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EXHIBIT 10.17.1
CONTRIBUTION AGREEMENT
AMENDMENT NO. 1
This Amendment No. 1 ("Amendment") of the Contribution Agreement (the
"Agreement"), dated as of June 15, 2000, effective as of August 10, 2000 is
entered into by and among the following:
1. U.S. Propane, L.P., a Delaware limited partnership ("LP");
2. Heritage Operating, L.P., a Delaware limited partnership
("Heritage OLP"); and
3. Heritage Propane Partners, L.P., a Delaware limited
partnership ("Heritage MLP").
Capitalized terms not defined herein shall have the meanings assigned
to them in the Agreement.
RECITALS
WHEREAS, the parties desire to restate Section 2.3 of the Agreement to
accurately reflect the number of Common Units to be issued to the LP in exchange
for the contribution of Heritage OLP Interests; and
WHEREAS, the parties desire to restate Section 4.2(a) of the Agreement
to provide for each Contributed Sub to become qualified to do business in each
of the states where it will do business; and
WHEREAS, the parties desire to restate Section 6.17 of the Agreement to
accurately reflect the agreement of Heritage GP and the LP and their respective
successors and assigns with respect to the vote of their Common Units; and
WHEREAS, the parties desire to restate Exhibit 2.6 to the Agreement to
reflect the appropriate date for the determination of Net Working Capital.
AMENDMENT
NOW, THEREFORE, Exhibit 2.6 to the Agreement is hereby deleted in its
entirety and replaced with that certain Exhibit 2.6 attached as Annex I hereto,
and Sections 2.3, 4.2(a) and 6.17 are hereby deleted in their entirety and
restated to read as follows:
2.3 ISSUANCE OF CERTIFICATE FOR COMMON UNITS. In exchange for the
contribution of Heritage OLP Interests by the LP pursuant to Section 2.2(f),
Heritage MLP shall issue to the LP a certificate representing Common Units, with
the number of Common Units to be equal to the quotient (rounded to the nearest
whole number) of $7,347,759.65 divided by the Average Price.
Contribution Agreement
Amendment No. 1
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4.2 ORGANIZATION AND CAPITALIZATION OF THE CONTRIBUTED SUBS.
(a) Each of the Contributed Subs that is a limited liability company
will be, as of the Closing, duly organized under the laws of the jurisdiction of
its formation, qualified to do business in each jurisdiction where the character
of its business requires it to be so qualified (or, as of the Closing, such
qualification shall be applied for and certified by an officer of such
Contributed Sub) and will be wholly owned by the LP. None of the Contributed
Subs will have any Subsidiaries or any equity interest in any other Person.
6.17 VOTE OF COMMON UNITS. Heritage GP and the LP and their respective
successors and assigns hereby covenant and agree to vote all of their Common
Units (other than those issued pursuant to Section 2.3 (the "New Units")) at
each meeting or vote of holders (the "Unitholders") of the Common Units, with
respect thereto, for approval of the conversion of Class B Subordinated Units to
Common Units (the "Conversion"), for the admission of the LP or its designee as
general partner of Heritage MLP (the "Admission"), and for any amendment of the
Heritage MLP Partnership Agreement related thereto. The LP agrees to xxxxx Xxxxx
X. Xxxxxxxxxxxx and H. Xxxxxxx Xxxxxxxx its proxy, at each meeting or other vote
of the Unitholders related to the Conversion, the Admission or any amendment of
the Heritage MLP Partnership Agreement related thereto, to vote its New Units in
the manner required by rule or interpretation of the New York Stock Exchange,
Inc. (the "NYSE") for the listing of the New Units on the NYSE.
RATIFICATION OF CONTRIBUTION AGREEMENT
FURTHER RESOLVED, that, except as expressly amended and restated
herein, all of the terms and conditions of the Agreement shall remain in full
force and effect.
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Contribution Agreement
Amendment No. 1
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IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the day and year first written above.
U.S. PROPANE, L.P.,
A DELAWARE LIMITED PARTNERSHIP
BY: U.S. PROPANE, L.L.C.,
ITS GENERAL PARTNER
By:
--------------------------------
Name:
Title:
HERITAGE OPERATING, L.P.,
A DELAWARE LIMITED PARTNERSHIP
BY: HERITAGE HOLDINGS, INC.,
ITS GENERAL PARTNER
By:
--------------------------------
Name:
Title:
HERITAGE PROPANE PARTNERS, L.P.,
A DELAWARE LIMITED PARTNERSHIP
BY: HERITAGE HOLDINGS, INC.,
ITS GENERAL PARTNER
By:
--------------------------------
Name:
Title:
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Contribution Agreement
Amendment No. 1
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EXHIBIT 2.6
ANNEX I
NET WORKING CAPITAL
PART 1
Definition of Net Working Capital
As used herein, the term "Net Working Capital" shall be determined for
the LP on a consolidated basis including all assets held by each Contributed Sub
as of 12:01 a.m. on August 1, 2000 (the "Accounting Effective Time") and shall
mean the current assets minus the assumed liabilities of such Contributed Sub as
of the Accounting Effective Time, as such items are determined in accordance
with GAAP but subject to the adjustments specified below under "Adjustments to
Current Assets and Assumed Liabilities."
Adjustments to Current Assets and Assumed Liabilities
Current assets include:
o Cash and cash equivalents
o Accounts receivable
o Notes receivable
o Liquids inventory
o Appliances
o Non-consumable operating materials and supplies (based on a
physical inventory conducted within 60 days of the Accounting
Effective Time and adjustment to the Accounting Effective Time
if necessary), including parts, fittings and regulators
o Prepaid expenses
o Prepaid utilities, service charges and rentals
Assumed Liabilities include:
o Accounts payable
o Accrued liabilities (such as vacation and payroll)
o Deferred credits (such as customer deposits, escheat and
Permits)
o Non-income taxes payable (such as sales taxes, motor fuel
taxes and property taxes)
o Present value of vehicle leases, discounted at 10% (discount
rate subject to auditor approval)
o The present value of payment obligations under noncompetition
agreements, to the extent included in the balance sheet and
not expensed, discounted at 10% (discount rate subject to
auditor approval)
o Credit balances on accounts receivable (prebuys, overpayments,
budget plans)
Annex I - Page 1
Contribution Agreement
Amendment No. 1
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Assumed Liabilities do not include debt of the Contributed Subs repaid in
accordance with Section 2.2(e) of the Contribution Agreement.
PART 2
Valuation of Net Working Capital
The Net Working Capital shall be valued as of the Accounting Effective
Time using the following valuation conventions:
Except to the extent the LP provides sufficient documentation to
reasonably support a different valuation percentage, each account
receivable shall be valued based on a percentage of its face amount
based on the age of such account or note receivable as of the
Accounting Effective Time as follows:
Age of Receivable in Days Percentage
0-30 100%
31-90 90%
91-120 75%
>120 50%
Liquids inventory:
1. Working inventories are those gallons which are held at
branch/satellite facilities and are used in the normal course
of business for daily usage/deliveries. Those inventories
should be valued at the laid-in market prices, which is based
on applicable pipeline posted prices at the Accounting
Effective Time.
2. Supply position inventories are those inventories which have
been purchased for future delivery or placed into storage for
use as demand requires. These volumes could represent gallons
that have been pre-sold or bought to protect against
anticipated possible cost changes. These inventories should be
valued at cost, including freight, storage and hedging cost.
Each appliance shall be valued based on a percentage of original cost
based on the age of such appliance as of the Accounting Effective Time
as follows:
Age of Appliance in Months Percentage
0-12 100%
13-18 75%
>18 0%
Non-consumable operating materials and supplies shall be valued at the
lower of cost or fair market value as of the Accounting Effective Time.
Annex I - Page 2
Contribution Agreement
Amendment No. 1
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Prepaid expenses shall be valued as of the Accounting Effective Time in
accordance with GAAP.
All other items comprising Net Working Capital and not otherwise
addressed herein shall be valued as of the Accounting Effective Time in
accordance with GAAP.
Annex I - Page 3
Contribution Agreement
Amendment No. 1
