Execution Version

Exhibit 10.9

 

 

 

AMENDED AND RESTATED RECEIVABLE INTEREST SALE AGREEMENT

 

DATED AS OF JUNE 7, 2005

 

BETWEEN

 

FERRELLGAS, L.P., AS ORIGINATOR,

 

AND

 

FERRELLGAS RECEIVABLES, LLC, as Buyer

 

 

 

HOUSTON\1845808.4

 

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TABLE OF CONTENTS

PAGE

 

 

 

ARTICLE I.

 

PURCHASE AND CONTRIBUTION

2

 

Section 1.1

 

Contribution of Contributed Interest

2

 

Section 1.2

 

Purchase of the Receivables Interest

2

 

Section 1.3

 

Payment of the Purchase Price

2

 

Section 1.4

 

Deemed Collections

3

 

Section 1.5

 

Payments and Computations, Etc.

3

 

Section 1.6

 

Intention of the Parties

4

 

 

 

 

 

ARTICLE II.

 

PAYMENTS AND COLLECTIONS

4

 

Section 2.1

 

Collections Prior to Termination

4

 

Section 2.2

 

Collections Following Termination

4

 

Section 2.3

 

Payment Recission

4

 

 

 

 

 

ARTICLE III.

 

REPRESENTATIONS AND WARRANTIES

5

 

Section 3.1

 

Representations and Warranties of the Originator

5

 

 

 

 

 

ARTICLE IV.

 

CONDITIONS OF PURCHASE

8

 

Section 4.1

 

Conditions Precedent to Purchase

8

 

 

 

 

 

ARTICLE V.

 

COVENANTS

8

 

Section 5.1

 

Financial Reporting

8

 

Section 5.2

 

Certificates; Other Information

9

 

Section 5.3

 

Notices

10

 

Section 5.4

 

Compliance with Laws

11

 

Section 5.5

 

Preservation of Existence, Etc.

11

 

Section 5.6

 

Payment of Obligations

11

 

Section 5.7

 

Audits

11

 

Section 5.8

 

Keeping of Records and Books

12

 

Section 5.9

 

Compliance with Contracts and Credit and Collection Policy

12

 

Section 5.10

 

Ownership

12

 

Section 5.11

 

Purchasers’ Reliance

12

 

Section 5.12

 

Collections

13

 

Section 5.13

 

Negative Covenants of Originator

13

 

 

 

 

 

ARTICLE VI.

 

ADMINISTRATION AND COLLECTION

14

 

Section 6.1

 

Designation of Servicer

14

 

Section 6.2

 

Duties of Servicer

14

 

Section 6.3

 

Servicing Fee

15

 

 

 

 

 

ARTICLE VII.

 

TERMINATION FEES

15

 

Section 7.1

 

Termination Events

15

 

Section 7.2

 

Remedies

18

 

 

 

 

 

 

 

 

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ARTICLE VIII.

 

INDEMNIFICATION

18

 

Section 8.1

 

Indemnities by Originator

18

 

Section 8.2

 

Other Costs and Expenses

20

 

 

 

 

 

ARTICLE IX.

 

MISCELLANEOUS

20

 

Section 9.1

 

Waivers and Amendments

20

 

Section 9.2

 

Notices

20

 

Section 9.3

 

Protection of Ownership Interests of Buyer

20

 

Section 9.4

 

Confidentiality

21

 

Section 9.5

 

Bankruptcy Petition

22

 

Section 9.6

 

Limitation of Liability

22

 

Section 9.7

 

CHOICE OF LAW

22

 

Section 9.8

 

CONSENT TO JURISDICTION

23

 

Section 9.9

 

WAIVER OF JURY TRIAL

23

 

Section 9.10

 

Integration; Binding Effect; Survivial of Terms

23

 

Section 9.11

 

Counterparts; Severability; Section References

24

 

Section 9.12

 

Amendment and Restatement

24

 

 

ii

 

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AMENDED AND RESTATED RECEIVABLE INTEREST SALE AGREEMENT

THIS AMENDED AND RESTATED RECEIVABLE INTEREST SALE AGREEMENT dated as of June 7,
2005 is between Ferrellgas, L.P., a Delaware limited partnership (“Originator”),
and Ferrellgas Receivables, LLC, a Delaware limited liability company (“Buyer”).
Unless defined elsewhere herein, capitalized terms used in this Agreement shall
have the meanings assigned to such terms in Exhibit I.

PRELIMINARY STATEMENTS

A.            The Originator and the Buyer have previously executed and
delivered that certain Receivable Interest Sale Agreement dated as of September
26, 2000, as amended by Amendment No. 1 to Receivable Interest Sale Agreement
dated as of January 17, 2001 and Amendment No. 2 to Receivable Interest Sale
Agreement dated November 1, 2004 (as so amended, the “Original Sale Agreement”).

B.             The Originator and the Buyer desire to amend and restate (but not
extinguish) the Original Sale Agreement in its entirety as hereinafter set forth
through the execution of this Amended and Restated Receivable Interest Sale
Agreement.

C.            On the terms and subject to the conditions hereinafter set forth,
Originator desires to continue selling a Receivable Interest, and continue
contributing a Contributed Interest to Buyer, and Buyer desires to continue
purchasing such Receivable Interest, and continue to accept contributions of
such Contributed Interest, from Originator.

D.            Originator and Buyer intend the transactions contemplated hereby
to be a true sale or other outright conveyance of the Receivable Interest and
the Contributed Interest from Originator to Buyer, providing Buyer with the full
benefits of ownership of the Receivable Interest and the Contributed Interest,
and Originator and Buyer do not intend these transactions to be, or for any
purpose to be characterized as, loans from Buyer to Originator.

E.             From time to time after the date hereof, Buyer will sell
undivided interests in the Receivable Interest and the Contributed Interest
pursuant to that certain Amended and Restated Receivables Purchase Agreement
dated as of June 7, 2005 (as the same may from time to time hereafter be
amended, supplemented, restated or otherwise modified, the “Purchase Agreement”)
among Buyer, as seller, Originator, as initial Servicer, Jupiter Securitization
Corporation (“Conduit”), the financial institutions from time to time party
thereto as “Financial Institutions” (together with Conduit, the “Purchasers”),
and JPMorgan Chase Bank, N.A. or any successor agent appointed pursuant to the
terms of the Purchase Agreement, as agent for Conduit and such Financial
Institutions (in such capacity, the “Agent”).

 

 

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NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, the Originator and the Buyer, (i) do hereby
agree that the Original Sale Agreement is amended and restated (but not
substituted or extinguished) in its entirety as set forth herein, and (ii) do
hereby further agree as follows:

ARTICLE I.

PURCHASE AND CONTRIBUTION

Section 1.1          Contribution of Contributed Interest. On the date hereof,
in consideration of the issuance of all of Buyer’s Equity Interests, Originator
does hereby contribute, assign, transfer, set-over and otherwise convey to
Buyer, without recourse (except to the extent expressly provided herein), and
Buyer does hereby accept from Originator as a contribution to Buyer’s capital,
the Contributed Interest. Subject to Section 7.1(o), after the date hereof
through and including the Termination Date, the Contributed Interest shall be
adjusted as of the opening of business on each Business Day on which any
adjustment in the Receivable Interest occurs as provided in Section 1.3(c).

Section 1.2          Purchase of the Receivable Interest. Upon the terms and
subject to the conditions hereof, in consideration of the Purchase Price,
effective on the date hereof, Originator does hereby sell, assign, transfer,
set-over and otherwise convey to Buyer, without recourse (except to the extent
expressly provided herein), and Buyer does hereby purchase from Originator, all
of Originator’s right, title and interest in the Receivable Interest. The
Receivable Interest shall be adjusted as of the opening of business on each
Business Day after the date hereof through and including the Termination Date in
accordance with Section 1.3(c).

Section 1.3

Payment of the Purchase Price.

(a)            On the date hereof, upon satisfaction of the conditions precedent
set forth in Article IV hereof, Buyer shall pay Originator the initial Purchase
Price for the Receivable Interest computed as of the Initial Computation Date,
by (i) deposit of immediately available funds, no later than 2:00 p.m. (Chicago
time), to Originator’s Account, and (ii) delivering the Subordinated Note
referred to in clause (b) below.

(b)           A portion of the Purchase Price to be paid by the Buyer may from
time to time be paid to the Originator after the consummation of the sale of the
Receivable Interest. Such unpaid portion of the Purchase Price may be paid in
immediately available funds or, at Buyer’s election, subject to Section 7.1(o),
by increasing the amount outstanding under the Subordinated Note.

(c)            The Receivable Interest shall be adjusted on a daily basis
because of the daily changes that occur in respect of the Variable Purchased
Percentage. Notwithstanding such daily adjustments, the Buyer and the Originator
agree that the Buyer shall only be required to re-calculate the Variable
Purchased Percentage (i) on a monthly basis as of the last day of each calendar
month (or if such day is not a Business Day, the next succeeding Business Day),
(ii) on the date of the occurrence of any change in the Funded Amount in
accordance with clause (d) below, and (iii) on the Termination Date. Such
redetermined amount of the Variable Purchased Percentage shall be deemed to be
the value of the Receivable Interest for all purposes under this Agreement until
such Receivable Interest is redetermined pursuant to this clause (c).

 

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(d)           If the Funded Amount shall be increased or decreased on any date,
the Buyer shall (i) in the case of an increase in the Funded Amount, pay to the
Originator the proceeds received by it resulting from such increase as
consideration for the purchase of an additional portion of the Receivable
Interest, and the Receivable Interest shall be adjusted accordingly, and (ii) in
the case of a decrease in the Funded Amount, use the proceeds of Collections
(and if necessary to obtain additional proceeds, re-sell to the Originator a
portion of the Receivable Interest) to repay to the Agent for the account of the
applicable Purchaser(s), the amounts required to be repaid pursuant to the
Purchase Agreement, and the Receivable Interest shall be adjusted accordingly.
In addition, if the Variable Purchased Percentage would, but for the limitation
contained in the definition of such term, ever exceed 100%, the Buyer shall
repay to the Agent for the account of the applicable Purchaser(s), such amounts
as may be required to reduce the Variable Purchased Percentage to an amount
equal to or less than 100%.

Section 1.4

Deemed Collections.

(a)            If on any day the Outstanding Balance of a Pool Receivable is
either (i) reduced as a result of any defective or rejected goods or services,
any cash discount or any adjustment by Originator, or (ii) reduced or cancelled
as a result of a setoff in respect of any claim by any Person (whether such
claim arises out of the same or a related transaction or an unrelated
transaction), Originator shall be deemed to have received on such day a
Collection of such Pool Receivable in the amount of such reduction or
cancellation. If on any day any of the representations or warranties in Section
3.1(h), (i), (j), (r) or (t) is no longer true with respect to any Pool
Receivable, Originator shall be deemed to have received on such day a Collection
of such Pool Receivable in full.

(b)           If Originator is deemed to receive Collections pursuant to this
Section 1.4, the Receivable Interest shall be adjusted accordingly on the date
of such deemed receipt pursuant to Section 1.3(c).

Section 1.5

Payments and Computations, Etc.

(a)            All amounts to be paid or deposited by Buyer hereunder (except
amounts payable by increasing the outstanding principal balance under the
Subordinated Note) shall be paid or deposited to Originator’s Account in
accordance with the terms hereof on the day when due in immediately available
funds. All amounts to be paid or deposited by Originator hereunder shall be paid
or deposited to the Facility Account in accordance with the terms hereof on the
day when due in immediately available funds.

(b)           In the event that any payment owed by any Person hereunder becomes
due on a day that is not a Business Day, then such payment shall be made on the
next succeeding Business Day.

(c)            If any Person fails to pay any amount hereunder when due, such
Person agrees to pay, on demand, the Default Fee in respect thereof until paid
in full; provided, however, that such Default Fee shall not at any time exceed
the maximum rate permitted by applicable law.

 

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Section 1.6          Intention of the Parties. It is the intention of the
parties hereto that the contribution of the Contributed Interest, and the sale
of the Receivable Interest hereunder, shall constitute sales or other outright
conveyances which are absolute and irrevocable and provide Buyer with the full
benefits of ownership of the Contributed Interest and the Receivable Interest.
The sale of the Receivable Interest and contribution of the Contributed Interest
hereunder are made without recourse to Originator; provided, however, that (i)
Originator shall be liable to Buyer for all representations, warranties,
covenants and indemnities made by Originator pursuant to the terms of the
Transaction Documents to which Originator is a party, and (ii) such sale and
contribution do not constitute and are not intended to result in an assumption
by Buyer or any assignee thereof of any obligation of Originator or any other
Person arising in connection with the Pool Receivables, the related Contracts
and/or other Related Security or any other obligations of Originator. In view of
the intention of the parties hereto that the conveyances of the Receivable
Interest and the Contributed Interest made hereunder shall constitute sales or
other outright conveyances thereof rather than loans secured thereby, Originator
agrees that it will, on or prior to the date hereof, mark its master data
processing records relating to the Pool Receivables with a legend acceptable to
Buyer and to the Agent (as Buyer’s assignee), evidencing that Buyer owns the
Receivable Interest and the Contributed Interest as provided in this Agreement
and to note in its financial statements that the Receivable Interest has been
sold, and the Contributed Interest has been contributed, to Buyer and have been
further sold or pledged to the Agent. Originator authorizes the Buyer or the
Agent (as Buyer’s assignee) to file such financing or continuation statements,
or amendments thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate to perfect and maintain the
perfection of Buyer’s ownership of the Receivable Interest and the Contributed
Interest.

ARTICLE II.

PAYMENTS AND COLLECTIONS

Section 2.1          Collections Prior to Termination. On each Business Day
prior to the Termination Date, after deduction by the Servicer of its Servicing
Fee: (i) the Originator’s Percentage of any remaining Collections received by
the Servicer on such Business Day shall be deposited to the Originator’s
Account, and (ii) the Buyer’s Percentage then in effect of any remaining
Collections received by the Servicer shall be, at the Buyer’s option, either
applied to payment of any amounts owing on such Business Day by Buyer to
Originator in respect of the Subordinated Note or deposited to the Facility
Account and then transferred to the Originator’s Account as payment of the
Purchase Price for the Receivable Interest.

Section 2.2          Collections Following Termination. On the Termination Date
and on each day thereafter until payment in full of all Aggregate Unpaids, after
deduction of the Servicing Fee: (i) the Originator’s Percentage then in effect
of any remaining Collections received by the Servicer on such Business Day shall
be deposited to the Originator’s Account, and (ii) the Buyer’s Percentage then
in effect of any remaining Collections received by the Servicer shall be
deposited to the Facility Account.

Section 2.3          Payment Recission. No amount due and owing to either party
hereunder shall be considered paid or applied hereunder to the extent that, at
any time, all or any portion of such payment or application is rescinded by
application of law or judicial authority, or must otherwise be returned or
refunded for any reason. The paying party shall remain obligated

 

4

 

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for the amount of any payment or application so rescinded, returned or refunded,
and shall promptly pay to the Person who suffered such recission, return or
refund) the full amount thereof, plus interest thereon at the Default Fee from
the date of any such recission, return or refunding.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

Section 3.1          Representations and Warranties of the Originator.
Originator hereby represents and warrants to Buyer and its assigns, as of the
date hereof and as of each Business Day hereafter through and including the
Termination Date that:

(a)            Existence and Power. Originator is a limited partnership, duly
organized, validly existing and in good standing under the laws of Delaware, and
is duly qualified to do business and is in good standing as a foreign
partnership, and has and holds all partnership power and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is conducted except where
the failure to so qualify or so hold could not reasonably be expected to have a
Material Adverse Effect.

(b)           Power and Authority; Due Authorization, Execution and Delivery.
The execution and delivery by Originator of this Agreement and each other
Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder and, Originator’s use of the proceeds of
the Purchase made hereunder, are within its partnership powers and authority and
have been duly authorized by all necessary partnership action on its part. This
Agreement and each other Transaction Document to which Originator is a party has
been duly executed and delivered by Originator.

(c)            No Conflict. The execution and delivery by Originator of this
Agreement and each other Transaction Document to which it is a party, and the
performance of its obligations hereunder and thereunder do not contravene or
violate (i) its certificate of formation or partnership agreement, (ii) any law,
rule or regulation applicable to it, (iii) any restrictions under any agreement,
contract or instrument to which it is a party or by which it or any of its
property is bound, or (iv) any order, writ, judgment, award, injunction or
decree binding on or affecting it or its property, and do not result in the
creation or imposition of any Adverse Claim on assets of Originator or its
Subsidiaries (except as created under the Transaction Documents) except, in each
case, where such contravention or violation could not reasonably be expected to
have a Material Adverse Effect; and no transaction contemplated hereby requires
compliance with any bulk sales act or similar law.

(d)           Governmental Authorization. Other than the filing of the financing
statements required hereunder, no authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for the due execution and delivery by Originator of this Agreement
and each other Transaction Document to which it is a party and the performance
of its obligations hereunder and thereunder.

(e)            Actions, Suits. There are no actions, suits or proceedings
pending, or to the best of Originator’s knowledge, threatened, against or
affecting Originator, or any of its properties, in or before any Governmental
Authority, which (a) purport to affect or pertain to this

 

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Agreement or any other Transaction Document or any of the transactions
contemplated hereby or thereby; or (b) if determined adversely to Originator,
would reasonably be expected to have a Material Adverse Effect. No injunction,
writ, temporary restraining order or any order of any nature has been issued by
any court or other Governmental Authority purporting to enjoin or restrain the
execution, delivery or performance of this Agreement or any other Transaction
Document, or directing that the transactions provided for herein or therein not
be consummated as herein or therein provided.

(f)            Binding Effect. This Agreement and each other Transaction
Document to which Originator is a party constitute the legal, valid and binding
obligations of Originator enforceable against Originator in accordance with
their respective terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws relating to or
limiting creditors’ rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).

(g)           Accuracy of Information. All information heretofore furnished by
Originator or any of its Affiliates to Buyer (or its assigns) for purposes of or
in connection with this Agreement, any of the other Transaction Documents or any
transaction contemplated hereby or thereby is, and all such information
hereafter furnished by Originator or any of its Affiliates to Buyer (or its
assigns) will be, true and accurate in every material respect on the date such
information is stated or certified and does not and will not contain any untrue
statement of a material fact or omit any material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.

(h)           Use of Proceeds. No Purchase Price payment hereunder will be used
(i) for a purpose that violates, or would be inconsistent with, any law, rule or
regulation applicable to Originator or (ii) to acquire any security in any
transaction which is subject to Section 13 or 14 of the Securities Exchange Act
of 1934, as amended.

(i)             Good Title. On the Initial Computation Date and upon the
creation of each Pool Receivable coming into existence after the Initial
Computation Date, Originator (i) is the legal and beneficial owner of the Pool
Receivables and (ii) is the legal and beneficial owner of the Collections and
Related Security with respect thereto, in each case, free and clear of any
Adverse Claim except as created by the Transaction Documents.

(j)             Perfection. This Agreement, together with the filing of the
financing statements contemplated hereby, is effective to transfer to Buyer (and
Buyer shall acquire from Originator) legal and equitable title to, with the
right to sell and encumber, the Receivable Interest and the Contributed
Interest, free and clear of any Adverse Claim, except as created by the
Transactions Documents. There have been duly filed all financing statements or
other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect Buyer’s ownership of
the Receivable Interest and the Contributed Interest.

(k)           Places of Business and Locations of Records. Originator is
organized under the laws of Delaware. The offices where Originator keeps all of
its records regarding the Receivable Interest are located at the address(es)
listed on Exhibit II, or such other locations of

 

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which Buyer has been notified in accordance with Section 5.13(a) in
jurisdictions where all action required by Section 5.13(a) has been taken and
completed. Originator’s Federal Employer Identification Number is correctly set
forth on Exhibit II.

(l)             Material Adverse Effect. Since January 31, 2005, no event has
occurred that would have a Material Adverse Effect.

(m)          Names. In the five (5) years prior to the date of this Agreement,
Originator has not used any partnership names, trade names or assumed names
other than the name in which it has executed this Agreement and as listed on
Exhibit II.

(n)           Ownership of Buyer. Originator owns, directly or indirectly, 100%
of the issued and outstanding Equity Interests of Buyer, free and clear of any
Adverse Claim. Such Equity Interests are validly issued, fully paid and
nonassessable, and there are no options, warrants or other rights to acquire
securities of Buyer.

(o)           Not a Regulated Entity. Originator is not an “investment company”
within the meaning of the Investment Company Act of 1940, as amended, or any
successor statute. Originator is not subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act, any state public utilities code, or any other Federal or state
statute or regulation limiting its ability to incur Indebtedness or to sell
interests in the Pool Receivables.

(p)           Compliance with Law. Originator has complied with all applicable
laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject, except where the failure to so comply could
not reasonably be expected to have a Material Adverse Effect. Each Pool
Receivable, together with the Contract related thereto, does not contravene any
laws, rules or regulations applicable thereto (including, without limitation,
laws, rules and regulations relating to truth in lending, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection practices
and privacy), and no part of such Contract is in violation of any such law, rule
or regulation, except where such contravention or violation could not reasonably
be expected to have a Material Adverse Effect.

(q)           Compliance with Credit and Collection Policy. Originator has
complied in all material respects with the Credit and Collection Policy with
regard to each Pool Receivable and the related Contract, and has not made any
change to such Credit and Collection Policy, except such material change as to
which Buyer (or its assigns) has been notified in accordance with Section
5.13(a).

(r)            Eligible Receivables. Each of the Receivables included as a Pool
Receivable in the Receivable Interest or the Contributed Interest on any day
prior to the Termination Date is an Eligible Receivable.

(s)            Payments to Originator. Neither the sale by Originator of the
Receivable Interest, nor the contribution by Originator of the Contributed
Interest, is voidable under any section of the Federal Bankruptcy Code.

 

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(t)             Enforceability of Contracts. Each Contract with respect to each
Pool Receivable is effective to create, and has created, a legal, valid and
binding obligation of the related Obligor to pay the Outstanding Balance of the
Pool Receivable created thereunder and any accrued interest thereon, enforceable
against the Obligor in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors’ rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).

(u)           Accounting. The manner in which Originator accounts for the sale
of the Receivable Interest and the contribution of the Contributed Interest does
not jeopardize its characterization as being a true sale or an absolute
contribution, as applicable.

(v)           Tax Status. Originator is subject to taxation under the Code only
as a partnership and not as a corporation.

ARTICLE IV.

CONDITIONS OF PURCHASE

Section 4.1          Conditions Precedent to Purchase. The Original Sale
Agreement shall be amended and restated in its entirety as set forth herein and
is subject to the conditions precedent that (a) the Agent shall have received on
or before the date of such purchase those documents listed on Schedule A hereto,
(b) all conditions precedent effectiveness under the Purchase Agreement shall
have been satisfied, (c) the representations and warranties set forth in Section
3.1 are true and correct in all material respects on the date hereof, and (d) no
event has occurred and is continuing that will constitute a Termination Event,
and no event has occurred and is continuing that would constitute a Potential
Termination Event.

ARTICLE V.

COVENANTS

Section 5.1          Financial Reporting. Originator shall deliver to the Buyer
and the Agent (as Buyer’s assignee), in form and detail satisfactory to the
Buyer and the Agent (as Buyer’s assignee) and consistent with the form and
detail of financial statements and projections provided to the Buyer and the
Agent (as Buyer’s assignee) by Originator and its Affiliates prior to the date
of this Agreement:

(a)            Originator’s Annual Financial Statements. As soon as available,
but not later than 100 days after the end of each fiscal year, a copy of the
audited consolidated balance sheet of Originator and its Subsidiaries as at the
end of such year and the related consolidated statements of income or
operations, partners’ or shareholders’ equity and cash flows for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, and accompanied by the opinion of a nationally-recognized
independent public accounting firm (“Independent Auditor”) which report shall
state that such consolidated financial statements present fairly the financial
position for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years. Such opinion shall not be qualified or limited in
any manner, including on account of any limitation on it because of a restricted
or limited examination by the Independent Auditor of any material portion of the
Originator’s or any Subsidiary’s records;

 

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(b)           Originator’s Quarterly Financial Statements. As soon as available,
but not later than 45 days after the end of each of the first three fiscal
quarters of each fiscal year, a copy of the unaudited consolidated balance sheet
of Originator and its Subsidiaries as of the end of such quarter and the related
consolidated statements of income, partners’ or shareholders’ equity and cash
flows for the period commencing on the first day and ending on the last day of
such quarter, and certified by a Responsible Officer as fairly presenting, in
accordance with GAAP (subject to ordinary, good faith year-end audit
adjustments), the financial position and the results of operations of Originator
and the Subsidiaries; and

(c)            General Partner Annual Consolidated Statements. As soon as
available, but not later than 100 days after the end of each fiscal year of the
General Partner, a copy of the unaudited (or audited, if available) consolidated
balance sheets of the General Partner as of the end of such fiscal year and the
related consolidated statements of income, shareholders’ equity and cash flows
for such fiscal year, certified by a Responsible Officer as fairly presenting,
in accordance with GAAP, the financial position and the results of operations of
the General Partner and its Subsidiaries (or, if available, accompanied by an
opinion of an Independent Auditor as described in Section 5.1(a) above).

Documents required to be delivered pursuant to Section 5.1 or 5.2(c) may be
delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Originator posts such documents, or
provides a link thereto on the Originator’s website on the internet at the
www.ferrellgas.com; or (ii) on which such documents are posted on the
Originator’s behalf on IntraLinks/IntraAgency or another relevant website, if
any, to which each party hereto has access (whether a commercial, a third-party
website, or whether sponsored by the Buyer) provided that: (i) upon request by
the Buyer, the Originator shall deliver paper copies of such documents to the
Buyer until a written request to cease delivering paper copies is given by the
Buyer to Originator and (ii) the Originator shall notify (which may be by
facsimile or electronic mail) the Buyer of the posting of any such documents and
provide to the Buyer by electronic mail electronic versions (i.e., soft copies)
of such documents.

Section 5.2          Certificates; Other Information. Originator shall furnish
to the Buyer and the Agent (as Buyer’s assignee):

(a)            Independent Auditor’s Certificate. Concurrently with the delivery
of the financial statements referred to in Section 5.1(a), a certificate of the
Independent Auditor stating that in making the examination necessary therefor no
knowledge was obtained of any Termination Event or Potential Termination Event,
except as specified in such certificate;

(b)           Compliance Certificate. Concurrently with the delivery of the
financial statements referred to in Sections 5.1(a) and (b), a Compliance
Certificate executed by a Responsible Officer with respect to the periods
covered by such financial statements together with supporting calculations and
such other supporting detail as the Buyer and the Agent (as Buyer’s assignee)
shall require;

(c)            SEC Reports. Promptly, copies of all financial statements and
reports that the MLP sends to its partners, and copies of all financial
statements and regular, periodic or special reports (including Forms 10-K, 10-Q
and 8-K) that Originator or any Affiliate of

 

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Originator, the General Partner, the MLP or any Subsidiary may make to, or file
with, the SEC; and

(d)           Other Information. Promptly, such additional information regarding
the Pool Receivables or the business, financial or corporate affairs of
Originator, the General Partner, the MLP or any Subsidiary as the Buyer or the
Agent (as Buyer’s assignee) may from time to time request.

Section 5.3          Notices. Originator shall promptly notify the Buyer and the
Agent (as Buyer’s assignee):

(a)            Of the occurrence of any Potential Termination Event or
Termination Event;

(b)           Of any matter that has resulted or may reasonably be expected to
result in a Material Adverse Effect, including (i) breach or non-performance of,
or any default under, a Contractual Obligation of Originator, the General
Partner, the MLP or any Subsidiary; (ii) any dispute, litigation, investigation,
proceeding or suspension between Originator, the General Partner, the MLP or any
Subsidiary and any Governmental Authority; or (iii) the commencement of, or any
material development in, any litigation or proceeding affecting Originator, the
General Partner, the MLP or any Subsidiary, including pursuant to any applicable
Environmental Laws, in each case to the extent that any of the foregoing has
resulted or may reasonably be expected to result in a Material Adverse Effect;

(c)            The occurrence of a default or an event of default under any
other financing arrangement pursuant to which Originator, the General Partner or
the MLP is a debtor or an obligor;

(d)           At least thirty (30) days prior to the effectiveness of any
material change in or material amendment to the Credit and Collection Policy, a
copy of the Credit and Collection Policy then in effect and a notice (A)
indicating such change or amendment, and (B) if such proposed change or
amendment would be reasonably likely to adversely affect the collectibility of
the Pool Receivables or decrease the credit quality of any newly created Pool
Receivables, requesting Buyer’s consent thereto;

(e)            Of any material change in accounting policies or financial
reporting practices by Originator or any of its consolidated Subsidiaries; and

(f)            If any of the representations and warranties in Article III
ceases to be true and correct.

Each notice under this Section shall be accompanied by a written statement by a
Responsible Officer setting forth details of the occurrence referred to therein,
and stating what action Originator or any affected Affiliate proposes to take
with respect thereto and at what time. Each notice under Section 5.3(a) shall
describe with particularity any and all clauses or provisions of this Agreement
or other Transaction Document that have been breached or violated.

 

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Section 5.4          Compliance with Laws. Originator shall comply with all
Requirements of Law of any Governmental Authority having jurisdiction over it or
its business (including the Federal Fair Labor Standards Act), except such as
may be contested in good faith or as to which a bona fide dispute may exist or
the failure of which to comply with could not reasonably be expected to have a
Material Adverse Effect.

Section 5.5

Preservation of Existence, Etc. Originator shall:

(a)            Preserve and maintain in full force and effect its partnership
existence and good standing under the laws of its state or jurisdiction of
organization except in connection with transactions permitted by the Credit
Agreement;

(b)           Preserve and maintain in full force and effect all governmental
rights, privileges, qualifications, permits, licenses and franchises necessary
or desirable in the normal conduct of its business except in connection with
transactions permitted by the Credit Agreement, or except where the failure to
so preserve or maintain such governmental rights, privileges, qualifications,
permits, licenses and franchises could not reasonably be expected to have a
Material Adverse Effect;

(c)            Preserve its business organization and goodwill, except where the
failure to so preserve its business organization or goodwill could not
reasonably be expected to have a Material Adverse Effect; and

(d)           Preserve or renew all of its registered patents, trademarks, trade
names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.

Section 5.6          Payment of Obligations. Originator shall pay and discharge
as the same shall become due and payable (except to the extent the failure to so
pay and discharge could not reasonably be expected to have a Material Adverse
Effect), all of its obligations and liabilities, including:

(a)            All tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested
in good faith by appropriate proceedings and adequate reserves in accordance
with GAAP are being maintained by Originator or such Subsidiary; and

(b)           All lawful claims which, if unpaid, would by law become a Adverse
Claim upon its property, unless such claims are being contested in good faith by
appropriate proceedings and adequate reserves in accordance with GAAP are being
maintained by Originator or such Subsidiary.

Section 5.7          Audits. Originator will furnish to Buyer (or its assigns)
from time to time such information with respect to it and the Pool Receivables
as Buyer (or its assigns) may reasonably request. Originator will, from time to
time during regular business hours as requested by Buyer (or its assigns), upon
reasonable notice and at the sole cost of Originator, permit Buyer (or its
assigns) or their respective agents or representatives (i) to examine and make
copies of and abstracts from all Records in the possession or under the control
of Originator relating to the

 

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Pool Receivables and the Related Security, including, without limitation, the
related Contracts, and (ii) to visit the offices and properties of Originator
for the purpose of examining such materials described in clause (i) above, and
to discuss matters relating to Originator’s financial condition or the Pool
Receivables and the Related Security or Originator’s performance under any of
the Transaction Documents or Originator’s performance under the Contracts and,
in each case, with any of the officers or employees of Originator having
knowledge of such matters.

Section 5.8          Keeping of Records and Books. Originator will maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Pool Receivables in the
event of the destruction of the originals thereof), and keep and maintain all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Pool Receivables (including, without
limitation, records adequate to permit the immediate identification of each new
Pool Receivable and all Collections of and adjustments to each existing Pool
Receivable). Originator will give Buyer (or its assigns) notice of any material
change in the administrative and operating procedures referred to in the
previous sentence.

Section 5.9          Compliance with Contracts and Credit and Collection Policy.
Originator will timely and fully (i) perform and comply with all provisions,
covenants and other promises required to be observed by it under the Contracts
related to the Pool Receivables, except where the failure to so comply could not
reasonably be expected to have a material adverse impact on the overall
collectibility of the Pool Receivables, and (ii) comply in all respects with the
Credit and Collection Policy in regard to each Pool Receivable and the related
Contract, except where the failure to so comply could not reasonably be expected
to have a material adverse impact on the overall collectibility of the Pool
Receivables.

Section 5.10       Ownership. Originator will take all necessary action to
establish and maintain, irrevocably in Buyer, legal and equitable title to the
Receivable Interest and the Contributed Interest, free and clear of any Adverse
Claims other than Adverse Claims arising under the Transaction Documents.
Originator authorizes Buyer to file all financing statements or other similar
instruments or documents necessary under the UCC (or any comparable law) of all
appropriate jurisdictions to perfect Buyer’s interest in the Receivable Interest
and the Contributed Interest and such other action to perfect, protect or more
fully evidence the interest of Buyer as Buyer (or its assigns).

Section 5.11       Purchasers’ Reliance. Originator acknowledges that the Agent
and the Purchasers are entering into the transactions contemplated by the
Purchase Agreement in reliance upon Buyer’s identity as a legal entity that is
separate from Originator and any Affiliates thereof. Therefore, from and after
the date of execution and delivery of this Agreement, Originator will take all
reasonable steps including, without limitation, all steps that Buyer or any
assignee of Buyer may from time to time reasonably request to maintain Buyer’s
identity as a separate legal entity and to make it manifest to third parties
that Buyer is an entity with assets and liabilities distinct from those of
Originator and any Affiliates thereof and not just a division of Originator or
any such Affiliate. Without limiting the generality of the foregoing and in
addition to the other covenants set forth herein, Originator (i) will not hold
itself out to third parties as liable for the debts of Buyer nor purport to own
the Receivable Interest or the Contributed Interest, (ii) will take all other
actions necessary on its part to ensure that Buyer is at all times in compliance
with the covenants set forth in Section 7.10 of the Purchase Agreement

 

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and (iii) will cause all tax liabilities arising in connection with the
transactions contemplated herein or otherwise to be allocated between Originator
and Buyer on an arm’s-length basis and in a manner consistent with the
procedures set forth in U.S. Treasury Regulations §§1.1502-33(d) and 1.1552-1.

Section 5.12       Collections(a). Originator, individually or as Servicer, will
cause all Collections on the Pool Receivables to be concentrated no less often
than weekly into the Servicer’s Concentration Account; provided, however, that
upon written request of Buyer (or its assignee), Originator, individually or as
Servicer, will cause all such Collections to be concentrated each Business Day
into the Servicer’s Concentration Account. Originator, individually or as
Servicer, will sweep the Buyer’s Percentage of all such Collections from the
Servicer’s Concentration Account no less than daily into the Facility Account
and, unless the Termination Date has occurred, immediately thereafter
transferred to the Originator’s Account.

Section 5.13       Negative Covenants of Originator. Until the date on which
this Agreement terminates in accordance with its terms, Originator hereby
covenants that:

(a)            Name Change, Offices and Records. Originator will not change its
name, identity or legal structure (within the meaning of Article 9 of any
applicable enactment of the UCC) or relocate any office where Records are kept
unless it shall have: (i) given Buyer (or its assigns) at least fifteen (15)
days’ prior written notice thereof. Furthermore, Originator authorizes Buyer (or
its assigns) to file all financing statements, instruments and other documents
in connection with such change or relocation.

(b)           Change in Payment Instructions to Obligors. Originator will not
authorize any Obligor to make payment to any Lock-Box or Collection Account
(each, as defined in the Purchase Agreement) other than one which is swept into
the Servicer’s Concentration Account in accordance with Section 5.12.

(c)            Modifications to Contracts and Credit and Collection Policy.
Originator will not make any change to the Credit and Collection Policy that
could adversely affect the collectibility of the Pool Receivables or decrease
the credit quality of any newly created Pool Receivables. Except as otherwise
permitted in its capacity as Servicer pursuant to Article VIII of the Purchase
Agreement, Originator will not extend, amend or otherwise modify the terms of
any Pool Receivable or any Contract related thereto other than in accordance
with the Credit and Collection Policy.

(d)           Sales, Adverse Claims. Originator will not sell, assign (by
operation of law or otherwise) or otherwise dispose of, or grant any option with
respect to, or create or suffer to exist any Adverse Claim upon (including,
without limitation, the filing of any financing statement) or with respect to,
the Receivable Interest, the Contributed Interest, or the Servicer’s
Concentration Account, or assign any right to receive income with respect
thereto (other than, in each case, the creation of the interests therein in
favor of Buyer provided for herein), and Originator will defend the right, title
and interest of Buyer in, to and under any of the foregoing property, against
all claims of third parties claiming through or under Originator.

(e)            Accounting for Purchase. Originator will not, and will not permit
any Affiliate to, account for or treat (whether in financial statements or
otherwise) the transactions

 

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contemplated hereby in any manner other than the sale of the Receivable Interest
and a contribution of the Contributed Interest by Originator to Buyer except to
the extent that either such transaction is not recognized on account of
consolidated financial reporting in accordance with generally accepted
accounting principles.

(f)            Change in Business. Originator shall not engage in any material
line of business substantially different from those lines of business carried on
by Originator and the Restricted Subsidiaries on the date of this Agreement.

(g)           Accounting Changes. Originator shall not, and shall not suffer or
permit any Restricted Subsidiary to, make any significant change in accounting
treatment or reporting practices, except as required by GAAP, or change the
fiscal year of Originator or of any Restricted Subsidiary except as required by
the Code.

ARTICLE VI.

ADMINISTRATION AND COLLECTION

Section 6.1          Designation of Servicer. The servicing, administration and
collection of the Pool Receivables shall be conducted by such Person (the
“Servicer”) so designated from time to time in accordance with this Section 6.1.
Ferrellgas, L.P. is hereby designated as, and hereby agrees to perform the
duties and obligations of, the Servicer pursuant to the terms of this Agreement
and the Purchase Agreement. The Agent (as Buyer’s assignee) may at any time
designate as Servicer any Person to succeed Ferrellgas, L.P. or any successor
Servicer; provided, however, that unless a Termination Event has occurred,
replacement of the Servicer shall not result in the occurrence of the
Termination Date.

Section 6.2

Duties of Servicer.

(a)            The Servicer shall take or cause to be taken all such actions as
may be necessary or advisable to collect each Pool Receivable from time to time,
all in accordance with applicable laws, rules and regulations, with reasonable
care and diligence, and in accordance with the Credit and Collection Policy.

(b)           The Servicer shall administer the Collections in accordance with
the procedures described in this Agreement and the Purchase Agreement.

(c)            Any payment by an Obligor in respect of any indebtedness owed by
it to Originator shall, except as otherwise specified by such Obligor or
otherwise required by contract or law and unless otherwise instructed by the
Agent, be applied as a Collection of any Pool Receivable of such Obligor
(starting with the oldest such Pool Receivable) to the extent of any amounts
then due and payable thereunder before being applied to any other receivable or
other obligation of such Obligor.

 

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Section 6.3          Servicing Fee. In consideration of Ferrellgas, L.P.’s
agreement to act as Servicer hereunder and under the Purchase Agreement, the
parties hereby agree that, so long as Ferrellgas, L.P. shall continue to perform
as Servicer hereunder and under the Purchase Agreement, as compensation for its
servicing activities, Ferrellgas, L.P. shall be entitled to a per annum fee (the
“Servicing Fee”), payable monthly in arrears on the 20th day of each month
hereafter (or, if any such date is not a Business Day, on the next succeeding
Business Day), determined between the Servicer and Buyer on an arms’-length
basis  (at any time while Ferrellgas, L.P. or one of its Affiliates is acting as
Servicer).

ARTICLE VII.

TERMINATION EVENTS

Section 7.1          Termination Events. The occurrence of any one or more of
the following events shall constitute a Termination Event:

(a)            Non-Payment. Originator fails to pay, within 5 days after the
same becomes due, any interest, fee or any other amount payable under this
Agreement or under any other Transaction Document; or

(b)           Representation or Warranty. Any representation or warranty by
Originator made or deemed made in this Agreement, in any other Transaction
Document, or which is contained in any certificate, document or financial or
other statement by Originator or any Responsible Officer furnished at any time
under this Agreement, or in or under any other Transaction Document, is
incorrect in any material respect on or as of the date made or deemed made; or

(c)            Specific Defaults. Originator fails to perform or observe any
term, covenant or agreement contained in any of Section 5.3(a), 5.12 or 5.13; or

(d)           Other Defaults. Originator fails to perform or observe any other
term or covenant contained in this Agreement or any other Transaction Document,
and such default shall continue unremedied for a period of 30 days after the
earlier of (i) the date upon which a Responsible Officer knew or reasonably
should have known of such failure or (ii) the date upon which written notice
thereof is given to Originator by Buyer or the Agent (as Buyer’s assignee); or

(e)            Cross-Default. (i) Any Event of Default under and as defined in
the Credit Agreement shall occur and either (A) the administrative agent
thereunder accelerates the Indebtedness arising pursuant thereto, or (B) the
requisite lenders thereunder shall not have agreed in writing to waive such
Event of Default or to forbear from exercising their remedies as a result
thereof within 30 days after the occurrence thereof; or (ii) Originator, the
General Partner or any Restricted Subsidiary (A) fails to make any payment in
respect of any Indebtedness (other than Indebtedness arising pursuant to the
Credit Agreement), Synthetic Lease Obligation or Contingent Obligation having an
aggregate principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $25,000,000 when due (whether by scheduled

 

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maturity, required prepayment, acceleration, demand, or otherwise) and such
failure continues after the applicable grace or notice period, if any, specified
in the relevant document on the date of such failure; or (B) fails to perform or
observe any other condition or covenant, or any other event (including any
termination or similar event in respect of any Accounts Receivable
Securitization) shall occur or condition exist, under any agreement or
instrument relating to any such Indebtedness (other than Indebtedness pursuant
to the Credit Agreement), Synthetic Lease Obligation or Contingent Obligation,
and such failure continues after the applicable grace or notice period, if any,
specified in the relevant document on the date of such failure if the effect of
such failure, event or condition is to cause, or to permit the holder or holders
of such Indebtedness or beneficiary or beneficiaries of such Indebtedness or
such Synthetic Lease Obligation (or a trustee or agent on behalf of such holder
or holders or beneficiary or beneficiaries) to cause such Indebtedness or such
Synthetic Lease Obligation to be declared to be due and payable prior to its
stated maturity or to cause such Indebtedness, Synthetic Lease Obligation or
Contingent Obligation to be prepaid, purchased or redeemed by Originator, the
General Partner or any Restricted Subsidiary, or such Contingent Obligation to
become payable or cash collateral in respect thereof to be demanded; or

(f)            Insolvency; Voluntary Proceedings. The General Partner or
Originator (i) ceases or fails to be solvent, or generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise;
(ii) voluntarily ceases to conduct its business in the ordinary course;
(iii) commences any Insolvency Proceeding with respect to itself; or (iv) takes
any action to effectuate or authorize any of the foregoing; or

(g)           Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding
is commenced or filed against the General Partner or Originator, or any writ,
judgment, warrant of attachment, execution or similar process, is issued or
levied against a substantial part of any such Person’s properties, and any such
proceeding or petition shall not be dismissed, or such writ, judgment, warrant
of attachment, execution or similar process shall not be released, vacated or
fully bonded within 60 days after commencement, filing or levy; (ii) the General
Partner or Originator admits the material allegations of a petition against it
in any Insolvency Proceeding, or an order for relief (or similar order under
non-U.S. law) is ordered in any Insolvency Proceeding; or (iii) the General
Partner or Originator acquiesces in the appointment of a receiver, trustee,
custodian, conservator, liquidator, mortgagee in possession (or agent therefor),
or other similar Person for itself or a substantial portion of its property or
business; or

(h)           ERISA. (i) An ERISA Event occurs with respect to a Pension Plan
which has resulted or could reasonably be expected to result in liability of
Originator or the General Partner under Title IV of ERISA to the Pension Plan or
the PBGC in an aggregate amount in excess of $25,000,000; or (ii) the
commencement or increase of contributions to, or the adoption of or the
amendment of a Pension Plan by Originator, the General Partner or any of their
Affiliates which has resulted or could reasonably be expected to result in an
increase in Unfunded Pension Liability among all Pension Plans in an aggregate
amount in excess of $25,000,000; or

(i)             Monetary Judgments. One or more judgments, orders, decrees or
arbitration awards is entered against Originator or the General Partner
involving in the aggregate a liability (to the extent not covered by independent
third-party insurance as to which the insurer

 

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does not dispute coverage) as to any single or related series of transactions,
incidents or conditions, of more than $25,000,000; or

(j)             Non-Monetary Judgments. Any non-monetary judgment, order or
decree is entered against Originator or the General Partner which does or would
reasonably be expected to have a Material Adverse Effect, and there shall be any
period of 60 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or

(k)

Adverse Change. There occurs a Material Adverse Effect; or

(l)

Change of Control. A Change of Control shall occur; or

 

(m)          Leverage Ratio. Originator shall fail to maintain as of the last
day of each fiscal quarter a Leverage Ratio equal to or less than 4.90 to 1.00
as of the last day of each fiscal quarter. For purposes of this Section 7.1(m),
(x) Funded Debt and Synthetic Lease Obligations shall be calculated as of the
last day of such fiscal quarter and (y) Consolidated Cash Flow shall be
calculated for the most recently ended four consecutive fiscal quarters,
provided, however, that (i) prior to or concurrently with each delivery of a
Compliance Certificate pursuant to Section 5.2(b), Originator may elect to
calculate Consolidated Cash Flow for the most recently ended eight consecutive
fiscal quarters (in which case Consolidated Cash Flow shall be divided by two),
and (ii) for purposes of calculating the Leverage Ratio, all Indebtedness under
the Purchase Agreement shall be excluded from such calculation; or

(n)           Interest Coverage Ratio. Originator shall fail to maintain, as of
the last day of each fiscal quarter of Originator, an Interest Coverage Ratio
for the fiscal period consisting of such fiscal quarter and the three
immediately preceding fiscal quarters of at least 2.40 to 1.00 for each such
period of four fiscal quarters; or

(o)           Excessive Contribution or Subordinated Note Balance. (i) The
aggregate principal amount outstanding under the Subordinated Note, plus (ii)
the Contributed Interest, plus (iii) all other Investments that are not
Permitted Investments (each, as defined in the Credit Agreement) exceeds
$40,000,000 at any one time outstanding.Section 7.2Remedies. Upon the occurrence
and during the continuation of a Termination Event, Buyer may take any of the
following actions: (i) declare the Termination Date to have occurred, whereupon
the Termination Date shall forthwith occur, without demand, protest or further
notice of any kind, all of which are hereby expressly waived by Originator;
provided, however, that upon the occurrence of a Termination Event described in
Section 7.1(f) or (g), or of an actual or deemed entry of an order for relief
with respect to Originator under the Federal Bankruptcy Code, the Termination
Date shall automatically occur, without demand, protest or any notice of any
kind, all of which are hereby expressly waived by Originator and (ii) to the
fullest extent permitted by applicable law, declare that the Default Fee shall
accrue with respect to any amounts then due and owing by Originator to Buyer.
The aforementioned rights and remedies shall be without limitation and shall be
in addition to all other rights and remedies of Buyer and its assigns otherwise
available under any other provision of this Agreement, by operation of law, at
equity or otherwise, all of which are hereby expressly preserved, including,
without limitation, all rights and remedies provided under the UCC, all of which
rights shall be cumulative.

             Section 7.2 Remedies Upon the occurrence and during the
continuation of a Termination Event, Buyer may take any of the following
actions:  (i) declare the Termination Date to have occurred, whereupon the
Termination Date shall forthwith occur, without demand, protest or further
notice of any kind, all of which are hereby expressly waived by Originator;
provided, however, that upon the occurrence of a Termination Event described in
Section 7.1(f) or (g), or of an actual or deemed entry of an order for relief
with respect to Originator under the Federal Bankruptcy Code, the Termination
Date shall automatically occur, without demand, protest or any notice of any
kind, all of which are hereby expressly waived by Originator and (ii) to the
fullest extent permitted by applicable law, declare that the Default Fee shall
accrue with respect to any amounts then due and owing by Originator to Buyer. 
The aforementioned rights and remedies shall be without limitation and shall be
in addition to all other rights and remedies of Buyer and its assigns otherwise
available under any other provision of this Agreement, by operation of law, at
equity or otherwise, all of which are hereby expressly preserved, including,
without limitation, all rights and remedies provided under the UCC, all of which
rights shall be cumulative.

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ARTICLE VIII.

INDEMNIFICATION

Section 8.1          Indemnities by Originator. Without limiting any other
rights that Buyer may have hereunder or under applicable law, Originator hereby
agrees to indemnify (and pay upon demand to) Buyer and its assigns, officers,
directors, agents and employees (each, an “Indemnified Party”) from and against
any and all damages, losses, claims, taxes, liabilities, costs, expenses and for
all other amounts payable, including reasonable attorneys’ fees (which attorneys
may be employees of Buyer or any such assign) and disbursements (all of the
foregoing being collectively referred to as “Indemnified Amounts”) awarded
against or incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by Buyer of the
Receivable Interest and/or the Contributed Interest, excluding, however:

(a) Indemnified Amounts to the extent that a final judgment of a court of
competent jurisdiction holds that such Indemnified Amounts resulted from gross
negligence or willful misconduct on the part of the Indemnified Party seeking
indemnification;

(b) Indemnified Amounts to the extent the same includes losses in respect of
Pool Receivables that are uncollectible on account of the insolvency, bankruptcy
or lack of creditworthiness of the related Obligor; or

(c) taxes imposed by the jurisdiction in which such Indemnified Party’s
principal executive office is located, on or measured by the overall net income
of such Indemnified Party to the extent that the computation of such taxes is
consistent with the characterization for income tax purposes of the acquisition
by the Purchasers of Purchaser Interests under the Purchase Agreement as a loan
or loans by the Purchasers to Buyer secured by, among other things, the
Receivable Interest and the Contributed Interest;

provided, however, that nothing contained in this sentence shall limit the
liability of Originator or limit the recourse of Buyer to Originator for amounts
otherwise specifically provided to be paid by Originator under the terms of this
Agreement. Without limiting the generality of the foregoing indemnification,
Originator shall indemnify Buyer for Indemnified Amounts (including, without
limitation, losses in respect of uncollectible Pool Receivables, regardless of
whether reimbursement therefore would constitute recourse to Originator)
relating to or resulting from:

(i)             any representation or warranty made by Originator (or any
officers of Originator) under or in connection with this Agreement, any other
Transaction Document or any other information or report delivered by Originator
pursuant hereto or thereto that shall have been false or incorrect when made or
deemed made;

(ii)           the failure by Originator, to comply with any applicable law,
rule or regulation with respect to any Pool Receivable or Contract related
thereto, or the nonconformity of any Pool Receivable or Contract included
therein with any such

 

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applicable law, rule or regulation or any failure of Originator to keep or
perform any of its obligations, express or implied, with respect to any
Contract;

(iii)          any failure of Originator to perform its duties, covenants or
other obligations in accordance with the provisions of this Agreement or any
other Transaction Document;

(iv)          any products liability, personal injury or damage suit or other
similar claim arising out of or in connection with merchandise, insurance or
services that are the subject of any Contract or any Pool Receivable;

(v)           any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Pool Receivable
(including, without limitation, a defense based on such Pool Receivable or the
related Contract not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any other claim
resulting from the sale of the merchandise or service related to such Pool
Receivable or the furnishing or failure to furnish such merchandise or services;

(vi)          the commingling of Collections allocable to the Receivable
Interest or the Contributed Interest at any time with other funds;

(vii)        any investigation, litigation or proceeding related to or arising
from this Agreement or any other Transaction Document, the transactions
contemplated hereby, the use of the proceeds of any Purchase Price payment, the
ownership of the Receivable Interest or the Contributed Interest or any other
investigation, litigation or proceeding relating to Originator in which any
Indemnified Party becomes involved as a result of any of the transactions
contemplated hereby;

(viii)       any inability to litigate any claim against any Obligor in respect
of any Pool Receivable as a result of such Obligor being immune from civil and
commercial law and suit on the grounds of sovereignty or otherwise from any
legal action, suit or proceeding;

(ix)

any Termination Event described in Section 7.1(f) or (g);

(x)           any failure to vest and maintain vested in Buyer, or to transfer
to Buyer, legal and equitable title to, and ownership of, the Receivable
Interest and the Contributed Interest free and clear of any Adverse Claim;

(xi)          the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to the Receivable
Interest and the Contributed Interest, and the proceeds of any thereof, whether
at the time of the Purchase or at any subsequent time;

 

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(xii)        any action or omission by Originator which reduces or impairs the
rights of Buyer with respect to any Pool Receivable or the value of any such
Pool Receivable; and

(xiii)       any attempt by any Person to void the Purchase hereunder under
statutory provisions or common law or equitable action.

Section 8.2          Other Costs and Expenses. Originator shall pay all
reasonable costs and out-of-pocket expenses in connection with the preparation,
execution and delivery of this Agreement. Originator shall pay to Buyer on
demand any and all costs and expenses of Buyer, if any, including reasonable
counsel fees and expenses in connection with the enforcement of this Agreement
and the other documents delivered hereunder and in connection with any
restructuring or workout of this Agreement or such documents, or the
administration of this Agreement following a Termination Event.

ARTICLE IX.

MISCELLANEOUS

Section 9.1

Waivers and Amendments.

(a)            No failure or delay on the part of Buyer (or its assigns) in
exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other further exercise thereof or the exercise of
any other power, right or remedy. The rights and remedies herein provided shall
be cumulative and nonexclusive of any rights or remedies provided by law. Any
waiver of this Agreement shall be effective only in the specific instance and
for the specific purpose for which given.

(b)           No provision of this Agreement or the Subordinated Note may be
amended, supplemented, modified or waived except in writing signed by Originator
and Buyer and, to the extent required under the Purchase Agreement, the Agent
and the Financial Institutions or the Required Financial Institutions.

Section 9.2          Notices. All communications and notices provided for
hereunder shall be in writing (including bank wire, telecopy, electronic mail,
facsimile transmission or similar writing) and shall be given to the other
parties hereto at their respective addresses or telecopy numbers set forth on
the signature pages hereof or at such other address or telecopy number as such
Person may hereafter specify for the purpose of notice to the other party
hereto. Each such notice or other communication shall be effective (a) if given
by telecopy, upon the receipt thereof, (b) if given by mail, three (3) Business
Days after the time such communication is deposited in the mail with first class
postage prepaid or (c) if given by any other means, when received at the address
specified in this Section 7.2.

Section 9.3

Protection of Ownership Interests of Buyer.

(a)            Originator agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary or desirable, or that Buyer (or its assigns) may
request, to perfect, protect or more fully evidence the

 

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interest of Buyer hereunder and the Receivable Interest and the Contributed
Interest, or to enable Buyer (or its assigns) to exercise and enforce their
rights and remedies hereunder. At any time, Buyer (or its assigns) may, at
Originator’s sole cost and expense, direct Originator to notify the Obligors of
Pool Receivables of the ownership interests of Buyer under this Agreement and
may also, at any time after the occurrence and continuation of a Termination
Event, direct that payments of all amounts due or that become due under any or
all Pool Receivables be made directly to Buyer or its designee.

(b)           If Originator fails to perform any of its obligations hereunder,
Buyer (or its assigns) may (but shall not be required to) perform, or cause
performance of, such obligations, and Buyer’s (or such assigns’) costs and
expenses incurred in connection therewith shall be payable by Originator as
provided in Section 6.2. Originator irrevocably authorizes Buyer (and its
assigns) at any time and from time to time in the sole discretion of Buyer (or
its assigns), and appoints Buyer (and its assigns) as its attorney(ies)-in-fact,
to act on behalf of Originator (i) to, after the occurrence and continuance of a
Termination Event execute on behalf of Originator as debtor and to file
financing statements necessary or desirable in Buyer’s (or its assigns’) sole
discretion to perfect and to maintain the perfection and priority of the
interest of Buyer in the Pool Receivables and (ii) after the occurrence and
continuance of a Termination Event, to file a carbon, photographic or other
reproduction of this Agreement or any financing statement with respect to the
Receivable Interest and the Contributed Interest as a financing statement in
such offices as Buyer (or its assigns) in their sole discretion deem necessary
or desirable to perfect and to maintain the perfection and priority of Buyer’s
interest in the Receivable Interest and the Contributed Interest. This
appointment is coupled with an interest and is irrevocable.

Section 9.4

Confidentiality.

(a)            Originator shall maintain and shall cause each of its employees
and officers to maintain the confidentiality of the Fee Letter and the other
confidential or proprietary information with respect to the Agent and Conduit
and their respective businesses obtained by it or them in connection with the
structuring, negotiating and execution of the transactions contemplated herein,
except that Originator and its officers and employees may disclose such
information to Originator’s external accountants and attorneys and as required
by any applicable law or order of any judicial or administrative proceeding.

(b)           Originator hereby consents to the disclosure of any nonpublic
information with respect to it (i) to Buyer, the Agent, the Financial
Institutions or Conduit, (ii) to any prospective or actual assignee or
participant of any of the Persons described in clause (i), (iii) to any rating
agency, Commercial Paper dealer or provider of a surety, guaranty or credit or
liquidity enhancement to Conduit or any entity organized for the purpose of
purchasing, or making loans secured by, financial assets for which Bank One acts
as the administrative agent and (iv) to any officers, directors, employees,
outside accountants and attorneys of any of the foregoing, provided each such
Person is informed of the confidential nature of such information and, in the
case of a Person described in clause (ii), agrees in writing to keep such
information confidential. In addition, the Purchasers and the Agent may disclose
any such nonpublic information pursuant to any law, rule, regulation, direction,
request or order of any judicial, administrative or regulatory authority or
proceedings (whether or not having the force or effect of law).

 

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(c)            Buyer shall maintain and shall cause each of its employees and
officers to maintain the confidentiality of the confidential or proprietary
information with respect to Originator, the Obligors and their respective
businesses obtained by it in connection with the due diligence evaluations,
structuring, negotiating and execution of the Transaction Documents, and the
consummation of the transactions contemplated herein and any other activities of
Buyer arising from or related to the transactions contemplated herein provided,
however, that each of Buyer and its employees and officers shall be permitted to
disclose such confidential or proprietary information: (i) to the Persons
described in clause (b) above, and (ii) to the extent required pursuant to any
applicable law, rule, regulation, direction, request or order of any judicial,
administrative or regulatory authority or proceedings with competent
jurisdiction (whether or not having the force or effect of law) so long as such
required disclosure is made under seal to the extent permitted by applicable law
or by rule of court or other applicable body.

Section 9.5          Bankruptcy Petition. (a) Originator and Buyer each hereby
covenants and agrees that, prior to the date that is one year and one day after
the payment in full of all outstanding senior indebtedness of Conduit, it will
not institute against, or join any other Person in instituting against Conduit
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United States or
any state of the United States.

(b) Originator covenants and agrees that, prior to the date that is one year and
one day after the payment in full of all outstanding obligations of Buyer under
the Purchase Agreement, it will not institute against, or join any other Person
in instituting against, Buyer any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the laws
of the United States or any state of the United States.

Section 9.6          Limitation of Liability. Except with respect to any claim
arising out of the willful misconduct or gross negligence of Conduit, the Agent
or any Financial Institution, no claim may be made by Originator or any other
Person against Conduit, the Agent or any Financial Institution or their
respective Affiliates, directors, officers, employees, attorneys or agents for
any special, indirect, consequential or punitive damages in respect of any claim
for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement, or any act, omission
or event occurring in connection therewith; and Originator hereby waives,
releases, and agrees not to sue upon any claim for any such damages, whether or
not accrued and whether or not known or suspected to exist in its favor.

Section 9.7          CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF (EXCEPT IN THE CASE OF THE OTHER
TRANSACTION DOCUMENTS, TO THE EXTENT OTHERWISE EXPRESSLY STATED THEREIN) AND
EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE OWNERSHIP INTERESTS OR SECURITY
INTERESTS OF BUYER OR THE AGENT IN THE RECEIVABLE INTEREST AND THE CONTRIBUTED
INTEREST IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
TEXAS.

 

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Section 9.8          CONSENT TO JURISDICTION. NOTWITHSTANDING THE CHOICE OF
TEXAS LAW PURSUANT TO SECTION 9.7, ORIGINATOR HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT
SITTING IN NEW YORK COUNTY, NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY ORIGINATOR PURSUANT TO
THIS AGREEMENT AND ORIGINATOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF
BUYER (OR ITS ASSIGNS) TO BRING PROCEEDINGS AGAINST ORIGINATOR IN THE COURTS OF
ANY OTHER JURISDICTION.

Section 9.9          WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL
BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY
ORIGINATOR PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER
OR THEREUNDER.

Section 9.10

Integration; Binding Effect; Survival of Terms.

(a)            This Agreement and each other Transaction Document contain the
final and complete integration of all prior expressions by the parties hereto
with respect to the subject matter hereof and shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof
superseding all prior oral or written understandings.

(b)           This Agreement shall be binding upon and inure to the benefit of
Originator, Buyer and their respective successors and permitted assigns
(including any trustee in bankruptcy). Originator may not assign any of its
rights and obligations hereunder or any interest herein without the prior
written consent of Buyer. Buyer may assign at any time its rights and
obligations hereunder and interests herein to any other Person without the
consent of Originator. Without limiting the foregoing, Originator acknowledges
that Buyer, pursuant to the Purchase Agreement, may assign to the Agent, for the
benefit of the Purchasers, its rights, remedies, powers and privileges hereunder
and that the Agent may further assign such rights, remedies, powers and
privileges to the extent permitted in the Purchase Agreement. Originator agrees
that the Agent, as the assignee of Buyer, shall, subject to the terms of the
Purchase Agreement, have the right to enforce this Agreement and to exercise
directly all of Buyer’s rights and remedies under this Agreement (including,
without limitation, the right to give or withhold any consents or approvals of
Buyer to be given or withheld hereunder) and Originator agrees to cooperate
fully with the Agent in the exercise of such rights and remedies. This Agreement
shall create and constitute the continuing obligations of the parties hereto in
accordance with its terms and shall remain in full force and effect until
terminated in accordance with its terms; provided, however, that the rights and
remedies with respect to (i) any breach of any representation and warranty made
by Originator pursuant to Article II; (ii) the indemnification and payment
provisions of

 

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Article VIII; and (iii) Section 9.5 shall be continuing and shall survive any
termination of this Agreement.

Section 9.11       Counterparts; Severability; Section References. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to “Article,” “Section,” “Schedule” or “Exhibit” shall mean articles and
sections of, and schedules and exhibits to, this Agreement.

Section 9.12       Amendment and Restatement. This Agreement is an amendment and
restatement of the Original Sale Agreement and supersedes the Original Sale
Agreement in its entirety; provided, however, that the execution and delivery of
this Agreement shall not effect a novation of the Original Sale Agreement but
shall be, to the fullest extent applicable, in modification, renewal,
confirmation and extension of such Original Sale Agreement.

(Remainder of this page intentionally left blank)

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date hereof.

FERRELLGAS, L.P.

 

BY: FERRELLGAS, INC., its General Partner

 

 

By:

 

Name:

Kevin T. Kelly

 

Title:

Senior Vice President and Chief Financial Officer

 

Address:

 

Ferrellgas, L.P.

7500 College Blvd., Suite 1000

Overland Park, Kansas 66210

Attention: Chief Financial Officer

Telephone: (913) 661-1500

Facsimile: (913) 661-1537

 

 

FERRELLGAS RECEIVABLES, LLC

 

 

By:

 

Name:

Kevin T. Kelly

 

Title:

Senior Vice President and Chief Financial Officer

Address:

One Allen Center

500 Dallas Street, Suite 2700

Houston, TX 77002

 

Attention: Jimmy McDonald

Phone:

(713) 844-6593

Fax:

(713) 844-6527

 

 

 

 

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EXHIBIT I

 

DEFINITIONS

 

This is Exhibit I to the Agreement (as hereinafter defined). As used in the
Agreement and the Exhibits, Schedules and Annexes thereto, capitalized terms
have the meanings set forth in this Exhibit I (such meanings to be equally
applicable to the singular and plural forms thereof). If a capitalized term is
used in the Agreement, or any Exhibit, Schedule or Annex thereto, and not
otherwise defined therein or in this Exhibit I, such term shall have the meaning
assigned thereto in Exhibit I to the Purchase Agreement.

“Acquisition” means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition of all
or substantially all of the assets of a Person, or of any business or division
of a Person, (b) the acquisition of in excess of 50% of the capital stock,
partnership interests or equity of any Person or otherwise causing any Person,
to become a Subsidiary of the acquiring Person, or (c) a merger or consolidation
or any other combination with another Person (other than a Person that is a
Subsidiary of the acquiring Person) provided that Originator or the Subsidiary
of the acquiring entity is the surviving Person.

“Adjusted Pool Amount” means, on any date of determination, an amount to equal
to the quotient of the Funded Amount divided by 0.80.

“Adverse Claim” means any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising under
or evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease, any financing lease having
substantially the same economic effect as any of the foregoing, or the filing of
any financing statement naming the owner of the asset to which such lien relates
as debtor, under the UCC or any comparable law) and any contingent or other
agreement to provide any of the foregoing, but not including the interest of a
lessor under an operating lease.

“Affiliate” means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract, or otherwise.

“Agent” has the meaning set forth in the Preliminary Statements to the
Agreement.

“Aggregate Unpaids” has the meaning set forth in the Purchase Agreement.

“Agreement” means this Amended and Restated Receivable Interest Sale Agreement,
dated as of June 7, 2005, between Originator and Buyer, as the same may be
amended, restated or otherwise modified.

 

 

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“Asset Sale” has the meaning specified in the Credit Agreement.

“Business Day” means any day on which banks are not authorized or required to
close in New York, New York or Chicago, Illinois and The Depository Trust
Company of New York is open for business.

“Buyer” has the meaning set forth in the preamble to the Agreement.

“Buyer’s Percentage” means, on any date of determination, the sum of the
Variable Purchased Percentage plus the Variable Contributed Percentage.

“Calculation Period” means each period beginning on a Settlement Date and ending
on the day preceding the next succeeding Settlement Date.

“Capital Interests” means (a) with respect to any corporation, any and all
shares, participations, rights or other equivalent interests in the capital of
the corporation, (b) with respect to any partnership or limited liability
company, any and all partnership interests (whether general or limited) or
limited liability company interests, respectively, and other interests or
participations that confer on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, such partnership or
limited liability company, and (c) with respect to any other Person, ownership
interests of any type in such Person.

“Capital Lease Obligation” means, at the time any determination thereof is to be
made, the amount of the liability in respect of a capital lease that would at
such time be so required to be capitalized on the balance sheet in accordance
with GAAP.

“Change of Control” means (a) the sale, lease, conveyance or other disposition
of all or substantially all of the Originator’s assets to any Person or group
(as such term is used in Section 13(d)(3) of the Exchange Act) other than James
E. Ferrell, the Related Parties and any Person of which James E. Ferrell and the
Related Parties beneficially own in the aggregate 51% or more of the voting
Capital Interests (or if such Person is a partnership, 51% or more of the
general partner interests), (b) the liquidation or dissolution of Originator or
the General Partner, and/or (c) the occurrence of any transaction, the result of
which is that James E. Ferrell and the Related Parties beneficially own in the
aggregate, directly or indirectly, less than 51% of the total voting power
entitled to vote for the election of directors of the General Partner.

“Charged-Off Receivable” means a Receivable: (i) as to which the Obligor thereof
has taken any action, or suffered any event to occur, of the type described in
Section 7.1(f) or (g) (as if references to the Originator therein refer to such
Obligor); (ii) as to which the Obligor thereof, if a natural person, is
deceased, (iii) which, consistent with the Credit and Collection Policy, would
be written off the Originator’s books as uncollectible, or (iv) which has been
identified by the Originator, Buyer or Servicer as uncollectible.

“Code” means the Internal Revenue Code of 1986, as amended, and regulations
promulgated thereunder.

“Collections” means, with respect to any Pool Receivable, all cash collections
and other cash proceeds in respect of such Pool Receivable, including, without
limitation, all

 

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Finance Charges or other related amounts accruing in respect thereof and all
cash proceeds of Related Security with respect to such Pool Receivable.

“Compliance Certificate” means a certificate in the form of Exhibit III hereto
duly executed by a Responsible Officer of Originator.

“Conduit” has the meaning set forth in the Preliminary Statements to the
Agreement.

“Consolidated Cash Flow” means, with respect to Originator and the Restricted
Subsidiaries for any period, the Consolidated Net Income for such period, plus
(a) an amount equal to any extraordinary loss (including expenses related to the
early extinguishment of Indebtedness) plus any net loss realized in connection
with an asset sale, to the extent such losses were deducted in computing
Consolidated Net Income, plus (b) provision for taxes based on income or profits
of Originator and the Restricted Subsidiaries for such period, to the extent
such provision for taxes was deducted in computing Consolidated Net Income, plus
(c) Consolidated Interest Expense for such period, whether paid or accrued
(including amortization of original issue discount, non-cash interest payments
and the interest component of any payments associated with Capital Lease
Obligations and net payments (if any) pursuant to Hedging Obligations), to the
extent such expense was deducted in computing Consolidated Net Income, plus (d)
depreciation and amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior period) of Originator and the Restricted Subsidiaries for such
period, to the extent such depreciation and amortization were deducted in
computing Consolidated Net Income, plus (e) non-cash employee compensation
expenses of Originator and the Restricted Subsidiaries for such period, plus (f)
the Synthetic Lease Principal Component of Originator and the Restricted
Subsidiaries for such period; in each case, for such period without duplication
on a consolidated basis and determined in accordance with GAAP.

“Consolidated Interest Expense” means, with respect to Originator and the
Restricted Subsidiaries for any fiscal period, on a consolidated basis, the sum
of (a) all interest, fees (including Letter of Credit fees), charges and related
expenses paid or payable (without duplication) by Originator and the Restricted
Subsidiaries for that fiscal period to the Banks hereunder or to any other
lender in connection with borrowed money or the deferred purchase price of
assets that are considered “interest expense” under GAAP, plus (b) the portion
of rent paid or payable (without duplication) by Originator and the Restricted
Subsidiaries for that fiscal period under Capital Lease Obligations that should
be treated as interest in accordance with Financial Accounting Standards Board
Statement No. 13, on a consolidated basis, plus (c) the Synthetic Lease Interest
Component of Originator and the Restricted Subsidiaries for that fiscal period.

“Consolidated Net Income” means, with respect to Originator and the Restricted
Subsidiaries for any period, the aggregate of the Net Income of Originator and
the Restricted Subsidiaries for such period, on a consolidated basis, determined
in accordance with GAAP; provided, that (a) the Net Income of any Person that is
not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid to Originator or a Wholly-Owned Subsidiary of the Originator,
(b) the Net Income of any Person that is a Restricted Subsidiary (other than a

 

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Wholly-Owned Subsidiary) shall be included only to the extent of the amount of
dividends or distributions paid to Originator or a Wholly-Owned Subsidiary of
the Originator, (c) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded except to the extent otherwise includable under clause (a) above and
(d) the cumulative effect of a change in accounting principles shall be
excluded.

“Contingent Obligation” means, as to any Person, any direct or indirect
liability of that Person, whether or not contingent, with or without recourse:
(a) with respect to any Indebtedness, lease, dividend, distribution, letter of
credit or other obligation (the “primary obligations”) of another Person (the
“primary obligor”), including any obligation of that Person (i) to purchase,
repurchase or otherwise acquire such primary obligations or any security
therefor, (ii) to advance or provide funds for the payment or discharge of any
such primary obligation, or to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial condition of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation, or
(iv) otherwise to assure or hold harmless the holder of any such primary
obligation against loss in respect thereof (each, a “Guaranty Obligation”);
(b) with respect to any Surety Instrument (other than any Letter of Credit)
issued for the account of that Person or as to which that Person is otherwise
liable for reimbursement of drawings or payments; (c) to purchase any materials,
supplies or other property from, or to obtain the services of, another Person if
the relevant contract or other related document or obligation requires that
payment for such materials, supplies or other property, or for such services,
shall be made regardless of whether delivery of such materials, supplies or
other property is ever made or tendered, or such services are ever performed or
tendered; or (d) in respect of any Hedging Obligation. The amount of any
Contingent Obligation shall, in the case of Guaranty Obligations, be deemed
equal to the stated or determinable amount of the primary obligation in respect
of which such Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in respect thereof,
and in the case of other Contingent Obligations, shall be equal to the maximum
reasonably anticipated liability in respect thereof.

“Contract” means, with respect to any Pool Receivable, any and all instruments,
agreements, invoices or other writings pursuant to which such Pool Receivable
arises or which evidences such Pool Receivable.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, undertaking, contract, indenture,
mortgage, deed of trust or other instrument, document or agreement to which such
Person is a party or by which it or any of its property is bound.

“Contributed Interest” means a specified dollar amount of Pool Receivables which
equates to a variable undivided percentage interest (less than or equal to 100%)
in and to the Pool Receivables, the associated Related Security and Collections
and all proceeds of the foregoing equal to the Variable Contributed Percentage.

 

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“Credit Agreement” means that certain Fifth Amended and Restated Credit
Agreement dated as of April 22, 2005, among Originator, as borrower, the General
Partner, the lenders from time to time party thereto, and Bank of America, N.A.,
as administrative agent and swing line lender, Wells Fargo Bank, N.A. and BNP
Paribas, as co-documentation agents and JPMorgan Chase Bank, N.A., as
syndication agent, as amended from time to time in accordance with the terms
thereof.

“Credit and Collection Policy” means Originator’s credit and collection policies
and practices relating to Contracts and Receivables existing on the date hereof
and summarized in Exhibit V, as modified from time to time in accordance with
the Agreement.

“Deemed Collections” means Collections deemed to be received by Originator in
accordance with Section 1.4 of the Agreement.

“Default Fee” means a per annum rate of interest equal to the sum of (i) the
Prime Rate, plus (ii) 2% per annum (computed for actual days elapsed on the
basis of a 365/366-day year).

“Defaulted Receivable” means a Receivable as to which any payment, or part
thereof, remains unpaid for 61 or more days from the original invoice date for
such payment.

“Discount Factor” means a percentage calculated to provide Buyer with a
reasonable return on its investment in the Receivable Interest after taking
account of (i) the time value of money based upon the anticipated dates of
collection of the Pool Receivables and the cost to Buyer of financing its
investment in the Receivable Interest during such period and (ii) the risk of
nonpayment by the Obligors. Originator and Buyer may agree from time to time to
change the Discount Factor based on changes in one or more of the items
affecting the calculation thereof, provided that any change to the Discount
Factor shall take effect as of the commencement of a Calculation Period, shall
apply only prospectively and shall not affect the Purchase Price payment made
prior to the Calculation Period during which Originator and Buyer agree to make
such change.

“Dollars,” “dollars” and “$” each mean lawful money of the United States.

“Eligible Receivable” means, at any time, a Receivable:

(i)             the Obligor of which (a) if a natural person, is a resident of
the United States or, if a corporation or other business organization, is
organized under the laws of the United States or any political subdivision
thereof and has its chief executive office in the United States; (b) is not an
Affiliate of any of the parties hereto; and (c) is not a government or a
governmental subdivision or agency against which assignments of claims may only
be assigned in compliance with the Federal Assignment of Claims Act or similar
legislation unless the aggregate Outstanding Balance of all Pool Receivables
from such Obligors is less than 2% of the aggregate Outstanding Balance of all
Pool Receivables,

(ii)           the Obligor of which is not the Obligor on Defaulted Receivables,
the aggregate Outstanding Balance of which exceeds 10% of such Obligor’s total
Receivables,

 

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(iii)          which is not, on any date of determination, a Defaulted
Receivable or a Charged-Off Receivable,

(iv)          which by its terms is due and payable within 30 days of the
original billing date therefore and has not had its payment terms extended,

(v)           which is an “account” within the meaning of Article 9 of the UCC
of all applicable jurisdictions,

(vi)          which is denominated and payable only in United States dollars in
the United States,

(vii)        which arises under an invoice, which, together with such
Receivable, is in full force and effect and constitutes the legal, valid and
binding obligation of the related Obligor enforceable against such Obligor in
accordance with its terms subject to no offset, counterclaim or other defense,

(viii)       which arises under an invoice which (A) does not require the
Obligor under such invoice to consent to the transfer, sale or assignment of the
rights and duties of Originator or any of its assignees under such invoice and
(B) does not contain a confidentiality provision that purports to restrict the
ability of Buyer or any of its assigns to exercise its rights under the
Transaction Documents, including, without limitation, its right to review such
invoice,

(ix)          which arises under an invoice that contains an obligation to pay a
specified sum of money, contingent only upon the sale of propane or the
provision of services by Originator,

(x)           which, together with the invoice related thereto, does not
contravene any law, rule or regulation applicable thereto (including, without
limitation, any law, rule and regulation relating to truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy) and with respect to which no part of the
invoice related thereto is in violation of any such law, rule or regulation,

(xi)          which satisfies all material requirements of the Credit and
Collection Policy,

(xii)        which was generated in the ordinary course of Originator’s
business,

(xiii)       which arises solely from the sale of propane or the provision of
services to the related Obligor by Originator, and not by any other Person (in
whole or in part),

(xiv)        as to which the Agent has not notified Originator or Buyer that the
Agent has determined, in the exercise of its commercially reasonable credit
judgment, that such Receivable or class of Receivables is not acceptable as an
Eligible Receivable,

(xv)         which is not subject to any right of rescission, set-off,
counterclaim, any other defense (including defenses arising out of violations of
usury laws) of the applicable Obligor against Originator or any other Adverse
Claim, and the Obligor thereon

 

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holds no right as against Originator to cause Originator to repurchase the
propane the sale of which shall have given rise to such Receivable (except with
respect to sale discounts effected pursuant to the invoice, or defective goods
returned in accordance with the terms of the invoice),

(xvi)        as to which Originator has satisfied and fully performed all
obligations on its part with respect to such Receivable required to be fulfilled
by it, and no further action is required to be performed by any Person with
respect thereto other than payment thereon by the applicable Obligor,

(xvii)      in which Buyer’s undivided ownership interest therein is free and
clear of any Adverse Claim, and

(xviii)     of which the Obligor and its Affiliates (considered as if they were
one and the same Obligor) are not the Obligors on more than 2% of the aggregate
Outstanding Balance of all Receivables.

“Environmental Laws” means all federal, state or local laws, statutes, common
law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authorities, in each case
relating to environmental, health, safety and land use matters.

“Equity Interests” means Capital Interests and all warrants, options or other
rights to acquire Capital Interests (but excluding any debt security that is
convertible into, or exchangeable for, Capital Interests).

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and regulations promulgated thereunder.

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by Originator or the General Partner from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations which
is treated as such a withdrawal under Section 4062(e) of ERISA; (c) the filing
of a notice of intent to terminate, the treatment of a plan amendment as a
termination under Section 4041 or 4041A of ERISA or the commencement of
proceedings by the PBGC to terminate a Pension Plan subject to Title IV of
ERISA; (d) a failure by Originator or the General Partner to make required
contributions to a Pension Plan or other Plan subject to Section 412 of the
Code; (e) an event or condition which might reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (f) the imposition of any
liability under Title IV of ERISA, other than PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon Originator or the General Partner;
or (g) an application for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Code with respect to any Pension Plan.

“Event of Default” has the meaning specified in the Credit Agreement.

 

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“Exchange Act” means the Securities Exchange Act of 1934, and regulations
promulgated thereunder.

“Facility Account” means the account at Wells Fargo Bank in Dallas, Texas
designated in writing to the Servicer and the Agent as being the “Facility
Account”.

“FCI ESOT” means the employee stock ownership trust of Ferrell Companies, Inc.
organized under Section 4975(e)(7) of the Code.

“Finance Charges” means, with respect to a Contract, any finance, interest, late
payment charges or similar charges owing by an Obligor pursuant to such
Contract.

“Fixed Charge Coverage Ratio” means with respect to Originator and the
Restricted Subsidiaries for any period, the ratio of Consolidated Cash Flow for
such period to Fixed Charges for such period. In the event that Originator or
any of the Restricted Subsidiaries (a) incurs, assumes or guarantees any
Indebtedness or Synthetic Lease Obligations (other than revolving credit
borrowings including, with respect to the Originator, the Loans) or (b) redeems
or repays any Indebtedness or Synthetic Lease Obligations (other than revolving
credit borrowings that are properly classified as a current liability for GAAP
including, with respect to the Originator, the Loans to the extent that such
Loans are so classified and excluding, regardless of classification, any Loans
or other Indebtedness or Synthetic Lease Obligations the proceeds of which are
used for Acquisitions or Growth Related Capital Expenditures), in any case
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated but prior to the date of the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the “Fixed Charge Ratio
Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, guarantee, redemption or
repayment of Indebtedness or Synthetic Lease Obligations, as if the same had
occurred at the beginning of the applicable reference period. The foregoing
calculation of the Fixed Charge Coverage Ratio shall also give pro forma effect
to Acquisitions (including all mergers and consolidations), Asset Sales and
other dispositions and discontinuances of businesses or assets that have been
made by Originator or any of the Restricted Subsidiaries during the reference
period or subsequent to such reference period and on or prior to the Fixed
Charge Ratio Calculation Date assuming that all such Acquisitions, Asset Sales
and other dispositions and discontinuances of businesses or assets had occurred
on the first day of the reference period; provided, however, that with respect
to Originator and the Restricted Subsidiaries, (a) Fixed Charges shall be
reduced by amounts attributable to businesses or assets that are so disposed of
or discontinued only to the extent that the obligations giving rise to such
Fixed Charges would no longer be obligations contributing to the Fixed Charges
of Originator or the Restricted Subsidiaries subsequent to Fixed Charge Ratio
Calculation Date and (b) Consolidated Cash Flow generated by an acquired
business or asset of Originator or the Restricted Subsidiaries shall be
determined by the actual gross profit (revenues minus costs of goods sold) of
such acquired business or asset during the immediately preceding number of full
fiscal quarters as are in the reference period minus the pro forma expenses that
would have been incurred by Originator and the Restricted Subsidiaries in the
operation of such acquired business or asset during such period computed on the
basis of (i) personnel expenses for employees retained by Originator and the
Restricted Subsidiaries in the operation of the acquired business or asset and
(ii) non-personnel costs and expenses incurred by Originator and the Restricted

 

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Subsidiaries on a per gallon basis in the operation of the Originator’s business
at similarly situated Originator facilities.

“Fixed Charges” means, with respect to Originator and the Restricted
Subsidiaries for any period, the sum, without duplication, of (a) Consolidated
Interest Expense for such period, whether paid or accrued, to the extent such
expense was deducted in computing Consolidated Net Income (including
amortization of original issue discounts, non-cash interest payments, the
interest component of all payments associated with Capital Lease Obligations and
net payments (if any) pursuant to Hedging Obligations permitted under this
Agreement), (b) commissions, discounts and other fees and charges incurred with
respect to letters of credit, (c) any interest expense on Indebtedness of
another Person that is guaranteed by Originator and the Restricted Subsidiaries
or secured by an Adverse Claim on assets of any such Person, and (d) the product
of (i) all cash dividend payments on any series of preferred stock of Originator
and the Restricted Subsidiaries, times (ii) a fraction, the numerator of which
is one and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of the Originator, expressed as a
decimal, determined, in each case, on a consolidated basis and in accordance
with GAAP.

“Funded Amount” means, as of any date of determination through and including the
Termination Date, the Aggregate Capital (under and as defined in the Purchase
Agreement) then outstanding.

“Funded Debt” means all Indebtedness of Originator and the Restricted
Subsidiaries, excluding all Contingent Obligations of Originator and the
Restricted Subsidiaries under or in connection with Letters of Credit
outstanding from time to time.

“GAAP” means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.

“General Partner” means Ferrellgas, Inc., a Delaware corporation and the sole
general partner of Originator.

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.

“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).

 

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“Guarantor” has the meaning specified in the Credit Agreement.

“Guaranty Obligation” has the meaning specified in the definition of “Contingent
Obligation.”

“Hedging Obligations” means, with respect to any Person, the obligations of such
Person under (a) interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements and (b) other agreements or arrangements
designed to protect such Person against fluctuations in interest rates.

“Indebtedness” of any Person means, without duplication: (a) all indebtedness
for borrowed money; (b) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than trade payables
entered into in the ordinary course of business on ordinary terms); (c) all
non-contingent reimbursement or payment obligations with respect to Surety
Instruments; (d) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (e) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to property
acquired by the Person (even though the rights and remedies of the seller or
bank under such agreement in the event of default are limited to repossession or
sale of such property); (f) all Capital Lease Obligations; (g) all Hedging
Obligations; (h) all obligations in respect of Accounts Receivable
Securitizations (as defined in the Credit Agreement); (i) all indebtedness
referred to in clauses (a) through (h) above secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Adverse Claim upon or in property (including accounts and
contracts rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such Indebtedness; and (j) all Guaranty
Obligations in respect of indebtedness or obligations of others of the kinds
referred to in clauses (a) through (i) above; provided, however, that
“Indebtedness” shall not include Synthetic Lease Obligations.

“Indemnified Amounts” has the meaning specified in Section 8.1.

“Indemnified Party” has the meaning specified in Section 8.1.

“Independent Auditor” has the meaning specified in Section 5.1(a).

“Initial Computation Date” means the close of business on June 6, 2005.

“Insolvency Proceeding” means (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshalling of assets for creditors, or other similar arrangement
in respect of a Person’s creditors generally or any substantial portion of a
Person’s creditors; undertaken under U.S. Federal, state or foreign law,
including the Bankruptcy Code.

“Interest Coverage Ratio” means with respect to Originator and the Restricted
Subsidiaries for any period, the ratio of Consolidated Cash for such period to
Consolidated

 

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Interest Expense for such period. In the event that Originator or any of the
Restricted Subsidiaries (a) incurs, assumes or guarantees any Indebtedness or
Synthetic Lease Obligations (other than revolving credit borrowings including,
with respect to the Originator, the Loans) or (b) redeems or repays any
Indebtedness or Synthetic Lease Obligations (other than revolving credit
borrowings that are properly classified as a current liability under GAAP
including, with respect to the Originator, the Loans, to the extent such Loans
are so classified and excluding, regardless of classification, any Loans or
other Indebtedness or Synthetic Lease Obligations the proceeds of which are used
for Acquisitions or Growth Related Capital Expenditures), in any case subsequent
to the commencement of the period for which the Interest Coverage Ratio is being
calculated, but prior to the date on which the calculation of the Interest
Coverage Ratio is made (the “Interest Coverage Ratio Calculation Date”), then
the Interest Coverage Ratio shall be calculated giving pro forma effect to such
incurrence, assumption, guarantee, redemption or repayment of Indebtedness or
Synthetic Lease Obligations, as if the same had occurred at the beginning of the
applicable reference period. The foregoing calculation of the Interest Coverage
Ratio shall also give pro forma effect to Acquisitions (including all mergers
and consolidations), Asset Sales and other dispositions and discontinuances of
businesses or assets that have been made by Originator or any of the Restricted
Subsidiaries during the reference period or subsequent to such reference period
and on or prior to the Interest Coverage Ratio Calculation Date assuming that
all such Acquisitions, Asset Sales and other dispositions and discontinuances of
businesses or assets had occurred on the first day of the reference period;
provided, however, that with respect to Originator and the Restricted
Subsidiaries, (a) Consolidated Interest Expense shall be reduced by amounts
attributable to businesses or assets that are so disposed of or discontinued
only to the extent that the Indebtedness or Synthetic Lease Obligations giving
rise to such Consolidated Interest Expense would no longer be Indebtedness or
Synthetic Lease Obligations contributing to the Consolidated Interest Expense of
Originator or the Restricted Subsidiaries subsequent to the Interest Coverage
Ratio Calculation Date and (b) Consolidated Cash Flow generated by an acquired
business or asset of Originator and the Restricted Subsidiaries shall be
determined by the actual gross profit (revenues minus costs of goods sold) of
such acquired business or asset during the immediately preceding number of full
fiscal quarters as in the reference period minus the pro forma expenses that
would have been incurred by Originator and the Restricted Subsidiaries in the
operation of such acquired business or asset during such period computed on the
basis of (i) personnel expenses for employees retained by Originator and the
Restricted Subsidiaries in the operation of the acquired business or asset and
(ii) non-personnel costs and expenses incurred by Originator and the Restricted
Subsidiaries on a per gallon basis in the operation of the Originator’s business
at similarly situated facilities of the Originator.

“Letter of Credit” has the meaning provided in the Credit Agreement.

“Leverage Ratio” means, with respect to Originator and the Restricted
Subsidiaries for any period, the ratio of Funded Debt plus Synthetic Lease
Obligations, in each case of Originator and the Restricted Subsidiaries as of
the last day of such period, to Consolidated Cash Flow for such period. In the
event that Originator or any of the Restricted Subsidiaries (a) incurs, assumes
or guarantees any Indebtedness or Synthetic Lease Obligations (other than
revolving credit borrowings including, with respect to the Originator, the
Loans) or (b) redeems or repays any Indebtedness or Synthetic Lease Obligations
(other than revolving credit borrowings that are properly classified as a
current liability under GAAP including, with

 

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respect to the Originator, the Loans to the extent such Loans are so classified
and excluding, regardless of classification, any Loans or other Indebtedness or
Synthetic Lease Obligations the proceeds of which are used for Acquisitions or
Growth Related Capital Expenditures), in any case subsequent to the commencement
of the period for which the Leverage Ratio is being calculated but prior to the
date on which the calculation of the Leverage Ratio is made (the “Leverage Ratio
Calculation Date”), then the Leverage Ratio shall be calculated giving pro forma
effect to such incurrence, assumption, guarantee, redemption or repayment of
Indebtedness or Synthetic Lease Obligations, as if the same had occurred at the
beginning of the applicable reference period. The foregoing calculation of the
Leverage Ratio shall also give pro forma effect to Acquisitions (including all
mergers and consolidations), Asset Sales and other dispositions and
discontinuances of businesses or assets that have been made by Originator or any
of the Restricted Subsidiaries during the reference period or subsequent to such
reference period and on or prior to the Leverage Ratio Calculation Date assuming
that all such Acquisitions, Asset Sales and other dispositions and
discontinuances of businesses or assets had occurred on the first day of the
reference period; provided, however, that with respect to Originator and the
Restricted Subsidiaries, (a) Funded Debt and Synthetic Lease Obligations shall
be reduced by amounts attributable to businesses or assets that are so disposed
of or discontinued only to the extent that the Indebtedness or Synthetic Leases
included within such Funded Debt and Synthetic Lease Obligations would no longer
be an obligation of Originator or the Restricted Subsidiaries subsequent to the
Leverage Ratio Calculation Date and (b) Consolidated Cash Flow generated by an
acquired business or asset of Originator or the Restricted Subsidiaries shall be
determined by the actual gross profit (revenues minus costs of goods sold) of
such acquired business or asset during the immediately preceding number of full
fiscal quarters as in the reference period minus the pro forma expenses that
would have been incurred by Originator and the Restricted Subsidiaries in the
operation of such acquired business or asset during such period computed on the
basis of (i) personnel expenses for employees retained by Originator and the
Restricted Subsidiaries in the operation of the acquired business or asset and
(ii) non-personnel costs and expenses incurred by Originator and the Restricted
Subsidiaries on a per gallon basis in the operation of the Originator’s business
at similarly situated facilities of the Originator.

“Loan” has the meaning provided in the Credit Agreement.

“Material Adverse Effect” means (i) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, condition (financial
or otherwise) or prospects of Originator; (ii) a material impairment of the
ability of Originator or any Subsidiary to perform under any Transaction
Document to which it is a party; (iii) a material adverse effect upon the
legality, validity, binding effect or enforceability against Originator or any
Subsidiary of any Transaction Document to which it is a party; (iv) a material
adverse effect upon Originator’s, Buyer’s, the Agent’s or any Purchaser’s
interest in the Pool Receivables generally or in any significant portion of the
Pool Receivables, or (v) a material adverse effect upon the collectibility of
the Pool Receivables generally or of any material portion of the Pool
Receivables.

“Minimum Receivables Percentage” means, on any date of determination through and
including the Termination Date, a variable undivided interest in and to the Pool
Receivables and the associated Collections and all proceeds of the foregoing,
which interest is equal to the percentage equal to a fraction, the numerator of
which is equal to the Adjusted Pool

 

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Amount as of such date of determination, and the denominator of which is the
aggregate Outstanding Balance of all Pool Receivables as of the close of
business on the Business Day immediately preceding the date of determination.

“MLP” means Ferrellgas Partners, L.P., a Delaware limited partnership and the
sole limited partner of the Originator.

“Net Income” means, with respect to Originator and the Restricted Subsidiaries,
the net income (loss) of such Persons, determined in accordance with GAAP and
before any reduction in respect of preferred stock dividends, excluding,
however, (a) any gain (but not loss), together with any related provision for
taxes on such gain (but not loss), realized in connection with (i) any asset
sale (including, without limitation, dispositions pursuant to sale and leaseback
transactions), or (ii) the disposition of any securities or the extinguishment
of any Indebtedness of Originator or any of the Restricted Subsidiaries, and
(b) any extraordinary gain (but not loss), together with any related provision
for taxes on such extraordinary gain (but not loss).

“Non-Recourse Subsidiary” has the meaning specified in the Credit Agreement.

“Obligor” means a Person obligated to make payments pursuant to a Contract.

“Organization Documents” means, (a) for any corporation, the certificate or
articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such corporation,
any shareholder rights agreement, and all applicable resolutions of the board of
directors (or any committee thereof) of such corporation, (b) for any general or
limited partnership, the partnership agreement of such partnership and all
amendments thereto and any agreements otherwise relating to the rights of the
partners thereof, and (c) for any limited liability company, the limited
liability, operating or similar agreement and all amendments thereto and any
agreements otherwise relating to the rights of the members thereof.

“Original Purchase Agreement” has the meaning set forth in the Preliminary
Statements.

“Originator” has the meaning set forth in the preamble to the Agreement.

“Originator’s Account” has the meaning set forth in Section 1.3(a).

“Originator’s Percentage” means, on any date of determination, 100% minus the
Buyer’s Percentage on such date.

“Outstanding Balance” of any Pool Receivable at any time means the then
outstanding principal balance thereof.

“Partnership Agreement” shall mean the Third Amended and Restated Agreement of
Limited Partnership of Originator dated April 7, 2004, as amended from time to
time in accordance with the terms of this Agreement.

“PBGC” means the Pension Benefit Guaranty Corporation, or any Governmental
Authority succeeding to any of its principal functions under ERISA.

 

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“Pension Plan” means a pension plan (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA which Originator or the General Partner sponsors,
maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a multiple employer plan (as described in
Section 4064(a) of ERISA) has made contributions at any time during the
immediately preceding five (5) plan years.

“Person” means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture or Governmental Authority.

“Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA)
which Originator sponsors or maintains or to which Originator or the General
Partner makes, is making, or is obligated to make contributions and includes any
Pension Plan.

“Pool Receivables” means, collectively, all Eligible Receivables existing on the
Initial Computation Date and all Eligible Receivables arising after the Initial
Computation Date through and including the Termination Date, and “Pool
Receivable” means any such Eligible Receivable individually. For the avoidance
of doubt, a Receivable shall cease to be a Pool Receivable if on any day prior
to the Termination Date, such Receivable ceases to be an Eligible Receivable,
but shall continue to be a Pool Receivable if it ceases to be an Eligible
Receivable on or after the Termination Date. For purposes of calculating the
amount of all "Pool Receivables" at any time, such amount shall be the
Outstanding Balance of all such Pool Receivables minus $1,000,000.

“Potential Termination Event” means an event which, with the passage of time or
the giving of notice, or both, would constitute a Termination Event.

“Prime Rate” means a rate per annum equal to the prime rate of interest
announced from time to time by JPMorgan Chase Bank, N.A. or its Originator
(which is not necessarily the lowest rate charged to any customer), changing
when and as said prime rate changes

“Purchase” means the purchase pursuant to Section 1.2(a) of the Agreement by
Buyer from Originator of the Receivable Interest, together with all related
rights in connection therewith.

“Purchase Agreement” has the meaning set forth in the Preliminary Statements to
the Agreement.

“Purchase Price” means, on any date of determination, the aggregate price to be
paid by Buyer to Originator for the Receivable Interest, which price shall equal
(a) the product of (i) the Variable Purchased Percentage on such date,
multiplied by (ii) the Outstanding Balance of the Pool Receivables as of the
close of business on the Business Day preceding the date of determination,
multiplied by (iii) one minus the Discount Factor in effect on such date.

“Receivable” means each account receivable owed to Originator (at the time it
arises, and before giving effect to any transfer or conveyance under the
Agreement), arising in connection with the sale of propane or provision of
related services by Originator, including, without limitation, the obligation to
pay any Finance Charges with respect thereto. Accounts receivable arising from
any one transaction, including, without limitation, accounts receivable

 

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represented by a single invoice, shall constitute a Receivable separate from a
Receivable consisting of the accounts arising from any other transaction;
provided, further, that any account receivable referred to in the immediately
preceding sentence shall be a Receivable regardless or whether the account
debtor or Originator treats such obligation as a separate payment obligation.

“Receivable Interest” means a specified dollar amount of Pool Receivables which
equates to a variable undivided percentage interest (equal to the Variable
Purchased Percentage) in and to the Pool Receivables, the associated Related
Security and Collections and all proceeds of the foregoing.

“Records” means, with respect to any Pool Receivable, (i) any and all customer
information regarding payment history of the applicable Obligor, propane gallons
delivered to the applicable Obligor, timing of propane gallons delivered to the
applicable Obligor, payment terms and prices charged to the applicable Obligor,
and (ii) any and all invoices evidencing all or any portion of the amount owing
under such Pool Receivable, whether each of the foregoing is in paper or
electronic form.

“Related Party” means (a) the spouse or any lineal descendant of James E.
Ferrell, (b) any trust for his benefit or for the benefit of his spouse or any
such lineal descendants, (c) any corporation, partnership or other entity in
which James E. Ferrell and/or such other Persons referred to in the foregoing
clauses (a) and (b) are the direct record and beneficial owners of all of the
voting and nonvoting Equity Interests, (d) the FCI ESOT or (e) any participant
in the FCI ESOT whose ESOT account has been allocated shares of Ferrell
Companies, Inc.

“Related Security” means, with respect to any Pool Receivable:

(i)

all Records related to such Pool Receivable, and

 

(ii)

all proceeds of such Pool Receivable or Records.

“Reportable Event” means any of the events set forth in Section 4043(b) of ERISA
or the regulations thereunder, other than any such event for which the 30-day
notice requirement under ERISA has been waived in regulations issued by the
PBGC.

“Requirement of Law” means, as to any Person, any law (statutory or common),
treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.

“Responsible Officer” means the chief executive officer, the president, the
chief financial officer, director of finance, the treasurer or assistant
treasurer of the General Partner or any other officer having substantially the
same authority and responsibility to act for the General Partner on behalf of
Originator.

“Restricted Subsidiary” has the meaning provided in the Credit Agreement.

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

 

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“Servicer” has the meaning specified in Section 6.1.

“Servicer’s Concentration Account” means the account in the name of the Servicer
at Wells Fargo Bank in Dallas, Texas and designated in writing by the Servicer
to the Agent as being the “Servicer’s Concentration Account”.

“Servicing Fee” has the meaning set forth in Section 6.3.

“Settlement Date” has the meaning set forth in the Purchase Agreement.

“Subordinated Loan” means a loan from Originator to Buyer of a portion of the
Purchase Price that is evidenced by and payable as provided in the Subordinated
Note.

“Subordinated Note” means a subordinated promissory note of the Buyer payable to
the order of the Originator in substantially the form of Exhibit V hereto, which
promissory note shall evidence that portion of the Purchase Price owing by the
Buyer to the Originator at any time in respect of the Receivable Interest owned
by the Buyer at such time.

“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, partnership, association or other business entity of which
more than 50% of the total voting power of shares of Capital Interests entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof (or, in the case of a limited
partnership, more than 50% of either the general partners’ Capital Interests or
the limited partners’ Capital Interests) is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of that Person or a combination thereof. Unless otherwise indicated in this
Agreement, “Subsidiary” shall mean a Subsidiary of the Originator.
Notwithstanding the foregoing, any Subsidiary of Originator that is designated a
“Non-Recourse Subsidiary” pursuant to the definition thereof in this Agreement
shall, for so long as all of the statements in the definition thereof remain
true, not be deemed a Subsidiary of the Originator.

“Surety Instruments” means all letters of credit (including standby and
commercial), bankers’ acceptances, bank guaranties, shipside bonds, surety bonds
and similar instruments.

“Synthetic Lease” means each arrangement, however described, under which the
obligor accounts for its interest in the property covered thereby under GAAP as
lessee of a lease which is not a capital lease under GAAP and accounts for its
interest in the property covered thereby for Federal income tax purposes as the
owner.

“Synthetic Lease Interest Component” means, with respect to any Person for any
period, the portion of rent paid or payable (without duplication) for such
period under Synthetic Leases of such Person that would be treated as interest
in accordance with Financial Accounting Standards Board Statement No. 13 if such
Synthetic Leases were treated as capital leases under GAAP.

“Synthetic Lease Obligation” means, as to any Person with respect to any
Synthetic Lease at any time of determination, the amount of the liability of
such Person in respect of such Synthetic Lease that would (if such lease was
required to be classified and

 

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accounted for as a capital lease on a balance sheet of such Person in accordance
with GAAP) be required to be capitalized on the balance sheet of such Person at
such time.

“Synthetic Lease Principal Component” means, with respect to any Person for any
period, the portion of rent (exclusive of the Synthetic Lease Interest
Component) paid or payable (without duplication) for such period under Synthetic
Leases of such Person that was deducted in calculating Consolidated Net Income
of such Person for such period.

“Termination Date” means the earliest to occur of (i) the Facility Termination
Date under and as defined in the Purchase Agreement, (ii) the Business Day
immediately prior to the occurrence of a Termination Event set forth in Section
7.1(f) or (g) with respect to Originator, (iii) the Business Day specified in a
written notice from Buyer (or the Agent, as Buyer’s assignee) to Originator
following the occurrence of any other Termination Event, and (iv) the date which
is 30 Business Days after receipt by the Agent (as Buyer’s assignee) of written
notice from Originator that it wishes to terminate the facility evidenced by
this Agreement.

“Termination Event” has the meaning set forth in Section 7.1 of the Agreement.

“Transaction Documents” means, collectively, this Agreement, the Purchase
Agreement, and all other instruments, documents and agreements executed and
delivered by Originator in connection herewith or therewith.

“UCC” means the Uniform Commercial Code as from time to time in effect in the
specified jurisdiction.

“Unfunded Pension Liability” means the excess of a Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Plan’s
assets, determined in accordance with the assumptions used for funding the
Pension Plan pursuant to Section 412 of the Code for the applicable plan year.

“Unrestricted Subsidiary” means any Subsidiary which is not a Restricted
Subsidiary.

“Variable Contributed Percentage” means, on any date of determination through
and including the Termination Date, a variable undivided interest in and to the
Pool Receivables and the associated Related Security and Collections and all
proceeds of the foregoing, which interest is equal to the percentage of the
aggregate Outstanding Balance of all Pool Receivables as of the close of
business on the Business Day immediately preceding the date of determination
which has been transferred by the Originator to the Buyer in the form of an
equity capital contribution.

“Variable Purchased Percentage” means, on any date of determination through and
including the Termination Date, the Minimum Receivables Percentage on such date
minus the Variable Contributed Percentage on such date; provided that, (a) from
and after the Termination Date until the Aggregate Unpaids have been
indefeasibly paid in full, the Variable Purchased Percentage shall be equal to
the Variable Purchased Percentage determined as of the date immediately
preceding the Termination Date, (b) from and after the date on which the

 

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Aggregate Unpaids have been indefeasibly paid in full, the Variable Purchased
Percentage shall be zero, and (c) at no time shall the Variable Purchased
Percentage exceed 100%.

“Wholly-Owned Subsidiary” means a Subsidiary of which all of the outstanding
Capital Interests or other ownership interests (other than directors’ qualifying
shares) or, in the case of a limited partnership, all of the partners’ Capital
Interests (other than up to a 1% general partner interest), is owned,
beneficially and of record, by the Originator, a Wholly-Owned Subsidiary of
Originator or both.

All accounting terms not specifically defined herein shall be construed in
accordance with GAAP. All terms used in Article 9 of the UCC in the State of New
York, and not specifically defined herein, are used herein as defined in such
Article 9.

 

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Exhibit II

 

Principal Place of Business and Chief Executive Office; Locations of Records;

Federal Employer Identification Number; Other Names

 

Chief Executive Office and Principal Place of Business:

7500 College Blvd., Suite 1000

Overland Park, Kansas 66210

 

Location of Records:

Same as above and One Liberty Plaza, Liberty, Missouri 64068

Federal Employer Identification Number:

43-1698481

Partnership, Trade and Assumed Names:

 

Ferrellgas

Ferrell North America

American Energy

NRG

Econogas

Barrow Propane

Blue Rhino

Qwik Ship

Global Sourcing

Uniflame

Ferrell Transport

Pro Am

Pro Am Southeast

Pro Am Northeast

Pro Am Texas

Thermogas

Skelgas

Alabama Butane

Blue Flame

Bowden Gas

Bud’s Propane

Crow’s LP Gas

Elk Grove Gas & Oil

 

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Exhibit III

 

Form of Compliance Certificate

 

This Compliance Certificate is furnished pursuant to that certain Amended and
Restated Receivable Interest Sale Agreement dated as of June 7, 2005, between
Ferrellgas, L.P. (“Originator”) and Ferrellgas Receivables, LLC (the
“Agreement”). Capitalized terms used and not otherwise defined herein are used
with the meanings attributed thereto in the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

1.

I am the duly elected ______________ of Originator.

2.              I have reviewed the terms of the Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and conditions of Originator and its Subsidiaries during the
accounting period covered by the attached financial statements.

3.              The examinations described in paragraph 2 did not disclose, and
I have no knowledge of, the existence of any condition or event which
constitutes a Termination Event or a Potential Termination Event, as each such
term is defined under the Agreement, during or at the end of the accounting
period covered by the attached financial statements or as of the date of this
Certificate, except as set forth below.

4.              Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which Originator has taken, is taking, or
proposes to take with respect to each such condition or event:

The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this ____ day of __________, 20__.

______________________________

[Name]

 

Exh I-45

 

 

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Exhibit IV

 

Credit and Collection Policy

 

[attached]

 

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Exhibit V

 

[Form of] Subordinated Note

 

SUBORDINATED NOTE

[DATE]

 

1. Note. FOR VALUE RECEIVED, the undersigned, Ferrellgas Receivables, LLC, a
Delaware limited liability company (“Buyer”), hereby unconditionally promises to
pay to the order of Ferrellgas, L.P., a Delaware limited partnership (“Seller”),
in lawful money of the United States of America and in immediately available
funds, on or before the date following the Termination Date which is one year
and one day after the date on which (i) the Receivables Interest (as defined in
the Receivable Interest Sale Agreement hereinafter described) has been reduced
to zero and (ii) all indemnities, adjustments and other amounts which may be
owed thereunder in connection with the Receivable Interest (as defined in the
Receivable Interest Sale Agreement hereinafter described) have been paid (the
“Collection Date”), the aggregate unpaid principal sum outstanding of all
Subordinated Loans (as defined in the Receivable Interest Sale Agreement
hereinafter described) made from time to time by Seller to Buyer pursuant to and
in accordance with the terms of that certain Amended and Restated Receivable
Interest Sale Agreement dated as of June 7, 2005, between Seller and Buyer (as
amended, restated, supplemented or otherwise modified from time to time, the
“Receivable Interest Sale Agreement”). Reference to Section 1.3 of the
Receivable Interest Sale Agreement is hereby made for a statement of the terms
and conditions under which the loans evidenced hereby have been and will be
made. Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to such terms in the Receivable Interest Sale Agreement.

2. Interest. Buyer further promises to pay interest on the outstanding unpaid
principal amount hereof from the date hereof until payment in full hereof at a
rate equal to the one month LIBOR rate published on the first business day of
each month on or after June 1, 2005 in The Wall Street Journal (“LIBOR”),
changing on the first business day of each month; provided, however, that if
Buyer shall default in the payment of any principal hereof, Buyer promises to
pay, on demand, interest at a rate per annum equal to the sum of LIBOR plus
2.00% per annum on any such unpaid amounts, from the date such payment is due to
the date of actual payment. Interest shall be payable on the first Business Day
of each month in arrears; provided, however, that Buyer may elect on the date
any interest payment is due hereunder to defer such payment and upon such
election the amount of interest due but unpaid on such date shall constitute
principal under this Subordinated Note. The outstanding principal of any loan
made under this Subordinated Note shall be due and payable on the Collection
Date and may be repaid or prepaid at any time without premium or penalty.

3. Principal Payments. Seller is authorized and directed by Buyer to enter on
the grid attached hereto, or, at its option, in its books and records, the date
and amount of each loan made by it which is evidenced by this Subordinated Note
and the amount of each payment of principal made by Buyer, and absent manifest
error, such entries shall constitute prima facie evidence of the accuracy of the
information so entered; provided that neither the failure of Seller to make any
such entry or any error therein shall expand, limit or affect the obligations of
Buyer hereunder.

 

 

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4. Subordination. Seller shall have the right to receive, and Buyer shall have
the right to make, any and all payments and prepayments relating to the loans
made under this Subordinated Note; provided that after giving effect to any such
payment or prepayment, the Receivable Interest plus the Contributed Interest
equals or exceeds the Minimum Receivables Percentage. Seller hereby agrees that
at any time during which the conditions set forth in the proviso of the
immediately preceding sentence shall not be satisfied, Seller shall be
subordinate in right of payment to the prior payment of any indebtedness or
obligation of Buyer owing to the Agent or any Purchaser (each, as defined below)
under that certain Amended and Restated Receivables Purchase Agreement, dated as
of June 7, 2005, by and among Buyer, Seller, as Servicer, various “Purchasers”
from time to time party thereto, and JPMorgan Chase Bank, N.A., as the “Agent”
(as amended, restated, supplemented or otherwise modified from time to time, the
“Receivables Purchase Agreement”). The subordination provisions contained herein
are for the direct benefit of, and may be enforced by, the Agent and the
Purchasers and/or any of their respective assignees (collectively, the “Senior
Claimants”) under the Receivables Purchase Agreement. Until the date on which
the “Aggregate Capital” outstanding under the Receivables Purchase Agreement has
been repaid in full and all obligations of Buyer and/or the Servicer thereunder
and under the “Fee Letter” referenced therein (all such obligations,
collectively, the “Senior Claim”) have been indefeasibly paid and satisfied in
full, Seller shall not institute against Buyer any proceeding of the type
described in Section 7.1(f) or (g) of the Receivable Interest Sale Agreement
unless and until the Collection Date has occurred. Should any payment,
distribution or security or proceeds thereof be received by Seller in violation
of this Section 4, Seller agrees that such payment shall be segregated, received
and held in trust for the benefit of, and deemed to be the property of, and
shall be immediately paid over and delivered to the Agent for the benefit of the
Senior Claimants.

5. Bankruptcy; Insolvency. Upon the occurrence of any proceeding of the type
described in Section 7.1(f) or (g) of the Receivable Interest Sale Agreement
involving Buyer as debtor, then and in any such event the Senior Claimants shall
receive payment in full of all amounts due or to become due on or in respect of
the Aggregate Capital and the Senior Claim (including “CP Costs” and “Yield” as
defined and as accruing under the Receivables Purchase Agreement after the
commencement of any such proceeding, whether or not any or all of such CP Costs
or Yield is an allowable claim in any such proceeding) before Seller is entitled
to receive payment on account of this Subordinated Note, and to that end, any
payment or distribution of assets of Buyer of any kind or character, whether in
cash, securities or other property, in any applicable insolvency proceeding,
which would otherwise be payable to or deliverable upon or with respect to any
or all indebtedness under this Subordinated Note, is hereby assigned to and
shall be paid or delivered by the Person making such payment or delivery
(whether a trustee in bankruptcy, a receiver, custodian or liquidating trustee
or otherwise) directly to the Agent for application to, or as collateral for the
payment of, the Senior Claim until such Senior Claim shall have been paid in
full and satisfied.

6. Amendments. The terms of this Subordinated Note may not be amended or
otherwise modified without the prior written consent of the Agent for the
benefit of the Purchasers.

7. GOVERNING LAW. THIS SUBORDINATED NOTE HAS BEEN MADE AND DELIVERED AT HOUSTON,
TEXAS, AND SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES
HERETO DETERMINED IN

 

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ACCORDANCE WITH THE LAWS AND DECISIONS OF THE STATE OF TEXAS. WHEREVER POSSIBLE
EACH PROVISION OF THIS SUBORDINATED NOTE SHALL BE INTERPRETED IN SUCH MANNER AS
TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION OF THIS
SUBORDINATED NOTE SHALL BE PROHIBITED BY OR INVALID UNDER APPLICABLE LAW, SUCH
PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY,
WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS
OF THIS SUBORDINATED NOTE.

8. Waivers. All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.
Seller additionally expressly waives all notice of the acceptance by any Senior
Claimant of the subordination and other provisions of this Subordinated Note and
expressly waives reliance by any Senior Claimant upon the subordination and
other provisions herein provided.

9. Assignment. This Subordinated Note may not be assigned, pledged or otherwise
transferred to any party without the prior written consent of the Agent, and any
such attempted transfer shall be void; provided, that, the Seller may pledge or
otherwise grant a security interest in this Subordinated Note to any lender or
other creditor of the Seller.

FERRELLGAS RECEIVABLES, LLC

 

By:_____________________________

Name:

Kevin T. Kelly

 

Title:

Senior Vice President and Chief Financial Officer

 

 

 

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SCHEDULE TO SUBORDINATED NOTE

SUBORDINATED LOANS AND PAYMENTS OF PRINCIPAL

DATE

AMOUNT OF SUBORDINATED LOAN

AMOUNT OF PRINCIPAL PAID

UNPAID PRINCIPAL BALANCE

NOTATION MADE BY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Schedule A

 

DOCUMENTS TO BE DELIVERED TO BUYER

ON OR PRIOR TO THE PURCHASE

 

1.

Executed copies of the Amended and Restated Receivable Interest Sale Agreement,
duly executed by the parties thereto.

2.

Certificate of Originator’s [Assistant] Secretary certifying the incumbency and
signatures of its officers who are authorized to execute the Transaction
Documents to which it is a party and attaching each of the following:

(a)            Copy of the Resolutions of the Board of Directors of the General
Partner certified by its Secretary, authorizing Originator’s execution, delivery
and performance of the Receivable Interest Sale Agreement and the other
documents to be delivered by it thereunder.

(b)           Certificate of Limited Partnership of Originator certified by the
Secretary of State of Delaware on or within thirty (30) days prior to the
initial Purchase (as defined in the Receivable Interest Sale Agreement).

(c)            Good Standing Certificates for Originator and the General Partner
issued by the Secretaries of State of its state of organization and each
jurisdiction where it has material operations, each of which is listed below:

 

i.

Delaware

 

 

ii.

Missouri

 

 

iii.

Kansas

 

 

(d)

A copy of Originator’s Partnership Agreement.

 

3.

Pre-filing state and federal tax lien, judgment lien and UCC lien searches
against Originator from the following jurisdictions:

 

a.

Delaware SOS

 

 

b.

Missouri SOS

 

 

c.

Clay County, MO

 

 

4.

Evidence that financing statements have been filed in all jurisdictions as may
be necessary or, in the opinion of Buyer (or its assigns), desirable, under the
UCC of all appropriate jurisdictions or any comparable law in order to perfect
the ownership interests contemplated by the Receivable Interest Sale Agreement.

5.

Time stamped receipt copies of proper UCC termination statements, if any,
necessary to release all security interests and other rights of any Person in
the Pool Receivables, Contracts or Related Security previously granted by
Originator.

 

 

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6.

A favorable opinion of legal counsel for Originator reasonably acceptable to
Buyer (or its assigns) which addresses the following matters and such other
matters as Buyer (or its assigns) may reasonably request:

--Each of Originator and its General Partner is duly organized, validly
existing, and in good standing under the laws of its state of organization.

--Each of Originator and its General Partner has all requisite authority to
conduct its business in each jurisdiction where failure to be so qualified would
have a material adverse effect on its business.

--The execution and delivery by Originator of the Amended and Restated
Receivable Interest Sale Agreement and each other Transaction Document to which
it is a party and its performance of its obligations thereunder have been duly
authorized by all necessary action and proceedings on the part of Originator and
the General Partner and will not:

(a)            require any action by or in respect of, or filing with, any
governmental body, agency or official (other than the filing of UCC financing
statements);

(b)           contravene, or constitute a default under, any provision of
applicable law or regulation or of its Organization Documents or of any material
agreement, judgment, injunction, order, decree or other instrument binding upon
Originator, the MLP or the General Partner [to include the Credit Agreement,
both Note Purchase Agreements and the Indenture]; or

(c)            result in the creation or imposition of any Adverse Claim on
assets of the General Partner, Originator or any of their respective
Subsidiaries (except as contemplated by the Receivable Interest Sale Agreement
and the Purchase Agreement).

--The Amended and Restated Receivable Interest Sale Agreement and each other
Transaction Document to which it is a party has been duly executed and delivered
by Originator and constitutes the legal, valid, and binding obligation of
Originator enforceable in accordance with its terms, except to the extent the
enforcement thereof may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors’ rights generally and subject also to the
availability of equitable remedies if equitable remedies are sought.

--The provisions of the Amended and Restated Receivable Interest Sale Agreement
are effective to create a valid security interest in favor of Buyer in all Pool
Receivables and upon the filing of financing statements, Buyer shall acquire a
first priority, perfected security interest in such Receivables.

--To the best of the opinion giver’s knowledge, there is no action, suit or
other proceeding against Originator, General Partner or any Affiliate of
Originator or General Partner, which would materially adversely affect the
business or financial condition of Originator and its Affiliates taken as a
whole or which would materially adversely affect the ability of Originator to
perform its obligations under the Transaction Documents to which it is a party.

 

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7.

A “true sale/true contribution” opinion and “substantive consolidation” opinion
of counsel for Originator with respect to the transactions contemplated by the
Amended and Restated Receivable Interest Sale Agreement.

8.

A Certificate of a Responsible Officer of Originator certifying that no
Termination Event or Potential Termination Event exists as of the date of the
Purchase or will result therefrom, and that each of the representations and
warranties made by Originator in any of the Transaction Documents to which it is
a party is true and correct as of such date.

9.

Executed copies of (i) all consents from and authorizations by any Persons and
(ii) all waivers and amendments to existing credit facilities, that are
necessary in connection with the Amended and Restated Receivable Interest Sale
Agreement.

 

 

 

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