Exhibit 4.5





Exhibit 4.5




 





Ferrellgas, L.P.




 






Note Purchase Agreement




 






Dated as of February 1, 2000





	 	Re: 	 	$21,000,000 8.68% Senior Notes, Series A, due August 1, 2006

$90,000,000 8.78% Senior Notes, Series B, due August 1, 2007

$73,000,000 8.87% Senior Notes, Series C, due August 1, 2009






 






 


 









 







Table of Contents




	 	 	 	 	 	 	 
	Section	 	Heading	 	Page
	 
	 	 	 	 	 	 
	Section 1.

	 	Authorization of Notes
	 	1

	 
	 	 	 	 	 	 
	Section 2.

	 	Sale and Purchase of Notes
	 	1

	 
	 	 	 	 	 	 
	Section 3.

	 	Closing
	 	2

	 
	 	 	 	 	 	 
	Section 4.

	 	Conditions to Closing
	 	2

	 
	 	 	 	 	 	 
	Section 4.1.

	 	Representations and Warranties
	 	2
	Section 4.2.

	 	Performance; No Default
	 	2
	Section 4.3.

	 	Compliance Certificates
	 	3
	Section 4.4.

	 	Opinions of Counsel
	 	3
	Section 4.5.

	 	Purchase Permitted by Applicable
Law, Etc.
	 	3
	Section 4.6.

	 	Related Transactions
	 	3
	Section 4.7.

	 	Payment of Special Counsel Fees
	 	3
	Section 4.8.

	 	Private Placement Numbers
	 	4
	Section 4.9.

	 	Changes in Structure
	 	4
	Section 4.10.

	 	Rating
	 	4
	Section 4.11.

	 	Proceedings and Documents
	 	4
	 
	 	 	 	 	 	 
	Section 5.

	 	Representations and Warranties of the Company
	 	4

	 
	 	 	 	 	 	 
	Section 5.1.

	 	Organization; Power and Authority; Ownership
	 	4
	Section 5.2.

	 	Authorization, Etc.
	 	4
	Section 5.3.

	 	Disclosure
	 	5
	Section 5.4.

	 	Organization and Ownership of Shares of Subsidiaries; Affiliates
	 	5
	Section 5.5.

	 	Financial Statements
	 	6
	Section 5.6.

	 	Compliance with Laws, Other
Instruments, Etc.
	 	6
	Section 5.7.

	 	Governmental Authorizations, Etc.
	 	6
	Section 5.8.

	 	Litigation; Observance of Agreements, Statutes and Orders
	 	6
	Section 5.9.

	 	Taxes
	 	7
	Section 5.10.

	 	Title to Property; Leases
	 	7
	Section 5.11.

	 	Licenses, Permits, Etc.
	 	7
	Section 5.12.

	 	Compliance with ERISA
	 	8
	Section 5.13.

	 	Private Offering by the Company
	 	8
	Section 5.14.

	 	Use of Proceeds; Margin Regulations
	 	9
	Section 5.15.

	 	Existing Indebtedness; Future Liens
	 	9
	Section 5.16.

	 	Foreign Assets Control Regulations,
Etc.
	 	9
	Section 5.17.

	 	Status under Certain Statutes
	 	9
	Section 5.18.

	 	Environmental Matters
	 	10






 


 









 





	 	 	 	 	 	 	 
	Section	 	Heading	 	Page
	 
	 	 	 	 	 	 
	Section 6.

	 	Representations of the Purchaser
	 	10

	 
	 	 	 	 	 	 
	Section 6.1.

	 	Purchase for Investment
	 	10
	Section 6.2.

	 	Source of Funds
	 	11
	 
	 	 	 	 	 	 
	Section 7.

	 	Information as to Company; Status of Subsidiaries
	 	12

	 
	 	 	 	 	 	 
	Section 7.1.

	 	Financial and Business Information
	 	12
	Section 7.2.

	 	Officer’s Certificate
	 	15
	Section 7.3.

	 	Inspection
	 	15
	Section 7.4.

	 	Change in Status of Subsidiaries
	 	16
	 
	 	 	 	 	 	 
	Section 8.

	 	Maturity; Prepayment of the Notes
	 	16

	 
	 	 	 	 	 	 
	Section 8.1.

	 	Prepayments
	 	16
	Section 8.2.

	 	Optional Prepayments with Make-Whole Amount
	 	16
	Section 8.3.

	 	Allocation of Partial Prepayments
	 	16
	Section 8.4.

	 	Maturity; Surrender, Etc.
	 	17
	Section 8.5.

	 	Purchase of Notes
	 	17
	Section 8.6.

	 	Make-Whole Amount
	 	17
	 
	 	 	 	 	 	 
	Section 9.

	 	Affirmative Covenants
	 	18

	 
	 	 	 	 	 	 
	Section 9.1.

	 	Compliance with Law
	 	18
	Section 9.2.

	 	Insurance
	 	19
	Section 9.3.

	 	Maintenance of Properties
	 	19
	Section 9.4.

	 	Payment of Taxes
	 	19
	Section 9.5.

	 	Partnership Existence, Etc.
	 	19
	Section 9.6.

	 	Ranking
	 	19
	 
	 	 	 	 	 	 
	Section 10.

	 	Negative Covenants
	 	20

	 
	 	 	 	 	 	 
	Section 10.1.

	 	Incurrence of Debt
	 	20
	Section 10.2.

	 	Guaranty of MLP Notes
	 	22
	Section 10.3.

	 	Restricted Subsidiary Debt
	 	22
	Section 10.4.

	 	Liens
	 	23
	Section 10.5.

	 	Restricted Payments
	 	25
	Section 10.6.

	 	Restrictions on Dividends of Subsidiaries, Etc.
	 	26
	Section 10.7.

	 	Mergers and Consolidations
	 	26
	Section 10.8.

	 	Sale of Assets; Sale of Stock
	 	27
	Section 10.9.

	 	Nature of Business
	 	28
	Section 10.10.

	 	Transactions with Affiliates
	 	28
	Section 10.11.

	 	Certain Refinancings
	 	29
	 
	 	 	 	 	 	 
	Section 11.

	 	Events of Default
	 	29







 


-ii-









 





	 	 	 	 	 	 	 
	Section	 	Heading	 	Page
	 
	 	 	 	 	 	 
	Section 12.

	 	Remedies on Default, Etc.
	 	31

	 
	 	 	 	 	 	 
	Section 12.1.

	 	Acceleration
	 	31
	Section 12.2.

	 	Other Remedies
	 	32
	Section 12.3.

	 	Rescission
	 	32
	Section 12.4.

	 	No Waivers or Election of Remedies,
Expenses, Etc.
	 	32
	 
	 	 	 	 	 	 
	Section 13.

	 	Registration; Exchange; Substitution of Notes
	 	33

	 
	 	 	 	 	 	 
	Section 13.1.

	 	Registration of Notes
	 	33
	Section 13.2.

	 	Transfer and Exchange of Notes
	 	33
	Section 13.3.

	 	Replacement of Notes
	 	33
	 
	 	 	 	 	 	 
	Section 14.

	 	Payments on Notes
	 	34

	 
	 	 	 	 	 	 
	Section 14.1.

	 	Place of Payment
	 	34
	Section 14.2.

	 	Home Office Payment
	 	34
	 
	 	 	 	 	 	 
	Section 15.

	 	Expenses, Etc.
	 	34

	 
	 	 	 	 	 	 
	Section 15.1.

	 	Transaction Expenses
	 	34
	Section 15.2.

	 	Survival
	 	35
	 
	 	 	 	 	 	 
	Section 16.

	 	Survival of Representations and Warranties; Entire Agreement
	 	35

	 
	 	 	 	 	 	 
	Section 17.

	 	Amendment and Waiver
	 	35

	 
	 	 	 	 	 	 
	Section 17.1.

	 	Requirements
	 	35
	Section 17.2.

	 	Solicitation of Holders of Notes
	 	36
	Section 17.3.

	 	Binding Effect, Etc.
	 	36
	Section 17.4.

	 	Notes Held by Company, Etc.
	 	36
	 
	 	 	 	 	 	 
	Section 18.

	 	Notices
	 	37

	 
	 	 	 	 	 	 
	Section 19.

	 	Reproduction of Documents
	 	37

	 
	 	 	 	 	 	 
	Section 20.

	 	Confidential Information
	 	37

	 
	 	 	 	 	 	 
	Section 21.

	 	Substitution of Purchaser
	 	38

	 
	 	 	 	 	 	 
	Section 22.

	 	Miscellaneous
	 	39

	 
	 	 	 	 	 	 
	Section 22.1.

	 	Successors and Assigns
	 	39
	Section 22.2.

	 	Payments Due on Non-Business Days
	 	39
	Section 22.3.

	 	Severability
	 	39
	Section 22.4.

	 	Construction
	 	39
	Section 22.5.

	 	Counterparts
	 	39
	Section 22.6.

	 	Governing Law
	 	39
	 
	 	 	 	 	 	 
	Signatures

	 	 	 	40





 


-iii-









 





	 	 	 	 	 
	Schedule A

	 	—
	 	Information Relating To Purchasers
	 
	 	 	 	 
	Schedule B

	 	—
	 	Defined Terms
	 
	 	 	 	 
	Schedule 5.1

	 	—
	 	Ownership of Company
	 
	 	 	 	 
	Schedule 5.3

	 	—
	 	Disclosure Materials
	 
	 	 	 	 
	Schedule 5.4

	 	—
	 	Subsidiaries of the Company and Ownership of Subsidiary Equity Interest
	 
	 	 	 	 
	Schedule 5.5

	 	—
	 	Financial Statements
	 
	 	 	 	 
	Schedule 5.11

	 	—
	 	Patents, etc.
	 
	 	 	 	 
	Schedule 5.14

	 	—
	 	Use of Proceeds
	 
	 	 	 	 
	Schedule 5.15

	 	—
	 	Existing Indebtedness and Liens
	 
	 	 	 	 
	Exhibit 1-A

	 	—
	 	Form of Series A Note
	 
	 	 	 	 
	Exhibit 1-B

	 	—
	 	Form of Series B Note
	 
	 	 	 	 
	Exhibit 1-C

	 	—
	 	Form of Series C Note
	 
	 	 	 	 
	Exhibit 4.4(a)

	 	—
	 	Form of Opinion of Special Counsel for the Company
	 
	 	 	 	 
	Exhibit 4.4(b)

	 	—
	 	Form of Opinion of Special Counsel for the Purchasers
	 
	 	 	 	 
	Exhibit 10.1

	 	—
	 	Subordination Provisions Applicable to Subordinated Debt







 


-iv-









 







Ferrellgas, L.P.

One Liberty Plaza

Liberty, Missouri 64068




$21,000,000 8.68% Senior Notes, Series A, due August 1, 2006

$90,000,000 8.78% Senior Notes, Series B, due August 1, 2007

$73,000,000 8.87% Senior Notes, Series C, due August 1, 2009




Dated as of

February 1, 2000




To each of the Purchasers listed in





the attached Schedule A:



Ladies and Gentlemen:



Ferrellgas, L.P., a Delaware limited partnership (the “Company"), agrees with the
Purchasers listed in the attached Schedule A (the “Purchasers") as follows:



Section 1. Authorization of Notes.




The Company will authorize the issue and sale of $184,000,000 aggregate principal amount of
its Senior Notes, comprised of $21,000,000 8.68% Senior Notes, Series A, due August 1, 2006 (the
“Series A Notes"), $90,000,000 8.78% Senior Notes, Series B, due August 1, 2007 (the “Series B
Notes"), $73,000,000 8.87% Senior Notes, Series C, due August 1, 2009 (the “Series C Notes") (said
Series A Notes, Series B Notes and Series C Notes being herein collectively called the “Notes",
such term to include any such notes issued in substitution therefor pursuant to Section 13 of this
Agreement (as hereinafter defined)). The Series A, B and C Notes shall be substantially in the
respective forms set out in Exhibit 1, in each case with such changes therefrom, if any, as may be
approved by each Purchaser and the Company. Certain capitalized terms used in this Agreement are
defined in Schedule B; references to a “Schedule” or an “Exhibit” are, unless otherwise specified,
to a Schedule or an Exhibit attached to this Agreement.



Section 2. Sale and Purchase of Notes.




Subject to the terms and conditions of this Agreement, the Company will issue and sell to each
Purchaser and each Purchaser will purchase from the Company, at the Closing provided for in
Section 3, Notes in the principal amount and of the series specified opposite such Purchaser’s name
in Schedule A at the purchase price of 100% of the principal amount thereof. The obligations of
each Purchaser hereunder are several and not joint obligations and each Purchaser shall have no
obligation and no liability to any Person for the performance or nonperformance by any other
Purchaser hereunder.


 


 









 





Section 3. Closing.




The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the
offices of Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603 at 10:00
a.m. Chicago time, at a closing (the “Closing") on February 28, 2000 or such other
Business Day prior to February 29, 2000 as may be designated by at least five Business Days’ prior
written notice to the Purchasers. At the Closing the Company will deliver to each Purchaser the
Notes of any such series to be purchased by such Purchaser in the form of a single Note of each
series to be purchased by such Purchaser (or such greater number of Notes of any such series in
denominations of at least $100,000 as such Purchaser may request) dated the date of the Closing and
registered in such Purchaser’s name (or in the name of such Purchaser’s nominee), against delivery
by such Purchaser to the Company or its order of immediately available funds in the amount of the
purchase price therefor by wire transfer of immediately available funds for the account of the
Company to Wells Fargo Bank, (San Francisco, CA), as cashiering agent, to account #4518-054085
ABA #121000248. If at the Closing the Company shall fail to tender such Notes to any Purchaser as
provided above in this Section 3, or any of the conditions specified in Section 4 shall not have
been fulfilled to any Purchaser’s satisfaction, such Purchaser shall, at such Purchaser’s election,
be relieved of all further obligations under this Agreement, without thereby waiving any rights
such Purchaser may have by reason of such failure or such nonfulfillment.



Section 4. Conditions to Closing.




The obligation of each Purchaser to purchase and pay for the Notes to be sold to such
Purchaser at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to
or at the Closing, of the following conditions:



Section 4.1. Representations and Warranties. The representations and warranties of
the Company in this Agreement shall be correct when made and at the time of the Closing.



Section 4.2. Performance; No Default. The Company shall have performed and complied
with all agreements and conditions contained in this Agreement required to be performed or complied
with by it prior to or at the Closing, and after giving effect to the issue and sale of the Notes
(and the application of the proceeds thereof as contemplated by Schedule 5.14), no Default or Event
of Default shall have occurred and be continuing. Neither the Company nor any Subsidiary shall
have entered into any transaction since the date of the Memorandum that would have been prohibited
by Section 10 hereof had such Section applied since such date.


 


-2-









 






Section 4.3. Compliance Certificates.




(a) Officer’s Certificate. The Company shall have delivered to such Purchaser an
Officer’s Certificate, dated the date of the Closing, certifying that the conditions
specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.




(b) Secretary’s Certificate. The General Partner shall have delivered to such
Purchaser a certificate certifying as to the resolutions attached thereto and other
proceedings relating to the authorization, execution and delivery of the Notes and this
Agreement.




(c) ERISA Certificate. If such Purchaser shall have made the disclosures referred to
in Section 6.2(b), (c) or (e), such Purchaser shall have received the certificate from the
Company described in the last paragraph of Section 6.2 and such certificate shall state that
(i) the Company is neither a “party in interest” nor a “disqualified person” (as defined in
Section 4975(e)(2) of the Code), with respect to any plan identified pursuant to
Section 6.2(b) or (e) or (ii) with respect to any plan, identified pursuant to
Section 6.2(c), neither the Company nor any “affiliate” (as defined in Section V(c) of the
QPAM Exemption) has, at such time or during the immediately preceding one year, exercised
the authority to appoint or terminate the QPAM as manager of the assets of any plan
identified in writing pursuant to Section 6.2(c) or to negotiate the terms of said QPAM’s
management agreement on behalf of any such identified plans.



Section 4.4. Opinions of Counsel. Such Purchaser shall have received opinions in
form and substance satisfactory to such Purchaser, dated the date of the Closing (a) from Bracewell
& Patterson, L.L.P., special counsel for the Company, covering the matters set forth in
Exhibit 4.4(a) and covering such other matters incident to the transactions contemplated hereby as
such Purchaser or such Purchaser’s counsel may reasonably request (and the Company hereby instructs
its counsel to deliver such opinion to such Purchaser) and (b) from Chapman and Cutler, the
Purchasers’ special counsel in connection with such transactions, substantially in the form set
forth in Exhibit 4.4(b) and covering such other matters incident to such transactions as such
Purchaser may reasonably request.



Section 4.5. Purchase Permitted by Applicable Law, Etc. On the date of the Closing
each purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to
which each Purchaser is subject, without recourse to provisions (such as Section 1405(a)(8) of the
New York Insurance Law) permitting limited investments by insurance companies without restriction
as to the character of the particular investment, (b) not violate any applicable law or regulation
(including, without limitation, Regulation T, U or X of the Board of Governors of the Federal
Reserve System) and (c) not subject any Purchaser to any tax, penalty or liability under or
pursuant to any applicable law or regulation, which law or regulation was not in effect on the date
hereof. If requested by any Purchaser, such Purchaser shall have received an Officer’s Certificate
certifying as to such matters of fact as such Purchaser may reasonably specify to enable such
Purchaser to determine whether such purchase is so permitted.



Section 4.6. Related Transactions.  The Company shall have consummated the sale of
the entire principal amount of the Notes scheduled to be sold on the date of Closing pursuant to
this Agreement.



Section 4.7. Payment of Special Counsel Fees. Without limiting the provisions of
Section 15.1, the Company shall have paid on or before the Closing the fees, charges and
disbursements of the Purchasers’ special counsel referred to in Section 4.4 to the extent reflected
in a statement of such counsel rendered to the Company at least one Business Day prior to the
Closing.


 


-3-









 





Section 4.8. Private Placement Numbers. A Private Placement Number issued by
Standard & Poor’s CUSIP Service Bureau (in cooperation with the Securities Valuation Office of the
National Association of Insurance Commissioners) shall have been obtained for each series of the
Notes.



Section 4.9. Changes in Structure. The Company shall not have changed its
jurisdiction of organization or, except as described in the Memorandum, been a party to any merger
or consolidation and shall not have succeeded to all or any substantial part of the liabilities of
any other entity, at any time following the date of the most recent financial statements referred
to in Schedule 5.5.



Section 4.10. Rating. Prior to the date of Closing, the Notes shall have received a rating of
“BBB” or better from Fitch IBCA, Inc.



Section 4.11. Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments incident to such
transactions shall be satisfactory to such Purchaser and such Purchaser’s special counsel, and such
Purchaser and such Purchaser’s special counsel shall have received all such counterpart originals
or certified or other copies of such documents as such Purchaser or such Purchaser’s special
counsel may reasonably request.



Section 5. Representations and Warranties of the Company.





The Company represents and warrants to each Purchaser that:



Section 5.1. Organization; Power and Authority; Ownership. The Company is a limited
partnership duly organized, validly existing and in good standing under the laws of the State of
Delaware, and is duly licensed or qualified as a foreign partnership and is in good standing in
each jurisdiction in which such qualification is required by law, other than those jurisdictions as
to which the failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company has the power and
authority to own or hold under lease the properties it purports to own or hold under lease, to
transact the business it transacts and proposes to transact, to execute and deliver this Agreement
and the Notes and to perform the provisions hereof and thereof. The name of each Person holding an
equity interest in the Company (including a description of the nature of such interest) is set
forth on Schedule 5.1.



Section 5.2. Authorization, Etc. This Agreement and the Notes have been duly
authorized by all necessary action on the part of the Company, and this Agreement constitutes, and
upon execution and delivery thereof each Note will constitute, a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors’ rights generally and
(ii) general principles of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).


 


-4-









 





Section 5.3. Disclosure. The Company, through its agent, Bank of America Securities
LLC, has delivered to each Purchaser a copy of a Private Placement Memorandum, dated January, 2000
(the “Memorandum”), relating to the transactions contemplated hereby. The Memorandum fairly
describes, in all material respects, the general nature of the business and principal properties of
the Company and its Restricted Subsidiaries. Except as disclosed in Schedule 5.3, this Agreement,
the Memorandum, the documents, certificates or other writings delivered to each Purchaser by or on
behalf of the Company in connection with the transactions contemplated hereby and the financial
statements listed in Schedule 5.5, taken as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made. Except as disclosed in the
Memorandum or as expressly described in Schedule 5.3, or in one of the documents, certificates or
other writings identified therein, or in the financial statements listed in Schedule 5.5, since
July 31, 1999, there has been no change in the financial condition, operations, business,
properties or prospects of the Company or any of its Restricted Subsidiaries except changes that
individually or in the aggregate could not reasonably be expected to have a Material Adverse
Effect. There is no fact known to the Company that could reasonably be expected to have a Material
Adverse Effect that has not been set forth herein or in the Memorandum or in the other documents,
certificates and other writings delivered to each Purchaser by or on behalf of the Company
specifically for use in connection with the transactions contemplated hereby.



Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.


(a) Schedule 5.4 contains (except as noted therein) complete and correct lists (i) of the
Company’s Subsidiaries, showing, as to each Subsidiary, its status (whether a Restricted or
Unrestricted Subsidiary), the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar equity interests outstanding
owned by the Company and each other Subsidiary, (ii) of the Company’s Affiliates, other than
Subsidiaries, and (iii) of the Company’s directors and senior officers.




(b) All of the outstanding shares of capital stock or similar equity interests of each
Subsidiary shown in Schedule 5.4 as being owned by the Company and its Subsidiaries have been
validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary
free and clear of any Lien (except as otherwise disclosed in Schedule 5.4).




(c) Each Restricted Subsidiary identified in Schedule 5.4 is a corporation or other legal
entity duly organized, validly existing and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation or other legal entity and is in good
standing in each jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each
such Restricted Subsidiary has the corporate or other power and authority to own or hold under
lease the properties it purports to own or hold under lease and to transact the business it
transacts and proposes to transact.


 


-5-









 






(d) No Restricted Subsidiary is a party to, or otherwise subject to, any legal restriction or
any agreement (other than this Agreement, the agreements listed on Schedule 5.4 and customary
limitations imposed by corporate law statutes) restricting the ability of such Restricted
Subsidiary to pay dividends out of profits or make any other similar distributions of profits to
the Company or any of its Restricted Subsidiaries that owns outstanding shares of capital stock or
similar equity interests of such Restricted Subsidiary.



Section 5.5. Financial Statements. The Company has delivered to each Purchaser
copies of the financial statements of the Company and its Restricted Subsidiaries listed on
Schedule 5.5. All of said financial statements (including in each case the related schedules and
notes) fairly present in all material respects the consolidated financial position of the Company
and its Restricted Subsidiaries as of the respective dates specified in such financial statements
and the consolidated results of their operations and cash flows for the respective periods so
specified and have been prepared in accordance with GAAP consistently applied throughout the
periods involved except as set forth in the notes thereto (subject, in the case of any interim
financial statements, to normal year-end adjustments).



Section 5.6. Compliance with Laws, Other Instruments, Etc. The execution, delivery
and performance by the Company of this Agreement and the Notes will not (a) contravene, result in
any breach of, or constitute a default under, or result in the creation of any Lien in respect of
any property of the Company or any Restricted Subsidiary under, any indenture, mortgage, deed of
trust, loan, purchase or credit agreement, lease, partnership agreement, corporate charter or
by-laws, or any other agreement or instrument to which the Company or any Restricted Subsidiary is
bound or by which the Company or any Restricted Subsidiary or any of their respective properties
may be bound or affected, (b) conflict with or result in a breach of any of the terms, conditions
or provisions of any Material order, judgment, decree, or ruling of any court, arbitrator or
Governmental Authority applicable to the Company or any Restricted Subsidiary or (c) violate any
provision of any Material statute or other rule or regulation of any Governmental Authority
applicable to the Company or any Restricted Subsidiary.



Section 5.7. Governmental Authorizations, Etc. No consent, approval or authorization
of, or registration, filing or declaration with, any Governmental Authority is required in
connection with the execution, delivery or performance by the Company of this Agreement or the
Notes.



Section 5.8. Litigation; Observance of Agreements, Statutes and Orders.


(a) There
are no actions, suits or proceedings pending or, to the knowledge of the Company, threatened
against or affecting the Company or any Restricted Subsidiary or any property of the Company or any
Restricted Subsidiary in any court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect.




(b) Neither the Company nor any Restricted Subsidiary is in default under any term of any
agreement or instrument to which it is a party or by which it is bound, or any order, judgment,
decree or ruling of any court, arbitrator or Governmental Authority or is in violation of any
applicable law, ordinance, rule or regulation (including without limitation Environmental
Laws) of any Governmental Authority, which default or violation, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.



 


-6-









 





Section 5.9. Taxes. The Company and its Restricted Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to
be due and payable on such returns and all other taxes and assessments levied upon them or their
properties, assets, income or franchises, to the extent such taxes and assessments have become due
and payable and before they have become delinquent, except for any taxes and assessments (a) the
amount of which is not individually or in the aggregate Material or (b) the amount, applicability
or validity of which is currently being contested in good faith by appropriate proceedings and with
respect to which the Company or a Restricted Subsidiary, as the case may be, has established
adequate reserves in accordance with GAAP. The Company knows of no basis for any other tax or
assessment that could reasonably be expected to have a Material Adverse Effect. The charges,
accruals and reserves on the books of the Company and its Restricted Subsidiaries in respect of
Federal, state or other taxes for all fiscal periods are adequate.



Section 5.10. Title to Property; Leases. The Company and its Restricted Subsidiaries
have good and sufficient title to their respective properties that individually or in the aggregate
are Material, including all such properties reflected in the most recent audited balance sheet
referred to in Section 5.5 or purported to have been acquired by the Company or any Restricted
Subsidiary after said date (except as sold or otherwise disposed of in the ordinary course of
business), in each case free and clear of Liens that individually or in the aggregate would have a
Material Adverse Effect. All leases that individually or in the aggregate are Material are valid
and subsisting and are in full force and effect in all material respects.




Section 5.11.
Licenses, Permits, Etc. Except as disclosed in Schedule 5.11.




(a) the Company and its Restricted Subsidiaries own or possess all licenses, permits,
franchises, authorizations, patents, copyrights, service marks, trademarks and trade names,
or rights thereto, that individually or in the aggregate are Material, without known
conflict with the rights of others;




(b) to the best knowledge of the Company, no product of the Company or any of its
Restricted Subsidiaries infringes in any material respect any license, permit, franchise,
authorization, patent, copyright, service mark, trademark, trade name or other right owned
by any other Person; and




(c) to the best knowledge of the Company, there is no Material violation by any Person
of any right of the Company or any of its Restricted Subsidiaries with respect to any
patent, copyright, service mark, trademark, trade name or other right owned or used by the
Company or any of its Restricted Subsidiaries.


 


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Section 5.12. Compliance with ERISA.


(a) The Company and each ERISA Affiliate have
operated and administered each Plan in compliance with all applicable laws except for such
instances of noncompliance as have not resulted in and could not reasonably be expected to
result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate has incurred any
liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and no event, transaction or
condition has occurred or exists that could reasonably be expected to result in the incurrence of
any such liability by the Company or any ERISA Affiliate, or in the imposition of any Lien on any
of the rights, properties or assets of the Company or any ERISA Affiliate, in either case pursuant
to Title I or IV of ERISA or to such penalty or excise tax provisions or to Section 401(a)(29) or
412 of the Code, other than such liabilities or Liens as would not be individually or in the
aggregate Material.



(b) The present value of the aggregate benefit liabilities under each of the Plans (other than
Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the
basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent
actuarial valuation report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities. The term “benefit liabilities” has the meaning specified in
Section 4001 of ERISA and the terms “current value” and “present value” have the meanings specified
in Section 3 of ERISA.



(c) The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and are not
subject to contingent withdrawal liabilities) under Section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are Material.




(d) The expected post-retirement benefit obligation (determined as of the last day of the
Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board
Statement No. 106, without regard to liabilities attributable to continuation coverage mandated by
Section 4980B of the Code) of the Company and its Restricted Subsidiaries is not Material.




(e) The execution and delivery of this Agreement and the issuance and sale of the Notes
hereunder will not involve any transaction that is subject to the prohibitions of Section 406 of
ERISA or in connection with which a tax could be imposed pursuant to Section 4975(c)(1)(A)-(D) of
the Code. The representation by the Company in the first sentence of this Section 5.12(e) is made
in reliance upon and subject to the accuracy of each Purchaser’s representation in Section 6.2 as
to the sources of the funds to be used to pay the purchase price of the Notes to be purchased by
such Purchaser.



Section 5.13. Private Offering by the Company. Neither the Company nor anyone acting
on its behalf has offered the Notes or any similar securities for sale to, or solicited any offer
to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any
Person other than the Purchasers and not more than 40 other institutional investors, each of which
has been offered the Notes at a private sale for investment. Neither the Company nor anyone acting
on its behalf has taken, or will take, any action that would subject the issuance or sale of the
Notes to the registration requirements of Section 5 of the Securities Act.


 


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Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply the
proceeds of the sale of the Notes as set forth in Schedule 5.14. No part of the proceeds from the
sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or
carrying any margin stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a violation of Regulation X of
said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said
Board (12 CFR 220). Margin stock does not constitute more than 0% of the value of the consolidated
assets of the Company and its Restricted Subsidiaries and the Company does not have any present
intention that margin stock will constitute more than 0% of the value of such assets. As used in
this Section, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings
assigned to them in said Regulation U.



Section 5.15. Existing Indebtedness; Future Liens.


(a) Schedule 5.15 sets forth a complete
and correct list of all outstanding Indebtedness of the Company and its Restricted Subsidiaries as
of January 31, 2000, since which date there has been no Material change in the amounts, interest
rates, sinking funds, installment payments or maturities of the Indebtedness of the Company or its
Restricted Subsidiaries. Neither the Company nor any Restricted Subsidiary is in default and no
waiver of default is currently in effect, in the payment of any principal or interest on any
Indebtedness of the Company or such Restricted Subsidiary and no event or condition exists with
respect to any Indebtedness of the Company or any Restricted Subsidiary that would permit (or that
with notice or the lapse of time, or both, would permit) one or more Persons to cause such
Indebtedness to become due and payable before its stated maturity or before its regularly scheduled
dates of payment.




(b) Except as disclosed in Schedule 5.15, neither the Company nor any Restricted Subsidiary
has agreed or consented to cause or permit in the future (upon the happening of a contingency or
otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien
not permitted by Section 10.4.



Section 5.16. Foreign Assets Control Regulations, Etc. Neither the sale of the Notes
by the Company hereunder nor its use of the proceeds thereof will violate the Trading with the
Enemy Act, as amended, or any of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto.



Section 5.17. Status under Certain Statutes. Neither the Company nor any Restricted
Subsidiary is an “investment company” registered or required to be registered under the Investment
Company Act of 1940, as amended, or is subject to regulation under the Public Utility Holding
Company Act of 1935, as amended, the ICC Termination Act of 1995, as amended, or the Federal Power
Act, as amended.


 


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Section 5.18. Environmental Matters. Neither the Company nor any Restricted Subsidiary has
knowledge of any claim or has received any notice of any claim, and no proceeding has been
instituted raising any claim against the Company or any of its Restricted Subsidiaries or any of
their respective real properties now or formerly owned, leased or operated by any of them or other
assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be expected to result in a
Material Adverse Effect. Except as otherwise disclosed to each Purchaser in writing:




(a) neither the Company nor any Restricted Subsidiary has knowledge of any facts which
would give rise to any claim, public or private, of violation of Environmental Laws or
damage to the environment emanating from, occurring on or in any way related to real
properties now or formerly owned, leased or operated by any of them or to other assets or
their use, except, in each case, such as could not reasonably be expected to result in a
Material Adverse Effect;




(b) neither the Company nor any of its Restricted Subsidiaries has stored any Hazardous
Materials on real properties now or formerly owned, leased or operated by any of them or has
disposed of any Hazardous Materials in a manner contrary to any Environmental Laws in each
case in any manner that could reasonably be expected to result in a Material Adverse Effect;
and




(c) all buildings on all real properties now owned, leased or operated by the Company
or any of its Restricted Subsidiaries are in compliance with applicable Environmental Laws,
except where failure to comply could not reasonably be expected to result in a Material
Adverse Effect.



Section 6. Representations of the Purchaser.




Section 6.1. Purchase for Investment. Each Purchaser represents that (a) it is
purchasing the Notes for its own account or for one or more separate accounts maintained by it or
for the account of one or more pension or trust funds and not with a view to the distribution
thereof, provided that the disposition of such Purchaser’s or such pension or trust funds’ property
shall at all times be within such Purchaser’s or such pension or trust funds’ control, and (b) it
is an “accredited investor” within the meaning of Rule 501 of Regulation D of the Securities Act.
Each Purchaser understands that the Notes have not been registered under the Securities Act and may
be resold only if registered pursuant to the provisions of the Securities Act or if an exemption
from registration is available, except under circumstances where neither such registration nor such
an exemption is required by law, and that the Company is not required to register the Notes.


 


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Section 6.2. Source of Funds. Each Purchaser represents that at least one of the following
statements is an accurate representation as to each source of funds (a “Source") to be used by it
to pay the purchase price of the Notes to be purchased by it hereunder:




(a) the Source is an “insurance company general account” within the meaning of
Department of Labor Prohibited Transaction Exemption (“PTE”) 95-60 (issued July 12, 1995)
and there is no employee benefit plan, treating as a single plan, all plans maintained by
the same employer or employee organization, with respect to which the amount of the general
account reserves and liabilities for all contracts held by or on behalf of such plan,
exceeds ten percent (10%) of the total reserves and liabilities of such general account
(exclusive of separate account liabilities) plus surplus, as set forth in the
NAIC Annual Statement for such Purchaser most recently filed with such Purchaser’s state of
domicile; or




(b) the Source is either (i) an insurance company pooled separate account, within the
meaning of PTE 90-1 (issued January 29, 1990), or (ii) a bank collective investment fund,
within the meaning of the PTE 91-38 (issued July 12, 1991) and, except as such Purchaser has
disclosed to the Company in writing pursuant to this paragraph (b), no employee benefit plan
or group of plans maintained by the same employer or employee organization beneficially owns
more than 10% of all assets allocated to such pooled separate account or collective
investment fund; or




(c) the Source constitutes assets of an “investment fund” (within the meaning of Part V
of the QPAM Exemption) managed by a “qualified professional asset manager” or “QPAM” (within
the meaning of Part V of the QPAM Exemption), no employee benefit plan’s assets that are
included in such investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same employer or by an affiliate (within the
meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client assets managed by such
QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the
QPAM nor a person controlling or controlled by the QPAM (applying the definition of
“control” in Section V(e) of the QPAM Exemption) owns a 5% or more interest in the Company
and (i) the identity of such QPAM and (ii) the names of all employee benefit plans whose
assets are included in such investment fund have been disclosed to the Company in writing
pursuant to this paragraph (c); or




(d) the Source is a governmental plan; or




(e) the Source is one or more employee benefit plans, or a separate account or trust
fund comprised of one or more employee benefit plans, each of which has been identified to
the Company in writing pursuant to this paragraph (e);




(f) the Source does not include assets of any employee benefit plan, other than a plan
exempt from the coverage of ERISA; or




(g) the Source is an insurance company separate account maintained solely in connection
with the fixed contractual obligations of the insurance company under which the amounts
payable, or credited, to any employee benefit plan (or its related trust) and to any
participant or beneficiary of such plan (including any annuitant) are not affected in any
manner by the investment performance of the separate account.


 


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If any Purchaser or any subsequent transferee of the Notes indicates that such Purchaser or such
transferee is relying on any representation contained in paragraph (b), (c) or (e) above, the
Company shall deliver on the date of Closing or on the date of transfer, as applicable, a
certificate, which shall state whether (i) it is a party in interest or a “disqualified person” (as
defined in Section 4975(e)(2) of the Code), with respect to any plan identified pursuant to
paragraphs (b) or (e) above, or (ii) with respect to any plan, identified pursuant to paragraph (c)
above, whether it or any “affiliate” (as defined in Section V(c) of the QPAM Exemption) has at such
time, and during the immediately preceding one year, exercised the authority to appoint or
terminate said QPAM as manager of any plan identified in writing pursuant to paragraph (c) above or
to negotiate the terms of said QPAM’s management agreement on behalf of any such identified plan.
As used in this Section 6.2, the terms “employee benefit plan”, “governmental plan”, “party in
interest” and “separate account” shall have the respective meanings assigned to such terms in
Section 3 of ERISA.



Section 7. Information as to Company; Status of Subsidiaries.




Section 7.1. Financial and Business Information. The Company shall deliver to each holder of
Notes that is an Institutional Investor:




(a) Quarterly Statements — within 60 days after the end of each quarterly fiscal period
in each fiscal year of the Company (other than the last quarterly fiscal period of each such
fiscal year), duplicate copies of,




(i) an unaudited consolidated balance sheet of the Company and its Restricted
Subsidiaries as at the end of such quarter, and




(ii) unaudited consolidated statements of income, changes in partners’ equity
and cash flows of the Company and its Restricted Subsidiaries, for such quarter and
(in the case of the second and third quarters) for the portion of the fiscal year
ending with such quarter,




setting forth in each case in comparative form the figures for the corresponding periods in
the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP
applicable to quarterly financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial position of the
companies being reported on and their results of operations and cash flows, subject to
changes resulting from normal, recurring year-end adjustments, provided that delivery within
the time period specified above of copies of the Company’s Quarterly Report on Form 10-Q
prepared in compliance with the requirements therefor and filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of this Section 7.1(a);




(b) Annual Statements — within 120 days after the end of each fiscal year of the
Company, duplicate copies of,




(i) a consolidated balance sheet of the Company and its Restricted
Subsidiaries, as at the end of such year, and




(ii) consolidated statements of income, changes in partners’ equity and cash
flows of the Company and its Restricted Subsidiaries, for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all
in reasonable detail, prepared in accordance with GAAP, and accompanied by



 


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(A) an opinion thereon of independent certified public accountants of
recognized national standing, which opinion shall state that such financial
statements present fairly, in all material respects, the financial position of the
companies being reported upon and their results of operations and cash flows and
have been prepared in conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has been made in accordance
with generally accepted auditing standards, and that such audit provides a
reasonable basis for such opinion in the circumstances, and




(B) a certificate of such accountants stating that they have reviewed this
Agreement and stating further whether, in making their audit, they have become aware
of any condition or event that then constitutes a Default or an Event of Default,
and, if they are aware that any such condition or event then exists, specifying the
nature and period of the existence thereof (it being understood that such
accountants shall not be liable, directly or indirectly, for any failure to obtain
knowledge of any Default or Event of Default unless such accountants should have
obtained knowledge thereof in making an audit in accordance with generally accepted
auditing standards or did not make such an audit),




provided that the delivery within the time period specified above of the Company’s Annual
Report on Form 10-K for such fiscal year (together with the Company’s annual report to
shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in
accordance with the requirements therefor and filed with the Securities and Exchange
Commission, together with the accountant’s certificate described in clause (B) above, shall
be deemed to satisfy the requirements of this Section 7.1(b);




(c) SEC and Other Reports — promptly upon their becoming available, one copy of each
regular or periodic report, each registration statement (without exhibits except as
expressly requested by such holder), and each prospectus and all amendments thereto filed by
the Company or any Restricted Subsidiary with the Securities and Exchange Commission and of
all press releases and other statements made available generally by the Company or any
Restricted Subsidiary to the public concerning developments that are Material;




(d) Notice of Default or Event of Default — promptly, and in any event within five
Business Days after a Responsible Officer becoming aware of the existence of any Default or
Event of Default or that any Person has given any notice or taken any action with respect to
a claimed default hereunder or that any Person has given any notice or taken any action with
respect to a claimed default of the type referred to in Section 11(f), a written notice
specifying the nature and period of existence thereof and what action the Company is taking
or proposes to take with respect thereto;


 


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(e) ERISA Matters — promptly, and in any event within five Business Days after a
Responsible Officer becoming aware of any of the following, a written notice setting forth
the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes
to take with respect thereto:




(i) with respect to any Plan, any reportable event, as defined in
section 4043(b) of ERISA and the regulations thereunder, for which notice thereof
has not been waived pursuant to such regulations as in effect on the date hereof; or




(ii) the taking by the PBGC of steps to institute, or the threatening by the
PBGC of the institution of, proceedings under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan
that such action has been taken by the PBGC with respect to such Multiemployer Plan;
or




(iii) any event, transaction or condition that could result in the incurrence
of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of
ERISA or the penalty or excise tax provisions of the Code relating to employee
benefit plans, or in the imposition of any Lien on any of the rights, properties or
assets of the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or
such penalty or excise tax provisions, if such liability or Lien, taken together
with any other such liabilities or Liens then existing, could reasonably be expected
to have a Material Adverse Effect;




(f) Notices from Governmental Authority — promptly, and in any event within 30 days of
receipt thereof, copies of any notice to the Company or any Restricted Subsidiary from any
Federal or state Governmental Authority relating to any order, ruling, statute or other law
or regulation that could reasonably be expected to have a Material Adverse Effect; and




(g) Requested Information — with reasonable promptness, such other data and information
relating to the business, operations, affairs, financial condition, assets or properties of
the Company or any of its Restricted Subsidiaries or relating to the ability of the Company
to perform its obligations hereunder and under the Notes as from time to time may be
reasonably requested by any such holder of Notes, including, without limitation, Form 8-K to
be filed with the Securities and Exchange Commission which shall include the audited
financial statements of Thermogas L.L.C. when available.


 


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Section 7.2. Officer’s Certificate. Each set of financial statements delivered to a holder of
Notes pursuant to Section 7.1(a) or Section 7.1(b) hereof shall be accompanied by a certificate of
a Senior Financial Officer setting forth:




(a) Covenant Compliance — the information (including detailed calculations) required in
order to establish whether the Company was in compliance with the
requirements of Section 10.1 through Section 10.8 hereof, inclusive, and Section 10.11
hereof, during the quarterly or annual period covered by the statements then being furnished
(including with respect to each such Section, where applicable, the calculations of the
maximum or minimum amount, ratio or percentage, as the case may be, permissible under the
terms of such Sections, and the calculation of the amount, ratio or percentage then in
existence); and




(b) Event of Default — a statement that such officer has reviewed the relevant terms
hereof and has made, or caused to be made, under his or her supervision, a review of the
transactions and conditions of the Company and its Restricted Subsidiaries from the
beginning of the quarterly or annual period covered by the statements then being furnished
to the date of the certificate and that such review shall not have disclosed the existence
during such period of any condition or event that constitutes a Default or an Event of
Default or, if any such condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of the Company or any Restricted
Subsidiary to comply with any Environmental Law), specifying the nature and period of
existence thereof and what action the Company shall have taken or proposes to take with
respect thereto.



Section 7.3. Inspection. The Company shall permit the representatives of each holder of Notes
that is an Institutional Investor:




(a) No Default — if no Default or Event of Default then exists, at the expense of such
holder and upon reasonable prior notice to the Company, to visit the principal executive
office of the Company, to discuss the affairs, finances and accounts of the Company and its
Restricted Subsidiaries with the Company’s officers, and (with the consent of the Company,
which consent will not be unreasonably withheld) its independent public accountants, and
(with the consent of the Company, which consent will not be unreasonably withheld) to visit
the other offices and properties of the Company and each Restricted Subsidiary, all at such
reasonable times and as often as may be reasonably requested in writing; and




(b) Default — if a Default or Event of Default then exists, at the expense of the
Company, to visit and inspect any of the offices or properties of the Company or any
Restricted Subsidiary, to examine all their respective books of account, records, reports
and other papers, to make copies and extracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective officers and independent public
accountants (and by this provision the Company authorizes said accountants to discuss the
affairs, finances and accounts of the Company and its Restricted Subsidiaries), all at such
times and as often as may be requested.


 


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Section 7.4. Change in Status of Subsidiaries.


(a) So long as no Default or Event of Default
shall have occurred and be continuing, the Company may at any time and from time to time, upon not
less than 30 days’ prior written notice given to each Holder, designate a previously Restricted
Subsidiary as an Unrestricted Subsidiary or a previously Unrestricted Subsidiary (including a new
Subsidiary designated on the date of its formation or acquisition)
which satisfies the requirements of clauses (i), (ii) and (iii) of the definition of “Restricted
Subsidiary” as a Restricted Subsidiary, provided that immediately after such designation and after
giving effect thereto no Default or Event of Default shall have occurred and be continuing, and
provided further that after such designation the status of such Subsidiary had not been changed
more than twice.



(b) Any notice of designation pursuant to this Section 7.4 shall be accompanied by a
certificate signed by a Responsible Officer of the Company stating that the provisions of this
Section 7.4 have been complied with in connection with such designation and setting forth the name
of each other Subsidiary (if any) which has or will become a Restricted Subsidiary or an
Unrestricted Subsidiary, as the case may be, as a result of such designation.



Section 8. Maturity; Prepayment of the Notes.




Section 8.1. Prepayments. The entire outstanding principal amount of the Series A Notes shall
be due on August 1, 2006, the entire outstanding principal amount of the Series B Notes shall be
due on August 1, 2007 and the entire outstanding principal amount of the Series C Notes shall be
due on August 1, 2009. Except as set forth in Section 8.2, the Notes may not be prepaid prior to
maturity at the option of the Company.



Section 8.2. Optional Prepayments with Make-Whole Amount. The Company may, at its option,
upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes
of any series, in an amount not less than $5,000,000 in the case of a partial prepayment of any
series, at 100% of the principal amount so prepaid, together with interest accrued thereon to the
date of such prepayment, plus the Make-Whole Amount determined for the prepayment date with respect
to such principal amount. The Company will give each holder of Notes of any series being prepaid
written notice of each optional prepayment under this Section 8.2 not less than 30 days and not
more than 60 days prior to the date fixed for such prepayment. Each such notice shall specify such
date, the aggregate principal amount of the Notes of such series to be prepaid on such date, the
principal amount of each Note of such series held by such holder to be prepaid (determined in
accordance with Section 8.3), and the interest to be paid on the prepayment date with respect to
such principal amount being prepaid, and shall be accompanied by a certificate of a Senior
Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment
(calculated as if the date of such notice were the date of the prepayment), setting forth the
details of such computation. Two Business Days prior to such prepayment, the Company shall deliver
to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation of
such Make-Whole Amount as of the specified prepayment date.



Section 8.3. Allocation of Partial Prepayments. In the case of each partial prepayment of the
Notes of any series, the principal amount of the Notes of such series to be prepaid shall be
allocated among all of the Notes of such series at the time outstanding in proportion, as nearly as
practicable, to the respective unpaid principal amounts thereof not theretofore called for
prepayment.


 


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Section 8.4. Maturity; Surrender, Etc. In the case of each prepayment of Notes of any series
pursuant to this Section 8, the principal amount of each Note of such series to be prepaid shall
mature and become due and payable on the date fixed for such prepayment, together with interest on
such principal amount accrued to such date and the applicable Make-Whole Amount, if any. From and
after such date, unless the Company shall fail to pay such principal amount when so due and
payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such
principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to
the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any
prepaid principal amount of any Note.



Section 8.5. Purchase of Notes. The Company will not and will not permit any Affiliate to
purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes
except upon the payment or prepayment of the Notes in accordance with the terms of this Agreement,
and the Notes. The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant
to any payment, prepayment or purchase of Notes pursuant to any provision of this Agreement and no
Notes may be issued in substitution or exchange for any such Notes.



Section 8.6. Make-Whole Amount. The term “Make-Whole Amount” means, with respect to a Note of
any Series, an amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called
Principal, provided that the Make-Whole Amount may in no event be less than zero. For the purposes
of determining the Make-Whole Amount, the following terms have the following meanings:




“Called Principal” means, with respect to a Note of any Series, the principal of such
Note that is to be prepaid pursuant to Section 8.2 or has become or is declared to be
immediately due and payable pursuant to Section 12.1, as the context requires.




“Discounted Value” means, with respect to the Called Principal of a Note of any Series,
the amount obtained by discounting all Remaining Scheduled Payments with respect to such
Called Principal from their respective scheduled due dates to the Settlement Date with
respect to such Called Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which interest on the Notes
of such Series is payable) equal to the Reinvestment Yield with respect to such Called
Principal.




“Reinvestment Yield” means, with respect to the Called Principal of a Note of any
Series, 0.50% over the yield to maturity implied by (i) the yields reported, as of 10:00
A.M. (New York City time) on the second Business Day preceding the Settlement Date with
respect to such Called Principal, on the display designated as “Page PX-1” on the Bloomberg
Financial Markets Services Screen (or such other display as may replace Page PX-1 on the
Bloomberg Financial Markets Services Screen) for actively traded U.S. Treasury securities
having a maturity equal to the Remaining Average Life of such Called Principal as of such
Settlement Date, or (ii) if such yields are not reported as of such time or the yields
reported as of such time are not ascertainable, the Treasury Constant Maturity Series Yields
reported, for the latest day for which such yields have
been so reported as of the second Business Day preceding the Settlement Date with
respect to such Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded U.S. Treasury securities having a
constant maturity equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield will be determined, if necessary, by (a) converting
U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between (1) the actively traded U.S.
Treasury security with the maturity closest to and greater than the Remaining Average Life
and (2) the actively traded U.S. Treasury security with the maturity closest to and less
than the Remaining Average Life.


 


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“Remaining Average Life” means, with respect to any Called Principal, the number of
years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called
Principal into (ii) the sum of the products obtained by multiplying (a) the principal
component of each Remaining Scheduled Payment with respect to such Called Principal by
(b) the number of years (calculated to the nearest one-twelfth year) that will elapse
between the Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.




“Remaining Scheduled Payments” means, with respect to the Called Principal of a Note of
any Series, all payments of such Called Principal and interest thereon that would be due
after the Settlement Date with respect to such Called Principal if no payment of such Called
Principal were made prior to its scheduled due date, provided that if such Settlement Date
is not a date on which interest payments are due to be made under the terms of the Notes of
such Series, then the amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 8.2 or 12.1.




“Settlement Date” means, with respect to the Called Principal of a Note of any Series,
the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has
become or is declared to be immediately due and payable pursuant to Section 12.1, as the
context requires.



Section 9. Affirmative Covenants.





The Company covenants that so long as any of the Notes are outstanding:



Section 9.1. Compliance with Law. The Company will, and will cause each of its Subsidiaries
to, comply with all laws, ordinances or governmental rules or regulations to which each of them is
subject, including, without limitation, Environmental Laws, and will obtain and maintain in effect
all licenses, certificates, permits, franchises and other governmental authorizations necessary to
the ownership of their respective properties or to the conduct of their respective businesses, in
each case to the extent necessary to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in
effect such licenses, certificates, permits, franchises and other governmental authorizations could
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.


 


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Section 9.2. Insurance. The Company will, and will cause each of its Restricted Subsidiaries
to, maintain, with financially sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and contingencies, of such types, on
such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or a similar business and similarly situated and
consistent with the existing practice of the Company and its Restricted Subsidiaries as of the date
hereof.



Section 9.3. Maintenance of Properties. The Company will, and will cause each of its
Restricted Subsidiaries to, maintain and keep, or cause to be maintained and kept, their respective
properties in good repair, working order and condition (other than ordinary wear and tear), so that
the business carried on in connection therewith may be properly conducted at all times, provided
that this Section shall not prevent the Company or any Restricted Subsidiary from discontinuing the
operation and the maintenance of any of its properties if such discontinuance is desirable in the
conduct of its business and the Company has concluded that such discontinuance could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.



Section 9.4. Payment of Taxes. The Company will, and will cause each of its Subsidiaries to,
file all tax returns required to be filed in any jurisdiction and to pay and discharge all taxes
shown to be due and payable on such returns and all other taxes, assessments, governmental charges,
or levies imposed on them or any of their properties, assets, income or franchises, to the extent
such taxes and assessments have become due and payable and before they have become delinquent and
all claims for which sums have become due and payable that have or might become a Lien on
properties or assets of the Company or any Subsidiary, provided that neither the Company nor any
Subsidiary need pay any such tax or assessment or claims if (i) the amount, applicability or
validity thereof is contested by the Company or such Subsidiary on a timely basis in good faith and
in appropriate proceedings, and the Company or a Subsidiary has established adequate reserves
therefor in accordance with GAAP on the books of the Company or such Subsidiary or (ii) the
nonpayment of all such taxes and assessments in the aggregate could not reasonably be expected to
have a Material Adverse Effect.



Section 9.5. Partnership Existence, Etc. The Company will at all times preserve its existence
and its status as a partnership and keep in full force and effect its partnership existence and its
status as a partnership not taxable as a corporation for U.S. federal income tax purposes. Subject
to Sections 10.7 and 10.8, the Company will at all times preserve and keep in full force and effect
the corporate or partnership existence, as the case may be, of each of its Restricted Subsidiaries
(unless merged into the Company or a Restricted Subsidiary) and all rights and franchises of the
Company and its Restricted Subsidiaries unless, in the good faith judgment of the Company, the
termination of or failure to preserve and keep in full force and effect such corporate or
partnership existence, right or franchise could not, individually or in the aggregate, have a
Material Adverse Effect.



Section 9.6. Ranking. The Company will ensure that, at all times, all liabilities of the
Company under the Notes will rank in right of payment either pari passu or senior to all other Debt
of the Company except for Debt which is preferred as a result of being secured as permitted by
Section 10.4 (but then only to the extent of such security).


 


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Section 10. Negative Covenants.





The Company covenants that so long as any of the Notes are outstanding:



Section 10.1. Incurrence of Debt. The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume, guarantee, or otherwise become
directly or indirectly liable with respect to, any Debt, other than:




(a) Debt evidenced by the Notes;




(b) Debt of the Company and its Restricted Subsidiaries outstanding on the date of the
Closing and disclosed in Schedule 5.15 (other than Debt of the Company under the Credit
Agreement or under the MLP Note Guaranty referred to in Section 10.2), and any extensions,
refundings, renewals and refinancings (collectively, a “Refinancing") thereof, provided that
(i) the principal amount of the Debt resulting from such Refinancing shall not exceed the
outstanding principal amount of such Debt being Refinanced, together with any accrued
interest and premium with respect thereto and any and all costs and expenses related to such
Refinancing, (ii) the maturity date of the Debt resulting from such Refinancing shall not be
earlier than the maturity date of the Debt being Refinanced, (iii) the average life to
maturity of the Debt resulting from such Refinancing shall not be less than the average life
to maturity of the Debt being Refinanced and (iv) no Default or Event of Default exists at
the time of such Refinancing;




(c) Debt of the Company and its Restricted Subsidiaries if on the date the Company or
such Restricted Subsidiary becomes liable with respect to any such Debt and immediately
after giving effect thereto and the concurrent retirement of any other Debt:




(i) no Default or Event of Default exists; and




(ii) any such Debt of a Restricted Subsidiary is permitted pursuant to Section
10.3; and




(iii) the ratio of Consolidated Cash Flow for the period of four consecutive
fiscal quarters ending on, or most recently ended prior to, such date to
Consolidated Interest Expense is not less than 2.25 to 1;




(iv) the ratio of Consolidated Debt to Consolidated Cash Flow for the period of
four consecutive fiscal quarters ending on, or most recently ended prior to, such
date is not greater than 5.00 to 1;


 


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(v) the ratio of Adjusted Consolidated Cash Flow to Adjusted Consolidated
Interest Expense for the period of four consecutive fiscal quarters ending on, or
most recently ended prior to, such date is not less than 2.15 to 1; and




(vi) the ratio of Adjusted Consolidated Debt to Adjusted Consolidated Cash Flow
for the period of four consecutive fiscal quarters ending on, or most recently ended
prior to, such date is not greater than (a) 5.40 to 1 if such date is on or prior to
April 30, 2001, or (b) 5.25 to 1 if such date is after April 30, 2001;




(d) Debt of the Company and its Restricted Subsidiaries incurred under a Working
Capital Facility if, on the date the Company or such Restricted Subsidiary becomes liable
with respect to any such Debt and immediately after giving effect thereto and the concurrent
retirement of any other such Debt, the Debt outstanding thereunder will not exceed
Consolidated Cash Flow for the period of four consecutive fiscal quarters ending on, or most
recently ended prior to, such date, provided that there shall have been during the
immediately preceding four consecutive fiscal quarters a period of at least 30 consecutive
days on each of which the Company and its Restricted Subsidiaries would have been permitted
to (but did not) incur on such day under Section 10.1(c) (without reference to the condition
stated in clause (i) thereof) Debt in the amount of the average daily balance of Debt
outstanding under the Working Capital Facility for such 30-day period, provided further that
any such Debt of a Restricted Subsidiary is permitted pursuant to Section 10.3;




(e) Subordinated Debt of the Company if on the date the Company becomes liable with
respect to any such Subordinated Debt and immediately after giving effect thereto and the
concurrent retirement of any other Debt, the aggregate amount of all outstanding
Subordinated Debt of the Company shall not exceed $50,000,000;




(f) Debt of the Company and its Restricted Subsidiaries to a seller of assets or shares
purchased by the Company or any Restricted Subsidiary if on the date the Company becomes
liable with respect to any such Debt and immediately after giving effect thereto and the
concurrent retirement of any other Debt, the aggregate amount of all outstanding Debt of the
Company to all such sellers of assets or shares shall not exceed $60,000,000, provided that
the agreement or instrument pursuant to which such Debt is incurred (i) contains no
financial covenants more restrictive on the Company or its Restricted Subsidiaries than
those contained in this Agreement and (ii) contains no events of default (other than in
respect of payment of principal and interest on such Debt and in respect of the accuracy of
representations and warranties made by the Company or its Restricted Subsidiaries
thereunder) which are capable of occurring prior to the occurrence of any Event of Default,
and provided, further, that any such Debt of a Restricted Subsidiary is permitted pursuant
to Section 10.3; and


 


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(g) Debt of the Company under the “Facility B Commitments” or the “Facility C
Commitments” pursuant to the Credit Agreement if on the date the Company becomes liable with
respect to any such Debt and immediately after giving effect thereto and the concurrent
retirement of any other Debt, the incurrence of such Debt would be
permitted under Section 10.1(c) and any Refinancing thereof, provided that (i) the principal
amount of the Debt resulting from such Refinancing shall not exceed the outstanding
principal amount of such Debt being Refinanced, together with any accrued interest and
premium with respect thereto and any and all costs and expenses related to such Refinancing,
(ii) the maturity date of the Debt resulting from such Refinancing shall not be earlier than
the maturity date of the Debt being Refinanced, (iii) the average life to maturity of the
Debt resulting from such Refinancing shall not be less than the average life to maturity of
the Debt being Refinanced, and (iv) the other terms applicable to the Debt resulting from
such Refinancing shall not be more onerous to the Company than the terms applicable to the
Debt being Refinanced, provided further that the aggregate amount of all such Debt of the
Company permitted by this clause (g) shall not exceed $75,000,000.



For the purposes of this Section 10.1, any Person becoming a Restricted Subsidiary after the date
hereof shall be deemed, at the time it becomes a Restricted Subsidiary, to have incurred all of its
then outstanding Debt, and any Person Refinancing any Debt shall be deemed to have incurred such
Debt at the time of such Refinancing.



Section 10.2. Guaranty of MLP Notes. The Company will not permit the Guaranty executed in
favor of the holders of the 9-3/8% Senior Secured Notes, due 2006 (the “MLP Senior Notes") issued
by Ferrellgas Partners, L.P. (the “MLP Notes Guaranty") to become effective pursuant to the terms
thereof as long as any obligations, indebtedness or otherwise, of the Company are outstanding under
the Notes. Accordingly, the earliest date that the Subsidiary Guaranty Effectiveness Date (as
defined in the Indenture pursuant to which the MLP Senior Notes were issued) can occur is 91 days
following the indefeasible discharge in full of all of the obligations of the Company under the
Notes and this Agreement.



Section 10.3. Restricted Subsidiary Debt. The Company will not at any time permit any
Restricted Subsidiary to, directly or indirectly, create, incur, assume, guarantee, have
outstanding, or otherwise become or remain directly or indirectly liable with respect to, any Debt
other than:




(a) Debt of a Restricted Subsidiary permitted pursuant to Section 10.1(b);




(b) Debt of a Restricted Subsidiary to the Company or a Wholly-Owned Restricted
Subsidiary;




(c) secured Debt of a Restricted Subsidiary secured by Liens permitted by
Section 10.4(h), and any Refinancing thereof, provided that (i) the principal amount of the
Debt resulting from such Refinancing shall not exceed the outstanding principal amount of
such Debt being Refinanced, together with any accrued interest and premium with respect
thereto and any and all costs and expenses related to such Refinancing, (ii) the maturity
date of the Debt resulting from such Refinancing shall not be earlier than the maturity date
of the Debt being Refinanced, (iii) the average life to maturity of the Debt resulting from
such Refinancing shall not be less than the average life to maturity of
the Debt being Refinanced and (iv) no Default or Event of Default exists at the time of such
Refinancing;


 


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(d) Debt of a Restricted Subsidiary in addition to that otherwise permitted by the
foregoing provisions of this Section 10.3, provided that on the date the Restricted
Subsidiary incurs or otherwise becomes liable with respect to any such additional Debt and
immediately after giving effect thereto and the concurrent retirement of any other Debt,




(i) no Default or Event of Default exists, and




(ii) Priority Debt does not exceed 12.5% of Consolidated Assets.



For the purposes of this Section 10.3, any Person becoming a Restricted Subsidiary after the
date hereof shall be deemed, at the time it becomes a Restricted Subsidiary, to have incurred all
of its then outstanding Debt, and any Person Refinancing any Debt shall be deemed to have incurred
such Debt at the time of such Refinancing. Also for purposes of this Section 10.3, the Debt of any
Restricted Subsidiary to any Wholly-Owned Restricted Subsidiary the shares of which are sold by the
Company pursuant to Section 10.8(c)(1)(B) shall be deemed to have been incurred at the time of such
sale.



Section 10.4. Liens. The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly create, incur, assume or permit to exist (upon the
happening of a contingency or otherwise) any Lien on or with respect to any property or asset
(including, without limitation, any document or instrument in respect of goods or accounts
receivable) of the Company or any such Restricted Subsidiary, whether now owned or held or
hereafter acquired, or any income or profits therefrom, or assign or otherwise convey any right to
receive income or profits, except:




(a) Liens for property taxes, assessments or other governmental charges which are not
yet due and payable;




(b) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics,
materialmen and other similar Liens, in each case, incurred in the ordinary course of
business for sums not yet due and payable;




(c) Liens (other than any Lien imposed by ERISA) incurred or deposits made in the
ordinary course of business (i) in connection with workers’ compensation, unemployment
insurance and other types of social security or retirement benefits, or (ii) to secure (or
to obtain letters of credit that secure) the performance of tenders, statutory obligations,
surety bonds, appeal bonds, bids, leases (other than Capital Leases), performance bonds,
purchase, construction or sales contracts and other similar obligations, in each case not
incurred or made in connection with the borrowing of money, the obtaining of advances or
credit or the payment of the deferred purchase price of property;


 


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(d) any attachment or judgment Lien, unless the judgment it secures shall not, within
60 days after the entry thereof, have been discharged or execution thereof stayed pending
appeal, or shall not have been discharged within 60 days after the expiration of any such
stay;




(e) leases or subleases granted to others, easements, rights-of-way, restrictions and
other similar charges or encumbrances, in each case incidental to, and not interfering with,
the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries,
provided that such Liens do not, in the aggregate, materially detract from the value of such
property or impair the use of such property;




(f) Liens on property or assets of the Company or any of its Restricted Subsidiaries
securing Debt owing to the Company or to a Wholly-Owned Restricted Subsidiary;




(g) Liens existing on the date of the Closing and securing the Debt of the Company and
its Restricted Subsidiaries shown as having “Security” pledged on Schedule 5.15;




(h) any Lien created to secure all or any part of the purchase price, or to secure Debt
incurred or assumed to pay all or any part of the purchase price or cost of construction, of
property (or any improvement thereon) acquired or constructed by the Company or a Restricted
Subsidiary after the date of the Closing, provided that




(i) any such Lien shall extend solely to the item or items of such property (or
improvement thereon) so acquired or constructed,




(ii) the principal amount of the Debt secured by any such Lien shall at no time
exceed an amount equal to the lesser of (A) the cost to the Company or such
Restricted Subsidiary of the property (or improvement thereon) so acquired or
constructed and (B) the Fair Market Value (as determined in good faith by the board
of directors of the General Partner) of such property (or improvement thereon) at
the time of such acquisition or construction, and




(iii) any such Lien shall be created contemporaneously with, or within 270 days
after, the acquisition or construction of such property;




(i) Liens on property or assets of any Restricted Subsidiary securing Indebtedness
owing to the Company or to a Wholly-Owned Restricted Subsidiary;




(j) any Lien existing on property of a Person immediately prior to its being
consolidated with or merged into the Company or a Restricted Subsidiary, or any Lien
existing on any property acquired by the Company or any Restricted Subsidiary at the time
such property is so acquired (whether or not the Debt secured thereby shall have been
assumed), provided that (i) no such Lien shall have been created or assumed in
contemplation of such consolidation or merger or such acquisition of property, and (ii) each
such Lien shall extend solely to the item or items of property so acquired;


 


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(k) Liens on personal property leased under leases (including Synthetic Leases) entered
into by the Company which are accounted for as operating leases in accordance with GAAP;




(l) any Lien renewing, extending or refunding any Lien permitted by paragraphs (g), (h)
or (j) of this Section 10.4, provided that (i) the principal amount of Debt secured by such
Lien immediately prior to such extension, renewal or refunding is not increased or the
maturity thereof reduced, (ii) such Lien is not extended to any other property, and
(iii) immediately after such extension, renewal or refunding no Default or Event of Default
would exist; and




(m) other Liens securing Debt not otherwise permitted by paragraphs (a) through (l),
provided that on the date any such Lien is created, incurred or assumed and immediately
after giving effect to the incurrence of any related Debt and the concurrent retirement of
any other Debt, Priority Debt does not exceed 12.5% of Consolidated Assets.



For the purposes of this Section 10.4, any Person becoming a Restricted Subsidiary after the date
of this Agreement shall be deemed to have incurred all of its then outstanding Liens at the time it
becomes a Restricted Subsidiary, and any Person Refinancing any Debt secured by any Lien shall be
deemed to have incurred such Lien at the time of such Refinancing.




Section 10.5. Restricted Payments.



(a) Limitation. The Company will not, and will not permit any of its Restricted Subsidiaries
to, at any time, declare or make, or incur any liability to declare or make, any Restricted Payment
provided that the Company may make one Restricted Payment in each fiscal quarter if:




(i) the amount of such Restricted Payment would not exceed the sum of




(A) Available Cash for the immediately preceding fiscal quarter, plus




(B) the lesser of (1) the amount of any Available Cash for the first 45 days of
such fiscal quarter, and (2) the excess of the aggregate amount of Debt that the
Company could have incurred under the Working Capital Facility pursuant to
Section 10.1(d) over the actual amount of loans outstanding thereunder at the end of
the immediately preceding fiscal quarter;




(ii) the ratio of Adjusted Consolidated Cash Flow for the period of eight consecutive
fiscal quarters ending on, or most recently ended prior to, such time to Adjusted
Consolidated Interest Expense for such period is greater than 2.0 to 1; and




(iii) no Default or Event of Default would exist;


 


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provided, further, that the Company may declare or order, and make, pay or set apart a Restricted
Payment out of the Restricted Payment Reserve if at such time (I) no Default or Event of Default
exists, and (II) the ratio of Adjusted Consolidated Cash Flow for the period of eight consecutive
fiscal quarters ending on, or most recently ended prior to, such time to Adjusted Consolidated
Interest Expense for such period is greater than 1.25 to 1. For purposes of this Section 10.5,
“Restricted Payment Reserve” means, as of the date of determination, the excess of the cumulative
amount, if any, of Restricted Payment Contributions generated each prior fiscal year commencing
with the fiscal year ended July 31, 1999 over the cumulative amount of all Restricted Payments
previously made from the Restricted Payment Reserve, and “Restricted Payment Contribution” means an
amount equal to the excess of (x) Consolidated Cash Flow for a fiscal year, over (y) the sum of
(I) consolidated cash interest expense of the Company and its Restricted Subsidiaries during such
fiscal year, plus (II) Maintenance Capital Expenditures incurred by the Company during such fiscal
year, plus (III) the cumulative amount of Restricted Payments made during such fiscal year.



(b) Time of Payment. The Company will not, nor will it permit any of its Subsidiaries to,
authorize a Restricted Payment that is not payable within 60 days of authorization.



Section 10.6. Restrictions on Dividends of Subsidiaries, Etc. The Company will not, and will
not permit any of its Restricted Subsidiaries to, enter into any agreement which would restrict any
Restricted Subsidiary’s ability or right to pay dividends to, or make advances to or Investments
in, the Company or, if such Restricted Subsidiary is not directly owned by the Company, the
“parent” Subsidiary of such Restricted Subsidiary.



Section 10.7. Mergers and Consolidations. The Company will not, and will not permit any
Restricted Subsidiary to, consolidate with or be a party to a merger with any other Person or
convey, transfer or lease substantially all of its assets in a single transaction or series of
transactions to any Person; provided, however, that:




(a) any Restricted Subsidiary may merge or consolidate with or into the Company or any
Wholly-Owned Restricted Subsidiary so long as in any merger or consolidation involving the
Company, the Company shall be the surviving or continuing corporation; and




(b) the Company may consolidate or merge with any other Person if (i) the surviving
entity is a solvent partnership or corporation organized and existing under the laws of the
United States of America or any State thereof, (ii) the surviving entity expressly assumes
in writing the Company’s obligations under the Notes and this Agreement, (iii) at the time
of such consolidation or merger, and after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing, and (iv) the surviving entity would be
permitted by the provisions of Section 10.1(c) hereof to incur at least $1.00 of additional
Debt owing to a Person other than a Restricted Subsidiary of the surviving entity.


 


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Section 10.8. Sale of Assets; Sale of Stock. 


(a) The Company will not, and will not permit
any Restricted Subsidiary to, sell, lease, transfer, abandon or otherwise dispose of assets (except
assets sold for fair market value (x) in the ordinary course of business or (y) in a Sale and
Leaseback Transaction within 90 days following the acquisition or construction thereof); provided
that the foregoing restrictions do not apply to:




(1) the sale, lease, transfer or other disposition of assets of a Restricted Subsidiary
to the Company or a Wholly-Owned Restricted Subsidiary;




(2) the sale of assets for cash or other property to a Person or Persons if all of the
following conditions are met:




(i) such assets (valued at net book value at the time of such sale) do not,
together with all other assets of the Company and its Restricted Subsidiaries
previously disposed of (valued at net book value at the time of such disposition)
(other than in the ordinary course of business or in a Sale and Leaseback
Transaction within 90 days following the acquisition or construction thereof) during
the same fiscal year exceed 10% of Consolidated Assets (which Consolidated Assets
shall be determined as of the last day of the fiscal year ending on, or most
recently ended prior to, such sale); and




(ii) in the opinion of the board of directors of the General Partner, the sale
is for Fair Market Value and is in the best interests of the Company.




provided, however, that for purposes of the foregoing calculation, there shall not be
included any assets the proceeds of which were or are applied within 180 days of the date of
sale of such assets to either (A) the acquisition of fixed assets useful and intended to be
used in the operation of the business of the Company and its Restricted Subsidiaries within
the limitations of Section 10.9 and having a Fair Market Value (as determined in good faith
by the board of directors of the General Partner) at least equal to that of the assets so
disposed of, or (B) the prepayment at any applicable prepayment premium, of Senior Funded
Debt selected by the Company of the Company or such Restricted Subsidiary that sold such
assets. It is understood and agreed by the Company that any such proceeds paid and applied
to the prepayment of the Notes as hereinabove provided shall be prepaid as and to the extent
provided in Section 8.2.



If any Restricted Subsidiary is designated as an Unrestricted Subsidiary pursuant to Section 7.4,
the total amount of property of such Restricted Subsidiary shall be deemed to be sold for purposes
of this Section 10.8 at such time.



 (b) The Company will not permit any Restricted Subsidiary to issue or sell any shares of stock
of any class (including as “stock” for the purposes of this Section 10.8, any warrants, rights or
options to purchase or otherwise acquire stock or other Securities exchangeable for or convertible
into stock) of such Restricted Subsidiary to any Person other than the Company or a Wholly-Owned
Restricted Subsidiary, except for the purpose of qualifying directors, or except in satisfaction of
the validly pre-existing preemptive rights of minority stockholders in connection
with the simultaneous issuance of stock to the Company and/or a Restricted Subsidiary whereby the
Company and/or such Restricted Subsidiary maintain their same proportionate interest in such
Restricted Subsidiary.


 


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(c) The Company will not sell, transfer or otherwise dispose of any shares of stock of any
Restricted Subsidiary (except to qualify directors) or any Debt of any Restricted Subsidiary, and
will not permit any Restricted Subsidiary to sell, transfer or otherwise dispose of (except to the
Company or a Wholly-Owned Restricted Subsidiary) any shares of stock or any Debt of any other
Restricted Subsidiary, unless:




(1) either




(A) in the case of such a sale, transfer or disposition of shares of stock or
Debt, simultaneously with such sale, transfer, or disposition, all shares of stock
and all Debt of such Restricted Subsidiary at the time owned by the Company and by
every other Restricted Subsidiary shall be sold, transferred or disposed of as an
entirety, and the Restricted Subsidiary being disposed of shall not have any
continuing investment in the Company or any other Restricted Subsidiary not being
simultaneously disposed of; or




(B) in the case of such a sale, transfer or disposition of shares of stock, at
the time of such sale, transfer or disposition and after giving effect thereto,
(i) no Default or Event of Default exists, and (ii) the minority interests in the
Restricted Subsidiary the shares of which are being disposed of, after giving effect
to such sale, transfer or disposition, would not exceed 20%;




(2) said shares of stock and Debt are sold, transferred or otherwise disposed of to a
Person, for a cash consideration and on terms reasonably deemed by the board of directors of
the General Partner to be adequate and satisfactory; and




(3) such sale or other disposition is permitted by Section 10.8(a).



Section 10.9. Nature of Business. Neither the Company nor any Restricted Subsidiary will
engage in any business if, as a result thereof, the Company and its Restricted Subsidiaries would
not be principally and predominantly engaged in the business of retail and wholesale propane sales
and purchases of inventory, operation of related propane distribution networks and storage
facilities and the acquisitions, operations and maintenance of such facilities.



Section 10.10. Transactions with Affiliates. The Company will not and will not permit any
Restricted Subsidiary to enter into directly or indirectly any transaction or group of related
transactions (including without limitation the purchase, lease, sale or exchange of properties of
any kind or the rendering of any service) with any Affiliate, except in the ordinary course and
pursuant to the reasonable requirements of the Company’s or such Restricted Subsidiary’s business
and upon fair and reasonable terms no less favorable to the Company or such Restricted Subsidiary
than would be obtainable in a comparable arm’s-length transaction with a Person not an Affiliate.


 


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Section 10.11. Certain Refinancings. Notwithstanding the provisions of Section 10.1 or 10.3,
the Company will not, and will not permit any Restricted Subsidiary to, incur any Debt for the
purpose of refinancing the Debt of Ferrellgas Partners, L.P., a Delaware limited partnership and
the limited partner of the Company, or any other entity owning an equity interest in the Company,
provided that the Company may incur Debt for the purpose of refinancing the Debt of Ferrellgas
Partners, L.P. so long as it is a limited partner in the Company and so long as such incurrence is:




(a) otherwise permitted by the provisions of Section 10.1; and




(b) after giving effect to the issuance of such Debt and the concurrent issuance or
retirement of any other Debt, no Default or Event of Default exists and either:




(i) either Fitch IBCA, Inc. shall have assigned a rating of at least BBB- to
the Notes, or Standard & Poor’s Ratings Group, a division of McGraw Hill, shall have
assigned a rating of at least BBB- to the Notes or Moody’s Investors Service, Inc.
shall have assigned a rating of at least Baa3 to the Notes; or




(ii) (A) the ratio of Consolidated Cash Flow for the period of four consecutive
fiscal quarters ending on, or most recently ended prior to, the date of issuance of
such Debt to Consolidated Interest Expense is not less than 2.75 to 1; and (B) the
ratio of Consolidated Debt to Consolidated Cash Flow for the period of four
consecutive fiscal quarters ending on, or most recently ended prior to, such date is
not greater than 4.50 to 1.



Section 11. Events of Default.




An “Event of Default” shall exist if any of the following conditions or events shall occur and
be continuing:




(a) the Company defaults in the payment of any principal or Make-Whole Amount, if any,
on any Note when the same becomes due and payable, whether at maturity or at a date fixed
for prepayment or by declaration or otherwise; or




(b) the Company defaults in the payment of any interest on any Note for more than five
Business Days after the same becomes due and payable; or




(c) the Company defaults in the performance of or compliance with any term contained in
Section 7.1(d) or Section 10; or




(d) the Company defaults in the performance of or compliance with any term contained
herein (other than those referred to in paragraphs (a), (b) and (c) of this Section 11) and
such default is not remedied within 30 days after the earlier of (i) a Responsible Officer
obtaining actual knowledge of such default and (ii) the Company receiving written notice of
such default from any holder of a Note (any such written
notice to be identified as a “notice of default” and to refer specifically to this paragraph
(d) of Section 11); or


 


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(e) any representation or warranty made in writing by or on behalf of the Company or by
any officer of the Company in this Agreement or in any writing furnished in connection with
the transactions contemplated hereby proves to have been false or incorrect in any material
respect on the date as of which made; or




(f) (i) the Company or any Restricted Subsidiary is in default (as principal or as
guarantor or other surety) in the payment of any principal of or premium or make-whole
amount or interest on any Indebtedness that is outstanding in an aggregate principal amount
of at least $10,000,000 beyond any period of grace provided with respect thereto, or
(ii) the Company or any Restricted Subsidiary is in default in the performance of or
compliance with any term of any evidence of any Indebtedness in an aggregate outstanding
principal amount of at least $10,000,000 or of any mortgage, indenture or other agreement
relating thereto or any other condition exists, and as a consequence of such default or
condition such Indebtedness has become, or has been declared (or one or more Persons are
entitled to declare such Indebtedness to be), due and payable before its stated maturity or
before its regularly scheduled dates of payment, or (iii) as a consequence of the occurrence
or continuation of any event or condition (other than the passage of time or the right of
the holder of Indebtedness to convert such Indebtedness into equity interests), (x) the
Company or any Restricted Subsidiary has become obligated to purchase or repay Indebtedness
before its regular maturity or before its regularly scheduled dates of payment in an
aggregate outstanding principal amount of at least $10,000,000, or (y) one or more Persons
have the right to require the Company or any Restricted Subsidiary so to purchase or repay
such Indebtedness; or




(g) the Company, the General Partner or any Restricted Subsidiary (i) is generally not
paying, or admits in writing its inability to pay, its debts as they become due, (ii) files,
or consents by answer or otherwise to the filing against it of, a petition for relief or
reorganization or arrangement or any other petition in bankruptcy, for liquidation or to
take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar
law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors,
(iv) consents to the appointment of a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial part of its property,
(v) is adjudicated as insolvent or to be liquidated, or (vi) takes action for the purpose of
any of the foregoing; or




(h) a court or governmental authority of competent jurisdiction enters an order
appointing, without consent by the Company, the General Partner or any Subsidiary of the
Company, a custodian, receiver, trustee or other officer with similar powers with respect to
it or with respect to any substantial part of its property, or constituting an order for
relief or approving a petition for relief or reorganization or any other petition in
bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of
any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company, the
General Partner or any Subsidiary of the Company, or any such petition shall be filed
against the Company, the General Partner or any Subsidiary of the Company and such petition
shall not be dismissed or appointment discharged within 120 days; or


 


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(i) a final judgment or judgments for the payment of money aggregating in excess of
$10,000,000 are rendered against one or more of the Company and its Restricted Subsidiaries
and which judgments are not, within 60 days after entry thereof, bonded, discharged or
stayed pending appeal, or are not discharged within 60 days after the expiration of such
stay; or




(j) If (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the
Code for any plan year or part thereof or a waiver of such standards or extension of any
amortization period is sought or granted under Section 412 of the Code, (ii) a notice of
intent to terminate any Plan shall have been or is reasonably expected to be filed with the
PBGC or the PBGC shall have instituted proceedings under Section 4042 of ERISA to terminate
or appoint a trustee to administer any Plan or the PBGC shall have notified the Company or
any ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii) the
aggregate “amount of unfunded benefit liabilities” (within the meaning of
Section 4001(a)(18) of ERISA) under all Plans, determined in accordance with Title IV of
ERISA, shall exceed $10,000,000, (iv) the Company or any ERISA Affiliate shall have incurred
or is reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to employee benefit plans, (v) the
Company or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or
any Restricted Subsidiary establishes or amends any employee welfare benefit plan that
provides post-employment welfare benefits in a manner that would increase the liability of
the Company or any Restricted Subsidiary thereunder; and any such event or events described
in clauses (i) through (vi) above, either individually or together with any other such event
or events, could reasonably be expected to have a Material Adverse Effect.



As used in Section 11(j), the terms “employee benefit plan” and “employee welfare benefit plan”
shall have the respective meanings assigned to such terms in Section 3 of ERISA.



Section 12. Remedies on Default, Etc.




Section 12.1. Acceleration.


 (a) If an Event of Default with respect to the Company or the
General Partner described in paragraph (g) or (h) of Section 11 (other than an Event of Default
described in clause (i) of paragraph (g) or described in clause (vi) of paragraph (g) by virtue of
the fact that such clause encompasses clause (i) of paragraph (g)) has occurred, all the Notes then
outstanding shall automatically become immediately due and payable.



(b) If any other Event of Default has occurred and is continuing, any holder or holders of
more than 33-1/3% in principal amount of the Notes at the time outstanding may at any time at its
or their option, by notice or notices to the Company, declare all the Notes then outstanding to be
immediately due and payable.


 


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(c) If any Event of Default described in paragraph (a) or (b) of Section 11 has occurred and
is continuing, any holder or holders of Notes at the time outstanding affected by such Event of
Default may at any time, at its or their option, by notice or notices to the Company, declare all
the Notes held by it or them to be immediately due and payable.



Upon any Note’s becoming due and payable under this Section 12.1, whether automatically or by
declaration, such Note will forthwith mature and the entire unpaid principal amount of such Note,
plus (i) all accrued and unpaid interest thereon and (ii) the Make-Whole Amount determined in
respect of such principal amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand, protest or further
notice, all of which are hereby waived. The Company acknowledges, and the parties hereto agree,
that each holder of a Note has the right to maintain its investment in the Notes free from
repayment by the Company (except as herein specifically provided for) and that the provision for
payment of a Make-Whole Amount by the Company in the event that the Notes are prepaid or are
accelerated as a result of an Event of Default, is intended to provide compensation for the
deprivation of such right under such circumstances.



Section 12.2. Other Remedies. If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have been declared immediately due
and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to
protect and enforce the rights of such holder by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement contained herein or
in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in
aid of the exercise of any power granted hereby or thereby or by law or otherwise.



Section 12.3. Rescission. At any time after any Notes have been declared due and payable
pursuant to clause (b) or (c) of Section 12.1, the holders of not less than 51% in principal amount
of the Notes then outstanding, by written notice to the Company, may rescind and annul any such
declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all
principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue principal and Make-Whole
Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of
the Notes, at the Default Rate, (b) all Events of Default and Defaults, other than non-payment of
amounts that have become due solely by reason of such declaration, have been cured or have been
waived pursuant to Section 17, and (c) no judgment or decree has been entered for the payment of
any monies due pursuant hereto or to the Notes. No rescission and annulment under this
Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any
right consequent thereon.



Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No course of dealing and no
delay on the part of any holder of any Note in exercising any right, power or remedy shall operate
as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies. No right,
power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be
exclusive of any other right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise. Without limiting the obligations of the
Company under Section 15, the Company will pay to the holder of each Note on demand
such further amount as shall be sufficient to cover all costs and expenses of such holder incurred
in any enforcement or collection under this Section 12, including, without limitation, reasonable
attorneys’ fees, expenses and disbursements.


 


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Section 13. Registration; Exchange; Substitution of Notes.




Section 13.1. Registration of Notes. The Company shall keep at its principal executive office
a register for the registration and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the name and address of each transferee
of one or more Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered shall be deemed and
treated as the owner and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give to any holder of a
Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy
of the names and addresses of all registered holders of Notes of each series.



Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note at the principal
executive office of the Company for registration of transfer or exchange (and in the case of a
surrender for registration of transfer, duly endorsed or accompanied by a written instrument of
transfer duly executed by the registered holder of such Note or its attorney duly authorized in
writing and accompanied by the address for notices of each transferee of such Note or part
thereof), the Company shall execute and deliver, at the Company’s expense (except as provided
below), one or more new Notes (as requested by the holder thereof) of the same series in exchange
therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered
Note. Each such new Note shall be payable to such Person as such holder may request and shall be
substantially in the form of the series of Notes being surrendered as set forth in Exhibit 1-A,
1-B, and 1-C, as the case may be. Each such new Note shall be dated and bear interest from the
date to which interest shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon. The Company may require payment of a
sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such
transfer of Notes. Notes shall not be transferred in denominations of less than $100,000, provided
that if necessary to enable the registration of transfer by a holder of its entire holding of
Notes, one Note may be in a denomination of less than $100,000. Any transferee, by its acceptance
of a Note registered in its name (or the name of its nominee), shall be deemed to have made the
representation set forth in Section 6.2.



Section 13.3. Replacement of Notes. Upon receipt by the Company of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from such Institutional
Investor of such ownership and such loss, theft, destruction or mutilation), and




(a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to
it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser
or another holder of a Note with a minimum net worth of at least $50,000,000, such Person’s
own unsecured agreement of indemnity shall be deemed to be satisfactory), or




(b) in the case of mutilation, upon surrender and cancellation thereof,


 


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the Company at its own expense shall execute and deliver, in lieu thereof, a new Note of the same
series as such lost, stolen, destroyed or mutilated Note, dated and bearing interest from the date
to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated
the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.



Section 14. Payments on Notes.




Section 14.1. Place of Payment. Subject to Section 14.2, payments of principal, Make-Whole
Amount, if any, and interest becoming due and payable on the Notes shall be made in Liberty,
Missouri at the principal office of the Company in such jurisdiction. The Company may at any time,
by notice to each holder of a Note, change the place of payment of the Notes so long as such place
of payment shall be either the principal office of the Company in such jurisdiction or the
principal office of a bank or trust company in such jurisdiction.



Section 14.2. Home Office Payment. So long as any Purchaser or such Purchaser’s nominee shall
be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note
to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole
Amount, if any, and interest by the method and at the address specified for such purpose for such
Purchaser on Schedule A, or by such other method or at such other address as such Purchaser shall
have from time to time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon, except that upon
written request of the Company made concurrently with or reasonably promptly after payment or
prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation,
reasonably promptly after any such request, to the Company at its principal executive office or at
the place of payment most recently designated by the Company pursuant to Section 14.1. Prior to any
sale or other disposition of any Note held by any Purchaser or such Purchaser’s nominee such
Purchaser will, at its election, either endorse thereon the amount of principal paid thereon and
the last date to which interest has been paid thereon or surrender such Note to the Company in
exchange for a new Note or Notes pursuant to Section 13.2. The Company will afford the benefits of
this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any
Note purchased by any Purchaser under this Agreement and that has made the same agreement relating
to such Note as such Purchaser has made in this Section 14.2.



Section 15. Expenses, Etc.




Section 15.1. Transaction Expenses. Whether or not the transactions contemplated hereby are
consummated, the Company will pay all costs and expenses (including reasonable attorneys’ fees of
one special counsel and, if reasonably required, local or other counsel) incurred by the Purchasers
or the holders of Notes in connection with such transactions and in connection with any amendments,
waivers or consents under or in respect of this Agreement or the Notes (whether or not such
amendment, waiver or consent becomes effective). The Company will pay all costs and expenses
(including reasonable attorneys’ fees of


 


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	a special counsel and, if reasonably required, local or other counsel) incurred by each Purchaser or holder of a Note in
connection with enforcing or defending (or determining whether or how to enforce or defend) any
rights under this Agreement or the Notes or in responding to any subpoena or other legal process or
informal investigative demand issued in connection with this Agreement or the Notes, or by reason
of being a holder of any Note, as well as the costs and expenses, including financial advisors’
fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or
in connection with any work-out or restructuring of the transactions contemplated hereby and by the
Notes. The Company will pay, and will save each Purchaser and each other holder of a Note harmless
from, all claims in respect of any fees, costs or expenses if any, of brokers and finders (other
than those retained by such Purchaser or holder).






Section 15.2. Survival. The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this
Agreement or the Notes, and the termination of this Agreement.



Section 16. Survival of Representations and Warranties; Entire Agreement.



All representations and warranties contained herein shall survive the execution and delivery
of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion
thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent
holder of a Note, regardless of any investigation made at any time by or on behalf of such
Purchaser or any other holder of a Note. All statements contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed
representations and warranties of the Company under this Agreement. Subject to the preceding
sentence, this Agreement and the Notes embody the entire agreement and understanding between each
Purchaser and the Company and supersede all prior agreements and understandings relating to the
subject matter hereof.



Section 17. Amendment and Waiver.




Section 17.1. Requirements. This Agreement and the Notes may be amended, and the observance
of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and
only with) the written consent of the Company and the Required Holders, except that (a) no
amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any
defined term (as it is used therein), will be effective as to any Purchaser unless consented to by
such Purchaser in writing, and (b) no such amendment or waiver may, without the written consent of
the holder of each Note at the time outstanding affected thereby, (i) subject to the provisions of
Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or
payment of principal of, or reduce the rate or change the time of payment or method of computation
of interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage of the principal
amount of the Notes the holders of which are required to consent to any such amendment or waiver,
or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.


 


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Section 17.2. Solicitation of Holders of Notes.



(a) Solicitation. The Company will provide each holder of the Notes (irrespective of the
amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the
date a decision is required, to enable such holder to make an informed and considered decision with
respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or
of the Notes. The Company will deliver executed or true and correct copies of each amendment,
waiver or consent effected pursuant to the provisions of this Section 17 to each holder of
outstanding Notes promptly following the date on which it is executed and delivered by, or receives
the consent or approval of, the requisite holders of Notes.



(b) Payment. The Company will not directly or indirectly pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any
security, to any holder of Notes as consideration for or as an inducement to the entering into by
any holder of Notes of any waiver or amendment of any of the terms and provisions hereof or of the
Notes unless such remuneration is concurrently paid, or security is concurrently granted, on the
same terms, ratably to each holder of Notes then outstanding even if such holder did not consent to
such waiver or amendment.



Section 17.3. Binding Effect, Etc. Any amendment or waiver consented to as provided in this
Section 17 applies equally to all holders of Notes and is binding upon them and upon each future
holder of any Note and upon the Company without regard to whether such Note has been marked to
indicate such amendment or waiver. No such amendment or waiver will extend to or affect any
obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or
impair any right consequent thereon. No course of dealing between the Company and the holder of
any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a
waiver of any rights of any holder of such Note. As used herein, the term “this Agreement” and
references thereto shall mean this Agreement as it may from time to time be amended or
supplemented.



Section 17.4. Notes Held by Company, Etc. Solely for the purpose of determining whether the
holders of the requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this Agreement or the
Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon
the direction of the holders of a specified percentage of the aggregate principal amount of Notes
then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall
be deemed not to be outstanding.


 


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Section 18. Notices.




All notices and communications provided for hereunder shall be in writing and sent (a) by
telefacsimile if the sender on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by registered or certified mail with return
receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with
charges prepaid). Any such notice must be sent:




(i) if to a Purchaser or such Purchaser’s nominee, to such Purchaser or such
Purchaser’s nominee at the address specified for such communications for such Purchaser
signature on Schedule A, or at such other address as such Purchaser or such Purchaser’s
nominee shall have specified to the Company in writing,




(ii) if to any other holder of any Note, to such holder at such address as such other
holder shall have specified to the Company in writing, or




(iii) if to the Company, to the Company at its address set forth at the beginning
hereof to the attention of the Assistant Treasurer, or at such other address as the Company
shall have specified to the holder of each Note in writing.



Notices under this Section 18 will be deemed given only when actually received.



Section 19. Reproduction of Documents.



This Agreement and all documents relating thereto, including, without limitation,
(a) consents, waivers and modifications that may hereafter be executed, (b) documents received by
each Purchaser at the Closing (except the Notes themselves), and (c) financial statements,
certificates and other information previously or hereafter furnished to each Purchaser, may be
reproduced by such Purchaser by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and such Purchaser may destroy any original document so
reproduced. The Company agrees and stipulates that, to the extent permitted by applicable law, any
such reproduction shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and whether or not such
reproduction was made by such Purchaser in the regular course of business) and any enlargement,
facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.
This Section 19 shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from introducing
evidence to demonstrate the inaccuracy of any such reproduction.



Section 20. Confidential Information.



For the purposes of this Section 20, “Confidential Information” means information delivered to
any Purchaser by or on behalf of the Company or any Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was
clearly marked or labeled or otherwise adequately identified in writing when received by such
Purchaser as being confidential information of the Company or such Subsidiary, provided that such
term does not include information that (a) was publicly known or otherwise known to such Purchaser
prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or
omission by such Purchaser or any Person acting on such Purchaser’s behalf, (c) otherwise becomes
known to such Purchaser other than through disclosure by the Company or any Subsidiary or
(d) constitutes financial statements delivered to such Purchaser under Section 7.1 that are
otherwise publicly available. Each Purchaser will maintain the confidentiality of such
Confidential Information in accordance with procedures adopted by such Purchaser in good faith to
protect confidential information of third parties
delivered to such Purchaser, provided that such Purchaser may deliver or disclose Confidential
Information to (i) such Purchaser’s directors, trustees, officers, employees, agents, attorneys and
affiliates (to the extent such disclosure reasonably relates to the administration of the



 


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investment
represented by such Purchaser’s Notes), (ii) such Purchaser’s financial advisors and
other professional advisors who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 20, (iii) any other holder of any Note,
(iv) any Institutional Investor to which such Purchaser sells or offers to sell such Note or any
part thereof or any participation therein (if such Person has agreed in writing prior to its
receipt of such Confidential Information to be bound by the provisions of this Section 20), (v) any
Person from which such Purchaser offers to purchase any security of the Company (if such Person has
agreed in writing prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 20), (vi) any federal or state regulatory authority having jurisdiction
over such Purchaser, (vii) the National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires access to information about
such Purchaser’s investment portfolio, or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance with any law, Rule, regulation
or order applicable to such Purchaser, (x) in response to any subpoena or other legal process,
(y) in connection with any litigation to which such Purchaser is a party or (z) if an Event of
Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such
delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of
the rights and remedies under such Purchaser’s Notes and this Agreement. Each holder of a Note, by
its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the
benefits of this Section 20 as though it were a party to this Agreement. On reasonable request by
the Company in connection with the delivery to any holder of a Note of information required to be
delivered to such holder under this Agreement or requested by such holder (other than a holder that
is a party to this Agreement or its nominee), such holder will enter into an agreement with the
Company embodying the provisions of this Section 20.



Section 21. Substitution of Purchaser.




Each Purchaser shall have the right to substitute any one of such Purchaser’s Affiliates as
the purchaser of the Notes that such Purchaser has agreed to purchase hereunder, by written notice
to the Company, which notice shall be signed by both such Purchaser and such Purchaser’s Affiliate,
shall contain such Affiliate’s agreement to be bound by this Agreement and shall contain a
confirmation by such Affiliate of the accuracy with respect to it of the representations set forth
in Section 6. Upon receipt of such notice, wherever the word “Purchaser” is used in this Agreement
(other than in this Section 21), such word shall be deemed to refer to such Affiliate in lieu of
such Purchaser. In the event that such Affiliate is so substituted as a purchaser hereunder and
such Affiliate thereafter transfers to such Purchaser all of the Notes then held by such Affiliate,
upon receipt by the Company of notice of such transfer, wherever the word “Purchaser” is used in
this Agreement (other than in this Section 21), such word shall no longer be deemed to refer to
such Affiliate, but shall refer to such Purchaser, and such Purchaser shall have all the rights of
an original holder of the Notes under this Agreement.


 


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Section 22. Miscellaneous.




Section 22.1. Successors and Assigns. All covenants and other agreements contained in this
Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent holder of a Note)
whether so expressed or not.



Section 22.2. Payments Due on Non-Business Days. Anything in this Agreement or the Notes to
the contrary notwithstanding, any payment of principal of or Make-Whole Amount or interest on any
Note that is due on a date other than a Business Day shall be made on the next succeeding Business
Day without including the additional days elapsed in the computation of the interest payable on
such next succeeding Business Day.



Section 22.3. Severability. Any provision of this Agreement that is 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 (to the full extent permitted by
law) not invalidate or render unenforceable such provision in any other jurisdiction.



Section 22.4. Construction. Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained herein, so that
compliance with any one covenant shall not (absent such an express contrary provision) be deemed to
excuse compliance with any other covenant. Where any provision herein refers to action to be taken
by any Person, or which such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person.



Section 22.5. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be an original but all of which together shall constitute one instrument. Each
counterpart may consist of a number of copies hereof, each signed by less than all, but together
signed by all, of the parties hereto.



Section 22.6. Governing Law. This Agreement shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that would require the application of
the laws of a jurisdiction other than such State.



*   *   *   *   *




 


-39-









 







The execution hereof by the Purchasers shall constitute a contract among the Company and the
Purchasers for the uses and purposes hereinabove set forth. This Agreement may be executed in any
number of counterparts, each executed counterpart constituting an original but all together only
one agreement.



Very truly yours,




Ferrellgas, L.P.








	 	 	 	 	 	 	 
	 

	By: 	Ferrellgas, Inc., its general partner	 	 
	 
	 

	 	By: 	 	 	 	 
	 
	 	 	 

	 	 
	 

	 	 	Its 	 

	 	 
	 

	 	 	 	 

	 	 





 


-40-









 





Accepted as of the first date written above:



[Variation]




	 	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 







 


-41-











 




	 	 	 	 	 	 	 
	 	 	 	 	Principal Amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	The Northwestern Mutual Life Insurance Company

	 	Series A
	 	—

	720 East Wisconsin Avenue
	 	Series B
	 	$	19,000,000	 
	Milwaukee, Wisconsin 53202
	 	Series C 
	 	$	9,000,000	 
	Attention: Securities Department
	 	 	 	 	 	 
	Telecopier Number: (414) 299-7124
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds (identifying each payment as Ferrellgas, L.P. and as to interest rate,
security, description, maturity date, PPN, principal, premium or interest) to:




Bankers Trust Company (ABA #0210-01033)

16 Wall Street

Insurance Unit, 4th Floor

New York, New York 10005




for credit to: The Northwestern Mutual Life Insurance Company

Account Number 00-000-027



Notices




All notices and communications to be addressed as first provided above, except notices with respect
to payments and written confirmation of each such payment to be addressed, Attention: Investment
Operations, Fax Number: (414) 299-5714.



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 39-0509570



Schedule A 

(to Note Purchase Agreement)



 


 









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal Amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	The
Northwestern Mutual Life Insurance Company for its Group Annuity Separate Account
	 	Series A
	 	—

	720 East Wisconsin Avenue

	 	Series B
	 	$	1,000,000	 
	Milwaukee, Wisconsin 53202

	 	Series C
	 	$	1,000,000	 
	Attention: Securities Department

	 	 	 	 	 	 
	Telecopier Number: (414) 299-7124
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds (identifying each payment as Ferrellgas, L.P. and as to interest rate,
security, description, maturity date, PPN, principal, premium or interest) to:




Bankers Trust Company

ABA #0210-01033

16 Wall Street

Insurance Unit, 4th Floor

New York, New York 10005




for credit to: The Northwestern Mutual Life Insurance Company, for its Group Annuity
Separate Account

Account Number 00-000-027



Notices




All notices and communications to be addressed as first provided above, except notices with respect
to payments and written confirmation of each such payment to be addressed, Attention: Investment
Operations, Fax Number: (414) 299-5714.



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 39-0509570


 


A-2









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Provident Life and Accident Insurance Company

	 	Series A
	 	—

	c/o Provident Investment Management, LLC

	 	Series B
	 	—

	One Fountain Square
	 	Series C
	 	$	10,000,000	 
	Chattanooga, Tennessee 37402
	 	 	 	 	 	 
	Attention: Private Placements
	 	 	 	 	 	 
	Telefacsimile: (423) 755-1172
	 	 	 	 	 	 
	Confirmation: (423) 755-3351
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds to:




CUDD & CO.

c/o The Chase Manhattan Bank, N.A.

New York, New York

ABA #021-000-021

SSG Private Income Processing

A/C #900-9-000200

For credit to: Provident Life and Accident Insurance Company

Custodial Account Number G06704



	 	 	 	 	 
	 

	 	Please reference:
	 	Issuer: Ferrellgas, L.P.
	 

	 	 	 	PPN: 31529# AC 7
	 

	 	 	 	Coupon:
	 

	 	 	 	Maturity:
	 

	 	 	 	Principal=$                    
	 

	 	 	 	Interest=$                    






Notices




All notices and communications, including notices with respect to payments and written confirmation
of each such payment, to be addressed as first provided above.



Name of Nominee in which Notes are to be issued: CUDD & CO.



Taxpayer I.D. Number for CUDD & Co.: 13-6022143


 


A-3









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal Amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Unum Life Insurance Company of
 America

	 	Series C
	 	$	10,000,000	 
	2211 Congress Street
	 	 	 	 	 	 
	Portland, Maine 04122-0590
	 	 	 	 	 	 
	Attention: Bond Investment Division
	 	 	 	 	 	 
	Telefacsimile Number: (207) 770-4000
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds to:




CUDD & CO.

c/o The Chase Manhattan Bank, N.A.

New York, New York

ABA #021-000-021

SSG Private Income Processing

A/C #900-9-000200

Custodial Account Number G08287




	 	 	 	 	 
	 

	 	Please reference:
	 	Issuer: Ferrellgas, L.P.
	 

	 	 	 	PPN: 31529# AC 7
	 

	 	 	 	Coupon:
	 

	 	 	 	Maturity:
	 

	 	 	 	Principal=$                    
	 

	 	 	 	Interest=$                    






Notices




All notices and communications, including notices with respect to payments and written confirmation
of each such payment, to be addressed as first provided above.



Name of Nominee in which Notes are to be issued: CUDD & CO.



Taxpayer I.D. Number for CUDD & Co.: 13-6022143


 


A-4









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal Amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Nationwide Life Insurance Company

	 	Series B
	 	$	12,000,000	 
	One Nationwide Plaza (1-33-07)
	 	 	 	 	 	 
	Columbus, Ohio 43215-2220
	 	 	 	 	 	 
	Attention: Corporate Fixed-Income Securities
	 	 	 	 	 	 






Payments




All notices of payment on or in respect of the Notes and written confirmation of each such payment
to:




The Bank of New York

ABA #021-000-018

BNF: IOC566

F/A/O Nationwide Life Insurance Company

Attention: P&I Department

PPN 31529# AB 9

Security Description:                                         



Notices




All notices of payment on or in respect of the Notes and written confirmation of each such payment
to:




Nationwide Life Insurance Company

c/o The Bank of New York

P. O. Box 19266

Newark, New Jersey 07195

Attention: P&I Department




With a copy to:




Nationwide Life Insurance Company

One Nationwide Plaza (1-32-05)

Columbus, Ohio 43215-2220

Attention: Investment Accounting



All notices and communications other than those in respect to payments to be addressed as first
provided above.



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 31-4156830


 


A-5









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal Amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Nationwide Mutual Insurance Company

	 	Series B
	 	$	5,000,000	 
	One Nationwide Plaza (1-33-07)
	 	 	 	 	 	 
	Columbus, Ohio 43215-2220
	 	 	 	 	 	 
	Attention: Corporate Fixed-Income Securities
	 	 	 	 	 	 






Payments




All notices of payment on or in respect of the Notes and written confirmation of each such payment
to:




The Bank of New York

ABA #021-000-018

BNF: IOC566

F/A/O Nationwide Mutual Insurance Company

Attention: P&I Department

PPN 31529# AB 9

Security Description:                                         



Notices




All notices of payment on or in respect of the Notes and written confirmation of each such payment
to:




Nationwide Mutual Insurance Company

c/o The Bank of New York

P. O. Box 19266

Newark, New Jersey 07195

Attention: P&I Department




With a copy to:




Nationwide Mutual Insurance Company

One Nationwide Plaza (1-32-05)

Columbus, Ohio 43215-2220

Attention: Investment Accounting



All notices and communications other than those in respect to payments to be addressed as first
provided above.



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 31-4177100


 


A-6









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal Amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Nationwide Mutual Fire Insurance 
 Company

	 	Series B
	 	$	3,000,000	 
	One Nationwide Plaza (1-33-07)
	 	 	 	 	 	 
	Columbus, Ohio 43215-2220
	 	 	 	 	 	 
	Attention: Corporate Fixed-Income Securities
	 	 	 	 	 	 






Payments




All notices of payment on or in respect of the Notes and written confirmation of each such payment
to:




The Bank of New York

ABA #021-000-018

BNF: IOC566

F/A/O Nationwide Mutual Fire Insurance Company

Attention: P&I Department

PPN 31529# AB 9

Security Description:                                         



Notices




All notices of payment on or in respect of the Notes and written confirmation of each such payment
to:




Nationwide Mutual Fire Insurance Company

c/o The Bank of New York

P. O. Box 19266

Newark, New Jersey 07195

Attention: P&I Department




With a copy to:




Nationwide Mutual Fire Insurance Company

One Nationwide Plaza (1-32-05)

Columbus, Ohio 43215-2220

Attention: Investment Accounting



All notices and communications other than those in respect to payments to be addressed as first
provided above.



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 31-4177110


 


A-7









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Jefferson-Pilot Life Insurance Company

	 	Series A
	 	—

	P. O. Box 21008

	 	Series B
	 	—

	Greensboro, North Carolina 27420

	 	Series C
	 	$	10,000,000	 
	Attention: Securities Administration — 3630
	 	 	 	 	 	 
	Telefacsimile: (336) 691-3025
	 	 	 	 	 	 
	Overnight Mail Address:
	 	 	 	 	 	 
	100 North Greene Street
	 	 	 	 	 	 
	Greensboro, North Carolina 27401
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds (identifying each payment as Ferrellgas, L.P. and as to interest rate,
security, description, maturity date, PPN 31529# AC 7, principal, interest or premium) to:




Jefferson-Pilot Life Insurance Company

c/o The Bank of New York

ABA #021 000 018 BNF: IOC566

Attention: P&I Department



Notices




All notices of payment on or in respect of the Notes and written confirmation of each such payment,
to be addressed to:




Jefferson-Pilot Life Insurance Company

c/o The Bank of New York

P. O. Box 19266

Newark, New Jersey 07195

Attention: P&I Department



with duplicate notice to Jefferson-Pilot Life Insurance Company at the address first provided
above.



All notices and communications other than those in respect to payments to be addressed as first
provided above.



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 56-0359860


 


A-8









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Alexander Hamilton Life Insurance Company of America

	 	Series A
	 	—

	P. O. Box 21008

	 	Series B
	 	$	10,000,000	 
	Greensboro, North Carolina 27420
	 	Series C
	 	—

	Attention: Securities Administration — 3630
	 	 	 	 	 	 
	Telefacsimile: (336) 691-3025
	 	 	 	 	 	 
	Overnight Mail Address:
	 	 	 	 	 	 
	100 North Greene Street
	 	 	 	 	 	 
	Greensboro, North Carolina 27401
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds (identifying each payment as Ferrellgas, L.P. and as to interest rate,
security, description, maturity date, PPN 31529# AB 9, principal, interest or premium) to:




Alexander Hamilton Life Insurance Company of America

c/o The Bank of New York

ABA #021 000 018 BNF: IOC566

Attention: P&I Department



Notices




All notices of payment on or in respect of the Notes and written confirmation of each such payment,
to be addressed to:




Alexander Hamilton Life Insurance Company of America

c/o The Bank of New York

P. O. Box 19266

Newark, New Jersey 07195

Attention: P&I Department



with duplicate notice to Alexander Hamilton Life Insurance Company of America at the address first
provided above.



All notices and communications other than those in respect to payments to be addressed as first
provided above.



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 56-1311063


 


A-9









 





	 	 	 	 	 
	 	 	 	 	Principal amount
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 
	Teachers Insurance and Annuity Association of America

	 	Series A
	 	—
	730 Third Avenue

	 	Series B
	 	—
	New York, New York 10017-3263
	 	Series C
	 	$15,000,000






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds (identifying each payment as Ferrellgas, L.P. and as to interest rate,
security description, maturity date, PPN 31529# AC 7, principal, premium or interest) to:




The Chase Manhattan Bank

ABA #021000021

New York, New York

Account of: Teachers Insurance and Annuity Association of America

Account Number 900-9-000200




For further credit to: Account Number G07040

On order of: Ferrellgas, L.P., PPN 31529# AC 7



Notices




All notices of payment on or in respect of the Notes and written confirmation of each such payment
to:




Teachers Insurance and Annuity Association of America

730 Third Avenue

New York, New York 10017-3206

Attention: Securities Accounting Division

Telephone: (212) 916-6004

Telefacsimile: (212) 916-6955



All other notices and communications to be addressed to:




Teachers Insurance and Annuity Association of America

730 Third Avenue, 4th Floor

New York, New York 10017-3206

Attention: Securities Division, Archibald Team, Felicissimo Falcon

Telephone: (212) 916-6210 or (212) 490-9000 (General Number)

Telefacsimile: (212) 916-6582 (Team Fax Number)



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 13-1624203


 


A-10









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Massachusetts Mutual Life Insurance Company

	 	Series A
	 	$	3,000,000	 
	1295 State Street

	 	Series B
	 	$	3,000,000	 
	Springfield, Massachusetts 01111

	 	Series C
	 	$	3,000,000	 
	Attention: Securities Investment Division
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds (identifying each payment as Ferrellgas, L.P. and as to interest rate,
security, description, maturity date, PPN, principal, premium or interest) to:




Citibank, N.A. (ABA #021000089)

111 Wall Street

New York, New York 10043




for credit to: MassMutual Long Term Pool Account Number 4067-3488

Re: Description of security, principal and interest split



With telephone advice of payment to the Securities Custody and Collection Department of
Massachusetts Mutual Life Insurance Company at (413) 744-3561.



Notices




All notices and communications to be addressed as first provided above, except notices with respect
to payments, to be addressed Attention: Securities Custody and Collection Department, F 381.



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 04-1590850


 


A-11









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Massachusetts Mutual Life Insurance Company

	 	Series A
	 	$	800,000	 
	1295 State Street

	 	Series B
	 	$	800,000	 
	Springfield, Massachusetts 01111
	 	Series C
	 	$	800,000	 
	Attention: Securities Investment Division
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds (identifying each payment as Ferrellgas, L.P. and as to interest rate,
security, description, maturity date, PPN, principal, premium or interest) to:




Chase Manhattan Bank, N.A. (ABA #021000021)

4 Chase MetroTech Center

New York, New York 10081




for credit to: MassMutual Pension Management Account Number 910-2594018

Re: Description of security, principal and interest split



With telephone advice of payment to the Securities Custody and Collection Department of
Massachusetts Mutual Life Insurance Company at (413) 744-3561.



Notices




All notices and communications to be addressed as first provided above, except notices with respect
to payments, to be addressed Attention: Securities Custody and Collection Department, F 381.



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 04-1590850


 


A-12









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal Amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	C.M. Life Insurance Company

	 	Series A
	 	$	700,000	 
	c/o Massachusetts Mutual Life Insurance Company

	 	Series B
	 	$	700,000	 
	1295 State Street

	 	Series C
	 	$	700,000	 
	Springfield, Massachusetts 01111
	 	 	 	 	 	 
	Attention: Securities Investment Division
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds (identifying each payment as Ferrellgas, L.P., and as to interest rate,
security, description, maturity date, PPN, principal, premium or interest) to:




Citibank, N.A.

111 Wall Street

New York, New York 10043

ABA #021000089




for credit to: Segment 43 — Universal Life Account Number 4068-6561

Re: Description of security, principal and interest split



with telephone advice of payment to the Securities Custody and Collection Department of
Massachusetts Mutual Life Insurance Company at (413) 744-3561.



Notices




All notices and communications to be addressed as first provided above, except notices with respect
to payments, to be addressed Attention: Securities Custody and Collection Department, F 381.



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 06-1041383


 


A-13









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal Amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Massachusetts Mutual Life Insurance Company

	 	Series A
	 	$	500,000	 
	1295 State Street

	 	Series B
	 	$	500,000	 
	Springfield, Massachusetts 01111
	 	Series C
	 	$	500,000	 
	Attention: Securities Investment Division
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds (identifying each payment as Ferrellgas, L.P. and as to interest rate,
security, description, maturity date, PPN, principal, premium or interest) to:




Chase Manhattan Bank, N.A. (ABA #021000021)

4 Chase MetroTech Center

New York, New York 10081




for credit to: IFM Non-Traditional Account Number 910-2509073

Re: Description of security, principal and interest split



With telephone advice of payment to the Securities Custody and Collection Department of
Massachusetts Mutual Life Insurance Company at (413) 744-3561.



Notices




All notices and communications to be addressed as first provided above, except notices with respect
to payments, to be addressed Attention: Securities Custody and Collection Department, F 381.



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 04-1590850


 


A-14









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	The Guardian Life Insurance Company of America

	 	Series A
	 	—

	7 Hanover Square

	 	Series B
	 	$	15,000,000	 
	New York, New York 10004-2616
	 	Series C
	 	—

	Attention: Tom Donohue, Investment Department 20-D
	 	 	 	 	 	 
	Fax Number: (212) 919-2656/2658
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds (identifying each payment as Ferrellgas, L.P. and as to interest rate,
security, description, maturity date, PPN 31529# AB 9, principal, premium or interest) to:




The Chase Manhattan Bank

FED ABA #021000021

CHASE/NYC/CTR/BNF

A/C 900-9-000200

Reference A/C #G05978, Guardian Life

And the name and CUSIP for which payment is being made



Notices




All notices of payments, on or in respect of the Notes and written confirmation of each such
payment to:




The Guardian Life Insurance Company of America

7 Hanover Square

New York, New York 10004-2616

Attention: Investment Accounting Dept. 17-B

Fax Number: (212) 598-7011



All notices and communications other than those in respect to payments to be addressed as first
provided above.



Name of Nominee in which Notes are to be issued: CUDD & CO.



Taxpayer I.D. Number: 13-6022143


 


A-15









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Sun Life Assurance Company of Canada

	 	Series A
	 	—

	One Sun Life Executive Park

	 	Series B
	 	$	4,000,000	 
	Wellesley Hills, Massachusetts 02481

	 	Series C
	 	—

	Attention: Investment Department/Private Placements,
	 	 	 	 	 	 
	SC #1303
	 	 	 	 	 	 
	Telecopier Number: (781) 446-2392
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds (identifying each payment as Ferrellgas, L.P. and as to interest rate,
security, description, maturity date, PPN 31529# AB 9, principal, premium or interest) to:




Citibank, N.A.

Attention: Gary Quitch

ABA #021-000-089

Re: Ferrellgas, L.P.

Account No.: 36112805

For Further Credit: 199 541



Notices




All notices of mandatory payment, on or in respect of the Notes and written confirmation of each
such payment and any audit confirmation to:




Sun Life Assurance Company of Canada

One Sun Life Executive Park, SC 1395

Wellesley Hills, Massachusetts 02481

Attention: Manager, Securities Accounting



All other notices and communications, including notices of optional prepayments, to be addressed as
first provided above.



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 38-1082080


 


A-16









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Sun Life Assurance Company of Canada

	 	Series A
	 	—

	One Sun Life Executive Park

	 	Series B
	 	$	3,000,000	 
	Wellesley Hills, Massachusetts 02481

	 	Series C
	 	—

	Attention: Investment Department/Private Placements,
	 	 	 	 	 	 
	SC #1303
	 	 	 	 	 	 
	Telecopier Number: (781) 446-2392
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds (identifying each payment as Ferrellgas, L.P. and as to interest rate,
security, description, maturity date, PPN 31529# AB 9, principal, premium or interest) to:




Citibank, N.A.

Attention: Gary Quitch

ABA #021-000-089

Re: Ferrellgas, L.P.

Account No.: 36112805

For Further Credit: 199 541



Notices




All notices of mandatory payment, on or in respect of the Notes and written confirmation of each
such payment and any audit confirmation to:




Sun Life Assurance Company of Canada

One Sun Life Executive Park, SC 1395

Wellesley Hills, Massachusetts 02481

Attention: Manager, Securities Accounting



All other notices and communications, including notices of optional prepayments, to be addressed as
first provided above.



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 38-1082080


 


A-17









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Sun Life Assurance Company of Canada

	 	Series A
	 	—

	One Sun Life Executive Park

	 	Series B
	 	$	1,000,000	 
	Wellesley Hills, Massachusetts 02481

	 	Series C
	 	—

	Attention: Investment Department/Private Placements,
	 	 	 	 	 	 
	SC #1303
	 	 	 	 	 	 
	Telecopier Number: (781) 446-2392
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds (identifying each payment as Ferrellgas, L.P. and as to interest rate,
security, description, maturity date, PPN 31529# AB 9, principal, premium or interest) to:




Citibank, N.A.

Attention: Gary Quitch

ABA #021-000-089

Re: Ferrellgas, L.P.

Account No.: 36112805

For Further Credit: 199 541



Notices




All notices of mandatory payment, on or in respect of the Notes and written confirmation of each
such payment and any audit confirmation to:




Sun Life Assurance Company of Canada

One Sun Life Executive Park, SC 1395

Wellesley Hills, Massachusetts 02481

Attention: Manager, Securities Accounting



All other notices and communications, including notices of optional prepayments, to be addressed as
first provided above.



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 38-1082080


 


A-18









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Sun Life Assurance Company of Canada

	 	Series A
	 	—

	One Sun Life Executive Park

	 	Series B
	 	$	750,000	 
	Wellesley Hills, Massachusetts 02481

	 	Series C
	 	—

	Attention: Investment Department/Private Placements,
	 	 	 	 	 	 
	SC #1303
	 	 	 	 	 	 
	Telecopier Number: (781) 446-2392
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds (identifying each payment as Ferrellgas, L.P. and as to interest rate,
security, description, maturity date, PPN 31529# AB 9, principal, premium or interest) to:




Citibank, N.A.

Attention: Gary Quitch

ABA #021-000-089

Re: Ferrellgas, L.P.

Account No.: 36112805

For Further Credit: 199 541



Notices




All notices of mandatory payment, on or in respect of the Notes and written confirmation of each
such payment and any audit confirmation to:




Sun Life Assurance Company of Canada

One Sun Life Executive Park, SC 1395

Wellesley Hills, Massachusetts 02481

Attention: Manager, Securities Accounting



All other notices and communications, including notices of optional prepayments, to be addressed as
first provided above.



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 38-1082080


 


A-19









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Sun Life Assurance Company of Canada

	 	Series A
	 	—

	One Sun Life Executive Park

	 	Series B
	 	$	500,000	 
	Wellesley Hills, Massachusetts 02481

	 	Series C
	 	—

	Attention: Investment Department/Private Placements,
	 	 	 	 	 	 
	SC #1303
	 	 	 	 	 	 
	Telecopier Number: (781) 446-2392
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds (identifying each payment as Ferrellgas, L.P. and as to interest rate,
security, description, maturity date, PPN 31529# AB 9, principal, premium or interest) to:




Citibank, N.A.

Attention: Gary Quitch

ABA #021-000-089

Re: Ferrellgas, L.P.

Account No.: 36112805

For Further Credit: 199 541



Notices




All notices of mandatory payment, on or in respect of the Notes and written confirmation of each
such payment and any audit confirmation to:




Sun Life Assurance Company of Canada

One Sun Life Executive Park, SC 1395

Wellesley Hills, Massachusetts 02481

Attention: Manager, Securities Accounting



All other notices and communications, including notices of optional prepayments, to be addressed as
first provided above.



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 38-1082080


 


A-20









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Sun Life Assurance Company of Canada

	 	Series A
	 	—

	One Sun Life Executive Park

	 	Series B
	 	$	300,000	 
	Wellesley Hills, Massachusetts 02481

	 	Series C
	 	—

	Attention: Investment Department/Private Placements,
	 	 	 	 	 	 
	SC #1303
	 	 	 	 	 	 
	Telecopier Number: (781) 446-2392
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds (identifying each payment as Ferrellgas, L.P. and as to interest rate,
security, description, maturity date, PPN 31529# AB 9, principal, premium or interest) to:




Bank of New York

P&I Department

ABA #021-000-018

Account #: IOC 566

Re: Ferrellgas, L.P.

For Further Credit: IOC 566



Notices




All notices of mandatory payment, on or in respect of the Notes and written confirmation of each
such payment and any audit confirmation to:




Sun Life Assurance Company of Canada

One Sun Life Executive Park, SC 1395

Wellesley Hills, Massachusetts 02481

Attention: Manager, Securities Accounting



All other notices and communications, including notices of optional prepayments, to be addressed as
first provided above.



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 38-1082080


 


A-21









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Sun Life Assurance Company of Canada

	 	Series A
	 	—

	One Sun Life Executive Park

	 	Series B
	 	$	200,000	 
	Wellesley Hills, Massachusetts 02481-5615

	 	Series C
	 	—

	Attention: Investment Department/Private Placements,
	 	 	 	 	 	 
	SC #1303
	 	 	 	 	 	 
	Telecopier Number: (781) 446-2392
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds (identifying each payment as Ferrellgas, L.P. and as to interest rate,
security, description, maturity date, PPN 31529# AB 9, principal, premium or interest) to:




Bank of New York

P&I Department

ABA #021-000-018

Account #: IOC 566

Re: Ferrellgas, L.P.

For Further Credit: IOC 566



Notices




All notices of mandatory payment, on or in respect of the Notes and written confirmation of each
such payment and any audit confirmation to:




Sun Life Assurance Company of Canada

One Sun Life Executive Park, SC 1395

Wellesley Hills, Massachusetts 02481

Attention: Manager, Securities Accounting



All other notices and communications, including notices of optional prepayments, to be addressed as
first provided above.



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 38-1082080


 


A-22









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Sun Life Insurance and Annuity Company of New York

	 	Series A
	 	—

	One Sun Life Executive Park

	 	Series B
	 	$	250,000	 
	One Sun Life Executive Park

	 	Series C
	 	—

	Wellesley Hills, Massachusetts 02481-5615
	 	 	 	 	 	 
	Attention: Investment Department/Private Placements,
	 	 	 	 	 	 
	SC #1303
	 	 	 	 	 	 
	Telecopier Number: (617) 446-2392
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds (identifying each payment as Ferrellgas, L.P. and as to interest rate,
security, description, maturity date, PPN 31529# AB 9, principal, premium or interest”) to:




The Chase Manhattan Bank

Private Placement Processing

ABA No. 021-000-021

Account No. 900-9-000192

Re: Ferrellgas, L.P.

Chase Account#: G 51642



Notices




All notices of mandatory payment, on or in respect of the Notes and written confirmation of each
such payment to:




Sun Life Assurance Company of Canada

One Sun Life Executive Park, SC 1395

Wellesley Hills, Massachusetts 02481

Attention: Manager, Securities Accounting



All notices and communications other than those in respect to mandatory payments to be addressed as
first provided above.



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 04-2845273


 


A-23









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Principal Life Insurance Company

	 	Series A
	 	—

	c/o Principal Capital Management, LLC

	 	Series B
	 	$	3,000,000	 
	801 Grand Avenue

	 	Series C
	 	—

	Des Moines, Iowa 50392-0800
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be made by 12:00 Noon (New York City time) by wire
transfer of immediately available funds to: (identifying each payment as Ferrellgas, L.P. and as to
interest rate, security, description, maturity date, PPN, principal, premium or interest) to:




ABA #073000228

Norwest Bank Iowa, N.A.

7th and Walnut Streets

Des Moines, Iowa 50309

For credit to Principal Life Insurance Company

Account No. 0000014752

OBI PFGSE (S) B0062740() Ferrellgas L.P.




With sufficient information (including interest rate, maturity date, interest amount,
principal amount and premium amount, if applicable) to identify the source and application
of such funds.



All notices with respect to payments to:




Principal Capital Management, LLC

801 Grand Avenue

Des Moines, Iowa 50392-0960

Attention: Investment Accounting — Securities

Telefacsimile: (515) 248-2643

Confirmation: (515) 247-0689



All other notices and communications to:




Principal Capital Management, LLC

801 Grand Avenue

Des Moines, Iowa 50392-0800

Attention: Investment — Securities

Telefacsimile: (515) 248-2490

Confirmation: (515) 248-3495



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 42-0127290


 


A-24









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Principal Life Insurance Company

	 	Series A
	 	—

	c/o Principal Capital Management, LLC

	 	Series B
	 	$	3,000,000	 
	801 Grand Avenue

	 	Series C
	 	—

	Des Moines, Iowa 50392-0800
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be made by 12:00 Noon (New York City time) by wire
transfer of immediately available funds to: (identifying each payment as Ferrellgas, L.P. and as to
interest rate, security, description, maturity date, PPN, principal, premium or interest) to:




ABA #073000228

Norwest Bank Iowa, N.A.

7th and Walnut Streets

Des Moines, Iowa 50309

For credit to Principal Life Insurance Company

Account No. 0000014752

OBI PFGSE (S) B0062740() Ferrellgas L.P.




With sufficient information (including interest rate, maturity date, interest amount,
principal amount and premium amount, if applicable) to identify the source and application
of such funds.



All notices with respect to payments to:




Principal Capital Management, LLC

801 Grand Avenue

Des Moines, Iowa 50392-0960

Attention: Investment Accounting — Securities

Telefacsimile: (515) 248-2643

Confirmation: (515) 247-0689



All other notices and communications to:




Principal Capital Management, LLC

801 Grand Avenue

Des Moines, Iowa 50392-0800

Attention: Investment — Securities

Telefacsimile: (515) 248-2490

Confirmation: (515) 248-3495



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 42-0127290


 


A-25









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Principal Life Insurance Company

	 	Series A
	 	—

	c/o Principal Capital Management, LLC

	 	Series B
	 	$	2,000,000	 
	801 Grand Avenue

	 	Series C
	 	—

	Des Moines, Iowa 50392-0800
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be made by 12:00 Noon (New York City time) by wire
transfer of immediately available funds to: (identifying each payment as Ferrellgas, L.P. and as to
interest rate, security, description, maturity date, PPN, principal, premium or interest) to:




ABA #073000228

Norwest Bank Iowa, N.A.

7th and Walnut Streets

Des Moines, Iowa 50309

For credit to Principal Life Insurance Company

Account No. 0000014752

OBI PFGSE (S) B0062740() Ferrellgas L.P.




With sufficient information (including interest rate, maturity date, interest amount,
principal amount and premium amount, if applicable) to identify the source and application
of such funds.



All notices with respect to payments to:




Principal Capital Management, LLC

801 Grand Avenue

Des Moines, Iowa 50392-0960

Attention: Investment Accounting — Securities

Telefacsimile: (515) 248-2643

Confirmation: (515) 247-0689



All other notices and communications to:




Principal Capital Management, LLC

801 Grand Avenue

Des Moines, Iowa 50392-0800

Attention: Investment — Securities

Telefacsimile: (515) 248-2490

Confirmation: (515) 248-3495



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 42-0127290


 


A-26









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Principal Life Insurance Company

	 	Series A
	 	—

	c/o Principal Capital Management, LLC

	 	Series B
	 	$	2,000,000	 
	801 Grand Avenue

	 	Series C
	 	—

	Des Moines, Iowa 50392-0800
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be made by 12:00 Noon (New York City time) by wire
transfer of immediately available funds to: (identifying each payment as Ferrellgas, L.P. and as to
interest rate, security, description, maturity date, PPN, principal, premium or interest) to:




ABA #073000228

Norwest Bank Iowa, N.A.

7th and Walnut Streets

Des Moines, Iowa 50309

For credit to Principal Life Insurance Company

Account No. 0000014752

OBI PFGSE (S) B0062740() Ferrellgas L.P.




With sufficient information (including interest rate, maturity date, interest amount,
principal amount and premium amount, if applicable) to identify the source and application
of such funds.



All notices with respect to payments to:




Principal Capital Management, LLC

801 Grand Avenue

Des Moines, Iowa 50392-0960

Attention: Investment Accounting — Securities

Telefacsimile: (515) 248-2643

Confirmation: (515) 247-0689



All other notices and communications to:




Principal Capital Management, LLC

801 Grand Avenue

Des Moines, Iowa 50392-0800

Attention: Investment — Securities

Telefacsimile: (515) 248-2490

Confirmation: (515) 248-3495



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 42-0127290


 


A-27









 





	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 
	The Canada Life Assurance Company

	 	Series A
	 	$5,000,000
	330 University Avenue, SP-11

	 	Series B
	 	—
	Toronto, Ontario, Canada M5G 1R8

	 	Series C	 	 
	Attention: Paul English, Associate Treasurer,
	 	 	 	 
	U.S. Private Placements
	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds to:




For Regular Principal and Interest:

Chase Manhattan Bank

ABA #021-000-021

Account No. 900-9-000200

Trust Account No. G52708, The Canada Life Assurance Company

Attention: Bond Interest




Reference: PPN number, name of issuer, rate, maturity date, type of security, whether
principal and/or interest and due date




For Call or Maturity:

Chase Manhattan Bank

ABA #021-000-021

Account No. 900-9-000192

Trust Account No. G52708, The Canada Life Assurance Company

Attention: Doll Balbadar




Reference: PPN number, name of issuer, rate, maturity date, whether principal and/or
interest and effective date of call or maturity.


 


A-28









 





Notices




All notices and communications (including financial statements) to be addressed as first provided
above, except notices with respect to payments and written confirmation of each such payment, to be
addressed:




Chase Manhattan Bank

North America Insurance

3 Chase MetroTech Centre — 6th Floor

Brooklyn, New York 11245

Attention: Ms. Doll Balbadar



with a copy to:




The Canada Life Assurance Company

330 University Avenue, SP-12

Toronto, Ontario, Canada M5G 1R8

Attention: Supervisor, Securities Accounting



Name of Nominee in which Notes are to be issued: J. Romeo & Co.



Taxpayer I.D. Number: 38-0397420


 


A-29









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Canada Life Insurance Company of America

	 	Series A	 	 	 	 
	c/o The Canada Life Assurance Company

	 	Series B	 	 	 	 
	Corporate Treasury, SP-11
	 	Series C	 	$	4,000,000	 
	330 University Avenue
	 	 	 	 	 	 
	Toronto, Ontario, Canada M5G 1R8
	 	 	 	 	 	 
	Attention: Brian Lynch, Associate Treasurer, U.S. Private Placements	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds to:




For Regular Principal and Interest:

Chase Manhattan Bank

ABA #021-000-021

Account #900-9-000168

Trust Account No. G52709, Canada Life Insurance Company of America

Attention: Bond Interest




Reference: PPN number, name of issuer, rate, maturity date, type of security, whether
principal and/or interest and due date




For Call or Maturity:

Chase Manhattan Bank

ABA #021-000-021

Account No. 900-9-000192

Trust Account No. G52708, The Canada Life Assurance Company

Attention: Doll Balbadar




Reference: PPN number, name of issuer, rate, maturity date, whether principal and/or
interest and effective date of call or maturity.



 


A-30









 





Notices




All notices and communications (including financial statements) to be addressed as first provided
above, except notices with respect to payments and written confirmation of each such payment, to be
addressed:




Chase Manhattan Bank

North America Insurance

3 Chase MetroTech Centre — 6th Floor

Brooklyn, New York 11245

Attention: Ms. Doll Balbadar



with a copy to:




The Canada Life Assurance Company

330 University Avenue, SP-12

Toronto, Ontario, Canada M5G 1R8

Attention: Supervisor, Securities Accounting



Name of Nominee in which Notes are to be issued: J. Romeo & Co.



Taxpayer I.D. Number: 38-2816473


 


A-31









 





	 	 	 	 	 	 
	 	 	 	 	 	Principal amount 
	 	 	 	Series	 	of Notes to be
	Name of Purchasers	 	 	of Notes	 	Purchased
	 
	 	 	 	 	 
	Canada Life Insurance Company of New York
	 	 	Series A	 	 
	c/o The Canada Life Assurance Company

	 	 	Series B	 	 
	Corporate Treasury, SP-11
	 	 	Series C	 	$1,000,000
	330 University Avenue
	 	 	 	 	 
	Toronto, Ontario, Canada M5G 1R8
	 	 	 	 	 
	Attention: Brian Lynch, Associate Treasurer, U.S. Private Placements	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds to:




Chase Manhattan Bank

ABA #021-000-021

A/C #900-9-000200

Trust Account No. G52685, Canada Life of New York

Attention: Bond Interest




Reference: PPN number, name of issuer, rate, maturity date, type of security, whether
principal and/or interest and due date



Notices



All notices and communications (including financial statements) to be addressed as first provided
above, except notice with respect to payment, and written confirmation of each such payment, to be
addressed:




Chase Manhattan Bank

North America Insurance

3 Chase MetroTech Centre — 6th Floor

Brooklyn, New York 11245

Attention: Ms. Doll Balbadar



with a copy to:




The Canada Life Assurance Company

330 University Avenue, SP-12

Toronto, Ontario, Canada M5G 1R8

Attention: Supervisor, Securities Accounting



Name of Nominee in which Notes are to be issued: J. Romeo & Co.



Taxpayer I.D. Number: 13-2690792


 


A-32









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Lutheran Brotherhood

	 	Series A
	 	$	7,000,000	 
	625 Fourth Avenue South

	 	Series B
	 	—

	Minneapolis, Minnesota 55415

	 	Series C
	 	—

	Attention: Investment Division
	 	 	 	 	 	 






Payments




All payments of principal, interest and premium on the account of the Notes shall be made by bank
wire transfer (in immediately available funds) to:




Norwest Bank Minnesota, N.A.

ABA #091000019

For Credit to Trust Clearing Account #0000840245

Attention: Sarah Corcoran

For credit to: Lutheran Brotherhood

Account Number 12651300




All payments must include the following information:




A/C Lutheran Brotherhood

Account No.: 12561300

Security Description

PPN Number 31529# AA1

Reference Purpose of Payment

Interest and/or Principal Breakdown



Notices




All notices and communications to be addressed as first provided above, except notices with respect
to payments and written confirmation of each such payment, to be addressed:




Lutheran Brotherhood

625 Fourth Avenue South, 10th Floor

Minneapolis, Minnesota 55415

Attention: Investment Accounting/Trading Administrator



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 41-0385700


 


A-33









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Phoenix Home Life Mutual Insurance Company

	 	Series A
	 	—

	One American Row

	 	Series B
	 	—

	Hartford, Connecticut 06115
	 	Series C
	 	$	5,000,000	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds (identifying each payment as Ferrellgas, L.P. and as to interest rate,
security, description, maturity date, PPN, principal, premium or interest) to:




ABA #021 000 021

Chase Manhattan Bank, N.A.

New York, New York




Account Number: 900 9000 200

Account Name: Income Processing

Reference: Phoenix Home Life Account #G05143

OBI=[Name of Issuer, PPN=                    , RATE=_____ 
%, DUE=                     (include principal and
interest breakdown and premium, if any)



Notices




All notices and communications, including notices with respect to payments and written confirmation
of each such payment, to be addressed:




Phoenix Home Life Mutual Insurance Company

c/o Phoenix Investment Partners, LTD.

56 Prospect Street

P. O. Box 150480

Hartford, Connecticut 06115-0480

Attention: Private Placements Division

Telecopier Number: (860) 403-5451



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 06-0493340


 


A-34









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Berkshire Life Insurance Company

	 	Series A
	 	—

	700 South Street

	 	Series B
	 	—

	Pittsfield, Massachusetts 01201

	 	Series C
	 	$	3,000,000	 
	Attention: Securities Department
	 	 	 	 	 	 
	Telefacsimile: (413) 442-9763
	 	 	 	 	 	 
	Telephone: (413) 499-4321
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds for credit to:




Berkshire Life Insurance Company

Account Number 002-4-020877

The Chase Manhattan Bank, N.A.

ABA #021000021




With sufficient information (including Ferrellgas L.P., PPN 31529 AC 7, interest rate,
maturity and whether payment is of principal, premium or interest) to identify the source
and application of funds.



Notices




All notices and communications, including notices with respect to payments and written confirmation
of each such payment, to be addressed as first provided above.



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 04-1083480


 


A-35









 





	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 
	Woodmen Accident and Life Company

	 	Series A
	 	$2,000,000
	P.O. Box 82288

	 	Series B
	 	—
	Lincoln, Nebraska 68501

	 	Series C
	 	—
	Attention: Securities Division
	 	 	 	 
	Telecopy Number: (402) 437-4392
	 	 	 	 






Payments




All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds (identifying each payment as Ferrellgas, L.P. and as to interest rate,
security, description, maturity date, PPN 31529# AA 1, principal, premium or interest) to:




U.S. Bank

13 and M Streets

Lincoln, Nebraska 68508

ABA #104-000-029




for credit to: Woodmen Accident and Life Company’s General Fund

Account Number 1-494-0092-9092



Notices




All notices and communications, including notices with respect to payments and written confirmation
of each such payment, to be addressed as first provided above; provided, however, all notices and
communications delivered by overnight courier shall be addressed as follows:




Woodmen Accident and Life Company

1526 K Street

Lincoln, Nebraska 68508

Attention: Securities Division



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 47-0339220


 


A-36









 





	 	 	 	 	 	 	 
	 	 	 	 	Principal amount 
	 	 	Series	 	of Notes to be
	Name of Purchasers	 	of Notes	 	Purchased
	 
	 	 	 	 	 	 
	Clarica Life Insurance Company-U.S.

	 	Series A
	 	$	2,000,000	 
	c/o Clarica U.S. Inc.

	 	Series B
	 	—

	13890 Bishops Drive, Suite 300

	 	Series C
	 	—

	Brookfield, Wisconsin 53005
	 	 	 	 	 	 
	Attention: Connie Keller
	 	 	 	 	 	 
	Phone: (262) 641-4022
	 	 	 	 	 	 
	Facsimile: (262) 641-4055
	 	 	 	 	 	 






Payments




All payments on or in respect of the Notes to be made by wire or intrabank transfer of immediately
available funds to:




Norwest Bank Minnesota, N.A.

ABA #091000019

BNF A/C: 0000840245 (must be 10 digits in length)

BNF: Trust Wire Clearing (must be on line 2)

OBI= FFC:I.C. 13326600 Ferrellgas, L.P. PPN: 31529# AA 1

P=                     I=                    

End Balance=                                        



Notices




All notices with respect to payments and written confirmation of each such payment, to be addressed
to:




Clarica Life Insurance Company-U.S.

c/o Clarica U.S. Inc.

13890 Bishops Drive, Suite 300

Brookfield, Wisconsin 53005

Attention: Tamie Greenwood

Phone: (262) 641-4027

Facsimile: (262) 641-4055



 


A-37












 





All other communications to be addressed to:




Clarica Life Insurance Company-U.S.

c/o Clarica U.S. Inc.

13890 Bishops Drive, Suite 300

Brookfield, Wisconsin 53005

Phone: (262) 641-4027

Facsimile: (262) 641-4055



Name of Nominee in which Notes are to be issued: None




Taxpayer I.D. Number: 45-0208990





 


A-38












 




Defined Terms




General Provisions




Where the character or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation is required to be
made for the purposes of this Agreement, the same shall be done in accordance with GAAP, to the
extent applicable, except where such principles are inconsistent with the express requirements of
this Agreement.



Definitions




As used herein, the following terms have the respective meanings set forth below or set forth
in the Section hereof following such term:



“Affiliate” means, at any time, and with respect to any Person, (a) any other Person that at
such time directly or indirectly through one or more intermediaries Controls, or is Controlled by,
or is under common Control with, such first Person, (b) any Person beneficially owning or holding,
directly or indirectly, 10% or more of any class of voting or equity interests of such first Person
or any subsidiary of such first Person or any corporation of which such first Person and the
subsidiaries of such first Person beneficially own or hold, in the aggregate, directly or
indirectly, 10% or more of any class of voting or equity interests, and (c) any officer or director
of such first Person. As used in this definition, “Control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or otherwise. Unless the
context otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate
(other than a Restricted Subsidiary) of the Company.



“Adjusted Consolidated Cash Flow” means for any period the sum of (i) Consolidated Cash Flow
during such period, plus (ii) to the extent deducted from Consolidated Net Income for purposes of
determining Consolidated Cash Flow for such period, Synthetic Lease Rent Payments during such
period.



“Adjusted Consolidated Debt” means, as of any date of determination, the sum of
(i) Consolidated Debt, plus (ii) Consolidated Synthetic Lease Obligations on such date.



“Adjusted Consolidated Interest Expense” means for any period the sum of (i) Consolidated
Interest Expense for such period, plus (ii) Synthetic Lease Interest Expense for such period.



“Asset Acquisition” means (a) an Investment by the Company or any Restricted Subsidiary in any
other Person pursuant to which such Person shall become a Restricted Subsidiary or shall be merged
with or into the Company or any Restricted Subsidiary, (b) the acquisition by the Company or any
Restricted Subsidiary of the assets of any Person (other than a Restricted Subsidiary) which
constitutes all or substantially all of the assets of such Person or
(c) the acquisition by the Company or any Restricted Subsidiary of any division or line of
business of any Person (other than a Restricted Subsidiary).



Schedule B

(to Purchase Agreement)



 


 









 






“Asset Sale” means any Transfer except:




(a) any




(i) Transfer from a Restricted Subsidiary to the Company or a Wholly-Owned
Restricted Subsidiary;




(ii) Transfer from the Company to a Wholly-Owned Restricted Subsidiary; and




(iii) Transfer from the Company to a Restricted Subsidiary (other than a
Wholly-Owned Restricted Subsidiary) or from a Restricted Subsidiary to another
Restricted Subsidiary (other than a Wholly-Owned Restricted Subsidiary), which in
either case is for Fair Market Value,




so long as immediately before and immediately after the consummation of any such Transfer
and after giving effect thereto, no Default or Event of Default exists; and




(b) any Transfer made in the ordinary course of business and involving only property
that is inventory held for sale.




“Available Cash” means with respect to any period and without duplication:




(a) the sum of:




(i) all cash receipts of the Company during such period from all sources
(including, without limitation, distributions of cash received by the Company from a
Subsidiary and borrowings made under the Working Capital Facility); and




(ii) any reduction with respect to such period in a cash reserve previously
established pursuant to clause (b) (ii) below (either by reversal or utilization)
from the level of such reserve at the end of the prior period;




(b) less the sum of:




(i) all cash disbursements of the Company during such period including, without
limitation, disbursements for operating expenses, taxes, if any, debt service
(including, without limitation, the payment of principal, premium and interest),
redemption of Partnership Interests, capital expenditures, contributions, if any, to
a Subsidiary and cash distributions to the General Partner and the Limited Partners
(but only to the extent that such cash distributions to the General
Partner and the Limited Partners exceed Available Cash for the immediately preceding
fiscal quarter); and


 


B-2









 






(ii) any cash reserves established with respect to such period, and any
increase with respect to such period in a cash reserve previously established
pursuant to this clause (b) (ii) from the level of such reserve at the end of the
prior period, in such amounts as the General Partner determines in its reasonable
discretion to be necessary or appropriate (A) to provide for the proper conduct of
the business of the Company (including, without limitation, reserves for future
capital expenditures or capital contributions to a Subsidiary) or (B) to provide
funds for distributions to the General Partner and the Limited Partners in respect
of any one or more of the next four fiscal quarters or (C) because the distribution
of such amounts would be prohibited by applicable law or by any loan agreement,
security agreement, mortgage, debt instrument or other agreement or obligation to
which the Company is a party or by which it is bound or its assets are subject.



Notwithstanding the foregoing (x) disbursements (including, without limitation, contributions to a
Subsidiary or disbursements on behalf of a Subsidiary) made or reserves established, increased or
reduced after the end of any fiscal quarter but on or before the date on which the Company makes
its distribution of Available Cash in respect of such fiscal quarter pursuant to Section 10.5(a)
shall be deemed to have been made, established, increased or reduced, for purposes of determining
Available Cash, with respect to such fiscal quarter if the General Partner so determines and (y)
“Available Cash” with respect to any period shall not include any cash receipts or reductions in
reserves or take into account any disbursements made or reserves established after the Liquidation
Date.



For purposes of the definition of “Available Cash” the following terms have the following
meanings:




“Additional Limited Partner” means a Person admitted to the Company as a Limited
Partner pursuant to Section 11.6 of the Partnership Agreement and who is shown as such on
the books and records of the Company,




“Departing Partner” means a former General Partner, from and after the effective date
of any withdrawal or removal of such former General Partner pursuant to Section 12.1 or
Section 12.2 of the Partnership Agreement.




“Initial Limited Partner means Ferrellgas Partners, L.P., a Delaware limited
partnership.




“Limited Partner” means the Initial Limited Partner, the General Partner pursuant to
Section 4.2 of the Partnership Agreement, each Substituted Limited Partner, if any, each
Additional Limited Partner and any Departing Partner upon the change of its status from
General Partner to Limited Partner pursuant to Section 12.3 of the Partnership Agreement,
but excluding any such Person from and after the time it withdraws from the Company.


 


B-3









 






“Liquidation Date” means (a) in the case of an event giving rise to the dissolution of
the Company of the type described in clauses (a) and (b) of the first sentence of Section
13.2 of the Partnership Agreement, the date on which the applicable time period during which
the General Partner and the Limited Partners have the right to elect to reconstitute the
Company and continue its business has expired without such an election being made, and (b)
in the case of any other event giving rise to the dissolution of the Company, the date on
which such event occurs.




“Partnership Agreement” means the Agreement of Limited Partnership of Ferrellgas, L.P.
dated as of July 5, 1995 among the General Partner and the Initial Limited Partner.




“Partnership Interest” means the interest of the General Partner or a Limited Partner
in the Company.




“Substituted Limited Partner” means a Person who is admitted as a Limited Partner to
the Company pursuant to Section 11.3 of the Partnership Agreement in place of and with all
the rights of a Limited Partner and who is shown as a Limited Partner on the books and
records of the Company.



“Business Day” means (a) for the purposes of Section 8.6 only, any day other than a Saturday,
a Sunday or a day on which commercial banks in New York City are required or authorized to be
closed, and (b) for the purposes of any other provision of this Agreement, any day other than a
Saturday, a Sunday or a day on which commercial banks in San Francisco, California, Chicago,
Illinois or Kansas City, Missouri are required or authorized to be closed.



“Capital Lease” means, at any time, a lease with respect to which the lessee is required
concurrently to recognize the acquisition of an asset and the incurrence of a liability in
accordance with GAAP.



“Capital Lease Obligation” means, with respect to any Person and a Capital Lease, the amount
of the obligation of such Person as the lessee under such Capital Lease which would, in accordance
with GAAP, appear as a liability on a balance sheet of such Person.




“Closing” is defined in Section 3.



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




“Company” means Ferrellgas, L.P., Delaware limited partnership.




“Confidential Information” is defined in Section 20.



“Consolidated Assets” means, at any time, the total assets of the Company and its Restricted
Subsidiaries which would be shown as assets on a consolidated balance sheet of the Company and its
Restricted Subsidiaries as of such time prepared in accordance with GAAP,
after eliminating all amounts properly attributable to minority interests, if any, in the
stock and surplus of Restricted Subsidiaries.


 


B-4









 





“Consolidated Cash Flow” means, in respect of any period, the excess, if any, of (a) the sum
of, without duplication, the amounts for such period, taken as a single accounting period, of
(i) Consolidated Net Income for such period, plus (ii) to the extent deducted in the determination
of Consolidated Net Income for such period, after excluding amounts attributable to minority
interests in Subsidiaries and without duplication, (A) Consolidated Non-Cash Charges,
(B) Consolidated Interest Expense and (C) Consolidated Income Tax Expense, over (b) any non-cash
items increasing Consolidated Net Income for such period to the extent that such items constitute
reversals of Consolidated Non-Cash Charges for a previous period and which were included in the
computation of Consolidated Cash Flow for such previous period pursuant to the provisions of the
preceding clause (a), provided that in calculating Consolidated Cash Flow for any such period,
(1) Consolidated Cash Flow shall be calculated after giving effect on a pro forma basis for such
period, in all respects in accordance with GAAP, to any Asset Acquisitions (including, without
limitation any Asset Acquisition by the Company or any Restricted Subsidiary giving rise to the
need to determine Consolidated Cash Flow as a result of the Company or one of its Restricted
Subsidiaries (including any Person that becomes a Restricted Subsidiary as result of any such Asset
Acquisition) incurring, assuming or otherwise becoming liable for any Debt) occurring during the
period commencing on the first day of such period to and including the date of such determination,
as if such Asset Acquisition occurred on the first day of such period and (2) Consolidated Cash
Flow attributable to any assets or property subject to an Asset Sale by the Company or any
Restricted Subsidiary on or prior to the date of such determination shall be deemed to be zero for
such period.



“Consolidated Debt” means, as of any date of determination, the total of all Debt of the
Company and its Restricted Subsidiaries outstanding on such date, after eliminating all offsetting
debits and credits between the Company and its Restricted Subsidiaries and all other items required
to be eliminated in the course of the preparation of consolidated financial statements of the
Company and its Restricted Subsidiaries in accordance with GAAP.



“Consolidated Income Tax Expense” means, with respect to any period, all provisions for
Federal, state, local and foreign income taxes of the Company and its Restricted Subsidiaries for
such period as determined on a consolidated basis in accordance with GAAP.



“Consolidated Interest Expense” means, with respect to any period, the sum (without
duplication) of the following (in each case, eliminating all offsetting debits and credits between
the Company and its Restricted Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the Company and its Restricted
Subsidiaries in accordance with GAAP): (a) all interest in respect of Debt of the Company and its
Restricted Subsidiaries whether earned or accrued (including non-cash interest payments and imputed
interest on Capital Lease Obligations) deducted in determining Consolidated Net Income for such
period, and (b) all debt discount and expense amortized or required to be amortized in the
determination of Consolidated Net Income for such period, provided that for purposes of making any
computation pursuant to Section 10.1(c)(iii) and Section 10.11 (including any calculation of
Consolidated Cash Flow relating thereto), Consolidated Interest
Expense shall be determined on a pro forma basis giving effect to the incurrence of Debt (and
the application of proceeds thereof) which is the subject of such computation as if such Debt had
been incurred (and the proceeds thereof applied) on the first day of such period.


 


B-5









 





“Consolidated Net Income” means, with reference to any period, the net income (or loss) of the
Company and its Restricted Subsidiaries for such period (taken as a cumulative whole), as
determined in accordance with GAAP, after eliminating all offsetting debits and credits between the
Company and its Restricted Subsidiaries and all other items required to be eliminated in the course
of the preparation of consolidated financial statements of the Company and its Restricted
Subsidiaries in accordance with GAAP, provided that there shall be excluded:




(a) the income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary or is merged into or consolidated with the Company or a Subsidiary, and the
income (or loss) of any Person, substantially all of the assets of which have been acquired
in any manner, realized by such other Person prior to the date of acquisition,




(b) the income (or loss) of any Person (other than a Subsidiary) in which the Company
or any Subsidiary has an ownership interest, except to the extent that any such income has
been actually received by the Company or such Subsidiary in the form of cash dividends or
similar cash distributions,




(c) the undistributed earnings of any Restricted Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Restricted Subsidiary
is not at the time permitted by the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to such
Restricted Subsidiary,




(d) any aggregate net gain or loss during such period arising from the sale,
conversion, exchange or other disposition of capital assets (such term to include, without
limitation, (i) all non-current assets and, without duplication, and (ii) the following,
whether or not current: all fixed assets, whether tangible or intangible, all inventory
sold in conjunction with the disposition of fixed assets, and all Securities), and




(e) any net income or gain or loss during such period from (i) any change in accounting
principles in accordance with GAAP, (ii) any prior period adjustments resulting from any
change in accounting principles in accordance with GAAP, or (iii) any extraordinary items.



“Consolidated Non-Cash Charges” means, with respect to any period, the aggregate depreciation
and amortization (other than amortization of debt discount), and any non-cash employee compensation
expenses for such period, in each case, reducing Consolidated Net Income of the Company and its
Restricted Subsidiaries for such period as determined on a consolidated basis in accordance with
GAAP.


 


B-6









 





“Consolidated Synthetic Lease Obligations” means, as of any date of determination, the total
amount of the liability of the Company and its Restricted Subsidiaries in respect of
Synthetic Leases that would be required to be capitalized on the balance sheet of the Company
and its Restricted Subsidiaries at such time, if such Synthetic Leases were required to be
classified and accounted for as Capital Leases on the balance sheet of the Company and its
Restricted Subsidiaries in accordance with GAAP.



“Credit Agreement” means the Second Amended and Restated Credit Agreement dated July 2, 1998,
between the Company and the banks named therein, as the same may be amended and supplemented from
time to time.




“Debt” means, with respect to any Person, without duplication,




(a) its liabilities for borrowed money;




(b) its liabilities for the deferred purchase price of property acquired by such Person
(excluding accounts payable arising in the ordinary course of business but including,
without limitation, all liabilities created or arising under any conditional sale or other
title retention agreement with respect to any such property);




(c) its Capital Lease Obligations;




(d) all liabilities for borrowed money secured by any Lien with respect to any property
owned by such Person (whether or not it has assumed or otherwise become liable for such
liabilities); and




(e) any Guaranty of such Person with respect to liabilities of a type described in any
of clauses (a) through (d) hereof.



Debt of any Person shall include all obligations of such Person of the character described in
clauses (a) through (e) to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished under GAAP.



“Default” means an event or condition the occurrence or existence of which would, with the
lapse of time or the giving of notice or both, become an Event of Default.



“Default Rate” means with respect to any Note that rate of interest that is the greater of
(i) 2% per annum above the rate of interest stated in clause (a) of the first paragraph of such
Note or (ii) 2% over the rate of interest publicly announced by Bank of America, N.A. in Chicago,
Illinois as its “base” or “prime” rate.



“Distribution” means, in respect of any corporation, partnership, association or other
business entity:




(a) dividends or other distributions or payments on capital stock or other equity
interest of such corporation, association or other business entity (except distributions in
such stock or other equity interest); and




(b) the redemption, retirement, purchase or acquisition of such stock or other equity
interests or of warrants, rights or other options to purchase such stock or other equity
interests (except when solely in exchange for such stock or other equity interests) unless
made, contemporaneously, from the net proceeds of a sale of such stock or other equity
interests.


 


B-7









 





“Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.



“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time in effect.



“ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated as
a single employer together with the Company under Section 414 of the Code.




“Event of Default” is defined in Section 11.




“Exchange Act” means the Securities Exchange Act of 1934, as amended.



“Fair Market Value” means, at any time and with respect to any property, the sale value of
such property that would be realized in an arm’s-length sale at such time between an informed and
willing buyer and an informed and willing seller (neither being under a compulsion to buy or sell).



“GAAP” means generally accepted accounting principles as in effect from time to time in the
United States of America.




“General Partner” means Ferrellgas, Inc., a Delaware corporation.




“Governmental Authority” means




(a) the government of




(i) the United States of America or any State or other political subdivision
thereof, or




(ii) any jurisdiction in which the Company or any Subsidiary conducts all or
any part of its business, or which asserts jurisdiction over any properties of the
Company or any Subsidiary, or




(b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.


 


B-8









 





“Guaranty” means, with respect to any Person, any obligation (except the endorsement in the
ordinary course of business of negotiable instruments for deposit or collection) of such Person
guaranteeing or in effect guaranteeing any Indebtedness, dividend or other obligation of any other
Person in any manner, whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:




(a) to purchase such Indebtedness or obligation or any property constituting security
therefor;




(b) to advance or supply funds (i) for the purchase or payment of such Indebtedness or
obligation, or (ii) to maintain any working capital or other balance sheet condition or any
income statement condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such Indebtedness or obligation;




(c) to lease properties or to purchase properties or services primarily for the purpose
of assuring the owner of such Indebtedness or obligation of the ability of any other Person
to make payment of the Indebtedness or obligation; or




(d) otherwise to assure the owner of such Indebtedness or obligation against loss in
respect thereof.



In any computation of the Indebtedness or other liabilities of the obligor under any Guaranty, the
Indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be
direct obligations of such obligor.



“Hazardous Material” means any and all pollutants, toxic or hazardous wastes or any other
substances that might pose a hazard to health or safety, the removal of which may be required or
the generation, manufacture, refining, production, processing, treatment, storage, handling,
transportation, transfer, use, disposal, release, discharge, spillage, seepage, or filtration of
which is or shall be restricted, prohibited or penalized by any applicable law (including, without
limitation, asbestos, urea formaldehyde foam insulation and polychlorinated biphenyls).



“Holder” or “holder” means, with respect to any Note, the Person in whose name such Note is
registered in the register maintained by the Company pursuant to Section 13.1.




“Indebtedness” with respect to any Person means, at any time, without duplication,




(a) its liabilities for borrowed money and its redemption obligations in respect of
mandatorily redeemable Preferred Stock;




(b) its liabilities for the deferred purchase price of property acquired by such Person
(excluding accounts payable arising in the ordinary course of business but
including all liabilities created or arising under any conditional sale or other title
retention agreement with respect to any such property);


 


B-9









 






(c) all liabilities appearing on its balance sheet in accordance with GAAP in respect
of Capital Leases;




(d) all liabilities for borrowed money secured by any Lien with respect to any property
owned by such Person (whether or not it has assumed or otherwise become liable for such
liabilities);




(e) all its liabilities in respect of letters of credit or instruments serving a
similar function issued or accepted for its account by banks and other financial
institutions (whether or not representing obligations for borrowed money); and




(f) any Guaranty of such Person with respect to liabilities of a type described in any
of clauses (a) through (e) hereof.



Indebtedness of any Person shall include all obligations of such Person of the character described
in clauses (a) through (f) to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished under GAAP.



“Institutional Investor” means (a) any original purchaser of a Note, (b) any holder of a Note
holding more than 2% of the aggregate principal amount of the Notes then outstanding, and (c) any
bank, trust company, savings and loan association or other financial institution, any pension plan,
any investment company, any insurance company, any broker or dealer, or any other similar financial
institution or entity, regardless of legal form.



“Investment” means any investment, made in cash or by delivery of property, by the Company or
any of its Restricted Subsidiaries (i) in any Person, whether by acquisition of stock, Indebtedness
or other obligations or Security, or by loan, Guaranty, advance, capital contribution or otherwise,
or (ii) in any property that would be classified as Investments on a balance sheet prepared in
accordance with GAAP.



“Lien” means, with respect to any Person, any mortgage, lien, pledge, charge, security
interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other
secured party to or of such Person under any conditional sale or other title retention agreement or
Capital Lease, upon or with respect to any property or asset of such Person (including in the case
of stock, stockholder agreements, voting trust agreements and all similar arrangements).



“Maintenance Capital Expenditures” means cash 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 the Company and its Restricted Subsidiaries, taken as a whole, as such assets existed at
the time of such expenditure.



“Make-Whole Amount” is defined in Section 8.6.


 


B-10









 





“Material” means material in relation to the business, operations, affairs, financial
condition, assets, properties or prospects of the Company and its Restricted Subsidiaries taken as
a whole.



“Material Adverse Effect” means a material adverse effect on (a) the business, operations,
affairs, financial condition, assets or properties of the Company and its Restricted Subsidiaries
taken as a whole, or (b) the ability of the Company to perform its obligations under this Agreement
and the Notes, or (c) the validity or enforceability of this Agreement or the Notes.




“Memorandum” is defined in Section 5.3.



“Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in
Section 4001(a)(3) of ERISA).




“Notes”, “Series A Notes”, “Series B Notes”, and “Series C Notes”, are defined in Section 1.



“Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other
officer of the Company whose responsibilities extend to the subject matter of such certificate.



“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any
successor thereto.



“Person” means an individual, partnership, joint venture, corporation, limited liability
company, association, trust, unincorporated organization, or a government or agency or political
subdivision thereof.



“Plan” means an “employee benefit plan” (as defined in Section 3(3) of ERISA) that is or,
within the preceding five years, has been established or maintained, or to which contributions are
or, within the preceding five years, have been made or required to be made, by the Company or any
ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may have any liability.



“Preferred Stock” means any class of capital stock of a corporation that is preferred over any
other class of capital stock of such corporation as to the payment of dividends or the payment of
any amount upon liquidation or dissolution of such corporation.



“Priority Debt” means, without duplication, the sum of (a) all Debt of the Company and its
Restricted Subsidiaries secured by Liens permitted by Section 10.4(m), and (b) all Debt of
Restricted Subsidiaries that is not permitted by Section 10.3(a), (b) or (c).



“property” or “properties” means, unless otherwise specifically limited, real or personal
property of any kind, tangible or intangible, choate or inchoate.


 


B-11









 





“QPAM Exemption” means Prohibited Transaction Class Exemption 84-14 issued by the United
States Department of Labor.




“Refinancing” is defined in Section 10.1(b).



“Required Holders” means, at any time, the holders of at least 51% in principal amount of the
Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its
Affiliates).



“Responsible Officer” means any Senior Financial Officer and any other officer of the Company
with responsibility for the administration of the relevant portion of this Agreement.



“Restricted Payment” means any Distribution in respect of the Company. For purposes of this
Agreement, the amount of any Restricted Payment made in property shall be the greater of (x) the
Fair Market Value of such property (as determined in good faith by the board of directors (or
equivalent governing body) of the Person making such Restricted Payment) and (y) the net book value
thereof on the books of such Person, in each case determined as of the date on which such
Restricted Payment is made.



“Restricted Subsidiary” means any Subsidiary (i) of which more than 80% of the Voting Stock is
beneficially owned, directly or indirectly by the Company, (ii) which is organized under the laws
of the United States or any State thereof, (iii) which maintains substantially all of its assets
and conducts substantially all of its business within the United States, and (iv) which is properly
designated as such by the Company in the most recent notice (or, prior to any such notice, on
Schedule 5.4) with respect to such Subsidiary given by the Company pursuant to and in accordance
with the provisions of Section 7.4.



“Sale and Leaseback Transaction” means, with respect to a Person and property, a transaction
or series of transactions pursuant to which such Person sells such property with the intent at the
time of entering into such transaction or transactions of leasing such property for a term in
excess of six months.




“Securities Act” means the Securities Act of 1933, as amended from time to time.



“Security” has the meaning set forth in section 2(a)(1) of the Securities Act of 1933, as
amended.



“Senior Debt” means (a) any Debt of the Company (other than Subordinated Debt) and (b) any
Debt of any Restricted Subsidiary.



“Senior Funded Debt” means, with respect to any Person, all Senior Debt of such Person which
by its terms, or by the terms of any instrument or agreement relating thereto, matures or is
otherwise payable one year or more from the date of any determination thereof.



“Senior Financial Officer” means the chief financial officer, principal accounting officer,
treasurer or comptroller of the Company.


 


B-12









 





“Subordinated Debt” means any Debt of the Company that shall contain or have applicable
thereto subordination provisions substantially in the form set forth in Exhibit 10.1 attached
hereto providing for the subordination thereof to the Notes, or other provisions as may be approved
in writing prior to the incurrence thereof by the Holders of not less than 66-2/3% in aggregate
principal amount or the outstanding Notes.



“Subsidiary” means, as to any Person, any corporation, association or other business entity in
which such Person or one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group)
ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons
performing similar functions) of such entity, and any partnership or joint venture if more than a
50% interest in the profits or capital thereof is owned by such Person or one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major business actions without
the prior approval of such Person or one or more of its Subsidiaries). Unless the context
otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the
Company.



“Subsidiary Stock” means the stock (or any options or warrants to purchase stock or other
Securities exchangeable for or convertible into stock) of any Restricted Subsidiary.



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



“Synthetic Lease Interest Expense” means, for any period, the portion of rent paid or payable
(without duplication) for such period under Synthetic Leases of the Company and its Restricted
Subsidiaries 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 Principal Component” means for any period, the portion of rent (exclusive of
the Synthetic Lease Interest Expense) paid or payable (without duplication) for such period under
Synthetic Leases for the Company and its Restricted Subsidiaries that was deducted in calculating
Consolidated Net Income of the Company and its Restricted Subsidiaries for such period.



“Synthetic Lease Rent Payments” means, with resect to any Person for any period, the sum of
the Synthetic Lease Interest Expense and the Synthetic Lease Principal Component for all Synthetic
Leases of such Person.



“Transfer” means, with respect to any Person, any transaction in which such Person sells,
conveys, abandons, transfers, leases (as lessor), or otherwise disposes of (including, without
limitation, in connection with a Sale Leaseback Transaction), any of its property, including,
without limitation, Subsidiary Stock.


 


B-13









 






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



“Voting Stock” means (i) Securities of any class of classes, the holders of which are
ordinarily, in the absence of contingencies, entitled to elect a majority of the directors (or
Persons performing similar functions) or (ii) in the case of a partnership or joint venture,
interests in the profits or capital thereof entitling the holders of such interests to approve
major business actions.



“Wholly-Owned Restricted Subsidiary” means, at any time, any Restricted Subsidiary one hundred
percent (100%) of all of the equity interests (except directors’ qualifying shares) and voting
interests of which are owned by any one or more of the Company and the Company’s other Wholly-Owned
Restricted Subsidiaries at such time.



“Working Capital Facility” means the Debt facility made available to the Company for working
capital purposes under the “Facility A Commitments” pursuant to the Credit Agreement dated June 30,
1998, between the Company and the banks named therein, as from time to time amended, supplemented
and Refinanced and any other credit agreement from time to time entered into by the Company and its
Restricted Subsidiaries for purposes of obtaining working capital Debt.




 


B-14









 







Schedule 5.1 — Ownership of Company




The Company is owned 1% by Ferrellgas, Inc., as general partner, and 99% by Ferrellgas
Partners, L.P., as limited partner.




 


 









 







Schedule 5.3 — Disclosure Materials




None




 


 









 







Schedule 5.4 — Subsidiaries of the Company and Ownership Interests




The Company has no Subsidiaries





 


 









 







Schedule 5.5 — Financial Statements




1999 Annual Report and the audited financial statements (including balance sheets and income
statements) of the Company dated as of July 31, 1999 and July 31, 1998.




SEC Form 10-K of the Company for the fiscal years ending July 31, 1997, 1996 and 1995.



Unaudited financial statements (including balance sheet and income statement) of the Company
dated as of October 31, 1999.




 


 









 







Schedule 5.11 — Patents, Etc.




None




 


 









 







Schedule 5.14 — Use of Proceeds




The proceeds of the Notes will be used (a) to repay existing indebtedness owing to Bank of
America, N.A. under the Company’s Bridge Loan Credit Agreement dated as of February 17, 1999 among
the Company, the banks named therein, and Bank of America, N.A., as administrative agent for such
banks and (b) to pay related transaction costs and expenses.




 


 









 







Schedule 5.15 — Existing Indebtedness and Liens





	 	A.	 	Existing Indebtedness







See Attached List




	 	B.	 	Existing Liens







Liens securing copiers and other office equipment and other immaterial liens.




 


 









 







[Form of Series A Note]




Ferrellgas, L.P.




8.68% Senior Note, Series A, due August 1, 2006




			
	No. [R-A-]
	 	[Date]
	$[                    ]
	 	PPN 31529# AA 1






For Value Received, the undersigned, Ferrellgas, L.P. (herein called the
“Company”), a limited partnership organized and existing under the laws of the State of Delaware,
hereby promises to pay to [                                                            ] or registered assigns, the principal sum of
[                                        ] Dollars on August 1, 2006 with interest (computed on the basis of a
360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 8.68% per
annum from the date hereof, payable semiannually, on the first day of February and August in each
year, commencing with the February or August next succeeding the date hereof, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by law on any overdue
payment (including any overdue prepayment) of principal, any overdue payment of interest and any
overdue payment of any Make-Whole Amount (as defined in the Note Purchase Agreement referred to
below), payable semiannually as aforesaid (or, at the option of the registered holder hereof, on
demand), at a rate per annum from time to time equal to the greater of (i) 10.68% or (ii) 2% over
the rate of interest publicly announced by Bank of America, N.A. from time to time in Chicago,
Illinois as its “base” or “prime” rate.



Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are
to be made in lawful money of the United States of America at the principal office of the Company
in Liberty, Missouri or at such other place as the Company shall have designated by written notice
to the holder of this Note as provided in the Note Purchase Agreement referred to below.



This
Note is one of the 8.68% Senior Notes, Series A (herein called the “Series A Notes”),
issued pursuant to the Note Purchase Agreement, dated as of February 1, 2000 (as from time to time
amended, the “Note Purchase Agreement”), between the Company and the Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in Section 20 of the Note
Purchase Agreement and (ii) to have made the representation set forth in Section 6.2 of the Note
Purchase Agreement.



This Note is a registered Series A Note and, as provided in the Note Purchase Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written
instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney
duly authorized in writing, a new Series A Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for registration of transfer,
the Company may treat the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other purposes, and the Company will
not be affected by any notice to the contrary.



Exhibit 1-A

(to Note Purchase Agreement)




 


 









 







This Note is subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement, but not otherwise.



If an Event of Default, as defined in the Note Purchase Agreement, occurs and is continuing,
the principal of this Note may be declared or otherwise become due and payable in the manner, at
the price (including any applicable Make-Whole Amount) and with the effect provided in the Note
Purchase Agreement.



This Note shall be construed and enforced in accordance with, and the rights of the issuer and
holder hereof shall be governed by, the law of the State of Illinois excluding choice-of-law
principles of the law of such State that would require the application of the laws of a
jurisdiction other than such State.



Ferrellgas, L.P.




By: Ferrellgas, Inc., its general partner




	 	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Its	 	 	 	 
	 

	 	 	 	 	 	 

	 	 







 


E-1-A-2









 







[Form of Series B Note]




Ferrellgas, L.P.




8.78% Senior Note, Series B, due August 1, 2007




			
	No. [R-B-]
	 	[Date]
	$[                    ]
	 	PPN 31529# AB 9






For Value Received, the undersigned, Ferrellgas, L.P. (herein called the
“Company”), a limited partnership organized and existing under the laws of the State of Delaware,
hereby promises to pay to [                                                            ] or registered assigns, the principal sum of
[                                        ] Dollars on August 1, 2007 with interest (computed on the basis of a
360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 8.78% per
annum from the date hereof, payable semiannually, on the first day of February and August in each
year, commencing with the February or August next succeeding the date hereof, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by law on any overdue
payment (including any overdue prepayment) of principal, any overdue payment of interest and any
overdue payment of any Make-Whole Amount (as defined in the Note Purchase Agreement referred to
below), payable semiannually as aforesaid (or, at the option of the registered holder hereof, on
demand), at a rate per annum from time to time equal to the greater of (i) 10.78% or (ii) 2% over
the rate of interest publicly announced by Bank of America, N.A. from time to time in Chicago,
Illinois as its “base” or “prime” rate.



Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are
to be made in lawful money of the United States of America at the principal office of the Company
in Liberty, Missouri or at such other place as the Company shall have designated by written notice
to the holder of this Note as provided in the Note Purchase Agreement referred to below.



This Note is one of the 8.78% Senior Notes, Series B (herein called the “Series B Notes”),
issued pursuant to Note Purchase Agreement, dated as of February 1, 2000 (as from time to time
amended, the “Note Purchase Agreement”), between the Company and the Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in Section 20 of the Note
Purchase Agreement and (ii) to have made the representation set forth in Section 6.2 of the Note
Purchase Agreement.



This Note is a registered Series B Note and, as provided in the Note Purchase Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written
instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney
duly authorized in writing, a new Series B Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for registration of transfer,
the Company may treat the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other purposes, and the Company will
not be affected by any notice to the contrary.



Exhibit 1-B

(to Note Purchase Agreement)



 


 









 





This Note is subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement, but not otherwise.



If an Event of Default, as defined in the Note Purchase Agreement, occurs and is continuing,
the principal of this Note may be declared or otherwise become due and payable in the manner, at
the price (including any applicable Make-Whole Amount) and with the effect provided in the Note
Purchase Agreement.



This Note shall be construed and enforced in accordance with, and the rights of the issuer and
holder hereof shall be governed by, the law of the State of Illinois excluding choice-of-law
principles of the law of such State that would require the application of the laws of a
jurisdiction other than such State.



Ferrellgas, L.P.




By: Ferrellgas, Inc., its general partner




	 	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Its	 	 	 	 
	 

	 	 	 	 	 	 

	 	 







 


E-1-B-2









 







[Form of Series C Note]




Ferrellgas, L.P.




8.87% Senior Note, Series C, due August 1, 2009




			
	No. [R-C-]
	 	[Date]
	$[                    ]
	 	PPN 31529# AC 7






For Value Received, the undersigned, Ferrellgas, L.P. (herein called the
“Company”), a limited partnership organized and existing under the laws of the State of Delaware,
hereby promises to pay to [                                                            ] or registered assigns, the principal sum of
[                                        ] Dollars on August 1, 2009 with interest (computed on the basis of a
360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 8.87% per
annum from the date hereof, payable semiannually, on the first day of February and August in each
year, commencing with the February or August next succeeding the date hereof, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by law on any overdue
payment (including any overdue prepayment) of principal, any overdue payment of interest and any
overdue payment of any Make-Whole Amount (as defined in the Note Purchase Agreement referred to
below), payable semiannually as aforesaid (or, at the option of the registered holder hereof, on
demand), at a rate per annum from time to time equal to the greater of (i) 10.87% or (ii) 2% over
the rate of interest publicly announced by Bank of America, N.A. from time to time in Chicago,
Illinois as its “base” or “prime” rate.



Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are
to be made in lawful money of the United States of America at the principal office of the Company
in Liberty Missouri or at such other place as the Company shall have designated by written notice
to the holder of this Note as provided in the Note Purchase Agreement referred to below.



This Note is one of the 8.87% Senior Notes, Series C (herein called the “Series C Notes”),
issued pursuant to Note Purchase Agreement, dated as of February 1, 2000 (as from time to time
amended, the “Note Purchase Agreement”), between the Company and the Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in Section 20 of the Note
Purchase Agreement and (ii) to have made the representation set forth in Section 6.2 of the Note
Purchase Agreement.



This Note is a registered Series C Note and, as provided in the Note Purchase Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written
instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney
duly authorized in writing, a new Series C Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for registration of transfer,
the Company may treat the person in whose name this Note is registered as the owner hereof for the
purpose of receiving payment and for all other purposes, and the Company will not be affected by
any notice to the contrary.



Exhibit 1-C

(to Note Purchase Agreement)



 


 









 





This Note is subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement, but not otherwise.



If an Event of Default, as defined in the Note Purchase Agreement, occurs and is continuing,
the principal of this Note may be declared or otherwise become due and payable in the manner, at
the price (including any applicable Make-Whole Amount) and with the effect provided in the Note
Purchase Agreement.



This Note shall be construed and enforced in accordance with, and the rights of the issuer and
holder hereof shall be governed by, the law of the State of Illinois excluding choice-of-law
principles of the law of such State that would require the application of the laws of a
jurisdiction other than such State.



Ferrellgas, L.P.




By: Ferrellgas, Inc., its general partner




	 	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Its	 	 	 	 
	 

	 	 	 	 	 	 

	 	 







 


E-1-C-2









 







Form of Opinion of Special Counsel for the Company




The closing opinion of Bracewell & Patterson, L.L.P., special counsel for the Company, its
Restricted Subsidiaries and the General Partner, which is called for by Section 4.4(a) of the Note
Purchase Agreement, shall be dated the date of the Closing and addressed to the Purchasers, shall
be satisfactory in scope and form to the Purchasers and shall be to the effect that:




1. The Company is a partnership, duly formed, validly existing and in good standing
under the laws of the State of Delaware, has the partnership power and authority to execute
and perform the Note Purchase Agreement and to issue the Notes and has the requisite
partnership power and authority to conduct its business in all material respects as
presently conducted and, based solely on certificates of foreign qualification provided by
the Secretary of State of each jurisdiction, is duly qualified or registered as a foreign
partnership to transact business in, and is in good standing as a foreign partnership in
each jurisdiction set forth on Schedule I hereto, and, to our knowledge, such jurisdictions
are the only jurisdictions in which the Company conducts any business that requires
qualification or registration to conduct business as a foreign partnership, except where the
failure to so qualify or register would not have a Material Adverse Effect.




2. The General Partner is a corporation, duly formed, validly existing and in good
standing under the laws of the State of Delaware, has the partnership power and authority to
execute and deliver the Note Purchase Agreement and to issue the Notes on behalf of the
Company and has the requisite power and authority to conduct its business in all material
respects as presently conducted and, based solely on certificates of foreign qualification
provided by the Secretary of State of each jurisdiction, is duly qualified or registered as
a foreign corporation to transact business in, and is in good standing as a foreign
corporation in each jurisdiction set forth on Schedule I hereto, and, to our knowledge, such
jurisdictions are the only jurisdictions in which the General Partner conducts any business
that requires qualification or registration to conduct business as a foreign partnership,
except where the failure to so qualify or register would not have a Material Adverse Effect.




3. Each Restricted Subsidiary of the Company is a corporation or limited partnership
duly incorporated or formed, as the case may be, validly existing and in good standing under
the laws of its jurisdiction of incorporation or formation and, based solely upon
certificates of foreign qualification provided by the Secretary of State of each
jurisdiction, is duly qualified or registered as a foreign corporation or limited
partnership to transact business in, and is in good standing as a foreign corporation or
limited partnership in each jurisdiction set forth on Schedule II hereto, and, to our
knowledge, such jurisdictions are the only jurisdictions in which the Restricted
Subsidiaries of the Company conduct any business that requires qualification or registration
to conduct business as a foreign corporation or partnership, except where the failure to so
qualify or register would not have a material adverse effect upon the respective Restricted
Subsidiaries; and all of the issued and outstanding shares of capital stock or other
ownership interests of each such Restricted Subsidiary, as applicable, have been validly
issued, are fully paid and non-assessable and the Company and/or one or more Restricted
Subsidiaries is the holder of record of such shares or ownership interests.


Exhibit 4.4(a)

(to Note Purchase Agreement)




 


 









 







4. The Note Purchase Agreement has been duly authorized by all necessary partnership
action on the part of the Company, has been duly executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company enforceable in accordance
with its terms, except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance and similar laws affecting creditors’ rights
generally, and general principles of equity (regardless of whether the enforceability of
such principles is considered in a proceeding in equity or at law).




5. The Notes have been duly authorized by all necessary partnership action on the part
of the Company, have been duly executed and delivered by the Company, and when paid for by
the Purchasers, will constitute the legal, valid and binding obligations of the Company
enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent
conveyance and similar laws affecting creditors’ rights generally, and general principles of
equity (regardless of whether the application of such principles is considered in a
proceeding in equity or at law).




6. No approval, consent, registration, qualification or other action on the part of, or
filing with any governmental body, Federal, state or local, is required for the execution,
delivery and performance by the Company of the Note Purchase Agreement or the execution,
delivery and performance by the Company of the Notes, except, in each case, such approvals,
consents, registrations, or qualifications as have been obtained.




7. The issuance and sale of the Notes and the execution, delivery and performance by
the Company of the Note Purchase Agreement do not violate applicable provisions of statutory
law applicable to or binding on the Company or any order of any court or governmental
authority or agency applicable to or binding on the Company, or violate or result in any
breach of any of the provisions of or constitute a default under, or result in the creation
or imposition of a Lien with respect to, any material bond, note, debenture or other
evidence of indebtedness or any material indenture, mortgage, deed of trust, loan agreement,
contract, lease or other material instrument for money borrowed known to us to which the
Company is a party or by which the Company is bound or to which the property of the Company
is subject, nor will such action result in a breach or violation of the Certificate of
Formation or Articles of Partnership of the Company.




8. The issuance, sale and delivery of the Notes by the Company under the circumstances
contemplated by the Note Purchase Agreement do not, under existing law, require the
registration of the Notes under the Securities Act of 1933, as amended, or the qualification
of an indenture in respect thereof under the Trust Indenture Act of 1939, as amended.


 


E-4.4(a)-2









 






9. To our knowledge, there are no actions, suits or proceedings pending or overtly
threatened by written communication against the Company or any Restricted
Subsidiary in any court or before any arbitrator of any kind or before or by any
Governmental Authority either (i) which purport to affect the Note Purchase Agreement or the
Notes, or (ii) that, individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect.




10. The issuance of the Notes and the use of the proceeds of the sale of the Notes in
accordance with the provisions of and as contemplated by the Note Purchase Agreement
(including, without limitation, the representations and warranties set forth in the Note
Purchase Agreement) do not violate or conflict with Regulation T, U or X of the Board of
Governors of the Federal Reserve System.




11. The Company is not an “investment company,” or a company “controlled” by an
“investment company,” under the Investment Company Act of 1940, as amended.




12. A court sitting in the State of Missouri will look to the conflict of law rules of
the State of Missouri to determine which law governs. Under the conflict of law rules of
the State of Missouri, a court sitting in the State of Missouri should give effect to the
contractual choice of law clause in the Note Purchase Agreement and the Notes electing
Illinois law assuming that the Purchasers have reasonable contacts with the State of
Illinois, including without limitation, that many of the Purchasers have offices or agents
in the State of Illinois, that the Note Purchase Agreement and the Notes will be delivered
in the State of Illinois, and that counsel to the Purchasers is located in the State of
Illinois.



The opinion of Bracewell & Patterson, L.L.P. shall be limited to the laws of the State of
Missouri, the Delaware Revised Uniform Limited Partnership Act, the general business corporation
law of the State of Delaware and the Federal laws of the United States. In rendering the opinions
set forth in paragraphs (4) and (5) above, Bracewell & Patterson, L.L.P. shall assume that the laws
of Missouri govern the Note Purchase Agreement and the Notes. The opinion of Bracewell &
Patterson, L.L.P. shall cover such other matters relating to the sale of the Notes as the
Purchasers may reasonably request. With respect to matters of fact on which such opinion is based,
such counsel shall be entitled to rely on appropriate certificates of public officials and officers
of the Company and upon representations of the Company and the Purchasers delivered in connection
with the issuance and sale of the Notes.




 


E-4.4(a)-3









 







Form of Opinion of Special Counsel

to the Purchasers




The closing opinion of Chapman and Cutler, special counsel for the Purchasers, called for by
Section 4.4(b) of the Note Purchase Agreement, shall be dated the date of the Closing and addressed
to the Purchasers, shall be satisfactory in form and substance to the Purchasers and shall be to
the effect that:




1. The Company is a partnership, validly existing and in good standing under the laws
of the State of Delaware and has the power and the authority to execute and deliver the Note
Purchase Agreement and to issue the Notes.




2. The Note Purchase Agreement has been duly authorized by all necessary action on the
part of the Company, has been duly executed and delivered by the Company and constitutes the
legal, valid and binding contract of the Company enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent conveyance and similar laws affecting
creditors’ rights generally, and general principles of equity (regardless of whether the
application of such principles is considered in a proceeding in equity or at law).




3. The Notes have been duly authorized by all necessary action on the part of the
Company, and the Notes being delivered on the date hereof have been duly executed and
delivered by the Company and constitute the legal, valid and binding obligations of the
Company enforceable in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent conveyance and similar laws affecting creditors’ rights generally, and general
principles of equity (regardless of whether the application of such principles is considered
in a proceeding in equity or at law).




4. The issuance, sale and delivery of the Notes under the circumstances contemplated by
the Note Purchase Agreement do not, under existing law, require the registration of the
Notes under the Securities Act of 1933, as amended, or the qualification of an indenture
under the Trust Indenture Act of 1939, as amended.



The opinion of Chapman and Cutler shall also state that the opinion of Bracewell & Patterson,
L.L.P., special counsel for the Company, is satisfactory in scope and form to Chapman and Cutler
and that, in their opinion, the Purchasers are justified in relying thereon.



In rendering the opinion set forth in paragraph 1 above, Chapman and Cutler may rely, as to
matters referred to in paragraph 1, solely upon an examination of the Certificate of Formation
certified by, and a certificate of good standing of the Company from, the Secretary of State of the
State of Delaware, the Articles of Partnership of the Company and the general partnership law of
the State of Delaware. The opinion of Chapman and Cutler shall be limited to the laws of the State
of Illinois, the Delaware Revised Uniform Limited Partnership Act and the Federal laws of the
United States.



With respect to matters of fact upon which such opinion is based, Chapman and Cutler may rely
on appropriate certificates of public officials and officers of the Company and upon
representations of the Company and the Purchasers delivered in connection with the issuance and
sale of the Notes.



Exhibit 4.4(b)

(to Note Purchase Agreement)





 


 









 







Subordination Provisions Applicable to

Subordinated Debt




(a) The indebtedness evidenced by the subordinated notes and any renewals or extensions
thereof, premium, if any, interest (including, without limitation any such interest accruing
subsequent to the filing by or against the Company of any proceeding brought under Chapter 11 of
the Bankruptcy Code (11 U.S.C. Section 100 et seq.)) and any fees, charges, expenses or other sums
payable under or in respect of the agreements pursuant to which such subordinated notes were
issued, shall at all times be wholly and unconditionally subordinate and junior in right of payment
to any and all indebtedness of the Company (including principal, premium, if any, accrued and
unpaid interest, including any interest which may accrue subsequent to commencement of proceedings
under bankruptcy laws (whether or not such interest is allowed as a claim pursuant to the
provisions of any such bankruptcy laws) evidenced by the Company’s $21,000,000 aggregate principal
amount 8.68% Senior Notes, Series A, due August 1, 2006, $90,000,000 aggregate principal amount
8.78% Senior Notes, Series B, due August 1, 2007, and $73,000,000 aggregate principal amount 8.87%
Senior Notes, Series C, due August 1, 2009, issued pursuant to the Note Purchase Agreement, dated
as of February 1, 2000, as the same shall be amended from time to time, between the Company and the
institutional investors named in Schedule A attached thereto and all other amounts due under said
Note Purchase Agreement (together with any renewal, replacement or refinancing thereof, herein
called “Superior Indebtedness”), in the manner and with the force and effect hereafter set forth:




(1) In the event of any (i) liquidation, dissolution or winding up of the Company,
voluntary or involuntary, (ii) any execution, sale, receivership, insolvency, bankruptcy,
liquidation, readjustment, reorganization or other similar proceeding relative to the
Company or its property, (iii) any general assignment by the Company for the benefit of
creditors, or (iv) any distribution, division, marshalling or application of any of the
properties or assets of the Company or the proceeds thereof to creditors, voluntary or
involuntary, and whether or not involving legal proceedings, then and in any event:




(A) all principal, premium, if any, and interest and all other sums owing on
all Superior Indebtedness shall first be indefeasibly paid in full in cash before
any payment or distribution of any kind or character is made upon the indebtedness
evidenced by the subordinated notes; and in any such event any payment or
distribution of any kind or character, whether in cash, property or securities
(other than in securities, including equity securities, or other evidences of
indebtedness, the payment of which is unconditionally subordinated (to the same
extent as the subordinated notes) to the payment of all Superior Indebtedness which
may at the time be outstanding) which shall be made upon or in respect of the
subordinated notes shall immediately be paid over to the holders of such Superior
Indebtedness, pro rata, for application in payment thereof, unless and until such
Superior Indebtedness shall have been indefeasibly paid or satisfied in full in
cash;



Exhibit 10.1

(to Note Purchase Agreement)



 


 









 






(2) In the event that the subordinated notes are in default under circumstances when
the foregoing clause (l) shall not be applicable, the holders of the subordinated
notes shall be entitled to payments of principal, premium, if any, or interest only after
there shall first have been indefeasibly paid in full in cash all Superior Indebtedness
outstanding at the time the subordinated notes so become in default; and




(3) During the continuance of any default with respect to any Superior Indebtedness, no
payment of principal, premium, if any, or interest or any other fees, charges, expenses or
other sums payable under or in respect of the agreements pursuant to which such subordinated
notes were issued shall be made on the subordinated notes.



(b) The holder of each subordinated note agrees that: (1) it will not initiate a proceeding
for liquidation, dissolution or winding-up of the Company, or for execution, sale, receivership,
insolvency, bankruptcy, liquidation, readjustment, reorganization or other similar proceeding
relative to the Company or its property and (2) it will not accelerate the maturity of or enforce
the collection of the subordinated notes.



(c) The holder of each subordinated note undertakes and agrees for the benefit of each holder
of Superior Indebtedness to execute, verify, deliver and file any proofs of claim within 30 days
before the expiration of the time to file the same which any holder of Superior Indebtedness may at
any time require in order to prove and realize upon any rights or claims pertaining to the
subordinated notes and to effectuate the full benefit of the subordination contained herein; and
upon failure of the holder of any subordinated note so to do, any such holder of Superior
Indebtedness shall be deemed to be irrevocably appointed the agent and attorney-in-fact of the
holder of such note to execute, verify, deliver and file any such proofs of claim.



(d) No right of any holder of any Superior Indebtedness to enforce subordination as herein
provided shall at any time or in any way be affected or impaired by any failure to act on the part
of the Company or the holders of Superior Indebtedness, or by any noncompliance by the Company with
any of the terms, provisions and covenants of the subordinated notes or the agreement under which
they are issued, regardless of any knowledge thereof that any such holder of Superior Indebtedness
may have or be otherwise charged with.



(e) The subordination effected by the foregoing provisions and the rights created thereby of
the holders of the Superior Indebtedness shall not be affected by: (1) any amendment of or addition
or supplement to any Superior Indebtedness or any instrument or agreement relating thereto, (2) any
exercise or non-exercise of any right, power or remedy under or in respect of any Superior
Indebtedness or any instrument or agreement relating thereto, or (3) the giving or denial of any
waiver, consent, release, indulgence, extension, renewal, modification or delay or the taking or
nontaking of any other action, inaction or omission, in respect of any Superior Indebtedness or any
instrument or agreement relating thereto or to any securities relating thereto or any guarantee
thereof, whether or not any holder of any subordinated notes shall have had notice or knowledge of
any of the foregoing.


 


10.1-2









 





(f) The Company agrees, for the benefit of the holders of Superior Indebtedness, that in the
event that any subordinated note is declared due and payable before its expressed maturity because
of the occurrence of a default hereunder: (1) the Company will give prompt notice in writing of
such happening to the holders of Superior Indebtedness and (2) all Superior
Indebtedness shall forthwith become immediately due and payable upon demand, regardless of the
expressed maturity thereof and (3) the holders of such subordinated notes shall not entitled to
receive any payment or distribution in respect thereof or applicable thereto until all Superior
Indebtedness at the time outstanding shall have been indefeasibly paid in full in cash.



(g) No holder of any subordinated notes will sell, assign, pledge, encumber or otherwise
dispose of any of its subordinated notes unless such sale, assignment, pledge, encumbrance or
disposition is made expressly subject to the foregoing provisions.



(h) If any payment or distribution of any character, whether in cash, securities or other
property shall be received by any holder of any subordinated notes in contravention of this Section
                    , such payment or distribution shall be received and held in trust for the benefit of, and
shall be promptly paid over or delivered and transferred in the form received to, the holders of
the Superior Indebtedness pro rata for application to the payment of all Superior Indebtedness
remaining unpaid, to the extent necessary to indefeasibly pay all such Superior Indebtedness in
full in cash. In the event of the failure of any holder of the subordinated notes to endorse or
assign any such payment, distribution or security, any holder of the Superior Indebtedness or such
holder’s representative is hereby irrevocably authorized to endorse or assign the same.





 


10.1-3