Document:

Exhibit 10.2

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INVESTMENT AGREEMENT
by and among
Ferrellgas, L.P.,
Ferrellgas, Inc.
and
the Purchasers Listed on Schedule I
Dated as of March 30, 2021
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TABLE OF CONTENTS
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	Page

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	ARTICLE I Definitions
	1

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	Section 1.01
	Definitions
	1

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	ARTICLE II Purchase and Sale
	7

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	Section 2.01
	Purchase and Sale
	7

	Section 2.02
	Closing
	7

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	ARTICLE III Representations and Warranties of the Company
	10

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	Section 3.01
	SEC Documents.
	10

	Section 3.02
	Independent Accountants.
	10

	Section 3.03
	Financial Statements.
	10

	Section 3.04
	Absence of Certain Changes
	10

	Section 3.05
	Organization and Good Standing
	11

	Section 3.06
	Capitalization
	11

	Section 3.07
	Subsidiaries
	12

	Section 3.08
	Authority
	12

	Section 3.09
	No Violation or Default
	12

	Section 3.10
	No Conflicts
	13

	Section 3.11
	No Consents Required
	13

	Section 3.12
	No Labor Disputes
	13

	Section 3.13
	Legal Proceedings
	13

	Section 3.14
	Compliance with Laws; Licenses and Permits
	14

	Section 3.15
	Real and Personal Property
	14

	Section 3.16
	Title to Intellectual Property
	14

	Section 3.17
	Compliance with Environmental Laws
	15

	Section 3.18
	Compliance with ERISA
	15

	Section 3.19
	Disclosure Controls.
	16

	Section 3.20
	Accounting Controls.
	16

	Section 3.21
	Sarbanes-Oxley Act.
	16

	Section 3.22
	Taxes.
	16

	Section 3.23
	Insurance.
	18

	Section 3.24
	Investment Company Act; Covered Fund.
	18

	Section 3.25
	Absence of Manipulation.
	18

	Section 3.26
	No Unlawful Payments.
	18

	Section 3.27
	Compliance with Anti-Money Laundering Laws.
	19

	Section 3.28
	No Conflicts with Sanctions Laws.
	19

	Section 3.29
	No Restrictions on Subsidiaries.
	19

	Section 3.30
	No Undisclosed Relationships.
	19

	Section 3.31
	Brokers and Other Advisors
	20

	Section 3.32
	Sale of Securities
	20

	Section 3.33
	Status of Securities
	20

	Section 3.34
	Disclosure
	20

	Section 3.35
	Solvency
	21

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	ARTICLE IV Representations and Warranties of the Purchasers
	21

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	Section 4.01
	Organization; Standing
	22

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	TABLE OF CONTENTS
(cont'd)
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	Section 4.02
	Authority; Noncontravention
	22

	Section 4.03
	Governmental Approvals
	22

	Section 4.04
	Financing
	23

	Section 4.05
	Brokers and Other Advisors
	23

	Section 4.06
	Purchase for Investment
	23

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	ARTICLE V Additional Agreements
	23

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	Section 5.01
	Further Assurances
	23

	Section 5.02
	Public Disclosure
	24

	Section 5.03
	Confidentiality
	24

	Section 5.04
	Securities Not Registered; Legend
	25

	Section 5.05
	Tax Matters
	25

	Section 5.06
	Use of Proceeds
	26

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	ARTICLE VI Miscellaneous
	26

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	Section 6.01
	Survival
	26

	Section 6.02
	Amendments; Waivers
	26

	Section 6.03
	Extension of Time, Waiver, Etc.
	26

	Section 6.04
	Assignment
	26

	Section 6.05
	Counterparts
	27

	Section 6.06
	Entire Agreement; No Third-Party Beneficiaries
	27

	Section 6.07
	Governing Law; Jurisdiction
	27

	Section 6.08
	Remedies
	27

	Section 6.09
	Waiver of Jury Trial
	28

	Section 6.10
	Notices
	28

	Section 6.11
	Severability
	29

	Section 6.12
	Expenses
	29

	Section 6.13
	Interpretation
	29

	Section 6.14
	Non-Recourse
	30

	Section 6.15
	Acknowledgement
	31

	Section 6.16
	PATRIOT Act
	31

	Section 6.17
	Termination of Commitment Letters
	31

	Section 6.18
	Certain Acknowledgements and Agreements
	31

	Section 6.19
	Class B Units
	32

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	Exhibits

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	Exhibit A:
	Company A&R LPA

	Exhibit B:
	Company A&R LPA Amendment

	Exhibit C:
	Purchasers' Side Letters

	Exhibit D:
	Parent LPA

	Exhibit E:
	Redemption Default Agreement

	Exhibit F:
	Voting Agreement

	Exhibit G:
	Amended and Restated General Partner Bylaws

	Exhibit H:
	Form of Opinion of Squire Patton Boggs (US) LLP

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	TABLE OF CONTENTS
(cont'd)

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	Schedules

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	Schedule I:
	Purchasers Allocations

	Schedule II:
	Subsidiaries

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INVESTMENT AGREEMENT, dated as of March 30, 2021 (this "Agreement"), by and among Ferrellgas, L.P., a Delaware limited partnership (the "Company"), Ferrellgas, Inc., a Delaware corporation (in its capacity as the general partner of the Company, the "General Partner"), and the several purchasers listed on Schedule I (such Persons together with their successors and any Permitted Transferee that becomes a party to this Agreement pursuant to Section 6.04, the "Purchasers" and each a "Purchaser").
RECITALS
WHEREAS, Ferrellgas Partners, L.P., a Delaware limited partnership ("Parent") owns a 99% limited partnership interest in the Company;
WHEREAS, Parent and Ferrellgas Partners Finance Corp., a Delaware corporation, filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware on January 11, 2021;
WHEREAS, on March 5, 2021 the United States Bankruptcy Court for the District of Delaware entered a confirmation order in respect of the Second Amended Prepackaged Joint Chapter 11 Plan of Reorganization of Ferrellgas Partners, L.P. and Ferrellgas Partners Finance Corp. Docket No. 164 (the "Plan"), which contemplates, among other things, certain reorganization and refinancing transactions of Parent and the Company; and
WHEREAS, subject to the terms set forth herein, the Company desires to issue, sell and deliver to the several Purchasers, and the several Purchasers desire to purchase and acquire from the Company, an aggregate of 700,000 of the Company's Senior Preferred Units (the "Preferred Units"), having the designation, preferences and other rights specified in the Fifth Amended and Restated Agreement of Limited Partnership of the Company, in the form attached as Exhibit A (the "Company A&R LPA") and the First Amendment to the Company A&R LPA, in the form attached as Exhibit B (the "LPA Amendment", and together with the Company A&R LPA, the "Company LPA").
NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained in this Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:
ARTICLE I
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Definitions
Section 1.01Definitions.  (a) As used in this Agreement (including the recitals), the following terms shall have the following meanings:
"2020 Notes" means the 8.625% Senior Notes due 2020, co-issued by Parent and Ferrellgas Partners Finance Corp.
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"2025 Notes" means the 10.000% Senior Secured First Lien Notes due 2025 of the Company and Ferrellgas Finance Corp.
"Affiliate" means, as to any Person, any other Person that, directly or indirectly, controls, or is controlled by, or is under common control with, such Person; provided, however, (i) that the Company and its Subsidiaries shall not be deemed to be Affiliates of any Purchaser or any of its Affiliates; and (ii) "portfolio companies" (as such term is customarily used in the private equity industry) of funds managed or advised by any Affiliate of any Purchaser shall not be considered to be Affiliates of any Purchaser or any of its Affiliates, so long as such portfolio company (x) is not a member of a group (as such term is defined in Section 13(d)(3) of the Exchange Act) with either the Purchaser or any of its Affiliates with respect to any securities of the Company, and (y) has not received from the Purchaser or any Affiliate of the Purchaser or any Preferred Director (as defined in the Company A&R LPA), directly or indirectly, any confidential information with respect to the Company. For this purpose, "control" (including, with its correlative meanings, "controlled by" and "under common control with") shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.
"Ares Commitment Letter" means that certain Preferred Financing Commitment Letter, dated March 1, 2021, by and between Ares Management LLC, solely in its capacity as manager to one or more managed funds and accounts and their respective affiliates, and the Company.
"Ares Purchasers" means Purchasers that are Affiliates of Ares Management LLC, together with their Permitted Transferees.
"Board" means the board of directors of the General Partner.
"Business Day" means Monday through Friday of each week, except that a legal holiday recognized as such by the government of the United States or the states of New York or Missouri shall not be regarded as a Business Day.
"CARES Act" means the Coronavirus Aid, Relief, and Economic Security Act.
"Class B Contingent Acquisition Agreement" means that certain Contingent Acquisition Agreement, dated March 30, 2021 among the General Partner, FCI, and the holders of Ferrellgas Partners L.P. Class B Units.
"Class B Voting Agreement" means the Voting Agreement, dated March 30, 2021 among the General Partner, FCI, and the holders of Ferrellgas Partners L.P. Class B Units.
"Code" means the United States Internal Revenue Code of 1986, as amended.
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"Commitment Letters" mean the Ares Commitment Letter and JPMCF Commitment Letter.
"Confirmation Order" shall have the meaning set forth in the Plan.
"Effective Date" shall have the meaning set forth in the Plan.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"Exchange Act" means the Securities Exchange Act of 1934.
"FCI" means Ferrell Companies, Inc., a Kansas corporation.
"Ferrellgas Parties" means the Parent, the General Partner, FCI and the Company.
"Final Order" shall have the meaning set forth in the Plan.
"GAAP" means generally accepted accounting principles in the United States, consistently applied.
"Governmental Authority" means any government, court, regulatory or administrative agency, commission, arbitrator (public or private) or authority or other legislative, executive or judicial governmental entity (in each case including any self-regulatory organization), whether federal, state or local, domestic, foreign or multinational.
"Indentures" means those certain Indentures, each dated as of March 30, 2021, among the Company, Ferrellgas Finance Corp., the guarantors party thereto and U.S. Bank National Association, as trustee, as in effect on the Effective Date.
"IRS" means the United States Internal Revenue Service.
"JPMCF" means JPMorgan Chase Funding Inc.
"JPMCF Commitment Letter" means that certain Preferred Financing Commitment Letter, dated March 2, 2021, by and between JPMCF and the Company.
"Liens" means liens (statutory or other), encumbrances, mortgages, charges, deeds of trust, claims, hypothecations, assignments, deposit arrangements, preferences, restrictions, calls, options,  pledges, priority or other security interests or preferential arrangements in the nature of security interests of any kind or nature (including conditional sale or other title retention agreements), title defects, easements, rights-of-way, covenants, encroachments or other adverse claims of any kind with respect to a property or asset and any financing leases having substantially the same economic effect as any of the foregoing.
"Material Adverse Effect" means a material adverse effect (other than such an effect resulting from general economic or market conditions, trends or developments in the United States, from pandemics or civil unrest or from general trends or developments
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in the propane distribution business, in each case, not affecting the Ferrellgas Parties disproportionately) on (i) the business, financial condition, prospects or results of operations of the Company and its Subsidiaries, taken as a whole; (ii) the material rights and remedies of the Purchasers under any of the Transaction Documents; or (iii) the ability of the Ferrellgas Parties to perform any of their obligations under any of the Transaction Documents.
"Non-Recourse Parties" means each of the Ferrellgas Non-Recourse Parties and Purchaser Non-Recourse Parties (as defined in Section 6.14 below).
"Parent LPA" means the Sixth Amended and Restated Agreement of Limited Partnership of Parent, dated as of the date of this Agreement, in the form attached as Exhibit D.
"PATRIOT Act" means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001).
"Permitted Transferee" means, with respect to any Person, (i) any Affiliate of such Person; or (ii) with respect to any Person that is an investment fund, vehicle or similar entity: (x) any other investment fund, vehicle or similar entity of which such Person or an Affiliate, advisor or manager of such Person serves as the general partner, manager or advisor; and (y) any direct or indirect limited partner or investor in such investment fund, vehicle or similar entity or any direct or indirect limited partner or investor in any other investment fund, vehicle or similar entity of which such Person or an Affiliate, advisor or manager of such Person serves as the general partner, manager or advisor; provided, however, that in no event shall any "portfolio companies" (as such term is customarily used in the private equity industry) of any holder of Preferred Units or any entity that is controlled by a "Portfolio Company" of a holder of Preferred Units constitute a Permitted Transferee.
"Person" means an individual, corporation, limited liability company, partnership, joint venture, association, trust, unincorporated organization or any other entity, including a Governmental Authority.
"Purchasers' Side Letters" means those separate agreements or letters dated as of the date hereof and referenced on Schedule III to the LPA Amendment, in the forms attached as Exhibit C.
"PIK Redemption Price" shall have the meaning set forth in the LPA Amendment.
"Redemption Default Agreement" means the Redemption Default Agreement, dated as of the date of this Agreement, in the form attached as Exhibit E.
"Refinancing Transactions" shall have the meaning set forth in the Commitment Letters.
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"Representatives" means, with respect to any Person, its officers, directors, principals, partners, managers, members, employees, consultants, agents, financial advisors, investment bankers, attorneys, accountants, other advisors and other representatives.
"Required Purchasers" means both (i) Purchasers owning at least 33.3% of the total Senior Preferred Units outstanding at any given time, and (ii) the Ares Purchasers, for so long as the Ares Purchasers collectively own at least 25% of the Senior Preferred Units outstanding at such time.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933.
"Senior Secured First Lien Credit Agreement" means the Credit Agreement, dated as of March 30, 2021, among the Company as borrower, the guarantors party thereto and JPMorgan Chase Bank, N.A., as administrative agent.
"Subsidiary", when used with respect to any Person, means any corporation, limited liability company, partnership, association, trust or other entity of which (x) securities or other ownership interests representing more than 50% of the ordinary voting power (or, in the case of a partnership, more than 50% of the general partnership interests) or (y) sufficient voting rights to elect at least a majority of the board of directors or other governing body are, as of such date, owned by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.
"Tax" means any and all United States federal, state, local or non-United States taxes, fees, levies, duties, tariffs, imposts, and other similar charges (together with any and all interest, penalties and additions to tax) imposed by any Governmental Authority, including taxes or other charges on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers' compensation, unemployment compensation or net worth; taxes or other charges in the nature of excise, withholding, estimated, ad valorem, stamp, transfer, value added or gains taxes; license, registration and documentation fees; and customs duties, tariffs and similar charges, together with any interest or penalty, in addition to tax or additional amount imposed by any Governmental Authority.
"Tax Return" means all original or amended returns, declarations, reports, estimates, information returns, statements and other documents filed or required to be filed in respect of Taxes (including any elections, declarations, schedules or attachments, and any amendments of such elections, declarations, schedules or attachments) including any claim for refund or declaration of estimated Tax, and including, where permitted or required, combined, consolidated or unitary returns for any group of entities.
"Total Redemption Price" shall have the meaning set forth in the LPA Amendment.
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"Transaction Documents" means this Agreement, the Parent LPA, the Company LPA, the Voting Agreement, the Redemption Default Agreement and all other documents, certificates or agreements executed in connection with the Transactions.
"Transaction Support Agreement" shall have the meaning set forth in the Commitment Letters.
"Transactions" means the transactions expressly contemplated by this Agreement and the other Transaction Documents.
"Treasury Regulations" means the regulations issued under the Code.
"Voting Agreement" means the Voting Agreement, dated as of the date of this Agreement, in the form attached as Exhibit F.
(a)In addition to the terms defined in Section 1.01(a), the following terms have the meanings assigned to them in the Sections set forth below:
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	Term
	Section

	Acquired Units
	2.01

	Actions
	3.13

	Agreement
	Preamble

	Announcement
	5.02

	Anti-Money Laundering Laws
	3.27

	Bankruptcy and Equity Exception
	3.08

	Beneficial Ownership Regulations
	6.16

	Closing
	2.02

	Company
	Preamble

	Company A&R LPA
	Recitals

	Company LPA
	Recitals

	Company Plan
	3.18

	Company SEC Documents
	3.01

	Confidential Information
	5.03

	Contract
	3.09

	Environmental Laws
	3.17

	Ferrellgas Non-Recourse Parties
	6.14(b)

	General Partner
	Preamble

	Information
	3.34

	Intellectual Property
	3.16

	Judgments
	3.09

	Laws
	3.14

	LPA Amendment
	Recitals

	Multiemployer Plan
	3.18

	Parent
	Recitals

	Plan
	Recitals

	Preferred Units
	Recitals

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	Projections
	3.34

	Purchase Price Portion
	2.01

	Purchaser
	Preamble

	Purchaser Acquired Units
	2.01

	Purchaser Non-Recourse Parties
	6.14(a)

	Sanctioned Country
	3.28

	Sanctions
	3.28

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ARTICLE II
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Purchase and Sale
Section 2.01Purchase and Sale.  On the terms of this Agreement, at the Closing, each Purchaser shall severally purchase and acquire from the Company the number of Preferred Units set forth opposite such Purchaser's name on Schedule I (such Purchaser's "Purchaser Acquired Units"), and the Company shall issue, sell and deliver to each Purchaser, free and clear of all Liens, except restrictions imposed by the Securities Act and any other applicable securities Laws or by the Company LPA, such Purchaser's Purchaser Acquired Units (in aggregate, the "Acquired Units") for a cash purchase price per Acquired Unit equal to $1,000 and an aggregate cash purchase price with respect to each Purchaser as set forth opposite their name on Schedule I (such amount, the Purchaser's "Purchase Price Portion"), and an aggregate cash purchase price of $700,000,000 among all the Purchasers.  The Preferred Units shall have the designation, preferences and other rights and limitations set forth in the Company LPA.  The Company agrees that the Preferred Units shall be classified as mezzanine equity or equity (but not debt) for purposes of GAAP and U.S. Federal income taxes.
Section 2.02Closing.  The closing of the sale and purchase of the Acquired Units (the "Closing") shall occur on the date of this Agreement and concurrently with the Effective Date or at such time as agreed in writing by the Company and the Required Purchasers.  Upon the Closing, each Purchaser shall be bound by the terms and provisions of the Company LPA as a holder of the Preferred Units with respect to the Purchaser Acquired Units held by such Purchaser.
(a)At the Closing (unless otherwise specified):
(i)the Company shall deliver to each of the Purchasers
(A)a copy of the updated register of partners of the Company, reflecting the issuance to such Purchaser of such Purchaser's Acquired Units;
(B)the Parent LPA, duly executed by each of the parties to such document;
(C)the Company A&R LPA, duly executed by
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each of the parties to such document;
(D)the LPA Amendment, duly executed by each of the parties to such document;
(E)the Voting Agreement, duly executed by the General Partner and FCI;
(F)the Redemption Default Agreement, duly executed each of the parties to such document (other than the Purchasers);
(G)a copy of the duly adopted Amended and Restated Bylaws of the General Partner in the form attached as Exhibit G;
(H)the written opinion of Squire Patton Boggs (US) LLP, as counsel for the Company, dated as of the Closing and substantially in the form attached hereto as Exhibit H;
(I)a certificate as to the good standing (or the local law equivalent) of each of the Ferrellgas Parties and the Company's Subsidiaries as of a recent date, from the Secretary of State of the States of Delaware or Kansas (as applicable); and
(J)evidence reasonably satisfactory to the Purchasers that the Confirmation Order has become a Final Order and that no order staying, reversing, modifying or amending the Confirmation Order is in effect as of the Closing;
(K)evidence reasonably satisfactory to the Purchasers of the consummation of the Refinancing Transactions or that the Refinancing Transactions will be consummated substantially concurrently with the Closing;
(L)evidence reasonably satisfactory to the Purchasers that no Contract binding on the Company or its Subsidiaries prevents or restricts the Company from making the payments contemplated by Section 7 of the LPA Amendment and any applicable payments contemplated by any of the Purchasers' Side Letters as set forth therein;
(M)the Purchasers' Side Letter to which such Purchaser is a party, duly executed by the General Partner and the Company;
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		(ii)
	the Company shall deliver to the Ares Purchasers payment of all reasonable and documented expenses actually incurred by the Ares Purchaser in accordance with the Ares Commitment Letter and Section 6.12 of this Agreement by wire transfer in immediately available U.S. federal funds, to the account or accounts designated by the Ares Purchasers in writing;

		(iii)
	the Company shall deliver to the JPMCF Purchaser payment of all reasonable and documented expenses actually incurred by the JPMCF Purchaser in accordance with the JPMCF Commitment Letter and Section 6.12 of this Agreement by wire transfer in immediately available U.S. federal funds, to the account or accounts designated by the JPMCF Purchaser in writing;

(iv)each Purchaser shall severally
(A)pay its respective Purchase Price Portion (after deduction of an amount equal to three percent (3.00%) of such Purchase Price Portion, which shall be treated as a discount to the Purchase Price for federal income tax purposes) to the Company, by wire transfer in immediately available U.S. federal funds, to the account designated by the Company in writing;
(B)deliver to the Company a joinder to the Company LPA, duly executed by such Purchaser;
(C)deliver to the Company the Redemption Default Agreement, duly executed by such Purchaser;
(D)deliver to the Company the Voting Agreement, duly executed by such Purchaser to be party to the Voting Agreement; and
(E)deliver a duly executed Internal Revenue Service Form W-9 or Form W-8, as applicable;
(F)deliver to the Company the Purchasers' Side Letter to which such Purchaser is a party, duly executed by such Purchaser, along with duly executed Internal Revenue Service Forms W-9 or Form W-8, as applicable, for each Blocker (as such term is defined in the such Purchasers' Side Letter), as applicable.
(b)The failure of any Purchaser to perform, or any waiver by the Company of such performance, shall not excuse the failure to perform by any other
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Purchaser, and the waiver of any Purchaser of performance of the Company under this Agreement shall not excuse the failure to perform by the Company with respect to any other Purchaser.  In the event of any failure to perform by any Purchaser or any waiver by the Company of such performance, the Ares Purchasers shall have the right, but not the obligation, to purchase such Purchaser's Purchaser Acquired Units upon payment of the applicable Purchase Price Portion to the Company.
ARTICLE III
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Representations and Warranties of the Company
The Company represents and warrants to each of the Purchasers as of the date of this Agreement (except to the extent made only as of a specified date, in which case such representation and warranty is made as of such date) that:
Section 3.01SEC Documents.  As of their respective SEC filing dates, the reports, schedules, forms, statements and other documents filed by the Company with the SEC pursuant to the Exchange Act since August 1, 2019 (collectively, the "Company SEC Documents") complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, applicable to such Company SEC Documents, and none of the Company SEC Documents as of such respective dates (or, if amended prior to the Closing, the date of the filing of such amendment, with respect to the disclosures that are amended) contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
Section 3.02Independent Accountants.  Grant Thornton LLP, which has certified certain financial statements of the Parent, the Company and their Subsidiaries included in the Company SEC Documents is an independent registered public accounting firm with respect to Parent and its Subsidiaries within the applicable rules and regulations adopted by the SEC and the Public Company Accounting Oversight Board (United States) and as required by the Securities Act.
Section 3.03Financial Statements.  The financial statements of the Company included in the Company SEC Documents, together with the related schedules and notes, present fairly in all material respects the financial position of the Company and its consolidated Subsidiaries as of the dates indicated and the results of their operations and their cash flows for the periods specified.  Such financial statements have been prepared in conformity with GAAP applied on a consistent basis throughout the periods covered thereby, except, in each case, as otherwise disclosed therein and the related notes and, in the case of unaudited interim financial statements, subject to normal year-end audit adjustments.
Section 3.04Absence of Certain Changes.  Since July 31, 2020, except as otherwise disclosed in the Company SEC Documents, (a) there has not been any development that, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect; (b) except pursuant to the Transaction Support Agreement,
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the Senior Secured First Lien Credit Agreement, the Indentures or the Transaction Documents to which they are parties, neither the Company nor any of its Subsidiaries has entered into any transaction or agreement that is  material to the Company and its Subsidiaries taken as a whole or incurred any liability or obligation, direct or contingent, that is material to the Company and its Subsidiaries taken as a whole; and (c) neither the Company nor any of its Subsidiaries has sustained any loss or interference with its business that is (i) material to the Company and its Subsidiaries taken as a whole; and (ii) that is from (x) fire, explosion, flood or other calamity, whether or not covered by insurance; (y) any labor disturbance or dispute; or (z) any action, order or decree of any court or arbitrator or Governmental Authority.  From the date of the Commitment Letters through the date of this Agreement, the Transaction Support Agreement and the Plan have not been amended or waived.
Section 3.05Organization and Good Standing.  The Ferrellgas Parties and each of the Company's Subsidiaries (a) have been duly organized, are validly existing and in good standing (where such designation is applicable) under the Laws of their respective jurisdictions of organization; (b) are duly qualified to do business and are in good standing (or the local law equivalent) in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification; and (c) have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except, with respect to the Company's Subsidiaires, where the failure to be so qualified or in good standing would not, individually or in the aggregate, have a Material Adverse Effect.  The Company has made available to the Purchasers complete and correct copies the certificates of incorporation, and by-laws or comparable governing documents, of each of Parent, the General Partner and the Company, each as amended to the date of this Agreement, and each as so delivered is in full force and effect as of the date of this Agreement (except pursuant to the Transaction Documents).
Section 3.06Capitalization.  (a) FCI is the sole stockholder of the General Partner, holding 100% of the issued and outstanding shares of capital stock of the General Partner.  Such shares of capital stock have been duly authorized and validly issued and are fully paid and non-assessable.  FCI owns such shares of capital stock free and clear of all Liens, except restrictions imposed by the Securities Act and any other applicable securities Laws or under the General Partner's organizational documents, and the Voting Agreement, the Class B Voting Agreement and the Class B Contingent Acquisition Agreement.
(a)On the date of the Closing the General Partner will be the sole general partner of each of Parent and the Company and own the entire general partner interest in each of Parent and the Company.  The general partner interest in each of Parent and the Company is duly authorized and validly issued and the General Partner has no obligation to make further payments or contributions to Parent or the Company solely by reason of its ownership of such general partner interest. The General Partner owns such general partner interest in each of Parent and the Company free and clear of all Liens, except restrictions imposed by the Securities Act and any other applicable securities Laws or under Parent or the Company's organizational documents and the Class B Contingent Acquisition Agreement.
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(b)Other than the Purchasers holding Preferred Units issued pursuant to this Agreement, Parent is the sole limited partner of the Company.  Parent's limited partner interest in the Company has been duly authorized and validly issued and Parent has no obligation to make further payments or contributions to the Company solely by reason of its ownership of such limited partner interest.  Parent owns such limited partner interest free and clear of all Liens, except restrictions imposed by the Securities Act and any other applicable securities Laws or under the Company's organizational documents.  Except for the Transaction Agreements and the Class B Contingent Acquisition Agreement, no other equity interests, options, warrants or other rights to purchase, agreements or other obligations to issue or rights to convert any obligation into any equity interest in the General Partner or the Company are outstanding.
Section 3.07Subsidiaries.  Schedule II sets forth the name of, and the ownership by the Company and its Subsidiaries in, each Subsidiary of the Company.  Each Subsidiary is wholly owned directly or indirectly by the Company.  No Subsidiary of the Company has issued any equity interests, or securities exercisable or exchangeable for or convertible into any equity interests, other than the equity interests owned directly or indirectly by the Company.
Section 3.08Authority.  The Ferrellgas Parties have the full right, power and authority to execute and deliver this Agreement and the other Transaction Documents to which they are a party, to perform their obligations hereunder and thereunder and to consummate the Transactions.  The execution, delivery and performance by the Ferrellgas Parties of this Agreement and the other Transaction Documents, as applicable, and the consummation by them of the Transactions, have been duly authorized by the Board (or a duly authorized committee).  No other action on the part of the Ferrellgas Parties or any of their equity holders is necessary to authorize the execution, delivery and performance by the Ferrellgas Parties of this Agreement and the other Transaction Documents to which they are a party and the consummation by them of the Transactions.  This Agreement has been duly executed and delivered by the General Partner and the Company and, assuming due authorization, execution and delivery by the Purchasers, constitutes a legal, valid and binding obligation of the General Partner and the Company, enforceable against the General Partner and the Company in accordance with its terms, except as such enforceability (i) may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar Laws of general application affecting or relating to the enforcement of creditors' rights generally; and (ii) is subject to general principles of equity, whether considered in a proceeding at law or in equity (the "Bankruptcy and Equity Exception").  The other Transaction Documents have been duly executed and delivered by the Ferrellgas Parties party to such documents and, assuming due authorization, execution and delivery by the Purchasers or other signatories to such documents, constitute legal, valid and binding obligations of the applicable Ferrellgas Parties, enforceable against such Person(s), in accordance with their terms, except as such enforceability may be limited by the Bankruptcy and Equity Exception.  Purchasers have valid and enforceable rights as third-party beneficiaries to Sections 6.16 of the Parent LPA and the sections referenced therein.
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Section 3.09No Violation or Default.  Neither the Ferrellgas Parties nor any of the Company's Subsidiaries is (a) in violation of their respective organizational documents; (b) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any loan or credit agreement, indenture, debenture, note, bond, mortgage, deed of trust, lease, sublease, license, contract or other agreement (each, a "Contract") to which it is party or by which it is bound or to which any of its property or assets is subject; or (c) in violation of any Law or any outstanding order, judgment, injunction, ruling, writ or decree of any Governmental Authority ("Judgments"), except, in the case of clauses (b) and (c) above, for any such default or violation that would not, individually or in the aggregate, have a Material Adverse Effect.
Section 3.10No Conflicts  The execution, delivery and performance by the Ferrellgas Parties of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Preferred Units and the consummation of the Transactions will not (a) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, result in the termination, modification or acceleration of, or result in the creation or imposition of any Lien upon any of their respective properties or assets, any Contract to which the Ferrellgas Parties or any of the Company's Subsidiaries is a party or by which the Ferrellgas Parties or any of the Company's Subsidiaries is bound or to which any property or assets of the Ferrellgas Parties or any of the Company's Subsidiaries is subject; (b) result in any violation of the provisions of the organizational documents of the Ferrellgas Parties or any of the Company's Subsidiaries; or (c) result in the violation of any Law or Judgment, except, in the case of clauses (a) and (c) above, for any such conflict, breach, violation, default, lien, charge or encumbrance that would not, individually or in the aggregate, have a Material Adverse Effect.
Section 3.11No Consents Required.  No consent, approval, authorization, order, registration or qualification of or with any Governmental Authority is required for the execution and delivery of this Agreement and the other Transaction Documents by the applicable Ferrellgas Parties, the performance of their respective obligations hereunder and thereunder and the consummation of the Transactions, except for (a)  filings with the SEC under the Securities Act and the Exchange Act; (b) compliance with any applicable state securities or blue sky laws; and (c) such consents, approvals, authorizations, orders, registrations or qualifications (i) as have already been made or obtained or (ii) where the failure to obtain any such consent, approval, authorization, order, registration or qualification would not, individually or in the aggregate, have a Material Adverse Effect.
Section 3.12No Labor Disputes.  No labor disturbance by or dispute with the employees of the Company or any of its Subsidiaries exists or, to the knowledge of the Ferrellgas Parties, is contemplated or threatened, and the Company is not aware of any existing or imminent labor disturbance by, or dispute with, the employees of any of its or its Subsidiaries' principal suppliers, contractors or customers, except as would not, individually or in the aggregate, have a Material Adverse Effect.  Neither the Company nor any of its Subsidiaries has received any notice of cancellation or termination with respect to any collective bargaining agreement to which it is a party.
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Section 3.13Legal Proceedings.  Except as disclosed in the Company SEC Documents, (i) there are no legal, governmental or regulatory investigations, actions, demands, claims, suits, arbitrations, inquiries or proceedings ("Actions") pending to which any of the Ferrellgas Parties or any of the Company's Subsidiaries is a party or to which any of their properties is subject that, if determined adversely to such Person, would, individually or in the aggregate, have a Material Adverse Effect, and (ii) no such Actions are, to the knowledge of the Ferrellgas Parties, threatened or contemplated by any Governmental Authority or by others that, if determined adversely to such Person, would, individually or in the aggregate, have a Material Adverse Effect.
Section 3.14Compliance with Laws; Licenses and Permits.  The Ferrellgas Parties and each of the Company's Subsidiaries are in material compliance with all state or federal laws, common law, statutes, ordinances, codes rules or regulations or other similar requirements enacted, adopted, promulgated or applied by any Governmental Authority ("Laws").  The Ferrellgas Parties and each of the Company's Subsidiaries possess all licenses, sub-licenses, certificates, permits and other authorizations issued by, and have made all declarations and filings with, the appropriate Governmental Authorities that are necessary for the ownership or lease of their respective properties or the conduct of their respective businesses, except where the failure to possess or make the same would not, individually or in the aggregate, have a Material Adverse Effect.  Neither the Ferrellgas Parties nor any of the Company's Subsidiaries has received notice of any revocation or modification of any such license, sub-license, certificate, permit or authorization, except where the failure to possess or make the same would not, individually or in the aggregate, have a Material Adverse Effect.
Section 3.15Real and Personal Property.  The Company and its Subsidiaries have good and marketable title in fee simple to (in the case of real property), or have valid rights to lease or otherwise use, all items of real and personal property that are material to the respective businesses of the Company and its Subsidiaries taken as a whole, in each case free and clear of all Liens and defects and imperfections of title, except (a) those under the Senior Secured First Lien Credit Agreement; (b) Permitted Liens (as defined in the Senior Secured First Lien Credit Agreement); and (c) those which do not materially interfere with the use made and proposed to be made of such property by the Company and its Subsidiaries.
Section 3.16Title to Intellectual Property.  (a) The Company and its Subsidiaries own or possess adequate rights to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, domain names and other source indicators, copyrights, and copyrightable works, know-how, trade secrets, systems, procedures, proprietary or confidential information and all other worldwide intellectual property, industrial property and proprietary rights (collectively, "Intellectual Property") used in the conduct of their respective businesses, except where the failure to own or possess such rights would not, individually or in the aggregate, have a Material Adverse Effect; (b) the Company and its Subsidiaries' conduct of their respective businesses does not infringe, misappropriate or otherwise violate any Intellectual Property of any Person in any material respect; (c) neither the Company nor any of its Subsidiaries has received any written notice of any claim of infringement, misappropriation or conflict
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with any such Intellectual Property, which could reasonably be expected to result in a Material Adverse Effect; and (d) to the knowledge of the Ferrellgas Parties, the Intellectual Property of the Company and its Subsidiaries is not being infringed, misappropriated or otherwise violated by any Person.
Section 3.17Compliance with Environmental Laws.  Except as disclosed in the Company SEC Documents, the Company and its Subsidiaries (a) are and have been in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment, natural resources, hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Laws"); (b) have received and are in compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (c) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  There are no costs or liabilities associated with Environmental Laws (including, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities or any potential liabilities to third parties) which would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 3.18Compliance with ERISA.  (a) Each employee benefit plan (other than any multi-employer plan), within the meaning of Section 3(3) of ERISA for which the Company or any member of its "Controlled Group" (defined as any organization which is a member of a controlled group of corporations within the meaning of Section 414 of the Code) would have any liability (each, a "Company Plan") has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including ERISA and the Code, except for noncompliance that would not reasonably be expected to result in liability to the Company or its Subsidiaries; (b) each multiemployer plan, within meaning of Section 3(3) of ERISA (each, a "Multiemployer Plan"), has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including ERISA and the Code, except for noncompliance that would not reasonably be expected to result in liability to the Company or its Subsidiaries; (c) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Company Plan and with respect to any Multiemployer Plan, excluding transactions effected pursuant to a statutory or administrative exemption that would not reasonably be expected to result in liability to the Company or its Subsidiaries; (d) for each Company Plan and in the case of each Multiemployer Plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, the minimum funding standards of Section 302 of ERISA or Section 412 of the Code, as applicable, has been satisfied (without taking into account any waiver or extension of any amortization period) and is reasonably expected to be satisfied in the future (without taking into account any waiver or extension of any amortization period); (e) the fair market value of the assets of each Company Plan and in the case of each Multiemployer Plan exceeds the present value of all benefits accrued under such
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Company Plan and Multiemployer Plan, in each case, (determined based on those assumptions used to fund such Company Plan and Multiemployer Plan) if required by the terms of such Company Plan and Multiemployer Plan; (f) no "reportable event" (within the meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to occur that has resulted, or would reasonably be expected to result, in liability to the Company or its Subsidiaries and (g) neither the Company nor any member of the Controlled Group has incurred, nor reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the Company Plan and in the case of the Multiemployer Plan or premiums to the Pension Benefit Guaranty Corporation, in the ordinary course and without default) in respect of a Company Plan (including a Multiemployer Plan within the meaning of Section 4001(a)(3) of ERISA), except in each case with respect to the events or conditions set forth in (a) through (g), as would not, individually or in the aggregate, have a Material Adverse Effect.
Section 3.19Disclosure Controls.  Parent and the Company maintain effective disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) that are designed to ensure that information required to be disclosed by Parent in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to Parent's management as appropriate to allow timely decisions regarding required disclosure.  Parent's management has carried out evaluations of the effectiveness of its disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.
Section 3.20Accounting Controls.  Parent and the Company maintain processes of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) designed by, or under the supervision of, its principal executive and principal financial officers, or persons performing similar functions, sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  Parent and the Company's internal controls over financial reporting are effective and there are no material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Parent or the Company's ability to record, process, summarize and report financial information.
Section 3.21Sarbanes-Oxley Act.  There is and has been no failure on the part of the Ferrellgas Parties and, to the knowledge of the Ferrellgas Parties, their respective officers and directors to comply with any applicable provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith, including Section 402 related to loans and Sections 302 and 906 related to certifications.
Section 3.22Taxes.  (a) All income and other material Tax Returns required to be filed by the Company or any of its Subsidiaries through the Closing have been timely filed (taking into account any valid extensions of the time for filing).  All such Tax Returns are true, correct, and complete in all material respects.
(a)The Company and each of its Subsidiaries have timely paid, or
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caused to be paid, all material Taxes required to have been paid by them, whether or not shown as due on a Tax Return.
(b)All material Taxes required to have been  withheld or collected by the Company or any of its Subsidiaries have been withheld and collected and, to the extent required by the applicable Law, paid to the appropriate Governmental Authority.  No Taxes of the Company or any of its Subsidiaries have been deferred pursuant to Section 2302 of CARES Act.
(c)Neither the IRS nor any other Governmental Authority (i) has asserted by written notice to the Company or any of its Subsidiaries as of the date of this Agreement any deficiency or claim for any material amount of additional Taxes which such asserted deficiency or claim has not yet been resolved; (ii) is currently conducting an audit or other administrative or judicial proceeding with respect to Taxes of the Company or any of its Subsidiaries or has threatened any such audit or proceeding or (iii) has made a written claim against the Company or any of its Subsidiaries in a jurisdiction where neither the Company nor any Subsidiary of the Company files Tax Returns that the Company or such Subsidiary is or may be subject to taxation by that jurisdiction.
(d)There are no Liens for any Tax (other than for ad valorem property Taxes not yet due and payable) upon any asset of the Company or its Subsidiaries.
(e)No waiver or agreement by the Company or any of its Subsidiaries for the extension of time for the assessment or payment of any material Taxes is currently in effect.
(f)Neither the Company nor any of its Subsidiaries has any liability for the Taxes of any Person (other than the Company) pursuant to Treasury Regulation Section 1.1502-6 (or any similar provisions of state, local or non-U.S. law), as a transferee or successor, by Contract or otherwise (other than with respect to any such Contract made in the ordinary course of business that does not involve an acquisition or disposition of any entity or other asset (other than inventory) and does not relate primarily to Tax).
(g)Neither the Company nor any of its Subsidiaries will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion of such period) ending after the date of the Closing as a result of any of the following that occurred or exists on or prior to Closing:  (i) a "closing agreement" as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non U.S. income Tax Law); (ii) an installment sale or open transaction entered into outside the ordinary course of business; (iii) a prepaid amount received outside of the ordinary course of business; or (iv) a change in accounting method pursuant to Section 481 of the Code or any similar provision of the Code or the corresponding Tax Laws of any nation, state or locality.
(h)Neither the Company nor any of its Subsidiaries have engaged in a "listed transaction" within the meaning of Treasury Regulations Section 1.6011-4(b).
(i)The Company is properly classified as a partnership for U.S. federal
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income tax purposes and not treated as a corporation pursuant to Section 7704 of the Code.  The Company has not made any election or taken any other action inconsistent with this classification.
(j)For each taxable year since the Company's formation, 90 percent or more of its gross income for the taxable year has consisted of qualifying income, as defined in Section 7704(d) of the Code.
Section 3.23Insurance. ( a)  The Company and its Subsidiaries have insurance covering their respective properties, operations, personnel and businesses, including business interruption insurance, which insurance is in amounts and insures against such losses and risks as are adequate to protect the Company and its Subsidiaries and their respective businesses, taken as a whole.  Neither the Company nor any of its Subsidiaries (a) has received notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance; or (b) believes that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from similar insurers as may be necessary to continue its business.  The Ferrellgas Parties have provided the Purchasers with copies of the policies for directors' and officers' liability insurance and fiduciary liability insurance that are expected to be in place from and immediately after the Closing.
Section 3.24Investment Company Act; Covered Fund.. (a)None of the Ferrellgas Parties nor any of the Company's Subsidiaries is required, and upon the issuance and sale of the Preferred Units as contemplated herein and the application of the net proceeds therefrom, will not be, required to register as an "investment company" or an entity "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940.  The Company agrees that it is not, and will not become a "covered fund" as such term is defined in the final regulations promulgated under Section 13 of the U.S. Bank Holding Company Act of 1956, as amended, 12 C.F.R. section 248.10(b)(1).
Section 3.25Absence of Manipulation. ( a)None of the Ferrellgas Parties nor any of their respective Affiliates has taken, directly or indirectly, any action designed, or that could reasonably be expected, to cause or result in the stabilization or manipulation of the price of any security of the Company.
Section 3.26No Unlawful Payments. (a)None of the Ferrellgas Parties or their respective Subsidiaries, nor any director, officer, nor, to the knowledge of the Ferrellgas Parties, any agent, employee or other person acting on behalf of the Ferrellgas Parties or their respective Subsidiaries has (a) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (b) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment from corporate funds to any foreign or domestic government official or employee, including of any government-owned or controlled entity or of a public international organization; (c) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any other applicable anti-bribery or anti-corruption law; or (d) made any bribe, rebate, payoff, influence payment, kickback or other
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unlawful or improper payment or benefit.  The Ferrellgas Parties or their respective Subsidiaries enforce, and will continue to enforce policies and procedures designed to promote and ensure compliance with all applicable anti-bribery and anti-corruption laws.
Section 3.27Compliance with Anti-Money Laundering Laws. (a)  The operations of the Ferrellgas Parties and their respective Subsidiaries are and have for the last six years been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements, including those of the Currency and Foreign Transactions Reporting Act of 1970, the applicable money laundering statutes of applicable jurisdictions where the Ferrellgas Parties or any of their respective Subsidiaries conducts business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any Governmental Authority (collectively, the "Anti-Money Laundering Laws").  No action, suit or proceeding by or before any Governmental Authority involving the Ferrellgas Parties or any of their respective Subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of the Ferrellgas Parties, threatened.
Section 3.28No Conflicts with Sanctions Laws. (a)  None of the Ferrellgas Parties or their respective Subsidiaries, nor any director, employee, officer, or, to the knowledge of the Ferrellgas Parties, any agent, or any of their Affiliates is currently the subject or the target of any sanctions administered or enforced by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury), the United Nations Security Council, the European Union, Her Majesty's Treasury or other relevant sanctions authority (collectively, "Sanctions").  None of the Ferrellgas Parties nor any of their Subsidiaries, is located, organized or resident in a country or territory that is the subject or target of Sanctions (each, a "Sanctioned Country").  The Company will not directly or indirectly use the proceeds from the sale of the Preferred Units hereunder, or lend, contribute or otherwise make available such proceeds to any other person or entity (a) to fund any activities of or business with any person, or in any country or territory, that, at the time of such funding, is the subject or target of Sanctions; or (b) in any other manner that will result in a violation by any person of Sanctions.  The Ferrellgas Parties and their respective Subsidiaries have not and are not now knowingly engaged in and will not engage in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or target of Sanctions or with any Sanctioned Country.
Section 3.29No Restrictions on Subsidiaries. (a)  No Company Subsidiary is prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to the Company, from making any other distribution on such Subsidiary's capital stock, from repaying to the Company any loans or advances to such Subsidiary from the Company or from transferring any of such Subsidiary's properties or assets to the Company or any other Subsidiary of the Company.
Section 3.30No Undisclosed Relationships. (a)  No relationship, direct or indirect, exists between or among the Ferrellgas Parties or any of their respective Subsidiaries, on the one hand, and the directors, officers, stockholders or other Affiliates of the Ferrellgas Parties or any of their respective Subsidiaries, on the other, that is required
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by the Securities Act or the Exchange Act to be described in the Company SEC Documents and that is not so described in such Company SEC Documents.
Section 3.31Brokers and Other Advisors.  Except for Moelis & Company LLC, no broker, investment banker, financial advisor or other Person is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the Transactions based upon arrangements made by or on behalf of the Company or any of its Subsidiaries.
Section 3.32Sale of Securities.  Assuming the accuracy of the representations and warranties set forth in Section 4.06, the sale of the Preferred Units pursuant to this Agreement is exempt from the registration and prospectus delivery requirements of the Securities Act.  Without limiting the foregoing, neither the Company nor, to the knowledge of the Ferrellgas Parties, any other Person authorized by the Company to act on its behalf, has engaged in a general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) of investors with respect to offers or sales of Preferred Units.  Neither the Company nor, to the knowledge of the Ferrellgas Parties, any Person acting on their behalves has made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the offering or issuance of Preferred Units under this Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act that would result in none of Regulation D or any other applicable exemption from registration under the Securities Act to be available.  The Ferrellgas Parties will not take any action or steps that would cause the offering or issuance of Preferred Units under this Agreement to be integrated with other offerings by the Company.
Section 3.33Status of Securities.  The Acquired Units will be, when issued at the Closing, duly authorized and validly issued in accordance with the requirements of the organizational documents of the Company and the Purchasers will have no obligation to make further payments or contributions to the Company, other than their respective Purchase Price Portion, solely by reason of their ownership of the Acquired Units.  Assuming the accuracy of the representations and warranties set forth in Section 4.06, the Acquired Units will be, when issued at the Closing, issued in compliance with all applicable federal and state securities Laws.  The Acquired Units will not be subject to preemptive rights of any other limited partner of the Company, and will be free and clear of all Liens, except restrictions imposed by the Securities Act and any applicable securities Laws or under the Company LPA.  The respective rights, preferences, privileges and restrictions of the Preferred Units are as stated in the Company LPA or as otherwise provided by applicable Law.  The Preferred Units rank senior to the other limited partnership interest in the Company in the right to receive distributions and in right of payment to the extent of the Total Redemption Price and the PIK Redemption Price.
Section 3.34Disclosure.  (a) All written factual information concerning the Ferrellgas Parties and their respective Subsidiaries and Affiliates (other than financial projections (the "Projections"), other forward-looking and/or projected information and information of a general economic or industry-specific nature) that has been made available to the Purchasers by the Company, its Subsidiaries or any of their respective
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Representatives on the Company's behalf in connection with the Transactions (the "Information"), when taken as a whole, does not or did not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained in the Information not materially misleading in light of the circumstances under which such statements were made (after giving effect to all supplements and updates to such statements from time to time).
(a)The Projections made available to the Purchasers by the Company, its Subsidiaries or any their respective Representatives on the Company's behalf in connection with the Transactions have been prepared in good faith based upon assumptions believed by the Company and its Subsidiaries to be reasonable at the time furnished (it being recognized by the Purchasers that such Projections and other forward-looking and/or projected information were as to future events and were not to be viewed as facts and were subject to significant uncertainties and contingencies many of which were beyond your control, that no assurance can be given that any particular Projections or other forward-looking or projected information would be realized, that actual results may differ from projected results or forward-looking information and that such differences may be material).
Section 3.35Solvency.  (a) As of the Closing, immediately after giving effect to the consummation of the Transactions, assuming that indebtedness and other obligations will become due at their respective maturities, (i) the present fair value of the assets of the Company and its Subsidiaries on a consolidated basis, at a fair valuation, will exceed the debts and liabilities, direct, subordinated, contingent or otherwise, of the Company and its Subsidiaries on a consolidated basis; (ii) the present fair saleable value of the property of the Company and its Subsidiaries on a consolidated basis will be greater than the amount that will be required to pay the probable liability of the Company and its Subsidiaries on a consolidated basis on their debts and other liabilities, direct, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) the Company and its Subsidiaries on a consolidated basis will be able to pay their debts and liabilities, direct, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) the Company and its Subsidiaries on a consolidated basis will not have unreasonably small capital with which to conduct the businesses in which they are engaged as such businesses are now conducted and are proposed to be conducted following the Closing.
(a)As of the Closing, immediately after giving effect to the consummation of the Transactions, the Company does not intend to, and the Company does not believe that it or any of its Subsidiaries will, incur debts beyond its ability to pay such debts as they mature, taking into account the timing and amounts of cash to be received by it or any such subsidiary and the timing and amounts of cash to be payable on or in respect of its indebtedness or the indebtedness of any such subsidiary.
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ARTICLE IV
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Representations and Warranties of the Purchasers
Each of the Purchasers represents and warrants, severally and not jointly, to the Company, as of the date of this Agreement (it being understood that references to the Purchaser in this Article IV shall be deemed to be references and statements solely with respect to such Purchaser) that:
Section 4.01Organization; Standing.  The Purchaser is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization and has all requisite power and authority to carry on its business as presently conducted.
Section 4.02Authority; Noncontravention.  (a) The Purchaser has all necessary power and limited partnership (or similar) authority to execute and deliver this Agreement and the other Transaction Documents to which it is a party and to perform its obligations hereunder and thereunder and to consummate the Transactions.  The execution, delivery and performance by the Purchaser of this Agreement and the other Transaction Documents to which it is a party, and the consummation by the Purchaser of the Transactions, have been duly authorized and approved by all necessary action on the part of the Purchaser.  No further action, approval or authorization by any of its partners, members or equityholders is necessary to authorize the execution, delivery and performance by the Purchaser of this Agreement and the other Transaction Documents to which it is a party and the consummation by the Purchaser of the Transactions.  This Agreement and the other Transaction Documents to which it is a party have been duly executed and delivered by the Purchaser and, assuming due authorization, execution and delivery by the other parties to such document, constitute the legal, valid and binding obligations of the Purchaser, enforceable against the Purchaser in accordance with their terms, except as such enforceability may be limited by the Bankruptcy and Equity Exception.
(a)Neither the execution and delivery of this Agreement or the other Transaction Documents by the Purchaser, nor the consummation of the Transactions by the Purchaser, nor performance or compliance by the Purchaser with any of the terms or provisions hereof or thereof, will (i) conflict with or violate any provision of the certificate of incorporation, bylaws or other organizational documents of the Purchaser, or (ii) (x) violate any Laws or Judgments applicable to the Purchaser or any of its Subsidiaries or (y) violate or constitute a default (or constitute an event which, with notice or lapse of time or both, would violate or constitute a default) under any of the terms, conditions or provisions of any Contract to which the Purchaser or any of its Subsidiaries is a party or accelerate the Purchaser's or any of its Subsidiaries', if applicable, obligations under any such Contract, except, in the case of clause (ii) above, as would not, individually or in the aggregate, reasonably be expected to prevent, materially delay or materially impair the ability of the Purchaser to consummate the Transactions.
Section 4.03Governmental Approvals.  No consent or approval of, or filing, license, permit or authorization, declaration or registration with, any Governmental Authority is necessary for the execution and delivery of this Agreement and the other
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Transaction Documents to which it is a party by the Purchaser, the performance by the Purchaser of its obligations hereunder and thereunder and the consummation by the Purchaser of the Transactions, other than such other consents, approvals, filings, licenses, permits, authorizations, declarations or registrations that, if not obtained, made or given, would not, individually or in the aggregate, reasonably be expected to prevent, materially delay or materially impair the ability of the Purchaser to consummate the Transactions.
Section 4.04Financing.  The Purchaser currently has capital commitments or other sources of funds sufficient to pay its Purchase Price Portion on the terms and conditions contemplated by this Agreement.
Section 4.05Brokers and Other Advisors.  No broker, investment banker, financial advisor or other Person is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the Transactions based upon arrangements made by or on behalf of the Purchaser or any of its Subsidiaries, except for Persons, if any, whose fees and expenses will be paid by the Purchaser or its Affiliates.
Section 4.06Purchase for Investment.  The Purchaser acknowledges that the Preferred Units have not been, and will not be, registered under the Securities Act or under any state or other applicable securities laws.  The Purchaser (a) acknowledges that it is acquiring the Preferred Units pursuant to an exemption from registration under the Securities Act solely for investment with no intention to distribute any of the foregoing to any Person; (b) will not transfer any of the Preferred Units, except in compliance with the Company LPA and the registration requirements or exemption provisions of the Securities Act and any other applicable securities Laws; (c) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Preferred Units and of making an informed investment decision; (d) is an "accredited investor" (as that term is defined by Rule 501 of the Securities Act); (e) is a "qualified institutional buyer" (as that term is defined in Rule 144A of the Securities Act); and (f) (i) has reviewed the information that it considers necessary; or appropriate to make an informed investment decision with respect to the Preferred Units, (ii) has had an opportunity to discuss with the Company and its Representatives the intended business and financial affairs of the Company and to obtain information necessary to verify the information furnished to it or to which it had access; and (iii) can bear the economic risk of (1) an investment in the Preferred Units indefinitely; and (2) a total loss in respect of such investment.  The Purchaser has such knowledge and experience in business and financial matters so as to enable it to understand and evaluate the risks of, and form an investment decision with respect to its investment in, the Preferred Units.
ARTICLE V
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Additional Agreements
Section 5.01Further Assurances.  At any time and from time to time after the Closing while any Preferred Units are outstanding, the Company, on the one hand, and the several Purchasers, on the other, agree to (a) furnish upon request to each other such further
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assurances, documents, or instruments of transfer or assignment; (b) promptly execute, acknowledge and deliver any such further assurances, documents, or instruments of transfer; and (c) do all such further acts and things necessary and advisable under applicable Law, all as such other party may reasonably request, in each case for the purpose of carrying out the provisions of the Transaction Documents and to consummate and make effective the Transactions.
Section 5.02Public Disclosure.  The Required Purchasers, the Ferrellgas Parties and their respective Subsidiaries shall consult with each other before issuing, and give each other the opportunity to review and comment upon, any press release or other public statements with respect to the Transaction Documents or the Transactions, and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable Law, Judgment, court process or the rules and regulations of any national securities exchange or national securities quotation system.  The Purchasers, the Ferrellgas Parties and their respective Subsidiaries agree that the initial press release to be issued with respect to the Transactions following execution of this Agreement shall be in a form agreed to by the Required Purchasers and the Ferrellgas Parties (the "Announcement").  Notwithstanding the forgoing, this Section 5.02 shall not apply to any press release or other public statement made by the Purchasers, the Ferrellgas Parties or their respective Subsidiaries (a) which is consistent with the Announcement and does not contain any information relating to the Transactions that has not been previously announced or made public in accordance with the terms of this Agreement; or (b) is made in the ordinary course of business consistent with past practice and does not relate specifically to the signing of the Transaction Documents or the Transactions.
Section 5.03Confidentiality.  Each of the Purchasers will, and will direct their respective Affiliates and Representatives to, keep confidential any data or other information (including oral, written and electronic data or other information) concerning the Ferrellgas Parties or their Subsidiaries or Affiliates that may be furnished to such Purchaser, their Affiliates or their respective Representatives by or on behalf of the Ferrellgas Parties or any of their Representatives pursuant to this Agreement (collectively referred to as the "Confidential Information") and to use the Confidential Information solely for purposes of monitoring, administering or managing (including transferring in accordance with the Transaction Documents) such Purchaser's investment in the Company made pursuant to this Agreement.  Notwithstanding the foregoing, the Confidential Information shall not include information that (a) was or becomes available to the public other than as a result of a disclosure by the such Purchaser, any of their Affiliates or any of their respective Representatives in violation of this Section 5.03; (b) was or becomes available to such Purchaser, any of its Affiliates or any of their respective Representatives from a source other than the Ferrellgas Parties or their Representatives, provided that such source is not known to such Purchaser to be disclosing such information in violation of an obligation of confidentiality (whether by agreement or otherwise) to the Ferrellgas Parties; (c) at the time of disclosure is already in the possession of such Purchaser, any of their Affiliates or any of their respective Representatives on a non-confidential basis; or (d) was independently developed by such Purchaser, any of their Affiliates or any of their respective Representatives without reference to, incorporation of, or other use of any Confidential Information.  The Confidential Information may be disclosed (i) to each of
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the Purchaser's Affiliates, and their direct and indirect equityholders, limited partners or members or funding sources and its and their respective Representatives (including any listed entity that is an investor in an Affiliate of any of the Purchasers) on a need-to-know basis (including in connection with fundraising, marketing and reporting activities) (provided that such Purchaser's Affiliates and respective Representatives agree to maintain the confidentiality of such Confidential Information and such Purchaser will be responsible for any breach by its Affiliates, and their direct and indirect equityholders, limited partners or members or funding sources and its and their respective Representatives of their obligations to keep such Confidential Information confidential in accordance with the provisions hereof unless such Affiliate, equityholder, limited partner, member, funding source or Representative has entered into a confidentiality agreement enforceable by the Company); (ii) to a potential transferee of its Preferred Units (so long as such transfer is permitted under the Transaction Documents); provided, that such potential transferee agrees to be bound by the provisions of this Section 5.03 or a confidentiality obligation having substantially similar restrictions, (iii) in the event that a Purchaser, any of its Affiliates or any of their respective Representatives are requested or required by applicable Law, Judgment, court process or the rules and regulations of any national securities exchange or national securities quotation system, governmental, regulatory or self-regulatory authority exercising examination or regulatory authority or otherwise to disclose any Confidential Information, in each of which instances (except with respect to any audit or examination conducted by bank accountants or any regulatory authority exercising examination or regulatory authority) such Purchaser, their Affiliates and their respective Representatives, as the case may be, shall, to the extent legally permitted, provide notice to the Company sufficiently in advance of any such disclosure so that the Company will have a reasonable opportunity to timely seek to limit, condition or quash such disclosure at the Company's sole cost and expense, (iv) to rating agencies and (v) to the extent necessary, to enforce a Purchaser's rights hereunder.
Section 5.04Securities Not Registered; Legend.  Purchasers acknowledge that the Acquired Units are not currently registered under the Securities Act or any applicable state securities law, and that such Acquired Units may not be transferred or sold except pursuant to the registration provisions of the Securities Act or pursuant to an applicable exemption therefrom and pursuant to state securities laws and regulations as applicable.  In addition to any other legend required under the Delaware Uniform Revised Limited Partnership Act and the Company LPA, all certificates or other instruments representing the Preferred Units will bear a legend substantially to the following effect:
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS, OR WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.
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Section 5.05Tax Matters.  (a) On or prior to the Closing, each Purchaser shall deliver to the Company or its paying agent a duly executed, valid, accurate and properly completed IRS Form W-9 or an appropriate IRS Form W-8, as applicable, and any other applicable evidence, which shall establish any exemption from, or reduction in, U.S. federal withholding tax to which such Purchaser is entitled in respect of payments with respect to the Preferred Units.  Each Purchaser agrees that if any form or any other applicable evidence it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form and any other applicable evidence or promptly notify the Company in writing of its legal inability to do so.
(a)The Company shall pay any and all documentary, stamp and similar issue or transfer Tax due on the issuance of the Preferred Units.
Section 5.06Use of Proceeds.  The Company shall use the proceeds from the issuance and sale of the Acquired Units, together with available cash, to satisfy and discharge the Company's obligations under the indenture governing the 2025 Notes in accordance with the terms thereof, and to pay related fees, premiums and accrued and unpaid interests on the 2025 Notes.
ARTICLE VI
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Miscellaneous
Section 6.01Survival.  All of the covenants or other agreements of the parties contained in this Agreement shall survive until fully performed or fulfilled, unless and to the extent that non-compliance with such covenants or agreements is waived in writing by the party entitled to such performance.  The representations and warranties made herein shall survive the Closing, regardless of any investigation made at any time by or on behalf of the Purchasers or the Company.
Section 6.02Amendments; Waivers.  Subject to compliance with applicable Law, this Agreement may be amended or supplemented only by written agreement of each of (i) the Company and (ii) the Required Purchasers.
Section 6.03Extension of Time, Waiver, Etc.  The Company and the Required Purchasers may, subject to applicable Law, (a) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto; (b) extend the time for the performance of any of the obligations under this Agreement; or (c) waive compliance with any of the agreements contained herein.  Notwithstanding the foregoing, no failure or delay by the Company or any of the Purchasers in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right hereunder.  Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.
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Section 6.04Assignment.  Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned, in whole or in part, by operation of Law or otherwise, by any of the parties hereto without the prior written consent of each of the other parties hereto.  Notwithstanding the foregoing, and without the prior written consent of the Company, any of the Purchasers may assign its rights, interests and obligations under this Agreement, in whole or in part, to one or more Permitted Transferees; provided that no such assignment will relieve such Purchaser of its obligations hereunder prior to the Closing.  Subject to the immediately preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and permitted assigns.
Section 6.05Counterparts.  This Agreement may be signed in any number of counterparts and by the parties hereto in separate counterparts, and signature pages may be delivered by facsimile, electronic mail (including any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transaction Act, the New York Electronic Signatures and Records Act (N.Y. State Tech. §§ 301-309), as amended from time to time, or other applicable Law) or other transmission method, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
Section 6.06Entire Agreement; No Third-Party Beneficiaries.  This Agreement (including the recitals), together with the other Transaction Documents, constitutes the entire agreement, and supersedes all other prior agreements and understandings, both written and oral, among the parties and their Affiliates, or any of them, with respect to the subject matter hereof and thereof.  No provision of this Agreement shall confer upon any Person other than the parties hereto and their permitted assigns any rights or remedies hereunder; provided that Section 6.14 shall be for the benefit of and fully enforceable by each of the Non-Recourse Parties.
Section 6.07Governing Law; Jurisdiction.  (a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under any applicable conflict of Laws principles.
(a)All legal actions or proceedings arising out of or relating to this Agreement shall be heard and determined in the Court of Chancery of the State of Delaware or, if the Court of Chancery of the State of Delaware lacks jurisdiction over such matter, the Superior Court of the State of Delaware and the federal courts of the United States of America located in the State of Delaware, and the parties hereto hereby irrevocably submit to the exclusive jurisdiction and venue of such courts in any such legal action or proceeding and irrevocably waive the defense of an inconvenient forum or lack of jurisdiction to the maintenance of any such legal action or proceeding.  The consents to jurisdiction and venue set forth in this Section 6.07 shall not constitute general consents to service of process in the State of Delaware and shall have no effect for any purpose except as provided in this paragraph and shall not be deemed to confer rights on any Person other than the parties hereto.  Each party hereto agrees that service of process upon such party in any legal action or proceeding arising out of or relating to this Agreement shall be effective if notice is given by overnight courier at the address set forth in Section 6.10 of this Agreement.  The
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parties hereto agree that a final judgment in any such legal action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law; provided, however, that nothing in the foregoing shall restrict any party's rights to seek any post-judgment relief regarding, or any appeal from, a final trial court judgment.
Section 6.08Remedies.  (a) Except as otherwise provided in this Agreement, all remedies available under this Agreement, at law or otherwise, shall be deemed cumulative and not alternative or exclusive of other remedies.  The exercise by any party of a particular remedy shall not preclude the exercise of any other remedy.
(a)The parties hereto agree that irreparable damage for which monetary relief, even if available, would not be an adequate remedy, would occur in the event that any provision of this Agreement is not performed in accordance with its specific terms or is otherwise breached, including if the parties hereto fail to take any action required of them hereunder to cause the Closing to occur.  The parties acknowledge and agree that (i) the parties shall be entitled to seek an injunction or injunctions, specific performance or other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in the courts described in Section 6.07 without proof of damages or otherwise (in each case, subject to the terms and conditions of this Section 6.08), this being in addition to any other remedy to which they are entitled under this Agreement; and (ii) the right of specific enforcement is an integral part of the Transactions and without that right, neither the Company nor any of the Purchasers would have entered into this Agreement.  The parties hereto agree not to assert that a remedy of specific enforcement is unenforceable, invalid, contrary to Law or inequitable for any reason, and agree not to assert that a remedy of monetary damages would provide an adequate remedy or that the parties otherwise have an adequate remedy at law.  The parties hereto acknowledge and agree that any party seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this Section 6.08 shall not be required to provide any bond or other security in connection with any such order or injunction.
Section 6.09Waiver of Jury Trial.  EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER OR RELATE TO THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (C) IT MAKES SUCH
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WAIVER VOLUNTARILY AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 6.09.
Section 6.10Notices.  All notices, requests and other communications to any party hereunder shall be in writing and shall be deemed given if delivered personally, emailed (which is confirmed) or sent by overnight courier (providing proof of delivery) to the parties at the following addresses:
(a)If to the Company, to it at:
Ferrellgas, L.P.
750 College Blvd., Suite 1000
Overland Park, Kansas 66210
Attention: Jordan Burns, Vice President & General Counsel
Email: jordanburns@ferrellgas.com
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with a copy to (which shall not constitute notice):
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Squire Patton Boggs (US) LLP
201 E. Fourth Street, Suite 1900
Cincinnati, Ohio 45202
Attention: Stephen Lerner and Aaron Seamon
Email: stephen.lerner@squirepb.com;
aaron.seamon@squirepb.com
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(b)If to the Purchasers, in accordance with the notice information provided in Schedule I.
or such other address or email address as such party may hereafter specify by like notice to the other parties hereto.  All such notices, requests and other communications shall be deemed received on the date of actual receipt by the recipient thereof if received prior to 5:00 p.m. local time in the place of receipt and such day is a Business Day in the place of receipt.  Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt.
Section 6.11Severability.  If any term, condition or other provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other terms, provisions and conditions of this Agreement shall nevertheless remain in full force and effect.  Upon such determination that any term, condition or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible to the fullest extent permitted by applicable Law.
Section 6.12Expenses.  Except as otherwise expressly provided herein or in any other Transaction Document, the Company will, in accordance with, and subject to any
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limitations described in, the Commitment Letters, reimburse the Ares Purchasers and the JPMCF Purchaser for each of their respective reasonable and documented expenses incurred in connection with this Agreement and the Transactions, including fees of counsel, financial advisors and accountants.
Section 6.13Interpretation.  (a) When a reference is made in this Agreement to an Article, a Section, Exhibit or Schedule, such reference shall be to an Article of, a Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated.  The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation".  The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement unless the context requires otherwise.  The words "date hereof" when used in this Agreement shall refer to the date of this Agreement.  The terms "or", "any" and "either" are not exclusive.  The word "extent" in the phrase "to the extent" shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply "if".  The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term.  Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and any rules and regulations thereunder.  Unless otherwise specifically indicated, all references to "dollars" or "$" shall refer to the lawful money of the United States.  References to a Person are also to its permitted assigns and successors.  When calculating the period of time between which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded (unless, otherwise required by Law, if the last day of such period is not a Business Day, the period in question shall end on the next succeeding Business Day).
(a)The parties hereto have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of the authorship of any provision of this Agreement.
(b)Any obligation of any Purchaser under this Agreement, which obligation is performed, satisfied or fulfilled by an Affiliate of such Purchaser, shall be deemed to have been performed, satisfied or fulfilled by such Purchaser.  Whenever this Agreement requires the Company to take any action, such requirement shall be deemed to include an undertaking on the part of the General Partner and Parent to cause the Company to take such action.
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Section 6.14Non-Recourse.  This Agreement and the other Transaction Documents may only be enforced against, and any claim or cause of action based upon, arising out of, or related to this Agreement other Transaction Documents, or the Transactions and thereby may only be brought against the entities that are expressly named as parties hereto or thereto and their respective successors and permitted assigns. Except as set forth in the immediately preceding sentence:
(a)No past, present or future director, officer, employee, incorporator, member, manager, general or limited partner, stockholder, equityholder, Affiliate, agent, attorney, advisor or representative of any Purchaser (collectively, the "Purchaser Non-Recourse Parties") shall have any liability for any obligations or liabilities of any Purchaser under this Agreement or for any claim based on, in respect of, or by reason of, the Transactions.  Without limiting the rights of any party against the other parties hereto, in no event shall any party or any of its Affiliates seek to enforce this Agreement against, make any claims for breach of this Agreement against, or seek to recover monetary damages from, any Purchaser Non-Recourse Party.  Each of the Purchaser Non-Recourse Parties is an intended third party beneficiary of this Section 6.14(a).
(b)No past, present or future director, officer, employee, incorporator, member, manager, general or limited partner, stockholder, equityholder, Affiliate, agent, attorney, advisor or representative of the Company, General Partner, Parent and Subsidiaries (collectively, the "Ferrellgas Non-Recourse Parties") shall have any liability for any obligations or liabilities for any claim based on, in respect of, or by reason of, the Transactions.  Without limiting the rights of any party against the other parties hereto, in no event shall any party or any of its Affiliates seek to enforce this Agreement against, make any claims for breach of this Agreement against, or seek to recover monetary damages from, any Ferrellgas Non-Recourse Party.  Each of the Ferrellgas Non-Recourse Parties is an intended third party beneficiary of this Section 6.14(b).
Section 6.15Acknowledgement.  Each of the parties hereby acknowledges and agrees that the Purchasers are acting independently of each other and nothing herein or in any other Transaction Document shall be deemed to create any agreement, arrangement or understanding between or among any of the Purchasers.
Section 6.16PATRIOT Act.  The Purchasers hereby notify the Company that, pursuant to the requirements of the PATRIOT Act and the requirements of the 31 C.F.R. §1010.230 (the "Beneficial Ownership Regulations"), the Purchaser may be required to obtain, verify and record information that identifies Parent and/or the Company, which information includes the names and addresses of Parent and/or the Company, as well as such other information that will allow the Purchasers to identify Parent and/or the Company in accordance with the PATRIOT Act and the Beneficial Ownership Regulations.  In addition, the Purchasers may be required to obtain with respect to Parent and/or the Company all documentation and other information required by U.S. regulatory authorities under applicable "know your customer" and anti-money laundering rules and regulations.
Section 6.17Termination of Commitment Letters.  As provided in the Commitment Letters, effective upon Closing, the Commitment Letters will terminate and
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be of no further force and effect and the parties to the Commitment Letters will have no further obligations under the Commitment Letters, except for, in each case, the obligations that are expressly stated in the Commitment Letters to survive termination.
Section 6.18Certain Acknowledgements and Agreements.  (a) The Company acknowledges that the Purchasers and their respective Affiliates may be providing debt financing, equity capital or other services (including financial advisory services) to other companies in respect of which the Company may have conflicting interests regarding the Transactions and otherwise.  The Company also acknowledges that none of the Purchasers or their respective Affiliates has any obligation to use in connection with the Transactions, or to furnish to the Company, confidential information obtained from other companies.  The Company further acknowledges that certain of the Purchasers are investment firms that may from time to time effect transactions, for its own or its Affiliates' account or the account of customers, and hold positions in loans, securities or options on loans or securities of the companies that may be the subject of the Transactions and further agrees not to assert any claim such party might allege based on any actual or potential conflicts of interest that might be asserted to arise or result therefrom.
(a)Each Purchaser and the Company further acknowledges and agree that (i) no fiduciary, advisory or agency relationship between the parties is intended to be or has been created in respect of any of the Transactions; (ii) the Purchasers, severally, on the one hand, and the Company, on the other hand, have an arm's-length business relationship that does not directly or indirectly give rise to, nor has either relied on, any fiduciary duty on the part of the Company or the Purchasers; (iii) the Company and the several Purchasers are capable of evaluating and understanding, and the parties understand and accept, the terms, risks and conditions of the Transactions; (iv) the Company and the several Purchasers understand that each is engaged in a broad range of transactions that may involve interests that differ from the interests of the other and that neither the Company nor the Purchasers have any obligation to disclose such interests and transactions by virtue of any fiduciary, advisory or agency relationship; and (v) the Company and each of the Purchasers waive, to the fullest extent permitted by Law, any claims it may have against any Purchaser for breach of fiduciary duty or alleged breach of fiduciary duty and agree that none of the Purchasers shall have any liability (whether direct or indirect) to another party in respect of such a fiduciary duty claim or to any Person asserting a fiduciary duty claim on behalf of or in right of such party, including any party's equity holders, employees or creditors.  Additionally, the Company acknowledges and agrees that no party is advising the other as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction.
(b)The Company has consulted with its advisors concerning the matters in this Agreement and is responsible for making its independent investigation and evaluation of such matters, and none of the Purchasers shall have any responsibility or liability to the Company with respect to such matters.  Any review by the Company or the Purchasers of the Transactions or other matters relating to such transactions have been performed solely for the benefit of such party and not on behalf of any other party or any of its Affiliates.
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Section 6.19Class B Units.  Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement is intended to limit the rights of any Purchaser with respect to the Company, Parent or any of their respective Affiliates under any separate agreements or court orders to the extent related to any Purchaser's right as a holder of Class B Units.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.
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	FERRELLGAS, L.P.

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	By: Ferrellgas, Inc., its General Partner

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	/s/ Brian W. Herrmann

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	Name:Brian W. Herrmann

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	Title:Interim Chief Financial Officer

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	FERRELLGAS, INC.

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	By:

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	/s/ Brian W. Herrmann

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	Name:Brian W. Herrmann

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	Title:Interim Chief Financial Officer

​
​

[Signature Page to Investment Agreement]

​

​
	​

	​

	​

	JPMORGAN CHASE FUNDING INC.
	​

	​
	​

	​
	​

	By: 
	/s/ Brian M. Ercolani
	​

	Name:
	Brian M. Ercolani
	​

	Title:
	Operations Manager
	​

​
​

[Signature Page to Investment Agreement]

​

​
	​

	​

	​

	ARCC FGP LLC
	​

	​
	​

	By:
	/s/ Mitchell Goldstein
	​

	Name:
	Mitchell Goldstein
	​

	Title:
	Authorized Signatory
	​

	​
	​

	​
	​

	CION ARES DIVERSIFIED CREDIT FUND
	​

	​
	​

	By:
	/s/ Mitchell Goldstein
	​

	Name:
	Mitchell Goldstein
	​

	Title:
	Authorized Signatory
	​

	​
	​

	​
	​

	ARES CENTRE STREET PARTNERSHIP, L.P.
	​

	By: Ares Centre Street GP, Inc., as general partner
	​

	​
	​

	By:
	/s/ Mitchell Goldstein
	​

	Name:
	Mitchell Goldstein
	​

	Title:
	Authorized Signatory
	​

	​
	​

	​
	​

	Ares Private Credit Solutions, L.P.
	​

	By: Ares Capital Management LLC, its investment manager
	​

	​
	​

	By:
	/s/ Mitchell Goldstein
	​

	Name:
	Mitchell Goldstein
	​

	Title:
	Authorized Signatory
	​

	​
	​

	​
	​

	Ares PCS Holdings Inc.
	​

	By: Ares Capital Management LLC, its investment manager
	​

	​
	​

	By:
	/s/ Mitchell Goldstein
	​

	Name:
	Mitchell Goldstein
	​

	Title:
	Authorized Signatory
	​

	​
	​

	​
	​

	Ares Private Credit Solutions II, L.P.
	​

	By: Ares Capital Management LLC, its investment manager
	​

	​
	​

	By:
	/s/ Mitchell Goldstein
	​

	Name:
	Mitchell Goldstein
	​

	Title:
	Authorized Signatory
	​

​

[Signature Page to Investment Agreement]

​

​
	​

	​

	​

	Ares Private Credit Solutions (Delaware) II, LLC
	​

	By: Ares PCS Management II, L.P., its manager
	​

	By: Ares PCS Management GP II, LLC, its general partner
	​

	​
	​

	​
	​

	By:
	/s/ Mitchell Goldstein
	​

	Name:
	Mitchell Goldstein
	​

	Title:
	Authorized Signatory
	​

	​
	​

	​
	​

	Ares Credit Strategies Insurance Dedicated Fund
	​

	Series Interests of SALI Multi-State Fund, L.P.
	​

	By: Ares Management LLC, its investment subadvisor
	​

	By: Ares Capital Management LLC, as subadvisors
	​

	​
	​

	​
	​

	By:
	/s/ Mitchell Goldstein
	​

	Name:
	Mitchell Goldstein
	​

	Title:
	Authorized Signatory
	​

	​
	​

	​
	​

	ASOF FG Holdings LP
	​

	By: ASOF Management, L.P., its general partner
	​

	By: ASOF Management GP LLC, its general partner
	​

	​
	​

	​
	​

	By:
	/s/ Scott Graves
	​

	Name:
	Scott Graves
	​

	Title:
	Co-Head of Private Equity
	​

​
​

[Signature Page to Investment Agreement]

​

​
	​

	​

	​

	PURCHASERS:
	​

	​
	​

	BARINGS BDC, INC.
	​

	By: Barings LLC as Investment Manager
	​

	​
	​

	​
	​

	By:
	/s/ Bryan High
	​

	Name:
	Bryan High
	​

	Title:
	Managing Director
	​

	​
	​

	​
	​

	BARINGS CAPITAL INVESTMENT CORPORATION
	​

	By: Barings LLC as Investment Manager
	​

	​
	​

	​
	​

	By:
	/s/ Bryan High
	​

	Name:
	Bryan High
	​

	Title:
	Managing Director
	​

​
​

[Signature Page to Investment Agreement]

​

​
	CTC ALTERNATIVE STRATEGIES, LTD.
	​

	​
	​

	​
	​

	By:
	/s/  William J Schatz
	​

	Name:
	William J Schatz
	​

	Title:
	Authorized Signatory
	​

​
​

[Signature Page to Investment Agreement]

​

​
	 ​

	​

	​

	PURCHASERS:
	​

	​
	​

	CYRUS OPPORTUNITIES MASTER FUND II, LTD.
	​

	By: Cyrus Capital Partners, L.P., its investment manager
	​

	​
	​

	​
	​

	By:
	/s/  Jennifer M. Pulick
	​

	Name:
	Jennifer M. Pulick
	​

	Title:
	Authorized Signatory
	​

	​
	​

	​
	​

	CYRUS SELECT OPPORTUNITIES MASTER FUND, LTD.
	​

	By: Cyrus Capital Partners, L.P., its investment manager
	​

	​
	​

	​
	​

	By:
	/s/  Jennifer M. Pulick
	​

	Name:
	Jennifer M. Pulick
	​

	Title:
	Authorized Signatory
	​

​
​

[Signature Page to Investment Agreement]

​

PURCHASERS:
​
	​

	​

	​

	KEYFRAME FUND I, L.P.

	By: Keyframe Capital Partners, L.P., its investment manager

	​
	​

	By:
	/s/  Jennifer M. Pulick
	​

	Name: Jennifer M. Pulick

	Title: Authorized Signatory

	​

​
​
	​

	​

	​

	KEYFRAME FUND II, L.P.

	By: Keyframe Capital Partners, L.P., its investment manager

	​
	​

	By:
	/s/  Jennifer M. Pulick
	​

	Name: Jennifer M. Pulick

	Title: Authorized Signatory

​
​
	 ​

	​

	​

	KEYFRAME FUND III, L.P.

	By: Keyframe Capital Partners, L.P., its investment manager

	​
	​

	By:
	/s/  Jennifer M. Pulick
	​

	Name: Jennifer M. Pulick

	Title: Authorized Signatory

​
​
	 ​

	​

	​

	KEYFRAME FUND IV, L.P.

	By: Keyframe Capital Partners, L.P., its investment manager

	​
	​

	By:
	/s/  Jennifer M. Pulick
	​

	Name: Jennifer M. Pulick

	Title: Authorized Signatory

​
​

[Signature Page to Investment Agreement]

​

​
PURCHASERS:
​
	COMMONWEALTH LAND

	TITLE INSURANCE COMPANY

	​
	​

	By:
	/s/ Anthony L. Longi, Jr.
	​

	Name: Anthony L. Longi, Jr.

	Title: Authorized Signatory

​
​

[Signature Page to Investment Agreement]

​

​
	 ​

	​

	​

	PGIM, INC., on behalf of one or more funds and/or

	accounts for which it serves as investment advisor

	​
	​

	By:
	/s/  Richard Greenwood
	​

	Name: Richard Greenwood

	Title: Vice President

​
​

[Signature Page to Investment Agreement]

​

​
PURCHASERS:
​
	 ​

	​

	​

	Shenkman Tactical Credit Master Fund LP

	​

	By: Shenkman Capital Management, Inc., its

	Investment Manager

	​
	​

	By:
	/s/  Serge Todorovich
	​

	Name: Serge Todorovich

	Title: SVP, General Counsel & Chief

	Compliance Officer

​
​

[Signature Page to Investment Agreement]

​

​
PURCHASERS:
​
	.

	​

	​

	By:
	/s/ Soohyung Kim
	​

	​
	Name: Standard General Master Fund L.P.
	​

	​
	Title: Soohyung Kim, CEO of Standard General
	​

	​
	L.P., its Investment Manager
	​

	​
	​
	​

	By:
	/s/ Soohyung Kim
	​

	​
	Name: Standard General Master Fund II L.P.
	​

	​
	Title: Soohyung Kim, CEO of Standard General
	​

	​
	L.P., its Investment Manager
	​

	​
	​
	​

	By:
	/s/ Soohyung Kim
	​

	​
	Name: Standard General Master Focus L.P.
	​

	​
	Title: Soohyung Kim, CEO of Standard General
	​

	​
	L.P., its Investment Manager
	​

​
	​

	​

	​

	By:
	/s/ Soohyung Kim
	​

	​
	Name: SG CQ Blocker LLC
	​

	​
	Title: Soohyung Kim, Chief Investment
	​

	​
	Officer/Portfolio Manager
	​

​
​

[Signature Page to Investment Agreement]

​

SCHEDULE I
​
​

​

​

Purchaser Allocations
​
​

​

​

SCHEDULE II
​
SUBSIDIARIES
​
		1.
	Ferrellgas Receivables, LLC, a Delaware limited liability company

		2.
	Ferrellgas Finance Corp, a Delaware corporation

		3.
	FNA Canada, Inc., a Delaware corporation

		4.
	Blue Rhino Global Sourcing, Inc., a Delaware corporation

		5.
	Bridger Logistics, LLC, a Louisiana limited liability company

		6.
	Bridger Transportation, LLC, a Louisiana limited liability company

		7.
	Bridger Leasing, LLC, a Louisiana limited liability company

		8.
	Bridger Storage, LLC, a Louisiana limited liability company

		9.
	Bridger Marine, LLC, a Delaware limited liability company

		10.
	Bridger Admin Services II, LLC, a Delaware limited liability company

		11.
	Bridger Rail Shipping, LLC, a Louisiana limited liability company

		12.
	South C&C Trucking, LLC, a Texas limited liability company

		13.
	Bridger Terminals, LLC, a Delaware limited liability company

		14.
	Bridger Real Property, LLC, a Delaware limited liability company

		15.
	J.J. Addison Partners, LLC, a Texas limited liability company

		16.
	J.J. Karnack Partners, LLC, a Texas limited liability company

		17.
	J.J. Liberty, LLC, a Texas limited liability company

		18.
	Bridger Lake, LLC, a Delaware limited liability company

​Exhibit 10.16

 

Note:
The fees, payment terms, and other business terms in the agreement and exhibits have been excluded because these terms are both not material
and would likely cause competitive harm to IDW Media Holdings Inc. if publicly disclosed.

 

DISTRIBUTION
AGREEMENT

 

between

 

PENGUIN
RANDOM HOUSE PUBLISHER SERVICES and Idea and Design Works, LLC

 

     

     

    

 

CONTENTS

 

	1.	Interpretation	1
	 	 	 
	2.	Term	1
	 	 	 
	3.	Appointment	1
	 	 	 
	4.	Provision of the Services	2
	 	 	 
	5.	Publisher’s Obligations	4
	 	 	 
	6.	Insurance and Indemnification	5
	 	 	 
	7.	Returns, Hurts & Remainders	7
	 	 	 
	8.	Fees and Payment	8
	 	 	 
	9.	Confidentiality	9
	 	 	 
	10.	Termination	9
	 	 	 
	11.	Warranty	11
	 	 	 
	12.	Unavoidable Delays	11
	 	 	 
	13.	Non-Assignment	12
	 	 	
	14.	General Provisions	12
	 	 	 
	Schedule 1	Definitions and Interpretation	14
	 	 	 
	Schedule 2	Contracted Publisher Profile	17
	 	 	 
	Schedule 3	Principal Fee and Additional Charges	18
	 	 	 
	Schedule 4	Direct-to-Consumer Sales	19
	 	 	 
	Schedule 5	Insight Program	20
	 	 	 
	Exhibit A	Random House Binders Kit	 

 

    i

     

    

  

DATE:
June 20, 2016

 

PARTIES:

 

		(1)	PENGUIN
                                            RANDOM HOUSE PUBLISHER SERVICES, a division of Random House LLC, whose registered office
                                            is at 1745 Broadway, New York, New York 10019 (Distributor).

 

		(2)	Idea
                                            and Design Works, LLC, whose registered office is at 2765 Truxtun Road, San Diego, CA
                                            92106 (Publisher).

 

This
distribution agreement (the “Agreement”) when signed by both parties will confirm the agreement regarding the distribution
by Random House LLC of books published by Publisher.

 

In
consideration of the promises and mutual agreements herein contained, the parties hereto agree as follows:

 

		1	Interpretation

 

The
definitions and interpretative provisions listed in Schedule 1 of this Agreement apply to it and to all Schedules.

 

		2	Term

 

This
Agreement (subject to earlier termination in accordance with the next sentence and paragraph 10) is for an initial term of [redacted]
years from the Commencement Date (the “Term”). Publisher may terminate this Agreement at any time prior to August 31,
2016, by providing written notice to Distributor. The Term shall be extended automatically for periods of [redacted] years unless
cancelled in accordance with paragraph 10.

 

		3	Appointment

 

		3.1	The
                                            Publisher appoints the Distributor to be its exclusive supplier of the Principal Services
                                            during the Term, for the Publications, and in the Territory and in the Channels as described
                                            in Schedule 2.

 

		3.2	The
                                            Distributor will provide the Principal Services and the Additional Services to and on behalf
                                            of the Publisher during the Term in accordance with the terms of this Agreement.

 

		3.3	The
                                            Publisher will not perform or appoint any other person to provide for it during the Term
                                            any services for the Publications in the Territory or Channels that would fall within the
                                            definition of Principal Services or Additional Services except as specifically provided in
                                            this Agreement.

 

    1

     

    

 

		4	Provision
of the Services

 

		4.1	The
Distributor will during the Term perform the Principal Services including, without limitation, the following:

 

		4.1.1	carry
                                            out an initial inspection of the Stocks when delivered to the Distributor with a view to
                                            ensuring that these appear in good and saleable condition but without any obligation to unpack
                                            or further inspect such Stocks. Acceptance of Stocks shall not be interpreted to mean that
                                            all Stocks are in saleable condition at time of receipt;

 

		4.1.2	take
                                            all reasonable care of the Stocks and ensure that the Stocks are stored safely and securely
                                            while they are in Distributor’s possession and control;

 

		4.1.3	decide
                                            at its absolute discretion:

 

		4.1.3.1	whether
                                            to open, close or place a Customer’s account on hold;

 

		4.1.3.2	the
                                            credit limit on any Customer’s account, and

 

		4.1.3.3	whether,
                                            and if so when, to institute legal proceedings for debt recovery;

 

		4.1.4	issue
                                            invoices to Customers payable to Distributor for Publications sold on behalf of Publisher;

 

		4.1.5	pack
                                            and ship Publications to Customers in the Territory and Channels using processes, packing
                                            materials and freight service determined by the Distributor;

 

		4.1.6	process
                                            returns of Publications consistent with Distributor’s returns policy, as described
                                            in paragraph 7;

 

		4.1.7	provide
                                            the Publisher with standard reports, including sales data on a monthly basis, which shall
                                            include for each of the Publications and on a country-by-country basis, the U.S. cover price,
                                            gross unit sales, unit returns, gross dollar sales, returns dollar value, and such additional
                                            information requested in writing by Publisher as Distributor may reasonably supply, for Publisher
                                            to be able to fulfill its reporting obligations to certain third party licensors of Publication
                                            content. Standard reports are subject to programming changes. No such changes will diminish
                                            or delete the basic information required above, including the basic information required
                                            by Publisher as described above in order to fulfill its reporting obligations to certain
                                            third party licensors of Publication content.

 

    2

     

    

 

		4.1.8	provide
                                            Publisher with access to certain information regarding sales to accounts, current inventory
                                            of Publisher’s titles and point-of-sale information, including sales and inventory
                                            by account where Distributor has been provided POS information. Distributor is not responsible
                                            for insuring Publisher’s IT systems meet minimum standards for accessing the online
                                            reports. While Distributor shall work to keep such account and point-of-sale information
                                            reasonably current and accurate (subject to the accuracy and timeliness of information received
                                            from Customers), due to the real or near real-time nature of such data, Distributor expressly
                                            makes no representation as to its accuracy;

 

		4.1.9	[redacted];

 

		4.1.10	[redacted];
                                            and

 

		4.1.11	make
                                            initial shipments of Publications according to its ordinary schedule, and will not be required
                                            to accommodate other schedules. Such ordinary schedule is subject to change at the discretion
                                            of Distributor, upon reasonable notice to Publisher. Deliveries outside the ordinary schedule
                                            will be subject to additional charges which include freight and labor; and

 

		4.2	The
                                            Distributor will provide the Services with reasonable skill and care in accordance with its
                                            usual practice and subject to any reasonable directions that the Publisher may properly give
                                            to the Distributor from time to time provided that the Distributor is entitled to charge
                                            reasonable mutually agreed upon additional sums for costs incurred in providing services
                                            beyond the Principal Services.

 

		4.3	The
                                            Distributor will determine from which of its facilities the Publications will be shipped,
                                            and is not obliged to fulfill orders below its shipping minimums. Publications may also be
                                            combined with those of other publishers to meet the shipment minimum within each warehouse.

 

		4.4	The
                                            Distributor shall not be obligated to distribute any individual Publication if in its sole
                                            judgment such Publication violates any privacy, property, or intellectual property right
                                            of any person or entity, contains libelous or obscene matter, or may subject Distributor
                                            to any other liability. Distributor affirms that, as of the Commencement Date, it is not
                                            aware of any Publication that it is not in a position to distribute. Distributor will neither
                                            on the basis of any third party claim nor, as a matter of independent judgment in the absence
                                            of any third party claim, cease distribution of any Publication already in distribution,
                                            nor fail to initially distribute any Publication that Publisher has already manufactured
                                            in anticipation of such distribution, without providing to Publisher (a) prompt written notice
                                            of the nature of any third party claim or independent decision, including the specific reason(s)
                                            for Distributor’s decision, and (b) a reasonable opportunity under the circumstances
                                            for Publisher to respond to any such claim before any such decision becomes final. If, notwithstanding
                                            Publisher’s response, Distributor elects not to distribute such Publication, then Publisher
                                            shall be free to distribute such Publication through any other means that it chooses; provided,
                                            however, that multiple instances of election not to distribute (as opposed to a very limited
                                            number of isolated and unrelated unique occurrences) shall entitle Publisher to terminate
                                            this Agreement by notice in writing to Distributor, and the provisions of paragraph 10.2
                                            below shall govern such termination. Distributor reserves the right not to distribute any
                                            non-standard product which it cannot logistically accommodate, or to charge additional fees
                                            incurred for Additional Services required to accommodate such product.

 

    3

     

    

 

		4.5	The
                                            Distributor may perform Additional Services during the Term pursuant to Publisher’s
                                            direction or as required to conform to Binder Kit specifications. Publisher shall not incur
                                            any additional costs for Additional Services without its prior written consent.

 

		4.6	Distributor
                                            shall have no obligation to act as distributor to any third-party sub-distribution clients
                                            of Publisher apart from those distributed by Publisher as of the date of this Agreement,
                                            but may consider doing so on a case-by-case basis.  This option by Distributor does
                                            not apply to companies that Publisher acquires or to product lines Publisher starts internally.
                                            Publisher is aware that if taking on new clients changes Publisher’s profile (e.g.
                                            average net price, average unit weight, returns rate, etc), there may be a commensurate increase
                                            in fees. Publisher agrees that any clients it distributes must be managed solely by Publisher,
                                            and must adhere to Distributor’s policies and procedures. Publisher is responsible
                                            for any charges or additional costs associated with its distribution client’s publications.

 

		5	Publisher’s
                                            Obligations

 

		5.1	The
                                            Publisher will during the Term:

 

		5.1.1	Arrange
and assume all costs for extraction of inventory from previous distributor, and determine the stock quantities that will be shipped to
the Distributor’s distribution facilities for all Publications. Stock must be shipped to Distributor in full carton quantities;

   

		5.1.2	promptly
refer to the Distributor all orders for Publications that it receives from Customers for supply in the Territory or Channels;

 

		5.1.3	promptly
deliver any payments and any associated paperwork and information to Distributor received from Customers for payment of Services, or
received from Customers for any reason where such Customer has a debt to Distributor for Services rendered with respect to Publisher’s
Publications;

 

		5.1.4	deliver
in due time, at Publisher’s sole expense, to Distributor’s warehouses as directed by Distributor, such Publications as the
Distributor requires to satisfy orders from Customers. Failure to deliver Publications to Distributor in time and as outlined in the
Distributor’s Binder’s Kit will result in either, at the Publisher’s election, a delayed release or increased charges
to Publisher to cover premium and/or incremental freight and labor. In circumstances where the delay of Publications will hurt Distributor’s
relationship with Customers in connection with promotional commitments, Distributor may pass incremental freight and labor charges to
Publisher incurred in order to meet Customer deadlines;

 

		5.1.5	ensure
that all deliveries of Publications to the Distributor comply with the Distributor’s delivery specifications as outlined in the
Distributor’s Binder’s Kit as modified from time to time, and pay for any handling costs of reworking non-complying deliveries
and for any Customer chargebacks that result from non-compliance;

 

		5.1.6	ensure
that the Distributor is listed as the Vendor of Record in all relevant listings. The Distributor will work with the Publisher to identify
all such listings;

 

		5.1.7	determine
the standard terms of sale for Customers, along with meeting competition exceptions and the suggested list price of the Publications
in the Territories;

 

		5.1.8	ensure
that all Publications delivered to the Distributor have appropriate country of origin, EAN and ISBN codes as determined by Distributor
and explained in the Binder’s Kit. If bar codes are not appropriate, Publisher will pay cost for Distributor to resticker or make
the Publication conform to standards set forth in the Binder’s Kit. Distributor is not responsible for any Publication that is
non-compliant, including new titles, reprints and returns;

 

    4

     

    

 

		5.1.9	must
receive advance credit approval from Distributor’s credit department on all Publisher-initiated direct shipments from bindery to
Customer ;

 

		5.1.10	work
with Distributor to transfer data (e.g. sales history, title specifications) from previous distributor to Distributor at earliest date
convenient to Distributor, so that the data is properly set up in Distributor’s system to comply with Customer requirements and
electronic feeds. Publisher must sign off on accuracy of the transferred data by such date. Publisher is responsible for ensuring transfer
of data is compliant with Distributor’s systems and Customer specifications;

 

		5.1.11	provide
                                            Distributor with financial statements, including P & L, balance sheet and cash flow statement,
                                            at time of signing Agreement and as reasonably requested by Distributor.

 

		5.1.12	provide
                                            such other actions and material as may be reasonably required pursuant to the addenda;

 

		5.1.13	obtain
                                            approval from Distributor before offering any promotional Dating.

 

		6	Insurance
                                            and Indemnification

 

		6.1	Except
as set out in paragraph 6.3, the Distributor will throughout the Term indemnify the Publisher including its officers, directors, agents,
employees and affiliates, against all liabilities, actions, damages and claims, including costs and interest, against

 

		6.1.1	any
                                            loss of or damage caused to Stocks or any other property of the Publisher as a direct consequence
                                            of any negligence or intentional misconduct of the Distributor including its employees, agents
                                            or sub-contractors; and

 

		6.1.2	any
                                            physical injury or death caused to any employee, agent or subcontractor of the Publisher
                                            as a direct consequence of any negligence or intentional misconduct of the Distributor including
                                            its employees, agents or subcontractors.

 

		6.2	The
                                            Distributor will maintain insurance covering damage to Publisher’s Stocks while under
                                            Distributor’s control, or that of its subcontractors, as part of Distributor’s
                                            ordinary insurance coverage. Publisher will be named as an additional insured party under
                                            such coverage for the entire Term hereof.

 

		6.3	[redacted]:

 

		6.3.1	[redacted]

 

		6.3.2	[redacted]

 

		6.3.3	[redacted]

 

    5

     

    

 

		6.4	Distributor’s
                                            liability for the loss or damage to Stocks under paragraphs 6.1.1 shall not exceed Publisher’s
                                            actual, direct, out-of-pocket costs of manufacturing (paper, printing and binding) of lost
                                            or damaged Stocks and inbound shipping of replacement Stocks, and shall not extend to Stocks
                                            that have been designated for destruction.

 

		6.5	The
                                            Publisher will indemnify the Distributor, including its officers, directors, agents, employees
                                            and affiliates, against all liabilities, actions, damages and claims, including costs and
                                            interest, and attorney’s fees incurred or made or awarded against the Distributor arising
                                            from or in connection with any infringement or alleged infringement of any copyright or intellectual
                                            property right, any infringement or alleged infringement of any privacy right, any allegation
                                            of libel, false light or obscene material, or other facts or circumstance whereby the Distributor
                                            may be the subject of a claim or is held legally liable for Publications or any aspect of
                                            Publications, or any material breach by the Publisher of its representations, warranties
                                            or obligations herein. Publisher shall control any such litigation subject to consultation
                                            of Distributor, but shall not settle any claim adverse to Distributor without the prior written
                                            consent of Distributor.

 

		6.6	The
                                            Publisher will maintain insurance covering any claim that might be brought against Distributor
                                            and covered under paragraph 6.5.

 

		6.7	The
                                            Publisher will retain title to the Publications at all times until the Publications are sold
                                            to Customers or the Publications are sold by the Distributor in exercise of any common law
                                            right or rights under this Agreement.

 

		6.8	[redacted].

 

		6.9	If
                                            any claim (actual or threatened) is made against the Publisher or the Distributor which appears
                                            likely to give rise to a liability under paragraph 6, the party first becoming aware of the
                                            circumstance will promptly give written notice to the other of all circumstances known to
                                            them relating to the potential claim and take such action as may be reasonably requested
                                            by the other to avoid or mitigate any claim or liability. The Distributor will be at liberty,
                                            if called upon to do so under any legal process, to deliver up to any third party authorized
                                            by such process any Stocks including Publications alleged to be infringing or illegal. The
                                            Distributor will use reasonable commercial to provide Publisher notice of any such process
                                            sufficiently in advance to permit Publisher time to respond and protect its interests.

 

    6

     

    

 

		6.10	If
                                            the either party fails to give the other instructions or information as referred to in paragraph
                                            6.9, the controlling party may at its discretion pay or settle any claim on such terms as
                                            it may think fit, and require payment from the other party under paragraph 6, or withhold
                                            payment.

 

		7	Returns,
                                            Hurts & Remainders

 

		7.1	Distributor
                                            shall accept returns of all Publications, except titles designated by Publisher as being
                                            out-of-print. Distributor may return to Customer or destroy such out-of-print Returns at
                                            Distributor’s sole discretion. Distributor may choose to, but is not obligated to credit
                                            Customers for such out-of-print Returns.

 

		7.2	Upon
                                            return of Publications (except those excluded by paragraph 7.1 above), Distributor shall
                                            credit Customer for the full price paid to Distributor by Customer. In the event of a dispute
                                            between Distributor and Customer over the number, edition, title, or condition of returns,
                                            Distributor shall resolve such dispute without the involvement of Publisher, and Distributor’s
                                            decision shall be final; provided, however, that Distributor shall provide written notice
                                            to Publisher of the nature of the dispute and the manner in which it was resolved.

 

		7.3	Distributor
                                            shall process Hurts and Remainders according to Distributor’s standard procedures,
                                            which may change from time to time; provided, however, that such processes and procedures
                                            will be consistent with the returns codes supplied by the Publisher.

 

		7.4	Distributor
                                            shall determine whether a book is damaged and the process and procedures for handling Hurts,
                                            including the number and allotment of hurt shrouds.

 

		7.5	At
                                            the discretion of the Publisher, sales of remainder and hurts may be handled by Distributor,
                                            and will follow the processes and procedures as defined by Distributor; provided, however,
                                            that such processes and procedures will be consistent with the returns codes supplied by
                                            the Publisher.

 

		7.6	Reports
                                            or notifications regarding Remainder operations shall be communicated solely to the Publisher,
                                            who shall remain responsible for any notification obligations it may have with individual
                                            authors. Distributor shall not assume any responsibility for notifying or seeking author
                                            approval for Remainders.

  

    7

     

    

 

		8	Fees
                                            and Payment

 

		8.1	The
                                            parties agree that the Distributor will invoice Customers, and that Customers will make all
                                            payments for Publications to the Distributor. Publisher shall not invoice any Customers.
                                            Any payments made directly to the Publisher by the Customer in error shall be immediately
                                            notified to the Distributor and immediately repaid by the Publisher to the Distributor or
                                            deducted from any payments due to the Publisher at Distributor’s discretion. Publisher
                                            will also provide any relevant payment and check information from the Customer to the Distributor.

 

		8.2	The
                                            Distributor will charge fees as set out in Schedule 3 based on the Contracted Publisher Profile
                                            set out in Schedule 2. Any Additional Services not listed in Schedule 3 are subject to additional
                                            mutually agreed upon charges based upon costs incurred by Distributor.

 

		8.3	Distributor
                                            will render to Publisher a statement of account within thirty (30) days after the end of
                                            each month, and payment within an additional thirty (30) days in an amount equal to the Gross
                                            Sales less the following:

 

		8.3.1	Distributor’s
fees for the Principal Services outlined in Schedule 3, along with any additional fees for Additional Services allowed by this Agreement;

 

		8.3.2	Credits
                                            for actual Returns;

 

		8.3.3	A
                                            Reserve against future returns: [redacted]

 

		8.3.4	The
Distributor reserves the right to adjust the Reserve calculation, or hold the Reserve for a greater length of time if a new title is
released with sales or returns expectations materially outside of the publisher’s average for new title sales or returns over the
previous twelve months. Additionally, if in any given month, the Net Sales are projected to be negative, the projected negative balance
may be withheld from the prior month’s remittance.

 

		8.3.5	All
                                            Publisher co-operative advertising (co-op) terms of sale will be determined by Publisher,
                                            in compliance with the Random House LLC established co-op policy and procedures. Distributor
                                            shall issue credit to Customers for co-op claims and deduct such amount from the subsequent
                                            payment to the Publisher. If the request for co-op claim credit comes to the Publisher from
                                            the Customer, Publisher shall promptly forward such request to Distributor co-op department
                                            for credit. Distributor will provide weekly electronic reporting that will include an open
                                            co-op contracts report that shows all pending co-op contracts in the system, and a transaction
                                            report showing the status of all contracts entered by account.

 

    8

     

    

 

		8.3.6	If
                                            the request for co-op claim comes to the Distributor from the Customer, Distributor shall
                                            determine whether to approve the request in compliance with Publisher’s terms of sale,
                                            co-op pool, and Distributor’s reasonable policies.

 

		8.3.7	[redacted]

 

		8.3.8	[redacted]

 

		9	Confidentiality

 

		9.1	The
                                            Publisher and the Distributor will each, throughout the Term and at all times thereafter,
                                            keep confidential this Agreement and all information of a private or confidential nature
                                            relating to the other or the business of the other which the other discloses to it or which
                                            may otherwise come into its possession in the operation of this Agreement, including financial
                                            information provided to Distributor pursuant to Section 5.1.11 above, and will not use or
                                            copy the information in any way for its own purposes or disclose it to any third party without
                                            the prior written consent of the other party, except where necessary to share with accountants,
                                            insurers or legal counsel in the course of business.

 

		9.2	The
                                            parties will use Confidential Information solely for the purposes of the provision of the
                                            Services and for no other purpose.

 

		9.3	Confidential
                                            Information for the purpose of this paragraph does not include information that is or becomes
                                            public knowledge, except where it becomes so as a result of a breach of this paragraph by
                                            the party claiming that the information is not confidential or by anyone receiving such information
                                            from that party, or where disclosure of such information is required by law. If either party
                                            is required by law to disclose Confidential Information, it shall notify the other party
                                            of such legal requirement with reasonable, sufficient advance notice of such disclosure to
                                            allow the other party to intervene.

 

		10	Termination

 

		10.1	Either
                                            party may terminate this Agreement with immediate effect at any time by notice in writing
                                            to the other party if the other party is in material or persistent breach of any provisions
                                            of this Agreement and the breach, if capable of remedy, has not been remedied within thirty
                                            (30) days after receipt by the defaulting party of notice requiring the breach to be remedied.
                                            Publisher may terminate this Agreement with immediate effect at any time by notice in writing
                                            to Distributor if Distributor is unable to perform its obligations due to Unavoidable Delay
                                            for more than forty five (45) consecutive days or for any cumulative period of forty five
                                            (45) days within a ninety (90) day period of time.

 

    9

     

    

 

		10.2	If
                                            this Agreement is terminated under paragraph 10.1 all the rights and obligations of the parties
                                            will cease immediately, except for those provisions expressly stated and intended to survive
                                            the termination of this Agreement. Termination of this Agreement will not affect any rights
                                            or liabilities arising prior to termination.

 

		10.3	Either
                                            party may inactivate the automatic extension provision of paragraph 2 by providing clear
                                            written notice of the party’s desire not to extend the Term of this Agreement no less
                                            than six (6) months nor more than nine (9) months before the end of the Term.

 

		10.4	Either
                                            party may terminate the Agreement in the event of a change of control of either party or
                                            either party’s parent. A six (6) month notice of termination must be given to the other
                                            party within three (3) months from the completion of such change of control.

 

		10.5	Upon
                                            notice of termination:

 

		10.5.1	the
                                            Publisher will notify the Distributor of an alternative storage location for Stocks and the
                                            Publisher will arrange for removal and delivery of the Stocks to such alternative location
                                            within a reasonable time agreed upon by Publisher, Distributor and alternative storage location
                                            (with the final transfer being not more than thirty (30) days from the effective date of
                                            termination) at the Publisher’s expense, together with such documents as are necessary
                                            for the new distributor to service Customer orders unfulfilled at the time of termination.
                                            All costs associated with the removal and transfer of inventory will be paid by the Publisher;

 

		10.5.2	[redacted];
                                            and

 

		10.5.3	within
                                            one hundred fifteen (115) days after the effective Termination date, the Distributor will
                                            prepare a final account of the balance owed to, or due from, the Publisher and the relevant
                                            party will, within fifteen (15) days of notification of that statement, pay the balance due.

 

		10.6	If
                                            the Publisher fails to remove its Publications within thirty (30) days of the effective date
                                            of any termination, the Distributor shall have the right either to dispose of such inventory
                                            as it deems best or to destroy such inventory at the Publisher’s expense.

  

    10

     

    

 

		10.7	Distributor
                                            will accept returns of any of the Publisher’s Publications for a period of ninety (90)
                                            days after the effective date of termination. Distributor will store Publisher’s returned
                                            Publications that would not otherwise be destroyed in mixed shrouds for a period of ninety
                                            (90) days. If the Publisher fails to remove these Publications within one hundred five (105)
                                            days after the effective date of termination, the Distributor shall have the right either
                                            to dispose of such inventory as it deems best or to destroy such inventory at the Publisher’s
                                            expense.

 

		11	Warranty

 

		11.1	The
                                            Publisher warrants and represents that it has the full right, power and authority to enter
                                            into this Agreement in accordance with its terms and to grant the Distributor the rights
                                            specified and that it owns or controls all relevant rights for the Publications (including
                                            their illustrations, photographs and cover art) within the Territory and Channels, will pay
                                            all advances, royalties and other charges in connection with the Publications, and perform
                                            all other obligations with respect to the authors of the Publications.

 

		11.2	The
                                            Distributor warrants and represents that it has the full right, power and authority to enter
                                            into this Agreement and to provide the Services. Except for the explicit warranties and obligations
                                            included in this Agreement, Distributor expressly disclaims any promise or warranty related
                                            to future business results of Publisher.

 

		11.3	The
                                            foregoing representations, warranties, and indemnities shall survive the termination of this
                                            Agreement.

 

		12	Unavoidable
                                            Delays

 

		12.1	The
                                            Distributor and Publisher will not be liable to each other for failure to perform any obligation
                                            under this Agreement to the extent that and so long as the failure is caused by Unavoidable
                                            Delay.

 

		12.2	If
                                            the Distributor becomes aware of such events it will promptly notify the Publisher in writing
                                            of the relevant facts and any likely delay or other effect, and both parties will use their
                                            best endeavors to mitigate the effects of the events.

 

    11

     

    

 

		13	Non-Assignment

 

Except
as set forth in the last sentence of this Paragraph 13, the Publisher may not without prior written consent of Distributor assign this
Agreement in whole or in part. Any attempted assignment in contravention of the terms of this paragraph shall be null and void. The Publisher
shall have the right at any time and without any consent to assign this Agreement in connection with a corporate reorganization, merger
or combination, or a sale of all or substantially all of the equity or assets of Publisher; provided, however, that any such assignment,
reorganization, sale or merger that would result in the Publisher or the Agreement being directly or indirectly controlled by an assignee
(a) that directly competes with the Distributor in the provision of the Principal Services to similarly situated customers or (b) with
respect to whom the provision of the Principal Services by the Distributor to such assignee would put the Distributor at a materially
competitive disadvantage (by way of illustration only, an assignment to Amazon.com or Google that would result in such assignee having
visibility into Distributor’s supply chain and/or warehouse) shall entitle the Distributor to terminate this Agreement in writing
effective as of a date that allows for a reasonable period of transition.

 

		14	General
                                            Provisions

 

		14.1	The
                                            failure or delay of the Publisher or Distributor at any time to insist upon strict performance
                                            of any of the provisions of this Agreement or to exercise any of their rights hereunder shall
                                            not be construed as a waiver or relinquishment for the future of the performance of any of
                                            such provisions or of the exercise of any rights of the Publisher or Distributor and the
                                            same shall be and remain in full force and effect.

 

		14.2	Any
                                            notice or other communication by either party to the other which is required to be given
                                            under this Agreement shall be sufficiently given if sent by Registered or Certified Mail
                                            Postage Prepaid, Return Receipt Requested, addressed as follows:

 

		14.2.1	To the Distributor: 	 Penguin Random House Publisher Services

1745
Broadway,

New York, New York 10019

Attention:
Jeff Abraham

 

		To the
                            Publisher:	Idea
and Design Works, LLC.

2765
Truxtun Road

San
Diego, CA 92106

Attention:
Ted Adams

 

		14.3	This
                                            document and the documents referred to in it, along with any schedules or addenda specifically
                                            referred to in this Agreement, constitute the entire agreement between the parties and supersede
                                            all other agreements or arrangements, whether written or oral, express or implied, between
                                            the parties. No variations of this Agreement are effective unless made in writing and signed
                                            by both parties or their authorized agents.

 

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		14.4	If
                                            any provision of this Agreement is or becomes illegal, invalid, or unenforceable by a court
                                            of competent jurisdiction, that will not affect or impair the legality, validity or enforceability
                                            in that jurisdiction of any other provision of this Agreement.

 

		14.5	The
                                            rights, powers and remedies provided in this Agreement are cumulative and not exclusive of
                                            any rights, powers and remedies provided by law. The exercise or partial exercise of any
                                            right, power or remedy provided by law or under this Agreement will not preclude any other
                                            or further exercise of it or the exercise of any other right, power or remedy.

 

		14.6	The
                                            Distributor will at all times be an independent contractor and will not act as an agent of
                                            the Publisher except as set out in this Agreement or as expressly so authorized by the Publisher.
                                            Nothing in this Agreement creates a partnership between the parties, which shall remain separate
                                            and independent parties.

 

		14.7	This
                                            Agreement, having been made and executed in New York, shall be applied and interpreted in
                                            accordance with the laws of New York, and under the jurisdiction of the courts located in
                                            New York County.

 

		14.8	In
                                            the event of any conflict between this English-language agreement and any translation of
                                            it into any foreign language, the English-language version shall control.

 

		14.9	In
                                            the event the parties are unable to resolve any dispute over the meaning or interpretation
                                            of this agreement, they agree to seek professional mediation for a period of sixty (60) days
                                            from notice to resolve such dispute. The parties shall share the cost of such mediation equally,
                                            and shall agree to waive any defense of laches or the statue of limitations that might otherwise
                                            arise as a result of the time spent pursuing mediation. Such time shall be calculated from
                                            the receipt of written notice of a demand to enter mediation. Both parties agree to designate
                                            a Mediation Organization and follow its mediation procedures. Either party may seek injunctive
                                            relief if warranted without having to wait for the expiration of the sixty (60) day period.
                                            Either party may resort to any available remedy at law or in equity after the sixty (60)
                                            day period expires.

 

IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed by the authorized officers of each for the parties hereto the
day and year first herein set forth.

  

	IDEA AND DESIGN WORKS, LLC	 	PENGUIN RANDOM HOUSE, LLC
	 	 	 
	By:	 /s/ Ted Adams	 	By:	/s/ Jeff Abraham  
	Title:	CEO	 	Title:	President, PRHPS
	Dated:	 7/1/16	 	Dated:	7/6/16

 

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Schedule 1

 

Definitions
and Interpretation

 

		1.	These definitions apply to the interpretation of this Agreement
including the schedules.

 

		2.	The following words and expressions have the following meanings:

 

	Additional Services	those services outside the Principal Services. Typical services and charges are set forth in Section 2 of Schedule 3. Additional Services not listed in Section 2 of Schedule 3 will be quoted on demand and subject to Publisher’s approval.
	 	 
	Anniversary Date	the anniversary of the Commencement Date in each year of the Term.
	 	 
	Average Net Price	weighted, average price of titles after discount and returns (excluding remainders, free and review copies and other high-discount sales), as defined in Schedule 2.
	 	 
	Bad Debts	debts from Customers which the Distributor determines to be unrecoverable.
	 	 
	Binder’s Kit 	Distributor’s instructions to Publisher on how to pack, label and ship Publications to the Distributor, as set forth in Exhibit A, which may be changed from time to time. Such change will not be applied solely to Publisher, but to all publishers represented by Distributor.
	 	 
	Channels 	segments of the bookselling marketplace, as per Schedule 2. 
	 	 
	Commencement Date	the date that Distributor becomes Publisher’s Vendor of Record and begins invoicing Customers, as defined in Schedule 2.
	 	 
	Confidential Information	Information of a kind referred to in paragraph 9.1 subject to paragraph 9.3.
	 	 
	Customers	buyers or prospective buyers of Publications.

 

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	Dating	the amount of time Distributor gives to Customers for payment.
	 	 
	Direct-to-Consumer	Publications sold to individual consumers, rather than resellers.
	 	 
	Excess Inventory	stocks of a title held in excess of the projected total Gross Sales for such title for the next 18-month period based on the title’s previous 12-month Rate of Movement.
	 	 
	Gross Sales	invoiced sales of Publications, net of  deductions taken by Customers off of list price, according to Publisher’s stated terms of sale.
	 	 
	Hurts	Returned product that is damaged or has other specific issues which cannot be returned to viable inventory
	 	 
	Net Sales	Gross Sales less Returns.
	 	 
	Non-Standard Product	Any product that is not a Standard Product.
	 	 
	Principal Services	warehousing, customer service, order fulfilment, shipping, returns processing, billing/collections, Customer credit management, sales, sales reporting, stock control and Web-access to sales and inventory information.
	 	 
	Publications	the following products: novels, graphic novels, and trade compilations in hard cover, jacketed, laminated, board, softcover, or paperback formats published or distributed by the Publisher for the Channels, as well as any related, Publisher approved point of sale material. For clarification purposes, “Publications” shall not include comic book periodicals.
	 	 
	Rate of Movement	a measure of the monthly sales performance of a title based on its gross sales over a period of time; for example, a twelve (12) month Rate of Movement is equal to the sum of gross sales for a title over a twelve(12)-month-period divided by twelve (12).

 

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	Remainders	titles that have reached their potential in the marketplace; including all remaining inventory and returns in mint condition.
	 	 
	Reserve for Returns 	monies withheld from payments to Publisher to cover anticipated future Returns.
	 	 
	Returns	Publications sold on a returnable basis which are returned to the Distributor.
	 	 
	Services	the Principal Services and the Additional Services.
	 	 
	Standard Product	Publications that meet standard size and weight and/or format requirements as defined by the Binder’s Kit.
	 	 
	Stocks	inventory of the Publications held by or under the control of the Distributor.
	 	 
	Stock Transfers	a request from the Publisher to move Stocks from a binder or from the distribution facility to another domestic facility on which the Distributor is not to invoice for the product, see Schedule 3.
	 	 
	Terms of Sale	the Publisher’s standard terms of sale or such other terms as are agreed by the Distributor for the sale of Publications to Customers.
	 	 
	Territory	a defined geographical region, as defined in Schedule 2.
	 	 
	Unavoidable Delays	
    delays occasioned by any of the following:

    act of God; war, insurrection, riot, civil disturbance,
    act of terrorism; fire, explosion, flood; theft, malicious damage, strike, lock-out, third-party injunction; national defense requirements,
    act or regulations of national or local governments; inability to obtain essential fuel, power, raw materials, denial of export or import
    licenses; any other cause beyond the reasonable control of the parties.

	 	 
	USD, Dollars, $	U.S. currency expressed in dollars.

 

    16

     

    

 

Schedule 2

 

Contracted
Publisher Profile

 

Profile
The Distributor’s fees have been calculated based on the following profile:

 

	1.	Initial Stockholding:	units	[redacted]
	 	 	 	 
	2.	Initial Number of titles sold in the North American
    market:		[redacted]
	 	 	 	 
	3.	Average Net Price:	USD	[redacted]
	 	 	 	 
	4.	Annual gross sales:	USD	[redacted]
	 	 	 	 
	5.	Annual returns:	 	[redacted]

 

	6.	Commencement Date:	April 1, 2017
	 	 	 
	7.	Channels: General book trade and non-traditional book channels, excluding “Direct Market” customers serviced by Diamond Comic Distributors, Inc. and its affiliates (or any replacement company appointed in its stead by Publisher) (“Diamond”).By way of illustration, “Direct Market” customers shall mean, for purposes of this agreement, book clubs and similar organizations such as Bookspan/SFBC and/or Scholastic Book Fairs, hobby and specialty game and comic retailers and wholesalers, and those stores that are of the type being served through the direct sales channel of distribution (as the term “direct sales” is commonly understood in the comic book industry), buying under Diamond’s non-returnable trade terms) (“Comic Retailers”). It is also agreed Distributor will make best efforts not to solicit Comic Retailers but will however process orders for such Publications if received; provided that an inadvertent solicitation by Distributor to Comic Retailer which is not regularly repeated after notice by Publisher to Distributor shall not be considered a material breach of contract.

 

	8.	Territory:	Worldwide (excluding UK and Ireland) with respect to all Publications as to which Publisher has worldwide rights.

 

    17

     

    

 

Schedule 3

 

Principal Fee and Additional Charges

 

 

    18

     

    

 

Schedule 4

 

Direct-to-Consumer
Sales

 

		1.	Distributor shall provide non-exclusive direct-to-consumer distribution of Publisher’s Stocks through
Penguin Random House online consumer sites in the United States and Canada. (“Direct-to-consumer Sales”). Publisher’s
books and Title Information shall appear on the consumer sites as provided by Publisher.

 

		2.	[redacted].

 

		3.	[redacted].

 

		4.	[redacted]

 

		5.	Publisher’s titles shall appear on the consumer sites according to rules established by the consumer
sites and are not subject to Publisher’s control.

 

		6.	All Direct-to-consumer Sales shall be independent of and not factored into Publisher’s Profile in the
Agreement. Distributor reserves the right to change its policy regarding the Profile with Publisher’s consent in the event Direct-to-consumer
Sales of Publisher’s books reach a significant percent of Publisher’s Net Sales.

 

		7.	[redacted]

 

		8.	Distributor shall provide limited aggregate point of sale information to Publisher such as titles, sales
dollars and units, but shall in no event provide individually identifying information about Distributor’s consumer Customers including
name, street address, email or credit card information.

 

		9.	Publisher may terminate its participation in Direct-to-consumer Sales by providing thirty (30) day written
notice to Distributor.

 

		10.	Charges associated with Direct to consumer sales are subject to revision by Distributor on an annual basis.
Publisher will receive written notice thirty (30) days prior to any new charges taking effect.

 

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Schedule 5

 

Insight Program

 

		1.	Distributor has launched an online search and browse service (“Insight”), that allows online
retailers, portals and search engines the opportunity to offer their customers and website visitors a search and browse experience for
accessing digital book content from participating titles. As part of Insight, Distributor has developed a “widget” application:
an online user interface that utilizes Insight to allow such search and browse capabilities on a per title basis (i.e. one title per widget).
The widget may be embedded into a web page, blog or social network profile using basic copy and paste functionality that permits syndicated
distribution.

 

		2.	Distributor would like to offer the Insight services to Publisher as an Additional Service, at Publisher’s
election on a title by title basis, for any Publications that are distributed by Distributor. Publisher will be able to choose by title
whether end users will have access to only a fixed sample of pages or a variable search option pre-determined by Distributor, that allows
end users to access pages in the book that are responsive to search requests, subject to pre-determined page limitations and other restrictions.
Distributor will make reasonable efforts to provide Publisher with the same options for participation in this program that are available
to Penguin Random House publishers, but makes no guarantee that all retailers, portals and search engines will accept Publisher’s
files via Distributor.

 

		3.	[redacted]

 

		4.	Once Publication files have been successfully processed and inducted, they will be made available to Publisher
as live widgets and accessible through eligible Insight programs that Publisher may initiate with third party channel partners. Publisher
will have the ability to remove Publications from the program by giving appropriate written notice to Distributor; however, single page
corrections cannot be made to a Publication once it has been inducted. Any such corrections will require a new induction of the entire
file.

 

		5.	Publisher acknowledges and agrees that Publisher’s warranties and indemnity set forth in the Agreement
with respect to the Publications shall apply in all respects to Publisher’s participation in the Insight program.

 

		6.	Distributor makes no promises or warranties as to the merchantability or fitness for a particular purpose
of the Insight services, or as to the quality or performance of the technology, computers or networks used in conjunction with such services.
Distributor will provide Publisher’s content with the same degree of care and security as is provided to Distributor’s own
proprietary and licensed content.

 

		7.	Either party may terminate participation in this program with sixty (60) days written notice.

 

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Idea and Design Works, LLC Authorization to
PRH 

 

As part of our distribution services to your company,
you hereby agree to the following terms with Amazon.

 

[redacted]

 

 

 21

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