Exhibit 10.25
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SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
among
PETROLEUM HEAT AND POWER COMPANY, INC.
and
VARIOUS FINANCIAL INSTITUTIONS,
as the Lenders
and
BANK OF AMERICA, N.A.,
as administrative agent for the Lenders and as Issuer
of certain Letters of Credit
and
FLEET NATIONAL BANK,
as Syndication Agent,
and
FIRST UNION NATIONAL BANK,
as Documentation Agent
as of
June 15, 2001
Arranged by
BANC OF AMERICA SECURITIES LLC
as Lead Arranger and Book Manager
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TABLE OF CONTENTS
Page
Article I DEFINITIONS AND ACCOUNTING TERMS..........................................1
SECTION 1.1 Defined Terms.....................................................1
SECTION 1.2 Use of Defined Terms.............................................31
SECTION 1.3 Other Interpretive Provisions....................................31
SECTION 1.4 Accounting and Financial Determinations..........................32
Article II COMMITMENTS, BORROWING PROCEDURES AND NOTES..............................32
SECTION 2.1 Commitments......................................................32
SECTION 2.1.1 Facility A Commitment...................................33
SECTION 2.1.2 Facility B Commitment...................................33
SECTION 2.1.3 Facility C Commitment...................................33
SECTION 2.1.4 Restrictions on Loans...................................34
SECTION 2.1.5 Increase of Facility C Commitments; New Commitments.....34
SECTION 2.2 Reduction and Termination of Commitments.........................36
SECTION 2.2.1 Optional................................................36
SECTION 2.2.2 Mandatory...............................................36
SECTION 2.2.3 Termination.............................................36
SECTION 2.3 Borrowing Procedure..............................................36
SECTION 2.4 Continuation and Conversion Elections............................37
SECTION 2.5 Funding..........................................................37
SECTION 2.6 Loan Accounts/Notes..............................................37
SECTION 2.7 Swing Line.......................................................38
Article III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES...............................41
SECTION 3.1 Repayments and Prepayments.......................................41
SECTION 3.1.1 Repayment...............................................41
SECTION 3.1.2 Voluntary Prepayments...................................42
SECTION 3.1.3 Mandatory Prepayments...................................42
SECTION 3.2 Interest Provisions..............................................44
SECTION 3.2.1 Rates...................................................44
SECTION 3.2.2 Post-Default Rate.......................................45
SECTION 3.2.3 Payment Dates...........................................45
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TABLE OF CONTENTS
(continued)
SECTION 3.3 Fees.............................................................45
SECTION 3.3.1 Facility Fee............................................45
SECTION 3.3.2 Letter of Credit Fee....................................46
SECTION 3.3.3 Letter of Credit Issuing Fee............................46
SECTION 3.3.4 Other Fees..............................................46
ARTICLE IV LETTERS OF CREDIT........................................................46
SECTION 4.1 The Letter of Credit Facility and Subfacilities..................46
SECTION 4.2 Issuance, Amendment and Renewal of Letters of Credit.............48
SECTION 4.3 Expenses.........................................................50
SECTION 4.4 Other Lenders' Participation.....................................50
SECTION 4.5 Disbursements....................................................51
SECTION 4.6 Reimbursement....................................................52
SECTION 4.7 Cash Collateral Pledge...........................................52
SECTION 4.8 Nature of Reimbursement Obligations..............................52
SECTION 4.9 Increased Costs; Indemnity.......................................53
SECTION 4.10 Uniform Customs and Practice.....................................54
ARTICLE V CERTAIN LIBOR AND OTHER PROVISIONS.......................................54
SECTION 5.1 LIBOR Lending Unlawful...........................................54
SECTION 5.2 Deposits Unavailable.............................................54
SECTION 5.3 Increased LIBOR Loan Costs, etc..................................55
SECTION 5.4 Funding Losses...................................................55
SECTION 5.5 Increased Capital Costs..........................................56
SECTION 5.6 Taxes............................................................56
SECTION 5.7 Payments, Computations, etc......................................58
SECTION 5.8 Sharing of Payments..............................................58
SECTION 5.9 Setoff...........................................................58
SECTION 5.10 Recourse.........................................................59
SECTION 5.11 Replacement of Lenders...........................................59
ARTICLE VI CONDITIONS TO BORROWING..................................................60
SECTION 6.1 Conditions to Effectiveness......................................60
SECTION 6.1.1 Credit Agreement and Notes..............................60
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TABLE OF CONTENTS
(continued)
SECTION 6.1.2 [Intentionally Omitted.]................................60
SECTION 6.1.3 [Intentionally Omitted.]................................60
SECTION 6.1.4 Closing Certificate.....................................60
SECTION 6.1.5 Permits.................................................60
SECTION 6.1.6 Opinion of Counsel......................................60
SECTION 6.1.7 Closing Fees, Expenses, etc.............................61
SECTION 6.1.8 Insurance...............................................61
SECTION 6.1.12 Borrowing Base Certificate..............................61
SECTION 6.1.13 Other Documents.........................................61
SECTION 6.1.14 Prepayment and Reborrowing of Loans.....................61
SECTION 6.1.15 Consent of Holders of Other Debt........................61
SECTION 6.2 All Borrowings and Issuances of Letters of Credit................61
SECTION 6.2.1 Compliance with Warranties, No Default, etc.............61
SECTION 6.2.2 Borrowing Request.......................................62
SECTION 6.2.3 Lien Searches...........................................62
SECTION 6.2.4 Satisfactory Legal Form.................................62
ARTICLE VII REPRESENTATIONS AND WARRANTIES...........................................62
SECTION 7.1 Organization etc.................................................63
SECTION 7.2 Subsidiaries.....................................................63
SECTION 7.3 Qualification....................................................63
SECTION 7.4 Enforceability...................................................64
SECTION 7.5 Due Authorization; Non-contravention; etc........................64
SECTION 7.6 Government Approvals; Regulations, etc...........................64
SECTION 7.7 Business; Financial Statements...................................64
SECTION 7.8 No Material Adverse Change.......................................65
SECTION 7.9 Litigation; Labor Controversies, etc.............................65
SECTION 7.10 Ownership of Properties; Liens...................................66
SECTION 7.11 Taxes............................................................66
SECTION 7.12 ERISA Compliance.................................................66
SECTION 7.13 Environmental Warranties.........................................67
SECTION 7.14 Regulations U and X and Use of Proceeds..........................69
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TABLE OF CONTENTS
(continued)
SECTION 7.15 Accuracy of Information..........................................69
SECTION 7.16 Solvency.........................................................69
SECTION 7.17 [Intentionally Omitted.].........................................69
SECTION 7.18 Compliance with Laws.............................................69
SECTION 7.19 Investment Company Act; Other Regulations........................70
SECTION 7.20 Restrictive Agreements...........................................70
ARTICLE VIII COVENANTS................................................................70
SECTION 8.1 Affirmative Covenants............................................70
SECTION 8.1.1 Financial Information, Reports, Notices, etc............70
SECTION 8.1.2 Maintenance of Properties...............................74
SECTION 8.1.3 Insurance...............................................74
SECTION 8.1.4 Payment of Obligations..................................74
SECTION 8.1.5 Compliance with Laws....................................75
SECTION 8.1.6 Books and Records.......................................75
SECTION 8.1.7 Inspection..............................................75
SECTION 8.1.8 Environmental Covenant..................................75
SECTION 8.1.9 Compliance with ERISA...................................76
SECTION 8.1.10 Ranking/Security........................................76
SECTION 8.1.11 Clean Down Period.......................................76
SECTION 8.1.12 Preservation of Corporate Existence.....................76
SECTION 8.1.13 Use of Proceeds.........................................77
SECTION 8.1.14 Update of Customer Lists................................77
SECTION 8.1.15 Further Assurances......................................77
SECTION 8.2 Negative Covenants...............................................78
SECTION 8.2.1 Business Activities.....................................78
SECTION 8.2.2 Indebtedness............................................78
SECTION 8.2.3 Liens...................................................80
SECTION 8.2.4 Financial Covenants.....................................81
SECTION 8.2.5 Investments.............................................82
SECTION 8.2.6 Restricted Payments, etc................................83
SECTION 8.2.7 Consolidation, Merger, etc..............................84
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TABLE OF CONTENTS
(continued)
SECTION 8.2.8 Asset Dispositions, etc.................................84
SECTION 8.2.9 Modification of Certain Agreements......................85
SECTION 8.2.10 Transactions with Affiliates............................85
SECTION 8.2.11 Negative Pledges, Restrictive Agreements, etc...........85
SECTION 8.2.12 Limitation on Issuance of Stock.........................85
SECTION 8.2.13 Operating Leases........................................86
SECTION 8.2.14 Prepayments.............................................86
SECTION 8.2.15 Organic Documents.......................................86
SECTION 8.2.16 Capital Expenditures....................................86
SECTION 8.2.17 Contingent Liabilities..................................86
SECTION 8.2.18 ERISA...................................................87
SECTION 8.2.19 Accounting Changes......................................87
SECTION 8.2.20 Bank Accounts...........................................87
ARTICLE IX EVENTS OF DEFAULT........................................................87
SECTION 9.1 Listing of Events of Default.....................................87
SECTION 9.1.1 Non-Payment of Obligations..............................87
SECTION 9.1.2 Breach of Warranty......................................87
SECTION 9.1.3 Non-Performance of Other Covenants and Obligations......88
SECTION 9.1.4 Default on Other Indebtedness...........................88
SECTION 9.1.5 Judgments...............................................88
SECTION 9.1.6 ERISA...................................................88
SECTION 9.1.7 Change in Control.......................................88
SECTION 9.1.8 Bankruptcy, Insolvency, etc.............................89
SECTION 9.1.9 Impairment of Security, etc.............................89
SECTION 9.1.10 Split-Up................................................90
SECTION 9.1.11 Guarantor Defaults......................................90
SECTION 9.2 Action if Bankruptcy.............................................90
SECTION 9.3 Action if Other Event of Default.................................90
ARTICLE X THE AGENT................................................................91
SECTION 10.1 Appointment and Authorization of Agent...........................91
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TABLE OF CONTENTS
(continued)
SECTION 10.2 Delegation of Duties.............................................92
SECTION 10.3 Liability of Agent...............................................92
SECTION 10.4 Reliance by Agent................................................92
SECTION 10.5 Notice of Default................................................93
SECTION 10.6 Credit Decision; Disclosure of Information by Agent..............93
SECTION 10.7 Indemnification of Agent.........................................94
SECTION 10.8 Agent in its Individual Capacity.................................94
SECTION 10.9 Successor Agent..................................................94
SECTION 10.10 Other Agents; Lead Managers......................................95
SECTION 10.11 Foreign Lenders..................................................95
SECTION 10.12 Collateral Matters...............................................96
ARTICLE XI MISCELLANEOUS PROVISIONS.................................................96
SECTION 11.1 Waivers, Amendments, etc.........................................96
SECTION 11.2 Notices..........................................................97
SECTION 11.3 Payment of Costs and Expenses....................................98
SECTION 11.4 Indemnification..................................................98
SECTION 11.5 Survival.........................................................99
SECTION 11.6 Severability.....................................................99
SECTION 11.7 Headings.........................................................99
SECTION 11.8 Execution in Counterparts, Effectiveness, etc....................99
SECTION 11.9 Governing Law; Entire Agreement.................................100
SECTION 11.10 Successors and Assigns..........................................100
SECTION 11.11 Sale and Transfer of Loans and Notes; Participations in its
Loans and Notes............................................................100
SECTION 11.11.1 Assignments............................................100
SECTION 11.11.2 Participations.........................................101
SECTION 11.12 Other Transactions..............................................102
SECTION 11.13 Forum Selection and Consent to Jurisdiction.....................102
SECTION 11.14 Waiver of Jury Trial............................................103
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Exhibits
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Exhibit A-1 Form of Facility A Promissory Note
Exhibit A-2 Form of Facility C Promissory Note
Exhibit A-3 Form of Swing Note
Exhibit B Form of Borrowing Base Certificate
Exhibit C Form of Borrowing Request
Exhibit D Intentionally Omitted
Exhibit E Form of Continuation/Conversion Notice
Exhibit F Form of Assignment and Acceptance Agreement
Exhibit G Form of Compliance Certificate
Exhibit H-1 Form of Subordination Agreement (Affiliate)
Exhibit H-2 Form of SGP Subordination Agreement (Affiliate)
Exhibit I Form of Opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ & Ballon
Exhibit J Form of Swing Loan Request
Exhibit K-1 Form of Guarantee Agreement of Star Gas Partners and
Holdings
Exhibit K-2 Form of Guarantee Agreement of the Material Subsidiaries
Exhibit L Form of Solvency Certificate
Schedules
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Schedule I Disclosure Schedule
Item 7.1 (Organization)
Item 7.2 (Subsidiaries)
Item 7.3 (Qualification)
Item 8.2.2(a)(i) (Secured Indebtedness)
Item 8.2.2(a)(iii)(Subordinated Indebtedness)
Item 8.2.2(a)(vii)(Acquisition Debt)
Item 8.2.17 (Contingent Obligations)
Schedule II Facility Percentages and Commitments
Schedule III Intentionally Omitted
Schedule IV List of Outstanding Facility B Letters of Credit
Schedule V List of Outstanding Facility C Letters of Credit
Schedule VI Bank Accounts
Schedule VII Lien Search Locations
CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED CREDIT AGREEMENT (as the same may be
amended, supplemented or otherwise modified from time to time, this
"Agreement"), dated as of June 15, 2001, among PETROLEUM HEAT AND POWER COMPANY,
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INC., a Minnesota corporation (the "Borrower"), the various financial
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institutions as are or may become parties hereto (collectively, the "Lenders"),
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BANK OF AMERICA, N.A. ("BofA"), as administrative agent (the "Agent") for the
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Lenders and as issuer of certain letters of credit, FLEET NATIONAL BANK, as
Syndication Agent, and FIRST UNION NATIONAL BANK, as Documentation Agent, is an
amendment and restatement of that earlier Amended and Restated Credit Agreement,
dated as of December 8, 2000, by and among the Borrower, the Agent and the other
parties thereto, as the same had been heretofore amended, which agreement
amended and restated that certain Credit Agreement, dated as of March 25, 1999,
by and among the Borrower, the Agent and the other parties thereto, as the same
had been amended (collectively, the "Original Credit Facility").
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W I T N E S S E T H:
WHEREAS, the Borrower is a distributor of home heating oil and
petroleum products and related heating equipment and maintenance services (the
"Fuel Oil Distribution Business");
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WHEREAS, the Borrower has requested that the Lenders amend and restate
the Original Credit Facility to include the following credit facilities: (i) a
$133,000,000 revolving credit facility for working capital purposes which will
include a $15,000,000 sublimit for the issuance of standby letters of credit and
a $5,000,000 sublimit for swing line loans, (ii) a $10,000,000 revolving credit
facility for the issuance of standby letters of credit issued by BofA in
connection with surety, worker's compensation and other financial guarantees,
and (iii) a $50,000,000 revolving credit facility (which converts to a term loan
facility) for financing and refinancing acquisitions and capital expenditures
relating to existing properties or future acquired businesses of the Borrower
(including the issuance of standby letters of credit), to refinance certain
maturing debt and, to the extent that there is insufficient availability under
the revolving credit facility described in clause (i) above from time to time,
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for working capital purposes; and
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions set forth in this Agreement, to agree to the Borrower's requests.
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Defined Terms. The following terms (whether or not
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underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings:
"Acquisition Debt" means unsecured Indebtedness for which Holdings, the
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Borrower or any Material Subsidiary becomes liable in connection with
acquisitions of businesses permitted by Section 8.2.1 in favor of the sellers of
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such businesses (provided that such Indebtedness may be secured to the extent
permitted by Section 8.2.3(e) and, subject to the other terms and conditions of
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this Agreement, by Facility C Letters of Credit).
"Affiliate" of any Person means as applied to any Person, any other
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Person directly or indirectly controlling or controlled by or under common
control with such Person, provided that, for purposes of this definition,
"control" as used with respect to any Person shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether as a general partner or through the
ownership of voting securities or by contract or otherwise.
"Agent" is defined in the preamble and includes each other Person as
----- --------
shall have subsequently been appointed as the successor Agent pursuant to
Section 10.9.
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"Agent-Related Person" means BofA in its capacity as agent and any
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successor agent arising under Section 10.9, the Issuer hereunder, together with
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Banc of America Securities LLC and their respective Affiliates, and the
officers, directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Agreement" is defined in the preamble.
--------- --------
"Alternate Base Rate" means, on any date and with respect to all Base
-------------------
Rate Loans, a fluctuating rate of interest per annum equal to the higher of:
(a) the rate of interest most recently announced by the Agent at
its principal office as its reference rate for Dollar loans; and
(b) the most recently determined Federal Funds Rate plus 1/2 of
1%.
The Alternate Base Rate is not necessarily intended to be the lowest
rate of interest determined by the Reference Lender in connection with
extensions of credit. Changes in the rate of interest on that portion of any
Loans maintained as Base Rate Loans will take effect simultaneously with each
change in the Alternate Base Rate. The Agent will give notice promptly to the
Borrower and the Lenders of changes in the Alternate Base Rate.
"Applicable Base Rate Margin" means, with respect to any Base Rate
---------------------------
Loan, the then applicable per annum rate (based on the then applicable Level)
set forth in the Pricing Grid.
"Applicable Lending Office" means, with respect to each Lender, with
-------------------------
respect to each type of Loan, the lending office as designated for such type of
Loan below its name on the signature pages hereof or such other office of such
Lender or of an affiliate of such Lender as such Lender may from time to time
specify to the Agent and the Borrower as the office at which its Loans of such
type are to be made and maintained.
"Applicable LIBOR Margin" means, with respect any LIBOR Loan, the then
-----------------------
applicable per annum rate (based on the then applicable Level) set forth in the
Pricing Grid.
2
"Arranger" means Banc of America Securities LLC, in its capacity as
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arranger.
"Asset Disposition" is defined in Section 8.2.8.
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"Assignee Lender" is defined in Section 11.11.1.
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"Assignment and Acceptance Agreement" means an Assignment and
-----------------------------------
Acceptance Agreement substantially in the form of Exhibit F hereto.
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"Available Cash" means the cumulative sum beginning January 1, 1999 of
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(a) the sum of (i)$15,000,000, (ii) Consolidated Cash Flow (excluding pro forma
cash flow from acquisitions and dispositions), (iii) certain cash and non-cash
charges previously deducted from net income relating to the Restructuring
Transactions in an amount equal to $8,662,000, (iv) 50% of unsecured
subordinated Indebtedness issued after March 25, 1999, and (v) net proceeds of
new equity issued, and capital contributions made, after March 25, 1999 less (b)
----
the sum of (i) Consolidated Interest Expense, (ii) Maintenance Capital
Expenditures, (iii) Restricted Payments and (iv) cash income taxes (the
calculation of cash income taxes shall exclude cash income taxes payable as a
result of the Restructuring Transactions up to an amount of $9,000,000).
"Bankruptcy Code" means Title 11 of the United States Code or any
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successor statute.
"Bankruptcy Law" is defined in Section 9.1.8.
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"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
--------------
determined by reference to the Alternate Base Rate.
"BofA" is defined in the preamble.
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"Borrower" is defined in the preamble.
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"Borrowing" means the Loans of the same type and, in the case of LIBOR
---------
Loans, having the same Interest Period made by all Lenders on the same Business
Day and pursuant to the same Borrowing Request in accordance with Section 2.3.
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"Borrowing Base Certificate" means a certificate executed by a
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Responsible Officer of the Borrower substantially in the form of Exhibit B
hereto. ---------
"Borrowing Request" means a Loan request and certificate duly executed
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by a Responsible Officer of the Borrower, substantially in the form of Exhibit C
hereto. ---------
"Business Day" means:
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(a) any day which is neither a Saturday or Sunday nor a legal
holiday on which banks are authorized or required to be closed in San
Francisco, California or New York, New York; and
3
(b) relative to the making, continuing, prepaying or repaying of
any LIBOR Loans, any day on which dealings in Dollars are carried on in
the London interbank market.
"Capital Expenditures" means, for any period, the aggregate amount of
--------------------
all payments made during such period by any Person directly or indirectly for
the purpose of acquiring, constructing or maintaining fixed assets, real
property or equipment that, in accordance with GAAP, would be added as a debit
to the fixed asset account of such Person, including, without limitation, all
amounts paid or payable during such period with respect to Capitalized Lease
Liabilities and interest that are required to be capitalized in accordance with
GAAP.
"Capital Stock" means, with respect to any Person, any capital stock
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(including preferred stock), shares, units, interests, participations or other
ownership interests (however designated, including without limitation such items
as they may apply to a partnership, limited liability company or similar Person)
of such Person and any rights, warrants or options to purchase any thereof.
"Capitalized Lease Liabilities" means all monetary obligations of
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Holdings, the Borrower or any Material Subsidiary under any leasing or similar
arrangement which, in accordance with GAAP, would be classified as capitalized
leases, and, for purposes of this Agreement and each other Loan Document, the
amount of such obligations shall be the capitalized amount thereof, determined
in accordance with GAAP, and the stated maturity thereof shall be the date of
the last payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be terminated by the lessee without payment
of a penalty.
"Cash Collateralize" means to pledge and deposit with or deliver to the
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Trustee, for the benefit of the Senior Debt pursuant to the Intercreditor
Agreement, as additional collateral for the L/C Obligations, cash or deposit
account balances pursuant to documentation in form and substance satisfactory to
the Agent and the Issuer. Derivatives of such term shall have corresponding
meanings.
"Casualty Event" means, with respect to any Property of Holdings, the
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Borrower or any of the Material Subsidiaries, any loss of or damage to, or any
condemnation or other taking of, such Property for which such Person receives
insurance proceeds, or proceeds of a condemnation award or other compensation.
"Casualty Proceeds" is defined in Section 3.1.3(i).
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"CERCLA" means the Comprehensive Environmental Response, Compensation
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and Liability Act of 1980, 42 U.S.C.ss.9601 et seq., as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
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Liability Information System List.
"Change in Control" means:
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4
(a) the ▇▇▇▇▇ Group shall fail to own directly at least a 51%
ownership interest in the Managing General Partner with voting power to
elect the Board of Directors or other governing body; or
(b) the Managing General Partner shall fail to own directly 100%
of the general partnership interests in Star Propane, or if Star
Propane shall have been converted to corporate form, at least 51% of
the voting shares of Star Propane; or
(c) the Managing General Partner shall fail to own directly 100%
of the general partnership interests in Star Gas Partners, or if Star
Gas Partners shall have been converted to corporate form, at least 51%
of the voting shares of Star Gas Partners; or
(d) (i) Star Gas Partners shall fail to own directly or indirectly
at least 51% of the voting shares of Holdings and the Borrower, or (ii)
Star Gas Partners shall fail to own directly or indirectly at least a
51% ownership interest in Holdings and the Borrower; or
(e) Star Gas Partners shall fail to own directly at least 99.00%
in Star Propane; or
(f) (i) Holdings shall fail to own directly at least 99.00% of the
voting shares of the Borrower, or (ii) Holdings shall fail to own
directly at least a 99.00% ownership interest in the Borrower; or
(g) (i) the Borrower or Holdings shall fail to own directly at
least 99.00% of the voting shares of their Material Subsidiaries, or
(ii) the Borrower or Holdings shall fail to own directly at least a
99.00% ownership interest in their Material Subsidiaries.
"Chase Account" means account no. 022098571 of the Borrower maintained
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at The Chase Manhattan Bank.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
----
otherwise modified from time to time.
"Collateral" is defined in the respective Security Documents.
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"Commitment" means, as the context may require, a Lenders' Facility A
----------
Commitment, Facility B Commitment or Facility C Commitment, or all thereof.
"Commitment Change" is defined in Section 2.1.5(a).
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"Commitment Termination Date" means, as the context may require, the
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Facility A Commitment Termination Date, the Facility B Commitment Termination
Date or the Facility C Loan Conversion Date.
"Commitment Termination Event" means:
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(a) the occurrence of any Default described in Section 9.1.8; or
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5
(b) the occurrence and continuance of any other Event of Default
and either:
(i) the declaration of the Loans to be due and payable
pursuant to Section 9.3; or
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(ii) in the absence of such declaration in clause (i)
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above, the giving of notice by the Agent, acting at the direction of
the Required Lenders, to the Borrower that the Commitments have been
terminated.
"Compliance Certificate" means a certificate signed by a Responsible
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Officer of the Borrower substantially in the form of Exhibit G, demonstrating
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compliance with the covenants contained in Sections 8.2.2(a), 8.2.4, 8.2.5,
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8.2.6, 8.2.8, 8.2.13 and 8.2.16 and the forty-five (45) day cleanup period
----- ----- ------ ------
contained in Section 8.1.11 and certifying that no Default or Event of Default
--------------
exists, or, if any Default or Event of Default exists, stating the nature and
status thereof.
"Consolidated" or "consolidated" means, when used with reference to any
------------ ------------
accounting term, the amount described by such accounting term, determined on a
consolidated basis in accordance with GAAP, after elimination of intercompany
items.
"Consolidated Cash Flow" means, for any period, with respect to
----------------------
Holdings, the Borrower and the Material Subsidiaries, Consolidated Net Income
for such period, plus (a) an amount equal to any extraordinary loss plus any net
loss realized in connection with asset sales during such period, to the extent
such losses were deducted in computing Consolidated Net Income, minus (b) an
amount equal to any extraordinary gain during such period plus any net gain
realized in connection with asset sales during such period, to the extent such
gains were added in computing Consolidated Net Income, plus (c) provision for
taxes based on income or profits of Holdings, the Borrower and the Material
Subsidiaries for such period, to the extent such provision for taxes was
deducted in computing Consolidated Net Income, plus (d) Consolidated Interest
Expense for such period, whether paid or accrued (including amortization of
original issue discount, non-cash interest payments and the interest component
of any payments associated with Capitalized Lease Liabilities and Synthetic
Lease Obligations and net payments (if any) pursuant to interest rate hedging
obligations), to the extent such expense was deducted in computing Consolidated
Net Income, plus (e) depreciation and amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period), to the extent such depreciation and
amortization were deducted in computing Consolidated Net Income for such period,
plus (f) all other non-cash expenses to the extent deducted in computing
Consolidated Net Income (less any payments with respect to such non-cash
expenses subsequently made in cash) as indicated on the income statements of
Holdings, the Borrower and the Material Subsidiaries, in each case on a
consolidated basis without duplication and determined in accordance with GAAP.
Consolidated Cash Flow shall be calculated after giving effect, on a pro forma
basis for the four (4) consecutive Fiscal Quarters most recently completed, to,
without duplication, any asset sales, dispositions or asset acquisitions
(including, without limitation, any asset acquisition giving rise to the need to
make such calculation as a result of Holdings, the Borrower or one of the
Material Subsidiaries (including any Person who becomes a Material Subsidiary as
a result of the asset acquisition) incurring, assuming or otherwise being liable
for acquired debt) occurring during the period commencing on the first day of
such period to and including the date of determination
6
(the "Reference Period"), as if such asset sale or asset acquisition occurred on
----------------
the first day of the Reference Period. Whenever pro forma effect is to be given
to an acquisition of assets, the amount of income or earnings relating thereto
and the amount of Consolidated Interest Expense associated with any Indebtedness
incurred in connection therewith, such pro forma calculations will be determined
in good faith by the senior financial officer of such Person; provided, however,
that such officer shall assume (i) the historical sales and gross profit margins
associated with such assets for the most recent consecutive twelve (12) month
period ended prior to the date of purchase for which financial statements are
available (provided that the first month of such period will be no more than
eighteen (18) months prior to such date of purchase), less estimated
post-acquisition loss of customers (not to be less than 5%) and (ii) other
expenses as if such assets had been owned by such Person since the first day of
such period. If any Indebtedness bears a floating rate of interest and is being
given pro forma effect, the interest on such Indebtedness will be calculated as
if the rate in effect on the date of determination had been the applicable rate
for the entire period. For purposes of the foregoing, asset sales and asset
acquisitions shall include all manners of accomplishing the same by way of
direct sale or acquisition, by sale or acquisition of stock or otherwise.
"Consolidated Cash Flow to Interest Expense Ratio" means, as of the
------------------------------------------------
date of determination, the pro forma Consolidated Cash Flow for the four (4)
full Fiscal Quarters immediately preceding the date of determination divided by
the pro forma Consolidated Interest Expense for such Fiscal Quarters.
"Consolidated Interest Expense" means, for any period, the aggregate
-----------------------------
consolidated interest expense of Holdings, the Borrower and the Material
Subsidiaries determined in accordance with GAAP net of up to $3,000,000 of
interest income received during such period but including, without duplication,
(a) all commissions, discounts and other fees and charges owed with respect to
letters of credit and banker's acceptances for such period, (b) net costs under
interest rate protection agreements for such period, (c) the Synthetic Lease
Interest Components of Holdings, the Borrower and the Material Subsidiaries for
such period, (d) the portion of any Capitalized Lease Liabilities allocable to
consolidated interest expense for such period and (e) the product of (1) the
amount of all dividends (whether in cash or otherwise (except dividends payable
solely in shares of Qualified Capital Stock)) on all Disqualified Stock of such
Person and its Subsidiaries, times (2) a fraction, the numerator of which is one
and the denominator of which is one minus the then current effective
consolidated federal, state and local income tax rate of such Person, expressed
as a decimal; provided, however, (i) that "Consolidated Interest Expense" shall,
in the event Holdings, the Borrower or any of the Material Subsidiaries has
incurred, assumed, guaranteed, redeemed or repaid any Indebtedness subsequent to
commencement of the period for which the Consolidated Cash Flow to Interest
Expense Ratio is being calculated but prior to the last day included in such
period, be calculated giving pro forma effect to such incurrence, assumption,
guarantee, redemption or repayment of Indebtedness, as if the same had occurred
at the beginning of such period, and (ii) interest on the Exchanged Notes shall
be included only at their stated rate or rates then in effect. The foregoing
calculation shall give pro forma effect to acquisitions (including all mergers
and consolidations), asset sales and other dispositions and discontinuations of
businesses or assets during the referenced period or subsequent to the
referenced period and on or prior to the calculation of the Consolidated Cash
Flow to Interest Expense Ratio assuming that all acquisitions, asset sales and
7
other dispositions and discontinuations of business or assets has occurred on
the first day of the referenced period.
"Consolidated Net Income" means, for any period, the net income (or
-----------------------
deficit) of Holdings, the Borrower and the Material Subsidiaries for such period
(taken as a cumulative whole) including, without limitation, the net income (or
deficit) attributable to the Sold Assets, after deducting all operating
expenses, provisions for all taxes and reserves (including reserves for deferred
income taxes) and all other proper deductions, all determined in accordance with
GAAP on a consolidated basis, after eliminating all intercompany transactions,
provided that there shall be excluded (a) the income (or deficit) of any Person
accrued prior to the date it becomes a Material Subsidiary or is merged into or
consolidated with Holdings, the Borrower or a Material Subsidiary, (b) the
income (or deficit) of any Person (other than a Material Subsidiary) in which
Holdings, the Borrower or any Material Subsidiary has an ownership interest,
except to the extent that any such income has been actually received by the
Borrower or such Material Subsidiary in the form of dividends, or similar
distributions, (c) the undistributed earnings of Holdings, the Borrower and any
Material Subsidiary to the extent that the declaration or payment of dividends
or similar distributions by Holdings, the Borrower and such Material Subsidiary
is not at the time permitted by the terms of its charter of any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to Holdings, the Borrower and such Material Subsidiary, (d) any
restoration to income of any contingency reserve, except to the extent that
provision for such reserve was made out of income accrued during such period,
(e) any aggregate net after tax gain or net after tax loss during such period
arising from the sale, exchange or other disposition of capital assets (such
term to include all fixed assets, whether tangible or intangible, all Inventory
sold in conjunction with the disposition of fixed assets, and all securities),
(f) any write-up of any asset, (g) any net gain from the collection of the
proceeds of life insurance polices, (h) any gain arising from the acquisition of
any securities, or the extinguishment, under GAAP, of any Indebtedness, of
Holdings, the Borrower or any Material Subsidiary, (i) any after tax gain or
loss during such period from any change in accounting, from any discontinued
operations or the disposition thereof, from any extraordinary events or from any
prior period adjustments, (j) any deferred credit representing the excess of
equity in any Material Subsidiary at the date of acquisition over the cost of
the investment in such Material Subsidiary, and (k) in the case of a successor
to the Borrower by consolidation or merger or as a transferee of its assets, any
earnings of the successor corporation prior to such consolidation, merger or
transfer of assets.
"Consolidated Total Assets" means, as of any date of determination, the
-------------------------
total assets of Holdings, the Borrower and the Material Subsidiaries on a
consolidated basis, as determined in accordance with GAAP.
"Consolidated Total Tangible Assets" means, as of any date of
----------------------------------
determination, the total tangible assets of Holdings, the Borrower and the
Material Subsidiaries on a consolidated basis, as determined in accordance with
GAAP.
"Contemplated Acquisition" means means the acquisition by Holdings, the
------------------------
Borrower or any Material Subsidiary of the capital stock (or equivalent
interest) of that certain retail heating oil company identified to the Lenders
in a letter from the Borrower dated May 24, 2001.
8
"Contingent Liability" means any agreement, undertaking or arrangement
--------------------
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Person's obligation under any Contingent Liability shall
(subject to any limitation set forth therein) be deemed to be the outstanding
principal amount of the debt, obligation or other liability guaranteed thereby.
"Continuation/Conversion Notice" means a notice of continuation or
------------------------------
conversion of LIBOR Loans or Base Rate Loans, as applicable, and a certificate
duly executed by an Responsible Officer of the Borrower, substantially in the
form of Exhibit E hereto.
---------
"Current Assets " means, at any date, the amount at which the current
--------------
assets of Holdings, the Borrower and the Material Subsidiaries (on a
consolidated basis), would be shown on the consolidated balance sheet of
Holdings, the Borrower and the Material Subsidiaries prepared in accordance with
GAAP; plus the lesser of (i) the aggregate amount of long term receivables of
such entities arising out of sales of equipment to customers with original
payoff terms not exceeding three years, and (ii) nine million dollars.
"Current Liabilities" means, at any date, the amount at which the
-------------------
current liabilities of Holdings, the Borrower and the Material Subsidiaries (on
a consolidated basis), would be shown on a balance sheet of Holdings, the
Borrower and the Material Subsidiaries prepared in accordance with GAAP
excluding the current portion of long term indebtedness (as such terms are
defined in GAAP), all outstanding Facility A Loans and all outstanding Facility
C Working Capital Loans.
"Customer List" means, at any time, the names and addresses of all
-------------
customers of Holdings, the Borrower and the Material Subsidiaries at such time,
together with all trade names and trademarks and all supporting documents,
including but not limited to computer discs, programs, tapes, trial balances and
carrying media.
"Default" means any event or occurrence which, after notice or lapse of
-------
time or both, would constitute an Event of Default.
"Disbursement Date" is defined in Section 4.5.
----------------- -----------
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
-------------------
Schedule I, as it may be amended, supplemented or otherwise modified from time
----------
to time by the Borrower with the written consent of the Agent and the Required
Lenders.
"Disqualified Stock" means, with respect to any Person, any Capital
------------------
Stock of such Person which by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable or exercisable), upon
the happening of any event or otherwise (i) matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, (ii) is
convertible into or exchangeable or exercisable for Indebtedness or Disqualified
Stock, or (iii) is redeemable
9
at the option of the holder thereof, in whole or in part, in each case on or
prior to the first anniversary of the stated maturity of such Capital Stock.
"Dollar" and the sign "$" mean lawful money of the United States.
------ -
"Effective Amount" means (i) with respect to any Loans on any date, the
----------------
aggregate outstanding principal amount thereof after giving effect to any
Borrowings and prepayments or repayments of Loans occurring on such date, and
(ii) with respect to any outstanding L/C Obligations on any date, the amount of
such L/C Obligations on such date after giving effect to any issuances of
Letters of Credit occurring on such date and any other changes in the aggregate
amount of the L/C Obligations as of such date, including as a result of any
reimbursements of outstanding unpaid drawings under any Letters of Credit or any
reductions in the maximum amount available for drawing under Letters of Credit
taking effect on such date. For purposes of Section 3.1 the Effective Amount
shall be determined without giving effect to any mandatory prepayments to be
made under such Section 3.1.
-----------
"Effective Date" means the date on which all conditions precedent set
--------------
forth in Section 6.1, Section 6.2 and Section 11.8 are satisfied or waived by
----------- ----------- ------------
all Lenders.
"Eligible Accounts" means, as to any Person at a particular date, the
-----------------
total outstanding balance of Accounts (as defined in the Uniform Commercial Code
in effect in the State of New York) of such Person recorded on the books of such
Person in accordance with GAAP after giving effect to all normal reserves
(including, without limitation, bad debt reserves) in connection therewith (a)
which are bona fide, valid and legally enforceable obligations of the account
debtor in respect thereof and arise from the actual sale and delivery of goods
or rendition and acceptance of services in the ordinary course of business to
such account debtor, (b) which are not owed by an obligor which is an affiliate
or Subsidiary of such Person, (c) which are not owed by an obligor which has
taken any of the actions or suffered any of the events of the kind described in
Section 9.1.8, (d) which are owed solely by such Person free and clear of all
------------------
liens or other rights or claims of any other Person (except in favor of the
Agent for the ratable benefit of the Lenders), (e) with respect to which no more
than sixty (60) days have elapsed since the date payment is due, and (f) in
which the Agent has a perfected, first priority security interest.
"Environmental Claim" means any written or oral notice, claim, demand
-------------------
or other communication (collectively, a "claim") for investigatory costs,
cleanup, costs, Government Authority response costs, damages to natural
resources or other property, personal injuries, fines or penalties arising out
of, based on or resulting from (a) the presence, or release into the
environment, of any Hazardous Material at any location, or (b) circumstances
forming the basis of any violation, or alleged violation, of any Environmental
Law. The term "Environmental Claim" shall include, without limitation, any claim
by any Government Authority for enforcement, cleanup, removal, response,
remedial or other actions or damages pursuant to any applicable Environmental
Law, and any claim by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
the presence of Hazardous Materials or arising from alleged injury or threat of
injury to health, public safety or the environment.
10
"Environmental Law" means any law, regulation, statute, ordinance,
-----------------
code, rule, regulation, order or guideline (including consent decrees or
administrative orders) relating to human health, public safety or the
environment or to emissions, discharges, releases or threatened releases of
Hazardous Materials into the environment (including, without limitation, ambient
air, soil, surface water, ground water, wetlands, land or subsurface strata), or
otherwise relating to the presence, existence, manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
-----
regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
---------------
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
-----------
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations which is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which could constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; or (f) the imposition of any
liability under Title IV of ERISA, other than PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA
Affiliate.
"Event of Default" is defined in Section 9.1.
---------------- -----------
"Excess Sale Proceeds" is defined in Section 8.2.8(b).
-------------------- ----------------
"Exchanged Notes" means the Borrower's $62,697,000 9% senior secured
---------------
notes due October 1, 2002, $2,140,000 aggregate 10.25% senior secured notes due
January 15, 2001, and $2,140,000 10.25% subordinated notes due January 15, 2001,
as each may be extended in accordance with its terms.
"Existing Facility B Letters of Credit" means those letters of credit
-------------------------------------
issued by BofA prior to the Effective Date which are listed on Schedule IV
hereto. -----------
"Existing Facility C Letters of Credit" means those letters of credit
-------------------------------------
issued by BofA prior to the Effective Date which are listed on Schedule V
hereto. ----------
"Existing Letters of Credit" means the Existing Facility B Letters of
--------------------------
Credit and the Existing Facility C Letters.
11
"Existing Subordinated Debt" means the unsecured subordinated
--------------------------
Indebtedness listed on Item 8.2.2(a)(iii) of the Disclosure Schedule.
"Facility A Borrowing Base" means, on any date of determination
-------------------------
thereof, the amount equal to 85% of the aggregate amount of Eligible Accounts of
the Borrower and its Material Subsidiaries and Holdings. The Facility A
Borrowing Base (including without limitation, the amount of Eligible Accounts)
on any date shall be determined by the Agent in accordance with the provisions
of Section 2.1.1(c).
----------------
"Facility A Commitment" is defined in Section 2.1.1.
--------------------- -------------
"Facility A Commitment Termination Date" means the earliest of:
--------------------------------------
(a) June 30, 2004;
(b) the date on which the Facility A Commitments are
terminated in full or reduced to zero pursuant to Section 2.2; and
-----------
(c) the date on which any Commitment Termination Event occurs.
"Facility A L/C Amendment Application" means an application form for
------------------------------------
the amendment or renewal of outstanding Facility A Letters of Credit as shall at
any time be in use at the Issuer, as the Issuer shall request.
"Facility A L/C Application" means an application form for the issuance
--------------------------
of a Facility A Letter of Credit as shall at any time be in use at the Issuer,
as the Issuer may request.
"Facility A L/C Issuance Date" is defined in Section 4.1(a).
---------------------------- --------------
"Facility A L/C Obligations" means, at any time, the sum of (a) the
--------------------------
aggregate undrawn amount of all Facility A Letters of Credit then outstanding,
plus (b) the aggregate amount of all unreimbursed drawings under all Facility A
Letters of Credit, plus (c) all other Obligations of the Borrower under or in
connection with Facility A L/C-Related Documents, to the extent not included
within clauses (a) and (b) hereof.
----------- ---
"Facility A L/C-Related Documents" means the Facility A Letters of
--------------------------------
Credit, the Facility A L/C Applications, the Facility A L/C Amendment
Applications, and any other document relating to any Facility A Letter of Credit
including any of the Issuer's standard form of reimbursement agreements and
other documents for letter of credit issuances and amendments.
"Facility A Letters of Credit" is defined in Section 4.1(a).
---------------------------- --------------
"Facility A Loan" is defined in Section 2.1.1(a).
--------------- ----------------
"Facility A Note" is defined in Section 2.6(b).
--------------- --------------
12
"Facility A Percentage" means, relative to any Lender, the Facility A
---------------------
Percentage set forth on Schedule II, as such percentage may be adjusted from
time to time pursuant to Assignment and Acceptance Agreement(s) executed by such
Lender and its Assignee Lender(s) and delivered pursuant to Section 11.11.1.
---------------
"Facility B Commitment" means, as to any Lender, its obligation to
---------------------
participate in Facility B Letters of Credit pursuant hereto in an aggregate
principal and/or face amount not to exceed at any one time outstanding the
amount set forth opposite such Lender's name on Schedule II under the caption
-----------
"Facility B Commitment" as such amount must be reduced from time to time as
provided herein.
"Facility B Commitment Termination Date" means the earliest of:
--------------------------------------
(a) June 30, 2004;
(b) the date on which the Facility B Commitments are
terminated in full or reduced to zero pursuant to Section 2.2; and
-----------
(c) the date on which any Commitment Termination Event occurs.
"Facility ▇ ▇/C Amendment Application" means an application form for
------------------------------------
the amendment or renewal of outstanding Facility B Letters of Credit as shall at
any time be in use at the Issuer, as the Issuer shall request.
"Facility ▇ ▇/C Application" means an application form for the issuance
--------------------------
of a Facility B Letter of Credit as shall at any time be in use at the Issuer,
as the Issuer may request.
"Facility ▇ ▇/C Issuance Date" is defined in Section 4.1(b).
---------------------------- --------------
"Facility ▇ ▇/C Obligations" means, at any time, the sum of (a) the
--------------------------
aggregate undrawn amount of all Facility B Letters of Credit then outstanding,
plus (b) the aggregate amount of all unreimbursed drawings under all Facility B
Letters of Credit, plus (c) all other Obligations of the Borrower, under or in
connection with the Facility ▇ ▇/C-Related Documents, to the extent included
within clauses (a) and (b) hereof.
"Facility ▇ ▇/C-Related Documents" means the Facility B Letters of
--------------------------------
Credit, the Facility ▇ ▇/C Applications, the Facility ▇ ▇/C Amendment
Applications and any other document relating to any Facility B Letter of Credit,
including any of the Issuer's standard form of reimbursement agreements and
other documents for letter of credit issuances and amendments.
"Facility B Letters of Credit" is defined in Section 4.1(b).
---------------------------- --------------
"Facility B Percentage" means, relative to any Lender, the Facility B
---------------------
Percentage set forth on Schedule II, as such percentage may be adjusted from
-----------
time to time pursuant to Assignment and Acceptance Agreement(s) executed by such
Lender and its Assignee Lender(s) and delivered pursuant to Section 11.11.1.
---------------
13
"Facility C Commitment" is defined in Section 2.1.3.
--------------------- -------------
"Facility C L/C Amendment Application" means an application form for
------------------------------------
amendment or renewal of outstanding Facility C Letters of Credit as shall at any
time be in use at the Issuer, as the Issuer shall request.
"Facility C L/C Application" means an application form for the issuance
--------------------------
of a Facility C Letter of Credit as shall at any time be in use at the Issuer,
as the Issuer may request.
"Facility C L/C Issuance Date" is defined in Section 4.1(c).
---------------------------- --------------
"Facility C L/C Obligations" means, at any time, (a) the aggregate
--------------------------
undrawn amount of all Facility C Letters of Credit, plus (b) the aggregate
amount of all unreimbursed drawings under all Facility C Letters of Credit, plus
(c) all other Obligations of the Borrower under or in connection with Facility C
L/C-Related Documents, to the extent not included within clauses (a) and (b)
hereof. ------- --- ---
"Facility C L/C-Related Documents" means the Facility C Letter of
--------------------------------
Credit, the Facility C L/C Applications, the Facility C L/C Amendment
Applications and any other document relating to Facility C Letter of Credit,
including any of the Issuer's standard form of reimbursement agreements and
other documents for letter of credit issuances and amendments.
"Facility C Letters of Credit" is defined in Section 4.1(c).
---------------------------- --------------
"Facility C Loan" is defined in Section 2.1.3, and shall include,
--------------- -------------
without limitation, Facility C Working Capital Loans.
"Facility C Loan Conversion Date" means the earliest of:
-------------------------------
(a) June 30, 2004;
(b) the date on which the Facility C Commitments are
terminated in full or reduced to zero pursuant to Section 2.2; and
-----------
(c) the date on which any Commitment Termination Event occurs.
"Facility C Note" is defined in Section 2.6(c).
--------------- --------------
"Facility C Percentage" means, relative to any Lender, the Facility C
---------------------
Percentage set forth on Schedule II, as such percentage may be adjusted from
-----------
time to time pursuant to Assignment and Acceptance Agreement(s) executed by such
Lender and its Assignee Lender(s) and delivered pursuant to Section 11.11.1.
---------------
"Facility C Working Capital Loans" is defined in Section 7.14(b).
-------------------------------- ---------------
"Facility C Working Capital Loan Cap" means (a) at any time on or prior
-----------------------------------
to June 25, 2004, an amount equal to the then unused amount of the combined
Facility C Commitments then in effect and (b) at any time after June 25, 2004,
zero.
14
"Federal Funds Rate" means, for any period, a fluctuating interest rate
------------------
per annum equal for each day during such period to:
(a) the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York; or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by the Reference Lender from three federal funds
brokers of recognized standing selected by it.
"Fiscal Quarter" means, with respect to any Person, the three (3) month
--------------
period ending on March 31, June 30, September 30 and December 31.
"Fiscal Year" means with respect to Star Gas Partners, Holdings, the
-----------
Borrower and the Material Subsidiaries, any period of twelve consecutive
calendar months ending on September 30; references to a Fiscal Year with a
number corresponding to any calendar year (e.g., the "2000 Fiscal Year") refer
to the Fiscal Year ending on the September 30 occurring during such calendar
year.
"F.R.S. Board" means the Board of Governors of the Federal Reserve
------------
System or any successor thereto.
"Fuel Oil Distribution Business" is defined in the recitals.
------------------------------ --------
"Funded Debt" means, as of any date of determination, without
-----------
duplication, (i) all interest bearing Indebtedness of Holdings, the Borrower and
the Material Subsidiaries (but excluding Facility A Loans, Swing Loans and
amounts not drawn in respect of the Facility A Letters of Credit and the
Facility B Letters of Credit); provided, however, that in determining the
principal amount of the Exchanged Notes to be included in the calculation of
Indebtedness, there shall be included the stated principal amount of the
Exchanged Notes rather than the principal amount of the Exchanged Notes
reflected in the financial statements, (ii) Capitalized Lease Liabilities, and
(iii) Synthetic Lease Obligations; provided, however, that "Funded Debt" shall,
in the event that Holdings, the Borrower or any Material Subsidiary has
incurred, assumed, guaranteed, redeemed or repaid any Indebtedness subsequent to
commencement of the period in which any Leverage Ratio is being calculated but
prior to the date on which the calculation of the Leverage Ratio is made, be
calculated giving pro forma effect to such incurrence, assumption, guarantee,
redemption or repayment of Indebtedness, as if the same had occurred at the
beginning of the applicable reference period. The foregoing calculation shall
give pro forma effect to acquisitions (including all mergers and
consolidations), asset sales and other dispositions and discontinuations of
businesses or assets during the reference period or subsequent to the reference
period and on or prior to the calculation of Leverage Ratio assuming that all
acquisitions, asset sales and other dispositions and discountenances of business
or assets had occurred on the first day of the reference period. Funded Debt
shall be reduced by amounts attributable to businesses and assets that are so
disposed of or discontinued only to the extent that
15
the Indebtedness included within such Funded Debt would no longer be an
obligation of Holdings, the Borrower or any of the Material Subsidiaries.
"GAAP" is defined in Section 1.4.
---- -----------
"Government Authority" means any agency, authority, board, bureau,
--------------------
commission, department, office or instrumentality of any nature whatsoever of
any governmental or quasi-governmental unit, whether federal, state, county,
district, city or other political subdivision, foreign or otherwise and whether
now or hereafter in existence, or any officer or official of any thereof.
"Guarantee Agreements" means (i) the Guarantee Agreement, dated as of
--------------------
March 25, 1999, among Star Gas Partners, Holdings and the Trustee in the form of
Exhibit K-1, and (ii) the Guarantee Agreement, dated as of March 25, 1999, among
-----------
the Material Subsidiaries and the Trustee in the form of Exhibit K-2.
"Hazardous Material" means:
------------------
(a) any "hazardous substance," as defined by CERCLA;
(b) any "hazardous waste," as defined by the Resource
Conservation and Recovery Act, as amended;
(c) any "pollutant" pursuant to the Clean Water Act, as
amended;
(d) any petroleum product or related compound;
(e) any polychlorinated biphenyls or friable asbestos;
(f) any radioactive material or substance; or
(g) any pollutant or contaminant or hazardous, dangerous or
toxic chemical, material, substance or waste within the meaning of any
other Environmental Law, all as amended or hereafter amended.
"Holdings" means Petro Holdings, Inc., a Minnesota corporation.
--------
"Indebtedness" of any Person means, without duplication:
------------
(a) any indebtedness for borrowed money which such Person has
directly or indirectly created, incurred or assumed;
(b) any indebtedness, whether or not for borrowed money, with
respect to which such 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 such
Person, whether, by purchase, consolidation, merger or otherwise;
16
(c) all obligations of such Person evidenced by notes,
bonds, debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of property,
assets or businesses;
(d) all indebtedness of such Person created or arising
under any conditional sale or other title retention agreement, or
incurred as financing, in either case with respect to property acquired
by the Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to
repossession or sale of such property);
(e) all Capitalized Lease Liabilities;
(f) any indebtedness, whether or not for borrowed money,
secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien in
respect of property owned by such Person, whether or not such Person
has assumed or become liable for the payment of such indebtedness,
provided that the amount of such Indebtedness if not so assumed shall
in no event be deemed to be greater than the fair market value from
time to time (as determined in good faith, by such Person) of the
property subject to such Lien;
(g) all liabilities of such Person in respect of letters
of credit or instruments serving a similar function issued or accepted
for its account by banks and other financial institutions (whether or
not representing obligations for borrowed money);
(h) any indebtedness of the character referred to in
clause (a) through (g) of this definition deemed to be extinguished
under GAAP but for which such Person remains legally liable but only to
the extent of such legal liability; and
(i) any indebtedness of any other Person of the character
referred to in clause (a) through (h) of this definition with respect
to which the Person whose Indebtedness is being determined has become
liable by way of a Contingent Liability.
"Indemnified Liabilities" is defined in Section 11.4.
----------------------- ------------
"Indemnified Parties" is defined in Section 11.4.
------------------- ------------
"Insolvency Proceeding" means (a) any case, action or proceeding before
---------------------
any court or other Government Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshalling of assets for creditors, or other similar arrangement
in respect of a Person's creditors generally or any substantial portion of a
Person's creditors; undertaken under U.S. Federal, state or foreign law,
including the Bankruptcy Code.
"Intercreditor Agreement" means that certain Intercreditor and Trust
-----------------------
Agreement, dated as of March 25, 1999, among Star Gas Partners, Holdings, the
Borrower and the Material Subsidiaries, as Obligors, HSBC Bank USA (formerly
known as Marine Midland Bank), as Trustee, the Note Purchasers named therein, as
Note Holders, the Lenders named therein, and the
17
Agent, in its capacity as Agent, as the same may be amended, supplemented,
restated or otherwise modified from time to time in accordance with the terms
hereof.
"Interest Period" means, relative to any LIBOR Loan, the period
---------------
beginning on (and including) the date on which such LIBOR Loan is made or
continued as, or converted into, a LIBOR Loan pursuant to Section 2.3 or 2.4 and
----------- ---
ending on (but excluding) the day which numerically corresponds to such date
one, two, three or six months thereafter (or, if such month has no numerically
corresponding day, on the last Business Day of such month) or any shorter period
if acceptable to all the Lenders, in each case as the Borrower may select in its
relevant notice pursuant to Section 2.3 or 2.4; provided, however, that:
----------- ---
(a) the Borrower shall not be permitted to select Interest
Periods to be in effect at any one time which have expiration dates
occurring on more than five (5) different dates;
(b) Interest Periods commencing on the same date for Loans
comprising part of the same Borrowing shall be of the same duration;
(c) if such Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next
following Business Day (unless, if such Interest Period applied to
LIBOR Loans, such next following Business Day is the first Business Day
of a calendar month, in which case such Interest Period shall end on
the Business Day next preceding such numerically corresponding day);
and
(d) no Interest Period may end later than the date set forth
in clause (a) of the definition "Facility A Commitment Termination
---------
Date," in the case of Interest Periods for Facility A Loans, or in the
case of Interest Periods for Facility C Loans any date on which a
principal payment is due if it would be necessary to repay Facility C
Loans before the end of the Interest Period applicable thereto.
"Investment" means, relative to any Person, any direct or indirect
----------
purchase or other acquisition by such Person of stock or other securities of any
other Person, or any direct or indirect loan, advance or capital contribution by
such Person to any other Person, and any other item which would be classified as
an "investment" on a balance sheet of such Person prepared in accordance with
GAAP, including, without limitation, any direct or indirect contribution by such
Person of property or assets to a joint venture, partnership or other business
entity in which such Person retains an interest, but excluding any Permitted
Hedging Agreement and investments in any company by which such company becomes a
Material Subsidiary. For the purposes of Section 8.2.5, the amount involved in
-------------
Investments made during any period shall be the aggregate cost during such
period to Holdings, the Borrower and the Material Subsidiaries of all such
Investments, determined in accordance with GAAP, but without regard to
unrealized increases or decreases in value, or write-ups, write-downs or
write-offs, of such investments and without regard to the existence of any
undistributed earnings or accrued interest with respect thereto accrued after
the respective dates on which such Investments were made, less any net return of
capital realized during such period upon the sale, repayment or other
liquidation of such Investment (determined in accordance with GAAP, but without
regard to any amounts received
18
as earnings (in the form of dividends not constituting a return of capital,
interest or otherwise) on such Investment or as loans from any Person in whom
such Investment has been made).
"Issue" means, with respect to any Letter of Credit, to issue or extend
-----
the expiry of, or to renew or increase the amount of, such Letter of Credit; and
the terms Issued, Issuing, and Issuance have corresponding meanings.
------ ------- --------
"Issuer" means BofA, in its capacity as issuer of one or more Letters
------
of Credit, or any successor issuer thereto as may be reasonably agreed upon by
the Agent, the Required Lenders and the Borrower.
"L/C Amendment Applications" means, as relevant, a Facility A L/C
--------------------------
Amendment Application, a Facility ▇ ▇/C Amendment Application or a Facility C
L/C Amendment Application or all.
"L/C Applications" means, as relevant, a Facility A L/C Application, a
----------------
Facility ▇ ▇/C Application or a Facility C L/C Application or all.
"L/C Obligations" means the Facility A L/C Obligations, the Facility B
---------------
L/C Obligations and the Facility C L/C Obligations.
"L/C-Related Documents" means, as relevant, the Facility A L/C-Related
---------------------
Documents, the Facility ▇ ▇/C-Related Documents or the Facility C L/C-Related
Documents, or all.
"Lenders" is defined in the preamble.
------- --------
"Letters of Credit" means the collective reference to the Facility A
-----------------
Letters of Credit, the Facility B Letters of Credit and the Facility C Letters
of Credit, including all Existing Letters of Credit.
"Level" means, at any time, ▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇ or
-----
Level V determined in accordance with the following table on the basis of the
Pricing Ratio computed as of the end of the Fiscal Quarter immediately preceding
the date of determination:
Pricing Ratio determined as of
the end of the immediately
Level preceding Fiscal Quarter
----- ------------------------
I less than 3.00
II greater than or equal to 3.00 less than 3.50
III greater than or equal to 3.50 less than 3.75
IV greater than or equal to 3.75 less than 4.00
V greater than or equal to 4.00
Notwithstanding the foregoing, any change in the Level shall be determined by
the Agent based upon the financial information required to be contained in the
Compliance Certificates delivered by the Borrower to the Agent with respect to
each Fiscal Quarter of the Borrower and shall,
19
subject to the next two succeeding sentences, become effective as of the day
following the date of delivery of such Compliance Certificate. If the Borrower
shall have failed to deliver a Compliance Certificate for any Fiscal Quarter by
the day which is ten (10) days after the date on which such Compliance
Certificate is required by this Agreement to be delivered to the Agent, and
without limiting the other rights and remedies of the Agent and the Lenders
hereunder, the Level shall, notwithstanding the actual Pricing Ratio at such
time, be deemed to be Level V as of the first day of the Fiscal Quarter
beginning after the Fiscal Quarter for which such Compliance Certificate was due
and shall continue at such Level until such Compliance Certificate shall have
been delivered. During the period from the Effective Date through December 31,
2001, the Level shall, notwithstanding the actual Pricing Ratio at such time, be
deemed to be Level IV unless such actual Pricing Ratio exceeds Level IV, in
which event the applicable Level shall be Level V.
"Leverage Ratio" means, at any date of determination, the ratio of
--------------
Funded Debt at such date to Consolidated Cash Flow for the then immediately
preceding four (4) Fiscal Quarters of the Borrower.
"LIBOR" means, for each Interest Period for each LIBOR Loan, the
-----
interest per annum obtained by the Agent as offered quotations (rounded upwards,
if necessary, to the nearest 1/100 of 1%) that appear on the Telerate Screen
which displays an average British Bankers Association Interest Settlement Rate
(such page number 3740 or 3750, as applicable) for deposits (on the date two (2)
Business Days prior to the first day of such Interest Period) with a term
equivalent to such period in Dollars, determined as of approximately 11:00 a.m.,
London time; provided that if such rate does not appear on such page or service
or such service shall cease to be available, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) which the Agent has
determined to be the offered rate on such other page or other service which
displays an average British Bankers Association Interest Settlement Rate for
deposits on the date two (2) Business Days prior to the first day of such
Interest Period) with a term equivalent to such period in Dollars, determined as
of approximately 11:00 a.m., London time.
"LIBOR Loan" means any Loan bearing interest, at all times during an
----------
Interest Period applicable to such Loan, at a fixed rate of interest determined
by reference to the LIBOR (Reserve Adjusted).
"LIBOR (Reserve Adjusted)" means, relative to any Loan to be made,
------------------------
continued or maintained as, or converted into, a LIBOR Loan for any Interest
Period, a rate per annum (rounded upward, if necessary, to the nearest 1/100 of
1%) determined pursuant to the following formula:
LIBOR LIBOR
---------------------- = -------------------------------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBOR (Reserve Adjusted) for any Interest Period for LIBOR Loans will be
determined by the Agent on the basis of the LIBOR Reserve Percentage in effect
on, and the applicable rates furnished to and received by the Agent from the
Reference Lender, two (2) Business Days before the first day of such Interest
Period.
20
"LIBOR Reserve Percentage" means, relative to any Interest Period for
------------------------
LIBOR Loans, the reserve percentage (expressed as a decimal) equal to the
maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of and including
"Eurocurrency Liabilities," as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such Interest Period.
"Lien" means, as to any Person, any mortgage, lien (statutory or
----
otherwise), pledge, reservation, right of entry, encroachment, easement, right
of way, restrictive covenant, license, charge, security interest or other
encumbrance in or on, or any interest or title of any vendor, lessor, lender or
other secured party to or of such Person under any conditional sale or other
title retention agreement or capital lease with respect to, any property or
asset owned or held by such Person, or the signing or filing of a financing
statement with respect to any of the foregoing which names such Person as
debtor, the signing of any security agreement with respect to any of the
foregoing authorizing any other party as the secured party thereunder to file
any financing statement or any other agreement to give or grant any of the
foregoing. For the purposes of this Agreement, a Person shall be deemed to be
the owner of any asset which it has placed in trust for the benefit of the
holders of Indebtedness of such Person and such trust shall be deemed to be a
Lien if such Person remains legally liable therefor, notwithstanding that such
Indebtedness is or may be deemed to be extinguished under GAAP.
"Loan" means, as the context may require, a Facility A Loan, a Facility
----
C Loan or a Swing Loan.
"Loan Document" means this Agreement, the Notes, the Guarantee
-------------
Agreements, the Security Documents, the L/C-Related Documents, the Intercreditor
Agreement, the letter agreement referred to in Section 3.3.4 and any pledge
-------------
agreement, security agreement, guaranty, or mortgage or subordination agreement
delivered to the Agent pursuant to this Agreement, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Maintenance Capital Expenditures" means, after consideration is given
--------------------------------
for attrition of volume, those capital expenditures made after January 1, 1999,
required to maintain weather normalized volume of heating oil sold on an annual
basis. For purposes of the foregoing, Maintenance Capital Expenditures shall not
include (i) capital expenditures made for the purposes of upgrading facilities
for the purpose of generating incremental net cash flow, and (ii) capital
expenditures made in connection with acquisitions of businesses.
"Managing General Partner" means Star Gas LLC, a Delaware limited
------------------------
liability company.
"Material Adverse Effect" means, without limitation, a material adverse
-----------------------
effect on (i) the condition (financial or otherwise), business, prospects,
operations, assets or properties of Star Gas Partners, (ii) the condition
(financial or otherwise), business, prospects, operations, assets or properties
of Holdings, the Borrower and the Material Subsidiaries (taken as a whole),
(iii) any Obligor's ability to perform its obligations under any Loan Document
to which it is a party,
21
(iv) the security interests (or the value or priority thereof) granted under the
Security Documents, or (v) the validity of the Loan Documents.
"Material Subsidiary" means Petro, Inc., Ortep of Connecticut, Inc.,
-------------------
Maxwhale Corp., Petro/Crystal Corp., Ortep of New Jersey, Inc., Ortep of
Pennsylvania, Inc., Marex Corporation, Star Gas Corporation and ▇.▇. ▇▇▇▇▇▇▇
Company, Inc., any Subsidiary formed or acquired in connection with the
Contemplated Acquisition and, unless waived by the Agent, all other existing,
future, direct and indirect Subsidiaries of the Borrower and Holdings.
"Multiemployer Plan" means a "multiemployer plan," within the meaning
------------------
of Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate
makes, is making, or is obligated to make contributions or, during the preceding
three (3) calendar years, has made, or been obligated to make, contributions.
"Note" means, as the context may require, either a Facility A Note, a
----
Facility C Note or a Swing Note, or any or all of them.
"Note Agreements" means, collectively, (a) the several substantially
---------------
identical note exchange agreements dated as of March 25, 1999 pursuant to which
$64,837,000 original principal amount of the Borrower's senior secured notes
(which Indebtedness constitutes Private Placement Debt) and $2,140,000 original
principal amount of the Borrower's subordinated notes (which Indebtedness
constitutes Existing Subordinated Debt ) was issued, (b) the several
substantially identical note purchase agreements dated as of March 25, 1999
pursuant to which $90,000,000 original principal amount of the Borrower's senior
secured notes (which Indebtedness constitutes Private Placement Debt) was issued
and (c) the several substantially identical note purchase agreements dated as of
October 1, 2000 pursuant to which $40,000,000 original principal amount of the
Borrower's senior secured notes (which Indebtedness constitutes Private
Placement Debt) was issued.
"Note Holders" is defined in the Intercreditor Agreement.
------------
"Obligations" means the obligations of the Borrower to the Agent, the
-----------
Issuer and the Lenders under this Agreement, the Letters of Credit, the Notes
and each other Loan Document.
"Obligor" means Star Gas Partners, Holdings, the Borrower, the Material
-------
Subsidiaries or any other Person (other than the Agent, the Issuer, the Arranger
or any Lender) obligated under any Loan Document.
"Other Facilities" is defined in Section 11.12.
---------------- -------------
"Organic Document" means, relative to any Obligor, its partnership
----------------
agreement, certificate of incorporation, certificate of formation, its by-laws
or operating agreement and all shareholder agreements, voting trusts and similar
arrangements applicable to any of its authorized shares of Capital Stock or
other equity interests.
"Parity Debt" means the obligations of the Borrower described in clause
----------- ------
(iv) of Section 8.2.2(a) (other than secured subordinated Indebtedness referred
---- ---------------
to in clause (E) thereof), which are secured and will rank pari passu with the
----------
Obligations hereunder.
22
"Participant" is defined in Section 11.11.2.
----------- ---------------
"Participating Lender" is defined in Section 2.1.5(a)(v).
-------------------- -------------------
"PBGC" means the Pension Benefit Guaranty Corporation or any Government
----
Authority succeeding to any of its principal functions under ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
------------
ERISA) subject to Title IV of ERISA (other than a Multiemployer Plan) which the
Borrower and/or any ERISA Affiliate sponsors, maintains, or to which it makes,
is making, or is obligated to make contributions, or in the case of multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding five (5) plan years.
"Percentage" means the Facility A Percentage, the Facility B Percentage
----------
or the Facility C Percentage, as applicable, or all.
"Permitted Hedging Agreements" means fuel oil hedging agreements for
----------------------------
the purpose of hedging (a) price fluctuations of inventory of the Borrower and
its Material Subsidiaries, and (b) the Borrower's obligation to deliver fuel oil
at capped prices (and not for investment or speculative purposes).
"Permitted Subordinated Debt" means Indebtedness that is subordinated
---------------------------
to the Obligations on and subject to the following terms and conditions (as
applicable):
(a) if such Indebtedness is provided by an Affiliate of any Obligor,
such Indebtedness (i) shall be created under an agreement containing
subordination provisions as are set forth in Exhibit H-1 (in the case of
-----------
Indebtedness of Holdings, the Borrower or any Material Subsidiary) or Exhibit
-------
H-2 (in the case of Indebtedness of Star Gas Partners) and (ii) shall otherwise
---
be on terms reasonably satisfactory to the Agent;
(b) if such Indebtedness is provided by a Person that is not an
Affiliate of any Obligor, such Indebtedness (i) shall not exceed $25,0000,000 in
aggregate principal amount outstanding at any time, (ii) shall bear interest at
market rates, (iii) shall not provide for any principal repayments (whether at
maturity, upon prepayment, upon scheduled installment or otherwise) that would
exceed $2,000,000 in the aggregate during any Fiscal Year during the term of
this Agreement and (iv) shall be created under an agreement containing
subordination and other provisions that are reasonably satisfactory to the
Agent; provided that the limitations set forth in clauses (i) and (iii) above
----------- ----
shall not apply with respect to Indebtedness of Star Gas Partners; and
(c) such Indebtedness shall not be secured by any property or other
assets of any Obligor unless the Senior Debt is secured by the same property or
assets and, if such Indebtedness is to be so secured, the Liens of the holder or
holders of such Indebtedness shall be subordinated to the Liens securing the
Senior Debt on terms that are reasonably satisfactory to the Agent (and, if such
Indebtedness is to be secured by any Collateral, the Intercreditor Agreement and
the Security Documents shall be amended in form and substance satisfactory to
the Agent to reflect such subordination).
23
"Person" means any natural person, corporation, partnership, firm,
------
association, trust, government, governmental agency or any other entity, whether
acting in an individual, fiduciary or other capacity.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
----
ERISA), subject to Part 4 of Title I (B) of ERISA which the Borrower sponsors or
maintains or to which the Borrower makes, is making, or is obligated to make
contributions and includes any Pension Plan.
"Post-Default Rate" means (a) in respect of any Loans a rate per annum
-----------------
equal to: (i) if such Loans are Base Rate Loans, 2% above the Alternate Base
Rate as in effect from time to time plus the Applicable Base Rate Margin (but in
no event less than the interest rate in effect on the due date), or (ii) if such
Loans are LIBOR Loans, 2% above the rate of interest in effect thereon at the
time of the Event of Default that resulted in the Post-Default Rate being
instituted until the end of the then current Interest Period therefor and,
thereafter, 2% above the Alternate Base Rate as in effect from time to time plus
the Applicable Base Rate Margin (but in no event less than the interest rate in
effect on the due date); and (b) in respect of other amounts payable by the
Borrower hereunder (other than interest) not paid when due (whether at stated
maturity, by acceleration or otherwise), a rate per annum during the period
commencing on the due date until such other amounts are paid in full equal to 2%
above the Alternate Base Rate as in effect from time to time plus the Applicable
Base Rate Margin (but in no event less than the interest rate in effect on the
due date).
"Pricing Grid" means the following:
------------
Applicable Applicable
Level Facility Fee LIBOR Margin Base Rate Margin
----- ------------ ------------ ----------------
Level I 0.375% 1.125% 0.000%
Level II 0.375% 1.375% 0.125%
Level III 0.500% 1.500% 0.250%
Level IV 0.500% 1.625% 0.500%
Level V 0.500% 1.750% 0.500%
"Pricing Ratio" means, as of the last day of each Fiscal Quarter of the
-------------
Borrower, the ratio of (a) the sum of Funded Debt plus the aggregate undrawn or
drawn amount of all issued Facility B Letters of Credit on such last day to (b)
Consolidated Cash Flow for such Fiscal Quarter of the Borrower and the three (3)
immediately preceding Fiscal Quarters of the Borrower.
"Private Placement Debt" means all of the existing secured Indebtedness
----------------------
set forth on Item 8.2.2(a)(i) of the Disclosure Schedule and other Parity Debt
now or hereinafter incurred.
"Pro Forma Basis" as used only in the definition of SGP Consolidated
---------------
Pro Forma Operating Cash Flow, means the adjustment of any item of income or
expense of any Person for any period as follows, (a) if such Person or any of
its Subsidiaries has incurred, repaid, discharged or defeased any Indebtedness
since the beginning of such period, the SGP
24
Consolidated Operating Cash Flow and the SGP Consolidated Interest Expense of
such Person for such period will be calculated after giving effect on a pro
forma basis to (i) the incurrence of any Indebtedness as if such Indebtedness
has been incurred on the first day of such period, (ii) the discharge of any
other Indebtedness repaid, repurchased, defeased or otherwise discharged as if
such discharge had occurred on the first day of such period, and (iii) the
interest income realized by such Person and its Subsidiaries on the proceeds of
such Indebtedness, to the extent not yet applied at the date of determination,
assuming such proceeds earned interest at the rate of 5% per annum from the date
such proceeds were received through such date of determination, (b) if since the
beginning of such period such Person or any of its Subsidiaries will have made
any Asset Disposition, the SGP Consolidated Operating Cash Flow for such period
will be reduced by an amount equal to the SGP Consolidated Operating Cash Flow
(if positive) directly attributable to the assets which are the subject of such
Asset Disposition for such period, or increased by an amount equal to the SGP
Consolidated Operating Cash Flow (if negative), directly attributable thereto
for such period, and the SGP Consolidated Interest Expense for such period will
be reduced by an amount equal to the SGP Consolidated Interest Expense directly
attributable to any Indebtedness of such Person or any of its Subsidiaries
repaid, repurchased, defeased or otherwise discharged with respect to such
Person and its continuing Subsidiaries in connection with such Asset
Dispositions for such period (or, if the Capital Stock of any of its
Subsidiaries is sold, the SGP Consolidated Interest Expense for such period
directly attributable to the Indebtedness of such Subsidiary to the extent such
Person and its continuing Subsidiaries are no longer liable for such
Indebtedness after such sale), (c) if since the beginning of such period such
Person or any of its Subsidiaries (by merger or otherwise) will have made an
Investment in any Subsidiary (or any Person which becomes a Subsidiary) or an
acquisition of assets, including any acquisition of assets occurring in
connection with a transaction causing a calculation to be made hereunder, which
constitutes all or substantially all of the assets of an operating unit of a
business, the SGP Consolidated Operating Cash Flow and the SGP Consolidated
Interest Expense for such period will be calculated after giving pro forma
effect hereto (including the incurrence of any Indebtedness) as if such
Investment or acquisition occurred on the first day of such period, and (d) the
SGP Consolidated Net Income will be calculated without reduction for expenses
incurred in connection with the Restructuring Transactions. For purposes of this
definition, whenever pro forma effect is to be given to an acquisition of
assets, the amount of income or earnings relating thereto and the amount of the
SGP Consolidated Interest Expense associated with any Indebtedness incurred in
connection therewith, such pro forma calculations will be determined in good
faith by the senior financial officer of such Person; provided, however, that
such officer shall assume (A) the historical sales and gross profit margins
associated with such assets for the most recent consecutive twelve (12) month
period ended prior to the date of purchase for which financial statements are
available (provided that the first month of such period will be no more than
eighteen (18) months prior to such date of purchase), less estimated
post-acquisition loss of customers (not to be less than 5%) and (B) other
expenses as if such assets had been owned by such Person since the first day of
such period. If any Indebtedness bears a floating rate of interest and is being
given pro forma effect, the interest on such Indebtedness will be calculated as
if the rate in effect on the date of determination had been the applicable rate
for the entire period.
"Property" means any right or interest in or to property whatsoever,
--------
whether real, personal or mixed and whether tangible or intangible.
25
"Qualified Capital Stock" means Capital Stock not constituting
-----------------------
Disqualified Stock.
"Quarterly Payment Date" means the last day of each March, June,
----------------------
September, and December or, if any such day is not a Business Day, the next
succeeding Business Day.
"Reference Lender" means BofA, so long as BofA is the Agent, or the
----------------
Lender serving for the time being as a successor Agent to BofA pursuant to
Section 10.9.
------------
"Regulatory Change" means, relative to the Agent or any Lender, any
-----------------
change after the date hereof in any (or the adoption after the date hereof of
any new):
(a) United States Federal or state law or foreign law
applicable to the Agent or such Lender; or
(b) regulation, interpretation, directive, or request (whether
or not having the force of law) applicable to such Agent or such Lender
or any court or government authority charged with the interpretation or
administration of any law referred to in the immediately preceding
clause (a) or of any fiscal, monetary, or other authority having
----------
jurisdiction over the Agent or such Lender.
"Reimbursement Obligation" is defined in Section 4.6.
------------------------ -----------
"Release" means a "release," as such term is defined in CERCLA.
-------
"Reportable Event" means, any of the events set forth in Section
----------------
4043(c) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived in regulations
issued by the PBGC.
"Required Lenders" means, except as otherwise provided in the
----------------
Intercreditor Agreement with respect to matters covered thereby, Lenders holding
51% or more of the Commitments (or, if the Commitments have been terminated,
Lenders holding 51% or more of the aggregate outstanding Obligations).
"Requirement of Law" means, as to any Person, any law (statutory or
------------------
common), treaty, rule or regulation or determination of an arbitrator or of a
Government Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"Resource Conservation and Recovery Act" means the Resource
--------------------------------------
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended.
"Responsible Officer" means with respect to any Person, the President,
-------------------
any Vice President, the Chief Financial Officer, the Treasurer and the Secretary
of such Person and any other officer of such Person who is responsible for
compliance with or performance of any obligation under or matter referred to in
this Agreement with respect to the Borrower, and, in any case, any employee of
the Borrower performing any of the above functions.
26
"Restricted Investment" means any Investment other than those permitted
---------------------
by Section 8.2.5.
-------------
"Restricted Payment" means any payment or other distribution made after
------------------
March 25, 1999 in respect of stock in Holdings, except a distribution payable
solely in additional stock of Holdings, and any payment by Holdings on account
of the redemption, retirement, purchase or other acquisition of stock.
"Restructuring Transactions" means a series of related transactions
--------------------------
which occurred in March of 1999 pursuant to which (i) the Borrower became a
99.99% owned subsidiary of Holdings, (ii) Holdings became an indirect
wholly-owned subsidiary of Star Gas Partners, (iii) Star/Petro (a direct
wholly-owned subsidiary of Star Gas Partners and the direct parent of Holdings)
assumed Star Propane's 8.04% First Mortgage Notes and 7.17% First Mortgage
Notes, and (iv) the Managing General Partner replaced Star Gas Corporation as
the sole general partner of Star Gas Partners and Star Propane.
"Securities Act" means the Securities Act of 1933, as amended from time
--------------
to time.
"Security" is defined in Section 2(1) of the Securities Act.
--------
"Security Agreements" means (i) the Pledge and Security Agreement,
-------------------
dated as of March 25, 1999, among the Borrower, the Material Subsidiaries and
the Trustee, as amended, supplemented, restated or otherwise modified from time
to time, and (ii) the Pledge and Security Agreement, dated as of March 25, 1999,
between Holdings and the Trustee, as amended, supplemented, restated or
otherwise modified from time to time.
"Security Documents" means any of the documents securing the Notes,
------------------
including without limitation, the Security Agreements.
"Senior Debt" means the Obligations and the Private Placement Debt.
-----------
"▇▇▇▇▇ Group" means ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and any testamentary
-----------
trust, all beneficiaries of which are members of the immediate family of ▇▇▇▇ ▇.
▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, and all trustees which are members of the immediate
family of ▇▇▇▇ ▇. ▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and, under the terms of the trust,
have the power to vote membership interests in the Managing General Partner.
"SGP Consolidated Interest Expense" means, of any Person for any
---------------------------------
period, the sum (without duplication) of (i) all interest deducted (including
the interest component of Capitalized Lease Liabilities) net of up to $3,000,000
of interest income received in any four (4) consecutive fiscal quarters (or a
ratable portion for any other period) in determining its SGP Consolidated Net
Income, together with all interest capitalized or deferred during such period
and not deducted in determining the SGP Consolidated Net Income for such period,
and (ii) all Indebtedness issuance cost, discount and expense amortized.
Interest on the Exchanged Notes shall be included only at their stated rate or
rates at the time in effect.
"SGP Consolidated Net Income" means, with reference to any Person for
---------------------------
any period, the net income (or loss) of such Person and its Subsidiaries for
such period (taken as a cumulative
27
whole), as determined in accordance with GAAP, after eliminating all offsetting
debits and credits between such Person and its Subsidiaries and all other items
required to be eliminated in the course of the preparation of consolidated
financial statements of such Person and its Subsidiaries in accordance with
GAAP, provided that there shall be excluded:
(a) the income (or loss) of any other Person accrued prior to
the date it becomes a Subsidiary or is merged into or consolidated with
such Person or a Subsidiary of such Person, and the income (or loss) of
any such Person, substantially all of the assets of which have been
acquired in any manner, realized by such other Person prior to the date
of acquisition,
(b) the income (or loss) of any other Person (other than a
Subsidiary of such Person) in which such Person or any Subsidiary of
such Person has an ownership interest, except to the extent that any
such income has been actually received by such Person or its Subsidiary
in the form of cash dividends or similar cash distributions, it being
understood that all amounts actually received by such Person shall be
included in the SGP Consolidated Net Income,
(c) the undistributed earnings of any Subsidiary of such
Person to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted
by the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to
such Subsidiary,
(d) any restoration to income of any contingency reserve,
except to the extent that provision for such reserve was made out of
income accrued during such period,
(e) any aggregate net gain (but not any aggregate net loss)
during such period arising from the sale, conversion, exchange or other
disposition of capital assets (such term to include, without
limitation, (i) all non-current assets and, without duplication, (ii)
the following, whether or not current: all fixed assets, whether
tangible or intangible, all inventory sold in conjunction with the
disposition of fixed assets, and all Securities),
(f) any gains resulting from any write-up of any assets (but
not any loss resulting from any write-down of any assets),
(g) any net gain from the collection of the proceeds of life
insurance policies,
(h) any gain arising from the acquisition of any Security, or
the extinguishment, under GAAP, of any Indebtedness, of such Person or
any Subsidiary of such Person,
(i) any net income or gain (but not any net loss) during such
period from (i) any change in accounting principles in accordance with
GAAP, (ii) any prior period adjustments resulting from any change in
accounting principles in accordance with GAAP, (iii) any extraordinary
items, or (iv) any discontinued operations or the disposition thereof,
28
(j) any deferred credit representing the excess of equity in
any Subsidiary of such Person at the date of acquisition over the cost
of the investment in such Subsidiary,
(k) in the case of a successor to such Person by consolidation
or merger or as a transferee of its assets, any earnings of the
successor corporation prior to such consolidation, merger or transfer
of assets, and
(l) any portion of such net income that cannot be freely
converted into United States Dollars.
"SGP Consolidated Operating Cash Flow" means, of any Person for any
------------------------------------
period, the sum of (i) the SGP Consolidated Net Income of such Person for such
period plus, to the extent deducted in arriving at such SGP Consolidated Net
Income; (ii) (w) depreciation, depletion, amortization, and all other non-cash
expenses of such Person for such period; (x) income tax expense of such Person
for such period; and (y) interest expense of such Person for such period, all
determined for such Person and its Subsidiaries in accordance with GAAP.
"SGP Consolidated Pro Forma Interest Expense" means, of any Person for
-------------------------------------------
any period, the SGP Consolidated Interest Expense of such Person for such period
determined on a Pro Forma Basis.
"SGP Consolidated Pro Forma Operating Cash Flow" means, of any Person
----------------------------------------------
for any period, the SGP Consolidated Operating Cash Flow of such Person for such
period determined on a Pro Forma Basis.
"SGP Restricted Payment" is defined in Section 8.2.6(b).
---------------------- ----------------
"Sold Assets" means those assets sold by Petro to Star Propane on the
-----------
date the Restructuring Transactions are consummated and which are immediately
thereafter transferred to Holdings on such date.
"Star Gas Corporation" means Star Gas Corporation, a Delaware
--------------------
corporation, that is the general partner of Star Gas Partners prior to the
consummation of any of the Restructuring Transactions.
"Star Gas Partners" means Star Gas Partners, L.P., a Delaware limited
-----------------
partnership.
"Star/Petro" means Star/Petro, Inc., a Minnesota corporation.
----------
"Star Propane" means Star Gas Propane, L.P., a Delaware limited
------------
partnership.
"Stated Maturity Date" means, with respect to the Facility A Loans,
--------------------
Swing Loans and Facility C Working Capital Loans, June 30, 2004 and, with
respect to the Facility C Loans (other than the Facility C Working Capital
Loans), June 30, 2006.
"Subsidiary" means, with respect to any Person, any corporation,
----------
limited liability company, business trust, association, partnership, joint
venture or other business entity at least a majority (by number of votes) of the
stock of any class or classes (or equivalent interest) of
29
which is at the time owned by such Person or by one or more Subsidiaries of such
Person or by such Person and one or more Subsidiaries of such Person, if the
holders of the stock of such class or classes (or equivalent interests) (a) are
ordinarily, in the absence of contingencies, entitled to vote for the election
of a majority of the directors (or Persons performing similar functions) of such
business entity, even though the right so to vote has been suspended by the
happening of such a contingency, or (b) are at the time entitled, as such
holders, to vote for the election of the majority of the directors (or Persons
performing similar functions) of such business entity, whether or not the right
so to vote exists by reason of the happening of a contingency. Unless the
context otherwise requires, any reference to a Subsidiary shall mean a
Subsidiary of the Borrower, Holdings or Star Gas Partners. Star Propane shall be
deemed to be a Subsidiary of Star Gas Partners so long as Star Gas Partners owns
a majority of the limited partnership interests in Star Propane and the Managing
General Partner is the sole general partner of Star Propane.
"Swing Line" is defined in Section 2.7.
---------- -----------
"Swing Line Lender" is defined in Section 2.7.
----------------- -----------
"Swing Loan" is defined in Section 2.7.
---------- -----------
"Swing Loan Request" means a loan request and certificate duly executed
------------------
by a Responsible Officer of the Borrower on behalf of the Borrower and
substantially in the form of Exhibit J.
"Swing Note" is defined in Section 2.7.
---------- -----------
"Synthetic Lease" means each arrangement, however described, under
---------------
which the obligor: (a) accounts for its interest in the property covered thereby
under GAAP as if the obligor were the lessee of a lease which is not a capital
lease; and (b) accounts for its interest in the property covered thereby for
Federal income tax purposes as if the obligor were the owner.
"Synthetic Lease Interest Component" means, with respect to any Person
----------------------------------
for any period, the portion of rent paid or payable (without duplication) for
such period under Synthetic Leases of such Person that would be treated as
interest in accordance with Financial Accounting Standards Board Statement No.
13 if such Synthetic Leases were treated as capital leases under GAAP.
"Synthetic Lease Obligation" means, as to any Person with respect to
--------------------------
any Synthetic Lease at any time of determination, the amount of the liability of
such Person in respect of such Synthetic Lease that would (if such lease was
required to be classified and accounted for as a capital lease on a balance
sheet of such Person in accordance with GAAP) be required to be capitalized on
the balance sheet of such Person at such time.
"Synthetic Lease Principal Component" means, with respect to any Person
-----------------------------------
for any period, the portion of rent (exclusive of the Synthetic Lease Interest
Component) paid or payable (without duplication) for such period under Synthetic
Leases of such Person that was deducted in calculating Consolidated Net Income
of such Person for such period.
30
"Taxes" is defined in Section 5.6.
----- -----------
"Trustee" means HSBC Bank USA (formerly known as Marine Midland Bank)
-------
or any permitted successor under the Intercreditor Agreement.
"type" means, relative to any Loan, the portion thereof, if any, being
----
maintained as a Base Rate Loan or a LIBOR Loan.
"Unfunded Pension Liability" means the excess of a Pension Plan's
--------------------------
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
"United States" or "U.S." means the United States of America, its fifty
------------- ---
States and the District of Columbia.
"Wholly-Owned Subsidiary" means any corporation in which (other than
-----------------------
directors' qualifying shares required by law) 100% of the capital stock of each
class having ordinary voting power, and 100% of the capital stock of every other
class, in each case, at the time as of which any determination is being made, is
owned, beneficially and of record, by the Borrower, Holdings, or by one or more
of the other Wholly-Owned Subsidiaries of the Borrower or Holdings, or any of
them. The Borrower shall be deemed to be a Wholly-Owned Subsidiary of Holdings
so long as Holdings owns at least 99.00% of the Borrower's issued and
outstanding equity securities.
SECTION 1.2 Use of Defined Terms. Unless otherwise defined or the
--------------------
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule and in
each Note, Borrowing Request, Continuation/Conversion Notice, Loan Document,
notice and other communication delivered from time to time in connection with
this Agreement or any other Loan Document.
SECTION 1.3 Other Interpretive Provisions.
-----------------------------
(a) The meanings of defined terms are equally applicable to
the singular and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar
words refer to this Agreement as a whole and not to any particular
provision of this Agreement; and clause, subsection, section, schedule
and exhibit references are to this Agreement unless otherwise
specified.
(c) (i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices
and other writings, however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
31
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to
but excluding," and the word "through" means "to and including."
(d) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments and
other modifications thereto, but only to the extent such amendments and
other modifications are not prohibited by the terms of any Loan
Document, and (ii) references to any statute or regulation are to be
construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the
statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation
of this Agreement.
(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or
similar matters. All such limitations, tests and measurements are
cumulative and shall each be performed in accordance with their terms.
(g) Unless otherwise expressly provided herein, financial
calculations applicable to the Borrower shall be made on a consolidated
basis among Holdings, the Borrower and the Material Subsidiaries.
SECTION 1.4 Accounting and Financial Determinations. Unless otherwise
---------------------------------------
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, all accounting determinations and computations hereunder or
thereunder (including under Section 8.2.4) shall be made, and all financial
-------------
statements required to be delivered hereunder or thereunder shall be prepared in
accordance with, those generally accepted accounting principles in effect in the
United States of America from time to time ("GAAP"). Notwithstanding the
----
foregoing, if the Borrower, the Required Lenders or the Agent determines that a
change in GAAP from that in effect on the date hereof, has altered the treatment
of certain financial data to its detriment under this Agreement, such party may
seek of the others a renegotiations of any financial covenant affected thereby.
If the Borrower, the Required Lenders and Agent cannot agree on renegotiated
covenants, then, for the purposes of this Agreement, GAAP will refer to
generally accepted accounting principles on the date just prior to the date on
which the change that gave rise to the renegotiation occurred.
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
SECTION 2.1 Commitments. On the terms and subject to the conditions of
-----------
this Agreement (including Article VI), each Lender severally agrees to make
----------
Loans and participate in Letters of Credit pursuant to the Commitments described
in this Section 2.1.
-----------
32
SECTION 2.1.1 Facility A Commitment.
---------------------
(a) On the terms and subject to the conditions of this
Agreement (including, without limitation, Section 2.1.4 and Section
------------- -------
8.1.11), from time to time on any Business Day occurring prior to the
------
Facility A Commitment Termination Date, each Lender will make loans
(relative to such Lender, its "Facility A Loans") to the Borrower in an
----------------
aggregate principal amount not to exceed at anytime outstanding the
lesser of (a) the amount set forth opposite such Lender's name on
Schedule II under the caption "Facility A Commitment" (such amount as
-----------
the same may be reduced hereunder or as reduced or increased as a result
of one or more assignments under Section 11.11.1, such Lender's
---------------
"Facility A Commitment"), and (b) such Lender's pro rata portion of an
---------------------
amount equal to (i) the Facility A Borrowing Base minus (ii) the
Effective Amount of all Facility C Working Capital Loans. On the terms
and subject to the conditions hereof, the Borrower may from time to time
borrow, prepay and reborrow Facility A Loans.
(b) As a subfacility of the combined Facility A Commitments,
the Borrower may, subject to the terms and conditions of this Agreement,
request (i) the Issuer to issue Facility A Letters of Credit pursuant to
Article IV and (ii) the Swing Line Lender to make Swing Loans pursuant
----------
to Section 2.7.
-----------
(c) The Borrower shall deliver a Borrowing Base Certificate
to the Agent on or prior to the Effective Date to permit the Agent to
determine the Facility A Borrowing Base to be in effect on the
Effective Date and, thereafter, shall deliver Borrowing Base
Certificates and such other materials to the Agent in accordance with
the provisions of Section 8.1.1(j). Each such Borrowing Base
----------------
Certificate shall certify the Facility A Borrowing Base in effect on
the last day of the applicable reporting period. Promptly following its
receipt of each Borrowing Base Certificate, the Agent shall determine
the then current Facility A Borrowing Base using the information
contained in such Borrowing Base Certificate and shall notify the
Borrower and each Lender of the Facility A Borrowing Base so
determined. Each determination of the Facility A Borrowing Base by the
Agent shall remain in effect until notice of a redetermined Facility A
Borrowing Base shall have been given by the Agent in accordance with
the provisions of this Section 2.1.1(c); provided, however, if the
----------------
Borrower fails to deliver a Borrowing Base Certificate, the Borrower
will be unable to borrow Facility A Loans until such time that a
Borrowing Base Certificate is delivered.
SECTION 2.1.2 Facility B Commitment. On the terms and subject to the
---------------------
conditions of this Agreement (including without limitations Section 2.1.4), from
-------------
time to time on any Business Day occurring prior to the Facility B Commitment
Termination Date, the Issuer shall issue and the Lenders shall participate in
Facility B Letters of Credit pursuant to Section 4.1.
-----------
SECTION 2.1.3 Facility C Commitment. On the terms and subject to the
---------------------
conditions of this Agreement (including without limitation Section 2.1.4), from
-------------
time to time on any Business Day occurring prior to the Facility C Loan
Conversion Date, each Lender will make loans (relative to such Lender, its
"Facility C Loans") to the Borrower and/or issue, or participate in, Facility C
----------------
Letters of Credit pursuant to Article IV in an aggregate principal
----------
33
amount not to exceed at any time outstanding the amount set forth opposite such
Lender's name on Schedule II under the caption "Facility C Commitment" (such
-----------
amount as the same may be reduced hereunder or as reduced or increased as a
result of one or more assignments under Section 11.11.1, such Lender's "Facility
--------------- --------
C Commitment"). On the terms and subject to the conditions hereof, the Borrower
------------
may from time to time borrow, prepay and reborrow Facility C Loans prior to the
Facility C Loan Conversion Date.
SECTION 2.1.4 Restrictions on Loans. None of the Lenders shall be
---------------------
permitted or required to:
(a) make any Facility A Loan or Facility C Working Capital
Loan if, after giving effect thereto, the sum of (i) the Effective
Amount of all Facility A Loans, plus (ii) the Effective Amount of all
Facility A L/C Obligations, plus (iii) the Effective Amount of all
Swing Loans plus (iv) the Effective Amount of all Facility C Working
Capital Loans, would exceed the lesser of (x) the sum of (i) combined
Facility A Commitments and (ii) the Facility C Working Capital Loan Cap
and (y) the Facility A Borrowing Base; or
(b) make any Swing Loan, if after giving effect thereto, the
Effective Amount of all Swing Loans would exceed $5,000,000; or
(c) make any Facility C Loan if, after giving effect thereto,
the Effective Amount of all Facility C Loans together with the
Effective Amount of all Facility C L/C Obligations would exceed the
Facility C Commitment; or
(d) make any Facility C Loan, if after giving effect thereto,
Section 8.1.13(b) would be breached.
----------------
SECTION 2.1.5 Increase of Facility C Commitments; New
---------------------------------------
Commitments.
-----------
(a) With the consent of the Agent and the Participating
Lenders referred to below, the Borrower may, following the Effective
Date, either establish new loan commitments under this Agreement or
increase the then effective aggregate amount of the Facility C
Commitments (in either case, a "Commitment Change") if the Borrower
-----------------
determines that it requires additional funding in order for it to
consummate the Contemplated Acquisition; provided that:
(i) the aggregate amount of the Commitment Change
pursuant to this Section 2.1.5 shall not exceed $25,000,000; the
-------------
minimum aggregate amount of the Commitment Change shall be
$1,000,000 and any integral multiple of $1,000,000 in excess
thereof;
(ii) the Borrower may make not more than one request for
a Commitment Change, which request must be made on or before May
31, 2002 in connection with the consummation of the Contemplated
Acquisition;
(iii) at the time any advance is made in respect of the
Commitment Change, the Borrower shall have complied with Section
-------
8.2.5(b) with respect to the Contemplated Acquisition;
-------
34
(iv) no Default or Event of Default shall have occurred
and be continuing or shall occur as a result of the Commitment
Change;
(v) the Commitment Change shall be on such terms and
subject to such conditions as the Borrower, the Agent and the
Lenders that agree to participate in the Commitment Change (each
such Lender, a "Participating Lender") shall mutually agree
--------------------
(provided that any amount advanced in respect of such Commitment
Change shall mature and be required to be repaid in full within
one year after the date of such advance); and
(vi) the Borrower shall, and shall cause the other
Obligors to, execute and deliver such amendments, documents,
promissory notes and other instruments and take such other
actions (including obtaining any necessary consents from third
parties) as may be reasonably requested by the Agent in
connection with the Commitment Change.
(b) Any request for a Commitment Change pursuant to this
Section 2.1.5 shall be submitted by the Borrower to the Agent (which
-------------
shall promptly forward copies to the Lenders) specifying the proposed
effective date and amount of the requested Commitment Change and be
accompanied by a certificate of the Borrower stating that no Default or
Event of Default exists or will occur as a result of such Commitment
Change. The Borrower may also specify any fees offered to the
Participating Lenders, which fees may be variable based upon the amount
by which any such Participating Lender is willing to participate in the
Commitment Change. No Lender shall have any obligation, express or
implied, to participate in the Commitment Change, and only the consent
of the Agent and each Participating Lender shall be required for a
Commitment Change to be made effective pursuant to this Section 2.1.5.
-------------
Any Lender that does not become a Participating Lender shall not have
any of its Commitments reduced or replaced without such Lender's prior
written consent. Each Participating Lender shall as soon as practicable
specify to the Agent and the Borrower the amount that such Lender is
willing to commit to the proposed Commitment Change, and the Borrower
may accept some or all of the offered commitments of such Lenders (such
accepted amount, the "Accepted Commitment Amount").
--------------------------
(c) Subject to compliance with the foregoing provisions of
this Section 2.1.5 (including the effectiveness of all required
-------------
documentation and third party consents), the Commitment Change shall
become effective as of the date requested by the Borrower in an amount
equal to the Accepted Commitment Amount. The Agent shall at the time of
the effectiveness of the Commitment Change or with reasonable
promptness thereafter prepare and deliver to the Lenders a substitute
Schedule II to this Agreement reflecting such Commitment Change (as
-----------
well as any changes to the Commitments and the related Percentages
resulting from any interim assignments by the Lenders pursuant to
Section 11.11.1), which substitute Schedule II shall (i) become
--------------- -----------
effective for all purposes of this Agreement upon the effectiveness of
the Commitment Change and (ii) be conclusive absent manifest error. To
the extent that the Commitment Change results in any losses or expenses
to any of the Lenders pursuant to Section 5.4, such losses or expenses
-----------
shall be for the account of the Borrower.
35
SECTION 2.2 Reduction and Termination of Commitments. The Commitments
----------------------------------------
are subject to reduction and termination from time to time pursuant to this
Section 2.2.
------------
SECTION 2.2.1 Optional. The Borrower may, from time to time on
--------
any Business Day occurring after the Effective Date, voluntarily reduce the
unused amount of any Commitment; provided, however, that all such reductions
shall require at least three (3) Business Days' prior notice to the Agent and be
permanent, and any partial reduction of any Commitment shall be in an integral
multiple of $1,000,000.
SECTION 2.2.2 Mandatory. The applicable Commitment shall be
---------
reduced by an amount equal to any amount required as a mandatory prepayment of
the Facility A Loans or Facility C Loans as applicable pursuant to Section
-------
3.1.1, 3.1.3(a), 3.1.3(f) or 3.1.3(i) (whether or not any Loans shall then be
----- -------- -------- --------
outstanding under the applicable Commitment).
SECTION 2.2.3 Termination.
-----------
(a) Upon the occurrence of any event described in the
definition of Facility A Commitment Termination Date, the Facility A
Commitment shall be reduced to zero and shall terminate automatically
and without further action.
(b) Upon the occurrence of any event described in the
definition of Facility B Commitment Termination Date, the Facility B
Commitment shall be reduced to zero and shall terminate automatically
and without further action.
(c) Upon the occurrence of any event described in the
definition of Facility C Commitment Termination Date, the Facility C
Commitment shall be reduced to zero and shall terminate automatically
and without further action.
SECTION 2.3 Borrowing Procedure. By delivering a Borrowing Request to
-------------------
the Agent on or before 9:00 a.m., San Francisco time, on a Business Day, the
Borrower may from time to time irrevocably request, on not less than three nor
more than five (5) Business Days' notice in the case of LIBOR Loans, and on the
same day or no more than five (5) Business Days' notice in the case of Base Rate
Loans, that a Borrowing be made in a minimum amount of $3,000,000 in the case of
LIBOR Loans, and in a minimum amount of $1,000,000 in the case of Base Rate
Loans, and in both instances in any integral multiple of $100,000 in excess
thereof, or in the unused amount of the applicable Commitment. On the terms and
subject to the conditions of this Agreement, each Borrowing shall be comprised
of the type of Loans, and shall be made on the Business Day, specified in such
Borrowing Request. Each Borrowing Request must be signed by a Responsible
Officer of the Borrower. Upon receipt of any Borrowing Request, the Agent shall
promptly notify the Lenders of such Borrowing Request. On or before 11:00 a.m.,
San Francisco time, on such Business Day each Lender shall deposit with the
Agent same day funds in an amount equal to such Lender's Percentage of the
requested Borrowing. Such deposit will be made to an account which the Agent
shall specify from time to time by notice to the Lenders. To the extent funds
are received from the Lenders, the Agent shall make such funds available to the
Borrower by wire transfer to the accounts specified in the applicable Borrowing
Request. No Lender's obligation to make any Loan shall be affected by any other
Lender's failure to make any Loan. Swing Loans shall not be subject to this
Section 2.3.
-----------
36
SECTION 2.4 Continuation and Conversion Elections. By delivering a
-------------------------------------
Continuation/Conversion Notice to the Agent on or before 9:00 a.m., San
Francisco time, on a Business Day, the Borrower may from time to time
irrevocably elect, on not less than three (3) nor more than five (5) Business
Days' notice that all, or any portion in a minimum amount of $3,000,000, in the
case of LIBOR Loans, and in a minimum amount of $1,000,000 in the case of Base
Rate Loans, and in both instances any integral multiple of $100,000 in excess
thereof, of any Loans be, in the case of Base Rate Loans, converted into LIBOR
Loans or, in the case of LIBOR Loans, be converted into a Base Rate Loan or a
LIBOR Loan or continued as a LIBOR Loan (in the absence of delivery of a
Continuation/Conversion Notice with respect to any LIBOR Loan at least three (3)
Business Days before the last day of the then current Interest Period with
respect thereto, such LIBOR Loan shall, on such last day, automatically convert
to a Base Rate Loan); provided, however, that (i) each such conversion or
continuation shall be pro rated among the applicable outstanding Loans of all
Lenders, and (ii) no portion of the outstanding principal amount of any Loans
may be continued as, or be converted into, LIBOR Loans when any Default or Event
of Default has occurred and is continuing.
SECTION 2.5 Funding. Each Lender may, if it so elects, fulfill its
-------
obligation to make, continue or convert LIBOR Loans hereunder by causing one of
its foreign branches or Affiliates (or an international banking facility created
by such Lender) to make or maintain such LIBOR Loan; provided, however, that
such LIBOR Loan shall nonetheless be deemed to have been made and to be held by
such Lender, and the obligation of the Borrower to repay such LIBOR Loan shall
nevertheless be to such Lender for the account of such foreign branch, Affiliate
or international banking facility. In addition, the Borrower hereby consents and
agrees that, for purposes of any determination to be made for purposes of
Section 5.1, 5.2, 5.3 or 5.4, it shall be conclusively assumed that each Lender
----------- --- --- ---
elected to fund all LIBOR Loans by purchasing, as the case may be, Dollar
certificates of deposit in the U.S. or Dollar deposits in its Applicable Lending
Office.
SECTION 2.6 Loan Accounts/Notes.
-------------------
(a) The Loans made by each Lender shall be evidenced by one or
more loan accounts or records maintained by such Lender in the ordinary
course of business. The loan accounts or records maintained by the
Agent and each Lender shall be conclusive absent manifest error of the
amount of the Loans made by the Lenders to the Borrower and the Letters
of Credit Issued for the account of the Borrower and the interest and
payments thereon. Any failure so to record or any error in doing so
shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Loans.
In case of a discrepancy between the entries in the Agent's books and
any Lender's books, the Agent's books shall be conclusive absent
manifest error.
(b) Upon the request of any Lender made through the Agent, the
Facility A Loans made by such Lender shall be evidenced by a single
promissory note of the Borrower in substantially the form of Exhibit
-------
A-1 hereto (each, a "Facility A Note" and collectively, the "Facility A
--- --------------- ----------
Notes"), instead of loan accounts. Each Facility A Note shall be dated
-----
the Effective Date, shall be payable to the order of such Lender in a
principal
37
amount equal to such Lender's Facility A Commitment as originally in
effect, and shall otherwise be duly completed. The Notes shall be
payable as provided in Article III.
-----------
(c) Upon the request of any Lender made through the Agent, the
Facility C Loans made by such Lender shall be evidenced by a single
promissory note of the Borrower in substantially the form of Exhibit
-------
A-2 hereto (each, a "Facility C Note" and collectively, the "Facility C
--- --------------- ----------
Notes"). Each Facility C Note shall be dated the Effective Date, shall
-----
be payable to the order of such Lender in a principal amount equal to
such Lender's Facility C Commitment as originally in effect, and shall
otherwise be duly completed. The Notes shall be payable as provided in
Article III.
(d) Each Lender shall enter on a schedule attached to its
Notes a notation with respect to each Loan made hereunder of: (i) the
date and principal amount thereof, (ii) each payment and prepayment of
principal thereof, (iii) whether the interest rate is initially to be
determined in accordance with Section 3.2.1(a) or Section 3.2.1(b), and
--------------- ---------------
(iv) the Interest Period, if applicable. Such notations shall be
conclusive and binding on the Borrower absent manifest error; provided,
however, that the failure of any Lender to make a notation on the
schedule to its Note as aforesaid shall not limit or otherwise affect
the obligation of the Borrower to repay the Loans in accordance with
their respective terms as set forth herein.
SECTION 2.7 Swing Line.
----------
(a) Upon the Borrower's request, and on the terms and subject
to the conditions of this Agreement, BofA (in such capacity, the "Swing
-----
Line Lender") may, in its sole discretion, on and after the Effective
-----------
Date and prior to the Facility A Commitment Termination Date, make
swing line loans (each, a "Swing Loan") available to the Borrower under
----------
a swing line credit facility (the "Swing Line") in an aggregate amount
----------
of up to $5,000,000 at any one time outstanding; provided that the
Swing Line Lender shall not in any event be permitted or required to
make any Swing Loan under the Swing Line if, after giving effect
thereto, (i) the sum of the then aggregate outstanding principal amount
of all Facility A Loans, Facility C Working Capital Loans, and Swing
Loans plus the then aggregate amount of all Facility A L/C Obligations
----
would exceed the lesser of (x) the sum of the combined Facility A
Commitments plus the Facility C Working Capital Loan Cap and (y) the
Facility A Borrowing Base, or (ii) the then aggregate outstanding
principal amount of all Swing Loans made by the Swing Line Lender would
exceed $5,000,000. The Swing Line Lender shall not be at any time
obligated to make any Swing Loan.
(b) Each request for Swing Loans shall be made from time to
time by the Borrower delivering a Swing Loan Request therefor to the
Agent and the Swing Line Lender at or before 12:00 noon, San Francisco
time, on any Business Day. On the terms and subject to the conditions
of this Agreement, each Swing Loan shall be disbursed on the Business
Day on which the request therefor was timely made, in same day funds by
wire transfer to such transferee(s), or to such account(s) of the
Borrower, as the Borrower shall have specified in the request therefor.
Swing Loans shall be in an aggregate
38
minimum principal amount of $100,000 and any integral multiple of
$50,000 in excess thereof.
(c) Each Swing Loan outstanding under the Swing Line shall
accrue interest at a rate per annum equal to the interest accrued on a
Base Rate Loan (the Alternate Base Rate plus the Applicable Base Rate
Margin) which interest shall be payable quarterly in arrears on each
Quarterly Payment Date and on the Facility A Commitment Termination
Date, and shall be payable to the Swing Line Lender; provided that,
notwithstanding any other provision of this Agreement, each Swing Loan
shall bear interest for a minimum of one (1) day.
(d) Each Swing Loan under the Swing Line shall be due and
payable on the earlier of:
(i) at or before 10:00 a.m., San Francisco time, on
the fifth Business Day immediately following the date such Swing Loan
was made pursuant to the Swing Line; and
(ii) in any event on the Facility A Commitment
Termination Date;
provided that, if no Event of Default shall have occurred and be continuing,
then unless the Borrower notifies the Swing Line Lender that it will repay such
Swing Loan, on the due date of such Swing Loan, if and to the extent that the
Borrower is permitted to borrow Facility A Loans under the terms of this
Agreement (the Facility A Commitment being determined for such purpose without
giving effect to any reduction thereof occasioned by such Swing Loans due and
payable) at the time such Swing Loans are due and provided that the Agent shall
have had sufficient prior written notice, the Borrower shall be deemed to have
submitted a Borrowing Request for Facility A Loans at the Base Rate in an amount
necessary to repay the amount demanded, and the provisions of Section 2.3
-----------
concerning the minimum principal amounts and integral multiples thereof required
for Borrowings of Facility A Loans shall not apply to Facility A Loans made
pursuant to this Section 2.7(d).
--------------
(e) The Borrower may, from time to time on any Business Day,
make a voluntary prepayment, in whole or in part, of the outstanding
principal amount of any Swing Loans, without incurring any premium or
penalty; provided that:
(i) each such voluntary prepayment shall require prior
written notice given to the Agent and Swing Line Lender no later than
11:00 a.m., San Francisco time, on the day on which the Borrower
intends to make a voluntary prepayment; and
(ii) each such voluntary prepayment shall be in a
minimum amount of $100,000 and in any integral multiple of $50,000 in
excess thereof (or, if less, the aggregate outstanding principal amount
of all Swing Loans then outstanding).
(f) Each Lender shall be deemed to have unconditionally and
irrevocably purchased a pro rata risk participation from the Swing Line
Lender in such Swing Line Lender's Swing Loans, without recourse,
representation or warranty in an amount equal
39
to such Lender's Facility A Percentage of such Swing Loans. In
addition, from and after the date that any Lender funds such
participation pursuant to Section 2.7(g) below, such Lender shall, to
-------------
the extent of its Facility A Percentage, be entitled to receive a
ratable portion of any payment of principal and interest received by
the Swing Line Lender on account of such Swing Loans, payable promptly
to such Lender upon such receipt.
(g) The Swing Line Lender may, in its sole and absolute
discretion at any time during the continuance of an Event of Default,
upon prior written notice to the Borrower, the Agent and the Lenders
not later than 10:00 a.m., San Francisco time, on the same Business
Day, terminate the Swing Line and cause all outstanding Swing Loans
automatically upon the giving of such notice to be repaid from the
proceeds of Facility A Loans made by the Lenders in accordance with
their respective Facility A Percentages (which Facility A Loans shall
be Base Rate Loans bearing interest at the applicable rate) in an
aggregate amount sufficient to repay all outstanding Swing Loans, and
the provisions of Section 2.3 concerning the minimum principal amounts
-----------
and integral multiples thereof required for Borrowings of Facility A
Loans shall not apply to Facility A Loans made pursuant to this Section
-------
2.7(g); provided, that if any Insolvency Proceeding has been commenced
-----
with respect to the Borrower on or prior to the date on which any Swing
Loan is due, and in lieu of funding its Facility A Percentage of
Facility A Loans as provided above, each Lender shall immediately fund
its risk participation in such Swing Loan by funding to the Agent, for
the account of the Swing Line Lender, such Lender's pro rata share of
such Swing Loan, based on such Lender's Facility A Percentage. None of
the conditions precedent set forth in Section 2.3 and Section 6.2 shall
----------- -----------
apply to any funding by a Lender of its Facility A Percentage of
Facility A Loans or its risk participation in a Swing Loan, in each
case pursuant to this Section 2.7(g).
--------------
(h) The Swing Line Lender shall not, without the approval of
all Lenders, make a Swing Loan if the Swing Line Lender then has
received a written notice of default from the Borrower, any Lender or
the Agent of the type referred to in the first sentence of Section
-------
10.5.
-----
(i) Each Lender's obligation in accordance with this Agreement
to make Facility A Loans upon the failure of a Swing Loan to be repaid
in full when due, or to fund its participation in such Swing Loans,
shall, in each case, be absolute and unconditional and without recourse
to the Swing Line Lender and shall not be affected by any circumstance,
including (i) any set-off, counterclaim, recoupment, defense or other
right which such Lender may have against the Swing Line Lender, the
Borrower or any other Person for any reason whatsoever; (ii) the
occurrence or continuance of a Default, an Event of Default or any
circumstance or event which could have a Material Adverse Effect; (iii)
the receipt by the Swing Line Lender of a written notice of default
from the Borrower, any Lender or the Agent of the type referred to in
the first sentence of Section 10.5 after a Swing Loan was made by the
------------
Swing Line Lender or (iv) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
40
(j) The Swing Loans made by the Swing Line Lender shall be
evidenced by one or more loan accounts or records maintained by the
Swing Line Lender in the ordinary course of business. The loan accounts
or records maintained by the Agent and the Swing Line Lender shall be
conclusive absent manifest error of the amount of the Swing Loans made
by the Swing Line Lender to the Borrower. Any failure so to record or
any error in doing so shall not, however, limit or otherwise affect the
obligation of the Borrower hereunder to pay any amount owing with
respect to the Swing Loans. In case of a discrepancy between the
entries in the Agent's books and the Swing Line Lender's books, the
Agent's books shall be conclusive absent manifest error.
(k) Upon the request of the Swing Line Lender through the
Agent, the Swing Loans made by the Swing Line Lender shall be evidenced
by a single promissory note of the Borrower in substantially the form
of Exhibit A-3 hereto (the "Swing Note") instead of loan accounts. The
----------- ----------
Swing Note shall be dated the Effective Date, shall be payable to the
order of the Swing Line Lender in a principal amount equal to
$5,000,000 and shall otherwise be duly completed.
(l) The Swing Line Lender shall enter on a schedule attached
to its Swing Note a notation with respect to each Swing Loan made
hereunder of: (i) the date and principal amount thereof, and (ii) each
payment and prepayment of principal thereof. Such notations shall be
conclusive and binding on the Borrower absent manifest error; provided,
however, that the failure of the Swing Line Lender to make a notation
on the schedule to its Swing Note as aforesaid shall not limit or
otherwise affect the obligation of the Borrower to repay the Swing
Loans in accordance with their respective terms as set forth herein.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1 Repayments and Prepayments..
---------------------------
SECTION 3.1.1 Repayment
---------
(a) Facility A Loans. The Borrower shall pay to the Agent for
----------------
the account of each Lender on the Facility A Commitment Termination
Date the aggregate principal amount of Facility A Loans and Swing Loans
outstanding on such date, together with all accrued and unpaid interest
thereon.
(b) Facility C Working Capital Loans. The Borrower shall pay
--------------------------------
to the Agent for the account of each Lender on the Facility C Loan
Conversion Date the aggregate principal amount of Facility C Working
Capital Loans outstanding on such date, together with all accrued and
unpaid interest thereon.
(c) Other Facility C Loans. Except as provided in Section
---------------------- -------
3.1.1(b) above with respect to Facility C Working Capital Loans, the
-------
Borrower shall pay to the Agent for the account of each Lender the
principal of the Facility C Loans made by such Lender outstanding at
the close of business on the Facility C Loan Conversion Date in eight
(8)
41
consecutive quarterly installments on the Quarterly Payment Dates
(together with all accrued and unpaid interest thereon) commencing on
the Quarterly Payment Date immediately succeeding the Facility C Loan
Conversion Date (provided that the last such payment shall be on June
30, 2006 in an amount sufficient to repay in full the principal amount
of such Facility C Loans), with the amount of the installment paid on
each Quarterly Payment Date to be equal 1/8 of the principal of such
Facility C Loans outstanding at the close of business on the Facility C
Loan Conversion Date together with all accrued and unpaid interest
thereon.
SECTION 3.1.2 Voluntary Prepayments The Borrower may, from time
---------------------
to time on any Business Day, make a voluntary prepayment, in whole or in part,
of the outstanding principal amount of any Loans; provided, however, that:
(a) any such prepayment shall be made pro rata among Loans of
the same type and, if applicable, having the same Interest Period of
all Lenders;
(b) all such voluntary prepayments of LIBOR Loans shall
require at least three (3) but no more than five (5) Business Days'
prior written notice to the Agent and all such voluntary prepayments of
Base Rate Loans shall require prior written notice to the Agent at
least by 1:00 p.m., San Francisco time, at least one (1) Business Day
prior to such repayment but no more than five (5) Business Days prior
to such repayment; and
(c) all such voluntary prepayments of LIBOR Loans or Facility
C Loans shall be made in a minimum amount of $3,000,000 and any
integral multiple of $100,000 in excess thereof, or in the whole
outstanding principal amount of such Loans, and all such voluntary
prepayments of Facility A Loans maintained as Base Rate Loans shall be
made in a minimum amount of $1,000,000 and an integral multiple of
$100,000, or in the whole outstanding principal amount of such Loan;
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as required by Section 5.4.
-----------
SECTION 3.1.3 Mandatory Prepayments.
---------------------
(a) The Borrower shall, on each date when any reduction in the
applicable Commitment shall become effective, including pursuant to
Section 2.2, make a mandatory prepayment of all applicable Loans equal
-----------
to the excess, if any, of the aggregate principal amount of all
applicable Loans over the applicable Commitment.
(b) If at any time the sum of the Effective Amounts of the
Facility A Loans, the Swing Loans, the Facility A L/C Obligations and
Facility C Working Capital Loans exceed the lesser of (x) sum of (i)
the combined Facility A Commitments then in effect plus (ii) the
Facility C Working Capital Loan Cap and (y) the Facility A Borrowing
Base, the Borrower shall immediately prepay such Facility A Loans and
Swing Loans and Facility C Working Capital Loans (and, to the extent
necessary, Cash Collateralize the Facility A Letters of Credit) in an
aggregate principal amount equal to such excess. If at any time the sum
of the Effective Amounts of the Facility A Loans, the Swing Loans and
the Facility A L/C Obligations exceeds the lesser of (x) the combined
Facility A
42
Commitments then in effect and (y) the Facility A Borrowing Base, the
Borrower shall immediately prepay such Facility A Loans and Swing Loans
(and, to the extent necessary, Cash Collateralize the Facility A
Letters of Credit) in an aggregate principal amount equal to such
excess. Any such prepayment shall be applied, first, to the Swing
Loans, second, to the Facility A Loans, third, to Facility C Working
Capital Loans, and fourth, to Cash Collateralize, in a manner
acceptable to the Agent, the Issuer, and the Lenders, the then
outstanding Facility A L/C Obligations. Amounts prepaid pursuant to
this Section may be reborrowed; provided that the aggregate Facility A
Commitment is not exceeded thereby, the aggregate Facility C Commitment
is not exceeded thereby, and the Effective Amount of Facility C Working
Capital Loans does not thereby exceed the Facility C Working Capital
Loan Cap.
(c) If at any time the Effective Amount of the Facility A L/C
Obligations exceed $15,000,000, the Borrower shall Cash Collateralize
on such date the outstanding Facility A Letters of Credit in an amount
equal to such excess.
(d) If at any time the Effective Amount of the Facility ▇ ▇/C
Obligations exceed the Facility B Commitment, the Borrower shall Cash
Collateralize on such date the outstanding Facility B Letters of Credit
in an amount equal to such excess.
(e) If at any time the Effective Amount of the Facility C
Loans and the Effective Amount of the Facility C L/C Obligations exceed
the combined Facility C Loan Commitments then in effect or the
Effective Amount of Facility C Working Capital Loans exceeds the
Facility C Working Capital Loan Cap, the Borrower shall immediately
prepay such Facility C Loans (and, to the extent necessary, Cash
Collateralize the Facility C Letters of Credit) in an aggregate
principal amount equal to such excess, together with commitment fees
accrued to the date of such payment. Any such prepayment shall be
applied, first, to the Facility C Loans, and second, to Cash
Collateralize, in a manner acceptable to the Agent and the Lenders, the
then outstanding Facility C L/C Obligations.
(f) In the event any Asset Disposition results in Excess Sale
Proceeds which are (i) not reinvested within ninety (90) days of such
disposition in replacement assets or not deposited with the Trustee
within ninety (90) days of such disposition to be reinvested in such
replacement assets, or (ii) deposited with the Trustee within ninety
(90) days of such disposition but which are not reinvested within
one-hundred eighty (180) days of such disposition all as provided
Section 8.2.8(b), such Excess Sale Proceeds shall be applied to the
----------------
prepayment of the Senior Debt on a pro rata basis in accordance with
Section 20 of the Intercreditor Agreement.
(g) The Borrower shall, immediately upon any acceleration of
the Stated Maturity Date of any Loans pursuant to Section 9.2 or
-----------
Section 9.3, repay all such Loans.
-----------
(h) The Borrower shall prepay amounts in accordance with
Section 8.1.11.
--------------
(i) In the event any Casualty Event affecting any property of
Holdings, the Borrower or any of the Material Subsidiaries which
results in insurance, condemnation
43
award or other compensation in excess of $500,000 ("Casualty Proceeds")
-----------------
which Casualty Proceeds are (i) not reinvested within ninety (90) days
of receipt of such Casualty Proceeds in replacement assets or not
deposited with the Trustee within ninety (90) days of such receipt of
Casualty Proceeds to be reinvested, or (ii) deposited with the Trustee
within ninety (90) days of receipt of such Casualty Proceeds but which
are not reinvested within one-hundred eighty (180) days of receipt of
such Casualty Proceeds, such Casualty Proceeds shall be applied to the
prepayment of the Senior Debt on a pro rata basis in accordance with
Section 20 of the Intercreditor Agreement.
Except as otherwise provided above, mandatory prepayments shall be applied first
to the Facility C Loans, then the Facility A Loans, then to the payment of the
then outstanding Swing Loans and then to Cash Collateralize the outstanding
aggregate amount of all L/C Obligations. Subsequent to the Facility C Loan
Conversion Date, each voluntary prepayment of Facility C Loans made pursuant to
Section 3.1.2 and each mandatory prepayment of Facility C Loans made pursuant to
-------------
Section 3.1.3 shall be applied, to the extent of such prepayment, to the
-------------
repayments of the Facility C Loans installments in inverse order of maturity.
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 5.4. No voluntary
-----------
prepayment of principal of any Facility A Loan or Facility C Loan prior to the
applicable Commitment Termination Date, shall cause a reduction in the Facility
A Commitment or Facility C Commitment, as applicable.
SECTION 3.2 Interest Provisions. Interest on the outstanding principal
-------------------
amount of Loans shall accrue and be payable in accordance with this Section 3.2.
------------
SECTION 3.2.1 Rates. Pursuant to an appropriately delivered
-----
Borrowing Request or Continuation/Conversion Notice, the Borrower may elect that
Loans comprising a Borrowing accrue interest at a rate per annum:
(a) on and prior to the Facility C Loan Conversion Date,
(i) on that portion maintained from time to time as a
Base Rate Loan, equal to the sum of the Alternate Base Rate from
time to time in effect plus the Applicable Base Rate Margin; and
(ii) on that portion maintained as a LIBOR Loan, during
each Interest Period applicable thereto, equal to the sum of the
LIBOR (Reserve Adjusted) for such Interest Period plus the
Applicable LIBOR Margin.
(b) after the Facility C Loan Conversion Date,
(i) on that portion maintained from time to time as a
Base Rate Loan, equal to the sum of the Alternate Base Rate from
time to time in effect plus the Applicable Base Rate Margin plus
0.25%, and
(ii) on that portion maintained as a LIBOR Loan, during
each Interest Period applicable thereto, equal to the sum of the
LIBOR (Reserve Adjusted) for such period plus the Applicable
LIBOR Margin plus 0.25%.
44
All LIBOR Loans shall bear interest from and including the first day of
the applicable Interest Period to (but not including) the last day of such
Interest Period at the rate determined as applicable to such LIBOR Loan.
SECTION 3.2.2 Post-Default Rate. Notwithstanding Section 3.2.1,
----------------- -------------
whenever an Event of Default has occurred and is continuing, the Borrower shall
pay interest on any Loan, and on any other amount payable by the Borrower
hereunder (to the extent permitted by law) for the period commencing on the
occurrence of such Event of Default until such Event of Default has been cured
or waived as acknowledged in writing by the Agent at the applicable Post-Default
Rate.
SECTION 3.2.3 Payment Dates. Interest accrued on each Loan shall
-------------
be payable, without duplication:
(a) on the Stated Maturity Date applicable to such Loan;
(b) with respect to any prepayment of a Loan in connection
with a reduction in the applicable Commitment, on the date of any such
prepayment;
(c) with respect to Base Rate Loans, on each Quarterly Payment
Date occurring after the date of the initial Borrowing hereunder;
(d) with respect to LIBOR Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed
three months, on the three month anniversary of the first day of such
Interest Period); and
(e) on that portion of any Loans the Stated Maturity Date of
which is accelerated pursuant to Section 9.2 or Section 9.3,
----------- -----------
immediately upon such acceleration.
Interest accruing on the Loans or other monetary Obligations arising under this
Agreement or any other Loan Document (i) shall be payable upon demand during the
continuance of any Event of Default and (ii) shall include interest that accrues
after the commencement of any proceeding under any Bankruptcy Law by or against
any Obligor or any Subsidiary or Affiliate of any such Obligor.
SECTION 3.3 Fees. The Borrower agrees to pay the fees set forth in this
Section 3.3. All such fees shall be non-refundable.
-----------
SECTION 3.3.1 Facility Fee. The Borrower shall pay to the Agent
------------
for the account of each Lender a facility fee on the daily actual amount of (a)
such Lender's Facility A Commitment (whether or not used) from the date hereof
until the Facility A Commitment Termination Date, (b) such Lender's Facility B
Commitment (whether or not used) from the date hereof until the Facility B
Commitment Termination Date and (c) such Lender's Facility C Commitment (whether
or not used) from the date hereof until the Facility C Loan Conversion Date, in
each case at the rate per annum set forth in the Pricing Grid. Accrued facility
fees shall be payable in arrears on each Quarterly Payment Date and on the date
on which the Commitments terminate as provided herein, commencing on the first
of such dates to occur after the date hereof.
45
SECTION 3.3.2 Letter of Credit Fee. The Borrower agrees to pay to
--------------------
the Agent, for the account of the Lenders, a fee for each Letter of Credit for
the period from and including the date of the issuance of such Letter of Credit
to (but not including) the date upon which such Letter of Credit expires, equal
to the product of, the Applicable LIBOR Margin per annum times the face amount
of such Letter of Credit; provided, however, if such Letter of Credit is Cash
Collateralized, the fee shall be 0.25% times the face amount of such Letter of
Credit. Such fee shall be payable by the Borrower in arrears on each Quarterly
Payment Date, and on the relevant Commitment Termination Date (or June 30, 2004
(or such later expiry date if renewed at the sole discretion of the Issuer) in
respect of Facility C Letters of Credit which have been Cash Collateralized and
are outstanding after the Facility C Loan Conversion Date) for any period then
ending for which such fee shall not theretofore have been paid, commencing on
the first such date after the issuance of such Letter of Credit.
SECTION 3.3.3 Letter of Credit Issuing Fee. The Borrower agrees
----------------------------
to pay to the Issuer for its own account, an issuing fee for each Letter of
Credit of 1/8 of 1% of the face amount of such Letter of Credit. Such fee shall
be payable by the Borrower upon issuance of such Letter of Credit. In addition,
the Borrower agrees to pay the Issuer from time to time on demand the normal
issuance, presentation, amendment and other processing fees, and other standard
costs and charges of the Issuer relating to the Letters of Credit as from time
to time in effect.
SECTION 3.3.4 Other Fees. The Borrower shall pay to the Agent,
----------
for the account of the Lenders or the Agent (as applicable), the fees specified
in a letter agreement dated April 17, 2001 (as amended by letter dated May 30,
2001) among the Borrower, BofA and Banc of America Securities LLC, in each case
at the times specified in such letter agreement.
ARTICLE IV
LETTERS OF CREDIT
SECTION 4.1 The Letter of Credit Facility and Subfacilities.
------------------------------------------------
(a) On the terms and subject to the conditions set forth
herein (i) the Issuer agrees from time to time on any Business Day
during the period from the Effective Date to the Facility A Commitment
Termination Date to issue standby letters of credit (the "Facility A
----------
Letters of Credit") for the account of the Borrower in accordance with
-----------------
this Article IV, and to amend or renew, extend the expiration of or
----------
increase the amount of the Facility A Letters of Credit previously
issued by and in accordance with Section 4.2(c) and Section 4.2(d) and
-------------- --------------
(ii) the Lenders agree to participate in the Facility A Letters of
Credit; provided, however, that the Issuer shall not be obligated to
Issue, and no Lender shall be obligated to participate in, any Facility
A Letter of Credit if, as of the date of Issuance of such Facility A
Letter of Credit (the "Facility A L/C Issuance Date") (1) the Effective
----------------------------
Amount of all Facility A L/C Obligations plus the Effective Amount of
all Facility A Loans plus the Effective Amount of all Swing Loans
exceeds the lesser of (x) the combined Facility A Commitments and (y)
the Facility A Borrowing Base or (2) the Effective Amount of the
Facility A L/C Obligations exceeds $15,000,000. Within the foregoing
limits, and subject to the other terms and conditions hereof, the
ability of the
46
Borrower to obtain Facility A Letters of Credit shall be fully
revolving, and accordingly, the Borrower may, during the foregoing
period, obtain Facility A Letters of Credit to replace the Facility A
Letters of Credit which have expired or which have been drawn upon and
reimbursed.
(b) On the terms and subject to the conditions set forth
herein (i) the Issuer agrees from time to time on any Business Day
during the period from the Effective Date to the Facility B Commitment
Termination Date to issue standby letters of credit (together with the
Existing Facility B Letters of Credit, the "Facility B Letters of
---------------------
Credit") for the account of the Borrower in accordance with this
------
Article IV, and to amend or renew, extend the expiration of or increase
----------
the amount of the Facility B Letters of Credit previously issued by and
in accordance with Section 4.2(c) and Section 4.2(d) and (ii) the
------------- -------------
Lenders agree to participate in the Facility B Letters of Credit
(including the Existing Facility B Letters of Credit); provided,
however, that the Issuer shall not be obligated to issue, and no Lender
shall be obligated to participate in, any Facility B Letter of Credit
(including the Existing Facility B Letters of Credit) if, as of the
date of issuance of such Facility B Letter of Credit (the "Facility B
----------
L/C Issuance Date") the Effective Amount of all Facility ▇ ▇/C
-----------------
Obligations exceeds the combined Facility B Commitments. Within the
foregoing limits, and subject to the other terms and conditions hereof,
the ability of the Borrower to obtain Facility B Letters of Credit
shall be fully revolving, and accordingly, the Borrower may, during the
foregoing period, obtain Facility B Letters of Credit to replace the
Facility B Letters of Credit which have expired or which have been
drawn upon and reimbursed.
(c) On the terms and subject to the conditions set forth
herein (i) the Issuer agrees from time to time on any Business Day
during the period from the Effective Date to the Facility C Loan
Conversion Date to issue standby letters of credit (together with the
Existing Facility C Letters of Credit, the "Facility C Letters of
---------------------
Credit") for the account of the Borrower in accordance with this
------
Article IV, and to amend or renew, extend the expiration of or increase
the amount of the Facility C Letters of Credit previously issued by and
in accordance with Section 4.2(c) and Section 4.2(d) and (ii) the
-------------- --------------
Lenders agree to participate in the Facility C Letters of Credit
(including the Existing Facility C Letters of Credit); provided,
however, that the Issuer shall not be obligated to Issue, and no Lender
shall be obligated to participate in, any Facility C Letter of Credit
(including the Existing Facility C Letters of Credit) if, as of the
date of Issuance of such Facility C Letter of Credit (the "Facility C
----------
L/C Issuance Date") the Effective Amount of all Facility C L/C
-----------------
Obligations plus the Effective Amount of all Facility C Loans exceeds
the combined Facility C Commitments. Within the foregoing limits, and
subject to the other terms and conditions hereof, the ability of the
Borrower to obtain Facility C Letters of Credit shall be fully
revolving, and accordingly, the Borrower may, during the foregoing
period, obtain Facility C Letters of Credit to replace the Facility C
Letters of Credit which have expired or which have been drawn upon and
reimbursed.
(d) The Issuer is under no obligation to Issue any Letter of
Credit if:
(i) any order, judgment or decree of any Government
Authority or arbitrator shall by its terms purport to enjoin or
restrain the Issuer from issuing
47
such Letter of Credit, or any Requirement of Law applicable to
the Issuer or any request or directive (whether or not having the
force law) from any Government Authority with jurisdiction over
the Issuer shall prohibit, or request that the Issuer refrain
from, the Issuance of letters of credit generally or such Letter
of Credit in particular or shall impose upon the Issuer any
restriction, reserve or capital requirement (for which the Issuer
is not otherwise compensated hereunder) not in effect on the
Effective Date, or shall impose upon the Issuer any unreimbursed
loss, cost or expense which was not applicable on the Effective
Date and which the Issuer in good ▇▇▇▇▇ ▇▇▇▇▇ material to it;
(ii) the Issuer has received written notice from any
Lender, the Agent or the Borrower, on or prior to the Business
Day prior to the requested date of Issuance of such Letter of
Credit, that one or more of the applicable conditions contained
in Article VI is not then satisfied;
----------
(iii) the expiry date of any requested Letter of Credit
is (A) with respect to Facility A Letters of Credit, more than
(1) one-hundred twenty (120) days after the Facility A L/C
Issuance Date or (2) after the Facility A Commitment Termination
Date (B) with respect to the Facility B Letters of Credit, more
than (1) three-hundred sixty (360) days after the Facility ▇ ▇/C
Issuance Date or (2) after the Facility B Commitment Termination
Date or (C) with respect to the Facility C Letters of Credit,
after the Facility C Loan Conversion Date, or if such Facility C
Letter of Credit is 100% Cash Collateralized on the Facility C
Loan Conversion Date, after June 30, 2006. Notwithstanding the
foregoing, any Facility C Letter of Credit expiring on June 30,
2006 may be automatically renewed in accordance with its terms
for an additional year unless the Issuer notifies the Borrower
and the beneficiary of such Facility C Letter of Credit thirty
(30) days prior to the expiry date of such Facility C Letter of
Credit that such Facility C Letter of Credit is not being renewed
by the Issuer. The Issuer shall not renew any Facility C Letter
of Credit beyond June 30, 2006 unless all of the Lenders shall
have consented to such renewal;
(iv) any requested Letter of Credit is not otherwise in
form and substance acceptable to the Issuer, or the issuance of a
Letter of Credit shall violate any applicable policies of the
Issuer; and
(v) such Letter of Credit is to be used for a purpose
other than as permitted by Section 8.1.13.
--------------
SECTION 4.2 Issuance, Amendment and Renewal of Letters of Credit.
----------------------------------------------------
(a) Each Letter of Credit shall be Issued upon the receipt by
the Issuer of an L/C Application or L/C Amendment Application (with a
copy sent by the Borrower to the Agent) prior to 10:00 a.m., San
Francisco time, at least three (3) Business Days prior to the proposed
date of Issuance for Letters of Credit.
48
(b) Not later than 10:00 a.m., San Francisco time, one (1)
Business Day Prior to the Issuance of any Letter of Credit, the Issuer
will confirm with the Agent (by telephone or in writing) that the Agent
has received a copy of the L/C Application or L/C Amendment Application
from the Borrower and, if not, the Issuer will provide the Agent with a
copy thereof. Unless the Issuer has on or before 11:00 a.m., San
Francisco time, on the Business Day the Issuer is to Issue a requested
Letter of Credit (i) received notice from the Agent directing the
Issuer not to Issue such Letter of Credit because such Issuance is not
then permitted under Sections 4.1(a), 4.1(b), and 4.1(c) as a result of
--------------- ------ ------
the limitations set forth therein; or (ii) received a notice described
in Section 4.1(d)(ii), then, subject to the terms and conditions
------------------
hereof, the Issuer shall, on the requested date, issue a Letter of
Credit in accordance with the Issuer's usual and customary business
practices.
(c) From time to time while a Letter of Credit is outstanding
and prior to the relevant Commitment Termination Date, the Issuer will,
upon the written, request of the Borrower received by the Issuer (with
a copy sent by the Borrower to the Agent) at least three (3) Business
Days (or such shorter time as the Issuer may agree in a particular
instance in its sole discretion) prior to the proposed date of
amendment, amend any Letter of Credit issued by it. Each such request
for amendment of a Letter of Credit shall be made by facsimile made in
the form of an L/C Amendment Application and shall specify in form and
detail satisfactory to the Issuer: (i) the Letter of Credit to be
amended; (ii) the proposed date of amendment of the Letter of Credit
(which shall be a Business Day); (iii) the nature of the proposed
amendment; and (iv) such other matters as the Issuer may reasonably
require. The Issuer shall not amend any Letter of Credit if: (A) the
Issuer would have no obligation at such time to issue such Letter of
Credit in its amended form under the terms of this Agreement; or (B)
the beneficiary of any such Letter of Credit does not accept the
proposed amendment to the Letter of Credit. The Agent will promptly
notify the Lenders of the receipt by it of any L/C Application or L/C
Amendment Application.
(d) Subject to Section 4.1(d), the Issuer and the Lenders
--------------
agree that, while a Letter of Credit is outstanding and prior to the
relevant Commitment Termination Date, at the option of the Borrower and
upon the written request of the Borrower received by the Issuer (with a
copy sent by the Borrower to the Agent) at least three (3) Business
Days (or such shorter time as the Issuer and the Agent may agree in a
particular instance in their sole discretion) prior to the proposed
date of notification of renewal, the Issuer shall authorize the
automatic renewal of any Letter of Credit issued by it. Each such
request for renewal of a Letter of Credit shall be made by facsimile,
confirmed promptly in an original writing, in the form of an L/C
Amendment Application, and shall specify in form and detail
satisfactory to the Issuer: (i) the Letter of Credit to be renewed;
(ii) the proposed date of notification of renewal of the Letter of
Credit (which shall be a Business Day); (iii) the revised expiry date
of the Letter of Credit; and (iv) such other matters as the Issuer may
reasonably require. The Issuer shall not renew any Letter of Credit if:
(A) the Issuer would have no obligation at such time to issue or amend
such Letter of Credit in its renewed form under the terms of this
Agreement; or (B) the beneficiary of such Letter of Credit does not
accept the proposed renewal of the Letter of Credit. If any outstanding
Letter of Credit shall provide that it shall be automatically renewed
in accordance with its terms unless the beneficiary thereof receives
notice from the Issuer
49
that such Letter of Credit shall not be renewed, and if at the time of
renewal the Issuer would be required to authorize the automatic request
renewal of such Letter of Credit in accordance with this Section 4.2(d)
--------------
upon the request of the Borrower but the Issuer shall not have received
any L/C Amendment Application from the Borrower with respect such
renewal or other written direction by the Borrower with respect
thereto, the Issuer shall nonetheless be permitted (upon prior written
notice to the Agent) to allow such Letter of Credit to renew, and the
Borrower and the Lenders hereby authorize such renewal, and,
accordingly, the Issuer shall be deemed to have received an L/C
Amendment Application from the Borrower requesting such renewal.
(e) The Issuer may, at its election (or as required by the
Agent at the direction of the Required Lenders), deliver any notices of
termination or other communications as appropriate, at any time and
from time to time, in order to cause the expiry date of such Letter of
Credit to be a date not later than the relevant Commitment Termination
Date.
(f) This Agreement shall control in the event of any conflict
with any L/C-Related Document (other than any Letter of Credit).
(g) The Issuer will also deliver to the Agent, concurrently or
promptly following its delivery of a Letter of Credit, or amendment to
or renewal of a Letter of Credit, to an advising bank or a beneficiary,
a true and complete copy of such Letter of Credit or amendment to or
renewal of a Letter of Credit.
SECTION 4.3 Expenses. The Borrower agrees to pay to the Issuer all
--------
administrative expenses of the Issuer in connection with the issuance,
maintenance, modification (if any) and administration of each Letter of Credit
issued by the Issuer upon demand from time to time.
SECTION 4.4 Other Lenders' Participation.
----------------------------
(a) Each Letter of Credit Issued pursuant to this Article IV
----------
and each Existing Letter of Credit shall, effective upon its issuance
and without further action, be issued on behalf of all Lenders
(including the Issuer thereof) pro rata according to their respective
relevant Percentages. Each Lender shall, to the extent of its relevant
Percentage, be deemed irrevocably to have participated in the issuance
of such Letter of Credit and shall be responsible to reimburse promptly
the Issuer thereof for Reimbursement Obligations which have not been
reimbursed by the Borrower in accordance with Section 4.5, or which
-----------
have been reimbursed by the Borrower but must be returned, restored or
disgorged by the Issuer for any reason, and each Lender shall, to the
extent of its relevant Percentage, be entitled to receive from the
Agent a ratable portion of the letter of credit fees received by the
Agent pursuant to Section 3.3.2, with respect to each Letter of Credit.
-------------
In the event that the Borrower shall fail to reimburse the Issuer, or
if for any reason relevant Loans shall not be made to fund any
Reimbursement Obligation (including without limitation, the failure to
satisfy the conditions in Section 6.2 or an Insolvency Proceeding), all
as provided in Section 4.5 and in an amount equal to the amount of any
-----------
drawing honored by the Issuer under a Letter of Credit issued by it, or
in the event the Issuer must for any reason return or disgorge such
reimbursement, the Issuer shall promptly notify the Agent and each
Lender of the unreimbursed amount of
50
such drawing and of such Lender's respective participation therein.
Each Lender shall make available to the Agent, who shall thereupon make
available to the Issuer, whether or not any Default shall have occurred
and be continuing, an amount equal to its respective participation in
immediately available funds at the office of the Issuer specified in
such notice not later than 8:00 a.m., San Francisco time, on the
Business Day after the date notified by the Issuer. In the event that
any Lender fails to so make available the amount of such Lender's
participation in such Letter of Credit as provided herein, the Issuer
shall be entitled to recover such amount on demand from such Lender
together with interest at the daily average Federal Funds Rate for
three (3) Business Days (together with such other compensatory amounts
as may be required to be paid by such Lender to the Agent pursuant to
the Rules for Interbank Compensation of the Council on International
Banking or the Clearinghouse Compensation Committee, as the case may
be, as in effect from time to time) and thereafter at the Alternate
Base Rate plus the Applicable Base Rate Margin plus 2%. The Issuer
shall pay to the Agent, who shall distribute to each other Lender which
has paid all amounts payable by it under this Section with respect to
any Letter of Credit issued by the Issuer, such other Lender's
Percentage of all payments received by the Issuer from the Borrower in
reimbursement of drawings honored by the Issuer under such Letter of
Credit when such payments are received.
(b) Each Lender's obligation in accordance with this Agreement
to fund its participation in Letters of Credit issued by the Issuer,
shall, in each case, be absolute and unconditional and without recourse
to the Issuer and shall not be affected by any circumstance, including
(i) any set-off, counterclaim, recoupment, defense or other right which
such Lender may have against the Issuer, the Borrower or any other
Person for any reason whatsoever; (ii) the occurrence or continuance of
a Default, an Event of Default or an event or circumstance which could
have a Material Adverse Effect; or (iii) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing.
SECTION 4.5 Disbursements. The Issuer will notify the Borrower and the
-------------
Agent promptly of the presentment for payment of any Letter of Credit, together
with notice of the date (a "Disbursement Date") such payment shall be made.
-----------------
Subject to the terms and provisions of such Letter of Credit, the Issuer shall
make such payment to the beneficiary (or its designee) of such Letter of Credit.
Prior to 10:00 a.m., San Francisco time, on the Disbursement Date, the Borrower
will reimburse the Issuer for all amounts which the Issuer has notified the
Borrower that it has disbursed under the Letter of Credit. To the extent the
Issuer is not reimbursed in full in accordance with the third sentence of this
Section, the Borrower's Reimbursement Obligation shall accrue interest at a
fluctuating rate determined by reference to the Alternate Base Rate plus the
Applicable Base Rate Margin plus 2% per annum, payable on demand. In the event
the Issuer is not reimbursed by the Borrower on the Disbursement Date, or if the
Issuer must for any reason return or disgorge such reimbursement, the Lenders
shall, on the terms and subject to the conditions of this Agreement, including
without limitation Section 6.2 and Section 2.1.4, fund the Reimbursement
----------- -------------
Obligation (i) in respect of Facility A Letters of Credit and Facility C Letters
of Credit therefor by making, on the next Business Day, either Facility A Loans
or Facility C Loans, as applicable, which are Base Rate Loans as provided in
Section 3.2.1 (the Borrower being deemed to have given a timely Borrowing
-------------
Request therefor for such amount), and (ii) in
51
respect of the Facility B Letters of Credit by making, on the next Business Day,
the Facility A Loans, which are Base Rate Loans as provided in Section 3.2.1
-------------
(the Borrower being deemed to have given a timely Borrowing Request for such
amounts); provided, further, for the purpose of determining the availability of
the Commitment in respect of such Loans to make such Loans immediately prior to
giving effect to the application of the proceeds of such Loans, such
Reimbursement Obligation shall be deemed not to be outstanding at such time.
SECTION 4.6 Reimbursement. The Borrower's obligation (a "Reimbursement
------------- -------------
Obligation") under Section 4.5 to reimburse the Issuer with respect to each
---------- -----------
disbursement (including interest thereon), and each Lender's obligation to make
participation payments in each drawing which has not been reimbursed by the
Borrower, shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim, or defense to payment which the
Borrower may have or have had against any Lender or any beneficiary of a Letter
of Credit, including any defense based upon the occurrence of any Default, any
draft, demand or certificate or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient, the failure of
any disbursement to conform to the terms of the applicable Letter of Credit (if,
in the Issuer's good faith opinion, such disbursement is determined to be
appropriate) or any non-application or misapplication by the beneficiary of the
proceeds of such disbursement, or the legality, validity, form, regularity, or
enforceability of such Letter of Credit.
SECTION 4.7 Cash Collateral Pledge. Upon (i) notice from the Agent or
----------------------
the Required Lenders, if, as of any Commitment Termination Date, or upon the
occurrence of an Event of Default, any Letters of Credit may for any reason
remain outstanding and partially or wholly undrawn, or (ii) the occurrence of
the circumstances described in Section 3.1.3 requiring the Borrower to Cash
-------------
Collateralize Letters of Credit, then the Borrower shall, unless waived by the
Required Lenders, immediately Cash Collateralize the L/C Obligations in an
amount equal to the L/C Obligations.
SECTION 4.8 Nature of Reimbursement Obligations. The Borrower shall
-----------------------------------
assume all risks of the acts, omissions, or misuse of any Letter of Credit by
the beneficiary thereof. None of the Issuer, the Agent or any Lender (except to
the extent of its own gross negligence or willful misconduct) shall be
responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness, or
legal effect of any Letter of Credit or any document submitted by any
party in connection with the application for and issuance or amendment
of a Letter of Credit, even if it should in fact prove to be in any or
all respects invalid, insufficient, inaccurate, fraudulent, or forged;
(b) the form, validity, sufficiency, accuracy, genuineness, or
legal effect of any instrument transferring or assigning or purporting
to transfer or assign a Letter of Credit or the rights or benefits,
thereunder or proceeds thereof in whole or in part, which may prove to
be invalid or ineffective for any reason;
(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;
52
(d) errors, omissions, interruptions, or delays in
transmission or delivery of any messages, by mail, cable, telegraph,
telex, or otherwise; or
(e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a disbursement under a
Letter of Credit or of the proceeds thereof.
None of the foregoing shall affect, impair, or prevent the vesting of any of the
rights or powers granted the Issuer, the Agent or any Lender hereunder. In
furtherance and extension, and not in limitation or derogation, of any of the
foregoing, any action taken or omitted to be taken by the Issuer in good faith
shall be binding upon the Borrower and shall not put the Issuer, the Agent or
any Lender under any resulting liability to the Borrower.
SECTION 4.9 Increased Costs; Indemnity. If by reason of:
--------------------------
(a) any change in applicable law, regulation, rule, decree or
regulatory requirement or any change in the interpretation or
application by any judicial or regulatory authority of any law,
regulation, rule, decree or regulatory requirement occurring after the
Effective Date; or
(b) compliance by the Issuer, the Agent or any Lender with any
direction, request or requirement made after the Effective Date
(whether or not having the force of law) of any governmental or
monetary authority, including Regulation D of the F.R.S. Board:
(i) the Issuer, the Agent or any Lender shall be
subject to any tax (other than taxes on net income including
franchise taxes on income and franchises), levy, charge or
withholding of any nature or to any variation thereof or to any
penalty with respect to the maintenance or fulfillment of its
obligations under this Article IV, whether directly or by such
----------
being imposed on or suffered by the Issuer, or any Lender;
(ii) any reserve, deposit or similar requirement is or
shall be applicable, imposed or modified in respect of any
Letters of Credit issued by the Issuer or participations therein
purchased by any Lender; or
(iii) there shall be imposed on the Issuer, the Agent or
any Lender any other condition regarding this Article IV, any
----------
Letter of Credit or any participation therein;
and the result of the foregoing is directly or indirectly to increase the cost
to the Issuer or such Lender of issuing, making or maintaining any Letter of
Credit or of purchasing or maintaining any participation therein, or to reduce
any amount receivable in respect thereof by the Issuer or such Lender, when and
in any such case the Issuer or such Lender may, at any time after the additional
cost is incurred or the amount received is reduced, notify the Borrower thereof
(with copies to the Agent), and the Borrower shall within five (5) days of
receipt of such notification pay on demand such amounts as the Issuer, the Agent
or Lender may specify to be necessary to compensate the Issuer, the Agent or
Lender for such additional cost or reduced receipt, together
53
with interest on such amount from the date demanded until payment in full
thereof at a rate equal at all times to the Alternate Base Rate plus the
Applicable Base Margin plus 2% per annum; provided, however, neither the Issuer
nor any Lender may make any demand for any amounts accrued for any period
commencing more than ninety (90) days prior to the date of demand or, should
such cost have accrued retroactively, within ninety (90) days of the
determination of such cost. The determination by the Issuer, the Agent or
Lender, as the case may be, of any amount due pursuant to this Section, as set
forth in a statement setting forth the calculation thereof in reasonable detail,
shall, in the absence of manifest error, be final and conclusive and binding on
all of the parties hereto. In addition to amounts payable as elsewhere provided
in this Article IV, the Borrower hereby agrees to protect, indemnify, pay and
save the Issuer harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees and allocated costs of internal counsel) which the Issuer may
incur or be subject to as a consequence, direct or indirect, of;
(A) the issuance of the Letters of Credit, other than as a
result of the gross negligence or willful misconduct of the Issuer as
determined by a court of competent jurisdiction, or
(B) the failure of the Issuer to honor a drawing under any
Letter of Credit as a result of any act or omission, whether rightful
or wrongful, of any present or future de jury or de facto government or
government authority.
SECTION 4.10 Uniform Customs and Practice. The Uniform Customs and
----------------------------
Practice for Documentary Credits as published by the International Chamber of
Commerce most recently at the time of any Letter of Credit shall (unless
otherwise expressly provided in the Letters of Credit) apply to all Letters of
Credit.
ARTICLE V
CERTAIN LIBOR AND OTHER PROVISIONS
SECTION 5.1 LIBOR Lending Unlawful. If any Lender shall determine
----------------------
(which determination shall, upon notice thereof to the Borrower, the Agent and
the Lenders, be conclusive and binding on the Borrower) that after the Effective
Date the introduction of or any change in or in the interpretation of any law
makes it unlawful, or any central bank or other government authority asserts
that it is unlawful, for such Lender to make, continue or maintain any Loan as,
or to convert any Loan into, a LIBOR Loan of a certain type, the obligations of
such Lender to make, continue, maintain or convert any such Loans shall, upon
such determination, forthwith be suspended until such Lender shall notify the
Agent that the circumstances causing such suspension no longer exist, and all
LIBOR Loans of such type shall automatically convert into Base Rate Loans at the
end of the then current Interest Periods with respect thereto or sooner, if
required by such law or assertion.
SECTION 5.2 Deposits Unavailable. If the Agent shall have determined
that: --------------------
(a) Dollar deposits in the relevant amount and for the
relevant Interest Period are not available to the Reference Lender in
the London interbank market; or
54
(b) by reason of circumstances affecting the London interbank
market, adequate means do not exist for ascertaining the interest rate
applicable hereunder to LIBOR Loans of such type;
then, upon notice from the Agent to the Borrower and the Lenders, the
obligations of all Lenders under Section 2.3 and Section 2.4 to make or continue
----------- -----------
any Loans as, or to convert any Loans into, LIBOR Loans of such type shall
forthwith be suspended until the Agent shall notify the Borrower and the Lenders
that the circumstances causing such suspension no longer exist.
SECTION 5.3 Increased LIBOR Loan Costs, etc. The Borrower agrees to
-------------------------------
reimburse each Lender for any increase in the cost to such Lender of, or any
reduction in the amount of any sum receivable by such Lender in respect of,
making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Loans as, or of converting (or of its obligation to convert) any
Loans into, LIBOR Loans, in any case from time to time by reason of:
(a) to the extent not included in the calculation of the LIBOR
(Reserve Adjusted), any reserve, special deposit, or similar
requirement against assets of, deposits with or for the account of, or
credit extended by such Lender, under or pursuant to any change in any
law, treaty, rule, regulation (including any F.R.S. Board regulation),
or requirement from that in effect on the Effective Date, or as the
result of any Regulatory Change; or
(b) any Regulatory Change which shall subject such Lender to
any tax (other than taxes on net income including franchise taxes based
on income, and franchises), levy, impost, charge, fee, duty, deduction,
or withholding or any kind whatsoever or change the taxation of any
Loan made or maintained as a LIBOR Loan and the interest thereon (other
than any change which affects, and to the extent that it affects, the
taxation of net income including franchise taxes based on income and
franchises).
Such Lender shall promptly and in no event later than ninety (90) days after its
knowledge of the occurrence of any such event notify the Agent and the Borrower
in writing of the occurrence of any such event, such notice to state, in
reasonable detail, the reasons therefor and the additional amount required fully
to compensate such Lender for such increased cost or reduced amount; provided,
however, no Lender may make any demand for any such amounts accrued under this
Section 5.3 for any period commencing more than ninety (90) days prior to the
-----------
receipt by the Borrower of such notice or, should such cost have accrued
retroactively, within ninety (90) days of the determination by such Lender of
such cost. Such additional amounts shall be payable by the Borrower directly to
such Lender within five (5) days of its receipt of such notice, and such notice
shall, in the absence of manifest error, be conclusive and binding on the
Borrower.
SECTION 5.4 Funding Losses. In the event any Lender shall incur any
--------------
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make, continue or maintain any portion of the principal amount of any Loan
as, or to convert any portion of the principal amount of any Loan into, a LIBOR
Loan) as a result of:
55
(a) any conversion or repayment or prepayment of the principal
amount of any LIBOR Loans on a date other than the scheduled last day
of the Interest Period applicable thereto, whether pursuant to Section
-------
3.1 or otherwise;
---
(b) any Loans not being made as LIBOR Loans in accordance with
the Borrowing Request therefor; or
(c) any Loans not being continued as, or converted into, LIBOR
Loans in accordance with the Continuation/Conversion Notice therefor;
then, upon the written notice of such Lender to the Borrower (with a copy to the
Agent), the Borrower shall, within five (5) days of its receipt thereof, pay
directly to such Lender such amount as will (in the reasonable determination of
such Lender) reimburse such Lender for such loss or expense. Such written notice
(which shall include calculations in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on the Borrower.
SECTION 5.5 Increased Capital Costs. If after the Effective Date any
-----------------------
change in, or the introduction, adoption, effectiveness, interpretation,
reinterpretation or phase-in of, any law or regulation, directive, guideline,
decision or request (whether or not having the force of law) of any court,
central bank, regulator or other government authority affects or would affect
the amount of capital required or expected to be maintained by any Lender or any
Person controlling such Lender, and such Lender determines (in its sole and
absolute discretion) that the rate of return on its or such controlling Person's
capital as a consequence of its Commitments or the Loans made by such Lender is
reduced to a level below that which such Lender or such controlling Person could
have achieved but for the occurrence of any such circumstance, then, in any such
case upon notice from time to time by such Lender to the Borrower (with copies
to the Agent), the Borrower shall within five (5) days of its receipt thereof
pay directly to such Lender additional amounts sufficient to compensate such
Lender or such controlling Person for such reduction in rate of return. Such
Lender shall promptly and in no event later than ninety (90) days after its
knowledge of any such event notify the Agent and the Borrower of the occurrence
of any such event; provided, however, no Lender may make any demand for any such
amounts accrued under this Section 5.5 for any period commencing more than
-----------
ninety (90) days prior to the receipt by the Borrower of any such notice or,
should such cost have accrued retroactively, within ninety (90) days of the
determination by such Lender of such cost. A statement of such Lender as to any
such additional amount or amounts (including calculations thereof in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
the Borrower. In determining such amount, such Lender may use any reasonable
method of averaging and attribution that it (in its sole and absolute
discretion) shall deem applicable.
SECTION 5.6 Taxes. Without duplication of any payments made under any
-----
other provisions of this Article V, all payments by the Borrower of principal
---------
of, and interest on, the Loans and all other amounts payable hereunder shall be
made free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or
other charges of any nature whatsoever imposed by any taxing authority, but
excluding franchise taxes and taxes imposed on or measured by any Lender's net
income (including franchise taxes based upon income) or receipts (such
non-excluded items being called "Taxes"). In the event that any withholding or
-----
deduction from any payment to be made by the
56
Borrower hereunder is required in respect of any Taxes pursuant to any
applicable law, rule or regulation, then the Borrower will:
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(c) pay to the Agent for the account of the Agent and the
Lenders such additional amount or amounts as is necessary to ensure
that the net amount actually received by the Agent and each Lender will
equal the full amount such Lender or the Agent would have received had
no such withholding or deduction been required; provided that the Agent
or each Lender shall promptly and in no event later than ninety (90)
days after its knowledge that any amount is payable under this clause
------
(c) notify the Agent and the Borrower of the same;
---
provided, however, no Lender or the Agent may make any demand for any such
amounts accrued under this Section 5.6 for any period commencing more than
-----------
ninety (90) days prior to the receipt by the Borrower of any such notice or,
should such cost have accrued retroactively, within ninety (90) days of the
determination by such Lender or the Agent of such cost.
Moreover, if any Taxes are directly asserted against the Agent or any
Lender with respect to any payment received by the Agent or such Lender
hereunder, the Agent or such Lender may pay such Taxes and the Borrower will pay
on demand such additional amounts (including any penalties, interest or
expenses) as is necessary in order that the net amount received by such person
after the payment of such Taxes (including any Taxes on such additional amount)
shall equal the amount such person would have received had not such Taxes been
asserted.
If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent, for the account of the
respective Lenders and the Agent, the required receipts or other required
documentary evidence, the Borrower shall indemnify the Lenders and the Agent for
any incremental Taxes, interest or penalties that may become payable by any
Lender as a result of any such failure.
For purposes of this Section 5.6, a distribution hereunder by the Agent or any
-----------
Lender to or for the account of any Lender or the Agent shall be deemed a
payment by the Borrower.
Each Lender that is organized under the laws of a jurisdiction other
than the United States shall, prior to the due date of any payments under the
Notes, (i) execute and deliver to the Borrower and the Agent, on or about the
first scheduled payment date in each Fiscal Year, one or more (as the Borrower
or the Agent may reasonably request) United States Internal Revenue Service
Forms 4224 or Forms 1001 or such other forms or documents (or successor forms or
documents), appropriately completed, as may be applicable to establish the
extent, if any, to which a payment to such Lender is exempt from withholding or
deduction of Taxes, and (ii) comply with the requirements of Section 10.10.
-------------
57
SECTION 5.7 Payments, Computations, etc. Unless otherwise expressly
---------------------------
provided, all payments by the Borrower pursuant to this Agreement, the Notes or
any other Loan Document shall be made in Dollars, in immediately available funds
by the Borrower to the Agent for the pro rata account of the Lenders entitled to
receive such payment. All such payments required to be made to the Agent shall
be made, without setoff, counterclaim, recoupment or other deduction, not later
than 11:00 a.m., San Francisco time, on the date due, in immediately available
funds, to such account as the Agent shall specify from time to time by notice to
the Borrower. Funds received after that time shall be deemed to have been
received by the Agent on the next succeeding Business Day. The Agent shall
promptly remit in same day funds to each Lender its share, if any, of such
payments received by the Agent for the account of such Lender. All interest
(other than interest computed at the Alternate Base Rate) and fees shall be
computed on the basis of the actual number of days (including the first day but
excluding the last day) occurring during the period for which such interest or
fee is payable over a year comprised of three-hundred sixty (360) days. Interest
computed at the Alternate Base Rate shall be computed on the basis of its actual
number of days (including the first day but excluding the last day) occurring
during the period for which such interest is payable over a year comprised of
365 or 366 days, as the case may be. Whenever any payment falls due on a day
which is not a Business Day, such payment shall (except as otherwise required by
clause (c) of the definition of the term "Interest Period" with respect to LIBOR
---------- ---------------
Loans) be made on the next succeeding Business Day and such extension of time
shall be included in computing interest and fees, if any, in connection with
such payment.
SECTION 5.8 Sharing of Payments. If any Lender shall obtain any payment
-------------------
or other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan (other than pursuant to the terms of Section
-------
5.3, 5.4 or 5.5) or Letter of Credit in excess of its pro rata share of payments
---- --- ---
then or therewith obtained by all Lenders, such Lender shall purchase from the
other Lenders such participations in Loans made by them and/or Letters of Credit
as shall be necessary to cause such purchasing Lender to share the excess
payment or other recovery ratably with each of them; provided, however, that if
all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Lender, the purchase shall be rescinded and each
Lender which has sold a participation to the purchasing Lender shall repay to
the purchasing Lender the purchase price to the ratable extent of such recovery
together with an amount equal to such selling Lender's ratable share (according
to the proportion of (a) the amount of such selling Lender's required repayment
to the purchasing Lender to (b) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section may, to the fullest extent permitted by law, exercise
all its rights of payment (including pursuant to Section 5.9) with respect to
-----------
such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. If under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured claim
in lieu of a setoff to which this Section applies, such Lender shall, to the
extent practicable, exercise its rights in respect of such secured claim in a
manner consistent with the rights of the Lenders entitled under this Section to
share in the benefits of any recovery on such secured claim.
SECTION 5.9 Setoff. Each Lender shall, upon the occurrence of any
------
Default or any other Event of Default, have the right to appropriate and apply
to the payment of the Obligations
58
(whether or not then due), and (as security for such Obligations) the Borrower
hereby grants to each Lender a continuing security interest in, any and all
balances, credits, deposits, accounts or moneys of the Borrower then or
thereafter maintained with such Lender; provided, however, that any such
appropriation and application shall be subject to the provisions of Section 5.8.
-----------
Each Lender agrees promptly to notify the Borrower and the Agent after any such
setoff and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such setoff and
application. The rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff under applicable law
or otherwise) which such Lender may have.
SECTION 5.10 Recourse. The Obligations of the Borrower to the Agent,
--------
the Issuer and the Lenders are secured and rank pari passu with all other Senior
Debt. All of the Collateral of Holdings, the Borrower and the Material
Subsidiaries will be pledged to secure the Obligations and all other Senior Debt
(and the Borrower hereby acknowledges and agrees that the Obligations are
Secured Obligations under (and as defined in) the Security Agreement to which
the Borrower is a party and confirms its pledge and grant of a security interest
in and to the Collateral to secure the Obligations pursuant to such Security
Agreement). In the event and at the time that Holdings or the Borrower obtains
or creates any Material Subsidiaries (a) each such Material Subsidiary must
issue and deliver to the Agent a guarantee of the Obligations in the form of
Exhibit K-2 and each such guarantee will be in favor of the Trustee and secured
-----------
by a pledge of all of the accounts receivable, inventory, cash, Customer Lists
and stock of such Material Subsidiary, and (b) the Borrower shall cause the
Security Agreements to be amended to add such Material Subsidiary as an Obligor
thereunder and shall deliver, or cause such Material Subsidiary to deliver, such
other agreements, documents, instruments and opinions in connection therewith as
the Agent may request. The Borrower shall promptly notify the Agent in the event
that Holdings or the Borrower obtains or creates any Material Subsidiary.
In furtherence of Section 21(a) of the Intercreditor Agreement, each Lender by
its execution of this Agreement (or, if such Lender is an Assignee Lender, by
its execution of an Assignment and Acceptance Agreement pursuant to Section
-------
11.11.1) confirms for the benefit of the Trustee and the other parties to the
-------
Intercreditor Agreement that such Lender shall be bound by the terms of, and be
entitled to the benefits and Security under, the Intercreditor Agreement as a
Bank Lender thereunder. Each of the Lenders further confirms its consent to the
amendment of the defined term "Bank Lenders" under the Intercreditor Agreement
to include each of the Lenders listed on the signature pages to this Agreement
and other Lenders under this Agreement from time to time, and each such Lender
authorizes the Agent to execute an amendment to the Intercreditor Agreement to
such effect on behalf of such Lender.
SECTION 5.11 Replacement of Lenders. In the event any Lender shall
----------------------
provide notice to the Agent pursuant to Section 4.9, 5.3, 5.5 or 5.6 hereunder,
----------- --- --- ---
the Borrower shall be permitted to replace such Lender, provided, however, that
such Lender's replacement shall agree to all the obligations and conditions
relating to an Assignee Lender contained in Section 11.11.1 hereto. Any such
---------------
replacement shall be subject to the Agent's consent which consent shall not be
unreasonably withheld.
59
ARTICLE VI
CONDITIONS TO BORROWING
SECTION 6.1 Conditions to Effectiveness. The effectiveness of this
---------------------------
Agreement shall be subject to the prior or concurrent satisfaction of each of
the conditions precedent set forth in this Section 6.1.
SECTION 6.1.1 Credit Agreement and Notes. This Agreement and the
--------------------------
other Loan Documents shall have been executed by each party thereto.
SECTION 6.1.2 [Intentionally Omitted.]
SECTION 6.1.3 [Intentionally Omitted.]
SECTION 6.1.4 Closing Certificate. A certificate signed by a
-------------------
Responsible Officer of the Borrower, dated as of the Effective Date, certifying:
(a) the representations and warranties contained in Article
-------
VII are true and correct on and as of such date, as though made on and
---
as of such date;
(b) since March 31, 2001, there has been no material adverse
change in the condition (financial or otherwise), operations, business
assets, liabilities (actual or contingent) or prospects taken as a
whole of the Borrower and its Material Subsidiaries from that set forth
in the financial statements as of March 31, 2001 for the period ending
on that date (which financial statements shall be attached);
(c) since March 31, 2001, there has been no material adverse
change in the condition (financial or otherwise), operations, business
assets, liabilities (actual or contingent) or prospects taken as a
whole of Star Gas Partners and its subsidiaries taken as a whole from
that set forth in the financial statements as of March 31, 2001 (which
financial statements shall be attached);
(d) There shall not have occurred a material adverse change in
the condition (financial or otherwise), operations, business, assets,
liabilities (actual or contingent) or prospects of Holdings or in the
facts and information regarding Star Gas Partners, Holdings, the
Borrower and the Material Subsidiaries; and
(e) the financial statements previously delivered to the
Lenders, the Issuer and the Agent are true and correct.
SECTION 6.1.5 Permits. The Agent shall have received a
-------
certificate of a responsible officer of the Borrower certifying that there are
no permits, licenses or regulatory approvals required for the execution,
delivery and performance of the this Agreement.
SECTION 6.1.6 Opinion of Counsel. The Agent shall have received
------------------
opinions, dated the Effective Date and addressed to the Agent and all Lenders,
from ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ & Ballon, special counsel to the Managing
General Partner, Star Gas Partners,
60
Holdings, the Borrower and the Material Subsidiaries substantially in the form
of Exhibit I hereto.
---------
SECTION 6.1.7 Closing Fees, Expenses, etc. The Agent shall have
---------------------------
received evidence satisfactory to it of payment for its own account, or for the
account of each Lender or the Issuer, as the case may be, all fees, costs and
expenses due and payable pursuant to Section 3.3 and, if then invoiced, Section
----------- -------
11.3.
-----
SECTION 6.1.8 Insurance. Insurance complying with the Loan
---------
Documents shall be in full force and effect and the Agent shall have received a
certificate satisfactory to it to that effect from the Borrower.
SECTION 6.1.9 Facility A Notes. The Borrower shall have duly
----------------
delivered to the Agent for the benefit of each Lender a duly executed Facility A
Note payable to each Lender.
SECTION 6.1.10 Facility C Notes. The Borrower shall have duly
----------------
delivered to the Agent for the benefit of each Lender a duly executed Facility C
Note payable to each Lender.
SECTION 6.1.11 Acceptance Letters. The Agent shall have received
------------------
letters of acceptance in respect of the Guarantee Agreements and the Security
Agreements.
SECTION 6.1.12 Borrowing Base Certificate. The Agent shall have
--------------------------
received a Borrowing Base Certificate.
SECTION 6.1.13 Other Documents. The Agent or any Lender shall
---------------
have received such other approvals, opinions, documents or materials as the
Agent or such Lender may reasonably request.
SECTION 6.1.14 Prepayment and Reborrowing of Loans. On the
-----------------------------------
Effective Date, the Borrower shall prepay, in accordance with the provisions of
Section 3.1.2, all outstanding Loans, and may, thereupon, reborrow Loans in
-------------
amounts permitted under this Agreement.
SECTION 6.1.15 Consent of Holders of Other Debt. The holders of
--------------------------------
the Senior Debt (other than Senior Debt in respect of this Agreement) and the
Existing Subordinated Debt shall, to the extent required by the agreements
governing such Indebtedness, have given their consent to the transactions
contemplated hereby, and the Agent shall have received evidence thereof in form
and substance reasonably satisfactory to it.
SECTION 6.2 All Borrowings and Issuances of Letters of Credit. The
-------------------------------------------------
obligation of each Lender to fund any Loan on the occasion of any Borrowing
(including the initial Borrowing) and the obligation of the Issuer to Issue any
Letters of Credit shall be subject to the satisfaction of each of the conditions
precedent set forth in this Section 6.2.
-----------
SECTION 6.2.1 Compliance with Warranties, No Default, etc. Both
-------------------------------------------
before and after giving effect to any Borrowing and the Issuance of any Letter
of Credit (but, if any Default of the nature referred to in Section 9.1.4 shall
-------------
have occurred with respect to any other Indebtedness, without giving effect to
the application, directly or indirectly, of the proceeds thereof) the following
statements shall be true and correct:
61
(a) the representations and warranties set forth in Article
-------
VII and the Security Agreements shall be true and correct with the same
---
effect as if then made (unless stated to relate solely to an earlier
date, in which case such representations and warranties shall be true
and correct as of such earlier date);
(b) no Default or Event of Default shall have then occurred
and be continuing;
(c) for borrowings of Facility A Loans and Facility C Working
Capital Loans and issuance of Facility A Letters of Credit, the ratio
of Current Assets to Current Liabilities is not less than 1.00 to 1
from December 31 through June 30 of each year and not less than 0.85 to
1 from July 1 through December 30 of each year; and
(d) no event or circumstance has occurred which could have a
Material Adverse Effect.
SECTION 6.2.2 Borrowing Request. The Agent shall have received a
-----------------
Borrowing Request, L/C Application or L/C Amendment Application (as applicable)
or request for a Swing Loan pursuant to Section 2.7, as the case may be, for
-----------
such Borrowing or Issuance of such Letter of Credit, as the case may be. Each of
the delivery of a Borrowing Request, L/C Application or L/C Amendment
Application (as applicable) or request for a Swing Loan pursuant to Section 2.7
-----------
and the acceptance by the Borrower of the proceeds of such Borrowing or the
Issuance of the Letter of Credit, as applicable, shall constitute a
representation and warranty by Star Gas Partners, Holdings, the Borrower and the
Material Subsidiaries that on the date of such Borrowing (both immediately
before and after giving effect to such Borrowing and the application of the
proceeds thereof) or the Issuance of the Letter of Credit, as applicable, each
of the statements made in Section 6.2.1 is true and correct.
-------------
SECTION 6.2.3 Lien Searches. With respect to the initial
-------------
Borrowing only, satisfactory results of lien searches against the Borrower and
the other Obligors in the locations set forth on Schedule VII.
SECTION 6.2.4 Satisfactory Legal Form. All documents executed or
-----------------------
submitted pursuant hereto by or on behalf of the Borrower, any other Obligor or
any Subsidiary shall be satisfactory in form and substance to the Agent and its
counsel and the Issuer and its counsel in respect of any L/C-Related Document or
in respect of the Issuance of the Existing Letters of Credit; the Agent and its
counsel shall have received all information, approvals, opinions, documents or
instruments as the Agent or its counsel and the Issuer and its counsel in
respect of any L/C-Related Document or in respect of the Issuance of the
Existing Letters of Credit may reasonably request.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders, the Agent and the Issuer to enter into
this Agreement and to make Loans and Issue Letters of Credit hereunder, the
Borrower represents and warrants unto the Agent, the Issuer and each Lender as
set forth in this Article VII.
-----------
62
SECTION 7.1 Organization etc.
----------------
(a) Each of the Managing General Partner, Holdings, the
Borrower and their Subsidiaries is a corporation (or a limited
liability company in the case of the Managing General Partner) duly
organized, validly existing and in good standing under the laws of its
state of organization and has all requisite power and authority to own
and operate its properties, to conduct its business as conducted on the
Effective Date, to enter into this Agreement, the Notes and the other
Loan Documents to which it is a party, and to carry out the terms of
this Agreement, the Notes and such other Loan Documents.
(b) Star Gas Partners is a limited partnership duly organized,
validly existing and in good standing under the laws of its state of
its organization and has all requisite partnership power and authority
to own and operate its properties, to conduct its business as conducted
on the Effective Date, and to execute, deliver and carry out the terms
of the Loan Documents to which it is a party.
(c) Item 7.1 of the Disclosure Schedule accurately and
completely lists, as to each of Star Gas Partners, Holdings, the
Borrower and each Material Subsidiary: (i) the state of incorporation
or organization of each such entity, and the type of legal entity that
each of them is, (ii) as to each of them that is a corporation, the
classes and number of authorized and outstanding shares of capital
stock of each such corporation, and the owners of such outstanding
shares of capital stock, (iii) as to each of them that is a legal
entity other than a corporation (but not a natural person), the type
and amount of equity interests authorized and outstanding of each such
entity, and the owners of such equity interests, and (iv) the business
in which each of such entities is engaged. All of the foregoing shares
or other equity interests that are issued and outstanding have been
duly and validly issued and are fully paid and non-assessable, and are
owned by the Persons referred to in Item 7.1 of the Disclosure
Schedule, free and clear of any Lien except as otherwise provided for
herein. Except as set forth on Item 7.1 of the Disclosure Schedule,
there are no outstanding warrants, options, contracts or commitments of
any kind entitling any Person to purchase or otherwise acquire any
shares of capital stock or other equity interests of Holdings, the
Borrower or any Material Subsidiary nor are there outstanding any
securities that are convertible into or exchangeable for any shares of
capital stock or other equity interests of Holdings, the Borrower or
any Material Subsidiary.
SECTION 7.2 Subsidiaries. Except as disclosed in Item 7.2
------------
("Subsidiaries") of the Disclosure Schedule, Star Gas Partners, Holdings and the
------------
Borrower do not have any Subsidiaries or any Investments in any Person (other
than Investments of the types permitted in Section 8.2.5).
--------------
SECTION 7.3 Qualification. Each of the Star Gas Partners, Holdings, the
-------------
Borrower and their Subsidiaries is duly qualified or registered and is in good
standing as a foreign corporation or partnership for the transaction of
business, in the jurisdictions set forth in Item 7.3 of the Disclosure Schedule
which are the only jurisdictions, on the date hereof, in which the nature of
their respective activities or the character of the properties they own, lease
or use makes such
63
qualification or registration necessary and in which the failure so to qualify
or to be so registered could be reasonably expected to have a Material Adverse
Effect.
SECTION 7.4 Enforceability. Each of Star Gas Partners, Holdings, the
--------------
Borrower and the Material Subsidiaries has taken all necessary partnership or
corporate action to authorize the execution, delivery and performance by it of
this Agreement, the Notes and each other Loan Document to which is a party. Each
of Star Gas Partners, Holdings, the Borrower and the Material Subsidiaries has
duly executed and delivered each of this Agreement, the Notes and the other Loan
Documents to which it is a party, and each of them constitutes its legal, valid
and binding obligation enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws of general application relating to
or affecting the rights and remedies of creditors and by general equitable
principles, regardless of whether such enforceability is considered in a
proceeding in equity or at law; provided, however, that such laws shall not
materially interfere with the practical realization of the Security Documents or
the Liens created thereby, except for (i) possible delay, (ii) situations that
may arise under Chapter 11 of the Bankruptcy Code, and (iii) equitable orders of
a bankruptcy court.
SECTION 7.5 Due Authorization; Non-contravention; etc. The execution,
-----------------------------------------
delivery and performance by each of Star Gas Partners, Holdings, the Borrower
and the Material Subsidiaries of this Agreement, the Notes and each other Loan
Document required to be executed by it hereunder are within Star Gas Partner's,
Holding's, the Borrower's and such Material Subsidiary's powers, have been duly
authorized by all necessary action, and do not:
(a) contravene Star Gas Partners', Holdings', the Borrower's
or any Material Subsidiary's Organic Documents;
(b) contravene any contractual restriction, law or
governmental regulation or court decree or order binding on or
affecting Star Gas Partners, Holdings, the Borrower or any Material
Subsidiary; or
(c) result in, or require the creation or imposition of, any
Lien on any of Star Gas Partners', Holding, the Borrower's or such
Material Subsidiary's properties, except as contemplated hereby.
SECTION 7.6 Government Approvals; Regulations, etc. No authorization or
---------------------------------------
approval or other action, by, and no notice to or filing with, any government
authority or regulatory body or other Person (that has not been obtained) is
required for the due execution, delivery or performance by Star Gas Partners,
Holdings, the Borrower or any Material Subsidiary of this Agreement, the Notes
or any other Loan Document to which it is a party. All such required
authorizations and approvals have been obtained and such required notices and
filings have been made.
SECTION 7.7 Business; Financial Statements.
------------------------------
(a) The audited consolidated financial statements of the
Borrower and its Subsidiaries for its
64
Fiscal Year ended September 30, 2000, and the unaudited consolidated
financial statements of Holdings, the Borrower and its Subsidiaries for
its Fiscal Quarter ended March 31, 2001, in each case together with the
related consolidated statements of income or operations, shareholders'
equity and cash flows for the fiscal periods ended on those respective
dates:
(i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as
otherwise expressly noted therein;
(ii) fairly present in accordance with GAAP the
financial condition of Holdings, the Borrower and its
Subsidiaries as of the date thereof and results of operations
for the period covered thereby; and
(iii) show all material indebtedness and other
liabilities, direct or contingent of Holdings, the Borrower and
its Subsidiaries required to be disclosed in accordance with
GAAP as of the date thereof including liabilities for taxes,
material commitment and Contingent Liabilities.
(b) The audited consolidated financial statements of Star Gas
Partners and its Subsidiaries for its fiscal year ended September 30,
2000, and the unaudited consolidated financial statements of Star Gas
Partners and its Subsidiaries for its Fiscal Quarter ended March 31,
2001, together with the related consolidated statements of income or
operations, partners' capital and cash flow for the fiscal periods
ended on those respective dates:
(i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as
otherwise expressly noted therein;
(ii) fairly present in accordance with GAAP the
financial condition of Star Gas Partners and its Subsidiaries as
of the date thereof and results of operations for the period
covered thereby; and
(iii) show all material indebtedness and other
liabilities, direct or contingent, of Star Gas Partners and its
consolidated Subsidiaries required to be disclosed in accordance
with GAAP as of the date thereof, including liabilities for
taxes, material commitments and Contingent Liabilities.
SECTION 7.8 No Material Adverse Change. Since the date of the financial
--------------------------
statements described in Section 7.7 or, for any determination after the delivery
-----------
of the first financial statements pursuant to Section 8.1.1(b), since the date
----------------
of such financial statements (if such financial statements shall be satisfactory
to the Required Lenders), there has been no material adverse change in the
condition (financial or otherwise), business, prospects, operations, assets or
properties of (a) Holdings, the Borrower and the Material Subsidiaries (taken as
a whole), or (b) Star Gas Partners.
SECTION 7.9 Litigation; Labor Controversies, etc. There is no pending
------------------------------------
or, to the knowledge of Star Gas Partners, Holdings, the Borrower, or any of
their Subsidiaries, threatened litigation, action, proceeding, or labor
controversy affecting Star Gas Partners, Holdings, the
65
Borrower or any of their Subsidiaries, or any of their respective properties,
businesses, assets or revenues, (a) which has, or could have, a Material Adverse
Effect, (b) which could affect the legality, validity or enforceability of this
Agreement, the Notes or any other Loan Document, or (c) which could affect the
transaction contemplated hereby or the ability of Star Gas Partners, Holdings,
the Borrower or any Material Subsidiary to perform their respective obligations
under the Loan Documents.
SECTION 7.10 Ownership of Properties; Liens. Star Gas Partners,
------------------------------
Holdings, the Borrower and each of the Material Subsidiaries have (a) title to
all of their respective assets constituting real property owned in fee simple,
(b) good and valid leasehold interests in their respective assets constituting
leased real property, pursuant to which they enjoy undisturbed possession
thereof, except for defects in, or lack of recorded title and exceptions to,
leasehold interests could not, in the aggregate, be reasonably expected to have
a Material Adverse Effect, and (c) sufficient title to the portion of their
respective assets constituting personal property (including patents, trademarks,
trade names, service marks, copyrights and other intellectual property rights)
reasonably necessary for the use and operation of such personal property as it
has been used in the past and as it is proposed to be used, in each case subject
to no Liens except as permitted pursuant to Section 8.2.3. The Liens that have
-------------
been created and granted by the Security Documents constitute valid perfected
first Liens on the properties and assets covered by the Security Documents,
subject to prior or equal Liens as permitted by Section 8.2.3.
-------------
SECTION 7.11 Taxes. Star Gas Partners, Holdings, the Borrower and each
-----
Subsidiary, and any predecessor entity thereto, have filed all tax returns and
reports required by law to have been filed by them and have paid all taxes and
governmental charges thereby shown to be owing, except (a) any such taxes or
charges which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books, and (b) where the failure to do so could not have a
Material Adverse Effect.
SECTION 7.12 ERISA Compliance.
----------------
(a) Each Plan is in compliance in all material respects with
the applicable provisions of ERISA, the Code and other federal or state
law. Each Plan which is intended to qualify under Section 401(a) of the
Code has received a favorable determination letter from the Internal
Revenue Service and, to the best knowledge of the Borrower, nothing has
occurred which would cause the loss of such qualification. The Borrower
and each ERISA Affiliate has made all required contributions to any
Plan subject to Section 412 of the Code, and no application for a
funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of
Borrower, threatened claims, actions or lawsuits, or action by any
Government Authority, with respect to any Plan which has resulted or
could reasonably be expected to have a Material Adverse Effect on the
condition (financial or otherwise), business, operations, assets or
properties of Star Gas Partners, Holdings, the Borrower and the
Subsidiaries (taken as a whole). There has been no prohibited
transaction or violation of the fiduciary responsibility rules,
66
or failure to be able to accurately value Plan assets with respect to
any Plan which has resulted or could reasonably be expected to have a
Material Adverse Effect.
(c) (i) No ERISA Event has occurred or could reasonably be
expected to occur; (ii) except with respect to a $6,500,000
underfunding in the Pension Plan for the Borrower, no Pension Plan has
any Unfunded Pension Liability; (iii) neither the Borrower nor any
ERISA Affiliate has incurred, or could reasonably be expected to incur,
any could liability under Title IV of ERISA with respect to any Pension
Plan (other than premiums due and not delinquent under Section 4007 of
ERISA); (iv) neither the Borrower nor any ERISA Affiliate has incurred,
or reasonably could be expected to incur, any liability (and no event
has occurred which, with the giving of notice under Section 4219 of
ERISA, could result in such liability under Section 4201 or 4243 of
ERISA with respect to a Multiemployer Plan; and (v) neither the
Borrower nor any ERISA Affiliate has engaged in a transaction that
could reasonably be expected to be subject to Section 4069 or 4212(c)
of ERISA.
(d) From this date hereafter, each year the Borrower shall
have contributed, or cause to have been contributed, $500,000 among the
underfunded Pension Plans. This amount shall have been in addition to
contributions necessary to satisfy Section 412 of the Code for such
year.
SECTION 7.13 Environmental Warranties.
------------------------
(a) all facilities and property owned, leased, used, occupied
or controlled (in whole or in part) by Star Gas Partners, Holdings, the
Borrower or any Subsidiary have been, and continue to be, owned,
leased, used, occupied or controlled by Star Gas Partners, Holdings,
the Borrower or such Subsidiary in compliance with all Environmental
Laws except where the failure of any of the foregoing to be done could
not reasonably be expected to have a Material Adverse Effect.
(b) there have been no past, and there are no pending or
threatened
(i) Environmental Claims received by Star Gas Partners,
Holdings, the Borrower or any Subsidiary with respect to any
alleged violation of any Environmental Law, or
(ii) complaints, notices or inquiries to Star Gas
Partners, Holdings, the Borrower or any Subsidiary regarding
potential liability under any Environmental Law;
which in either the case of clause (i) or (ii) above, could be reasonably
---------- ----
expected to have a materially adverse effect on the condition (financial or
otherwise), business, operations, assets or properties of Star Gas Partners,
Holdings, the Borrower and the Subsidiaries (taken as a whole);
(c) to the knowledge of each of Star Gas Partners, Holdings,
the Borrower and the Subsidiaries there have been no Releases of
Hazardous Materials at, on or under any property now or previously
owned or leased by Star Gas Partners, Holdings, the
67
Borrower or any Subsidiary that, singly or in the aggregate, have, or
could reasonably be expected to have, a Material Adverse Effect;
(d) Star Gas Partners, Holdings, the Borrower and each
Subsidiary have been issued and are in material compliance with all
permits, certificates, approvals, licenses and other authorizations
relating to environmental matters and necessary or desirable for their
businesses the absence of or non compliance with which would be
materially adverse, and no order has been issued, no Environmental
Claim has been made, no penalty has been assessed and, to the knowledge
of the Borrower or any Subsidiary, no investigation or review has
occurred or is pending or threatened by any Person with respect to any
alleged failure by Star Gas Partners, Holdings, the Borrower or any
Subsidiary to have any permit, certificate, approval, license or other
governmental authorization required under applicable Environmental Laws
in connection with the conduct of the business or operations of any of
them, except where the failure of any of the foregoing to be done could
not reasonably be expected individually or in the aggregate to have a
Material Adverse Effect;
(e) no property now or previously owned or leased by the
Borrower or any Subsidiary is listed or proposed for listing (with
respect to owned property only) on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any similar state list of
sites requiring investigation or clean-up where the circumstances
giving rise to such listing or proposed listing or the effect of such
listing or proposed listing has, or could reasonably be expected to
have, a Material Adverse Effect;
(f) to the knowledge of each of Star Gas Partners, Holdings,
the Borrower and the Subsidiaries there are no underground storage
tanks, active or abandoned, including petroleum storage tanks, on or
under any property now leased, used, occupied or controlled (in whole
or in part) by Star Gas Partners, Holdings, the Borrower or any
Subsidiary that, singly or in the aggregate, have, or could reasonably
be expected to have, a Material Adverse Effect;
(g) to the knowledge of each of Star Gas Partners, Holdings,
the Borrower and each Material Subsidiary, none of Star Gas Partners,
Holdings, the Borrower or any Subsidiary has directly transported or
directly arranged for the transportation of any Hazardous Material to
any location, including locations which are listed or proposed for
listing on the National Priorities List pursuant to CERCLA, on the
CERCLIS or on any similar state list or which is the subject of
federal, state or local enforcement actions or other investigations
which, or otherwise which, could reasonably be expected to have a
Material Adverse Effect; and
(h) to the knowledge of each of Star Gas Partners, Holdings,
the Borrower and each Subsidiary there are no polychlorinated biphenyls
or friable asbestos present at any property now or previously owned,
leased, used, occupied or controlled (in whole or in part) by Star Gas
Partners, Holdings, the Borrower or any Subsidiary that, singly or in
the aggregate, have, or could reasonably be expected to have, a
Material Adverse Effect.
68
SECTION 7.14 Regulations U and X and Use of Proceeds.
---------------------------------------
(a) The Borrower is not engaged in the business of extending
credit for the purpose of buying or carrying margin stock, and no
proceeds of any Loans will be used for a purpose which violates, or
would be inconsistent with, F.R.S. Board Regulation U or X. Terms for
which meanings are provided in F.R.S. Board Regulation U or X or any
regulations substituted therefor, as from time to time in effect, are
used in this Section with such meanings.
(b) The Borrower shall (i) use the proceeds of the Facility A
Loans and Swing Loans, and request the issuance of Facility A Letters
of Credit, solely for working capital purposes, (ii) request the
issuance of Facility B Letters of Credit, solely in connection with
surety, worker's compensation, insurance and other financial
guarantees, and (iii) use the proceeds of the Facility C Loans and
request the issuance of Facility C Letters of Credit, solely for
purposes of financing and refinancing acquisitions by the Borrower, to
finance capital expenditures relating to existing properties or future
acquired businesses of the Borrower and to refinance senior secured
Indebtedness pursuant to Section 8.1.13(b), provided that Facility C
----------------- --------
Loans may be used for working capital purposes (such loans being
"Facility C Working Capital Loans") up to an Effective Amount equal to
--------------------------------
the Facility C Working Capital Loan Cap solely to the extent that there
is insufficient availability to utilize the Facility A Commitments for
such purposes at the time of the requested borrowing.
SECTION 7.15 Accuracy of Information. All factual information
-----------------------
heretofore or contemporaneously furnished by or on behalf of Star Gas Partners,
Holdings, the Borrower in writing to the Agent or any Lender for purposes of or
in connection with this Agreement or any transaction contemplated hereby which
were furnished to the Agent and all other such factual information hereafter
furnished by or on behalf of Star Gas Partners, Holdings, the Borrower or any of
their Subsidiaries to the Agent or any Lender will be true and accurate in every
material respect on the date as of which such information is dated or certified
and as of the date of execution and delivery of this Agreement by the Agent and
such Lender, and such information, when all such information is considered as a
whole, is not, or shall not be, as the case may be, incomplete by omitting to
state any material fact necessary to make such information not misleading.
SECTION 7.16 Solvency. The Borrower, both before and after giving
--------
effect to any Borrowing hereunder (including the initial Borrowings), (i) is not
"insolvent" (as such term is defined in ss.101(31)(A) of the Bankruptcy Code),
(ii) is able to pay its debts and other liabilities, contingent obligations and
commitments as they mature, and (iii) does not have unreasonably small capital
for the business in which it is engaged or for any business or transaction in
which it is about to engage.
SECTION 7.17 [Intentionally Omitted.]
SECTION 7.18 Compliance with Laws. None of Star Gas Partners, Holdings,
--------------------
the Borrower or any of their Subsidiaries is in default under any agreement by
which it is bound or in violation of any statute, law or governmental rule or
regulation or court or arbitrator's
69
judgment, decree or order, in any such case, which either individually or in the
aggregate, could have a Material Adverse Effect.
SECTION 7.19 Investment Company Act; Other Regulations. None of Star
-----------------------------------------
Gas Partners, Holdings, the Borrower or any Subsidiary is an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended. None of Star Gas Partners,
Holdings, the Borrower or any Subsidiary is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other federal
or state statute or regulation limiting its ability to incur Indebtedness.
SECTION 7.20 Restrictive Agreements. None of Holdings, the Borrower or
----------------------
any Material Subsidiary is party to any agreement except the Loan Documents, the
Note Agreements and the documents evidencing other Private Placement Debt and
the Existing Subordinated Debt which limits such Person's ability to pay
dividends to Star Gas Partners, Holdings, the Borrower or to any of the Material
Subsidiaries that own outstanding equity interests in such Person.
ARTICLE VIII
COVENANTS
SECTION 8.1 Affirmative Covenants. The Borrower agrees with the Agent
---------------------
and each Lender that, until all Commitments have terminated and all Obligations
have been paid and performed in full, the Borrower will perform the obligations
set forth in this Section 8.1.
-----------
SECTION 8.1.1 Financial Information, Reports, Notices, etc. The
--------------------------------------------
Borrower will furnish, or will cause to be furnished, to each Lender and the
Agent copies of the following financial statements, reports, notices and
information:
(a) (i) as soon as practicable, but in any event within
forty-five (45) days after the end of each of the first three quarterly
fiscal periods in each Fiscal Year of the Borrower, consolidated (and
in the case of Holdings, consolidating) balance sheets of Holdings, the
Borrower and the Material Subsidiaries as at the end of such period and
the related consolidated (and, as to statements of income and cash
flows, if applicable and to the extent that such are being prepared,
consolidating) statements of income, surplus or partners' capital, cash
flows and stockholders' equity of Holdings, the Borrower and the
Material Subsidiaries (1) for such period and (2) (in the case of the
second and third quarterly periods) for the period from the beginning
of the current Fiscal Year to the end of such quarterly period, setting
forth in each case in comparative form the consolidated and, where
applicable and as appropriate, consolidating figures for the
corresponding periods of the previous Fiscal Year, all in reasonable
detail and certified by an authorized financial officer of the Borrower
as presenting fairly, in all material respects, the information
contained therein (subject to changes resulting from normal year-end
adjustments), in accordance with GAAP applied on a basis consistent
with prior fiscal periods;
70
(ii) as soon as practicable, but in any event within
forty-five (45) days after the end of each of the first three
quarterly fiscal periods in each Fiscal Year of Star Gas
Partners, consolidated (and to the extent that such are being
prepared, consolidating) balance sheets of Star Gas Partners and
its Subsidiaries as at the end of such period and the related
consolidated (and, as to statements of income and cash flows, if
applicable and to the extent that such are being prepared,
consolidating) statements of income, surplus or partners'
capital and cash flows of Star Gas Partners and its Subsidiaries
(1) for such period and (2) (in the case of the second and third
quarterly periods) for the period from the beginning of the
current Fiscal Year of Star Gas Partners to the end of such
quarterly period, setting forth in each case in comparative form
the consolidated and, where applicable and as appropriate,
consolidating figures for the corresponding periods of the
previous Fiscal Year of Star Gas Partners, all in reasonable
detail and certified by an authorized financial officer of Star
Gas Partners as presenting fairly, in all material respects, the
information contained therein (subject to changes resulting from
normal year-end adjustments), in accordance with GAAP applied on
a basis consistent with prior fiscal periods;
(b)(i) as soon as practicable but in any event within ninety
(90) days after the end of each Fiscal Year of the Borrower,
consolidated (and in the case of Holdings, consolidating) balance
sheets of Holdings, the Borrower and the Material Subsidiaries as at
the end of such year and the related consolidated (and, as to
statements of income and cash flows, if applicable and to the extent
that such are being prepared, consolidating) statements of income, cash
flows and stockholders' equity of Holdings, the Borrower and the
Material Subsidiaries for such Fiscal Year, setting forth in each case
in comparative form the consolidated and, where applicable and to the
extent that such are being prepared, consolidating figures for the
previous Fiscal Year, all in reasonable detail, and accompanied by a
report thereon of KPMG LLP or other independent public accountants of
recognized national standing selected by the Borrower, which report
shall (1) contain no limitation on the scope of the audit and no
material qualification or exception and (2) state that such
consolidated financial statements present fairly in all material
respects the financial position of Holdings, the Borrower and the
Material Subsidiaries as at the dates indicated and the results of
their operations and cash flows for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years and that the
audit by such accountants in connection with such consolidated
financial statements has been made in accordance with GAAP;
(ii) as soon as practicable but in any event within
ninety (90) days after the end of each Fiscal Year of Star Gas
Partners, consolidated (and to the extent that such are being
prepared, consolidating) balance sheets of Star Gas Partners and
its Subsidiaries as at the end of such year and the related
consolidated (and, as to statements of income and cash flows, if
applicable and to the extent that such are being prepared,
consolidating) statements of income, partners' capital and cash
flows of Star Gas Partners and its Subsidiaries for such Fiscal
Year of Star Gas Partners, setting forth in each case in
comparative form the consolidated and, where applicable and to
the extent that such are being prepared, consolidating figures
for the previous Fiscal Year of Star Gas Partners, all in
reasonable detail,
71
and accompanied by a report thereon of KPMG LLP or other
independent public accountants of recognized national standing
selected by Star Gas Partners, which report shall (1) contain no
limitation on the scope of the audit and no material
qualification or exception and (2) state that such consolidated
financial statements present fairly in all material respects the
financial position of Star Gas Partners and its Subsidiaries as
at the dates indicated and the results of their operations and
cash flows for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years and that the
audit by such accountants in connection with such consolidated
financial statements has been made in accordance with GAAP;
(c) as soon as available and in any event within forty-five
(45) days after the end of each of the first three (3) Fiscal Quarters
of the Borrower and within ninety (90) days after the end of each
Fiscal Year of the Borrower, a Compliance Certificate with respect to
the period covered by the financial statements referred to in Section
-------
8.1.1(a) and 8.1.1(b) above together with supporting calculations and
------- --------
such other supporting detail as the Agent and the Required Lenders may
require;
(d) promptly upon receipt thereof, copies of all reports,
management letters and other detailed information (if any) prepared
with respect to Gas Star Partners, Holdings, the Borrower or any
Material Subsidiary by any independent public accountant in connection
with each annual or interim audit of such Person;
(e) as soon as possible and in any event within three (3)
Business Days after knowledge by a Responsible Officer of the
occurrence of each Default or Event of Default, a statement of the
chief financial officer of the Borrower setting forth details of such
Default or Event of Default and the action which the Borrower has taken
and propose to take with respect thereto;
(f) as soon as possible and in any event within three (3)
Business Days after knowledge by a Responsible Officer of (x) the
occurrence of any material adverse development with respect to any
litigation, action, proceeding, or labor controversy described in
Section 7.9 or (y) the commencement of any labor controversy,
-----------
litigation, action, proceeding of the type described in Section 7.9,
-----------
notice thereof and copies of all documentation relating thereto;
(g) within five (5) Business Days after the sending or filing
thereof, all reports, registration statements and prospectuses which
Star Gas Partners, the Borrower or any of its Subsidiaries files with
the Securities and Exchange Commission or any national securities
exchange;
(h) notice of the occurrence of any of the following events
affecting the Borrower or any ERISA Affiliate (but in no event more
than ten (10) days after knowledge by a Responsible Officer of such
event), and deliver to the Agent and each Lender a copy of any notice
with respect to such event that is filed with the Government Authority
and any notice delivered by a Government Authority to the Borrower or
any ERISA Affiliate with respect to such event:
72
(i) an ERISA Event;
(ii) a material increase in the Unfunded Pension
Liability of any Pension Plan;
(iii) the adoption of, or the commencement of
contributions to, any Plan subject to Section 412 of the Code by
the Borrower or any ERISA Affiliate;
(iv) the adoption of any amendment to a Plan subject to
Section 412 of the Code, if such amendment could result in a
material increase in contributions or Unfunded Pension
Liability; or
(v) any Pension Plan's having incurred an "accumulated
funding deficiency" (as defined in Section 412 of the Code), or
receiving notice from the PBGC, Internal Revenue Service or any
governmental agency that it is the subject of an audit, review
or any other governmental action.
In addition, the Borrower shall instruct the actuaries for all Pension Plans to
deliver to the Agent a copy of each Pension Plan's Actuarial Valuation and each
Pension Plan's Schedule B to Form 5500 at the earliest time that such is
delivered to the Borrower or any ERISA Affiliate.
(i) within sixty (60) Business Days after each Fiscal Quarter
end, a certificate setting forth the net proceeds from Asset
Dispositions, the application of such proceeds as permitted under
Section 8.2.8, and the mandatory prepayments made as required by
-------------
Section 3.1.3;
-------------
(j) on the fifteenth (15th) day of each month (or if such day
shall not be a Business Day, the next preceding Business Day) and
promptly after any day on which the Agent requests, a Borrowing Base
Certificate showing the Facility A Borrowing Base as of the last day of
the most recently ended calendar month or such other date as reasonably
requested by the Agent, as the case may be, in each case certified as
complete and correct by the chief financial officer of the Borrower
together with supporting documents reasonably acceptable to the Agent;
(k) promptly and in any event within ten (10) days of
knowledge by a Responsible Officer thereof, any litigation, proceeding,
investigation or dispute which may exist at any time between Star Gas
Partners, Holdings, the Borrower or any Material Subsidiary and any
governmental regulatory body which might interfere with the normal
business operations of Star Gas Partners, Holdings, the Borrower or any
Material Subsidiary, such other information respecting the condition or
operations, financial or otherwise, of Star Gas Partners, Holdings, the
Borrower or any Subsidiary as any Lender through the Agent may from
time to time reasonably request; and
(l) promptly and in any event within ten (10) days of
knowledge by a Responsible Officer thereof and to the extent not
otherwise covered in clauses (a)-(k) above, any event or circumstance
---------------
that could have a Material Adverse Effect, including without limitation
an event or circumstance which leads the Borrower to believe it will
not meet the financial covenants set forth in Section 8.2.4 on a pro
-------------
forma basis.
73
SECTION 8.1.2 Maintenance of Properties. Each of Star Gas
-------------------------
Partners, Holdings and the Borrower will, and will cause each of their
Subsidiaries to, maintain, preserve, protect and keep its properties in good
repair, working order and condition, and make necessary and proper repairs,
renewals and replacements so that its business carried on in connection
therewith may be properly conducted at all times unless Star Gas Partners, the
Borrower or Holdings determines in good faith that the continued maintenance of
any of its or its Subsidiaries' properties is no longer economically desirable.
SECTION 8.1.3 Insurance. In addition to insurance requirements
---------
set forth in the Security Documents, Holdings and the Borrower shall maintain,
and shall cause each of the Material Subsidiaries to maintain, with financially
sound and reputable independent insurers, insurance with respect to its
properties and business against loss or damage of the kinds customarily insured
against by Persons engaged in the same or similar business, of such types and in
such amounts as are customarily carried under similar circumstances by such
other Persons; including workers' compensation insurance, public liability and
property and casualty insurance which amount shall not be reduced by Holdings,
the Borrower or any Material Subsidiary in the absence of thirty (30) days'
prior notice to the Trustee and the Agent. All such insurance shall name the
Trustee as loss payee/mortgagee and as additional insured, for the benefit of
the Lenders, as their interests may appear. All casualty insurance maintained by
Holdings, the Borrower and the Material Subsidiaries shall name the Trustee as
loss payee and all liability insurance shall name the Trustee as additional
insured for the benefit of the Borrower, as their interests may appear. Upon
request of the Agent, the Trustee or any Lender, the Borrower shall furnish the
Agent, with sufficient copies for each Lender, at reasonable intervals (but not
more than once per calendar year) a certificate of a Responsible Officer of the
Borrower (and, if requested by the Agent, any insurance broker of the Borrower)
setting forth the nature and extent of all insurance maintained by Holdings, the
Borrower and the Material Subsidiaries in accordance with this Section or any
Security Documents (and which, in the case of a certificate of a broker, were
placed through such broker).
SECTION 8.1.4 Payment of Obligations. Star Gas Partners, Holdings
----------------------
and the Borrower shall, and shall cause each of their Subsidiaries to, pay and
discharge as the same shall become due and payable (except to the extent the
failure to so pay and discharge could not reasonably be expected to have a
Material Adverse Effect), all their respective obligations and liabilities,
including:
(a) all tax liabilities, assessments and governmental charges
or levies upon it or its properties or assets, unless the same are
being contested in good faith by appropriate proceedings and adequate
reserves in accordance with GAAP are being maintained by Star Gas
Partners, Holdings, the Borrower or such Material Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a
Lien upon its property; and
(c) all Indebtedness, as and when due and payable, but subject
to any subordination provisions contained in any instrument or
agreement evidencing such Indebtedness.
74
SECTION 8.1.5 Compliance with Laws. Each of Star Gas Partners,
--------------------
Holdings and the Borrower shall, and shall cause each Subsidiary to comply, in
all material respects with all Requirements of Law of any Government Authority
having jurisdiction over it or its business (including the Federal Fair Labor
Standards Act), except such as may be contested in good faith or as to which a
bona fide dispute may exist.
SECTION 8.1.6 Books and Records. Star Gas Partners, Holdings and
-----------------
the Borrower will, and will cause each of the Material Subsidiaries to, keep
books and records which accurately reflect all of its business affairs and
transactions.
SECTION 8.1.7 Inspection. The Borrower shall permit the
----------
representatives of each Lender and the Agent, at the expense of the Borrower at
any time when a Default or Event of Default has occurred and is in existence and
otherwise representatives of any Lender or the Agent with prior written notice
at the expense of such Lender or the Agent, to visit and inspect during normal
business hours any of the properties of Star Gas Partners, Holdings, the
Borrower or any Material Subsidiary, to examine all their respective books of
account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public accountants all at
such reasonable times and intervals and as often as may be reasonably requested.
Holdings and the Borrower hereby authorize Holdings', the Borrower's and the
Material Subsidiaries' independent accountants, and shall upon such request
deliver a letter to Holding's, the Borrower's and the Material Subsidiaries'
independent public accountants authorizing them, to reply to and comply with the
provisions of this Section 8.1.7.
-------------
SECTION 8.1.8 Environmental Covenant. Star Gas Partners, Holdings
----------------------
and the Borrower will, and will cause each of the Material Subsidiaries to:
(a) use and operate all of its facilities and properties in
compliance with all Environmental Laws, keep all necessary permits,
approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in compliance therewith, and
handle all Hazardous Materials in compliance with all applicable
Environmental Laws except where non-compliance could not singly or in
the aggregate be reasonably expected to have a Material Adverse Effect;
(b) immediately notify the Agent and provide copies upon
receipt of all written claims, complaints, notices or inquiries
relating to the condition of its facilities and properties or
compliance with Environmental Laws other than those claims, complaints,
notices or inquiries which singly or in the aggregate could not have a
Material Adverse Effect, and shall promptly cure and have dismissed
with prejudice to the satisfaction of the Agent any such actions and
proceedings relating to compliance with Environmental Laws except to
the extent being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books; and
(c) provide such information and certifications which the
Agent may reasonably request from time to time to evidence compliance
with this Section 8.1.8.
--------------
75
SECTION 8.1.9 Compliance with ERISA. Star Gas Partners, Holdings
---------------------
and the Borrower shall, and shall cause each of its ERISA Affiliates to: (a)
maintain each Plan in compliance in all material respects with the applicable
provisions of ERISA, the Code and other federal or state law; (b) cause each
Plan which is qualified under Section 401(a) of the Code to maintain such
qualification; and (c) make all required contributions to any Plan subject to
Section 412 of the Code.
SECTION 8.1.10 Ranking/Security. Holdings and the Borrower will
----------------
cause the Obligations to be secured and rank pari passu with all other Senior
Debt. All of the Collateral will be pledged to secure both the Obligations and
all other Senior Debt. In the event that the Borrower or Holdings obtains or
creates any Material Subsidiary (after the date hereof), the Borrower or
Holdings (as applicable) shall (a) cause each such Material Subsidiary to issue
a guarantee of the Obligations and each such guarantee will be in favor of the
Trustee and secured by a pledge of all of the accounts receivable, inventory,
cash, Customer Lists and stock of such Material Subsidiary, and (b) cause the
Security Agreements to be amended to add such Material Subsidiary as an Obligor
thereunder and shall deliver, or cause such Material Subsidiary to deliver, such
other agreements, documents, instruments and opinions in connection therewith as
the Agent or the Trustee may request.
SECTION 8.1.11 Clean Down Period. The Borrower, for a period of
-----------------
forty-five (45) consecutive days during the period of April 1 to September 30 of
each calendar year, will (a) make a repayment of the aggregate outstanding
principal amount of all Facility A Loans, all Swing Loans and all Facility C
Working Capital Loans, if any, in an amount sufficient so as to cause such
aggregate outstanding principal amount thereof to equal $0 during such period
and (b) reduce all Facility A L/C Obligations if any, in an amount sufficient so
as to cause such aggregate Facility A L/C Obligations not to exceed $0 during
such period.
SECTION 8.1.12 Preservation of Corporate Existence. Star Gas
-----------------------------------
Partners, Holdings and the Borrower shall, and Holdings and the Borrower shall
cause each of their Subsidiaries to:
(a) preserve and maintain in full force and effect its
corporate or partnership existence (as applicable) and good standing
under the laws of its state or jurisdiction of organization or
incorporation, except to the extent permitted by Section 8.2.7;
-------------
(b) preserve and maintain in full force and effect all
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its business
except in connection with transactions permitted by Section 8.2.7 and
-------------
sale of assets permitted by Section 8.2.8 or where the lapse could not
-------------
reasonably be expected to have a Material Adverse Effect;
(c) use reasonable efforts, in the ordinary course of
business, to preserve its business organization and goodwill; and
(d) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of
which could have a Material Adverse Effect.
76
SECTION 8.1.13 Use of Proceeds.
---------------
(a) Holdings and the Borrower shall not, and shall not suffer
or permit any Subsidiary to, use any portion of the Loan proceeds or
any Letter of Credit, directly or indirectly for the purpose of buying
or carrying margin stock or any purpose which violates, or would be
inconsistent with F.R.S. Board Regulation U or X. Terms for which
meanings are provided in F.R.S. Board Regulation U or X or any
regulations substituted therefor, as from time to time in effect, are
used in this Section with such meanings;
(b) The proceeds of the Loans and the Letters of Credit shall
be used for the purposes set forth in Section 7.14(b). Proceeds of the
--------------
Facility C Loans to refinance matured senior secured Indebtedness shall
be limited to $20,000,000 and, to the extent that the aggregate
outstanding principal balance of Facility C Loans, used for such
purpose exceeds $5,000,000 (or would exceed $5,000,000 upon giving
effect to the proposed borrowing), then Facility C Loans may be
incurred for such purpose only if, upon giving effect to such
borrowings (x) the Leverage Ratio would be less than or equal to 3.75
to 1 and (y) the Consolidated Cash Flow to Interest Expense Ratio would
be greater than or equal to 2.75 to 1. The Effective Amount of Facility
C Working Capital Loans shall not exceed the Facility C Working Capital
Loan Cap.
SECTION 8.1.14 Update of Customer Lists. Each of Holdings and the
------------------------
Borrower shall, and shall cause its Material Subsidiaries to, provide to the
Trustee for the benefit of the Agent, the Issuer and the Lenders on such dates
as the Agent reasonably may request one or more computer tapes (or such other
medium as may be acceptable to the Agent) containing each Customer List owned by
Holdings, the Borrower or any of the Material Subsidiaries and within fifteen
(15) days of such request the Borrower and the Agent agree that each Lender
shall be permitted to review such tapes (or other medium) during the reasonable
business hours of the Agent; provided that the Agent and the Lenders shall not
and the Trustee shall be caused not to disclose such information unless an Event
of Default has occurred and is continuing; provided, however, that prior to an
Event of Default, the Trustee, the Agent and the Lenders may disclose such
information only to (a) their respective attorneys, auditors, employees,
consultants or other agents, and (b) to any Government Authority to the extent
required by such Government Authority.
SECTION 8.1.15 Further Assurances.
------------------
(a) The Borrower shall ensure that all written information,
exhibits and reports furnished to the Agent, the Issuer, the Trustee or
the Lenders do not and will not contain any untrue statement of a
material fact and do not and will not omit to state any material fact
or any fact necessary to make the statements contained therein not
misleading in light of the circumstances in which made, and will
promptly disclose to the Agent, the Issuer, the Trustee and the Lenders
and correct any defect or error that may be discovered therein or in
any Loan Document or in the execution, acknowledgement or recordation
thereof.
(b) Promptly upon request by the Agent, the Trustee or the
Required Lenders, the Borrower shall (and shall cause any of its
Subsidiaries to) do, execute, acknowledge,
77
deliver, record, re-record, file, re-file, register and re-register,
any and all such further acts, deeds, conveyances, security agreements,
mortgages, assignments, estoppel certificates, financing statements and
continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments the Agent,
the Trustee or such Lenders, as the case may be, may reasonably require
from time to time in order (i) to carry out more effectively the
purposes of this Agreement or any other Loan Document, (ii) to subject
to the Liens created by any of the Security Documents any of the
properties, rights or interests covered by any of the Security
Documents, (iii) to perfect and maintain the validity, effectiveness
and priority of any of the Security Documents and the Liens intended to
be created thereby, and (iv) to better assure, convey, grant, assign,
transfer, preserve, protect and confirm to the Agent, the Trustee and
Lenders the rights granted or now or hereafter intended to be granted
to the Agent, the Trustee and the Lenders under any Loan Document or
under any other document executed in connection therewith.
SECTION 8.2 Negative Covenants. The Borrower agrees with the Agent and
------------------
each Lender that, until all Commitments have terminated and all Obligations have
been paid and performed in full, the Borrower will perform the obligations set
forth in this Section 8.2.
-----------
SECTION 8.2.1 Business Activities. Star Gas Partners, Holdings
-------------------
and the Borrower will not, nor will they permit any of the Material Subsidiaries
to, engage in any line of business, if, as a result, the general nature of the
business in which Star Gas Partners, Holdings, the Borrower and the Material
Subsidiaries taken as a whole are engaged in would be substantially different
from the nature of the business in which Star Gas Partners, Holdings, the
Borrower and the Material Subsidiaries are engaged in as of the Effective Date.
SECTION 8.2.2 Indebtedness.
------------
(a) Holdings and the Borrower will not, nor will they permit
any of the Material Subsidiaries to, create, incur, assume or suffer to
exist or otherwise become or be liable in respect of any Indebtedness,
other than, without duplication, the following:
(i) the Private Placement Debt identified on Item
8.2.2(a)(i) of the Disclosure Schedule;
(ii) Indebtedness evidenced by the Obligations;
(iii) the Existing Subordinated Debt;
(iv) additional secured Indebtedness of Holdings, the
Borrower and the Material Subsidiaries in excess of Indebtedness
permitted by clauses (i) and (ii) above, if (A) Holdings, the
--------------------
Borrower and the Material Subsidiaries are in compliance with
the covenant on pro forma Consolidated Cash Flow to Interest
Expense Ratio set forth in Section 8.2.4(b) (including the
---------------
Indebtedness to be incurred and the repayment of any
Indebtedness being refinanced), (B) Holdings, the Borrower and
the Material Subsidiaries are in compliance with the pro forma
Leverage Ratio covenant set forth in Section 8.2.4(a), (C) in
----------------
the case of Indebtedness (other than Borrower notes) incurred in
connection with Capitalized
78
Lease Liabilities, the obligations incurred do not exceed the
fair market value of such property or assets (as determined in
good faith by the Board of Directors of the Borrower), (D) to the
extent such Indebtedness is pari passu with the other Senior
Debt, the creditors in respect of such additional Indebtedness
shall have become parties to the Intercreditor Agreement and the
Intercreditor Agreement shall have been amended, if necessary, to
reflect such additional Indebtedness and otherwise shall be in
form and substance satisfactory to the Agent and the Lenders, (E)
to the extent such Indebtedness is subordinate to the Senior
Debt, such Indebtedness constitutes Permitted Subordinated Debt
and (F) no Default or Event of Default would exist after
incurring such Indebtedness;
(v) additional unsecured Indebtedness of Holdings, the
Borrower or the Material Subsidiaries provided that (A)
Holdings, the Borrower and the Material Subsidiaries are in
compliance with the covenant on pro forma Consolidated Cash Flow
to Interest Expense Ratio (including the Indebtedness to be
incurred and the repayment of any debt being refinanced and
repaid) set forth in Section 8.2.4(b), (B) Holdings, the
----------------
Borrower and the Material Subsidiaries are in compliance with
the Leverage Ratio covenant set forth in Section 8.2.4(a), (C)
----------------
in the case of Indebtedness incurred in connection with
Capitalized Lease Liabilities, the obligations incurred do not
exceed the fair market value of such property or assets (as
determined in good faith by the Board of Directors of the
Borrower), (D) such Indebtedness constitutes Permitted
Subordinated Debt and (E) no Default or Event of Default would
exist after incurring such Indebtedness;
(vi) to the extent not covered by paragraph (v) above,
Indebtedness in respect of the Permitted Hedging Agreements; and
(vii) the Acquisition Debt identified on Item
8.2.2(a)(vii) of the Disclosure Schedule and other Acquisition
Debt if (A) the principal amount of any such Acquisition Debt
shall not exceed the fair market value of the assets acquired
with such Indebtedness, (B) Holdings, the Borrower and the
Material Subsidiaries are in compliance with the covenant on pro
forma Consolidated Cash Flow to Interest Expense Ratio set forth
in Section 8.2.4(b) (including the Indebtedness to be incurred
----------------
and the repayment of any Indebtedness being refinanced), (C)
Holdings, the Borrower and the Material Subsidiaries are in
compliance with the pro forma Leverage Ratio covenant set forth
in Section 8.2.4(a), and (D) no Default or Event of Default
---------------
would exist after incurring such Indebtedness.
Notwithstanding the foregoing, in the case of the Material Subsidiaries only,
the aggregate amount of all Indebtedness of the Material Subsidiaries (exclusive
of Indebtedness in respect of Senior Debt) shall not exceed 2% of the
Consolidated Total Tangible Assets of Holdings at any time.
If no Default or Event of Default shall have occurred and be continuing, the
provisions of this Section will not prevent Holdings, the Borrower and the
Material Subsidiaries from incurring senior secured Indebtedness to refinance,
refund or renew the Senior Debt, provided that (1) the
79
principal amount of such Indebtedness shall not exceed the principal amount of
such Senior Debt being renewed, refunded or refinanced together with any accrued
interest and premium with respect thereto and any costs and expenses related to
such renewal, refunding or refinancing, (2) such Indebtedness (x) shall not
mature prior to the stated maturity of such Senior Debt so exchanged or
refinanced, (y) shall have an average life equal to or greater than the
remaining average life of such Senior Debt so exchanged or refinanced, and (3)
such Indebtedness shall continue to be subject to the Intercreditor Agreement.
Furthermore, if no Default or Event of Default shall have occurred and be
continuing, the provisions of this Section will not prevent Holdings, the
Borrower and the Material Subsidiaries from incurring Indebtedness to refinance,
refund or renew any outstanding subordinated Indebtedness, provided that (1) the
principal amount of such Indebtedness shall not exceed the principal amount of
the Indebtedness being renewed, refunded or refinanced together with any accrued
interest and premium with respect thereto and any costs and expenses related to
such renewal, refunding or refinancing, (2) such Indebtedness (x) shall not
mature prior to the stated maturity of the subordinated Indebtedness so
exchanged or refinanced and (y) shall have an average life equal to or greater
than the remaining average life of the subordinated Indebtedness so exchanged or
refinanced, and (3) such Indebtedness constitutes Permitted Subordinated Debt.
(b) Star Gas Partners will not create, incur, assume or suffer
to exist or otherwise become liable in respect of any Indebtedness
except (i) Indebtedness in respect of Senior Debt and Indebtedness
evidenced by its Guaranty dated March 25, 1999 in favor of the holders
of the $2,140,000 10.25% Subordinated Notes due January 15, 2001 (as
extended in accordance with its terms) as such Guaranty is in effect as
of the Effective Date and (ii) unsecured Contingent Liabilities in an
aggregate amount not exceeding $50,000,000 at any time outstanding
incurred solely by way of financial guarantees of obligations of its
direct or indirect Wholly-Owned Subsidiaries and its Subsidiary, Total
Gas & Electric, Inc. (including Contingent Liabilities in respect of
the obligations of Total Gas & Electric, Inc. under the Credit
Agreement dated as of March 30, 2001 among Total Gas & Electric, Inc.,
the banks referred to therein and The Chase Manhattan Bank, as
administrative agent for such banks); provided, however, if no Default
or Event of Default shall have occurred and be continuing, the
provisions of this clause (b) will not prevent Star Gas Partners from
----------
creating or incurring any Indebtedness, provided that (w) such
Indebtedness constitutes Permitted Subordinated Debt; (x) no Default or
Event of Default would exist after incurring such Indebtedness, and (y)
after incurring such Indebtedness, the ratio of SGP Consolidated Pro
Forma Operating Cash Flow to SGP Consolidated Pro Forma Interest
Expense is greater than 2.00 to 1.0 for the period of the four (4) most
recent Fiscal Quarters ending on or prior to the date of the incurrence
of such Indebtedness.
SECTION 8.2.3 Liens. Star Gas Partners, Holdings and the Borrower
-----
shall not, nor shall they permit any of the Material Subsidiaries to, create,
incur, assume or suffer to exist any Lien upon any of its property, revenues or
assets, whether now owned or hereafter acquired, except with respect to
Holdings, the Borrower and the Material Subsidiaries, any of the Liens referred
to below and with respect to Star Gas Partners the Liens referred to in clauses
-------
(b), (d) and (g) below:
--- --- ---
80
(a) Liens in the Collateral created in favor of the Trustee
for the benefit of the Agent, the Issuer, the Lenders, the Private
Placement Debt holders and the holders of other Parity Debt;
(b) Liens for taxes, assessments or other governmental charges
or levies not at the time delinquent or thereafter payable without
penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(c) Liens of carriers, warehousemen, mechanics, materialmen
and landlords incurred in the ordinary course of business for sums not
overdue and being diligently contested in good-faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(d) Liens incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure performance
of tenders, statutory obligations, leases and contracts (other than for
borrowed money) entered into in the ordinary course of business or to
secure obligations on surety or appeal bonds;
(e) the purchase money security interests on any property
acquired or held by Holdings, the Borrower or Material Subsidiaries in
the ordinary course of business, securing Indebtedness incurred or
assumed for the purpose of financing all or any part of the cost of
acquiring such property; provided that (i) any such Lien attaches to
such property concurrently with or within twenty (20) days after the
acquisition thereof, (ii) such Lien attaches solely to the property so
acquired in such transaction, (iii) the principal amount of the debt
secured thereby does not exceed 100% of the cost of such property and
(iv) the principal amount of the Indebtedness secured by any and all
such purchase money security interests shall not at any time exceed
$2,000,000;
(f) leases or subleases granted to others, zoning
restrictions, easements, licenses, reservations, rights-of-way,
restrictions on the use of property or irregularities of title and
other similar changes, encumbrances and Liens which do not materially
impair the use thereof by Holdings, the Borrower or any of their
Material Subsidiaries; and
(g) Liens (other than any Lien imposed by ERISA and other than
on the Collateral) consisting of pledges or deposits required in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other social security legislation;
provided, however, that Liens on real estate shall be limited to real estate
acquired after the Effective Date securing the purchase price thereof and not in
excess of $500,000 per Fiscal Year.
SECTION 8.2.4 Financial Covenants. The Borrower shall not
permit: -------------------
(a) the Leverage Ratio based upon the most recent four Fiscal
Quarters to exceed 4.00 to 1 at any time hereafter.
81
(b) the Consolidated Cash Flow to Interest Expense Ratio to be
equal to or less than 2.50 to 1 at any time hereafter.
(c) the ratio of Current Assets to Current Liabilities to be
less than the following respective amounts during the following
respective periods in which Facility A Loans, Facility A Letters of
Credit or Facility C Working Capital Loans are outstanding:
Current Assets to
Period Current Liabilities
------ -------------------
At December 31 through June 30 1.00 to 1
of each year
At July 1 through December 30 0.85 to 1
of each year
SECTION 8.2.5 Investments. Subject to Section 8.2.6, none of
----------- -------------
Holdings, the Borrower or any of the Material Subsidiaries shall make or suffer
to exist, any Investment in any Person, including without limitation, any
shareholder of Holdings, the Borrower or any Subsidiary except (and in each case
in accordance with Sections 2.03, 4.01 and 4.02 of the Security Agreements):
(a) Investments in:
(i) obligations issued or guaranteed by the United
States of America;
(ii) certificates of deposit, bankers acceptances and
other "money market instruments" issued by any bank or trust
company organized under the laws of the United States of America
or any State thereof and having capital and surplus in an
aggregate amount of not less than $100,000,000;
(iii) open market commercial paper bearing the highest
credit rating issued by Standard & Poor's Corporation or by
another nationally recognized credit rating agency;
(iv) repurchase agreements entered into with any bank or
trust company organized under the laws of the United States of
America or any State thereof and having capital and surplus in
an aggregate amount of not less than $100,000,000 relating to
United States of America government obligations; and
(v) shares of "money market funds," each having net
assets of not less than $100,000,000;
in each case maturing or being due or payable in full not more than one-hundred
eighty (180) days after Holdings', the Borrower's or any Material Subsidiary's
acquisition thereof;
(b) Investments by Holdings or the Borrower in any Material
Subsidiary (whether established before or after the Effective Date) and
by any Material Subsidiary in
82
the Borrower, Holdings or another Material Subsidiary; provided that,
with respect to any Investment that involves an acquisition of any
business (including the Contemplated Acquisition): (i) the acquiree
shall be primarily engaged in a business that would be permitted by
Section 8.2.1; (ii) immediately after giving effect to such
-------------
acquisition, no Default or Event of Default will occur or be continuing
and each of the representations and warranties of the Borrower in this
Agreement shall be true on and as of the date of consummation of the
acquisition, both before and after giving effect thereto; and (iii)
solely with respect to the Contemplated Acquisition, the Borrower shall
have received from Star Gas Partners net proceeds of at least
$60,000,000 from the issuance by Star Gas Partners of its common units;
provided further that, if any such acquisition is not structured as an
Investment under this Agreement, the provisions of this Section
-------
8.2.5(b) shall nonetheless be required to be complied with in
--------
connection with such acquisition; and
(c) Investments by Holdings or the Borrower in any existing or
future, direct or indirect, Subsidiary which exists for the sole
purpose of obtaining and holding a license which Holdings or the
Borrower deems necessary or advisable for its business, provided that
(i) the total Investment in such Subsidiary does not exceed $100,000 in
the aggregate for any one such Subsidiary or $200,000 in the aggregate
for all such Subsidiaries and (ii) if the failure to have such license
could reasonably be expected to have a Material Adverse Effect, the
Subsidiary holding such license shall be a Material Subsidiary.
SECTION 8.2.6 Restricted Payments, etc.
------------------------
(a) Holdings will not directly or indirectly declare, order,
pay, make or set apart any sum for any Restricted Payment, and Holdings
will not, and will not permit the Borrower or any of the Material
Subsidiaries to, make or authorize any Restricted Investment, except
that (i) Holdings may declare or order, and make, pay or set apart,
once during each calendar quarter a Restricted Payment, and (ii)
Holdings, the Borrower or any Material Subsidiary may make Restricted
Investments during each calendar quarter, provided that (x) the
aggregate amount of such Restricted Payments and Restricted Investments
in any calendar quarter do not exceed (as applicable) the Available
Cash for the immediately preceding calendar quarter, (y) immediately
after giving effect to any such proposed action no Default or Event of
Default shall exist and be continuing, and (z) Restricted Investments
may only be made in accordance with Sections 2.03 and 4.01 of the
Security Agreements.
(b) Star Gas Partners will not permit payment of any
partnership distribution, purchase any outstanding partnership units,
or retire, prior to its maturity, any subordinated debt (the "SGP
---
Restricted Payment") and Star Gas Partners will not, and will not
------------------
permit any of its Subsidiaries to, make or authorize any Restricted
Investment unless after giving effect to such action:
(i) the ratio of SGP Consolidated Pro Forma Operating
Cash Flow to SGP Consolidated Pro Forma Interest Expense for
Star Gas Partners is greater
83
than 1.75 to 1.0 for the period of the four (4) most recent
Fiscal Quarters ending on or prior to the date of such SGP
Restricted Payment; and
(ii) no Default or Event of Default would exist.
(c) Any Restricted Payment and any SGP Restricted Payment must
be payable within sixty (60) days of its declaration and if the
Restricted Payment or the SGP Restricted Payment (as applicable) would
have been permitted as of the date of such declaration such Restricted
Payment or SGP Restricted Payment (as applicable) shall be permitted if
made during such sixty (60) day period; provided, however, that no
Default or Event of Default exists on the day of such distribution or
would exist after making such distribution.
SECTION 8.2.7 Consolidation, Merger, etc. Star Gas Partners,
---------------------------
Holdings and the Borrower shall not, and shall not suffer or permit any Material
Subsidiary to, merge, consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its assets (whether nor owned or hereafter acquired)
to or in favor of any Person, except:
(a) any Material Subsidiary may merge with the Borrower,
provided that the Borrower shall be the continuing or surviving
corporation, or with any one or more Subsidiaries, provided that if any
transaction shall be between a Subsidiary and a Wholly-Owned
Subsidiary, the Wholly-Owned Subsidiary shall be the continuing or
surviving corporation; and
(b) any Material Subsidiary may sell all or substantially all
of its assets (upon voluntary liquidation or otherwise), to the
Borrower or another Wholly-Owned Material Subsidiary.
SECTION 8.2.8 Asset Dispositions, etc. Except in connection with
-----------------------
a transaction permitted under Section 8.2.7, none of Holdings, the Borrower or
-------------
any of the Material Subsidiaries may sell or dispose of any portion of its
property (excepting abandonment, sale of inventory or other dispositions in the
ordinary course of business), or sell equity interests in any Material
Subsidiary to any third party (all of the foregoing, are herein called "Asset
-----
Dispositions"), unless:
------------
(a) immediately before and after giving effect to such
transaction, no Default or Event of Default shall exist or be
continuing;
(b) one of the following two conditions shall be satisfied:
(i) the aggregate net after tax proceeds from such
Asset Disposition do not exceed 10% of the Consolidated Total
Assets of Holdings during such Fiscal Year; or
(ii) in the event that such net after tax proceeds from
such Asset Disposition exceed 10% of the Consolidated Total
Assets of Holdings ("Excess Sale Proceeds"), the Borrower shall
` --------------------
within ninety (90) days of the date of the
84
disposal of the assets giving rise to such proceeds, cause an
amount equal to such Excess Sale Proceeds to be applied (x) to
the acquisition of assets in replacement of the assets so
disposed of or of assets which may be productively used in the
United States in the conduct of Holdings', the Borrower's or any
Material Subsidiary's business (and such newly acquired assets
shall become part of the General Collateral and shall be
subjected to the Lien of the Security Documents), or (y) to the
extent not applied pursuant to the immediately preceding clause
------
(x), for deposit with the Trustee no later than ninety (90) days
---
of after such disposition to be reinvested in assets described
in clause (x) and to the extent such Excess Sale Proceeds are
----------
not reinvested as described above within one-hundred eighty
(180) days of such disposition to the prepayment of the
Obligations pursuant to Section 3.1; and
-----------
(c) 100% of the consideration received is in cash or
marketable securities or notes secured by a standby letter of credit.
SECTION 8.2.9 Modification of Certain Agreements. The Borrower
----------------------------------
shall not consent to any amendment, supplement or other modification of any of
the terms or provisions contained in, or applicable to, any document or
instrument evidencing or applicable to the Private Placement Debt (including the
Note Agreements), other Parity Debt, the Existing Subordinated Debt, other
Permitted Subordinated Debt or the Exchanged Notes, which increases any amount
payable thereunder or shortens the terms thereof or increases any installment or
required prepayment.
SECTION 8.2.10 Transactions with Affiliates. Star Gas Partners,
----------------------------
Holdings and the Borrower will not, and will not permit any Material Subsidiary
to, directly or indirectly, engage in any transaction with any Affiliate,
including, without limitation, the purchase, sale or exchange of assets or the
rendering of any service, to Star Gas Partners', Holdings', the Borrower's or
such Material Subsidiary's business except upon fair and reasonable terms that
are no less favorable to Star Gas Partners, Holdings, the Borrower or such
Material Subsidiary, as the case may be, than those which might be obtained in
an arm's-length transaction at the time such transaction is agreed upon from
Persons which are not such an Affiliate.
SECTION 8.2.11 Negative Pledges, Restrictive Agreements, etc.
----------------------------------------------
Holdings and the Borrower will not, and will not permit any of the Material
Subsidiaries to, enter into any agreement (excluding this Agreement, any other
Loan Document and any agreement governing any Indebtedness permitted herein)
prohibiting the creation or assumption of any Lien upon its properties, revenues
or assets, whether now owned or hereafter acquired, or the ability of the
Borrower or any other Obligor to amend or otherwise modify this Agreement or any
other Loan Document.
SECTION 8.2.12 Limitation on Issuance of Stock. Except as
-------------------------------
otherwise permitted herein and except with respect to issuances of additional
stock to the direct parent of Holdings, the Borrower or any Material Subsidiary,
Holdings and the Borrower shall not and shall not permit any of the Material
Subsidiaries to, directly or indirectly, issue, contingently or otherwise, any
shares of Holdings', the Borrower's or such Material Subsidiary's capital stock,
85
warrants, rights or options to purchase or acquire shares of Holdings, the
Borrower's or such Subsidiary's capital stock.
SECTION 8.2.13 Operating Leases.
----------------
(a) The aggregate obligations of Holdings, the Borrower and
the Material Subsidiaries for the payment of rent for any property
under lease or agreement to lease (excluding obligations of Holdings,
the Borrower and the Material Subsidiaries under or with respect to
Synthetic Leases) for any Fiscal Year shall not exceed $15,000,000.
(b) Star Gas Partners shall not have any obligations for the
payment of rent of any property under the lease or agreement to lease.
SECTION 8.2.14 Prepayments. None of Holdings, the Borrower or
-----------
any Material Subsidiary shall make any voluntary or optional prepayment of any
Indebtedness for borrowed money incurred or permitted to exist under the terms
of this Agreement other than as provided in Section 20 of the Intercreditor
Agreement and (i) the Indebtedness hereunder, (ii) Indebtedness repaid pursuant
to the two last paragraphs of Section 8.2.2(a), (iii) Acquisition Debt
----------------
identified on Item 8.2.2(a)(vii) of the Disclosure Schedule and any other
Acquisition Debt secured by Facility C Letters of Credit or (iv) up to
$4,000,000 of notes and debentures outstanding on the Effective Date under
indentures filed under the Trust Indenture Act of 1939.
SECTION 8.2.15 Organic Documents. Star Gas Partners, Holdings
-----------------
and the Borrower will not, and will not permit any Material Subsidiary, to alter
any Organic Document of such entity in any manner which could have a Material
Adverse Effect.
SECTION 8.2.16 Capital Expenditures. Holdings and the Borrower
--------------------
will not, nor will they permit any of the Material Subsidiaries to, make at any
time Capital Expenditures in respect of any line of business other than the Fuel
Oil Distribution Business which in the aggregate, over the term of this
Agreement, exceed 10% of the consolidated tangible assets of Holdings, the
Borrower and the Material Subsidiaries as determined in accordance with GAAP at
such time.
SECTION 8.2.17 Contingent Liabilities. Star Gas Partners,
----------------------
Holdings and the Borrower shall not, and shall not suffer or permit any Material
Subsidiary to, create, incur, assume or suffer to exist any Contingent
Liabilities except:
(a) endorsements for collection or deposit in the ordinary
course of business; and
(b) Contingent Liabilities of Holdings, the Borrower and the
Material Subsidiaries existing as of the Effective Date and listed in
Item 8.2.17 of the Disclosure Schedule (including, without limitation,
Contingent Liabilities in respect of the Obligations, the Parity Debt
and subordinated Indebtedness referred to on the Disclosure Schedule),
other Contingent Liabilities of such Persons permitted by Section
-------
8.2.2(a) and Contingent Liabilities of Star Gas Partners permitted by
--------
Section 8.2.2(b).
----------------
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SECTION 8.2.18 ERISA Star Gas Partners, Holdings and the
-----
Borrower shall not, and shall not suffer or permit any of its ERISA Affiliates
to: (a) engage in a prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan which has resulted, or otherwise
act or fail to make a contribution if such action or failure to act could result
in liability of the Borrower and/or ERISA Affiliate with respect to any Pension
Plan in an aggregate amount in excess of $7,000,000; (b) engage in a transaction
that could be subject to Section 4069 or 4212(c) of ERISA; or (c) permit to
exist any "accumulated funding deficiency" (as defined in Section 412 of the
Code) with respect to any Pension Plan. Each year, Star Gas Partners, Holdings,
and the Borrower shall contribute, or shall cause to be contributed, $500,000
among the underfunded Pension Plans. This amount shall be in addition to
contributions necessary to satisfy Section 412 of the Code for such year.
SECTION 8.2.19 Accounting Changes. Star Gas Partners, Holdings
------------------
and the Borrower shall not, and shall not suffer or permit any Material
Subsidiary to, make any significant change in accounting treatment or reporting
practices, except as required by GAAP, or change the Fiscal Year of Holdings,
the Borrower or of any Material Subsidiary.
SECTION 8.2.20 Bank Accounts. None of Holdings, the Borrower or
-------------
any of the Material Subsidiaries shall have any bank accounts other than (a) the
Chase Account, (b) the other existing bank accounts listed on Schedule VI and
-----------
(c) other accounts expressly permitted by Section 4.18(b) of each of the
Security Agreements (provided that the Borrower shall have furnished to the
Agent a copy of the Blocked Account Agreement required thereby at the time any
such account is opened or, if permitted by the Security Agreements, within
ninety (90) days thereafter as long as during any such period not more than
$1,000,000 shall be deposited in all accounts for which no Blocked Account
Agreement has yet been delivered).
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.1 Listing of Events of Default. Each of the following events
----------------------------
or occurrences described in this Section 9.1 shall constitute an "Event of
--------
Default".
-------
SECTION 9.1.1 Non-Payment of Obligations. The Borrower shall default in
--------------------------
the payment or prepayment when due of any principal or interest of any Loan, or
the payment of any fee or other Obligation (including Reimbursement
Obligations).
SECTION 9.1.2 Breach of Warranty. Any material representation or
------------------
warranty of the Borrower or any other Obligor made or deemed to be made
hereunder or in any other Loan Document executed by it or any other writing or
certificate furnished by or on behalf of the Borrower or any other Obligor to
the Agent or any Lender for the purposes of or in connection with this Agreement
or any such other Loan Document (including any certificates delivered pursuant
to Article VI) is or shall be incorrect when made in any material respect.
----------
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SECTION 9.1.3 Non-Performance of Other Covenants and
Obligations. --------------------------------------
-----------
(a) Any Obligor shall default in the due performance and
observance of any term, covenant or agreement contained in any of
Sections 8.1.5, 8.1.10, 8.1.11 or 8.1.14 or in any section of Section
8.2; or
(b) any Obligor shall default in the due performance and
observance of any other Obligation or agreement contained herein or in
any other Loan Document, and such default shall continue unremedied for
a period of fifteen (15) days after actual knowledge thereof by a
Responsible Officer.
SECTION 9.1.4 Default on Other Indebtedness. Star Gas Partners,
-----------------------------
Holdings, the Borrower or any Subsidiary shall default (after notice and the
expiration of any applicable grace period) in the payment of any amount of
principal, premium or interest on any Indebtedness (other than the Notes), or
any event shall occur or condition shall exist in respect of any Indebtedness of
Star Gas Partners, Holdings, the Borrower or any of their Subsidiaries (other
than the Notes) and the effect of such event or condition is to cause (or to
permit the holders of such Indebtedness to cause) such Indebtedness to become
due before its stated maturity, in each case, if the outstanding principal
balance of such Indebtedness is in excess of $2,000,000 in the aggregate.
SECTION 9.1.5 Judgments. Any judgment or order for the payment
---------
of money in excess of $1,000,000, net of insurance coverage, shall be rendered
against Star Gas Partners, Holdings, the Borrower or any of their Subsidiaries
and:
(a) such judgment or order is non appealable, has not been
stayed pending appeal, or all rights to appeal such judgment have
expired or been exhausted; and
(b) such judgment or order shall remain undischarged for a
period of sixty (60) consecutive days after the date due.
SECTION 9.1.6 ERISA. (a) An ERISA Event shall occur with respect
-----
to a Pension Plan or Multiemployer Plan which has resulted or could result in
liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $7,000,000;
or (b) the aggregate amount of Unfunded Pension Liability among all Pension
Plans at any time exceeds $7,000,000; or (c) with respect to any Pension Plan,
the Borrower or any ERISA Affiliate shall fail to pay when due, after the
expiration of any applicable grace period, any contribution required or needed
in order to avoid (i) an "accumulated funding deficiency" (as defined in Section
412 of the Code), or (ii) adverse PBGC action; or (d) $500,000 is not
contributed each year among the underfunded Pension Plans. For purposes of
clause (d), the $500,000 amount shall be in addition to contributions necessary
to satisfy Section 412 of the Code for such year.
SECTION 9.1.7 Change in Control. Any Change in Control shall
-----------------
occur except as is permitted by Section 8.2.7.
-------------
88
SECTION 9.1.8 Bankruptcy, Insolvency, etc. Any of the following
---------------------------
events shall occur:
(a) filing by or on the behalf of the Managing General
Partner, Star Gas Partners, Holdings, the Borrower, or any of their
Subsidiaries of a voluntary petition or an answer seeking
reorganization, arrangement, readjustment of its debts or for any other
relief under any bankruptcy, reorganization, compromise, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar
act or law, state or federal, now or hereafter existing ("Bankruptcy
----------
Law"), or any action by the Managing General Partner, Star Gas
---
Partners, Holdings, the Borrower or any of their Subsidiaries for, or
consent or acquiescence to, the appointment of a receiver, trustee or
other custodian of the Managing General Partner, Star Gas Partners,
Holdings, the Borrower or any of their Subsidiaries, or of all or a
substantial part of its property; or the making by the Managing General
Partner, Star Gas Partners, Holdings, the Borrower or any of their
Subsidiaries of any assignment for the benefit of creditors; or the
admission by the Managing General Partner, Star Gas Partners, Holdings,
the Borrower or any of their Subsidiaries in writing of its inability
to pay its debts as they become due; or
(b) filing of any involuntary petition against the Managing
General Partner, Star Gas Partners, Holdings, the Borrower or any of
their Subsidiaries in bankruptcy or seeking reorganization,
arrangement, readjustment or its debts or for any other relief under
any Bankruptcy Law and an order for relief by a court having
jurisdiction in the premises shall have been issued or entered therein;
or any other similar relief shall be granted under any applicable
Federal or state law; or a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee or other officer having similar
powers over the Managing General Partner, Star Gas Partners, Holdings,
the Borrower or any of their Subsidiaries or over all or a part of its
property shall have been entered; or the involuntary appointment of an
interim receiver, trustee or other custodian of the Managing General
Partner, Star Gas Partners, Holdings, the Borrower or any of their
Subsidiaries or of all or a substantial part of its property; or the
issuance of a warrant of attachment, execution or similar process
against any substantial part of the property of the Managing General
Partner, Star Gas Partners, Holdings, the Borrower or any of their
Subsidiaries and continuance of any such event for sixty (60)
consecutive days unless dismissed, bonded to the satisfaction of the
court having jurisdiction in the premises or discharged; or
(c) taking any action authorizing, or in furtherance of, any
of the foregoing by Star Gas Partners, Holdings, the Borrower or any
Material Subsidiary.
SECTION 9.1.9 Impairment of Security, etc. Any of the Security
---------------------------
Documents or documents guaranteeing the Notes shall cease in any material
respect to be in full force and effect or shall be declared to be null and void
in whole or in a material part by the final judgment (which is non-appealable or
has not been stayed pending appeal or as to which all rights to appeal have
expired or have been exhausted) of a court or other governmental or regulatory
authority having jurisdiction or the validity or enforceability thereof shall be
contested by or on behalf of Holdings, the Borrower or any Material Subsidiary
or Holdings, the Borrower or any Material Subsidiary shall renounce any of the
same or deny that it has any or further liability
89
thereunder or any security interest purported to be created by any Security
Document shall cease to be, or shall be asserted by Holdings, the Borrower or
any Material Subsidiary not to be, a valid, perfected, first priority (except as
expressly otherwise provided in this Agreement or such Security Document)
security interest in the collateral covered thereby.
SECTION 9.1.10 Split-Up. Any order, judgment or decree is entered
--------
in any proceeding against the Borrower decreeing a split-up of Holdings or the
Borrower which requires the divestiture of assets representing a substantial
part, or the divestiture of the stock of any Material Subsidiary whose assets
represent a substantial part, of the consolidated assets of Holdings, the
Borrower and Subsidiaries (determined in accordance with GAAP) or which requires
the divestiture of assets, or stock of any of their Material Subsidiaries, which
shall have contributed a substantial part of the consolidated Net Income of
Holdings, the Borrower and their Material Subsidiaries for any of the three
Fiscal Years then most recently ended, and such order, judgment or decree shall
not be dismissed or execution thereon stayed pending appeal or review within
sixty (60) days after entry thereof, or in the event of such a stay, such order,
judgment or decree or decree shall not be dismissed within sixty (60) days after
such stay expires.
SECTION 9.1.11 Guarantor Defaults. Any of Star Gas Partners,
------------------
Holdings or any Material Subsidiary fails in any material respect to perform or
observe any term, covenant or agreement in its Guarantee Agreement; or any
Guarantee Agreement is for any reason partially (including with respect to
future advances) or wholly revoked or invalidated, or otherwise ceases to be in
full force and effect, or any of Star Gas Partners, Holdings or any Material
Subsidiary or any other Person contests in any manner the validity or
enforceability thereof or denies that it has any further liability or obligation
thereunder.
SECTION 9.2 Action if Bankruptcy. If any Event of Default described in
--------------------
Section 9.1.8 shall occur, the Commitments and any obligation of the Issuer to
-------------
issue Letters of Credit (if not theretofore terminated) shall automatically
terminate and the outstanding principal amount of all outstanding Loans, the
maximum aggregate amount that is or at any time thereafter may become available
for drawing under any outstanding Letters of Credit and all other Obligations
shall automatically be and become immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower.
SECTION 9.3 Action if Other Event of Default.
--------------------------------
(a) If any Event of Default (other than any Event of Default
described in Section 9.1.8) shall occur for any reason, whether
-------------
voluntary or involuntary, and be continuing, the Agent, upon the
direction of the Required Lenders, shall by notice to the Borrower:
(i) declare the commitment of each Lender to make Loans
and any obligation of the Issuer to issue Letters of Credit to
be terminated, whereupon such commitments and obligation shall
be terminated;
(ii) declare an amount equal to the maximum aggregate
amount that is or at any time thereafter may become available
for drawing under any outstanding Letters of Credit (whether or
not any beneficiary shall have presented, or shall be
90
entitled at such time to present, the drafts or other documents
required to draw under such Letters of Credit) to be immediately
due and payable as cash collateral for the obligations
thereunder;
(iii) declare the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon, and
all other amounts owing or payable hereunder or under any other
Loan Document to be immediately due and payable (including,
without limitation, amounts due under Section 5.4), without
-----------
presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived by the Borrower; and
(iv) exercise on behalf of itself and the Lenders all
rights and remedies available to it and the Lenders under the
Loan Documents or applicable law.
(b) The affirmative vote of Lenders holding at least 66-2/3%
of the outstanding principal amount of the Obligations may rescind or
annul the acceleration at any time; provided, that, all Events of
Default have been cured or waived at such time.
(c) The rights provided for in this Agreement and the other
Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or
under any other instrument, document or agreement now existing or
hereafter arising.
ARTICLE X
THE AGENT
SECTION 10.1 Appointment and Authorization of Agent.
(a) Each Lender hereby irrevocably (subject to Section 10.9)
------------
appoints, designates and authorizes the Agent to take such action on
its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary contained
elsewhere herein or in any other Loan Document, the Agent shall not
have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary
relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise
exist against the Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" herein and in the other
Loan Documents with reference to the Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. Instead, such term is used
merely as a matter of market custom, and is intended to create or
reflect only an administrative relationship between independent
contracting parties.
91
(b) The Issuer shall act on behalf of the Lenders with respect
to any Letters of Credit issued by it and the documents associated
therewith until such time (and except for so long) as the Agent may
agree at the request of the Required Lenders to act for the Issuer with
respect thereto; provided, however, that the Issuer shall have all of
the benefits and immunities (i) provided to the Agent in this Article X
---------
with respect to any acts taken or omissions suffered by the Issuer in
connection with Letters of Credit issued by it or proposed to be issued
by it and the application and agreements for letters of credit
pertaining to the Letters of Credit as fully as if the term "Agent" as
used in this Article X included the Issuer with respect to such acts or
---------
omissions, and (ii) as additionally provided herein with respect to the
Issuer.
SECTION 10.2 Delegation of Duties. The Agent may execute any of its
--------------------
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties.
The Agent shall not be responsible for the negligence or misconduct of any agent
or attorney-in-fact that it selects in the absence of gross negligence or
willful misconduct.
SECTION 10.3 Liability of Agent. No Agent-Related Person shall (a) be
------------------
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct
in connection with its duties expressly set forth herein), or (b) be responsible
in any manner to any Lender or participant for any recital, statement,
representation or warranty made by Holdings, the Borrower or any Subsidiary or
Affiliate of the Borrower or any officer thereof, contained herein or in any
other Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in connection
with, this Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of the Borrower or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Lender or participant to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Borrower or any of the
Borrower's Subsidiaries or Affiliates thereof.
SECTION 10.4 Reliance by Agent.
-----------------
(a) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or
other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to
the Borrower), independent accountants and other experts selected by
the Agent. The Agent shall be fully justified in failing or refusing to
take any action under any Loan Document unless it shall first receive
such advice or concurrence of the Required Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and
92
expense which may be incurred by it by reason of taking or continuing
to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement
or any other Loan Document in accordance with a request or consent of
the Required Lenders or all the Lenders, if required hereunder, and
such request and any action taken or failure to act pursuant thereto
shall be binding upon all the Lenders and participants. Where this
Agreement expressly permits or prohibits an action unless the Required
Lenders or all the Lenders (as applicable) otherwise determine, the
Agent shall, and in all other instances, the Agent may, but shall not
be required to, initiate any solicitation for the consent or a vote of
the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 6.1, each Lender that has signed this Agreement
-----------
shall be deemed to have consented to, approved or accepted or to be
satisfied with, each document or other matter either sent by the Agent
to such Lender for consent, approval, acceptance or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender.
SECTION 10.5 Notice of Default. The Agent shall not be deemed to have
-----------------
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Lenders, unless the Agent shall
have received written notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default." The Agent will notify the Lenders, the Swing
Line Lender, the Issuer and the Borrower of its receipt of any such notice. The
Agent shall take such action with respect to such Default or Event of Default as
may be directed by the Required Lenders in accordance with Article IX; provided,
----------
however, that unless and until the Agent has received any such direction, the
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable or in the best interest of the Lenders.
SECTION 10.6 Credit Decision; Disclosure of Information by Agent. Each
---------------------------------------------------
Lender acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by the Agent hereinafter taken, including any
consent to and acceptance of any assignment or review of the affairs of Star Gas
Partners, Holdings, the Borrower and its Subsidiaries thereof, shall be deemed
to constitute any representation or warranty by any Agent-Related Person to any
Lender as to any matter, including whether Agent-Related Persons have disclosed
material information in their possession. Each Lender represents to the Agent
that it has, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower and
its Affiliates and Subsidiaries, and all applicable bank or other regulatory
laws relating to the transactions contemplated hereby, and made its own decision
to enter into this Agreement and to extend credit to the Borrower and its
Subsidiaries hereunder. Each Lender also represents that it will, independently
and without reliance upon any Agent-Related Person and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
93
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Agent herein,
the Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of the Borrower
which may come into the possession of any Agent-Related Person.
SECTION 10.7 Indemnification of Agent. Whether or not the transactions
------------------------
contemplated hereby are consummated, the Lenders shall indemnify upon demand
each Agent-Related Person (to the extent not reimbursed by or on behalf of the
Borrower and without limiting the obligation of the Borrower to do so), pro
rata, and hold harmless each Agent-Related Person from and against any and all
Indemnified Liabilities incurred by it; provided, however, that no Lender shall
be liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities resulting from such Person's gross negligence or willful
misconduct; provided, however, that no action taken in accordance with the
directions of the Required Lenders shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section. Without
limitation of the foregoing, each Lender shall reimburse the Agent upon demand
for its ratable share of any costs or out-of-pocket expenses (including attorney
costs) incurred by the Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that the Agent is not reimbursed for such expenses by or on behalf of the
Borrower. The undertaking in this Section shall survive termination of the
Commitments, the payment of all Obligations hereunder and the resignation or
replacement of the Agent.
SECTION 10.8 Agent in its Individual Capacity. BofA and its Affiliates
--------------------------------
may make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with the Borrower and
its Subsidiaries and Affiliates as though BofA (or such other lender) were not
the Agent or the Issuer hereunder and without notice to or consent of the
Lenders. The Lenders acknowledge that, pursuant to such activities, BofA or its
Affiliates may receive information regarding the Borrower or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Borrower or such Affiliate) and acknowledge that the Agent shall be
under no obligation to provide such information to them. With respect to its
Loans, BofA shall have the same rights and powers under this Agreement as any
other Lender and may exercise such rights and powers as though it were not the
Agent or the Issuer, and the terms "Lender" and "Lenders" include BofA in its
individual capacity.
SECTION 10.9 Successor Agent. The Agent may resign as Agent upon thirty
---------------
(30) days' notice to the Lenders. If the Agent resigns under this Agreement, the
Required Lenders shall appoint from among the Lenders a successor agent for the
Lenders which appointment shall require the consent of the Borrower at all times
other than during the existence of an Event of Default (which consent of the
Borrower shall not be unreasonably withheld or delayed). If no successor agent
is appointed prior to the effective date of the resignation of the Agent, the
Agent may appoint, after consulting with the Lenders and the Borrower, a
successor agent from among
94
the Lenders. Upon the acceptance of its appointment as successor agent
hereunder, such successor agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article X and Sections 11.4 and 11.5 shall inure to its
--------- ------------- ----
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor agent has accepted appointment as Agent by
the date which is thirty (30) days following a retiring Agent's notice of
resignation, the retiring Agent's resignation shall nevertheless thereupon
become effective and the Lenders shall perform all of the duties of the Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. Any successor agent shall have a market
capitalization equal to or greater than $500,000,000.
SECTION 10.10 Other Agents; Lead Managers. None of the Persons
---------------------------
identified on the facing page or signature pages of this Agreement as a
"syndication agent," "documentation agent," "lead arranger" or "lead manager"
shall have any right, power, obligation, liability, responsibility or duty under
this Agreement other than those applicable to all Lenders as such. Without
limiting the foregoing, none of the Persons so identified shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Persons so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
SECTION 10.11 Foreign Lenders. Each Lender that is a "foreign
---------------
corporation, partnership or trust" within the meaning of the Code (a "Foreign
-------
Lender") shall deliver to the Agent, prior to receipt of any payment subject to
------
withholding under the Code (or after accepting an assignment of an interest
herein), two duly signed completed copies of either IRS Form W-8BEN or any
successor thereto (relating to such Person and entitling it to an exemption
from, or reduction of, withholding tax on all payments to be made to such Person
by the Borrower pursuant to this Agreement) or IRS Form W-8ECI or any successor
thereto (relating to all payments to be made to such Person by the Borrower
pursuant to this Agreement) or such other evidence satisfactory to the Borrower
and the Agent that such Person is entitled to an exemption from, or reduction
of, U.S. withholding tax. Thereafter and from time to time, each such Person
shall (a) promptly submit to the Agent such additional duly completed and signed
copies of one of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be
available under then current United States laws and regulations to avoid, or
such evidence as is satisfactory to the Borrower and the Agent of any available
exemption from or reduction of, United States withholding taxes in respect of
all payments to be made to such Person by the Borrower pursuant to this
Agreement, (b) promptly notify the Agent of any change in circumstances which
would modify or render invalid any claimed exemption or reduction, and (c) take
such steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Lender, and as may be reasonably necessary (including the
re-designation of its Lending Office) to avoid any requirement of applicable
Laws that the Borrower make any deduction or withholding for taxes from amounts
payable to such Person. If such Person fails to deliver the above forms or other
documentation, then the Agent may withhold from any interest payment to such
Person an amount equivalent to the applicable withholding tax imposed by
Sections 1441 and 1442 of the Code, without reduction. If any Governmental
Authority asserts that the Agent did not properly withhold any
95
tax or other amount from payments made in respect of such Person, such Person
shall indemnify the Agent therefor, including all penalties and interest, any
taxes imposed by any jurisdiction on the amounts payable to the Agent under this
Section, and costs and expenses (including Attorney Costs) of the Agent. The
obligation of the Lenders under this Section shall survive the payment of all
Obligations and the resignation or replacement of the Agent.
SECTION 10.12 Collateral Matters.
------------------
Except as otherwise expressly provided in the Intercreditor Agreement:
(a) The Agent is authorized on behalf of all the Lenders and
the Issuer, without the necessity of any notice to or further consent
from the Lenders, from time to time to take any action with respect to
any Collateral or the Security Documents which may be necessary to
perfect and maintain perfected the security interest in and Liens upon
the Collateral granted pursuant to the Security Documents;
(b) The Lenders and the Issuer irrevocably authorize the
Agent, at its option and in its discretion, to authorize the release of
any Lien granted for the benefit of the Agent and the Lenders upon any
Collateral (i) upon termination of the Commitments and payment in full
of all Loans and all other Obligations known to the Agent and payable
under this Agreement or any other Loan Document; (ii) constituting
property sold or to be sold or disposed of as part of or in connection
with any disposition permitted hereunder; (iii) constituting property
leased to Holdings, the Borrower or any Material Subsidiary under a
lease which has expired or been terminated in a transaction permitted
under this Agreement or is about to expire and which has not been, and
is not intended by Holdings, the Borrower or such Material Subsidiary
to be, renewed or extended; (iv) consisting of an instrument evidencing
Indebtedness or other debt instrument, if the indebtedness evidenced
thereby has been paid in full; or (v) if approved, authorized or
ratified in writing by the Required Lenders or all the Lenders, as the
case may be, as provided in Section 11.1. Upon request by the Agent at
-------------
any time, the Lenders will confirm in writing the Agent's authority to
authorize the release of particular types or items of Collateral
pursuant to this Section 10.11(b); and
----------------
(c) Each Lender and the Issuer agree with and in favor of each
other (which agreement shall not be for the benefit of the Borrower or
any Subsidiary) that the Borrower's and the other Obligors' obligations
to such Lender and the Issuer under this Agreement and the other Loan
Documents are not and shall not be secured by any Lien on real property
collateral now or hereafter granted to such Lender and the Issuer.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1 Waivers, Amendments, etc. Except as expressly provided in
------------------------
the Intercreditor Agreement, the provisions of this Agreement and of each other
Loan Document may from time to time be amended, modified or waived, if such
amendment, modification or waiver is in writing and consented to by the Borrower
and the Required Lenders (or, in the case
96
of any amendment, modification or waiver required solely as a result of a
Commitment Change pursuant to Section 2.1.5, the Participating Lenders and the
-------------
Agent); provided, however, that no such amendment, modification or waiver which
would:
(a) modify any requirement hereunder that any particular
action be taken by all the Lenders or by the Required Lenders shall be
effective unless consented to by each Lender;
(b) modify this Section 11.1, change the definition of
------------
"Required Lenders," increase any Commitment or the Percentage of any
Lender other than pursuant to Section 2.1.5 or Section 11.11.1, reduce
------------- ---------------
any fees described in Article III, release any substantial portion of
-----------
collateral security, except as otherwise specifically provided in any
Loan Document, extend the Commitment Termination Date or Stated
Maturity Dates or change the interest provisions contained in Section
-------
3.2 shall be made without the consent of each Lender and each holder of
---
a Note;
(c) extend the due date for, or reduce the amount of, any
scheduled repayment or prepayment of principal of or interest on any
Loan (or reduce the principal amount of or rate of interest on any
Loan) shall be made without the consent of the holder of that Note
evidencing such Loan;
(d) affect adversely the interests, rights or obligations of
the Agent shall be made without consent of the Agent; or
(e) affect adversely the interests, rights or obligations of
the Issuer shall be made without the consent of the Issuer.
No failure or delay on the part of the Agent, any Lender, the Issuer or the
holder of any Note in exercising any power or right under this Agreement or any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice to or
demand on the Borrower in any case shall entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by the Agent, the Issuer,
any Lender or the holder of any Note under this Agreement or any other Loan
Document shall, except as may be otherwise stated in such waiver or approval, be
applicable to subsequent transactions. No waiver or approval hereunder shall
require any similar or dissimilar waiver or approval thereafter to be granted
hereunder.
SECTION 11.2 Notices. All notices and other communications provided to
--------
any party hereto under this Agreement or any other Loan Document shall be in
writing or facsimile and addressed, delivered or transmitted to such party at
its address or by facsimile number set forth below its signature hereto or, with
respect to Persons that become Lenders after the date hereof, set forth in the
Assignment and Acceptance Agreement or at such other address or facsimile number
as may be designated by such party in a notice to the other parties. Any notice,
if mailed and properly addressed with postage prepaid or if properly addressed
and sent by pre-paid courier service, shall be deemed given when received; any
notice, if transmitted by facsimile, shall be deemed given when transmitted.
97
SECTION 11.3 Payment of Costs and Expenses. The Borrower agrees to pay
------------------------------
on demand all expenses of the Agent and the Arranger (including the fees and
out-of-pocket expenses of counsel to the Agent and the Arranger and of local
counsel, if any, who may be retained by counsel to the Agent and the allocated
cost of internal counsel) in connection with:
(a) the negotiation, preparation, execution, delivery,
syndication and administration of this Agreement and of each other Loan
Document, including schedules and exhibits, and any amendments,
waivers, consents, supplements or other modifications to this Agreement
or any other Loan Document as may from time to time hereafter be
required, whether or not the transactions contemplated hereby are
consummated;
(b) the filing, recording, refiling or re-recording of the
Security Agreements and/or any Uniform Commercial Code financing
statements relating thereto and all amendments, supplements and
modifications to any thereof and any and all other documents or
instruments of further assurance required to be filed or recorded or
refiled or re-recorded by the terms hereof or of the Security
Agreements; and
(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document.
The Borrower agrees to pay to the Agent customary fees in connection with any
amendment or waiver in respect of the Loan Documents in accordance with the then
current market as determined by the Agent.
The Borrower further agrees to pay, and to save the Agent, the Arranger and the
Lenders harmless from all liability for, any stamp or other taxes which may be
payable in connection with the execution or delivery of this Agreement, the
borrowings hereunder, or the issuance of the Notes or any other Loan Documents.
The Borrower also agrees to reimburse the Agent, the Arranger, the Issuer and
each Lender upon demand for all reasonable out-of-pocket expenses (including
reasonable attorneys' fees, legal expenses and the allocated cost of internal
counsel) incurred by the Agent, the Issuer, the Arranger or such Lender in
connection with (x) the negotiation of any restructuring or "work-out" whether
or not consummated, of any Obligations and (y) the enforcement of any
Obligations.
SECTION 11.4 Indemnification. In consideration of the execution and
---------------
delivery of this Agreement by each Lender and the extension of the Commitments,
the Borrower hereby indemnifies, exonerates and holds the Agent, the Issuer, the
Arranger and each Lender and each of their respective officers, directors,
employees and agents (collectively, the "Indemnified Parties") free and harmless
---------------------
from and against any and all actions, causes of action, suits, losses, costs
(including settlement costs), liabilities and damages, and expenses incurred in
connection therewith (irrespective of whether any such Indemnified Party is a
party to the action for which indemnification hereunder is sought), including
reasonable attorneys' fees and disbursements and the allocated cost of internal
counsel (collectively, the "Indemnified Liabilities"), incurred by the
-----------------------
Indemnified Parties or any of them as a result of, or arising out of, or
relating to:
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Loan or the use
of any Letter of Credit;
98
(b) the entering into and performance of this Agreement and
any other Loan Document by any of the Indemnified Parties;
(c) any investigation, litigation or proceeding related to
any acquisition or proposed acquisition by the Borrower or any
Subsidiaries of all or any portion of the stock or assets of any
Person, whether or not the Agent or such Lender is party thereto;
(d) any Environmental Claim or other matter relating to the
protection of the environment or the Release by the Borrower or any
Subsidiary of any Hazardous Material; or
(e) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or releases from,
any real property owned or operated by the Borrower or any Subsidiary
of any Hazardous Material (including any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any
Environmental Law), regardless of whether caused by, or within the
control of, the Borrower or such Subsidiary,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or willful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Borrower hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
SECTION 11.5 Survival. The obligations of the Borrower under Section
-------- -------
5.3, 5.4, 5.5, 5.6, 11.3 and 11.4, and the obligations of the Lenders under
--- --- --- --- ---- ----
Section 10.1, shall in each case survive until the applicable statute of
------------
limitations has run on the bringing of any action thereon any termination of
this Agreement, the payment in full of all Obligations and the termination of
all Commitments. The representations and warranties made by each Obligor in this
Agreement and in each other Loan Document shall survive the execution and
delivery of this Agreement and each such other Loan Document.
SECTION 11.6 Severability. Any provision of this Agreement or any other
------------
Loan Document which is prohibited or unenforceable in any jurisdiction shall, as
to such provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
this Agreement or such Loan Document or affecting the validity or enforceability
of such provision in any other jurisdiction.
SECTION 11.7 Headings. The various headings of this Agreement and of
--------
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.
SECTION 11.8 Execution in Counterparts, Effectiveness, etc. This
---------------------------------------------
Agreement may be executed by the parties hereto in several counterparts, all of
which shall constitute together but one and the same agreement. This Agreement
shall become effective when counterparts hereof executed on behalf of the
Borrower, the Agent, the Issuer and each Lender (or notice thereof satisfactory
to the Agent) shall have
99
been received by the Agent and notice thereof shall have been given by the Agent
to the Borrower and each Lender and satisfaction of the conditions set forth in
Section 6.1.
-----------
SECTION 11.9 Governing Law; Entire Agreement. THIS AGREEMENT, THE NOTES
-------------------------------
AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. On the Effective
Date, this Agreement, the Notes, the Security Agreements and the other Loan
Documents shall constitute the entire understanding among the parties hereto
with respect to the subject matter hereof and supersede any prior agreements,
written or oral, with respect thereto.
SECTION 11.10 Successors and Assigns. This Agreement shall be binding
----------------------
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:
(a) the Borrower may not assign or transfer its rights or
obligations hereunder without the prior written consent of the Agent,
the Issuer and all Lenders (and any attempted or purported assignment
or transfer in contravention of the foregoing shall be null and void);
and
(b) the rights of sale, assignment and transfer of the Lenders
are subject to Section 11.11.
-------------
SECTION 11.11 Sale and Transfer of Loans and Notes; Participations in
-------------------------------------------------------
its Loans and Notes. Each Lender may assign or sell participations in, its Loans
-------------------
and Commitments to one or more other Persons in accordance with this Section
11.11.
SECTION 11.11.1 Assignments. Any Lender:
-----------
(a) with the written consents of the Borrower and the Agent,
the Issuer (which consents shall not be unreasonably delayed or
withheld and which consent, in the case of the Borrower, shall be
deemed to have been given in the absence of a written notice delivered
by the Borrower to the Agent, on or before the fifth (5th) Business Day
after receipt by the Borrower of such Lender's request for consent,
stating, in reasonable detail, the reasons why the Borrower proposes to
withhold such consent) may at any time assign and delegate to one or
more commercial banks or other financial institutions; provided that
such consent of the Borrower shall not be required at any time a
Default has occurred and is continuing;
(b) with notice to the Borrower, the Issuer and the Agent, but
without the consent of the Borrower, the Issuer or the Agent, may
assign and delegate to any of its Affiliates or to any other Lender;
and
(c) notwithstanding the foregoing, any Lender may at any time
pledge or assign a security interest in all or any portion of its
rights under this Agreement to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest;
100
provided that no such pledge or assignment of a security interest shall
release a Lender from any of its obligations hereunder or substitute
any such pledgee or assignee for such Lender as a party hereto;
(each Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "Assignee Lender"), all or any fraction of such Lender's total Loans and
Commitments (including participations in the Letters of Credit) which assignment
shall be a pro rata portion of the assigning Lender's Facility A Loans, Facility
A Commitment, Facility B Commitment, Facility C Loans and Facility C Commitment
in a minimum aggregate amount of $5,000,000; provided, however, that any such
Assignee Lender will comply, if applicable, with the provisions contained in
Section 10.10 and the last sentence of Section 5.6 and provided, further,
however, that the Borrower, each other Obligor and the Agent shall be entitled
to continue to deal solely and directly with such Lender in connection with the
interests so assigned and delegated to an Assignee Lender until:
(d) written notice of such assignment and delegation, together
with payment instructions, addresses (of credit and administrative
contacts) and related information with respect to such Assignee Lender,
shall have been given to the Borrower and the Agent by such Lender and
such Assignee Lender;
(e) such Assignee Lender shall have executed and delivered to
the Borrower and the Agent an Assignment and Acceptance Agreement,
accepted by the Agent; and
(f) the processing fees described below shall have been paid.
From and after the date that the Agent accepts such Assignment and Acceptance
Agreement, (x) the Assignee Lender thereunder shall be deemed automatically to
have become a party hereto and to the extent that rights and obligations
hereunder have been assigned and delegated to such Assignee Lender in connection
with such Assignment and Acceptance Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and (y)
the assignor Lender, to the extent that rights and obligations hereunder have
been assigned and delegated by it in connection with such Assignment and
Acceptance Agreement, shall be released from its obligations hereunder and under
the other Loan Documents. Such Assignee Lender must also pay a processing fee to
the Agent upon delivery of any Assignment and Acceptance Agreement in the amount
of $3,500. Any attempted assignment and delegation not made in accordance with
this Section 11.11.1 shall be null and void.
---------------
SECTION 11.11.2 Participations. Any Lender may at any time sell
--------------
to one or more commercial banks or other Persons (each of such commercial banks
and other Persons being herein called a "Participant") participating interests
-----------
(or a subparticipating interest, in the case of a Lender's participating
interest in a Letter of Credit) in any of the Loans, Commitments, or other
interests of such Lender hereunder; provided, however, that:
(a) no participation contemplated in this Section 11.11 shall
-------------
relieve such Lender from its Commitments or its other obligations
hereunder or under any other Loan Document;
101
(b) such Lender shall remain solely responsible for the
performance of its Commitments and such other obligations;
(c) the Borrower, each other Obligor and the Agent shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement and each
of the other Loan Documents;
(d) no Participant, unless such Participant is an Affiliate of
such Lender, or is itself a Lender, shall be entitled to require such
Lender to take or refrain from taking any action hereunder or under any
other Loan Document, except that such Lender may agree with any
Participant that such Lender will not, without such Participant's
consent, take any actions of the type described in clause (b) or (c) of
--------- ---
Section 11.1; and
------------
(e) the Borrower shall not be required to pay any amount under
Sections 5.3, 5.4, 5.5 or 5.6 that is greater than the amount which it
------------ --- --- ---
would have been required to pay had no participating interest been
sold.
The Borrower acknowledges and agrees that each subject to the preceding sentence
Participant, for purposes of Sections 5.3, 5.4, 5.5, 5.6, 5.8, 5.9, 11.3 and
------------ --- --- --- --- --- ----
11.4, shall be considered a Lender.
----
SECTION 11.12 Other Transactions. Nothing contained herein shall
------------------
preclude the Agent, the Issuer, the Arranger or any other Lender from engaging
in any transaction, in addition to those contemplated by this Agreement or any
other Loan document, with the Borrower or any of the Borrower's Affiliates in
which the Borrower or such Affiliate is not restricted hereby from engaging with
any other Person. The Lenders and the Issuer hereby acknowledge that BofA is
involved in other financings with Affiliates of Star Gas Partners, Holdings, the
Borrower and the Material Subsidiaries (the "Other Facilities") and that BofA's
----------------
decisions with respect to its exercise of rights and remedies with respect to
the Other Facilities will be made independently and as if not involved in the
credit facilities provided hereunder.
SECTION 11.13 Forum Selection and Consent to Jurisdiction. ANY
-------------------------------------------
LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE
LENDERS OR THE BORROWER SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THE INTERCREDITOR AGREEMENT, AT THE AGENT'S
OPTION, IN THE COURTS OF AND JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. EACH OF HOLDINGS AND THE BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE
102
AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. EACH OF HOLDINGS AND THE BORROWER FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH OF
HOLDINGS AND THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER
MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
SECTION 11.14 Waiver of Jury Trial. EACH OF THE AGENT, THE LENDERS AND
--------------------
THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS OR THE BORROWER. THE
BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN
DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT AND EACH
SUCH OTHER LOAN DOCUMENT.
103
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
PETROLEUM HEAT AND POWER COMPANY, INC.
By:
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Treasurer
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
Acknowledged and Agreed:
PETRO HOLDINGS, INC.
By:
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Treasurer
STAR GAS PARTNERS, L.P.
By: Star Gas LLC, its General Partner
By:
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
BANK OF AMERICA, N.A., as Agent
By:
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Address: Bank of America, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
Mail Code CA9-706-11-03
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Payment Office:
Bank of America, N.A.
Credit Services Agency
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Mail Code TX1-492-14-12
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for borrowings, conversions,
continuances and issuances and amendments
for letters of credit Notices:
Bank of America, N.A.
Credit Services Agency
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Mail Code TX1-492-14-12
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Other Notices:
Bank of America, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Mail Code CA9-706-11-03
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF AMERICA, N.A., as Issuer and a
Lender
By:
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
Address: Bank of America, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office for Base Rate Loans and
LIBOR Loans:
Bank of America, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Mail Code TX1-492-14-12
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices:
Bank of America, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Mail Code TX1-492-14-12
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Bank of America, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
THE CHASE MANHATTAN BANK, as a Lender
By:
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President
Address: The Chase Manhattan Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office for Base Rate Loans and
LIBOR Loans:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
CIBC INC., as a Lender
By:
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Executive Director
Address: CIBC, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office for Base Rate Loans and
LIBOR Loans:
CIBC Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices:
CIBC Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ Senanyake
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
CITIZENS BANK OF MASSACHUSETTS, as a
Lender
By:
-------------------------------------
Name:
Title:
Address: Citizens Bank of Massachusetts
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office for Base Rate Loans and
LIBOR Loans:
Citizens Bank of Massachusetts
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices:
Citizens Bank of Massachusetts
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
FIRST UNION NATIONAL BANK, as
Documentation Agent and a Lender
By:
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
Address: First Union National Bank
1 First Union Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ 0735
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Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office for Base Rate Loans and
LIBOR Loans:
First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ 1183
Charlotte, NC 28288
Attention: Chanue ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices:
First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ 1183
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chanue ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
FLEET NATIONAL BANK, as Syndication Agent
and a Lender
By:
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
Address: Fleet National Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Mail Stop: MADE10008A
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office for Base Rate Loans and
LIBOR Loans:
Fleet National Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Mail Stop: MADE10008A
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices:
Fleet National Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Mail Stop: MADE10008A
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
ISRAEL DISCOUNT BANK OF NEW YORK, as a
Lender
By:
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
By:
-------------------------------------
Name:
Title:
Address: Israel Discount Bank of New York
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office for Base Rate Loans and
LIBOR Loans:
Israel Discount Bank of New York
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices:
Israel Discount Bank of New York
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
ROYAL BANK OF CANADA, as a Lender
By:
-------------------------------------
Name:
Title:
Address: Royal Bank of Canada
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▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office for Base Rate Loans and
LIBOR Loans:
Royal Bank of Canada
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Claro Albay, Liability
Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices:
Royal Bank of Canada
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Claro Albay, Liability
Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Royal Bank of Canada
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
UNION BANK OF CALIFORNIA, N.A., as a
Lender
By:
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Address: Union Bank of California, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office for Base Rate Loans and
LIBOR Loans:
Union Bank of California, N.A.
Energy Capital Services
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices:
Union Bank of California, N.A.
Energy Capital Services
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE I
ITEM 7.1 - ORGANIZATION
-----------------------
State of Authorized Outstanding
Name Type of Entity Incorporation Shares Shares Owned By Business
-------------------------------- -------------- ---------------- ------------- -------------- ------------------ -------------
Star Gas Partners, L.P. Partnership Delaware See footnote (1) below Holding
Company
Star Gas Propane, L.P. Partnership Delaware See footnote (2) below Propane
distribution
Petroleum Heat & Power Co., Inc. Corporation Minnesota (3)65,000,000 26,452,270 Petro Holdings, Retail Oil
Inc. Distributor
6,500,000 11,228 Public
(4)Star Gas Corporation Corporation Delaware 3,038,000 505,154.33 Petroleum Heat & Holding
Power Co., Inc. Company
Petro/Crystal Corp. Corporation New York 200 100 Petroleum Heat & Holding
Power Co., Inc. Company
Petro Inc. Corporation Delaware 1000 950 Petro/Crystal Retail Oil
Corp. Distributor
Marex Corporation Corporation Maryland 200 100 Petro, Inc. Retail Oil
Distributor
▇.▇. ▇▇▇▇▇▇▇ Co., Inc. Corporation Washington, D.C. 200 100 Petro Inc. Retail Oil
Distributor
Ortep of Connecticut, Inc. Corporation Connecticut 5000 100 Petroleum Heat & Retail Oil
Power Co., Inc. Distributor
Ortep of Pennsylvania, Inc. Corporation Pennsylvania 200 200 Petroleum Heat & Retail Oil
Power Co., Inc. Distributor
Ortep of New Jersey, Inc. Corporation New Jersey 200 200 Petroleum Heat & Retail Oil
Power Co., Inc. Distributor
Maxwhale Corp. Corporation Minnesota 200 100 Petroleum Heat & Retail Oil
Power Co., Inc. Distributor
Petro Holdings, Inc. Corporation Minnesota 1,000 100 Star Gas/Petro Retail Oil
Inc. Distributor
Star/Petro Inc. Corporation Minnesota 1,000 100 Star Gas Propane, Holding
L.P. Company
Stellar Propane Service Corp. Corporation New York 200 100 Star/Petro, Inc. Retail/
Appliance
Sales
Ohio Gas & Appliance Co., Inc. Corporation Ohio 44,000 40,000 Star/Petro, Inc. Retail/
Appliance
Sales
Jark Inc. Corporation Ohio 700 200 Star/Petro, Inc. Inactive
Winico, Inc. Corporation Ohio 750 400 Star/Petro, Inc. Inactive
Total Gas & Electric, Inc. Corporation Florida 100 100 Star Gas Partners, Distribution
L.P. of Gas and
Electricity
--------------------
(1) Star Gas LLC is the general partner; the limited partnership interests
are publicly traded.
(2) Star Gas LLC is the general partner; Star Gas Partners L.P. is the
limited partner.
(3) Class A & Class C combined.
(4) Currently inactive.
I-1
State of Authorized Outstanding
Name Type of Entity Incorporation Shares Shares Owned By Business
-------------------------------- -------------- ---------------- ------------- -------------- ------------------ -------------
Total Gas & Electric (Pa) Inc. Corporation Florida 100 10 Total Gas & Retail Gas &
Electric, Inc. Electric
TG&E Service Company, Inc. Corporation Florida 100 10 Total Gas & Service
Electric, Inc. Company
ITEM 7.2 - SUBSIDIARIES
-----------------------
See Disclosure Schedule 7.1
ITEM 7.3 - QUALIFICATIONS
-------------------------
Petroleum Heat and Power Company, Inc.
--------------------------------------
qualified in: Connecticut New Hampshire Pennsylvania
District of Columbia New Jersey Rhode Island
Maryland New York Virginia
Massachusetts
Petro, Inc.
-----------
qualified in: Connecticut New York
Total Gas & Electric Inc.
-------------------------
qualified in: District of Columbia New Jersey Pennsylvania
Maryland New York
Total Gas & Electric (Pa) Inc.
------------------------------
qualified in: Pennsylvania
I-2
Star Gas LLC
------------
qualified in: Connecticut Maine Ohio
Florida Massachusetts Pennsylvania
Georgia Michigan Rhode Island
Illinois Minnesota Texas
Indiana New Hampshire West Virginia
Iowa New Jersey Wisconsin
Kentucky New York
Star Gas Partners, L.P.
-----------------------
qualified in: Connecticut Massachusetts Ohio
Illinois Michigan Pennsylvania
Indiana New Hampshire Rhode Island
Kentucky New Jersey Texas
Maine New York West Virginia
Star Gas Propane, L.P.
----------------------
qualified in: Connecticut Maine Ohio
Florida Massachusetts Pennsylvania
Georgia Michigan Rhode Island
Illinois Minnesota Texas
Indiana New Hampshire West Virginia
Iowa New Jersey Wisconsin
Kentucky New York
Stellar Propane Service Corp.
-----------------------------
qualified in: Maine New Hampshire Pennsylvania
Massachusetts New Jersey Rhode Island
Petro Holdings, Inc.
--------------------
qualified in: Connecticut Massachusetts Rhode Island
I-3
ITEM 8.2.2(a)(i) -SECURED INDEBTEDNESS
--------------------------------------
Indebtedness Amount
------------ ------
09.000% Senior Secured Notes Due October 1, 2002 $57,170,000
14.100% Senior Secured Notes Due January 15, 2001 1,000,000
07.920% Senior Secured Notes 90,000,000
08.960% Senior Secured Notes 40,000,000
ITEM 8.2.2(a)(iii) -SUBORDINATED INDEBTEDNESS
---------------------------------------------
Indebtedness Amount
------------ ------
14.100% Subordinated Notes Due January 15, 2002 $1,000,000
10.125% Senior Subordinated Debentures Due 2003 1,261,000
12.250% Senior Subordinated Debentures Due 2005 1,088,000
09.375% Senior Subordinated Debentures Due 2006 666,000
ITEM 8.2.2(a)(vii) -ACQUISITION DEBT
------------------------------------
Noteholder: ▇▇▇▇▇▇▇, ▇▇▇ - L/C Backup 3025117 224,161
14 semi-annual installments starting on January 1, 2001
Noteholder: ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ - L/C Backup 3025118 224,161
14 semi-annual installments starting on January 1, 2001
Noteholder: ▇▇▇▇▇▇▇▇, ▇▇▇ - L/C Backup 30313384 95,780
20 quarterly installments starting on June 1, 2001
Noteholder: ▇▇▇▇▇▇, ▇▇▇▇ - L/C Backup 3026957 117,000
2 annual installments of $58,500 on July 5, 2001 and July 5, 2002
Noteholder: ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ - L/C Backup 3026958 117,000
2 annual installments of $58,500 on July 5, 2001 and July 5, 2002
Star Gas Notes with various due dates over next five years 350,991
I-4
ITEM 8.2.17 - CONTINGENT OBLIGATIONS
------------------------------------
None, except Contingent Liabilities in respect of (a) the Obligations, (b) the
Private Placement Debt referred to in Item 8.2.2(a)(i) above, (c) the 14.10%
Subordinated Notes dues January 15, 2002 referred to in Item 8.2.2(a)(iii) above
and (d) Total Gas & Electric Inc.'s credit facilities referred to in in Section
8.2.2(b) of this Agreement.
I-5
SCHEDULE II
FACILITY PERCENTAGES AND COMMITMENTS
------------------------------------
Commitments:
------------
-----------------------------------------------------------------
Facility A Facility B Facility C Aggregate
Commitment Commitment Commitment Commitments
-----------------------------------------------------------------------------------------------
Bank of America, N.A. $ 19,295,336.79 $ 1,450,777.20 $ 7,253,886.01 $ 28,000,000.00
-----------------------------------------------------------------------------------------------
Fleet National Bank $ 19,295,336.79 $ 1,450,777.20 $ 7,253,886.01 $ 28,000,000.00
-----------------------------------------------------------------------------------------------
First Union National Bank $ 19,295,336.79 $ 1,450,777.20 $ 7,253,886.01 $ 28,000,000.00
-----------------------------------------------------------------------------------------------
Union Bank of California, $ 17,227,979.27 $ 1,295,336.79 $ 6,476,683.94 $ 25,000,000.00
N.A.
-----------------------------------------------------------------------------------------------
CIBC Inc. $ 15,160,621.76 $ 1,139,896.37 $ 5,699,481.87 $ 22,000,000.00
-----------------------------------------------------------------------------------------------
Citizens Bank of $ 15,160,621.76 $ 1,139,896.37 $ 5,699,481.87 $ 22,000,000.00
Massachusetts
-----------------------------------------------------------------------------------------------
The Chase Manhattan Bank $ 13,782,383.42 $ 1,036,269.43 $ 5,181,347.15 $ 20,000,000.00
-----------------------------------------------------------------------------------------------
Royal Bank of Canada $ 10,336,787.56 $ 777,202.08 $ 3,886,010.36 $ 15,000,000.00
-----------------------------------------------------------------------------------------------
Israel Discount Bank of New $ 3,445,595.86 $ 259,067.36 $ 1,295,336.78 $ 5,000,000.00
York
-----------------------------------------------------------------------------------------------
Totals $133,000,000.00 $10,000,000.00 $50,000,000.00 $193,000,000.00
-----------------------------------------------------------------------------------------------
Percentages:
------------
-----------------------------------------------------
Facility A Facility B Facility C
Percentage Percentage Percentage
---------------------------------------------------------------------------------------------
Bank of America, N.A. 14.507772021% 14.507772021% 14.507772021%
---------------------------------------------------------------------------------------------
Fleet National Bank 14.507772021% 14.507772021% 14.507772021%
---------------------------------------------------------------------------------------------
First Union National Bank 14.507772021% 14.507772021% 14.507772021%
---------------------------------------------------------------------------------------------
Union Bank of California, N.A. 12.953367876% 12.953367876% 12.953367876%
---------------------------------------------------------------------------------------------
CIBC Inc. 11.398963730% 11.398963730% 11.398963730%
---------------------------------------------------------------------------------------------
Citizens Bank of Massachusetts 11.398963730% 11.398963730% 11.398963730%
---------------------------------------------------------------------------------------------
The Chase Manhattan Bank 10.362694301% 10.362694301% 10.362694301%
---------------------------------------------------------------------------------------------
Royal Bank of Canada 7.▇▇▇▇▇▇▇▇▇% 7.▇▇▇▇▇▇▇▇▇% 7.772020725%
---------------------------------------------------------------------------------------------
Israel Discount Bank of New York 2.590673575% 2.590673575% 2.590673575%
---------------------------------------------------------------------------------------------
Totals 100% 100% 100%
---------------------------------------------------------------------------------------------
II-1
SCHEDULE III
[INTENTIONALLY OMITTED]
III-1
SCHEDULE IV
LIST OF OUTSTANDING FACILITY B LETTERS OF CREDIT
------------------------------------------------
--------------------------------------------------------------------------------
Facility B Letter of Credit Letter of Credit Balance
--------------------------------------------------------------------------------
LC# 247710 $7,022,000
--------------------------------------------------------------------------------
LC# 247706 $2,458,000
--------------------------------------------------------------------------------
LC# T0003021925 $ 393,000
--------------------------------------------------------------------------------
IV-1
SCHEDULE V
LIST OF OUTSTANDING FACILITY C LETTERS OF CREDIT
------------------------------------------------
--------------------------------------------------------------------------------
Facility C Letter of Credit Letter of Credit Balance
--------------------------------------------------------------------------------
LC# T▇▇▇▇▇▇▇▇▇▇ $ 276,500
--------------------------------------------------------------------------------
LC# T0003025118 $ 276,500
--------------------------------------------------------------------------------
LC# T0003026957 $ 125,000
--------------------------------------------------------------------------------
LC# T▇▇▇▇▇▇▇▇▇▇ $ 125,000
--------------------------------------------------------------------------------
LC# T0003031384 $ 100,000
--------------------------------------------------------------------------------
V-1
SCHEDULE VI
BANK ACCOUNTS
-------------
Branch Financial Institution Account Number Address City/State Purpose
------ --------------------- -------------- ------- ---------- -------
▇▇▇▇ Bank of New York 680-0182601 ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ Deposit Account
Norwalk Fleet Bank 936-159-9769 ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Deposit Account
Norwalk New Milford Bank and Trust ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ Deposit Account
Stamford Fleet Bank 000-210-6044 ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Deposit Account
▇▇▇▇▇ ▇▇▇▇▇ Manhattan Bank 209-043385 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Deposit Account
▇▇▇▇▇▇▇ Crestar 000516080 ▇.▇. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ Deposit Account
▇▇▇▇▇▇ Dauphin Deposit Bank ▇▇▇▇▇-▇▇▇▇-▇ ▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Deposit Account
Marex First National Bank of ▇▇▇▇▇-▇▇▇▇-▇ ▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Deposit Account
Maryland
▇▇▇▇▇▇ First Union National Bank 2000041764325 ▇.▇. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ Deposit Account
Sinkier First Union National Bank 200200265151 ▇.▇. ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Deposit Account
MacArthur First Union National Bank 2002008870790 ▇.▇. ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Deposit Account
Rockaway First Union National Bank 2083944006512 ▇.▇. ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Deposit Account
Dual Temp Mellon Bank 008449466 Mellon ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ Deposit Account
▇▇▇▇▇▇ National Penn Bank ▇▇▇▇▇-▇▇▇-▇ ▇.▇. ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ Deposit Account
Princeton PNC Bank ▇▇-▇▇▇▇-▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Deposit Account
Federal PNC Bank ▇▇-▇▇▇▇-▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Deposit Account
Dual Temp Sovereign Bank 00014200878 ▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ Deposit Account
Acme Summit Bank 978708091 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Deposit Account
Oil Direct Summit Bank 4240015779 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Deposit Account
Home Office Chase Manhattan Bank 3869 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Lock Box
▇▇▇▇▇ ▇▇▇▇▇ Manhattan Bank 6015 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Lock Box
Home Office Chase Manhattan Bank 022-098571 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Operating Account
Atlas Fleet Bank 938357-8910 ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Deposit Account
▇▇▇▇-mor Fleet Bank 938357-8929 ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Deposit Account
▇▇▇▇▇▇▇ Fleet Bank 939-5243912 ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Deposit Account
Holden Fleet Bank 936357-8902 ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Deposit Account
▇▇▇▇▇▇ Fleet Bank 936-159-9750 ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Deposit Account
Canton Fleet Bank ▇▇▇-▇▇▇-▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Deposit Account
VI-1
SCHEDULE VII
LIEN SEARCH LOCATIONS
---------------------
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Name of Debtor State Location of Searches County Location of Searches
----------------------------------------------------------------------------------------------
▇. ▇▇▇▇▇ Inc. 1. Secretary of State 1. City of Stamford
Connecticut Connecticut
2. City of South Norwalk
Connecticut
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2. Secretary of State 3. Kings County, New York
New York 4. Dutchess Cty, New York
5. Nassau Cty, New York
6. Queens Cty, New York
7. Suffolk Cty, New York
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3. Secretary of State 8. Prothonotary of
Pennsylvania ▇▇▇▇▇▇▇ Cty, Pennsylvania
----------------------------------------------------------------------------------------------
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Name of Debtor State Location of Searches County Location of Searches
----------------------------------------------------------------------------------------------
B. Maxwhale Corp. 1. Secretary of State 1. City of Stamford
Connecticut Connecticut
2. City of Canton
Connecticut
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2. Secretary of State 3. ▇▇▇▇▇▇ Cty, New Jersey
New Jersey 4. ▇▇▇▇▇▇ Cty, New Jersey
----------------------------------------------------------------------------------------------
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Name of Debtor State Location of Searches County Location of Searches
----------------------------------------------------------------------------------------------
C. Ortep of Connecticut, 1. Secretary of State 1. City of Milford
Inc. Connecticut Connecticut
2. City of North Haven
Connecticut
3. City of Stamford
Connecticut
4. City of Norwalk
Connecticut
5. City of Waterbury
Connecticut
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VII-1
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Name of Debtor State Location of Searches County Location of Searches
----------------------------------------------------------------------------------------------
D. Marex Corporation 1. Secretary of State 1. City of Stamford
Connecticut Connecticut
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2. Secretary of State 2. Baltimore Cty,
Maryland Maryland
----------------------------------------------------------------------------------------------
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Name of Debtor State Location of Searches County Location of Searches
----------------------------------------------------------------------------------------------
E. A.P. ▇▇▇▇▇▇▇ Company 1. Secretary of State 1. City of Stamford
Connecticut Connecticut
----------------------------------------------------------------------------------------------
2. Secretary of State 2. Prince George's Cty,
Maryland Maryland
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3. Secretary of State 3. Rec. of Deeds,
Virginia Alexandria City, Virginia
4. Rec. of Deeds,
Arlington City, Virginia
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VII-2
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Name of Debtor State Location of Searches County Location of Searches
----------------------------------------------------------------------------------------------
F. Petroleum Heat and 1. Secretary of State 1. City of Stamford
Power Company, Inc. Connecticut Connecticut
----------------------------------------------------------------------------------------------
2. Secretary of State 2. Essex Cty,
Massachusetts Massachusetts
3. Norfolk Cty,
Massachusetts
4. Suffolk Cty,
Massachusetts
5. Town of Attleboro,
Massachusetts
6. Town of Chelsea,
Massachusetts
7. Town of Holden,
Massachusetts
8. Town of Hyde Park,
Massachusetts
9. Town of Lawrence,
Massachusetts
10. Town of Westwood,
Massachusetts
11. Worcester Cty,
Massachusetts
----------------------------------------------------------------------------------------------
3. Secretary of State 12. ▇▇▇▇▇▇ Cty., New
New Jersey Jersey
13. Middlesex Cty., New
Jersey
----------------------------------------------------------------------------------------------
4. Secretary of State 14. .Kings Cty., New York
New York
----------------------------------------------------------------------------------------------
5. Secretary of State 15. Providence Cty, Rhode
Rhode Island Island
16. Tiverton Cty, Rhode
Island
----------------------------------------------------------------------------------------------
6. Secretary of State 17. Dauphin Cty.,
Pennsylvania Pennsylvania
18. ▇▇▇▇▇▇▇▇▇▇ Cty.
Pennsylvania
19. Philadelphia Cty.,
Pennsylvania
----------------------------------------------------------------------------------------------
7. Secretary of State 20. Fairfax Cty., Virginia
Virginia
----------------------------------------------------------------------------------------------
VII-3
----------------------------------------------------------------------------------------------
Name of Debtor State Location of Searches County Location of Searches
----------------------------------------------------------------------------------------------
G. Ortep of New Jersey, 1. Secretary of State 1. City of Stamford
Inc. Connecticut Connecticut
----------------------------------------------------------------------------------------------
2. Secretary of State 2. Camden Cty, New Jersey
New Jersey 3. Ocean Cty, New Jersey
4. Union Cty, New Jersey
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
Name of Debtor State Location of Searches County Location of Searches
----------------------------------------------------------------------------------------------
H. Ortep of Pennsylvania, 1. Secretary of State 1. City of Stamford
Inc. Connecticut Connecticut
----------------------------------------------------------------------------------------------
2. Secretary of State 2. Prothonotary of Berks
Pennsylvania Cty, Pennsylvania
3. Prothonotary of Bucks
Cty, Pennsylvania
4. Prothonotary of
▇▇▇▇▇▇▇ County,
Pennsylvania
5. Prothonotary of
Dauphin Cty, Pennsylvania
6. Prothonotary of
Lebanon Cty, Pennsylvania
7. Prothonotary of
Lehigh Cty, Pennsylavania
8. Prothanotary of
Monroe Cty, Pennsylvania
9. Prothonotary of
▇▇▇▇▇▇▇▇▇▇ Cty,
Pennsylvania
----------------------------------------------------------------------------------------------
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Name of Debtor State Location of Searches County Location of Searches
----------------------------------------------------------------------------------------------
I. Public Fuel Services
Co., Inc. - Dissolved or
merged.
No Longer in Existence.
----------------------------------------------------------------------------------------------
J. CBW Realty Corp. of 1. Secretary of State 1. City of Stamford
Connecticut Connecticut Connecticut
----------------------------------------------------------------------------------------------
▇. ▇▇▇▇▇/Crystal Corp. 1. Secretary of State 1. City of Stamford
[Holding Company does not Connecticut Connecticut
hold anything. S/S New
York County filing should
be in county where holding
co. is located.]
----------------------------------------------------------------------------------------------
L. Ocennet Fuel Oil Corp.
Merged into Petroleum Heat
& Power. No longer in
existence.
----------------------------------------------------------------------------------------------
VII-4
----------------------------------------------------------------------------------------------
Name of Debtor State Location of Searches County Location of Searches
----------------------------------------------------------------------------------------------
M. Star Gas Partners, L.P. 1. 1. Secretary of State 1. City of Stamford
Connecticut Connecticut
----------------------------------------------------------------------------------------------
2. Secretary of State 2. Kent County, Delaware
Delaware 3. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇
----------------------------------------------------------------------------------------------
3. Secretary of State 5. New York County, New
New York York
6. Dutchess County, New
York
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
Name of Debtor State Location of Searches County Location of Searches
----------------------------------------------------------------------------------------------
N. Star Gas Corporation 1. Secretary of State 1. City of Stamford
Connecticut Connecticut
----------------------------------------------------------------------------------------------
2. Secretary of State 2. Kent County, Delaware
Delaware 3. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇
----------------------------------------------------------------------------------------------
3. Secretary of State 5. New York County, New
New York York
6. Dutchess County, New
York
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
Name of Debtor State Location of Searches County Location of Searches
----------------------------------------------------------------------------------------------
▇. ▇▇▇▇▇ Holdings, Inc. 1. Secretary of State 1. Hennepin County,
Minnesota Minnesota
----------------------------------------------------------------------------------------------
2. Secretary of State 2. Stamford, Connecticut
Connecticut
----------------------------------------------------------------------------------------------
3. Secretary of State 3. Westwood County,
Massachusetts Massachusetts
----------------------------------------------------------------------------------------------
4. Secretary of State 4. Providence, Rhode
Rhode Island Island
----------------------------------------------------------------------------------------------
VII-5