AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT
AND AMENDMENT NO. 6 TO SUPPLEMENT A TO
LOAN AND SECURITY AGREEMENT
October 29, 1996
All Star Gas Corporation, f/k/a
Empire Gas Corporation
0000 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxxx Xxxxxx
Ladies and Gentlemen:
Reference is made to the Loan and Security Agree-
ment dated as of June 29, 1994, among Empire Gas Corporation
("Borrower"), the Lenders party thereto ("Lenders") and Bank
of America Illinois, f/k/a Continental Bank, f/k/a Continen-
tal Bank N.A., as a Lender and as Agent for the Lenders, as
amended through the date hereof (the "Loan Agreement").
Unless otherwise defined herein, capitalized terms used
herein shall have the meaning ascribed to such terms in the
Loan Agreement.
Borrower has informed Agent that effective October
1, 1996, Borrower has changed its name to "All Star Gas
Corporation" and hereby requests that Agent and Lenders
address all correspondence to Borrower under that name.
Borrower has further requested that Requisite
Lenders agree to amend the Loan Agreement in certain re-
spects, including without limitation, to extend the Termina-
tion Date thereunder and to provide for certain interest
rate reductions upon the achievement by Borrower of certain
financial benchmarks. Requisite Lenders have agreed to the
foregoing, on terms and conditions contained herein.
Therefore, the parties hereto agree as follows:
1. Amendments to Loan Agreement. Section 1.1 of
the Loan Agreement is hereby amended as follows:
(a) The formula contained in the definition of the
term "LIBOR Rate" contained in Section 1.1 of the Loan
Agreement is hereby amended and restated in its entire-
ty, as follows:
"LIBOR Rate = Applicable LIBOR Margin plus
LIBOR Base Rate "
1-Eurocurrency Reserve Requirement
(b) Clause (c) of the definition of the term "Permit-
xxx Acquisition" contained in Section 1.1 of the Loan
Agreement is hereby amended and restated in its entire-
ty, as follows:
"(c) immediately prior to, and immediately after,
consummation of such Acquisition, the Revolving
Credit Amount exceeds the outstanding principal
balance of the Revolving Loans plus the Letter of
Credit Obligations by at least (i) $500,000 at all
times prior to the occurrence of a Payment Event
and (ii) $1,500,000 at all times on and after the
occurrence of a Payment Event."
(c) The definition of the term "Termination Date"
contained in Section 1.1 of the Loan Agreement is
hereby amended by deleting therefrom the date "June 29,
1997" and inserting in its place the date "June 29,
1998."
(d) Section 1.1 of the Loan Agreement is hereby fur-
ther amended by inserting therein, in proper alphabeti-
cal order, the following new definitions:
"'Applicable LIBOR Margin' means a percentage
equal to 3.00% on the date hereof, which will be
adjusted on a fiscal quarterly basis hereafter,
commencing on September 30, 1996, depending on the
amount of EBITDA for the 12-month period ending on
the last day of such fiscal quarter, as follows:
Applicable LIBOR
EBITDA Margin
Less than $15,500,000 3.00%
Greater than or equal to $15,500,000 2.50%
and less than $20,000,000
Greater than or equal to $20,000,000 2.00%
The calculation of EBITDA for each fiscal quarter shall
be based on the financial statements delivered by
Borrower to Agent pursuant to Section 5.1.1. Each
adjustment to the Applicable LIBOR Margin shall be
effective prospectively 5 Banking Days after the date
of delivery of the applicable financial statements.
"'Applicable Reference Margin' means a per-
centage equal to 1.50% on the date hereof, which will
be adjusted on a fiscal quarterly basis hereafter,
commencing on September 30,1 996, depending on the
amount of EBITDA for the 12-month period ending on the
last day of such fiscal quarter, as follows:
Applicable Reference
EBITDA Margin
Less than $15,500,000 1.50%
Greater than or equal to $15,500,000 1.00%
and less than $20,000,000
Greater than or equal to $20,000,000 .50%
The calculation of EBITDA for each fiscal quarter shall
be based on the financial statements delivered by
Borrower to Agent pursuant to Section 5.1.1. Each
adjustment to the Applicable Reference Margin shall be
effective prospectively 5 Banking Days after the date
of delivery of the applicable financial statements.
"'EBITDA' means, for any period, net earnings
before interest expense, income tax expense, deprecia-
tion and amortization, all determined by Borrower and
its Subsidiaries on a consolidated basis and in accor-
dance with GAAP."
"Payment Event" means the initial receipt by
Borrower of any amount under the certain Termination
Agreement dated September 28, 1996, among Borrower,
Northwestern Growth Corporation and SYN Inc., as the
same may be amended, modified or revised from time to
time."
2. Amendment to Supplement A. Subsection (a) of
Section 3.1.1 of Supplement A is hereby amended by deleting
therefrom the percentage "1.00%" and inserting in its place
the phrase "Applicable Reference Margin."
3. Scope. This Amendment No. 3 to Loan and
Security Agreement and Amendment No. 6 to Supplement A to
Loan and Security Agreement (the "Amendment") shall have the
effect of amending the Loan Agreement, Supplement A and the
Related agreements as appropriate to express the agreements
contained herein. In all other respects, the Loan Agree-
ment, Supplement A and the Related Agreements shall remain
in full force and effect in accordance with their respective
terms.
4. Conditions to Effectiveness. This Amendment
shall be effective immediately upon the execution of this
Amendment by Agent, on behalf of the Requisite Lenders,
acceptance hereof by Borrower and each other Obligor, and
delivery hereof to BAI at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000, Attention: Xx. Xxxx Xxxxxx, on or prior to
October 28, 1996, together with the following:
1. Fully executed copies of (a) the certain
Termination Agreement dated September 28, 1996, among
Borrower, Northwestern Growth Corporation and SYN Inc.,
(b) the certain Purchase and Sale Agreement dated as of
May 17, 1995, referred to therein, (c) the certain
Management Agreement dated as of May 17, 1995, referred
to therein and (d) the certain Agreement Among Initial
Shareholders dated as of May 17, 1995, referred to
therein.
2. A. $37,500 extension and amendment fee pay-
able to Agent for its own account.
3. Copies of documents evidencing the change of
Borrower's name to "All Star Gas Corporation," certi-
fied by the Secretary of State of Missouri and the
Secretary of State of each other State in which Borrow-
er is qualified to do business.
Very truly yours,
BANK OF AMERICA ILLINOIS,
f/k/a/ CONTINENTAL BANK,
f/k/a/ CONTINENTAL BANK N.A.,
AS AGENT ON BEHALF OF REQUISITE
LENDERS
By____________________________________
Its__________________________________
Acknowledged and agreed to this
29th day of October 1996.
ALL STAR GAS CORPORATION f/k/a
EMPIRE GAS CORPORATION
By /s/ Xxxx Xxxxxxxxx
Its Vice President
Acknowledgment and Acceptance of Guarantors
Each of the undersigned is a party to the Master
Corporate Guaranty dated June 29, 1994, in favor of BAI, as
Agent for itself and Lenders (the "Guaranty"), pursuant to
which each of the undersigned has guaranteed the Obligations
of Borrower under the Loan Agreement. Each of the under-
signed hereby acknowledges receipt of the foregoing Amend-
ment, accepts and agrees to be bound by the terms thereof,
ratifiers and confirms all of its obligations under the
Guaranty, and agrees that the Guaranty shall continue in
full force and effect as to it, notwithstanding such Amend-
ment.
Acknowledged and Agreed to this
31st day of October, 1996.
EACH OF THE SUBSIDIARIES OF
ALL STAR GAS CORPORATION f/k/a
EMPIRE GAS CORPORATION LISTED
ON EXHIBIT A ATTACHED HERETO
By /s/ Xxxxxxx Xxxxxx
Vice President of each Subsidiary
EXHIBIT A
List of Subsidiaries
