As filed with the Securities and Exchange Commission on March 7, 2002
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------------------
AMERIGAS PARTNERS, L.P.
AP EAGLE FINANCE CORP.
(Exact name of registrants as specified in their charters)
DELAWARE 23-2787918
DELAWARE 23-3077318
(States or other jurisdictions of (I.R.S. Employer Identification No.)
incorporation or organization)
460 NORTH GULPH ROAD
KING OF PRUSSIA, PA 19406
(610) 337-7000
(Address, including zip code, and telephone number, including area code, of
registrants' principal executive offices)
BRENDAN P. BOVAIRD, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
AMERIGAS PROPANE, INC.
460 NORTH GULPH ROAD
KING OF PRUSSIA, PA 19406
(610) 337-7000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------------------
With Copies To:
LINDA L. GRIGGS, ESQ.
MORGAN, LEWIS & BOCKIUS LLP
1111 PENNSYLVANIA AVENUE, N.W.
WASHINGTON, D.C. 20004
(202) 739-3000
--------------------------
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this registration statement, as
determined by market conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box: [ ]
CALCULATION OF REGISTRATION FEE
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED BE OFFERING PRICE PER AGGREGATE REGISTRATION
REGISTERED UNIT OFFERING PRICE (1) FEE (2)
------------------------------------- ----------- ------------------ ------------------ ------------
8 7/8% Series B Senior Notes Due 2011 $60,000,000 100% $60,000,000 $5,520
(1) Equals the aggregate principal amount of the notes being registered.
(2) Calculated pursuant to Rule 457(o).
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED MARCH 7, 2002
PROSPECTUS
$60,000,000 8 7/8% Series B Senior Notes due 2011
AMERIGAS PARTNERS, L.P.
AP EAGLE FINANCE CORP.
We may sell from time to time our 8 7/8% Series B Senior Notes due 2011
in denominations of $1,000 or an integral multiple of $1,000. We will pay
interest semi-annually in arrears on May 20 and November 20 to holders of record
on the immediately preceding May 5 and November 5.
We may sell the notes to underwriters, through agents, or directly to
other purchasers. See "Plan of Distribution." The prospectus supplement will
list any underwriters or agents and the compensation they may receive.
We do not intend to list the notes on any securities exchange.
BEFORE MAKING AN INVESTMENT IN THE NOTES, CAREFULLY CONSIDER THE RISKS
FACTORS DESCRIBED UNDER "RISK FACTORS" BEGINNING ON PAGE 4 OF THIS PROSPECTUS.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the notes or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is [ ], 2002.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE INTO THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT MAKING
AN OFFER OF THESE NOTES IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU
SHOULD NOT ASSUME THAT THE INFORMATION PROVIDED BY THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE
FRONT OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT.
TABLE OF CONTENTS
Who We Are................................................................. 1
Ratio of Earnings to Fixed Charges......................................... 1
About This Prospectus...................................................... 2
Where You Can Find More Information........................................ 2
Incorporation of Documents by Reference.................................... 2
Forward-Looking Statements................................................. 3
Risk Factors............................................................... 4
Risks Related to the Notes........................................ 4
Risk Associated with the Propane Distribution Business
Acquired from Columbia Energy Group............................... 8
Risks Inherent in Our Business.................................... 9
Use of Proceeds............................................................ 13
Plan of Distribution....................................................... 13
Description of the Notes................................................... 14
Description of Certain Other Indebtedness.................................. 59
Legal Opinion.............................................................. 60
Experts.................................................................... 60
i
WHO WE ARE
AmeriGas Partners, L.P. is a publicly traded Delaware limited
partnership formed on November 2, 1994. We are the largest retail propane
distributor in the United States, distributing more than one billion gallons of
propane annually. We serve approximately 1.3 million residential, commercial,
industrial, agricultural and motor fuel customers from approximately 700
district locations in 46 states. Our operations are located primarily in the
East Coast, Southeast, Midwest, Mountain Central and West Coast regions of the
United States.
We conduct our business principally through our subsidiary AmeriGas
Propane, L.P., and its subsidiary, AmeriGas Eagle Propane, L.P. Both of these
entities are Delaware limited partnerships. We refer to these limited
partnerships collectively as our "operating partnership."
Our executive offices are located at 460 North Gulph Road, King of
Prussia, Pennsylvania 19406, and our telephone number is (610) 337-7000. In this
prospectus, the terms "AmeriGas Partners," "our," "us" and "we" are sometimes
used as abbreviated references to AmeriGas Partners, L.P. or AmeriGas Partners,
L.P. and its consolidated subsidiaries, which include the operating partnership
and AP Eagle Finance Corp. AP Eagle Finance Corp., a wholly owned finance
subsidiary, is a Delaware corporation formed on April 12, 2001 for the sole
purpose of acting as co-obligor of the notes.
AmeriGas Propane, Inc., a Pennsylvania corporation, is our general
partner. Our general partner is a wholly owned indirect subsidiary of UGI
Corporation, a public company listed on the New York and Philadelphia stock
exchanges. Through various subsidiaries, UGI has been in the propane
distribution business for over 40 years. Our general partner and its subsidiary,
Petrolane Incorporated, own an aggregate 50.6% interest in us.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of the periods
indicated below is as follows:
RATIO OF YEAR ENDED SEPTEMBER 30, THREE MONTHS
EARNINGS TO ENDED
FIXED CHARGES: 1997 1998 1999 2000 2001 DECEMBER 31,
2001
-------------- ---- ---- ---- ---- ---- ------------
1.61 1.29 1.34 1.18 1.58 1.72
For purposes of determining the ratio of earnings to fixed charges,
earnings are defined as earnings (loss) before income taxes, minority interest
and income (loss) from equity investees, plus distributed income of equity
investees plus fixed charges. Fixed charges consist of interest expense and the
portion of operating leases representative of the interest factor.
1
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we have filed
with the SEC using a "shelf" registration process. Under this shelf registration
process, we may sell from time to time the notes described in this prospectus in
one or more offerings. This prospectus provides you with a general description
of our business and the notes. Each time we sell notes under this prospectus, we
will provide a prospectus supplement that will contain specific information
about that offering. The prospectus supplement may also add to, update or change
information in this prospectus. The information in this prospectus is accurate
as of its date. You should carefully read this prospectus, the prospectus
supplement and the documents that we have incorporated by reference below.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information
with the SEC. These documents are available online through the SEC's Electronic
Data Gathering, Analysis, and Retrieval System (EDGAR), accessible through
internet at the SEC's web site at http://www.sec.gov. You can also obtain and
review our documents during normal business hours at the SEC's Public Reference
Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information about the operation of the Public
Reference Room.
We also provide information to the New York Stock Exchange because our
common units are traded on the New York Stock Exchange. You may obtain reports
and other information at the offices of the New York Stock Exchange, Inc., 20
Broad Street, New York, NY 10005.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference into this prospectus the
information that we file with the SEC. This means that we can disclose to you
important information contained in other documents filed with the SEC by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus. Information that we file later with the
SEC will automatically update and may supersede information in this prospectus
or information previously filed with the SEC. We incorporate by reference the
documents listed below:
(1) our annual report on Form 10-K for the year ended September
30, 2001, as amended on January 28, 2002;
(2) our quarterly report on Form 10-Q for the quarter ended
December 31, 2001; and
(3) our current report on Form 8-K dated January 22, 2002.
We also incorporate by reference all documents that we file with the
SEC pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act of 1934
after the date of this prospectus and until the termination of this offering.
2
If information in any document incorporated by reference conflicts with
information in this prospectus, you should rely on the most recent information.
If information in any document incorporated by reference conflicts with
information in another incorporated document, you should rely on the most recent
document incorporated by reference.
Upon the written or verbal request of each person to whom a copy of
this prospectus has been delivered, we will provide free of charge a copy of the
documents incorporated by reference (other than exhibits to such documents,
unless the exhibit is specifically incorporated by reference to such documents).
Please direct requests to:
AmeriGas Propane, Inc.
Attention: Robert W. Krick, Treasurer
P.O. Box 965
Valley Forge, Pennsylvania 19482
Telephone: (610) 337-7000
FORWARD-LOOKING STATEMENTS
The information in this prospectus, any prospectus supplement and the
documents that we have incorporated by reference may contain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Such statements use
forward-looking words such as "believe," "plan," "anticipate," "continue,"
"estimate," "expect," "may," "will," or similar words. These statements discuss
plans, strategies, events or developments that we expect or anticipate will or
may occur in the future. Specific factors which could cause actual results to
differ from those in the forward-looking statements include:
- adverse weather conditions resulting in reduced demand;
- price volatility and availability of propane, and the capacity
to transport to market areas;
- changes in laws and regulations, including safety, tax and
accounting matters;
- large supplier or customer defaults;
- competitive pressures from the same and alternative energy
sources;
- liability for environmental claims;
- customer conservation measures and improvements in energy
efficiency and technology resulting in reduced demand;
- adverse labor relations;
3
- inability to make business acquisitions on economically
acceptable terms;
- liability for personal injury and property damage arising from
explosions or other catastrophic events resulting from
operating hazards and risks incidental to transporting,
storing and distributing propane, butane and ammonia,
including liability in excess of insurance coverage;
- political, regulatory and economic conditions in the United
States and in foreign countries; and
- interest rate fluctuations and other capital market
conditions.
These factors are not necessarily all of the important factors that
could cause actual results to differ materially from those expressed in any of
our forward-looking statements. Other unknown or unpredictable factors could
also have material adverse effects on future results. We undertake no obligation
to update publicly any forward-looking statement whether as a result of new
information or future events.
RISK FACTORS
An investment in the notes involves a high degree of risk. You should
consider carefully the following risk factors, in addition to the other
information set forth in this prospectus, before making an investment decision.
RISKS RELATED TO THE NOTES
WE ARE A HOLDING COMPANY AND HAVE NO MATERIAL OPERATIONS OR ASSETS. ACCORDINGLY,
WE ARE DEPENDENT ON DISTRIBUTIONS FROM OUR OPERATING PARTNERSHIP TO SERVICE OUR
DEBT OBLIGATIONS. THESE DISTRIBUTIONS ARE NOT GUARANTEED AND MAY BE RESTRICTED.
We are a holding company for our subsidiaries. We have no material
operations and only limited assets. Accordingly, we are dependent on cash
distributions from our operating partnership, AmeriGas Propane, L.P., and its
subsidiary, AmeriGas Eagle Propane, L.P., to service our debt obligations. Our
operating partnership is required to distribute all of its available cash each
quarter, less the amount of cash reserves that AmeriGas Propane, Inc., our
general partner, determines is necessary or appropriate in its reasonable
discretion to provide for the proper conduct of our business, to provide funds
for distributions by us to our limited partners and our general partner over the
next four quarters or to comply with applicable law or any of our debt or other
agreements. The agreements governing the operating partnership's first mortgage
notes (the terms of which are briefly summarized below under "Description of
Certain Other Indebtedness; First Mortgage Notes") and bank credit facilities
require the operating partnership to include in its cash reserves amounts for
future payments on the first mortgage notes and amounts outstanding under the
bank credit facilities. This limits the amount of available cash the operating
partnership may distribute to us each quarter.
4
In addition, the agreements governing the first mortgage notes and bank
credit facilities only permit quarterly distributions by the operating
partnership to us if no default exists under those agreements. Those agreements
each contain various negative and affirmative covenants applicable to the
operating partnership. In addition, the agreements require the operating
partnership to maintain specified financial ratios. If the operating partnership
violates any of these covenants or requirements, a default may result and
distributions to us would be limited. These covenants limit the operating
partnership's ability to:
- incur other indebtedness;
- engage in transactions with affiliates;
- incur liens;
- make certain restricted payments;
- enter into certain business combinations and asset sale
transactions;
- engage in new lines of business; and
- make investments.
WE ARE REQUIRED TO DISTRIBUTE ALL OF OUR AVAILABLE CASH, WHICH MAY LIMIT THE
CASH AVAILABLE TO SERVICE THE NOTES.
Subject to the limitations on restricted payments contained in the
indenture governing the notes and the indenture governing our existing 10 1/8%
senior notes and 10% senior notes, our partnership agreement requires us to
distribute all of our available cash each quarter to our limited partners and
our general partner. As a result of these distribution requirements, we do not
expect to accumulate significant amounts of cash. Our general partner will
determine the timing and amount of our distributions. Depending on the timing
and amount of our cash distributions, these distributions could significantly
reduce the cash available to us in subsequent periods to make payments on the
notes.
THE NOTES ARE STRUCTURALLY SUBORDINATED TO ALL INDEBTEDNESS OF OUR OPERATING
PARTNERSHIP AND ITS SUBSIDIARIES.
The notes are effectively subordinated to all existing and future
claims of creditors of our operating partnership and its subsidiaries. This is
because these creditors will have priority as to the assets of our operating
partnership and its subsidiaries over our claims and, thereby indirectly, the
claims of the holders of the notes. Thus, the notes are effectively subordinated
to the claims of the lenders under the bank credit facilities, the holders of
the first mortgage notes, trade creditors and all possible future creditors of
any of our subsidiaries.
5
OUR SUBSTANTIAL DEBT COULD IMPAIR OUR FINANCIAL CONDITION AND OUR ABILITY TO
FULFILL OUR DEBT OBLIGATIONS.
We have substantial indebtedness. As of December 31, 2001, we had total
indebtedness of approximately $976.6 million, consisting of $968.6 million of
long-term debt (including current maturities of $66.5 million) and $8 million
under a revolving credit facility, partners' capital of $235.0 million and a
ratio of debt to partners' capital of 4.16 to 1. We also had, as of December 31,
2001, $154.4 million available under our operating partnership's bank credit
facilities. Subject to the restrictions in the bank credit facilities, the first
mortgage notes, the indenture governing the notes and the indentures governing
our existing 10 1/8% senior notes and 10% senior notes (the terms of which are
briefly summarized below under "Description of Certain Other Indebtedness"), we
may incur significant additional indebtedness, which may be secured and/or
structurally senior to the notes.
Our substantial indebtedness could have important consequences to you.
For example, it could:
- make it more difficult for us to satisfy our obligations with
respect to the notes;
- require us to dedicate a substantial portion of our cash flow
from the operating partnership to payments on the notes and
our other indebtedness, thereby reducing the availability of
our cash flow to fund working capital, capital expenditures
and other general partnership requirements;
- limit our flexibility in planning for, or reacting to, changes
in our business and the industry in which we operate; and
- place us at a competitive disadvantage compared to our
competitors that have proportionately less debt.
If we are unable to meet our debt service obligations, we could be
forced to restructure or refinance our indebtedness, seek additional equity
capital or sell assets. We may be unable to obtain financing or sell assets on
satisfactory terms, or at all.
RESTRICTIVE COVENANTS IN THE AGREEMENTS GOVERNING OUR INDEBTEDNESS AND THE
INDEBTEDNESS OF OUR OPERATING PARTNERSHIP MAY REDUCE OUR OPERATING FLEXIBILITY.
The indenture governing the notes, the indentures governing our
existing 10 1/8% senior notes and 10% senior notes and the agreements governing
the bank credit facilities and the existing first mortgage notes contain various
covenants that limit our ability to:
- incur other indebtedness;
- engage in transactions with affiliates;
- incur liens;
6
- make certain restricted payments;
- enter into certain business combinations and asset sale
transactions;
- engage in new lines of business; and
- make investments.
These restrictions could limit our ability and the ability of our operating
partnership to obtain future financings, make needed capital expenditures,
withstand a future downturn in our business or the economy in general, conduct
operations or otherwise take advantage of business opportunities that may arise.
The bank credit facilities and the first mortgage notes also require
the operating partnership to maintain specified financial ratios and satisfy
other financial conditions. The ability of the operating partnership to meet
those financial ratios and conditions can be affected by events beyond its
control, such as weather conditions and general economic conditions.
Accordingly, the operating partnership may be unable to meet those financial
ratios and conditions. Our breach of any of these covenants or the operating
partnership's failure to meet any of those financial ratios or conditions could
result in a default under the terms of the relevant indebtedness, which could
cause such indebtedness, and by reason of cross-default provisions, the notes,
to become immediately due and payable. If we were unable to repay those amounts,
the lenders could initiate a bankruptcy proceeding or liquidation proceeding or
proceed against the collateral granted to them to secure that indebtedness. If
the lenders under the bank credit facilities or the first mortgage notes so
accelerate the repayment of borrowings, we may not have sufficient assets to
repay our indebtedness, including the notes.
WE MAY BE UNABLE TO PURCHASE THE NOTES UPON A CHANGE OF CONTROL.
Upon the occurrence of any "change of control" event specified in the
indenture for the notes and summarized in this prospectus under "Description of
the Registered Notes," you may require us to purchase your notes at 101% of
their principal amount, plus accrued and unpaid interest. The terms of the bank
credit facilities and the first mortgage notes limit our ability to purchase
your notes in those circumstances. Any of our future debt agreements may contain
similar restrictions and provisions. Accordingly, we may be unable to satisfy
our obligations to purchase your notes unless we are able to refinance or obtain
waivers under the bank credit facilities and the first mortgage notes and other
indebtedness with similar restrictions. We may not have the financial resources
to purchase your notes, particularly if a change of control event triggers a
similar repurchase requirement for, or results in the acceleration of, other
indebtedness. The bank credit facilities and the first mortgage notes currently
provide that certain change of control events will constitute a default and
could result in the acceleration of the indebtedness under those agreements.
7
THERE IS NO ACTIVE TRADING MARKET FOR THE NOTES.
We do not intend to list the notes to be issued in this offering on any
securities exchange or to seek approval for quotations through any automated
quotation system. Although $200,000,000 of the notes are outstanding, there is
no established market for the notes, and we do not anticipate that one will
develop. For these reasons, we cannot assure you that:
- a liquid market for the notes will develop;
- you will be able to sell your notes; or
- you will receive any specific price upon any sale of the
notes.
If a public market for the notes did develop, the notes could trade at
prices that may be higher or lower than their principal amount or purchase
price, depending on many factors, including prevailing interest rates, the
market for similar notes and our financial performance.
RISK ASSOCIATED WITH THE PROPANE DISTRIBUTION BUSINESSES ACQUIRED FROM COLUMBIA
ENERGY GROUP
WE MAY BE ADVERSELY AFFECTED BY RESTRICTIONS ON OUR OPERATIONS AND INDEMNITY
OBLIGATIONS.
On August 21, 2001, we acquired the propane distribution businesses of
Columbia Energy Group, which were conducted through Columbia Propane Corporation
(now known as AmeriGas Eagle Propane, Inc.) and its 99% owned subsidiary,
Columbia Propane, L.P. (now known as AmeriGas Eagle Propane, L.P.). We now own
AmeriGas Eagle Propane, Inc. and substantially all of AmeriGas Eagle Propane,
L.P. As part of our acquisition of the propane distribution businesses of
Columbia Energy Group, AmeriGas Propane, L.P. became the payee under a $138
million intercompany note of AmeriGas Eagle Propane, L.P. In connection with
that intercompany note and the purchase agreement (the "1999 purchase
agreement") under which the predecessor of AmeriGas Eagle Propane, Inc. acquired
a propane distribution business from an affiliate of Triarc Companies, Inc.
("Triarc"), we have become subject to restrictions on our ability to operate
AmeriGas Eagle Propane, L.P. These restrictions, which effectively continue
until July 2009, limit our ability to, among other things:
- prepay, defease, purchase or otherwise retire the intercompany
note unless it is replaced by equivalent debt with no greater
amortization;
- modify the intercompany note so as to eliminate or limit the
recourse liability of Triarc;
- convert AmeriGas Eagle Propane, L.P. into a corporation for
federal income tax purposes, including by way of any merger or
consolidation;
- allow any third party to assume, guarantee, indemnify against
or otherwise incur any liability relating to the intercompany
note; or
8
- take or fail to take any action that would reduce the share of
the intercompany note allocated to Triarc for federal income
tax purposes.
Without becoming obligated to indemnify Triarc for any resulting tax
losses, we may not:
- make any material change in certain federal income tax
positions, methods, principles or elections of AmeriGas Eagle
Propane, L.P.;
- sell or dispose of certain assets of AmeriGas Eagle Propane,
L.P. if doing so would result in a gain of more than $5
million per year on a cumulative basis to be allocated to
Triarc; or
- increase the carrying value of certain assets of AmeriGas
Eagle Propane, L.P. for income tax purposes.
These restrictions on our ability to operate AmeriGas Eagle Propane,
L.P. could have a material adverse effect on us.
AmeriGas Eagle Propane, L.P. and certain of its affiliates are
obligated to indemnify Triarc and its affiliates for tax or other cash losses
they may incur as a result of the breach of the foregoing restrictions and any
other actions in violation of the 1999 purchase agreement that cause Triarc to
recognize a taxable gain or result in other losses for Triarc. These include
breaches that Triarc may claim result from our acquisition of the propane
distribution businesses of Columbia Energy Group and related transactions. Under
the agreement for our acquisition of the propane distribution businesses of
Columbia Energy Group, we agreed to apportion between us and Columbia Energy
Group any losses under the Triarc indemnity. In addition, AmeriGas Propane, L.P.
agreed with AmeriGas Eagle Propane, Inc. to take all actions necessary to ensure
that AmeriGas Eagle Propane, Inc. will have sufficient available funds to
satisfy all of its obligations and liabilities to Triarc under the
indemnification provisions of the 1999 purchase agreement.
RISKS INHERENT IN OUR BUSINESS
DECREASES IN THE DEMAND FOR PROPANE BECAUSE OF WARMER WEATHER ADVERSELY AFFECT
OUR RESULTS OF OPERATIONS.
Weather conditions have a significant impact on the demand for propane
for both heating and agricultural purposes. Many of our customers rely heavily
on propane as a heating fuel. Accordingly, the volume of propane sold is at its
highest during the five-month peak heating season of November through March and
is directly affected by the severity of the winter weather. Approximately 55% to
60% of our annual retail propane volumes are sold during these months. During
the five-month period ended February 28, 2002 and in years prior to fiscal 2001,
warmer-than-normal weather in our service territories reduced demand for propane
and other energy sources for heating purposes below normal levels, which had an
adverse effect on our operating
9
results. There can be no assurance that normal winter weather in our service
territories will occur in the future.
OUR ABILITY TO INCREASE REVENUES IS ADVERSELY AFFECTED BY THE MATURITY OF, AND
COMPETITION WITHIN, THE RETAIL PROPANE INDUSTRY.
The retail propane industry is mature, with only limited growth in
total demand for the product foreseen. We expect the demand for propane to
remain relatively constant for the foreseeable future, with year-to-year
industry volumes being affected primarily by weather patterns. Therefore, our
ability to grow within the industry is dependent on our ability to acquire other
retail distributors and to achieve internal growth, which includes expansion of
our PPX Prefilled Propane Xchange(R) program (through which consumers can
exchange an empty propane grill cylinder for a filled one) and National Accounts
program (through which we encourage large, multi-location propane users to enter
into a supply agreement with us rather than with many small suppliers), as well
as the success of our marketing programs designed to increase customers in
targeted segments. If we are unable to compete effectively in the propane
business, we may lose existing customers or fail to acquire new customers.
We compete with other distributors of propane, including several major
companies and thousands of small independent operators. In recent years, some
rural electric cooperatives and fuel oil distributors have expanded their
businesses to include propane distribution and we compete with them as well.
Generally, warmer-than-normal weather further intensifies competition. Our
ability to compete effectively depends upon the reliability of our service, our
responsiveness to customers and our ability to maintain competitive retail
prices and to control operating expenses.
OUR OPERATIONS MAY BE ADVERSELY AFFECTED BY COMPETITION FROM OTHER ENERGY
SOURCES.
Propane competes with other sources of energy, some of which are less
costly for equivalent energy value. We compete for customers against suppliers
of electricity, fuel oil and natural gas. Electricity is a major competitor of
propane, but propane generally enjoys a competitive price advantage over
electricity for space heating, water heating and cooking.
Fuel oil is also a major competitor of propane and is generally less
expensive than propane. Furnaces and appliances that burn propane will not
operate on fuel oil and vice versa, however, so a conversion from one fuel to
the other requires the installation of new equipment. Our customers generally
have an incentive to switch to fuel oil only if fuel oil becomes significantly
less expensive than propane. Except for certain industrial and commercial
applications, propane is generally not competitive with natural gas in areas
where natural gas pipelines already exist, because natural gas is generally a
less expensive source of energy than propane. The gradual expansion of the
nation's natural gas distribution systems has resulted in the availability of
natural gas in some areas that previously depended upon propane. In addition, we
cannot predict the effect that the development of alternative energy sources
might have on our operations.
10
OUR PROFITABILITY IS SUBJECT TO PRICING AND INVENTORY RISK.
The retail propane business is a "margin-based" business in which gross
profits are dependent upon the excess of the sales price over the propane supply
costs. Propane is a commodity, and, as such, its unit price is subject to
volatile fluctuations in response to changes in supply or other market
conditions. We have no control over these market conditions. Consequently, the
unit price of the propane that we and other marketers purchase can change
rapidly over a short period of time. Most of our product supply contracts permit
suppliers to charge posted prices at the time of delivery or the current prices
established at major storage points such as Mont Belvieu, Texas or Conway,
Kansas. Because our profitability is sensitive to changes in wholesale propane
supply costs, it will be adversely affected if we cannot pass on increases in
the cost of propane to our customers. There is no assurance, however, that we
will always be able to pass on product cost increases fully, particularly when
product costs rise rapidly. In addition, high product prices may lead to
customer conservation, resulting in reduced demand.
WE ARE DEPENDENT ON OUR PRINCIPAL SUPPLIERS, WHICH INCREASES THE RISKS FROM AN
INTERRUPTION IN SUPPLY AND TRANSPORTATION.
During the year ended September 30, 2001, we purchased approximately
81% of our propane from 10 suppliers. If supplies from these sources were
interrupted, the cost of procuring replacement supplies and transporting those
supplies from alternative locations might be materially higher and, at least on
a short-term basis, margins could be affected. Additionally, in certain market
areas some of our suppliers provide 70% to 80% of our propane requirements.
Disruptions in supply in these areas could also have an adverse impact on our
margins.
WE ARE SUBJECT TO OPERATING AND LITIGATION RISKS THAT MAY NOT BE COVERED BY
INSURANCE.
Our operations are subject to all of the operating hazards and risks
normally incidental to handling, storing, transporting and otherwise providing
combustible liquids such as propane for use by consumers. As a result, we are
sometimes a defendant in various legal proceedings and litigation arising in the
ordinary course of business. We maintain insurance policies with insurers in
such amounts and with such coverages and deductibles as we believe are
reasonable and prudent. There can be no assurance, however, that such insurance
will be adequate to protect us from all material expenses related to potential
future claims for personal and property damage or that such levels of insurance
will be available in the future at economical prices.
OUR ABILITY TO GROW WILL BE ADVERSELY AFFECTED IF WE ARE NOT SUCCESSFUL IN
MAKING ACQUISITIONS AND OUR PROFITABILITY MAY BE ADVERSELY AFFECTED BY THE TERMS
OF OUR INDEBTEDNESS.
We have historically expanded our propane business through acquisitions
and internal growth. We regularly consider and evaluate opportunities for growth
through the acquisition of local, regional and national propane distributors. We
may choose to finance future acquisitions with debt, equity, cash or a
combination of the three. There is significant competition for acquisitions
among publicly traded master limited partnerships engaged in the propane
distribution business. Although we believe that there are numerous potential
acquisition
11
candidates in the industry, some of which represent material acquisition
opportunities, there can be no assurance that we will find attractive
acquisition candidates in the future, that we will be able to acquire such
candidates on economically acceptable terms, that any acquisitions will not be
dilutive to earnings and distributions or that any additional debt incurred to
finance an acquisition will not affect our ability to make payments on the
notes. In addition, our bank credit facilities and our first mortgage notes
impose restrictions on our ability to make acquisitions through AmeriGas Eagle
Propane, L.P., which may adversely affect our growth in certain geographic
areas.
OUR OPERATIONS WILL BE ADVERSELY AFFECTED IF ENERGY CONSERVATION AND EFFICIENCY
AND TECHNOLOGY TRENDS DECREASE DEMAND FOR PROPANE.
Retail customers primarily use propane for home heating, water heating
and cooking purposes. We are not able to predict the effect that future
conservation measures or advances in heating, conservation or other devices
might have on our operations.
OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION MAY BE ADVERSELY AFFECTED BY
GOVERNMENTAL SAFETY, HEALTH, TRANSPORTATION AND ENVIRONMENTAL REGULATION AND
ASSOCIATED COSTS.
We are subject to various federal, state and local safety, health,
transportation and environmental laws and regulations governing the storage,
distribution and transportation of propane. We have implemented safety and
environmental programs and policies designed to avoid potential liability and
costs under applicable laws. It is possible, however, that we will incur
increased costs as a result of complying with new safety, health, transportation
and environmental regulations and that such costs will have an adverse impact on
our results of operations. It is also possible that material environmental
liabilities will be incurred, including those relating to claims for damages to
property and persons.
CURRENT ECONOMIC AND POLITICAL CONDITIONS MAY HARM OUR BUSINESS.
Deteriorating regional and global economic conditions and the effects
of ongoing military actions against terrorists may cause significant disruptions
to commerce throughout the world. To the extent that such conditions and
disruptions result in delays or cancellations of customer orders, impair our
ability to effectively market or acquire propane, or cause or prolong an
economic recession, our business, results of operations and financial condition
could be adversely affected. In addition, our ability to raise capital for
acquisitions, capital expenditures and ongoing operations is dependent upon
ready access to capital markets. During times of adverse economic and political
conditions, investor confidence in and accessibility to capital markets could
decrease. If capital markets are not available to us over an extended period of
time, we could be unable to make acquisitions, refinance debt, invest in capital
expenditures and fund operations, which could adversely affect our business,
results of operations and financial condition.
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USE OF PROCEEDS
We plan to use the proceeds from the sale of the notes to repay all or
a portion of the $60,000,000 maturing First Mortgage Notes due April 19, 2002.
Depending on when we sell the notes, however, we may repay all or a portion of
the $60,000,000 First Mortgage Notes with borrowings under our operating
partnership's bank revolving credit facility. If we do, we will repay all or a
portion of any such borrowings under our operating partnership's bank revolving
credit facility with the proceeds from the sale of the notes. The weighted
average annual interest rate on the $60,000,000 First Mortgage Notes is 10.09%.
Remaining proceeds from the sale of the notes, if any, will be used for general
business purposes.
PLAN OF DISTRIBUTION
We may sell the notes described in this prospectus and any prospectus
supplement to one or more underwriters for public offering and sale, or we may
sell the notes to investors, including institutional investors, directly or
through agents or dealers. Any underwriter, agent or dealer involved in the
offer and sale of the notes will be named in a prospectus supplement.
We or any underwriter we engage may sell the notes from time to time in
one or more transactions at a fixed price or fixed prices, which may be changed,
at market prices prevailing at the time of sale, at prices related to market
prices prevailing at the time of sale or at negotiated prices, based on various
factors such as interest rates at the time of sale and general economic
conditions. We may authorize any underwriter we engage to offer and sell the
notes upon the terms and conditions as may be set forth in a prospectus
supplement.
In connection with the sale of the notes, any underwriter we engage may
receive or may be deemed to have received compensation from us in the form of
underwriting discounts or commissions. Underwriters may also sell the notes to
or through dealers. Dealers may receive compensation in the form of discounts,
concessions or commissions from an underwriter and/or commissions from the
purchasers for whom they may act as agent or to whom they sell as principals, or
both. Any underwriting commission paid by us to underwriters or other agents in
connection with the offering of the notes, and any discounts, concessions or
commissions allowed by underwriters to dealers, will be set forth in a
prospectus supplement. Underwriters, dealers and agents participating in any
distribution of the notes may be deemed to be underwriters, and any discounts
and commissions received by them and any profit realized by them on any resale
of the notes may be deemed underwriting discounts and commissions under the
Securities Act of 1933.
We may enter into an agreement with an underwriter or other agent who
participates in a sale of the notes. Any such agreement may entitle a
participating underwriter to indemnification by us against certain liabilities,
including liabilities under the Securities Act of 1933.
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DESCRIPTION OF THE NOTES
AmeriGas Partners, L.P. and AP Eagle Finance Corp. will be the
co-issuers and co-obligors of the notes, which will be issued under an indenture
dated August 21, 2001 with First Union National Bank, as trustee. The terms of
the notes include those stated in the indenture and those made part of the
indenture by reference to the Trust Indenture Act of 1939.
Certain terms used in this summary description are defined below under
the caption "Certain Definitions." Other defined terms used in this summary
description are as follows:
- the "Partnership" refers to AmeriGas Partners, L.P.;
- the words "we," "us," "our" and "ourselves" refer to AmeriGas
Partners, L.P. and AP Eagle Finance Corp., the co-issuers of
the notes;
- the "Operating Partnership" refers to AmeriGas Propane, L.P.;
and
- the "General Partner" refers to AmeriGas Propane, Inc.
Below is a summary of the material provisions of the indenture and the
notes. We urge you to read the indenture, and the form of note attached as
Exhibit A to the indenture because they, not this description, define the rights
of the noteholders.
BRIEF DESCRIPTION OF THE NOTES
The notes:
- are our unsecured general joint and several obligations;
- rank senior in right of payment to all our subordinated
indebtedness;
- rank equally in right of payment with all our other senior
indebtedness;
- are effectively subordinated to claims of creditors, other
than claims of the Partnership and preferred stockholders of
our Subsidiaries; and
- are non-recourse to the property and assets of the General
Partner.
We do not intend to list the notes on any securities exchange or to
seek approval for quotations through any automated quotation system. Although,
as of the date of this prospectus, $200,000,000 of the notes are outstanding,
there is no established market for the notes, and we do not anticipate that one
will develop.
The Partnership is a holding company for its Subsidiaries, with no
material operations and no substantial assets other than its approximate 99%
limited partnership interest in each of the Operating Partnership and AmeriGas
Eagle Propane, L.P. Accordingly, the Partnership is
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dependent upon the distribution of the earnings of its Subsidiaries, including
the Operating Partnership, to service its debt obligations.
As a result of the structural subordination discussed above,
noteholders generally do not and will not have any recourse to the Operating
Partnership or any of its Subsidiaries or any of their respective assets with
respect to amounts due under the notes. However, noteholders may have indirect
recourse to the extent the Partnership has rights as a holder of equity
interests in the Operating Partnership and its Subsidiaries.
In addition, the noteholders do not have any right to require the
Operating Partnership to make distributions to the Partnership. The Operating
Partnership Agreement requires, subject to the restrictions imposed by the First
Mortgage Note agreements and Bank Credit Facilities, the Operating Partnership
to distribute all Available Cash.
PRINCIPAL, MATURITY AND INTEREST
The notes:
- will be issued in registered form, without coupons, and in
denominations of $1,000;
- will accrue interest at the annual rate of 8 7/8%;
- will pay interest semi-annually in arrears on May 20 and
November 20 to holders of record on the immediately preceding
May 5 and November 5; and
- will mature on May 20, 2011.
Subject to our compliance with the covenant described below under the
caption "Certain Covenants -- Limitation on Additional Indebtedness," we are
permitted to issue more notes under the indenture governing the notes in an
unlimited principal amount. Any additional notes that are actually issued under
the indenture will be treated as issued and outstanding notes (and as the same
class as the existing notes issued under that indenture) for all purposes under
the indenture and this "Description of the Notes" unless the context indicates
otherwise.
Interest on the notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of
original issuance. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
We will pay principal and interest on the notes at our office or
agency, which we maintain in New York City. At our option, we may make payments
of interest by check mailed to the noteholders at their respective addresses as
set forth in the register of notes. However, all payments with respect to global
notes will be made by wire transfer of immediately available funds to the
accounts specified by the holders of the global notes. Until otherwise
designated by us, our office or agency in New York will be the office of the
trustee maintained for payment purposes.
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OPTIONAL REDEMPTION
Except as set forth further below, we will not be entitled to redeem
the notes at our option prior to May 20, 2006. On and after May 20, 2006, we
will be entitled at our option to redeem the notes, in whole or in part, upon
not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed in percentages of principal amount) set forth below, plus accrued and
unpaid interest on the notes to the applicable redemption date, if redeemed
during the twelve-month period beginning on May 20 of the years indicated in the
table below:
YEAR PERCENTAGE
---- ----------
2006 104.438%
2007 102.958%
2008 101.479%
2009 and thereafter 100.000%
In the event that, on or prior to May 20, 2004, the Partnership
consummates a public offering of its Capital Stock, other than Redeemable
Capital Stock, then within 90 days of the consummation of the public offering
the Partnership may, at its option, use the net proceeds of the public offering
to redeem the notes at 108.875% of their principal amount, plus accrued and
unpaid interest to the applicable redemption date; provided, however, that at
least 67% of the principal amount of notes already issued, together with the
notes and any additional notes sold pursuant to this prospectus or otherwise,
are outstanding immediately following the redemption. Only one redemption may be
made under this provision.
MANDATORY REDEMPTION; OFFERS TO PURCHASE; OPEN MARKET PURCHASES
We are not required to make any mandatory redemption or sinking fund
payments with respect to the notes. However, we may be required to offer to
purchase the notes as described below under the caption "Repurchase at the
Option of Holders." We may at any time and from time to time purchase notes in
the open market or otherwise.
REPURCHASE AT THE OPTION OF HOLDERS
CHANGE OF CONTROL
If new persons take control of the Partnership or the Operating
Partnership, you may have the right to have your notes repurchased.
A "change of control" means:
(1) the sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Partnership or the Operating Partnership
to any Person or group, as that term is used in Section 13(d)(3) of the Exchange
Act, other than:
(A) UGI Corporation and its Subsidiaries; or
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(B) any Person in which UGI Corporation and its
Subsidiaries beneficially own at least 51% of that Person's
Voting Stock;
(2) the merger or consolidation of the Partnership or the
Operating Partnership with another partnership or corporation other than UGI
Corporation and its Subsidiaries or any Person of which UGI Corporation and its
Subsidiaries beneficially own at least 51% of that Person's Voting Stock;
(3) the liquidation or dissolution of the Partnership or the
General Partner; or
(4) the occurrence of any transaction, the result of which is that
UGI Corporation and its Subsidiaries beneficially own in the aggregate, directly
or indirectly, less than 51% of the Voting Stock of the General Partner.
With respect to the sale of assets referred to in (1) above, the phrase
"all or substantially all" as used in the indenture varies according to the
facts and circumstances of the subject transaction. It has no clearly
established meaning under New York law, which is the law that governs the
indenture. Therefore, in some transactions it may be unclear whether a change of
control has occurred and whether the notes are subject to a change of control
offer.
Upon the occurrence of a change of control, each noteholder will have
the right to require us to repurchase all or any part (equal to $1,000 or an
integral multiple of $1,000) of that holder's notes pursuant to a change of
control offer on the terms set forth in the indenture. In a change of control
offer, we will offer a change of control payment in cash equal to 101% of the
aggregate principal amount of the notes or portion of notes validly tendered for
payment, plus accrued and unpaid interest to the date of purchase.
Within 30 days following any change of control, we will mail a notice
to each noteholder stating:
(1) that the change of control offer is being made in accordance
with the covenant in the indenture entitled "Change of Control" and that all
notes tendered will be accepted for payment;
(2) the purchase price and the purchase date (the "change of
control payment date"), which shall be no earlier than 30 days nor later than 60
days from the date the notice is mailed;
(3) that any note not tendered will continue to accrue interest;
(4) that, unless we default in the payment of the change of
control payment, all notes accepted for payment in accordance with the change of
control offer will cease to accrue interest after the change of control payment
date;
(5) that holders electing to have any notes purchased in
accordance with a change of control offer will be required to surrender the
notes, with the form entitled "Option of Holder to Elect Purchase," on the
reverse of the notes, completed, to the paying agent at the address
17
specified in the notice prior to the close of business on the third business day
preceding the change of control payment date;
(6) that noteholders will be entitled to withdraw their election
if the paying agent receives, not later than the close of business on the second
business day preceding the change of control payment date, a proper notice
setting forth the name of the noteholder, the principal amount of notes
delivered for purchase, and a statement that such noteholder is withdrawing its
election to have such notes purchased; and
(7) that noteholders whose notes are being purchased only in part
will be issued new notes equal in principal amount to the unpurchased portion of
the notes surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple of $1,000.
We will comply with the requirements of Rule 14e-l under the Exchange
Act and any other relevant securities laws applicable to the repurchase of notes
in connection with a change of control.
On the change of control payment date, we will, to the extent lawful:
(1) accept for payment notes or portions of notes tendered in
accordance with the change of control offer;
(2) deposit an amount equal to the change of control payment with
the paying agent in respect of all notes or portions of notes properly tendered;
and
(3) deliver or cause to be delivered to the trustee the notes so
accepted together with an officers' certificate stating the aggregate amount of
the notes or portions of notes tendered to us.
The paying agent will promptly mail to each holder of notes so accepted
the change of control payment for the notes. The trustee will promptly
authenticate and mail to each noteholder a new note equal in principal amount to
any unpurchased portion of the notes surrendered. However, each new note will be
in a principal amount of $1,000 or an integral multiple of $1,000. We will
publicly announce the results of the change of control offer on or as soon as
practicable after the change of control payment date.
A noteholder's right to receive the change of control payment may be
restricted in the following circumstances:
- under agreements governing the First Mortgage Notes and the
Bank Credit Facilities, the Partnership must offer to repay
all amounts owing under the First Mortgage Notes if certain
events constituting a change of control occur;
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- under agreements governing the First Mortgage Notes, the
Partnership is restricted in its ability to redeem or
repurchase the notes out of distributions of Available Cash
from the Operating Partnership; and
- under the agreements governing the First Mortgage Notes and
the Bank Credit Facilities, the Operating Partnership is
limited in its ability to make distributions to the
Partnership, and the Partnership will be limited by its
then-existing financial resources to pay cash to the holders
of notes upon a repurchase.
Except as described above with respect to a change of control, the
indenture does not contain provisions that permit noteholders to require that we
repurchase or redeem the notes in the event of a takeover, recapitalization or
similar restructuring. The failure of the Partnership to repurchase the notes
upon a change of control offer would constitute an Event of Default under the
indenture.
ASSET SALES
The Partnership is limited in its ability to sell its assets. This
limitation is subject to important exceptions.
"Asset Sales" are defined as the following, whether in a single
transaction or a series of related transactions:
- the sale, lease, conveyance or other disposition of any assets
other than sales of inventory in the ordinary course of
business and consistent with past practice; or
- the issuance or sale of Capital Stock of any Restricted
Subsidiaries.
In general, the Partnership and its Restricted Subsidiaries are not
permitted to consummate an Asset Sale unless:
(1) the Partnership or the Restricted Subsidiary, as the case may
be, receives consideration at the time of the Asset Sale at least equal to the
fair market value, as determined in good faith by the General Partner, of the
assets sold or otherwise disposed of; and
(2) at least 80% of the consideration received by the Partnership
or the Restricted Subsidiary is in the form of cash; provided
(A) that for purposes of determining the amount of cash
received in an Asset Sale, the following will be
deemed to be cash:
(i) the amount of any liabilities on the
Partnership's or any Restricted Subsidiary's
balance sheet that are assumed by the
transferee of the assets; and
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(ii) the amount of any notes or other obligations
received by the Partnership or the
Restricted Subsidiary from the transferee
that is immediately converted by the
Partnership or the Restricted Subsidiary
into cash (to the extent of the cash
received); and
(B) the 80% limitation will not apply to any Asset Sale
in which the cash portion of the consideration
received, determined in accordance with the foregoing
provisions, is equal to or greater than the after-tax
proceeds would have been had the Asset Sale complied
with the 80% limitation.
The following transactions will not be considered Asset Sales:
(1) any transfer of assets or Capital Stock by the Partnership or
any of its Restricted Subsidiaries to a Wholly Owned Restricted Subsidiary of
the Partnership;
(2) any transfer of assets or Capital Stock by the Partnership or
any of its Restricted Subsidiaries to any Person in exchange for other assets
used in a permitted line of business and having a fair market value, as
determined in good faith by the General Partner, not less than that of the
assets so transferred; and
(3) any transfer of assets in accordance with a Permitted
Investment.
Also, the sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Partnership will be governed by the
provisions of the indenture described above under the caption "Change of
Control" or the provisions described below under the caption "Merger,
Consolidation or Sale of Assets," and not by the provisions of this covenant.
If the Partnership or any of its Restricted Subsidiaries receive Net
Proceeds exceeding $10 million from one or more Asset Sales in any fiscal year,
then within 270 days after the date the aggregate amount of Net Proceeds exceeds
that amount (or such longer period as may be required to comply with any
agreement in effect on the 10 1/8% Series B Senior Notes Issue Date), the
Partnership must apply the amount exceeding $10 million, less the amount of Net
Proceeds that have been previously applied for the purposes set forth below in
(1) or (2) during the current fiscal year, to:
(1) reduce Indebtedness of a Restricted Subsidiary, with a
permanent reduction of availability in the case of revolving Indebtedness; or
(2) make an investment in assets in the same line of business as
that of the Partnership on the 10 1/8% Series B Senior Notes Issue Date.
Pending the final application of any Net Proceeds, the Partnership or
any Restricted Subsidiary may temporarily reduce borrowings under the Bank
Credit Facilities or otherwise invest the Net Proceeds in any manner that is not
prohibited by the indenture. Any Net Proceeds that are not applied or invested
as provided in (1) or (2) above will be deemed to constitute "Excess Proceeds."
20
When the aggregate amount of Excess Proceeds exceeds $5 million, we
will make an offer to all noteholders called an "asset sale offer," to purchase
the maximum principal amount of notes that may be purchased out of the Excess
Proceeds. In an asset sale offer:
- the offer price will be in cash and will be 100% of the
principal amount of the note plus accrued and unpaid interest
to the date of purchase;
- we will follow the procedures set forth in the indenture; and
- we will comply with the requirements of Rule 14e-l under the
Exchange Act and any other applicable securities laws.
To the extent that the aggregate amount of notes tendered in accordance
with an asset sale offer is less than the Excess Proceeds, the Partnership or
any Restricted Subsidiary may use such deficiency for general business purposes.
If the aggregate principal amount of notes surrendered by their holders exceeds
the amount of Excess Proceeds, the trustee shall select the notes to be
purchased on a pro rata basis. Notwithstanding the foregoing, if we are required
to commence an asset sale offer at any time when we have securities outstanding
ranking pari passu in right of payment with the notes and the terms of those
securities provide that a similar offer must be made with respect to those other
securities, then the asset sale offer for the notes will be made concurrently
with the other offers, and securities of each issue will be accepted on a pro
rata basis in proportion to the aggregate principal amount of securities of each
issue which their holders elect to have purchased. Upon completion of the asset
sale offer, the amount of Excess Proceeds will be reset at zero.
SELECTION AND NOTICE
If less than all the notes are to be redeemed at any time, the trustee
will select the notes to be redeemed among the holders of notes pro rata, by lot
or in accordance with a method which the trustee considers to be fair and
appropriate. The trustee must choose in a manner that complies with any legal
and stock exchange requirements. Notices of redemption shall be mailed by first
class mail at least 30 but not more than 60 days before the redemption date to
each holder of notes to be redeemed at its registered address. If any note is to
be redeemed in part only, the notice of redemption that relates to that note
shall state the portion of the principal amount thereof to be redeemed. A new
note in principal amount equal to the unredeemed portion of the note will be
issued in the name of the holder of that note upon surrender and cancellation of
the original note. On and after the redemption date, interest ceases to accrue
on notes or portions of notes called for redemption.
CERTAIN COVENANTS
LIMITATION ON ADDITIONAL INDEBTEDNESS
The Partnership and its Restricted Subsidiaries may only incur more
debt under certain circumstances.
21
The Partnership will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or in any manner become directly or indirectly liable, contingently or
otherwise, for the payment (in each case, to "incur") any Indebtedness
(including Redeemable Capital Stock), unless at the time of the incurrence and
after giving pro forma effect to the receipt and application of the proceeds of
the Indebtedness, the Consolidated Fixed Charge Coverage Ratio of the
Partnership would be greater than 2.00 to 1.
In addition to any Indebtedness that may be incurred as set forth
above, the Partnership and its Restricted Subsidiaries may incur the following
(collectively, "Permitted Indebtedness"):
(1) Indebtedness outstanding on the 10 1/8% Senior Notes Issue
Date;
(2) Indebtedness of the Operating Partnership evidenced by the
First Mortgage Notes; provided that the aggregate principal amount, exclusive of
any unamortized premium, of this Indebtedness outstanding at any time may not
exceed $518 million;
(3) Indebtedness of the Partnership or a Restricted Subsidiary
incurred:
(A) for the making of expenditures for the improvement or
repair, to the extent the improvements or repairs may
be capitalized in accordance with GAAP, or additions,
including by way of acquisitions of businesses and
related assets, to the property and assets of the
Partnership and its Restricted Subsidiaries,
including, without limitation, to Indebtedness
incurred under the acquisition facility; or
(B) by assumption in connection with additions, including
additions by way of acquisition or capital
contributions of businesses and related assets, to
the property and assets of the Partnership and its
Restricted Subsidiaries; provided that the aggregate
principal amount of this Indebtedness outstanding at
any time may not exceed $75 million;
(4) Indebtedness of the Partnership or a Restricted Subsidiary
incurred for any purpose permitted under the Revolving Loan Facility; provided
that the aggregate principal amount of this Indebtedness outstanding at any time
may not exceed an amount equal to the greater of:
(A) $175 million; and
(B) the Consolidated Borrowing Base Amount; provided,
further, that the outstanding balance of this
Indebtedness will not exceed 50% of the greater
amount for 30 consecutive days during each fiscal
year;
(5) Indebtedness of the Partnership owed to the General Partner or
an Affiliate of the General Partner that is unsecured and that is Subordinated
Indebtedness; provided that the
22
aggregate principal amount of this Indebtedness outstanding at any time may not
exceed $50 million;
(6) Indebtedness of the Partnership or a Restricted Subsidiary for
the purpose of the payment of certain liabilities of Petrolane; provided that
the aggregate amount of such Indebtedness outstanding at any time may not exceed
$30 million;
(7) Indebtedness owed by the Partnership or any Restricted
Subsidiary to any Wholly Owned Restricted Subsidiary;
(8) Indebtedness under Interest Rate Agreements;
(9) Permitted Refinancing Indebtedness;
(10) the incurrence by the Partnership or a Restricted Subsidiary
of Indebtedness owing directly to its insurance carriers, without duplication,
in connection with the Partnership's, its Subsidiaries' or its Affiliates'
self-insurance programs or other similar forms of retained insurable risks for
their respective businesses, consisting of reinsurance agreements and
indemnification agreements, and guarantees of the foregoing, secured by letters
of credit; provided that any Consolidated Fixed Charges associated with the
Indebtedness evidenced by the reinsurance agreements, indemnification
agreements, guarantees and letters of credit will be included, without
duplication, in any determination of the Consolidated Fixed Charge Coverage
Ratio test set forth in the covenant in the indenture entitled "Limitation on
Additional Indebtedness;"
(11) Indebtedness of the Partnership and its Restricted
Subsidiaries in respect of Capital Leases; provided that the aggregate amount of
the Indebtedness outstanding at any time may not exceed $10 million;
(12) Indebtedness of the Partnership and its Restricted
Subsidiaries represented by letters of credit supporting:
(A) obligations under workmen's compensation laws;
(B) obligations to suppliers of propane; provided that
the aggregate amount of this Indebtedness outstanding
at any time may not exceed $15 million; and
(C) the repayment of Permitted Indebtedness; or
(13) surety bonds and appeal bonds required in the ordinary course
of business or in connection with the enforcement of rights or claims of the
Partnership or any of its Subsidiaries or in connection with judgments that do
not result in a Default or Event of Default.
23
LIMITATION ON RESTRICTED PAYMENTS
The Partnership will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, make any of the following payments or
Investments, which together are referred to as "Restricted Payments":
(1) declare or pay any dividend or make any other distribution or
payment on or with respect of Capital Stock of the Partnership or any of its
Restricted Subsidiaries or any payment made to the direct or indirect holders,
in their capacities as such, of Capital Stock of the Partnership or any of its
Restricted Subsidiaries other than:
(A) dividends or distributions payable solely in Capital
Stock of the Partnership, other than Redeemable
Capital Stock, or in options, warrants or other
rights to purchase Capital Stock of the Partnership,
other than Redeemable Capital Stock;
(B) the declaration and payment of dividends or other
distributions to the extent declared or paid to the
Partnership or any Restricted Subsidiary of the
Partnership; or
(C) the declaration and payment of dividends or other
distributions by any Restricted Subsidiary of the
Partnership to all holders of Capital Stock of that
Restricted Subsidiary on a pro rata basis, including,
in the case of the Operating Partnership, to its
General Partner;
(2) purchase, redeem, defease or otherwise acquire or retire for
value any Capital Stock of the Partnership or any of its Restricted
Subsidiaries, other than any Capital Stock owned by a Wholly Owned Restricted
Subsidiary of the Partnership;
(3) make any principal payment on, or purchase, defease,
repurchase, redeem or otherwise acquire or retire for value, prior to any
scheduled maturity, scheduled repayment, scheduled sinking fund payment or other
Stated Maturity, any Subordinated Indebtedness, other than any such Indebtedness
owned by the Partnership or a Wholly Owned Restricted Subsidiary of the
Partnership; or
(4) make any Investment, other than a Permitted Investment, in any
Person; unless, at the time of and after giving effect to the proposed
Restricted Payment:
(A) no Default or Event of Default shall have occurred
and be continuing; and
(B) the Restricted Payment, together with the aggregate
of all other Restricted Payments made by the
Partnership and its Restricted Subsidiaries during
the fiscal quarter during which the Restricted
Payment is made, will not exceed:
24
(i) if the Consolidated Fixed Charge Coverage
Ratio of the Partnership is greater than
1.75 to 1, an amount equal to Available Cash
as of the end of the immediately preceding
fiscal quarter; or
(ii) if the Consolidated Fixed Charge Coverage
Ratio of the Partnership is equal to or less
than 1.75 to 1, an amount equal to the sum
of:
(I) $24 million, less the aggregate
amount of all Restricted Payments
made by the Partnership and its
Restricted Subsidiaries in
accordance with this clause
(4)(B)(ii)(I) during the period
ending on the last day of the
fiscal quarter of the Partnership
immediately preceding the date of
the Restricted Payment and
beginning on the first day of the
sixteenth full fiscal quarter
immediately preceding the date of
the Restricted Payment; plus
(II) the aggregate net cash proceeds of
any substantially concurrent:
(x) capital contribution to the
Partnership from any Person
other than a Restricted
Subsidiary of the
Partnership; or
(y) issuance and sale of shares
of Capital Stock, other
than Redeemable Capital
Stock, of the Partnership
to any Person other than to
a Restricted Subsidiary
of the Partnership.
The Restricted Payment may be made in assets other than cash, in which
case the amount will be the fair market value, as determined in good faith by
the General Partner, on the date of the Restricted Payment of the assets
proposed to be transferred.
The above provisions will not prohibit:
(1) the payment of any dividend or distribution within 60 days
after the date of its declaration, if at the date of declaration the payment
would be permitted by the above paragraphs;
(2) the redemption, repurchase or other acquisition or retirement
of any shares of any class of Capital Stock of the Partnership or any Restricted
Subsidiary of the Partnership in exchange for, or out of the net cash proceeds
of, a substantially concurrent:
(A) capital contribution to the Partnership from any
Person other than a Restricted Subsidiary of the
Partnership; or
25
(B) issue and sale of other shares of Capital Stock,
other than Redeemable Capital Stock, of the
Partnership to any Person other than to a Restricted
Subsidiary of the Partnership; provided, however,
that the amount of any net cash proceeds that are
utilized for any redemption, repurchase or other
acquisition or retirement will be excluded from the
calculation of Available Cash; or
(3) any redemption, repurchase or other acquisition or retirement
of Subordinated Indebtedness in exchange for, or out of the net cash proceeds
of, a substantially concurrent:
(A) capital contribution to the Partnership from any
Person other than a Restricted Subsidiary of the
Partnership; or
(B) issue and sale of:
(i) Capital Stock, other than Redeemable Capital
Stock, of the Partnership to any Person
other than to a Restricted Subsidiary of the
Partnership; or
(ii) Indebtedness of the Partnership issued to
any Person other than a Restricted
Subsidiary of the Partnership, so long as
the Indebtedness is Permitted Refinancing
Indebtedness; provided, however, that the
amount of any net cash proceeds that are
utilized for any redemption, repurchase or
other acquisition or retirement will be
excluded from the calculation of Available
Cash.
In computing the amount of Restricted Payments previously made for purposes of
the Restricted Payments test above, Restricted Payments made under clause (1)
above will be included and Restricted Payments made under clauses (2) and (3)
shall not be so included.
LIMITATION ON LIENS
The Partnership will not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Liens, other than
Permitted Liens, upon any of its properties or assets, whether owned on the 10
1/8% Senior Notes Issue Date or acquired afterwards.
LIMITATION ON TRANSACTIONS WITH AFFILIATES
The Partnership will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions, including the sale, transfer,
disposition, purchase, exchange or lease of assets, property or services, other
than as provided for in the Operative Agreements, with, or for the benefit of
any Affiliates of the Partnership unless:
26
(1) the transaction or series of related transactions are between the
Partnership and its Wholly Owned Restricted Subsidiaries or between two Wholly
Owned Restricted Subsidiaries; or
(2) (A) the transaction or series of related transactions are
on terms that are no less favorable to the
Partnership or the Restricted Subsidiary, as the case
may be, than those which would have been obtained in
a comparable transaction at such time from Persons
who are not Affiliates of the Partnership or
Restricted Subsidiary and
(B) with respect to a transaction or series of
transactions involving aggregate payments or value
equal to or greater than $15 million, the Partnership
shall have delivered an officers' certificate to the
trustee certifying that the transaction or series of
related transactions comply with the preceding clause
(A) and that the transaction or series of
transactions have been approved by a majority of the
Board of Directors of the General Partner, including
a majority of the Disinterested Directors.
However, this covenant will not restrict the Partnership, any
Restricted Subsidiary or the General Partner from entering into:
(1) any employment agreement, stock option agreement, restricted stock
agreement or similar agreement in the ordinary course of business;
(2) transactions permitted by the provisions of the indenture described
under the covenant "Restricted Payments"; and
(3) transactions in the ordinary course of business in connection with
reinsuring the self-insurance programs or other similar forms of retained
insurable risks of the retail propane business operated by the Partnership, its
Subsidiaries and Affiliates.
LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES
The Partnership will not, and will not permit any of its Restricted
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to:
(1) pay dividends, in cash or otherwise, or make any other
distributions on or with respect to its Capital Stock or any other interest or
participation in, or measured by, its profits;
(2) pay any Indebtedness owed to the Partnership or any other
Restricted Subsidiary;
(3) make loans or advances to, or any investment in, the Partnership or
any other Restricted Subsidiary;
27
(4) transfer any of its properties or assets to the Partnership or any
other Restricted Subsidiary; or
(5) guarantee any Indebtedness of the Partnership or any other
Restricted Subsidiary.
Collectively, these restrictions are called the "Payment Restrictions." However,
the following encumbrances or restrictions are permissible if they exist under
or by reason of:
- applicable law;
- any agreement in effect at or entered into on the 10 1/8% Senior
Notes Issue Date, including the First Mortgage Notes outstanding
on the 10 1/8% Senior Notes Issue Date and the Bank Credit
Facilities in effect on the 10 1/8% Senior Notes Issue Date, or
any agreement relating to any Permitted Indebtedness; provided,
however, that the encumbrances and restrictions contained in the
agreements governing the Permitted Indebtedness are no more
restrictive with respect to the Payment Restrictions than those
set forth in the agreements governing the First Mortgage Notes and
the Bank Credit Facilities as in effect on the 10 1/8% Senior
Notes Issue Date;
- customary non-assignment provisions of any contract or any lease
governing a leasehold interest of the Partnership or any
Restricted Subsidiary;
- purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature
described in clause (4) above on the property so acquired;
- any agreement or other instrument of a Person acquired by the
Partnership or any Restricted Subsidiary, or of a Restricted
Subsidiary of that Person, in existence at the time of the
acquisition but not created in contemplation of the acquisition,
which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person,
or the properties, assets or Subsidiaries of the Person so
acquired; or
- provisions contained in agreements or instruments relating to
Indebtedness which prohibit the transfer of all or substantially
all of the assets of the obligor of the Indebtedness unless the
transferee shall assume the obligations of the obligor under the
agreement or instrument.
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS
The Partnership will not, and will not permit any of its Restricted
Subsidiaries to, enter into any Sale and Leaseback Transaction with respect to
their properties. However, the Partnership and its Restricted Subsidiaries may
enter into Sale and Leaseback Transactions with respect to property acquired or
constructed after the 10 1/8% Senior Notes Issue Date; provided that:
28
(1) the Partnership or the Restricted Subsidiary would be permitted
under the indenture to incur Indebtedness secured by a Lien on the property in
an amount equal to the Attributable Debt with respect to the Sale and Leaseback
Transaction; or
(2) the lease in the Sale and Leaseback Transaction is for a term not
in excess of the lesser of:
(A) three years; and
(B) 60% of the remaining useful life of such property.
LIMITATIONS ON AP EAGLE FINANCE CORP.
In addition to the restrictions set forth under "Limitation on
Additional Indebtedness" above, AP Eagle Finance Corp. may not incur any
Indebtedness unless:
(1) the Partnership is a co-obligor and guarantor of the Indebtedness;
or
(2) the net proceeds of the Indebtedness are:
(A) lent to the Partnership;
(B) used to acquire outstanding debt securities issued by
the Partnership; or
(C) used, directly or indirectly, to refinance or
discharge Indebtedness permitted under the limitation
of this paragraph.
AP Eagle Finance Corp. may not engage in any business not related,
directly or indirectly, to obtaining money or arranging financing for the
Partnership.
MERGER, CONSOLIDATION OR SALE OF ASSETS
The indenture provides that the Partnership may not consolidate or
merge with or into, whether or not the Partnership is the surviving Person, or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions to, another Person unless:
(1) (A) the Partnership is the surviving Person; or
(B) the Person formed by or surviving the consolidation
or merger, if other than the Partnership, or to which
the sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a
corporation or partnership organized or existing
under the laws of the United States, any state
thereof or the District of Columbia;
29
(2) the Person formed by or surviving the consolidation or merger, if
other than the Partnership, or to which the sale, assignment, transfer, lease,
conveyance or other disposition has been made assumes all the obligations of the
Partnership in accordance with a supplemental indenture in a form reasonably
satisfactory to the trustee, under the notes and the indenture;
(3) immediately after the transaction no Default or Event of Default
exists; and
(4) The Partnership or the Person formed by or surviving the
consolidation or merger, if other than the Partnership, or to which the sale,
assignment, transfer, lease, conveyance or other disposition has been made:
(A) will have, immediately after the transaction but
prior to any purchase accounting adjustments
resulting from the transaction, a Consolidated Net
Worth equal to or greater than the Consolidated Net
Worth of the Partnership immediately preceding the
transaction; and
(B) will, at the time of the transaction and after giving
pro forma effect to it as if the transaction had
occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least
$1.00 of additional Indebtedness in accordance with
the Consolidated Fixed Charge Coverage Ratio test set
forth in the covenant entitled "Limitation on
Additional Indebtedness."
The indenture also provides that AP Eagle Finance Corp. may not
consolidate or merge with or into, whether or not they are the surviving Person,
or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions to, another Person unless:
(1) (A) AP Eagle Finance Corp. is the surviving Person; or
(B) the Person formed by or surviving the consolidation
or merger, if other than AP Eagle Finance Corp., or
to which the sale, assignment, transfer, lease,
conveyance or other disposition has been made is a
corporation organized or existing under the laws of
the United States, any state thereof or the District
of Columbia and is a Wholly Owned Restricted
Subsidiary of the Partnership;
(2) the Person formed by or surviving the consolidation or merger, if
other than AP Eagle Finance Corp., or to which the sale, assignment, transfer,
lease, conveyance or other disposition has been made assumes all the obligations
of AP Eagle Finance Corp. in accordance with a supplemental indenture in a form
reasonably satisfactory to the trustee, under the note and the indenture; and
(3) immediately after such transaction no Default or Event of Default
exists.
30
LINE OF BUSINESS
The Partnership and its Restricted Subsidiaries will not materially and
substantially engage in any business other than the Business in which the
Partnership and its Restricted Subsidiaries were engaged on the 10 1/8% Senior
Notes Issue Date.
REPORTS
Whether or not required by the rules and regulations of the SEC, so
long as any notes are outstanding, we will furnish to the noteholders:
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if we
were required to file those Forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and, with respect to
the annual information only, a report on that information by our certified
independent accountants; and
(2) all reports that would be required to be filed with the SEC on Form
8-K if we were required to file the reports.
In addition, whether or not required by the rules and regulations of
the SEC, we will file a copy of all the information described in (1) and (2)
above with the SEC for public availability, unless the SEC will not accept the
filing. We will also make the information available to investors who request it
in writing. Currently, we are required and do file quarterly and annual reports
on Forms 10-Q and 10-K.
EVENTS OF DEFAULTS AND REMEDIES
Each of the following is an "Event of Default":
(1) default in the payment of the principal of or premium, if any, on
any note when the same becomes due and payable, upon Stated Maturity,
acceleration, optional redemption, required purchase, scheduled principal
payment or otherwise;
(2) default in the payment of an installment of interest on any of the
notes, when the same becomes due and payable, which default continues for a
period of 30 days;
(3) failure to perform or observe any other term, covenant or agreement
contained in the notes or the indenture, other than a default specified in
clause (1) or (2) above, and the default continues for a period of 45 days after
written notice of the default requiring us to remedy the same shall have been
given:
(A) to the Partnership by the trustee; or
(B) to us and the trustee by holders of 25% in aggregate
principal amount of the applicable notes then
outstanding;
31
(4) default or defaults under one or more agreements, instruments,
mortgages, bonds, debentures or other evidences of Indebtedness under which the
Partnership or any Restricted Subsidiary of the Partnership then has outstanding
Indebtedness, which default:
(A) is caused by a failure to pay:
(i) principal with respect to Indebtedness of a
Restricted Subsidiary at its Stated Maturity
or within the applicable grace period, if
any, provided with respect to the
Indebtedness; or
(ii) principal, premium or interest with respect
to Indebtedness of the Partnership within
the applicable grace period, if any,
provided in the Indebtedness, which,
collectively, is a "Payment Default;" or
(B) results in the acceleration of the Indebtedness prior
to its Stated Maturity and, in each case, the
principal amount of the Indebtedness, together with
the principal amount of any other Indebtedness under
which there has been a Payment Default or the
maturity of which has been so accelerated, amounts to
$10 million or more;
(5) a final judgment or judgments, which is or are non-appealable and
nonreviewable or which has or have not been stayed pending appeal or review or
as to which all rights to appeal or review have been expired or been exhausted,
which cannot be stayed shall be rendered against:
(A) the Partnership;
(B) any Restricted Subsidiary;
(C) the General Partner; or
(D) any Significant Subsidiary for the payment of money
in excess of $10 million in the aggregate and any one
of the judgments is not covered by insurance or
discharged or execution of the judgment stayed
pending appeal or review within 60 days after entry
of such judgment, or, in the event of a stay, the
judgment shall not be discharged within 30 days after
the stay expires; or
(6) certain events of bankruptcy, insolvency or reorganization with
respect to us or any of our respective Significant Subsidiaries has occurred. If
any Event of Default occurs and is continuing, the trustee or the holders of at
least 25% of principal amount of the applicable series of notes then outstanding
may declare all the notes of that series to be due and payable immediately.
32
Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency, with respect to the
Partnership or AP Eagle Finance Corp., any Significant Subsidiary or any group
of Subsidiaries that, taken together, would constitute a Significant Subsidiary,
all outstanding notes will become due and payable immediately without further
action or notice. Noteholders may not enforce the indenture or the notes except
as provided in the indenture. Subject to limitations, holders of a majority in
principal amount of a series of then-outstanding notes may direct the trustee of
that series of notes in its exercise of any trust or power. The trustee may
withhold from noteholders notice of any continuing Default or Event of Default,
except a Default or Event of Default relating to the payment of principal or
interest, if the trustee determines in good faith that withholding notice is in
their interest. If any Event of Default occurs because we or those acting on our
behalf willfully intended to avoid payment of the premium that we would have to
pay if we then elected to redeem the notes under the optional redemption
provisions of the indenture governing the notes, then an equivalent premium
shall also become and be immediately due and payable to the extent permitted by
law upon the acceleration of the notes. The holders of a majority in aggregate
principal amount of a series of notes issued under the indenture and then-
outstanding by notice to the trustee for those notes may waive any existing
Default or Event of Default for all noteholders of that series and its
consequences under the indenture, except a continuing Default or Event of
Default in the payment of any principal of, premium, if any, or interest on the
notes. We are required to deliver to the trustee annually a statement regarding
compliance with the indenture. In addition, upon becoming aware of any Default
or Event of Default, we are required to deliver to the trustee a statement
specifying the Default or Event of Default.
NO PERSONAL LIABILITY OF LIMITED PARTNERS, DIRECTORS, OFFICERS, EMPLOYEES AND
UNITHOLDERS
No limited partner of the Partnership or director, officer, employee,
incorporator or stockholder of the General Partner or AP Eagle Finance Corp., as
such, shall have any liability for any of our obligations under the notes, the
indenture or for any claim based, in respect of, or by reason of, these
obligations or their creation. Each noteholder, by accepting a note, waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the notes. The waiver may not be effective to
waive liabilities under the federal securities laws and it is the view of the
Commission that such a waiver is against public policy.
NON-RECOURSE
Our obligations under the indenture are non-recourse to the General
Partner and the Operating Partnership, and their respective Affiliates, other
than ourselves, and are payable only out of our cash flow and assets. The
trustee has, and each holder of a note, by accepting a note, is deemed to have,
agreed in the indenture that:
- the General Partner and its assets,
- the Operating Partnership and its assets, and
- their respective Affiliates, other than us, and their assets,
33
shall not be liable for any of our obligations under the indenture or the notes.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
We may, at our option and at any time, elect to have all of our
obligations discharged with respect to outstanding notes. This is known as
"legal defeasance." However, under legal defeasance we cannot discharge:
(1) the rights of holders of outstanding notes to receive payments with
respect to any principal, premium, and interest on the notes when the payments
are due;
(2) our obligations with respect to the notes concerning issuing
temporary notes, registration of notes, mutilated, destroyed, lost or stolen
notes;
(3) our obligation to maintain an office or agency for payment and
money for security payments held in trust;
(4) the rights, powers, trusts, duties and immunities of the trustee,
and our obligations in connection therewith; and
(5) the legal defeasance and covenant defeasance provisions of the
indenture.
In addition, we may, at our option and at any time, elect to have our
obligations released with respect to certain covenants that are described in the
indenture. This is called "covenant defeasance." After our obligations have been
released in this manner, any failure to comply with these obligations will not
constitute a Default or Event of Default with respect to the notes. In the event
covenant defeasance occurs, certain events, not including non-payment,
bankruptcy, receivership, reorganization and insolvency, described in the
indenture and summarized in this prospectus under the caption "Events of
Default" will no longer constitute an Event of Default with respect to the
notes.
In order to exercise either legal defeasance or covenant defeasance:
(1) we must irrevocably deposit with the trustee, in trust, for the
benefit of the noteholders, cash in U.S. dollars, non-callable U.S. government
securities, or a combination thereof, in amounts sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay the
principal and any premium, and interest on the outstanding notes on the Stated
Maturity or on the applicable redemption date;
(2) in the case of legal defeasance, we shall have delivered to the
trustee an opinion of counsel in the United States reasonably acceptable to the
trustee confirming that:
(A) we have received from, or there shall have been
published by, the IRS a ruling; or
34
(B) since the date of the indenture, there shall have
been a change in the applicable federal income tax
law, in either case to the effect that, and based
thereon the opinion of counsel shall confirm that,
the holders of the outstanding notes will not
recognize income, gain or loss for federal income tax
purposes as a result of the legal defeasance and will
be subject to federal income tax on the same amounts,
in the same manner and at the same times as would
have been the case if the legal defeasance had not
occurred;
(3) in the case of covenant defeasance, we shall have delivered to the
trustee an opinion of counsel in the United States reasonably acceptable to the
trustee confirming that the holders of the outstanding notes will not recognize
income, gain or loss for federal income tax purposes as a result of the covenant
defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if the covenant
defeasance had not occurred;
(4) no Event of Default has occurred and is continuing on the date of
the deposit or insofar as Events of Default from bankruptcy or insolvency events
are concerned, at any time in the period ending on the 91st day after the date
of deposit;
(5) the legal defeasance or covenant defeasance will not result in a
breach, violation or constitute a default under any material agreement or
instrument, other than the indenture, to which we or any of our Restricted
Subsidiaries is a party or by which we or any of our Restricted Subsidiaries is
bound;
(6) we shall have delivered to the trustee an opinion of counsel to the
effect that after the 91st day following the deposit, the trust funds will not
be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;
(7) we shall have delivered to the trustee an officers' certificate
stating that we did not make the deposit with the intent of preferring the
holders of notes over our other creditors with the intent of defeating,
hindering, delaying or defrauding our other creditors; and
(8) we shall have delivered to the trustee an officers' certificate and
an opinion of counsel, each stating that all conditions precedent provided for
or relating to legal defeasance or covenant defeasance have been complied with.
AMENDMENT, SUPPLEMENT AND WAIVER
In general, the indenture and the notes may be amended or supplemented,
and any existing default or compliance with any provision of the indenture or
the notes may be waived, with the consent of the holders of at least a majority
in principal amount of the notes then outstanding. This includes consents
obtained in connection with a tender offer or exchange offer
35
for notes. However, without the consent of each noteholder affected, an
amendment or waiver may not, with respect to any notes held by a non-consenting
noteholder:
(1) reduce the principal amount of notes whose holders must consent to
an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any note or
alter the provisions with respect to the redemption of the notes, other than
provisions relating to the covenants described above under the caption
"Repurchase at the Option of Holders;"
(3) reduce the rate of or change the time for payment of interest on
any note;
(4) waive a Default or Event of Default in the payment of principal,
premium, if any, or interest on the notes, except a rescission of acceleration
of the notes by the holders of at least a majority in aggregate principal amount
of the notes and a waiver of the payment default that resulted from the
acceleration;
(5) make any note payable in money other than that stated in the notes;
(6) make any change in the provisions of the indenture relating to
waivers of past Defaults or the rights of holders of notes to receive payments
of principal, of premium, if any, or interest on the notes;
(7) waive a redemption payment with respect to any note, other than
provisions relating to the covenants described above under the caption
"Repurchase at the Option of Holders;" or
(8) make any change in the foregoing amendment and waiver provisions.
Notwithstanding the foregoing, without the consent of any noteholder,
we and the trustee may amend or supplement the indenture or the notes to:
- cure any ambiguity, defect or inconsistency;
- provide for uncertificated notes in addition to or in place of
certificated notes;
- provide for the assumption of our obligations to noteholders in
the case of a merger or consolidation;
- make any change that could provide any additional rights or
benefits to the noteholders that does not adversely affect the
legal rights under the indenture of any such holder; or
- comply with requirements of the SEC in order to effect or maintain
the qualification of the indenture under the Trust Indenture Act.
36
THE TRUSTEE
Should the trustee become our creditor, the indenture contains certain
limitations on the trustee's rights to obtain payment of claims or to realize on
certain property received in respect of any claim as security or otherwise. The
trustee will be permitted to engage in other transactions; however, if it
acquires any conflicting interest it must:
- eliminate the conflict within 90 days;
- apply to the SEC for permission to continue; or
- resign.
The holders of a majority in principal amount of the then-outstanding
notes will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the trustee, subject to
certain exceptions. The indenture provides that in case an uncured Event of
Default occurs, the trustee will be required, in the exercise of its power, to
use the degree of care of a prudent man in the conduct of his own affairs.
Subject to these provisions, the trustee will be under no obligation to exercise
any of its rights or powers under the indenture at the request of any
noteholder, unless the noteholder offers to the trustee security and indemnity
satisfactory to the trustee against any loss, liability or expense.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the indenture and in
the summary of the notes set forth above. We urge you to read the indenture and
the form of note because they, not this summary description, define the rights
of the noteholders and include all the details about the notes and those rights.
"10 1/8% Senior Notes Issue Date" means April 19, 1995, the date of the
indenture governing the 10 1/8% Senior Notes.
"10 1/8% Senior Notes" means the 10 1/8% Senior Notes due April 15, 2007 issued
by the Partnership and AmeriGas Finance Corp.
"Acquired Indebtedness" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time the other
Person merged with or into or became a Subsidiary of the specified Person,
including Indebtedness incurred in connection with, or in contemplation of, the
other Person merging with or into or becoming a Subsidiary of the specified
Person; and
(2) Indebtedness encumbering any asset acquired by the specified
Person.
"Acquisition Facility" means the loan facility of the Operating Partnership
provided for in the Credit Agreement, for the purpose of financing acquisitions.
37
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, the specified Person. For purposes of this definition, "control"
means the power to direct the management and policies, whether through the
ownership of voting securities, by contract or otherwise. Notwithstanding the
foregoing, the term "Affiliate" shall not include any Wholly Owned Restricted
Subsidiary.
"Asset Acquisition" means:
(1) an Investment by the Partnership or any Restricted Subsidiary of
the Partnership in any other Person pursuant to which the Person shall become a
Restricted Subsidiary of the Partnership, or shall be merged with or into the
Partnership or any Restricted Subsidiary of the Partnership;
(2) the acquisition by the Partnership or any Restricted Subsidiary of
the Partnership of the assets of any Person, other than a Restricted Subsidiary
of the Partnership, which constitute all or substantially all of the assets of
such Person; or
(3) the acquisition by the Partnership or any Restricted Subsidiary of
the Partnership of any division or line of business of any Person, other than a
Restricted Subsidiary of the Partnership.
"Attributable Debt" means, with respect to any Sale and Leaseback Transactions
not involving a Capital Lease, as of any date of determination, the total
obligation, discounted to present value at the rate of interest implicit in the
lease included in the transaction, of the lessee for rental payments during the
remaining portion of the term of the lease, including extensions which are at
the sole option of the lessor, of the lease included in the transaction. For
purposes of this definition, the rental payments shall not include amounts
required to be paid on account of property taxes, maintenance, repairs,
insurance, assessments, utilities, operating and labor costs and other items
which do not constitute payments for property rights. In the case of any lease
which is terminable by the lessee upon the payment of a penalty, the rental
obligation shall also include the amount of the penalty, but no rent shall be
considered as required to be paid under such lease subsequent to the first date
upon which it may be so terminated.
"Available Cash" as to any quarter means:
(1) the sum of:
(A) all cash of the Partnership, the Operating
Partnership and any Subsidiaries thereof, treated as
a single consolidated entity (together, the
"Partnership Group"), on hand at the end of the
quarter; and
(B) all additional cash of the Partnership Group on hand
on the date of determination of Available Cash with
respect to the quarter resulting from borrowings
subsequent to the end of the quarter;
38
(2) less the amount of cash reserves that is necessary or appropriate
in the reasonable discretion of the General Partner to:
(A) provide for the proper conduct of the business of the
Partnership Group, including reserves for future
capital expenditures, subsequent to the quarter;
(B) provide funds for distributions under Section 5.3(a),
(b) and (c) or 5.4(a) of the Partnership Agreement in
respect of any one or more of the next four quarters;
or
(C) comply with applicable law or any debt instrument or
other agreement or obligation to which any member of
the Partnership Group is a party or its assets are
subject;
provided, however, that Available Cash attributable to any Restricted Subsidiary
of the Partnership will be excluded to the extent dividends or distributions of
Available Cash by the Restricted Subsidiary are not at the date of determination
permitted by the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or other regulation.
"Bank Credit Facilities" means the Acquisition Facility and the Revolving
Loan Facility.
"Business" means wholesale and retail sales, distribution and storage of propane
gas and related petroleum derivative products and the retail sale and
distribution of propane related supplies and equipment, including home
appliances.
"Capital Lease" means, with respect to any Person, any lease of any property,
whether real, personal or mixed, by a Person, as lessee of guarantor or other
surety, which would, in accordance with GAAP, be required to be classified and
accounted for as a capital lease on a balance sheet of the Person.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, units representing interests, participations, rights in or other
equivalents, however designated, of the Person's capital stock, including, with
respect to partnerships, partnership interests, whether general or unlimited,
any and other interest or participation that confers upon a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
partnership, and any rights, other than debt securities convertible into capital
stock, warrants or options exchangeable to or convertible into capital stock.
"Consolidated Borrowing Base Amount" means an amount equal to the sum of:
(1) 70% of the face amount of Eligible Accounts Receivable of the
Partnership and its Restricted Subsidiaries; and
39
(2) 70% of the book value, calculated on a first-in, first-out basis,
of the consolidated Inventory of the Partnership and its Restricted
Subsidiaries, in each case as determined in accordance with GAAP. To the extent
that information is not available as to the amount of Eligible Accounts
Receivable or Inventory as of a specific date, the Partnership may utilize the
most recent available information for purposes of calculating the Consolidated
Borrowing Base Amount.
"Consolidated Cash Flow Available for Fixed Charges" means, with respect to the
Partnership and its Restricted Subsidiaries, for any period, the sum of, without
duplication, the amounts for the period, taken as single accounting, of:
(1) Consolidated Net Income;
(2) Consolidated Non-cash Charges;
(3) Consolidated Interest Expense; and
(4) Consolidated Income Tax Expense.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to the
Partnership and its Restricted Subsidiaries, the ratio of:
(1) the aggregate amount of Consolidated Cash Flow Available for Fixed
Charges of the Person for the four full fiscal quarters immediately preceding
the date of the transaction (the "Transaction Date") giving rise to the need to
calculate the Consolidated Fixed Charge Coverage Ratio (the "Four Quarter
Period"); to
(2) the aggregate amount of Consolidated Fixed Charges of the Person
for the Four Quarter Period.
In addition to and without limitation of the foregoing, for purposes of this
definition, "Consolidated Cash Flow Available for Fixed Charges" and
"Consolidated Fixed Charges" shall be calculated after giving effect on a pro
forma basis for the period of the calculation to, without duplication:
(1) the incurrence or repayment of any Indebtedness, other than
revolving credit borrowings, of the Partnership or any of its Restricted
Subsidiaries (and in the case of any incurrence, the application of the net
proceeds thereof) during the period commencing on the first day of the Four
Quarter Period to and including the Transaction Date (the "Reference Period"),
including, without limitation, the incurrence of the Indebtedness giving rise to
the need to make the calculation (and the application of the net proceeds
thereof), as if the incurrence (and application) occurred on the first day of
the Reference Period; and
(2) any Asset Sales or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make the
calculation as a result of the Partnership or one of its Restricted
Subsidiaries, including any Person who becomes a Restricted Subsidiary as a
result
40
of the Asset Acquisition, incurring, assuming or otherwise being liable for
Acquired Indebtedness) occurring during the Reference Period, as if the Asset
Sale or Asset Acquisition occurred on the first day of the Reference Period;
provided, however, that:
(A) Consolidated Fixed Charges will be reduced by amounts
attributable to businesses or assets that are so
disposed of or discontinued only to the extent that
the obligations giving rise to such Consolidated
Fixed Charges would no longer be obligations
contributing to the Consolidated Fixed Charges
subsequent to the date of determination of the
Consolidated Fixed Charge Coverage Ratio; and
(B) Consolidated Cash Flow Available for Fixed Charges
generated by an acquired business or asset shall be
determined by the actual gross profit, which is equal
to revenues minus cost of goods sold, of the acquired
business or asset during the immediately preceding
four full fiscal quarters in the Reference Period,
minus the pro forma expenses that would have been
incurred by the Partnership and its Restricted
Subsidiaries in the operation of the acquired
business or asset during the period computed on the
basis of personnel expenses for employees retained or
to be retained by the Partnership and its Restricted
Subsidiaries in the operation of the acquired
business or asset and non-personnel costs and
expenses incurred by the Partnership and its
Restricted Subsidiaries in the operation of the
Partnership's business at similarly situated
facilities.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of
determining the "Consolidated Fixed Charge Coverage Ratio":
(1) interest on outstanding Indebtedness, other than Indebtedness
referred to in clause (2) below, determined on a fluctuating basis as of the
last day of the Four Quarter Period and which will continue to be so determined
thereafter shall be deemed to have accrued at a fixed rate per annum equal to
the rate of interest on such Indebtedness in effect on that date;
(2) only actual interest payments associated with Indebtedness incurred
in accordance with clauses (5) and (7) of the definition of Permitted
Indebtedness and all Permitted Refinancing Indebtedness in respect thereof,
during the Four Quarter Period shall be included in the calculation; and
(3) if interest on any Indebtedness actually incurred on the date may
optionally be determined at an interest rate based upon a factor of a prime or
similar rate, a eurocurrency interbank offered rate, or other rates, then the
interest rate in effect on the last day of the Four Quarter Period will be
deemed to have been in effect during the period. "Consolidated Fixed Charges"
means, with respect to the Partnership and its Restricted Subsidiaries for any
period, the sum of, without duplication:
(A) the amounts for such period of Consolidated Interest
Expense; and
41
(B) the product of:
(i) the aggregate amount of dividends and other
distributions paid or accrued during the
period in respect of Preferred Stock and
Redeemable Capital Stock of the Partnership
and its Restricted Subsidiaries on a
consolidated basis; and
(ii) a fraction, the numerator of which is one
and the denominator of which is one less the
then applicable current combined federal,
state and local statutory tax rate,
expressed as a percentage.
"Consolidated Income Tax Expense" means, with respect to the Partnership and its
Restricted Subsidiaries for any period, the provision for federal, state, local
and foreign income taxes of the Partnership and its Restricted Subsidiaries for
the period as determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to the Partnership and its
Restricted Subsidiaries, for any period, without duplication, the sum of:
(1) the interest expense of the Partnership and its Restricted
Subsidiaries for the period as determined on a consolidated basis in accordance
with GAAP, including, without limitation:
(A) any amortization of debt discount;
(B) the net cost under Interest Rate Agreements;
(C) the interest portion of any deferred payment
obligation;
(D) all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers'
acceptance financing; and
(E) all accrued interest for all instruments evidencing
Indebtedness; and
(2) the interest component of Capital Leases paid or accrued or
scheduled to be paid or accrued by the Partnership and its Restricted
Subsidiaries during the period as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Income" means the net income of the Partnership and its
Restricted Subsidiaries, as determined on a consolidated basis in accordance
with GAAP and as adjusted to exclude:
(1) net after-tax extraordinary gains or losses;
42
(2) net after-tax gains or losses attributable to Asset Sales;
(3) the net income or loss of any Person which is not a Restricted
Subsidiary and which is accounted for by the equity method of accounting,
provided that Consolidated Net Income shall include the amount of dividends or
distributions actually paid to the Partnership or any Restricted Subsidiary;
(4) the net income or loss prior to the date of acquisition of any
Person combined with the Partnership or any Restricted Subsidiary in a pooling
of interest;
(5) the net income of any Restricted Subsidiary to the extent that
dividends or distributions of that net income are not at the date of
determination permitted by the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or other regulation; and
(6) the cumulative effect of any changes in accounting principles.
"Consolidated Net Worth" means, with respect to the Partnership and its
Restricted Subsidiaries at any date, the consolidated stockholders' equity or
partners' capital of the Person less the amount of the stockholders' equity or
partners' capital attributable to Redeemable Capital Stock of the Partnership
and its Restricted Subsidiaries, as determined in accordance with GAAP.
"Consolidated Non-cash Charges" means, with respect to the Partnership and its
Restricted Subsidiaries for any period, the aggregate depreciation, amortization
and any other non-cash charges resulting from writedowns of non-current assets,
in each case which reduces the Consolidated Net Income of Partnership and its
Restricted Subsidiaries for the period, as determined on a consolidated basis in
accordance with GAAP.
"Credit Agreement" means the Credit Agreement, dated as of April 12, 1995, among
the Operating Partnership, the General Partner, Petrolane and Bank of America
National Trust and Savings Association, in its individual capacity and as agent,
and the other banks which are or become parties from time to time thereto,
evidencing the Bank Credit Facilities, and as it may be amended, supplemented or
otherwise modified from time to time, including all exhibits and schedules
thereto, and any successor or replacement facility entered into compliance with
the indenture.
"Default" means any event that is, or after notice or passage of time or both
would be, an Event of Default.
"Designation Amount" means, with respect to the designation of a Restricted
Subsidiary or a newly acquired or formed Subsidiary as an Unrestricted
Subsidiary, an amount equal to the sum of:
(1) the net book value of all assets of the Subsidiary at the time of
the designation in the case of a Restricted Subsidiary; and
43
(2) the cost of acquisition or formation in the case of a newly
acquired or formed Subsidiary.
"Disinterested Director" means, with respect to any transaction or series of
transactions with affiliates, a member of the Board of Directors of the General
Partner who has no financial interest, and whose employer has no financial
interest, in the transaction or series of transactions.
"Eligible Accounts Receivable" means consolidated accounts receivable of the
Partnership and its Restricted Subsidiaries that are no more than 60 days past
due under their scheduled payment terms.
"ERISA" means the Employee Retirement Income Security Act of 1974, as the same
may be amended from time to time.
"Event of Default" has the meaning set forth under "Events of Default" herein.
"First Mortgage Notes" means:
(1) the First Mortgage Notes, Series A through C, issued pursuant to
the note agreements dated as of the 10 1/8% Series B Senior Notes Issue Date;
(2) the First Mortgage Notes, Series D, issued pursuant to the note
agreement dated as of March 15, 1999; and
(3) the First Mortgage Notes, Series E, issued pursuant to the note
agreement dated as of March 15, 2000;
in each case as these note agreements may be amended, supplemented or otherwise
modified from time to time, including all exhibits and schedules to these note
agreements, and as the Indebtedness evidenced by these note agreements may be
extended, renewed, refunded or refinanced from time to time.
"GAAP" means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in the other statements by the other
entity as may be approved by a significant segment of the accounting profession
of the United States, which are applicable from time to time.
"General Partner" means AmeriGas Propane, Inc., a Pennsylvania corporation, and
any successors in the capacity of General Partner of the Partnership or the
Operating Partnership, including, if applicable, more than one successor in any
such capacity at the same time.
"Guaranty" means, as applied to any Person, any direct or indirect liability,
contingent or otherwise, of the Person with respect to any Indebtedness, lease,
cash dividend or other obligation of another, including without limitation:
44
(1) any obligation directly or indirectly guaranteed or endorsed,
otherwise than for collection or deposit in the ordinary course of business, by
the Person, or in respect of which the Person is otherwise directly or
indirectly liable;
(2) any other obligation under any contract which, in economic effect,
is substantially equivalent to a guaranty, including, without limitation, any
obligation of a partnership in which the Person is a General Partner or of a
joint venture in which the Person is a joint venturer; or
(3) any obligation in effect guaranteed by the Person through any
agreement, contingent or otherwise, to purchase, repurchase or otherwise acquire
the obligation or any security therefor, or to provide funds for the payment or
discharge of the obligation, whether in the form of loans, advances, stock
purchases, capital contributions or otherwise, or to maintain the solvency of
any balance sheet or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or supplies or for
any transportation or services regardless of the non-delivery or nonfurnishing
thereof; in any case if the purpose or intent of the agreement is to provide
assurance that the obligation will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of the obligation
will be protected against loss in respect thereof.
"Indebtedness" means, as applied to any Person, without duplication:
(1) any indebtedness for borrowed money and all obligations evidenced
by any bond, note, debenture or other similar instrument or letter of credit, or
reimbursement agreements in respect thereof, which the Person has, directly or
indirectly, created, incurred or assumed;
(2) any indebtedness for borrowed money and all obligations evidenced
by any bond, note, debenture or other similar instrument secured by any Lien in
respect of property owned by the Person, whether or not the Person has assumed
or become liable for the payment of the indebtedness; provided that the amount
of the Indebtedness, if the Person has not assumed the same or become liable
therefor, shall in no event be deemed to be greater than the fair market value
from time to time, as determined in good faith by the Person of the property
subject to the Lien;
(3) any indebtedness, whether or not for borrowed money, excluding
trade payables and accrued expenses arising in the ordinary course of business,
with respect to which the Person has become directly or indirectly liable and
which represents the deferred purchase price, or a portion thereof, or has been
incurred to finance the purchase price, or a portion thereof, of any property or
service or business acquired by the Person, whether by purchase, consolidation,
merger or otherwise;
(4) the principal component of any obligations under Capital Leases to
the extent the obligations would, in accordance with GAAP, appear on the balance
sheet of the Person;
(5) all Attributable Debt of the Person in respect of Sale and
Leaseback Transactions not involving a Capital Lease;
45
(6) any indebtedness of the character referred to in clause (1), (2),
(3), (4) or (5) of this definition deemed to be extinguished under GAAP but for
which the Person remains legally liable;
(7) any indebtedness of any other Person of the character referred to
in clause (1), (2), (3), (4), (5) or (6) of this definition with respect to
which the Person whose Indebtedness is being determined has become liable by way
of a Guaranty;
(8) all Redeemable Capital Stock of the Person valued at the greater of
its voluntary or involuntary maximum fixed repurchase price plus accrued
dividends;
(9) any Preferred Stock of any Subsidiary of the Person valued at the
liquidation preference thereof or any mandatory redemption payment obligations
in respect thereof plus, in either case, accrued dividends thereon; and
(10) any amendment, supplement, modification, deferral, renewal,
extension or refunding of any liability of the types referred to in clauses (1)
through (9) above.
For purposes hereof, the "maximum fixed repurchase price" of any Redeemable
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of the Redeemable Capital Stock as if it were
purchased on any date on which Indebtedness shall be required to be determined
pursuant to the indenture and if the price is based upon, or measured by, the
fair market value of the Redeemable Capital Stock, the fair market value shall
be determined in good faith by the board of directors of the issuer of the
Redeemable Capital Stock.
"Interest Rate Agreement" means any interest rate swap agreement, interest rate
cap agreement, interest rate collar agreement or other similar agreement or
arrangement designed to protect the Partnership or any Restricted Subsidiary
from fluctuations in interest rates.
"Inventory" means goods held by a Person for sale or lease or to be furnished
under contracts of service or if the Person has so furnished them, or if they
are raw materials, work-in-process materials used or consumed in the Business or
finished inventory of every type or description, including, without limitation,
all liquified petroleum gas, in each case as would be shown as inventory on a
balance sheet of the Person prepared in accordance with GAAP consistently
applied, and all documents of title covering the inventory, and shall
specifically include all "inventory" as such term is defined in the New York
Uniform Commercial Code, now or hereafter owned by the Person.
"Investment" means as applied to any Person:
(1) any direct or indirect purchase or other acquisition by the Person
of stock or other securities of any other Person; or
(2) any direct or indirect loan, advance or capital contribution by the
Person to any other Person and any other item which would be classified as an
"investment" on a balance sheet of the Person prepared in accordance with GAAP;
46
including without limitation any direct or indirect construction by the Person
of property or assets to a joint venture, partnership or other business entity
in which the Person retains an interest, it being understood that a direct or
indirect purchase or other acquisition by the Person of assets of any other
Person, other than stock or other securities, shall not constitute an
"Investment" for purposes of the indenture.
The amount classified as Investments made during any period shall be the
aggregate cost to the Partnership and its Restricted Subsidiaries of all the
Investments made during the period, determined in accordance with GAAP, but
without regard to unrealized increases or decreases in value, or write-ups,
write-downs or write-offs, of the Investments and without regard to the
existence of any undistributed earnings or accrued interest with respect thereto
accrued after the respective dates on which the Investments were made, less any
net return of capital realized during the period upon the sale, repayment or
other liquidation of the Investments, determined in accordance with GAAP, but
without regard to any amounts received during the period as earnings in the form
of dividends not constituting a return of capital, interest or otherwise on the
Investments or as loans from any Person in whom the Investments have been made.
"Issue Date" means, with respect to the notes, the date on which the notes are
originally issued.
"Lien" means any mortgage, charge, pledge, lien, statutory or other, security
interest, hypothecation, assignment for security, claim, or preference or
priority or other encumbrance upon or with respect to any property of any kind.
A Person shall be deemed to own subject to a Lien any property which the Person
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, Capital Lease or other title retention agreement.
"Maturity Date" means, with respect to the notes, the date on which any
principal of the notes becomes due and payable as therein or herein provided,
whether at the Stated Maturity with respect to the principal or by declaration
of acceleration, call for redemption or purchase or otherwise.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Amount of Unrestricted Investment" means, without duplication, the sum of:
(1) the aggregate amount of all Investments made after the 10 1/8%
Senior Notes Issue Date pursuant to subdivision (8) of the definition of
Permitted Investment, computed as provided in the last sentence of the
definition of Investment; and
(2) the aggregate of all Designation Amounts in connection with the
designation of Unrestricted Subsidiaries, less all Designation Amounts in
respect of Unrestricted Subsidiaries which have been designated as Restricted
Subsidiaries and otherwise reduced in a manner consistent with the provisions of
the last sentence of the definition of Investment.
"Net Proceeds" means, with respect to any Asset Sale or sale of Capital Stock,
the proceeds therefrom in the form of cash or cash equivalents including
payments in respect of deferred
47
payment obligations when received in the form of cash or cash equivalents,
except to the extent that the deferred payment obligations are financed or sold
with recourse to the Partnership or any of its Restricted Subsidiaries, net of:
(1) brokerage commissions and other fees and expenses related to the
Asset Sale, including, without limitation, fees and expenses of legal counsel
and accountants and fees, expenses, discounts or commissions of underwriters,
placement agents and investment bankers;
(2) provisions for all taxes payable as a result of the Asset Sale;
(3) amounts required to be paid to any Person, other than the
Partnership or any Restricted Subsidiary of the Partnership, owning a beneficial
interest in the assets subject to the Asset Sale;
(4) appropriate amounts to be provided by the Partnership or any
Restricted Subsidiary of the Partnership, as the case may be, as a reserve
required in accordance with GAAP against any liabilities associated with the
Asset Sale and retained by the Partnership or any Restricted Subsidiary of the
Partnership, as the case may be, after the Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with the Asset Sale; and
(5) amounts required to be applied to the repayment of Indebtedness
secured by any Lien on the asset or assets sold in the Asset Sale.
"Operating Partnership Agreement" is the Amended and Restated Agreement of
Limited Partnership of the Operating Partnership, as in effect on the Issue
Date, and as the same may from time to time be amended, supplemented or
otherwise modified in accordance with the terms thereof.
"Operative Agreements" means the:
(1) Partnership Agreement;
(2) Operating Partnership Agreement; and
(3) other agreements entered into between the Partnership or the
Operating Partnership and any of their respective Affiliates, including the
General Partner, on the 10 1/8% Senior Notes Issue Date.
"Partnership Agreement" means the Amended and Restated Agreement of Limited
Partnership of the Partnership, as in effect on the Issue Date, and as the same
may from time to time be amended, supplemented or otherwise modified in
accordance with the terms thereof.
"Permitted Investments" means any of the following:
48
(1) Investments made or owned by the Partnership or any Restricted
Subsidiary in:
(A) marketable obligations issued or unconditionally
guaranteed by the United States, or issued by any
agency thereof and backed by the full faith and
credit of the United States, in each case maturing
one year or less from the date of acquisition
thereof;
(B) marketable direct obligations issued by any state of
the United States or any political subdivision of any
such state or any public instrumentality thereof
maturing within one year from the date of acquisition
thereof and having as at such date the highest rating
obtainable from either S&P or Moody's;
(C) commercial paper maturing no more than 270 days from
the date of creation thereof and having as at the
date of acquisition thereof one of the two highest
ratings obtainable from either S&P or Moody's;
(D) certificates of deposit maturing one year or less
from the date of acquisition thereof issued by
commercial banks incorporated under the laws of the
United States or any state thereof or the District of
Columbia or Canada;
(i) the commercial paper or other short term
unsecured debt obligations of which are as
at such date rated either "A-2" or better
(or comparably if the rating system is
changed) by S&P or "Prime-2" or better (or
comparably if the rating system is changed)
by Moody's; or
(ii) the long-term debt obligations of which are,
as at such date, rated either "A" or better
(or comparably if the rating system is
changed) by either S&P or Moody's
("Permitted Banks");
(E) eurodollar time deposits having a maturity of less
than 270 days from the date of acquisition thereof
purchased directly from any Permitted Bank;
(F) bankers' acceptances eligible for rediscount under
requirements of the Board of Governors of the Federal
Reserve System and accepted by Permitted Banks; and
(G) obligations of the type described in clauses (1)(A)
through (E) above purchased from a securities dealer
designated as a "primary dealer" by the Federal
Reserve Bank of New York or from a Permitted Bank as
counterparty to a written repurchase agreement
obligating such
49
counterparty to repurchase such obligations not later
than 14 days after the purchase thereof and which
provides that the obligations which are the subject
thereof are held for the benefit of the Partnership
or a Restricted Subsidiary by a custodian which is a
Permitted Bank and which is not a counterparty to the
repurchase agreement in question;
(2) the acquisition by the Partnership or any Restricted Subsidiary of
Capital Stock or other ownership interests, whether in a single transaction or
in a series of related transactions, of a Person located in the United States or
Canada and engaged in substantially the same business as the Partnership such
that, upon the completion of such transaction or series of transactions, the
Person becomes a Restricted Subsidiary;
(3) subject to the provisions of subdivision (8) below, the making or
ownership by the Partnership or any Restricted Subsidiary of Investments (in
addition to Investments permitted by subdivisions (1), (2) and (4) through (7))
in any Person incorporated or otherwise formed pursuant to the laws of the
United States or Canada or any state thereof which is engaged in the United
States or Canada in substantially the same business as the Partnership; provided
that the aggregate amount of all such Investments made by the Partnership and
its Restricted Subsidiaries following the 10 1/8% Senior Notes Issue Date and
outstanding pursuant to this subdivision (3) and subdivision (8) below shall not
at any date of determination exceed 10% of Total Assets (the "Investment
Limit"); provided that, in addition to Investments that would be permitted under
the Investment Limit, during any fiscal year the Partnership and its Restricted
Subsidiaries may invest up to $25 million (the "Annual Limit") pursuant to the
provisions of this subdivision (3), but the unused amount of the Annual Limit
shall not be carried over to any future years;
(4) the making or ownership by the Partnership or any Restricted
Subsidiary of Investments:
(A) arising out of loans and advances to employees
incurred in the ordinary course of business;
(B) arising out of extensions of trade credit or advances
to third parties in the ordinary course of business;
and
(C) acquired by reason of the exercise of customary
creditors' rights upon default or pursuant to the
bankruptcy, insolvency or reorganization of a debtor;
(5) the creation or incurrence of liability by the Partnership or any
Restricted Subsidiary, with respect to any Guaranty constituting an obligation,
warranty or indemnity, not guaranteeing Indebtedness of any Person, which is
undertaken or made in the ordinary course of business;
(6) the creation or incurrence of liability by the Partnership or any
Restricted Subsidiary with respect to any Interest Rate Agreements;
50
(7) the making by any Restricted Subsidiary of Investments in the
Partnership or another Restricted Subsidiary;
(8) the making or ownership by the Partnership or any Restricted
Subsidiary of Investments in Unrestricted Subsidiaries; provided that the Net
Amount of Unrestricted Investment shall not at any time exceed $5 million (and
subject to the limitations specified in subdivision (3) above); and
(9) the making or ownership by the Partnership or any Restricted
Subsidiary of Investments in the Operating Partnership.
"Permitted Liens" means any of the following:
(1) Liens for taxes, assessments or other governmental charges, the
payment of which is not yet due and is being contested in good faith by
appropriate proceedings promptly initiated and diligently conducted and as to
which reserves or other appropriate provision, if any, as shall be required by
GAAP, shall have been made therefor and be adequate in the good faith judgment
of the obligor;
(2) Liens of lessors, landlords and carriers, vendors, warehousemen,
mechanics, materialmen, repairmen and other like Liens incurred in the ordinary
course of business for sums not yet due or the payment of which is being
contested in good faith by appropriate proceedings promptly initiated and
diligently conducted and as to which reserves or other appropriate provisions,
if any, as shall be required by GAAP, shall have been made therefor and be
adequate in the good faith judgment of the obligor, in each case:
(A) not incurred or made in connection with the borrowing
of money, the obtaining of advances or credit or the
payment of the deferred purchase price of property;
or
(B) incurred in the ordinary course of business securing
the unpaid purchase price of property or services
constituting current accounts payable;
(3) Liens, other than any Lien imposed by ERISA, incurred or deposits
made in the ordinary course of business:
(A) in connection with workers' compensation,
unemployment insurance and other types of social
security; or
(B) to secure or to obtain letters of credit that secure
the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, performance
bonds, purchase, construction or sales contracts and
other similar obligations, in each case not incurred
or made in connection with the borrowing of money;
51
(4) other deposits made to secure liability to insurance carriers under
insurance or self-insurance arrangements;
(5) Liens securing reimbursement obligations under letters of credit;
provided in each case that such Liens cover only the title documents and related
goods and any proceeds thereof covered by the related letter of credit;
(6) any attachment or judgment Lien, unless the judgment it secures
shall not, within 60 days after the entry thereof, have been discharged or
execution thereof stayed pending appeal or review, or shall not have been
discharged within 60 days after expiration of any such stay;
(7) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances, which, in each case
either:
(A) are granted, entered into or created in the ordinary
course of the business of the Partnership or any
Restricted Subsidiary; or
(B) do not materially impair the value or intended use of
the property covered thereby;
(8) Liens on property or assets of any Restricted Subsidiary securing
Indebtedness of the Restricted Subsidiary owing to the Partnership or a Wholly
Owned Restricted Subsidiary;
(9) Liens on assets of the Partnership or any Restricted Subsidiary
existing on the 10 1/8% Senior Notes Issue Date;
(10) Liens securing Indebtedness evidenced by the First Mortgage Notes
or any extension, renewal, refunding or refinancing of any such Indebtedness;
(11) Liens securing Indebtedness incurred under the Acquisition
Facility or any extension, renewal, refunding or refinancing of any such
Indebtedness;
(12) Liens securing Indebtedness incurred under the Revolving Loan
Facility or any extension, renewal, refunding or refinancing of any such
Indebtedness;
(13) Liens, other than the Liens referred to in clauses (11) and (12)
above, securing Indebtedness incurred in accordance with:
(A) clause (5) of the definition of Permitted
Indebtedness;
(B) clauses (6) and (8) of the definition of Permitted
Indebtedness; or
(C) Indebtedness otherwise permitted to be incurred under
the "Limitation on Additional Indebtedness" covenant
to the extent incurred:
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(i) to finance the making of expenditures for
the improvement or repair (to the extent the
improvements and repairs may be capitalized
on the books of the Partnership and the
Restricted Subsidiaries in accordance with
GAAP) of, or additions including additions
by way of acquisitions of businesses and
related assets to, the assets and property
of the Partnership and its Restricted
Subsidiaries; or
(ii) by assumption in connection with additions
including additions by way of acquisition or
capital contributions of businesses and
related assets to the property and assets of
the Partnership and its Restricted
Subsidiaries; provided that, in the case of
Indebtedness incurred in accordance with
clause 13(A) or (C) above, the principal
amount of the Indebtedness does not exceed
the lesser of the cost to the Partnership
and its Restricted Subsidiaries of the
additional property or assets and the fair
market value of the additional property or
assets at the time of the acquisition
thereof, as determined in good faith by the
General Partner;
(14) Liens existing on any property of any Person at the time it
becomes a Subsidiary of the Partnership, or existing at the time of acquisition
upon any property acquired by the Partnership or any Subsidiary through
purchase, merger or consolidation or otherwise, whether or not assumed by the
Partnership or the Subsidiary, or created to secure Indebtedness incurred to pay
all or any part of the purchase price (a "Purchase Money Lien") of property
including, without limitation, Capital Stock and other securities acquired by
the Partnership or a Restricted Subsidiary; provided that:
(A) the Lien shall be confined solely to the item or
items of property and, if required by the terms of
the instrument originally creating the Lien, other
property which is an improvement to or is acquired
for use specifically in connection with the acquired
property;
(B) in the case of a Purchase Money Lien, the principal
amount of the Indebtedness secured by the Purchase
Money Lien shall at no time exceed an amount equal to
the lesser of:
(i) the cost to the Partnership and the
Restricted Subsidiaries of the property; and
(ii) the fair market value of the property at the
time of the acquisition thereof as
determined in good faith by the General
Partner;
(C) the Purchase Money Lien shall be created not later
than 30 days after the acquisition of the property;
and
53
(D) the Lien, other than a Purchase Money Lien, shall not
have been created or assumed in contemplation of the
Person's becoming a Subsidiary of the Partnership or
the acquisition of property by the Partnership or any
Subsidiary;
(15) easements, exceptions or reservations in any property of the
Partnership or any Restricted Subsidiary granted or reserved for the purpose of
pipelines, roads, the removal of oil, gas, coal or other minerals, and other
like purposes, or for the joint or common use of real property, facilities and
equipment, which are incidental to, and do not materially interfere with, the
ordinary conduct of the business of the Partnership or any Restricted
Subsidiary;
(16) Liens arising from or constituting permitted encumbrances under
the agreements and instruments securing the obligations under the First Mortgage
Notes and the Bank Credit Facilities; and
(17) any Lien renewing or extending any Lien permitted by subdivisions
(9) through (14); provided that:
(A) the principal amount of the Indebtedness secured by
any such Lien shall not exceed the principal amount
of the Indebtedness outstanding immediately prior to
the renewal or extension of the Lien; and
(B) no assets encumbered by the Lien other than the
assets encumbered immediately prior to the renewal or
extension shall be encumbered thereby.
"Permitted Refinancing Indebtedness" means Indebtedness incurred by the
Partnership or any Restricted Subsidiary to substantially concurrently
(excluding any notice period on redemptions) repay, refund, renew, replace,
extend or refinance, in whole or in part, any Permitted Indebtedness of the
Partnership or any Restricted Subsidiary or any other Indebtedness incurred by
the Partnership or any Restricted Subsidiary pursuant to the "Limitation on
Additional Indebtedness" covenant, to the extent:
(1) the principal amount of the Permitted Refinancing Indebtedness does
not exceed the principal or accreted amount plus the amount of accrued and
unpaid interest of the Indebtedness so repaid, refunded, renewed, replaced,
extended or refinanced except that, in the case of the 8 7/8% notes, the
Permitted Refinancing Indebtedness may include the redemption premiums set forth
above under "Optional Redemption," in the case of the 10 1/8% Senior Notes, the
Permitted Refinancing Indebtedness may include the redemption premiums provided
in the indenture governing the 10 1/8% Senior Notes and, in the case of the
First Mortgage Notes, the Permitted Refinancing Indebtedness may include the
amount of any unamortized premium;
(2) with respect to the repayment, refunding, renewal, replacement,
extension or refinancing of our Indebtedness, the Permitted Refinancing
Indebtedness ranks no more
54
favorably in right of payment with respect to the notes than the Indebtedness so
repaid, refunded, renewed, replaced, extended or refinanced; and
(3) with respect to the repayment, refunding, renewal, replacement,
extension or refinancing our Indebtedness, the Permitted Refinancing
Indebtedness has a Weighted Average Life to Stated Maturity and Stated Maturity
equal to, or greater than, and has no fixed mandatory redemption or sinking fund
requirement in an amount greater than or at a time prior to the amounts set
forth in, the Indebtedness so repaid, refunded, renewed, replaced, extended or
refinanced;
provided, however, that Permitted Refinancing Indebtedness shall not include
Indebtedness incurred by a Restricted Subsidiary to repay, refund, renew,
replace, extend or refinance Indebtedness of the Partnership.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust, charitable
foundation, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Petrolane" means Petrolane Incorporated, a Pennsylvania corporation, and its
successors.
"Preferred Stock," as applied to the Capital Stock of any Person, means Capital
Stock, other than the common units, of any class or classes, however designated,
which is preferred as to the payment of distributions and dividends, or upon any
voluntary or involuntary liquidation or dissolution of the Person, over shares
or units of Capital Stock of any other class of the Person.
"Redeemable Capital Stock" means any shares of any class or series of Capital
Stock that, either by its terms, by the terms of any security into which it is
convertible or exchangeable or by contract or otherwise, is, or upon the
happening of an event or passage of time would be, required to be redeemed prior
to the Stated Maturity with respect to the principal of any note or is
redeemable at the option of its holder at any time prior to the Stated Maturity
of the notes, or is convertible into or exchangeable for debt securities at any
time prior to the Stated Maturity of the notes.
"Restricted Subsidiary" means a Subsidiary of the Partnership, which, as of the
date of determination, is not an Unrestricted Subsidiary of the Partnership.
"Revolving Loan Facility" means the revolving loan facility of the Operating
Partnership provided for in the Credit Agreement.
"S&P" means Standard & Poor's Ratings Group, and its successors.
"Sale and Leaseback Transaction" of any Person (a "Transferor") means any
arrangement, other than one between the Partnership and a Wholly Owned
Restricted Subsidiary or between Wholly Owned Restricted Subsidiaries, whereby:
55
(1) property (the "Subject Property") has been or is to be disposed of
by the Transferor to any other Person with the intention on the part of the
Transferor of taking back a lease of the Subject Property pursuant to which the
rental payments are calculated to amortize the purchase price of the Subject
Property substantially over the useful life of the Subject Property; and
(2) the Subject Property is in fact so leased by the Transferor or an
Affiliate of the Transferor.
"Significant Subsidiary" shall have the same meaning as defined in Rule 1.02(v)
of Regulation S-X under the Securities Act.
"Stated Maturity" means:
(1) when used with respect to any note or any installment of interest
thereon, the date specified in the note as the fixed date on which the principal
of the note or such installment of interest is due and payable; and
(2) when used with respect to any other Indebtedness, means the date or
dates specified in the instrument governing the Indebtedness as the fixed date
or dates on which each then remaining installment, sinking fund, serial maturity
or other required payments of principal, including payment at final maturity, in
respect of the Indebtedness, or any installment of interest thereon, is due and
payable.
"Subordinated Indebtedness" means the Indebtedness of the Partnership which is
expressly subordinated in right of payment to the notes.
"Subsidiary" means, with respect to any Person:
(1) a corporation whose majority Voting Stock or, in the case of a
partnership, a majority of the partners' Capital Stock, considering all
partners' Capital Stock as a single class, is at the time, directly or
indirectly, owned by the Person, by one or more Subsidiaries of the Person or by
the Person and one or more of its Subsidiaries; and
(2) any other Person, including, without limitation, a joint venture,
in which the Person, one or more of its Subsidiaries or the Person and one or
more of its Subsidiaries, directly or indirectly, at the date of determination
thereof, has at least majority ownership interest entitled to vote in the
election of its directors, managers, General Partners or trustees or other
Person performing similar functions or, if the Persons are not elected, to vote
on any matter that is submitted to the vote of all Persons holding ownership
interests in the entity. For purposes of this definition, any directors'
qualifying shares or investments by foreign nationals mandated by applicable law
shall be disregarded in determining the ownership of a Subsidiary.
"Total Assets" means, as of any date of determination, the consolidated total
assets of the Partnership and the Restricted Subsidiaries as would be shown on a
consolidated balance sheet of
56
the Partnership and the Restricted Subsidiaries prepared in accordance with GAAP
as of that date.
"Unrestricted Subsidiary" means any Subsidiary of the Partnership or a
Restricted Subsidiary that is designated as such by the General Partner;
provided that no portion of the Indebtedness or any other obligation contingent
or otherwise of such Subsidiary:
(1) is guaranteed by the Partnership or any Restricted Subsidiary;
(2) is recourse to or obligates the Partnership or any Restricted
Subsidiary in any way; or
(3) subjects any property or assets of the Partnership or any
Restricted Subsidiary, directly or indirectly, contingently or otherwise, to the
satisfaction thereof.
Notwithstanding the foregoing, the Partnership or a Restricted Subsidiary may
Guaranty or agree to provide funds for the payment or maintenance of, or
otherwise become liable with respect to Indebtedness of an Unrestricted
Subsidiary, but only to the extent that the Partnership or a Restricted
Subsidiary would be permitted to:
(1) make an Investment in the Unrestricted Subsidiary pursuant to
subdivision (8) of the definition of Permitted Investments; and
(2) incur the Indebtedness represented by the Guaranty or agreement
pursuant to the first paragraph of the covenant captioned "Limitation on
Additional Indebtedness." The board of directors may designate an Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that immediately after giving
effect to the designation:
(A) there exists no Event of Default or event which after
notice or lapse or time or both would become an Event
of Default; and
(B) if the Unrestricted Subsidiary has, as of the date of
the designation, outstanding Indebtedness other than
Permitted Indebtedness, the Partnership could incur
at least $1.00 of Indebtedness other than Permitted
Indebtedness.
Notwithstanding the foregoing:
(1) no Subsidiary may be designated an Unrestricted Subsidiary if the
Subsidiary, directly or indirectly, holds Capital Stock of a Restricted
Subsidiary; and
(2) neither the Operating Partnership nor AP Eagle Finance Corp. may be
designated an Unrestricted Subsidiary.
"Voting Stock" means any class or classes of Capital Stock pursuant to which the
holders thereof have the general voting power under ordinary circumstances to
elect at least a majority of the
57
board of directors, managers, General Partners or trustees of any Person,
irrespective of whether or not, at the time, Capital Stock of any other class or
classes shall have, or might have, voting power by reason of the happening of
any contingency, or, with respect to a partnership, whether general or limited,
any General Partner interest in the partnership.
"Weighted Average Life to Stated Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying:
(A) the amount of each then remaining installment,
sinking fund, serial maturity or other required
payments of principal, including payment at final
maturity, in respect thereof, by
(B) the number of years, calculated to the nearest
one-twelfth, that will elapse between the date and
the making of the payment, by
(2) the then outstanding principal amount of the Indebtedness;
provided, however, that with respect to any revolving Indebtedness, the
foregoing calculation of Weighted Average Life to Stated Maturity shall be
determined based upon the total available commitments and the required
reductions of commitments in lieu of the outstanding principal amount and the
required payments of principal, respectively.
"Wholly Owned Restricted Subsidiary" means the Operating Partnership or any
Subsidiary of the Partnership of which 100% of the outstanding Capital Stock is
owned by the Partnership or by one or more Wholly Owned Restricted Subsidiaries
of the Partnership. For purposes of this definition, any directors' qualifying
shares or investments by foreign nationals mandated by applicable law shall be
disregarded in determining the ownership of a Subsidiary.
FORM OF NOTES
The certificates representing the notes will be issued in fully
registered form, without coupons. Except as described in the next paragraph, the
notes will be deposited with, or on behalf of, DTC, and registered in the name
of Cede & Co., as DTC's nominee, in the form of a global note. Holders of the
notes will own book-entry interests in the global note evidenced by records
maintained by DTC. Book-entry interests may be exchanged for certificated notes
of like tenor and equal aggregate principal amount, if:
(1) DTC notifies us that it is unwilling or unable to continue as
depositary or we determine that DTC is unable to continue as depositary and we
fail to appoint a successor depositary;
(2) we provide for the exchange pursuant to the terms of the indenture;
or
58
(3) we determine that the book-entry interests will no longer be
represented by global notes and we execute and deliver to the Trustee
instructions to that effect.
As of the date of this prospectus, $200,000,000 of the notes have already been
issued and are outstanding.
DESCRIPTION OF CERTAIN OTHER INDEBTEDNESS
10 1/8% SENIOR NOTES
We currently have outstanding $85 million aggregate principal amount of
10 1/8% senior notes due 2007. These notes were issued pursuant to an indenture
dated as of April 19, 1995, with First Union National Bank, as trustee. The 10
1/8% senior notes are our senior unsecured obligations and rank senior in right
of payment to all of our existing and future subordinated indebtedness and pari
passu in right of payment with all of our existing and future senior
indebtedness, including the notes. They are effectively subordinated to all
secured and unsecured indebtedness and other liabilities of the operating
partnership and its subsidiaries. Except for maturity, the terms of the
indenture governing the 10 1/8% senior notes are substantially similar to the
terms in the indenture governing the notes.
FIRST MORTGAGE NOTES
Our operating partnership currently has outstanding $600 million
aggregate principal amount of Series A through Series E first mortgage notes
that are structurally senior to the claims of the holders of the notes being
offered hereby. Our general partner is a co-obligor of the first mortgage notes.
The operating partnership's obligations under the first mortgage notes
are secured, on an equal and ratable basis, with its obligations under the bank
credit facilities, by a mortgage on substantially all of the real property,
operating facilities, equipment and other assets of the operating partnership.
The first mortgage notes have maturity dates ranging from 2005 to 2010, and bear
interest at rates ranging from 9.34% to 11.71% for the Series A Notes and rates
of 10.07%, 8.83%, 7.11% and 8.50% for the Series B through Series E notes,
respectively. The Series A through Series E first mortgage notes require annual
principal payments, without premium, of approximately:
- $60.0 million in fiscal year 2002;
- $53.8 million in each fiscal year from 2003 through 2008;
- $123.8 million in fiscal year 2009; and
- $93.8 million in fiscal year 2010.
59
The operating partnership may, at its option, and upon the disposition
of assets may be required to, offer to prepay the first mortgage notes, in whole
or in part. These prepayments may be at a premium.
The agreements governing the first mortgage notes contain various
negative and affirmative covenants that apply to the operating partnership.
These restrictions limit our ability and the ability of the operating
partnership to:
- incur other indebtedness;
- engage in transactions with affiliates;
- incur liens;
- make restricted payments;
- enter into business combinations and asset sale transactions;
- engage in new lines of business; and
- make investments.
The agreements also require the operating partnership to maintain
specified financial ratios and satisfy various financial conditions. In the
event of a default under the first mortgage notes, the first mortgage
noteholders may accelerate the maturity under the first mortgage notes and cause
all outstanding amounts to become immediately due and payable.
Under the first mortgage note agreements, so long as no default exists
or would result, the operating partnership is permitted to make quarterly cash
distributions to us. In the quarter before a quarter in which an interest
payment is due on the first mortgage notes, the operating partnership is
required to reflect a reserve equal to 50% of the interest to be paid, thereby
reducing the amount of cash it may distribute to us in that quarter.
10% SENIOR NOTES
We currently have outstanding $60 million aggregate principal amount of
10% Senior Notes due April 15, 2006. These notes were issued pursuant to an
indenture dated as of April 4, 2001, between us and First Union National Bank,
as trustee. The terms of the 10% Senior Notes are substantially identical to the
terms of the notes being offered by this prospectus and the indenture for the
10% Senior Notes is substantially identical to the indenture for the notes being
offered by this prospectus.
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LEGAL OPINION
Certain legal matters relating to the notes being offered will be
passed upon for us by Morgan, Lewis & Bockius LLP. If certain legal matters in
connection with an offering of notes made by this prospectus and a related
prospectus supplement are passed on by counsel for the any underwriters of such
offering, that counsel will be named in the applicable prospectus supplement
relating to that offering.
EXPERTS
The audited consolidated financial statements and schedules
incorporated by reference in this prospectus and elsewhere in the registration
statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
We will incur and pay the following costs of this transaction. All
amounts other than the SEC registration fee are estimated.
SEC Registration Fee: $ 5,520
Accounting Fees and Expenses: $ 5,000
Legal Fees and Expenses: $ 50,000
Printing Expenses: $ 2,500
Miscellaneous: $ 1,980
--------
Total: $ 65,000
--------
Item 15. Indemnification of Directors and Officers
AmeriGas Partners, L.P.
The partnership agreement of AmeriGas Partners, L.P. provides that we
will indemnify and hold harmless our general partner, any departing partner, any
person who is or was an affiliate of the general partner or any departing
partner, any person who is or was an officer, director, employee, partner, agent
or trustee of the general partner, any departing partner or any such affiliate,
and any person who is or was serving at the request of the general partner, any
departing partner or any such affiliate as an officer, director, employee,
partner, agent, fiduciary or trustee of another person, to the fullest extent
permitted by law but subject to the limitations expressly provided for in the
partnership agreement, from and against any and all losses, claims, damages,
liabilities (joint or several), expenses (including legal fees and expenses),
judgments,
II-1
fines, penalties, interest, settlements or other amounts arising from any and
all claims, demands, actions, suits or proceedings, whether civil, criminal,
administrative or investigative, in which any of the above persons may be
involved, or is threatened to be involved, as a party or otherwise, by reason of
his, her or its status as any of the foregoing; provided, however, that in each
case such person acted in good faith and in a manner that such person reasonably
believed to be in, or not opposed to, the best interests of AmeriGas Partners,
L.P., and, with respect to any criminal proceeding, had no reasonable cause to
believe that the conduct was unlawful. Any indemnification under these
provisions will be made only out of our available assets, and our general
partner shall not be personally liable for, or have any obligation to contribute
or loan funds or assets to us to enable us to effectuate, such indemnification.
The indemnification so provided shall be in addition to any other rights to
which any of the aforementioned persons may be entitled under any agreement,
pursuant to a vote of the holders of outstanding units, as a matter of law or
otherwise, and shall continue for such persons who have ceased to serve in such
capacity and shall inure to the benefit of the heirs, successors, assigns and
administrators of such persons.
To the fullest extent permitted by law, expenses (including legal fees
and expenses) incurred by any of the aforementioned persons who is so
indemnified in defending any claim, demand, action, suit or proceeding shall,
from time to time, be advanced by us prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by us of any undertaking
by or on behalf of such person to repay such amount if it shall be determined
that such person is not entitled to be indemnified.
We are authorized to purchase (or to reimburse our general partner or
its affiliates for the cost of) insurance against any liability that may be
asserted against or expense that may be incurred by such persons in connection
with our activities, regardless of whether we would have the power to indemnify
such persons against such liability under the provisions of the partnership
agreement described above.
AP Eagle Finance Corp.
Section 145 of Delaware General Corporation Law.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation) by reason of the fact that the
person is or was a director, officer, employee, or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit, or proceeding if the person acted in good
faith and in a manner the person reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe the person's conduct was
unlawful.
II-2
Section 145 of the Delaware General Corporation Law also provides that
a corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending, or completed action or suit by or in
the right of the corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by the person in connection with the defense or
settlement of such action or suit if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery of Delaware or such other court shall deem proper.
To the extent that a present or former director or officer of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to above, or in defense of any claim, issue
or matter therein, such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
therewith; provided that indemnification provided for by Section 145 or granted
pursuant thereto shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled; and a corporation shall have power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred by such person
in any such capacity or arising out of such person's status as such whether or
not the corporation would have the power to indemnify such person against such
liabilities under Section 145.
In addition, Section 102(b)(7) of the Delaware General Corporation Law
permits Delaware corporations to include a provision in their certificates of
incorporation eliminating or limiting the personal liability of a director to
the corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, provided that such provisions shall not eliminate or limit
the liability of a director: (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders; (ii) for acts or omissions not
in good faith or that involve intentional misconduct or a knowing violation of
law; (iii) for unlawful payment of dividends or unlawful stock purchases or
redemptions; or (iv) for any transactions from which the director derived an
improper personal benefit.
The Certificate of Incorporation of AP Eagle Finance Corp. ("AP Eagle")
currently provides that each Director shall not be personally liable to such
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director.
II-3
Bylaws Provisions on Indemnity.
Article 7 of the Bylaws of AP Eagle sets forth the extent to which the
directors and officers of AP Eagle may be indemnified by AP Eagle against
liabilities which they may incur while serving in such capacity. Article 7
generally provides that AP Eagle shall indemnify the directors and officers of
AP Eagle who are or were a party to any threatened, pending, or contemplated
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a director or
officer of AP Eagle or of another corporation, partnership, joint venture,
employee benefit plan, trust or other enterprise, or by reason of any action
alleged to have been taken or omitted in such capacity, against expenses
(including attorneys' fees), judgments, fines, and amounts paid in settlement
actually and reasonably incurred in connection therewith, provided that the
applicable standard of conduct set forth in Section 145 of the Delaware General
Corporation Law was met and, provided further, that such indemnification shall
be limited to expenses (including attorneys' fees) actually and reasonably
incurred in the case of an action or suit by or in the right of AP Eagle to
procure a judgment in its favor. Subject to the procedures for indemnification
of directors and officers set forth in the Bylaws, the indemnification of the
directors and officers of AP Eagle provided for therein is in all other respects
substantially similar to that provided for in Section 145 of the Delaware
General Corporation Law. Any such indemnification shall continue as to a person
who has ceased to be a director or officer of AP Eagle and shall inure to the
benefit of the heirs, executors, and administrators of such person.
The above discussion of the Bylaws of AP Eagle and of Section 145 of
the Delaware General Corporation Law is not intended to be exhaustive and is
qualified in its entirety by such Bylaws and the Delaware General Corporation
Law.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the
registrants as disclosed above, the registrants have been informed that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
II-4
Item 16. Exhibits
Exhibit Number Description of Exhibits
-------------- -----------------------
4.1 Indenture dated August 21, 2001 among AmeriGas Partners, L.P.,
AP Eagle Finance Corp. and First Union National Bank, as
trustee, with respect to the 8 7/8% Series B Senior Notes due
2011 (incorporated by reference to Exhibit 4.2 to our
Registration Statement on Form S-4, file no. 333-72986, filed
on November 8, 2001)
4.2 Form of 8 7/8% Series B Senior Note Due 2011
5.1 Legal Opinion of Morgan, Lewis & Bockius LLP
12.1 Statement of Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Morgan, Lewis & Bockius LLP (included in Exhibit 5)
24.1 Power of Attorney (included on signature page)
25.1 Form T-1 Statement of Eligibility and Qualification under the
Trust Indenture Act or 1939, as amended, of First Union
National Bank, as trustee (incorporated by reference to
Exhibit 25.1 to our Registration Statement on Form S-4, file
no. 333-72986, filed on November 8, 2001)
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
II-5
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as part of this registration statement
in reliance upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this registration statement as of the time it was
declared effective.
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in King of Prussia, Pennsylvania, on March 6, 2002.
AMERIGAS PARTNERS, L.P., a Delaware
limited partnership
By: AMERIGAS PROPANE, INC., a
Pennsylvania corporation, its general
partner
By: /s/ Martha B. Lindsay
--------------------------------
Martha B. Lindsay, its
Vice President-Finance and
Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby appoints Martha B.
Lindsay, Robert H. Knauss and Eugene V. N. Bissell, and each of them, as his or
her true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement, and to file the same,
with all exhibits thereto and all other documents in connection therewith, with
the SEC, granting unto said attorneys-in-fact and agents full power and
authority to perform each and every act and thing appropriate or necessary to be
done, as fully and for all intents and purposes as he or she might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or their substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Capacity in which Signed Date
--------- ------------------------ ----
/s/ Lon R. Greenberg Chairman of the Board and March 6, 2002
--------------------------- Director
Lon R. Greenberg
/s/ Eugene V. N. Bissell President and Chief Executive March 6, 2002
--------------------------- Officer (Principal Executive
Eugene V. N. Bissell Officer) and Director
II-7
/s/ Martha B. Lindsay Vice President-Finance and March 6, 2002
--------------------------- Chief Financial Officer
Martha B. Lindsay (Principal Financial Officer)
/s/ Richard R. Eynon Controller and Chief March 6, 2002
--------------------------- Accounting Officer (Principal
Richard R. Eynon Accounting Officer)
Director March ____, 2002
---------------------------
Thomas F. Donovan
/s/ Richard C. Gozon Director March 6, 2002
---------------------------
Richard C. Gozon
/s/ William J. Marrazzo Director March 6, 2002
---------------------------
William J. Marrazzo
/s/ James W. Stratton Director March 6, 2002
---------------------------
James W. Stratton
/s/ Stephen A. Van Dyck Director March 6, 2002
---------------------------
Stephen A. Van Dyck
/s/ Roger B. Vincent Director March 6, 2002
---------------------------
Roger B. Vincent
II-8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in King of Prussia, Pennsylvania, on March 6, 2002.
AP EAGLE FINANCE CORP.
By: /s/ Martha B. Lindsay
--------------------------------
Martha B. Lindsay, its
Vice President-Finance and
Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby appoints Martha B.
Lindsay, Robert H. Knauss, and Eugene V. N. Bissell and each of them, as his or
her true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement, and to file the same,
with all exhibits thereto and all other documents in connection therewith, with
the SEC, granting unto said attorneys-in-fact and agents full power and
authority to perform each and every act and thing appropriate or necessary to be
done, as fully and for all intents and purposes as he or she might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or their substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Capacity in which Signed Date
--------- ------------------------ ----
/s/ Eugene V. N. Bissell President (Principal Executive March 6, 2002
--------------------------- Officer) and Director
Eugene V. N. Bissell
/s/ Martha B. Lindsay Vice President-Finance and March 6, 2002
--------------------------- Chief Financial Officer
Martha B. Lindsay (Principal Financial Officer)
and Director
II-9
/s/ Richard R. Eynon Controller and Chief March 6, 2002
--------------------------- Accounting Officer (Principal
Richard R. Eynon Accounting Officer)
Director March _____, 2002
---------------------------
Brendan P. Bovaird
II-10
EXHIBIT INDEX
Exhibit Number Description of Exhibits
-------------- -----------------------
4.1 Indenture dated August 21, 2001 among AmeriGas Partners, L.P.,
AP Eagle Finance Corp. and First Union National Bank, as
trustee, with respect to the 8 7/8% Series B Senior Notes due
2011 (incorporated by reference to Exhibit 4.2 to our
Registration Statement on Form S-4, file no. 333-72986, filed
on November 8, 2001)
4.2 Form of 8 7/8% Series B Senior Note Due 2011
5.1 Legal Opinion of Morgan, Lewis & Bockius LLP
12.1 Statement of Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Morgan, Lewis & Bockius LLP (included in Exhibit 5)
24.1 Power of Attorney (included on signature pages)
25.1 Form T-1 Statement of Eligibility and Qualification under the
Trust Indenture Act or 1939, as amended, of First Union
National Bank, as trustee (incorporated by reference to
Exhibit 25.1 to our Registration Statement on Form S-4, file
no. 333-72986, filed on November 8, 2001)
71