agreement) (other than the
Purchaser or its affiliates) who owns beneficially 20% or more of all Common
Units as set forth in the definition of "Outstanding" set forth in Article II of
the Purchaser Partnership Agreement);
(e) The Purchaser, the Subsidiary OLP and the General Partner each have the
requisite partnership and corporate power and authority, as applicable, to
execute, deliver and perform their respective obligations under the Purchaser
Partnership Agreement, this Representations Agreement and the Registration
Rights Agreement; the Purchaser Partnership Agreement, this Representations
Agreement and the Registration Rights Agreement have been duly authorized,
executed and delivered by the General Partner, the Purchaser and the Subsidiary
OLP, as the case may be; each of this Representations Agreement and the
Registration Rights Agreement constitutes a valid and legally binding agreement
of the General Partner, the Purchaser and the Subsidiary OLP, as the case may
be, enforceable against the General Partner, the Purchaser and the Subsidiary
OLP, as the case may be, in accordance with their respective terms, subject to
the Enforceability Exceptions and, with respect to the Registration Rights
Agreement only, except as any rights to indemnity and contribution thereunder
may be limited by federal and state securities laws and public policy
considerations; and the Purchaser Partnership Agreement constitutes a valid and
legally binding agreement of the General Partner, enforceable against the
General Partner in accordance with its terms, subject to the Enforceability
Exceptions;
(f) Neither the issuance, sale or delivery by the Purchaser of the Senior Units
or the Common Units issuable upon conversion of the Senior Units (assuming
receipt of the Unitholder Approval) or the Distribution Units nor the execution,
delivery or performance by the Purchaser, the Subsidiary OLP and the General
Partner, as the case may be, of the Operative Agreements nor the consummation by
the Purchaser, the Subsidiary OLP and the General Partner, as the case may be,
of the Transactions violates, conflicts with or constitutes a breach of, or
default under, any of the provisions of the Partnership Agreements or the
General Partner's charter or bylaws, as applicable;
(g) Neither the Purchaser, the Subsidiary OLP nor the General Partner is (i) an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act or (ii) a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" thereof within the
meaning of the Public Utility Holding Company Act of 1935, as amended;
(h) Each of the Purchaser, the Subsidiary OLP and the General Partner is duly
qualified or registered as a foreign limited partnership or a foreign
corporation, as applicable, and is in good standing under the laws of each of
the jurisdictions set forth in Annex I hereto; and to the knowledge of such
counsel, such jurisdictions are the only jurisdictions in which each of the
Purchaser, the Subsidiary OLP or the General Partner owns or leases property, or
conducts any business, so as to require qualification or registration to conduct
business as a foreign limited partnership or foreign corporation, as applicable,
and in which the failure so to qualify or register would (i) have a Material
Adverse Effect, or (ii) subject the holders of Senior Units or Common Units to
any material liability or disability. "Material Adverse Effect" means any
material adverse change in, or effect on the business, assets, financial
condition or results of operations of the Purchaser and its Subsidiaries, taken
as a whole; provided that any such effect resulting from (i) any change in
economic conditions generally or in the industries in which the Purchaser or its
Subsidiaries operate, (ii) any resignation, retirement or termination of
employees and effects thereof, or (iii) any actions to be taken in connection
with the consummation of the Transactions or pursuant to the Operative Documents
shall not be considered when determining whether a Material Adverse Effect has
occurred;
(i) Neither the issuance, sale or delivery by the Purchaser of the Senior Units
nor the Common Units issuable upon conversion of the Senior Units (assuming
receipt of the Unitholder Approval) or the Distribution Units nor the execution,
delivery or performance by the Purchaser, the Subsidiary OLP and the General
Partner, as the case may be, of the Operative Agreements nor the consummation by
the Purchaser, the Subsidiary OLP and the General Partner, as the case may be,
of the other Transactions, conflicts with or results in a breach or violation of
any of the terms or provisions of, or constitutes a default or causes an
acceleration of any obligation under, or results in the imposition or creation
of (or the obligation to create or impose) a Lien with respect to, any document
listed on the exhibit index to the Form 10-K, excluding in each case any
conflict, breach, violation, default or acceleration which, individually or in
the aggregate, would not have a Material Adverse Effect; nor will the issuance
and sale of the Senior Units by the Purchaser and the execution, delivery and
performance by the Purchaser, the Subsidiary OLP and the General Partner, as the
case may be, of the Operative Agreements or the consummation by any of them of
the other Transactions violate the Delaware General Corporation Law, the
Delaware Act or, to the knowledge of such counsel and assuming the truth of the
representations and warranties of all parties in the Operative Agreements, any
federal law of the United States or any rules or regulations adopted by a
governmental agency thereof applicable to the Purchaser, the General Partner or
any of the Subsidiaries, excluding in each case any violation which,
individually or in the aggregate, would not have a Material Adverse Effect;
(j) No consent, approval, authorization or other order of, or registration or
filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official of the United States or the State of
Delaware having jurisdiction over the Purchaser, the General Partner or any of
the Subsidiaries or any of their properties is required for the issuance and
sale by the Purchaser of the Senior Units, the Common Units issuable upon
conversion of the Senior Units or the Distribution Units or for the consummation
by the Purchaser, the Subsidiary OLP or the General Partner of the other
Transactions or the Operative Agreements, except in each case (i) which, if not
obtained, would not, individually or in the aggregate, have a Material Adverse
Effect (ii) as may be required in connection with the registration under the
Securities Act pursuant to the Registration Rights Agreement of the Senior Units
or the Common Units issuable upon conversion of the Senior Units and the
compliance with securities or Blue Sky laws of various jurisdictions, (iii) as
have been, prior to the date hereof obtained, (iv) as may be required in
connection with the exemption from registration of the issuance of the Senior
Units pursuant to the terms of the applicable Operative Agreements, or (v) as
may be required in connection with obtaining the Unitholder Approval;
(k) No securities of the Purchaser are of the same class (within the meaning of
Rule 144A under the Securities Act) as the Senior Units and listed on a national
securities exchange under Section 6 of the Exchange Act, or quoted in a U.S.
automated inter-dealer quotation system; and
(l) Assuming the truth of the representations and warranties of the Seller, the
Purchaser, the Subsidiary OLP and the General Partner in the Representations
Agreement and Thermogas Purchase Agreement, the proposed issuance of the Senior
Units to Seller under the circumstances contemplated by the Thermogas Purchase
Agreement may be effected without registration of the sale of the Senior Units
under the Securities Act.
In rendering such opinion, such counsel may (i) rely in respect of
matters of fact upon certificates of the Purchaser and the Subsidiary OLP and of
officers and employees of the General Partner and upon information obtained from
public officials and upon opinions of other counsel issued in connection with
the Transactions, and may assume that the signatures on all documents examined
by such counsel are genuine, (ii) state that their opinion is limited to federal
laws, the Delaware Act and the Delaware General Corporation Law and (iii) state
that their opinion is furnished as special counsel for the Purchaser, the
Subsidiary OLP and the General Partner and is solely for the benefit of the
Seller.
1. SECTION Restrictions on Transfer; Representations and Warranties and
Covenants of the Seller .
(a) From and after the date hereof, neither the Senior Units, the Distribution
Units nor the Common Units issued upon conversion of the Senior Units
(collectively, the "Securities") shall be transferable except upon the
conditions specified in this Section 5(a) and in Sections 5(b) and 5(c), which
conditions are intended to ensure compliance with the provisions of the
Securities Act in respect of the transfer of any such Securities or any interest
therein. The Seller shall require (in form and substance reasonably satisfactory
to Purchaser) any proposed transferee of any Securities (or any interest
therein) to be acquired from the Seller to agree to take and hold such
Securities (or any interest therein) subject to the provisions and upon the
conditions specified in this Section 5(a) and in Sections 5(b) and 5(c). Any
transfer of the Securities or any interest therein otherwise than in accordance
with the terms of this Representations Agreement shall be null and void.
(b) Each Security shall (unless otherwise permitted by the provisions of Section
5(c)) include a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD, UNLESS
IT HAS BEEN REGISTERED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE AND THEN ONLY IN COMPLIANCE
WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE REPRESENTATIONS AGREEMENT
DATED AS OF DECEMBER 17, 1999, A COPY OF WHICH MAY BE OBTAINED FROM THE
PARTNERSHIP AT ITS PRINCIPAL EXECUTIVE OFFICE.
(i) Five business days prior to any proposed transfer (other than transfers
of Securities (i) registered under the Securities Act or (ii) to be made in
reliance on Rule 144A under the Securities Act) of any Securities, the holder
thereof shall give written notice to the Purchaser of such holder's intention to
effect such transfer, setting forth the manner and circumstances of the proposed
transfer, and shall be accompanied by (i) an opinion of counsel reasonably
satisfactory to the Purchaser addressed to the Purchaser to the effect that the
proposed transfer of such Securities may be effected without registration under
the Securities Act, (ii) such representation letters in form and substance
reasonably satisfactory to the Purchaser to ensure compliance with the
provisions of the Securities Act and (iii) such letters in form and substance
reasonably satisfactory to the Purchaser from each such transferee stating such
transferee's agreement to be bound by the terms of this Representations
Agreement. Such proposed transfer may be effected only if the Purchaser shall
have received such satisfactory notice of transfer, opinion of counsel,
representation letters and other letters referred to in the immediately
preceding sentence, whereupon the holder of such Securities shall be entitled to
transfer such Securities in accordance with the terms of the notice delivered by
the holder to the Purchaser. Each certificate evidencing the Securities
transferred as above provided shall bear the legend set forth in Section 5(b),
except that such certificate shall not bear such legend if the opinion of
counsel referred to above is to the further effect that neither such legend nor
the restrictions on transfer in Sections 5(a) through 5(c) are required in order
to ensure compliance with the provisions of the Securities Act.
(ii) Five business days prior to any proposed transfer of any Securities to
be made in reliance on Rule 144A, the holder thereof shall give written notice
to the Purchaser of such holder's intention to effect such transfer, setting
forth the manner and circumstances of the proposed transfer and certifying that
such transfer will be made (A) in full compliance with Rule 144A and (B) to a
transferee that (I) such holder reasonably believes to be a "qualified
institutional buyer" within the meaning of Rule 144A and (II) is aware that such
transfer will be made in reliance on Rule 144A. Such proposed transfer may be
effected only if the Purchaser shall have received such notice of transfer and
an agreement from such transferee agreeing to be bound by the terms of this
Representations Agreement reasonably satisfactory to Purchaser, whereupon the
holder of such Securities may transfer them in accordance with the terms of the
notice delivered by the holder to the Purchaser. Each certificate evidencing the
Securities transferred as above provided shall bear the legend set forth in
Section 5(b).
(b) The Seller represents and warrants to the Purchaser that:
(i) the Seller is an accredited investor within the meaning of Rule 501(a)
under the Securities Act and the Securities to be acquired by it
pursuant to the Operative Agreements are being acquired for its own
account and not with a view toward, or for sale in connection with, any
distribution thereof except in compliance with applicable United States
federal and state securities laws;
(ii) Seller has the requisite corporate power and authority, to execute,
deliver and perform its obligations under the Operative Agreements, as
applicable;
(iii) this Representations Agreement has been duly authorized, executed and
delivered by the Seller;
(iv) Seller is aware that no federal or state governmental authority has
made any finding or determination as to the fairness of an investment
in the Securities, nor any recommendation or endorsement with respect
thereto; Seller acknowledges that the sale of the Senior Units has not
been registered under the Securities Act in reliance on an exemption
therefrom;
(v) the execution and delivery of this Representations Agreement does not,
and the fulfillment and compliance with the terms and conditions hereof will not
(A) conflict with any of, or require the consent of any person or entity under,
the terms, conditions or provisions of the charter or bylaws of the Seller or
the limited liability company agreement of the Company, (B) violate any
provision of, or require any consent, authorization or approval under, any law
or administrative regulation or any judicial, administrative or arbitration
order, award, judgment, writ, injunction or decree applicable to the Seller or
the Company, (C) conflict with, result in a breach of, constitute a default
under (whether with notice or the lapse of time or both) or accelerate or permit
the acceleration of the performance required by, or require any consent,
authorization or approval under, any indenture, mortgage, lien or any material
agreement, contract, commitment or instrument to which the Seller or the Company
is a party or by which the Seller or the Company is bound or to which any asset
of the Company is subject, or (D) result in the creation of any lien, charge or
encumbrance on the assets or properties of the Company under any such indenture,
mortgage, lien, agreement, contract or instrument, excluding from the foregoing
clauses (B), (C), and (D) such conflicts, violations, breaches, defaults,
accelerations, liens, charges or encumbrances which become applicable as a
result of the business or activities in which the Purchaser is engaged or
proposes to be engaged or as a result of any acts or omissions by, or the status
of or any facts pertaining to, Purchaser;
(vi) this Representations Agreement constitutes a valid and binding
agreement of the Seller, enforceable in accordance with its terms,
subject to the Enforceability Exceptions; and
(vii) the Seller has such knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks of its
investment in the Securities and the Seller is capable of bearing the
economic risks of such investment.
(c) the Seller covenants and agrees with the Purchaser that it will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly or indirectly,
the Senior Units without the prior written consent of the Purchaser before the
earlier of (i) February 1, 2002, or (ii) the occurrence of a Material Event (as
defined in the Purchaser Partnership Agreement). Notwithstanding the foregoing,
nothing herein shall prohibit the Seller from (i) transferring the Senior Units
to any of its affiliates, so long as such affiliates agree in writing to be
bound by the provisions of this Representations Agreement, or (ii) offering,
selling, contracting to sell, pledging or otherwise disposing, directly or
indirectly, the Common Units issued upon conversion of the Senior Units.
2. SECTION Survival and Indemnification .
All representations and warranties made in this Representations
Agreement shall survive the date hereof until one year after the date hereof.
Notwithstanding the foregoing, the representations and warranties contained in
Section 1(m) shall survive until 60 days after the expiration of the applicable
statute of limitations and the representations and warranties contained in
Section 1(c), 1(j), 5(d)(i), 5(d)(iv), 5(d)(v) and 5(d)(vii) shall survive
indefinitely. The applicable period of survival with respect to the survival of
the representations and warranties in this Representations Agreement is
sometimes referred to herein and in the Thermogas Purchase Agreement as the
"Indemnity Period." The parties hereto intend to shorten the statute of
limitations and agree that no claims or causes of action may be brought against
the Seller, the Purchaser, the Subsidiary OLP, the General Partner or any of
their directors, officers, employees, affiliates, controlling persons, agents or
representatives based upon, directly or indirectly, any of the representations
or warranties contained in this Representations Agreement after the Indemnity
Period. This Section 6(a) shall not limit any covenant or agreement of the
parties which contemplates performance after the date hereof. The parties hereto
agree that the indemnification provided in Article VII of the Thermogas Purchase
Agreement is the exclusive remedy for money damages for a breach by any party of
any representation or warranty contained in Section 1 and Section 5 of this
Representations Agreement, any covenant contained in Section 3 and Section 5 of
this Representations Agreement and with respect to the transactions contemplated
by this Representations Agreement.
1. SECTION Allocation .
For purposes of Section 704(c) of the Internal Revenue Code of 1984, as
amended, the Seller, the Purchaser and the Subsidiary OLP covenant to use their
good faith reasonable best efforts to agree to the value of each of the assets
of the Company, the depreciation lives of each of the assets of the Company and
the depreciation method to be used with respect to each of the assets of the
Company, in a manner consistent with the Purchaser's past practices with respect
to similar assets, within 90 days after the date hereof.
1. SECTION Notices .
Any notice, request, instruction, correspondence or other document to
be given hereunder by any party to any other (herein collectively called
"Notice") shall be in writing and delivered in person or by courier service
requiring acknowledgment of receipt of delivery or mailed by certified mail,
postage prepaid and return receipt requested, or by telecopier, as follows:
If to the Seller:
Xxxxxxxx National Gas Liquids, Inc.
Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxxx 00000
Attention: Xxx Xxxxxxxxxx
Telecopy: (000) 000-0000
with a copy to:
The Xxxxxxxx Companies, Inc.
Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Telecopy: (000) 000-0000
Xxxxxxx & Xxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
and if to any of the Purchaser, the General Partner and the
Subsidiary OLP to:
Ferrellgas Partners, L.P./Ferrellgas, L.P.
c/o Ferrellgas, Inc.
Xxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxxxx & Xxxxxxxxx LLP
South Tower Pennzoil Place
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxx
Telecopy: (000)000-0000
Xxxxx Xxxx LLP
3500 One Kansas City Place
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopy: (000)000-0000
Notice given by personal delivery, courier service or mail shall be
effective upon actual receipt. Notice given by telecopier shall be confirmed by
appropriate answer back and shall be effective upon actual receipt if received
during the recipient's normal business hours, or at the beginning of the
recipient's next business day after receipt if not received during the
recipient's normal business hours. All Notices by telecopier shall be confirmed
promptly after transmission in writing by certified mail or personal delivery.
Any party may change any address to which Notice is to be given to it by giving
Notice as provided above of such change of address.
1. SECTION Governing Law .
The provisions of this Representations Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of New York
and the federal laws of the United States. Each party hereto hereby irrevocably
and unconditionally (a) consents and submits to the exclusive jurisdiction of
the courts of the State of New York and of the United States of America located
in the State of New York (each a "New York Court") for any actions, suits or
proceedings arising out of or relating to this Representations Agreement or the
transactions contemplated hereby, (b) agrees that any such action, suit or
proceedings may be brought or maintained only in a New York Court and in no
other forum, (c) agrees that service of any process, summons, notice or document
by U.S. registered or certified mail to such party at the address specified in
Section 8 shall be effective service of process in any such action, suit or
proceeding in any New York Court, and (d) irrevocably and unconditionally waives
any objection to the laying of venue of any action, suit or proceeding arising
out of or related to this Representations Agreement or the transactions
contemplated hereby in any New York Court located in New York, New York, and
further irrevocably and unconditionally waives and agrees not to plead a claim
in any such court that any such action, suit or proceeding has been brought in
an inconvenient forum.
1. SECTION Entire Agreement; Amendment and Waivers .
This Representations Agreement and the Thermogas Purchase Agreement
constitute the entire agreement among the parties hereto pertaining to the
subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties, and there
are no warranties, representations or other agreements among the parties in
connection with the subject matter hereof except as set forth specifically
herein or contemplated hereby. All exhibits, annexes, certificate and other
instruments or documents referred to herein are hereby specifically made a part
of this Representations Agreement. Any reference in this Representations
Agreement to an Exhibit or Annex shall be deemed to be a reference to an Exhibit
or Annex to this Representations Agreement unless the context expressly
indicates otherwise. The failure of a party to exercise any right or remedy
shall not be deemed or constitute a waiver of such right or remedy in the
future. No waiver of any of the provisions of this Representations Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(regardless of whether similar), nor shall any such waiver constitute a
continuing waiver unless otherwise expressly provided.
1. SECTION Binding Effect and Assignment .
This Representations Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors and
assigns; but neither this Representations Agreement nor any of the rights,
benefits or obligations hereunder shall be assigned, by operation of law or
otherwise, by any party hereto without the prior written consent of either
Purchaser or Seller, as applicable, other than as set forth herein. Nothing in
this Representations Agreement, express or implied, is intended to confer upon
any person or entity other than the parties hereto and their respective
permitted successors and assigns, any rights, benefits or obligations hereunder.
1. SECTION Severability .
If any provision of this Representations Agreement is rendered or
declared illegal or unenforceable by reason of any existing or subsequently
enacted legislation or by decree of a court of last resort, the parties hereto
shall promptly meet and negotiate substitute provisions for those rendered or
declared illegal or unenforceable, but all of the remaining provisions of this
Representations Agreement shall remain in full force and effect.
1. SECTION Parties in Interest .
This Representations Agreement shall be binding upon and inure solely
to the benefit of each party hereto, and nothing in this Representations
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.
1. SECTION Headings; Survival of Covenants .
The headings of the sections herein are inserted for convenience of
reference only and are not intended to be a part of or to affect the meaning or
interpretation of this Representations Agreement. To the extent covenants
hereunder are intended to be performed following the date hereof, such covenants
shall survive.
1. SECTION Execution .
This Representations Agreement may be executed in multiple counterparts
each of which shall be deemed an original and all of which shall constitute one
instrument.
IN WITNESS WHEREOF, the parties have executed this Representations
Agreement as of the date first written above.
FERRELLGAS PARTNERS, L.P.
By: Ferrellgas, Inc.,
its General Partner
By:
Name:
Title:
FERRELLGAS, INC.
By:
Name:
Title:
FERRELLGAS L.P.
By: Ferrellgas, Inc.,
its General Partner
By:
Name:
Title:
XXXXXXXX NATURAL GAS LIQUIDS, INC.
By:
Name:
Title:
SUBSIDIARIES
Ferrellgas, L.P., a Delaware limited partnership
Ferrellgas Partners Finance Corp., a Delaware corporation
JURISDICTIONS IN WHICH THE PURCHASER, THE SUBSIDIARY OLP AND THE GENERAL
PARTNER ARE QUALIFIED
