FIRST AMENDMENT
TO SHORT-TERM REVOLVING CREDIT AGREEMENT
This FIRST AMENDMENT TO SHORT-TERM REVOLVING CREDIT AGREEMENT
(this "Amendment"), dated as of December 2, 1999, is entered into by and among
FERRELLGAS, L.P., a Delaware limited partnership (the "Borrower"), FERRELLGAS,
INC., a Delaware corporation and the sole general partner of the Borrower (the
"General Partner"), each of the financial institutions referred to as Banks in
the Existing Credit Agreement referred to below (collectively, the "Banks") and
BANK OF AMERICA, N.A. (formerly known as BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION), as agent for the Banks (in such capacity, the
"Administrative Agent"), and amends that certain Short-Term Revolving Credit
Agreement, dated as of April 30, 1999 (as the same is in effect immediately
prior to the effectiveness of this Amendment, the "Existing Credit Agreement"
and as the same may be amended, supplemented or modified and in effect from time
to time, the "Credit Agreement"), by and among the Borrower, the General
Partner, the Administrative Agent and the Banks from time to time party to the
Credit Agreement. Capitalized terms used and not otherwise defined in this
Amendment shall have the same meanings in this Amendment as set forth in the
Credit Agreement, and the rules of interpretation set forth in Section 1.02 of
the Credit Agreement shall be applicable to this Amendment.
RECITAL
The Borrower has requested that the Banks amend the Existing
Credit Agreement in the respects set forth below in this Amendment, and the
Banks are willing to agree to so amend the Existing Credit Agreement on the
terms and subject to the conditions set forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and agreements set forth below and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:
SECTION 1. Amendments. On the terms of this Amendment and
subject to the satisfaction of the conditions precedent set forth below in
Section 3:
(a) Section 1.01 of the Existing Credit Agreement is hereby amended by the
addition of the following definitions in such Section 1.01 in appropriate
alphabetical order:
"Accounts Receivable Securitization" shall
mean a financing arrangement involving the transfer or sale of
accounts receivable of the Borrower in the ordinary course of
business through one or more SPEs, the terms of which
arrangement do not impose (a) any recourse or repurchase
obligations upon the Borrower or any Affiliate of the Borrower
(other than any such SPE) except to the extent of the breach
of a representation or warranty by the Borrower in connection
therewith or (b) any negative pledge or Lien on any accounts
receivable not actually transferred to any such SPE in
connection with such arrangement.
"SPE" shall mean any special purpose
Non-Recourse Subsidiary of the Borrower established in
connection with Accounts Receivable Securitizations permitted
by Section 7.05.
"Thermogas" means Thermogas Company and,
upon conversion of Thermogas Company from a Delaware
corporation into a Delaware limited liability company,
Thermogas LLC (or other named company resulting from such
conversion).
"Thermogas Acquisition" means the occurrence
of all of the following: (a) the acquisition by the MLP of all
of the capital stock or member interests (as applicable) of
Thermogas; (b) the contribution by the MLP of such capital
stock or member interests to the Borrower; and (c) the
assumption by the Borrower of any and all Acquired Debt and
Synthetic Lease Obligations obtained in connection with such
acquisition.
(b) Section 1.01 of the Existing Credit Agreement is hereby amended by replacing
the chart in the definition of "Applicable Margin" in such Section 1.01 with the
following:
Pricing Ratio Base Rate Loans Eurodollar Rate Loans
Level 1 0.00 b.p. 62.50 b.p.
Level 2 0.00 b.p. 75.00 b.p.
Level 3 0.00 b.p. 100.00 b.p.
Xxxxx 0 25.00 b.p. 125.00 b.p.
Xxxxx 0 50.00 b.p. 150.00 b.p.
Xxxxx 0 75.00 b.p. 175.00 b.p.
Level 7 100.00 b.p. 200.00 b.p.
(c) Section 1.01 of the Existing Credit Agreement is hereby amended by replacing
the chart in the definition of "Commitment Fee Rate" in such Section 1.01 with
the following:
Pricing Ratio Commitment Fee Rate
Level 1 17.50 b.p.
Level 2 22.50 b.p.
Level 3 27.50 b.p.
Level 4 32.50 b.p.
Level 5 37.50 b.p.
Xxxxx 0 00.00 x.x.
Xxxxx 0 00.00 x.x.
(x) Section 1.01 of the Existing Credit Agreement is hereby amended by replacing
the definition of "Indebtedness" in such Section 1.01 with the following:
"Indebtedness" of any Person means, without
duplication, (a) all indebtedness for borrowed money; (b) all
obligations issued, undertaken or assumed as the deferred
purchase price of property or services (other than trade
payables entered into in the ordinary course of business on
ordinary terms); (c) all non-contingent reimbursement or
payment obligations with respect to Surety Instruments; (d)
all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced
incurred in connection with the acquisition of property,
assets or businesses; (e) all indebtedness 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 bank under such agreement in the
event of default are limited to repossession or sale of such
property); (f) all Capital Lease Obligations; (g) all Hedging
Obligations; (h) all obligations in respect of Accounts
Receivable Securitizations; (i) all indebtedness referred to
in clauses (a) through (h) above secured by (or for which the
holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon or in property
(including accounts and contracts rights) owned by such
Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness; and (j) all
Guaranty Obligations in respect of indebtedness or obligations
of others of the kinds referred to in clauses (a) through (i)
above; provided, however, that "Indebtedness" shall not
include Synthetic Lease Obligations.
(e) Section 1.01 of the Existing Credit Agreement is hereby amended by replacing
the definition of "Level" in such Section 1.01 with the following:
"Level" means, at any time, Xxxxx 0, Xxxxx
0, Xxxxx 0, Xxxxx 0, Xxxxx 5, Level 6 or Level 7 based on the
amount of the Pricing Ratio at such time. For purposes of this
Agreement, the following "Levels" of Pricing Ratio (PR) shall
apply:
Level Pricing Ratio
Level 1 PR LT 1.75
Level 2 1.75 LTE PR LT 2.75
Level 3 2.75 LTE PR LT 3.25
Level 4 3.25 LTE PR LT 3.75
Level 5 3.75 LTE PR LT 4.25
Level 6 4.25 LTE PR LT 4.75
Level 7 4.75 LTE PR
The Level of the Pricing Ratio for the period from and after
the date on which the Thermogas Acquisition occurs through the
last day of the fiscal quarter of the Borrower ending January
31, 2000 shall be equal to Level 7. Any change in the Level of
the Pricing Ratio shall be determined by the Administrative
Agent based upon the financial information required to be
contained in the Compliance Certificate delivered by the
Borrower to the Administrative Agent with respect to each
fiscal quarter of the Borrower and shall become effective as
of the first day of the fiscal quarter following the fiscal
quarter for which such Compliance Certificate was delivered.
Upon any failure of the Borrower to deliver a Compliance
Certificate for any fiscal quarter prior to 10 days after the
date on which such Compliance Certificate is required to be
delivered to the Administrative Agent, and without limiting
the other rights and remedies of the Administrative Agent and
the Banks hereunder, the Pricing Ratio shall be deemed to be
Xxxxx 0 as of the first day of the fiscal quarter beginning
after the fiscal quarter for which such Compliance Certificate
was due.
(f) Section 1.01 of the Existing Credit Agreement is hereby amended by replacing
the definition of "Majority Banks" in such Section 1.01 with the following:
"Majority Banks" means at any time Banks
then holding more than 50% of the then aggregate unpaid
principal amount of the Loans, or, if no such principal amount
is then outstanding, Banks then having more than 50% of the
aggregate Commitments.
(g) Section 5.16 of the Existing Credit Agreement is hereby amended to read
in its entirety as follows:
5.16 Subsidiaries and Affiliates. The
Borrower (a) has no Subsidiaries or other Affiliates except
(i) those specifically disclosed in part (a) of Schedule 5.16
hereto, (ii) one or more SPEs established in connection with
Accounts Receivable Securitizations permitted by Section 7.05,
(iii) Subsidiaries established in compliance with Section 7.20
and (iv) Thermogas (but only for so long as Thermogas shall be
permitted to be operated as a Wholly-Owned Subsidiary of the
Borrower as set forth in the proviso to Section 7.20) and (b)
has no equity investments in any corporation or entity other
than Subsidiaries and Affiliates disclosed in subsection (a)
above and those Permitted Investments specifically disclosed
in part (b) of Schedule 5.16.
(h) Section 6.12 of the Existing Credit Agreement is hereby amended by replacing
the first sentence of subsection (a) of such Section 6.12 with the following:
(a) Leverage Ratio. The Borrower shall
maintain as of the last day of each fiscal quarter a Leverage
Ratio equal to or less than 4.75 to 1.00 (or, if the Thermogas
Acquisition shall have been consummated on or prior to January
31, 2000, the Borrower shall be required to maintain from and
after the date of such Thermogas Acquisition a Leverage Ratio
equal to or less than (i) 5.25 to 1.00 as of the last day of
each fiscal quarter ending on or prior to January 31, 2000,
(ii) 5.10 to 1.00 as of the last day of each fiscal quarter
ending during the period commencing on February 1, 2000 and
ending on January 31, 2001 and (iii) 4.75 to 1.00 as of the
last day of each fiscal quarter ending after January 31,
2001).
(i) Section 6.12 of the Existing Credit Agreement is hereby further amended by
replacing subsection (b) of such Section 6.12 with the following:
(b) Interest Coverage Ratio. The Borrower
shall maintain, as of the last day of each fiscal quarter of
the Borrower, an Interest Coverage Ratio for the fiscal period
consisting of such fiscal quarter and the three immediately
preceding fiscal quarters of at least 2.50 to 1.00 (or, if the
Thermogas Acquisition shall have been consummated on or prior
to January 31, 2000, the Borrower shall be required to
maintain from and after the date of such Thermogas Acquisition
an Interest Coverage Ratio of at least 2.25 to 1.00 for each
such period of four fiscal quarters ending on or prior to
January 31, 2001 and 2.50 to 1.00 each such period of four
fiscal quarters ending after January 31, 2001).
(j) Section 7.01 of the Existing Credit Agreement is hereby amended by deleting
the words "in the ordinary course of business" in subsection (k) of such Section
7.01.
(k) Section 7.01 of the Existing Credit Agreement is hereby further amended by
deleting the word "and" at the end of subsection (o) of such Section 7.01,
substituting a semi-colon for the period at the end of subsection (p) thereof;
adding the word "and" following such semi-colon, and adding the following
subsection (q) to such Section 7.01:
(q) Liens securing Indebtedness of an SPE in
connection with an Accounts Receivable Securitization
permitted by Section 7.05 (including the filing of any related
financing statements naming the Borrower as the debtor
thereunder in connection with the sale of accounts receivable
by the Borrower to such SPE in connection with any such
permitted Accounts Receivable Securitization); provided that
the aggregate amount of accounts receivable subject to all
such Liens shall at no time exceed 133% of the amount of
Accounts Receivable Securitizations permitted to be
outstanding under such Section 7.05..
(l) Section 7.02 of the Existing Credit Agreement is hereby amended by replacing
the last sentence of such Section 7.02 with the following:
Notwithstanding the foregoing, Asset Sales shall not be deemed
to include (w) sales or transfers of accounts receivable by
the Borrower to an SPE and by an SPE to any other Person in
connection with any Accounts Receivable Securitization
permitted by Section 7.05 (provided that the aggregate amount
of such accounts receivable that shall have been transferred
to and held by all SPEs at any time shall not exceed 133% of
the amount of Accounts Receivable Securitizations permitted to
be outstanding under Section 7.05), (x) any transfer of assets
by the Borrower or any of its Subsidiaries to a Subsidiary of
the Borrower that is a Guarantor, (y) any transfer of assets
by the Borrower or any of its Subsidiaries to any Person in
exchange for other assets used in a line of business permitted
under Section 7.15 and having a fair market value not less
than that of the assets so transferred and (z) any transfer of
assets pursuant to a Permitted Investment or any
sale-leaseback (including sale-leasebacks involving Synthetic
Leases) permitted by Section 7.17.
(m) Section 7.05 of the Existing Credit Agreement is hereby amended by replacing
the final proviso of such Section 7.05 with the following:
provided, further, that (x) the aggregate principal amount of
(1) all Capitalized Lease Obligations and all Synthetic Lease
Obligations (other than Capitalized Lease Obligations and
Synthetic Lease Obligations in respect of Growth-Related
Capital Expenditures) of the Borrower and its Subsidiaries and
(2) all Indebtedness for which the Borrower and any Subsidiary
of the Borrower become liable in connection with Acquisitions
of retail propane businesses in favor of the sellers of such
businesses and secured by any Lien on any property of the
Borrower or any of its Subsidiaries, shall not exceed
$65,000,000 at any one time outstanding, and (y) the principal
amount of any Indebtedness for which the Borrower or any
Subsidiary of the Borrower becomes liable in connection with
Acquisitions of retail propane businesses in favor of the
sellers of such businesses shall not exceed the fair market
value of the assets so acquired, and (z) the aggregate amount
of Indebtedness of the Borrower and its Subsidiaries through
one or more SPEs in connection with Accounts Receivable
Securitizations shall not exceed $60,000,000 at any one time
outstanding.
(n) Section 7.06 of the Existing Credit Agreement is hereby amended by
substituting a semi-colon for the period at the end of such Section 7.06, adding
the word "and" following such semi-colon, and thereafter adding the following
proviso to the end of such Section 7.06:
provided, further, that the foregoing provisions of this
Section 7.06 shall not apply to transfers of accounts
receivable of the Borrower to an SPE in connection with any
Accounts Receivable Securitization permitted by Section 7.05.
(o) Section 7.17 of the Existing Credit Agreement is hereby amended to read
in its entirety as follows:
7.17. Limitation on Sale and Leaseback
Transactions. The Borrower will not, and will not permit any
of its Subsidiaries to, enter into any arrangement with any
Person providing for the leasing by the Borrower or such
Subsidiary of any property that has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person
in contemplation of such leasing; provided, however, that the
Borrower or such Subsidiary may enter into such sale and
leaseback transaction if: (i) the Borrower could have (A)
incurred Indebtedness in an amount equal to the Attributable
Debt relating to such sale and leaseback transaction pursuant
to the Leverage Ratio test set forth in Section 6.12(a) and
(B) secured a Lien on such Indebtedness pursuant to Section
7.01; (ii) the lease in such sale and leaseback transaction is
for a term not in excess of the lesser of (A) three years and
(B) 60% of the remaining useful life of such property; or
(iii) such sale and leaseback transaction is otherwise
permitted by the last sentence of Section 4.17 of the 1996
Indenture as in effect as of the date hereof.
(p) Section 7.20 of the Existing Credit Agreement is hereby amended by
substituting a semi-colon for the period at the end of such Section 7.20 and
adding the following proviso to the end of such Section 7.20 following such
semi-colon:
provided, however, that the Borrower may, without regard to
the foregoing provisions of this Section 7.20, (x) establish
and operate SPEs solely in connection with Accounts Receivable
Securitizations permitted by Section 7.05 and (y) operate
Thermogas as a Wholly-Owned Subsidiary for a period of up to
(but not exceeding) 30 days following the consummation of the
Thermogas Acquisition pending the merger of Thermogas with and
into the Borrower.
(q) Section 8.01 of the Existing Credit Agreement is hereby amended by replacing
clause (ii) of subsection (e) of such Section 8.01 with the following:
(ii) fails to perform or observe any other condition or
covenant, or any other event (including any termination or
similar event in respect of any Accounts Receivable
Securitization) shall occur or condition exist, under any
agreement or instrument relating to any such Indebtedness or
Contingent Obligation, and such failure continues after the
applicable grace or notice period, if any, specified in the
relevant document on the date of such failure if the effect of
such failure, event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on
behalf of such holder or holders or beneficiary or
beneficiaries) to cause such Indebtedness to be declared to be
due and payable prior to its stated maturity or to cause such
Indebtedness or Contingent Obligation to be prepaid, purchased
or redeemed by the Borrower, the MLP, the General Partner or
any Subsidiary, or such Contingent Obligation to become
payable or cash collateral in respect thereof to be demanded;
or
SECTION 2. Waiver. The Banks hereby waive any Default or Event
of Default arising as a result of any breach of Section 6.12(a) or Section
6.12(b) of the Existing Credit Agreement solely in connection with the pro forma
calculation of the Leverage Ratio and the Interest Coverage Ratio as of October
31, 1999 as required by the definitions of "Leverage Ratio" and "Interest
Coverage Ratio" in Section 1.01 of the Existing Credit Agreement in connection
with the Thermogas Acquisition.
SECTION 3. Conditions to Effectiveness. The amendments set
forth in Section 1 of this Amendment and the waiver set forth in Section 2 of
this Amendment shall become effective only upon the satisfaction of all of the
following conditions precedent (the date of satisfaction of all such conditions
being referred to as the "Amendment Effective Date"):
(a) The Administrative Agent shall have received, on behalf of the Banks, this
Amendment, duly executed and delivered by the Borrower, the General Partner, the
Majority Banks and the Administrative Agent.
(b) All corporate, partnership and other proceedings taken or to be taken in
connection with the transactions contemplated by this Amendment, and all
documents incidental thereto, shall be reasonably satisfactory in form and
substance to the Administrative Agent and its counsel, and the Administrative
Agent and such counsel shall have received all such counterpart originals or
certified copies of such documents as they may reasonably request.
(c) The Administrative Agent shall have received such other documents, opinions,
certificates and evidence as the Administrative Agent and its counsel may
reasonably request.
(d) The representations and warranties set forth in this Amendment shall be true
and correct as of the Amendment Effective Date.
SECTION 4. Representations and Warranties. In order to induce
the Administrative Agent and the Banks to enter into this Amendment and to amend
the Existing Credit Agreement in the manner provided in this Amendment, the
Borrower and the General Partner represent and warrant to the Administrative
Agent and each Bank as of the Amendment Effective Date as follows:
(a) Power and Authority. The Borrower and the General Partner
have all requisite corporate or partnership power and authority to enter into
this Amendment and to carry out the transactions contemplated by, and perform
their respective obligations under, the Existing Credit Agreement as amended by
this Amendment (hereafter referred to as the "Amended Credit Agreement").
(b) Authorization of Agreements. The execution and delivery of
this Amendment by the Borrower and the General Partner and the performance of
the Amended Credit Agreement by the Borrower and the General Partner have been
duly authorized by all necessary action, and this Amendment has been duly
executed and delivered by the Borrower and the General Partner.
(c) Enforceability. Each of this Amendment and the Amended
Credit Agreement constitutes the legal, valid and binding obligation of the
Borrower and the General Partner enforceable against the Borrower and the
General Partner in accordance with its terms, except as may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights in general. The enforceability of the obligations of the
Borrower and the General Partner hereunder is subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
(d) No Conflict. The execution and delivery by the Borrower
and the General Partner of this Amendment and the performance by the Borrower
and the General Partner of each of this Amendment and the Amended Credit
Agreement do not and will not (i) contravene, in any material respect, any
provision of any law, regulation, decree, ruling, judgment or order that is
applicable to the Borrower or the General Partner, as the case may be, or their
respective properties or other assets, (ii) result in a breach of or constitute
a default under the charter, bylaws or other organizational documents of the
Borrower or the General Partner, as the case may be, or any material agreement,
indenture, lease or instrument binding upon the Borrower or the General Partner
or their respective properties or other assets or (iii) result in the creation
or imposition of any Liens on their respective properties other than as
permitted under the Credit Agreement.
(e) Governmental Consents. No authorization or approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
the Borrower or the General Partner of this Amendment.
(f) Representations and Warranties in the Credit Agreement.
The Borrower and the General Partner confirm that as of the Amendment Effective
Date the representations and warranties contained in Article VI of the Credit
Agreement are (before and after giving effect to this Amendment) true and
correct in all material respects (except to the extent any such representation
and warranty is expressly stated to have been made as of a specific date, in
which case it shall be true and correct as of such specific date) and that no
Default has occurred and is continuing.
SECTION 5. Miscellaneous.
(a) Reference to and Effect on the Existing Credit
Agreement and the other Loan Documents.
(i) Except as specifically amended by this Amendment and the documents executed
and delivered in connection herewith, the Existing Credit Agreement and the
other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.
(ii) The execution and delivery of this Amendment and performance of the Amended
Credit Agreement shall not, except as expressly provided herein, constitute a
waiver of any provision of, or operate as a waiver of any right, power or remedy
of the Banks under, the Existing Credit Agreement or any of the other Loan
Documents.
(iii) Upon the conditions precedent set forth herein being satisfied, this
Amendment shall be construed as one with the Existing Credit Agreement, and the
Existing Credit Agreement shall, where the context requires, be read and
construed throughout so as to incorporate this Amendment.
(b) Expenses. The Borrower and the General Partner acknowledge
that all costs and expenses of the Administrative Agent incurred in connection
with this Amendment will be paid in accordance with Section 11.04 of the
Existing Credit Agreement.
(c) Headings. Section and subsection headings in this
Amendment are included for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose or be given any
substantive effect.
(d) Counterparts. This Amendment may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Transmission by
telecopier of an executed counterpart of this Amendment shall be deemed to
constitute due and sufficient delivery of such counterpart.
(e) Governing Law. This Amendment shall be governed by and
construed according to the laws of the State of New York.
(f) Merger of Thermogas into the Borrower. The Borrower
covenants and agrees with the Banks that Thermogas will be merged with and into
the Borrower as promptly as is reasonably practicable and in any event within 30
days following the consummation of the Thermogas Acquisition. Any failure by the
Borrower to observe or perform such agreement in a timely manner shall be deemed
to be a failure by the Borrower to observe or perform a covenant under the
Credit Agreement and thereby constitute an Event of Default under Section
8.01(d) of the Credit Agreement (subject to passage of the applicable grace
period referred to in such Section 8.01(d).
[Remainder of page intentionally left blank.]
DOCSLA1:325535.2
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of the date first above written.
FERRELLGAS, L.P., a Delaware limited partnership
By: Ferrellgas, Inc.
Its: General Partner
By: _______________________________________________________
Name:
Title: _______________________________________________________
FERRELLGAS, INC.
By: _______________________________________________________
Name:
Title: _______________________________________________________
ADMINISTRATIVE AGENT
BANK OF AMERICA, N.A., as Administrative Agent
By: _______________________________________________________
Name:
Title: _______________________________________________________
BANKS
BANK OF AMERICA, N.A.
By: _______________________________________________________
Name:
Title: _______________________________________________________
