Draft of February 13, 1997
PETROLEUM HEAT AND POWER CO., INC.
THIRD AMENDMENT AND RESTATEMENT OF
PURCHASE AGREEMENTS
Dated as of February 1, 1997
Re: 250,000 Shares of 1989 Preferred Stock, Par Value $.10
Exchangeable for
Subordinated Notes
DUE AUGUST 1, 1999
Amending and Restating the
Purchase Agreements dated as of August 1, 1989,
as heretofore amended
TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION HEADING PAGE
ARTICLE I AMENDMENT AND RESTATEMENT OF THE EXISTING PURCHASE
AGREEMENTS.................................................2
SECTION 2. REPRESENTATIONS..............................................2
Section 2.1. Representations of the Company...........................2
SECTION 3. EFFECTIVE DATE CLOSING CONDITIONS............................6
Section 3.1. Closing Certificate......................................6
Section 3.2. Legal Opinions...........................................7
Section 3.3. Satisfactory Proceedings.................................7
Section 3.4. Consummation of Sale of 1997 Preferred Stock.............7
Section 3.5. Payment of Special Counsel Fees..........................7
SECTION 4. EXCHANGE OF PREFERRED STOCK FOR NOTES........................7
Section 4.1. Exchange of Preferred Stock for Notes....................7
Section 4.2. Note Closing Conditions..................................8
SECTION 5. COMPANY COVENANTS............................................9
Section 5.1. Corporate Existence, etc.................................9
Section 5.2. Insurance................................................9
Section 5.3. Taxes, Claims for Labor and Materials, Compliance
with Laws..............................................9
Section 5.4. Maintenance, etc........................................10
Section 5.5. Nature of Business......................................10
Section 5.6. Limitations on Funded Debt..............................10
Section 5.7. Subsidiary Stock........................................11
Section 5.8. Dividends, Stock Purchases..............................11
Section 5.9. Mergers, Consolidations and Sales of Assets.............12
Section 5.10. Guaranties..............................................12
Section 5.11. Repurchase of Notes.....................................12
Section 5.12. Transactions with Affiliates............................13
Section 5.13. Termination of Pension Plans............................13
Section 5.14. Reports and Rights of Inspection........................13
Section 5.15. Limitation on Indebtedness and Preferred Stock
of Subsidiaries.......................................15
Section 5.16. Limitation on Restrictions on Distributions from
Subsidiaries..........................................16
SECTION 6. PREPAYMENT OF NOTES.........................................17
Section 6.1. Mandatory Prepayment on Change of Ownership.............17
Section 6.2. Optional Prepayments....................................19
Section 6.3. Notice of Prepayments...................................20
Section 6.4. Allocation of Prepayments...............................20
SECTION 7. SUBORDINATION OF NOTES......................................20
Section 7.1. Subordination to Senior Indebtedness....................20
Section 7.2. Proofs of Claim.........................................21
Section 7.3. No Waiver...............................................21
Section 7.4. Rights of Holders of Senior Indebtedness................22
Section 7.5. Rights of Holders of Notes..............................22
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SECTION 8. EVENTS OF DEFAULT WITH RESPECT TO NOTES AND REMEDIES
THEREFOR..................................................22
Section 8.1. Events of Default.......................................22
Section 8.2. Notice to Holders.......................................23
Section 8.3. Acceleration of Maturities..............................23
Section 8.4. Rescission of Acceleration..............................24
SECTION 9. AMENDMENTS, WAIVERS AND CONSENTS............................24
Section 9.1. Consent Required........................................24
Section 9.2. Effect of Amendment or Waiver...........................25
SECTION 10. INTERPRETATION OF AGREEMENT; DEFINITIONS....................25
Section 10.1. Definitions.............................................25
Section 10.2. Accounting Principles...................................34
Section 10.3. Directly or Indirectly..................................34
SECTION 11. MISCELLANEOUS...............................................34
Section 11.1. Designation of Observers................................34
Section 11.2. Agreement to Amend Charter..............................35
Section 11.3. Direct Payment..........................................35
Section 11.4. Registration and Transfers of the Notes.................36
Section 11.5. Exchange of Preferred Stock and Notes...................36
Section 11.6. Loss, Theft, etc. of Preferred Stock or Notes...........37
Section 11.7. Repurchase of Preferred Stock or Notes..................37
Section 11.8. Expenses, Stamp Tax Indemnity...........................38
Section 11.9. Notices.................................................38
Section 11.10. Successors and Assigns..................................38
Section 11.11. Survival of Covenants and Representations...............38
Section 11.12. Severability............................................38
Section 11.13. Governing Law...........................................39
Section 11.14. Captions................................................39
ARTICLE II AMENDMENTS TO SCHEDULES AND EXHIBITS TO EXISTING
PURCHASE AGREEMENTS.......................................39
ARTICLE III MISCELLANEOUS...............................................39
Section 3.1. Ratification of Existing Purchase Agreements............39
Section 3.2. Counterparts............................................39
Section 3.3. Fees and Expenses.......................................39
Section 3.4. References to Original Purchase Agreements..............39
Section 3.5. Governing Law...........................................39
Section 3.6. Consent to Issuance of 1997 Preferred Stock.............40
Signature Page................................................................41
ATTACHMENTS TO THIRD AMENDMENT AND RESTATEMENT:
Schedule I -- Name and Address of Holders of 1989 Preferred Stock
Schedule II -- Names of Holders of Beneficial Interest of Class C Common Stock
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Exhibit A -- Certificate of Designation
Exhibit B -- Preferred Stock Closing Certificate of the Company
Exhibit C -- Description of Xxxxxxx and Cutler's Preferred Stock Closing
Opinion
Exhibit D -- Description of Xxxxxxxx Xxxxx Xxxxxxxx Xxxx & Ballon LLP
Preferred Stock Closing Opinion
Exhibit E -- Form of Subordinated Note
Exhibit F -- Note Closing Certificate of the Company
Exhibit G -- Description of Note Closing Opinion of Special Counsel to
Holders
Exhibit H -- Description of Note Closing Opinion of Counsel to Company
Exhibit I -- Description of Minnesota Counsel Note Closing Opinion
Exhibit J -- Subsidiaries of the Company
Exhibit K -- Current Debt, Funded Debt, Capitalized Leases and Long-Term
Leases of the Company and its Subsidiaries
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Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
PETROLEUM HEAT AND POWER CO., INC.
XXXXXXXXX STREET
STAMFORD, CONNECTICUT 06904
THIRD AMENDMENT AND RESTATEMENT OF
PURCHASE AGREEMENTS
RE: 250,000 ORIGINALLY ISSUED SHARES OF 1989
PREFERRED STOCK EXCHANGEABLE
FOR SUBORDINATED NOTES
DUE AUGUST 1, 1999
Amending and Restating the
Purchase Agreements dated as of August 1, 1989,
as heretofore amended
Dated as of February 1, 1997
To the Holders of the 1989 Preferred Stock
Listed on the Attached Schedule I
Ladies and Gentlemen:
Reference is hereby made to the separate Purchase Agreements each dated as
of August 1, 1989 (the "Original Purchase Agreements") between Petroleum Heat
and Power Co., Inc., a Minnesota corporation (the "Company"), and the respective
Purchasers named therein (the Original Purchase Agreements, as heretofore
amended by the First Amendment dated as of January 24, 1994 (the "First
Amendment") and the Second Amendment dated as of November 28, 1995, are herein
referred to as the "Existing Purchase Agreements"), pursuant to which the
Company issued 250,000 shares of its 1989 Preferred Stock, due August 1, 1999
(the "Preferred Stock").
The Company now proposes to (i) issue $60,000,000 aggregate principal
amount of its Senior Notes due October 1, 2002 (the "2002 Notes") pursuant to
the separate Note Agreements each dated as of February 1, 1997 between the
Company and each of the respective Purchasers named therein, in exchange for the
$30,000,000 aggregate principal amount of the Company's Senior Notes due October
1, 1998 and the $30,000,000 aggregate principal amount of the Company's
Subordinated Notes due October 1, 1998, (ii) issue $30,000,000 aggregate
liquidation preference of its Exchangeable Preferred Stock (the "1997 Preferred
Stock") pursuant to Rule 144A under the Securities Act of 1933, as amended, and
(iii) amend the terms of the $6,250,000 original principal amount 14.10%
Subordinated Notes of the Company and the $6,250,000 original principal amount
14.10% Senior Notes of the Company pursuant to that certain Sixth Amendment and
Restatement of Note Agreement dated as of February 1, 1997 between the Company
and the holder of such Notes (the transactions described in the foregoing
clauses (i) through (iii) are herein referred to as the "Proposed
Transactions").
Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
In order to permit the Proposed Transactions, the Company now desires, and
the Company and each of you hereby agree, subject to satisfaction of the
conditions precedent set forth in ss.3 hereof (the "Closing Conditions"), to
amend and restate the Existing Purchase Agreements as of February 18, 1997 or,
in the event that all Closing Conditions have not been satisfied as of February
18, 1997, such later date on or prior to February 28, 1997 as of which all such
closing conditions have been satisfied (such date or such later date is herein
referred to as the "Effective Date") in the respects, but only in the respects,
hereinafter set forth in this Third Amendment and Restatement of Purchase
Agreements (this "Agreement"):
ARTICLE I
AMENDMENT AND RESTATEMENT
OF THE EXISTING PURCHASE AGREEMENTS
Sections 2 through 10 of the Existing Purchase Agreements shall be and are
hereby amended and restated in their entirety to read as follows:
SECTION 2. REPRESENTATIONS.
Section 2.1. Representations of the Company. The Company represents and
warrants to you as of the date hereof that:
(a) Subsidiaries. Exhibit J attached hereto states the name of each
of the Company's Subsidiaries, its jurisdiction of incorporation and the
percentage of its Voting Stock owned by the Company and/or its
Subsidiaries. The Company and each Subsidiary has title to all of the
shares it purports to own of the stock of each Subsidiary, free and clear
in each case of any lien except as disclosed in the notes to the financial
statements referred to in paragraph (d) hereof or in Exhibit K attached
hereto. All such shares have been duly issued and are fully paid and
non-assessable.
(b) Corporate Organization and Authority. The Company and each
Subsidiary
(i) is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation;
and
(ii) has all requisite corporate power and authority to own
and operate its properties and to carry on its business as now
conducted and as presently proposed to be conducted.
(c) Business and Property. You have heretofore been furnished with a
copy of the Company's Preliminary Offering Memorandum dated January 29,
1997 prepared by Xxxxxxxxx Xxxxxx & Xxxxxxxx Securities Corporation
regarding the
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Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
issuance and sale of the Company's 1997 Preferred Stock referred to in
ss.3.4 (the "Memorandum") which generally sets forth the business
conducted and proposed to be conducted by the Company and its Subsidiaries
and the principal properties of the Company and its Subsidiaries.
(d) Financial Statements. The balance sheets of the Company as of
December 31 in each of the years 1991 through 1995, and the statements of
income and shareholders equity and changes in financial position for the
fiscal years ended on said dates accompanied by a report thereon
containing an opinion unqualified as to scope limitations imposed by the
Company and otherwise without qualification except as therein noted, by
KPMG Peat Marwick LLP, certified public accountants, and the unaudited
balance sheet of the Company as of September 30, 1996 and the unaudited
statements of income and shareholders' equity and changes in financial
position for the nine-month period ended on such date, copies of which
have been delivered to you, have been prepared in accordance with
generally accepted accounting principles consistently applied except as
therein noted, are correct and complete and present fairly the financial
position of the Company and its Subsidiaries as of such dates and the
results of its operations and changes in its financial position or
consolidated statements of its cash flow for such periods.
(e) Indebtedness. Exhibit K attached hereto correctly describes all
Working Capital Borrowings, Funded Debt, Capitalized Leases and Long-Term
Leases of the Company and its Subsidiaries outstanding as of January 31,
1997.
(f) Full Disclosure. Neither the financial statements referred to in
paragraph (d) nor this Agreement, the Memorandum or any written statement
furnished by the Company to you in connection with the execution and
delivery of this Agreement, contains any untrue statement of a material
fact or omits a material fact necessary to make the statements contained
therein or herein not misleading. There is no fact peculiar to the Company
which the Company has not disclosed to you in writing which materially
affects adversely nor, so far as the Company can now foresee, will
materially affect adversely the properties, business, prospects, profits
or condition (financial or otherwise) of the Company, or the ability of
the Company to perform this Agreement, the Notes or the Restated and
Amended Articles of Incorporation of the Company as they apply to the
Preferred Stock.
(g) Pending Litigation. There are no proceedings pending or, to the
knowledge of the Company, threatened
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Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
against or affecting the Company or any Subsidiary in any court or before
any governmental authority or arbitration board or tribunal which involve
the possibility of materially and adversely affecting the properties,
business, prospects, profits or condition (financial or otherwise) of the
Company and its Subsidiaries, or the ability of the Company to perform
this Agreement, the Notes or the Restated and Amended Articles of
Incorporation of the Company as they apply to the Preferred Stock. Neither
the Company nor any Subsidiary is in default with respect to any order of
any court or governmental authority or arbitration board or tribunal.
(h) Title to Properties. The Company and each Subsidiary has good
and marketable title in fee simple (or its equivalent under applicable
law) to all the real property and has title to all the other property it
purports to own, including that reflected in the balance sheet as of
September 30, 1996 referred to in paragraph (d) except as sold or
otherwise disposed of in the ordinary course of business and except for
liens disclosed in notes to the financial statements referred to in
paragraph (d) hereof or in Exhibit K attached hereto and except for liens,
easements and minor defects in title thereto that do not materially
adversely affect the value of such property.
(i) Patents and Trademarks. The Company and each Subsidiary owns or
possesses all the patents, trademarks, trade names, service marks,
copyright, licenses and rights with respect to the foregoing necessary for
the present conduct of its business, without any known material conflict
with the rights of others.
(j) Sale is Legal and Authorized. (i) On (A) the Effective Date the
compliance by the Company with all of the provisions of this Agreement and
the Restated and Amended Articles of Incorporation of the Company as they
apply to the Preferred Stock and (B) each Note Closing Date, the issuance
of the Notes in exchange for the Preferred Stock and compliance by the
Company with all of the provisions of this Agreement and the Notes --
(y) will be within the corporate powers of the Company and
will have been duly authorized by proper corporate action on the
part of the Company; and
(z) will not violate any provisions of any law or any order of
any court or governmental authority or agency and will not conflict
with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under the Restated and
Amended Articles of Incorporation or By-laws of the
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Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
Company or any indenture or other agreement or instrument to which
the Company is a party or by which it may be bound or result in the
imposition of any liens or encumbrances on any property of the
Company.
(ii) When executed and delivered pursuant hereto on each Note
Closing Date, the Notes will be, legal, valid and binding
obligations of the Company enforceable in accordance with their
terms, subject to bankruptcy, insolvency and other laws and legal
and equitable principles affecting or limiting the enforcement of
creditors' rights generally.
(k) No Defaults. On the Effective Date and on each Note Closing
Date, no Default or Event of Default as defined in this Agreement will
have occurred and be continuing and no event will have occurred and be
continuing which would constitute a Default or an Event of Default were
any Notes outstanding on such date. Neither the Company nor any Subsidiary
is in default in the payment of principal or interest on any Indebtedness
for borrowed money nor in default under any instrument or instruments or
agreements under and subject to which any Indebtedness for borrowed money
has been issued and no event has occurred and is continuing under the
provisions of any such instrument or agreement which with the lapse of
time or the giving of notice, or both, would constitute an event of
default thereunder.
(l) Governmental Consent. No approval, consent or withholding of
objection on the part of any regulatory body, state, Federal or local, is
necessary in connection with the execution and delivery by the Company of
this Agreement or the Notes or the compliance by the Company with any of
the provisions of this Agreement, the Notes or the Restated and Amended
Articles of Incorporation of the Company as they apply to the Preferred
Stock.
(m) Taxes. All tax returns required to be filed by the Company or
any Subsidiary in any jurisdiction have, in fact, been filed, and all
taxes, assessments, fees and other governmental charges upon the Company
or any Subsidiary or upon any of their respective properties, income or
franchises, which are shown to be due and payable in such returns have
been paid. The Company does not know of any proposed additional tax
assessment against it or any Subsidiary for which adequate provision has
not been made on its accounts. The Federal income tax liability of the
Company and its Subsidiaries has been finally determined by the Internal
Revenue Service and satisfied for all taxable years up to and including
the taxable year ended December 31, 1991 and no controversy in respect of
a material amount
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Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
of additional income taxes due since said date is pending or to the
knowledge of the Company threatened. The provisions for taxes on the books
of the Company and each Subsidiary is adequate for all open years, and for
its current fiscal period.
(n) No Violation of Section 7 of Securities Exchange Act. None of
the transactions contemplated in this Agreement (including, without
limitation thereof, the use of proceeds, upon any exchange of Preferred
Stock for Notes) will violate or result in a violation of Section 7 of the
Securities Exchange Act of 1934, as amended, or any regulation issued
pursuant thereto, including, without limitation, Regulations G, T and X of
the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter
II.
(o) Registration. The Preferred Stock is not an equity security of a
class which is, or is required to be, registered pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended, and the provisions of
Section 13(d)(1) of said Act are not applicable to the Preferred Stock.
(p) Private Offering. Neither the Company, directly or indirectly,
nor any agent on its behalf has offered or will offer the Preferred Stock
or the Notes or any similar Security (other than the 1997 Preferred Stock)
to, or has solicited or will solicit an offer to acquire the Preferred
Stock or the Notes or any similar Security (other than the 1997 Preferred
Stock) from, or has otherwise approached or negotiated or will approach or
negotiate in respect of the Preferred Stock or the Notes or any similar
Security (other than the 1997 Preferred Stock) with any Person other than
you and the other Purchaser. Neither the Company, directly or indirectly,
nor any agent on its behalf has offered or will offer the Preferred Stock
or the Notes or any similar Security to, or has solicited or will solicit
an offer to acquire the Preferred Stock or the Notes or any similar
Security from any Person so as to bring the issuance and sale of the
Preferred Stock or the Notes within the provisions of Section 5 of the
Securities Act of 1933, as amended.
(q) Employee Retirement Income Security Act of 1974. The
consummation of the transactions provided for in this Agreement and
compliance by the Company with the provisions hereof and the Preferred
Stock and Notes issued hereunder will not involve any prohibited
transaction within the meaning of the Employee Retirement Income Security
Act of 1974 ("ERISA") or Section 4975 of the Internal Revenue Code of
1954, as amended. No "employee pension benefit plans",
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Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
as defined in ERISA ("Plans"), maintained by the Company or any Person
which is under common control with the Company within the meaning of
Section 4001(b) of ERISA, nor any trusts created thereunder, have incurred
any "accumulated funding deficiency" as defined in Section 302 of ERISA
nor did the present value of all benefits vested under all Plans exceed,
as of January 1, 1996, the last annual valuation date, the value of the
assets of the Plans allocable to such vested benefits by more than
$7,200,000.
(r) Investment Company Act. Neither the Company nor any Subsidiary
is, and neither is directly or indirectly controlled by, or acting on
behalf of any Person which is, an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
(s) Absence of Holding Company Status. The Company is not a "holding
company" or a subsidiary or affiliate of a "holding company", or a
subsidiary company of a "holding company", or a "public utility" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
(t) Dividends. The Company is not in arrears in the payment of any
dividends on any outstanding shares of its capital stock.
SECTION 3. EFFECTIVE DATE CLOSING CONDITIONS.
The effectiveness of this Agreement shall be subject to the performance by
the Company of its agreements hereunder which by the terms hereof are to be
performed at or prior to the Effective Date and to the following further
conditions precedent, and the Company will use its best efforts to fulfill all
of such conditions:
Section 3.1. Closing Certificate. On the Effective Date, all
representations and warranties of the Company set forth in ss.2.1 hereof shall
be true and correct, and you shall have received a certificate dated the
Effective Date to such effect, signed by a Chief Executive Officer or any Vice
President of the Company, substantially in the form attached hereto as Exhibit
B.
Section 3.2. Legal Opinions. On the Effective Date, you shall have
received from Xxxxxxx and Xxxxxx, who are acting as your special counsel in this
transaction and from Xxxxxxxx Xxxxx Xxxxxxxx Xxxx & Ballon LLP counsel for the
Company, their respective opinions, dated the Effective Date, in form and
substance satisfactory to you and covering the matters set forth in Exhibits C
and D, respectively, hereto.
Section 3.3. Satisfactory Proceedings. All proceedings taken in
connection with the transactions contemplated by this Agreement, and all
documents necessary to the consummation thereof, shall be satisfactory in form
and substance to you and your special counsel, and you shall have received a
copy
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Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
(executed or certified as may be appropriate) of all legal documents or
proceedings taken in connection with the consummation of said transactions.
Section 3.4. Consummation of Sale of 1997 Preferred Stock. On or prior to
the Effective Date, the Company shall have consummated the issuance and sale
pursuant to Rule 144A under the Securities Act of 1933, as amended, of
$30,000,000 aggregate liquidation preference of its Exchangeable Preferred Stock
(the "1997 Preferred Stock").
Section 3.5. Payment of Special Counsel Fees. Without limiting the
provisions of ss.11.8, the Company shall have paid on the Effective Date the
reasonable fees, charges and disbursements of your special counsel referred to
in ss.3.2 above to the extent reflected in a statement of such counsel rendered
to the Company at least one Business Day prior to the Effective Date.
SECTION 4. EXCHANGE OF PREFERRED STOCK FOR NOTES.
Section 4.1. Exchange of Preferred Stock for Notes. The Company, from
time to time, on any Business Day specified by the Company, upon not less than
14 days' nor more than 30 days' prior written notice to each holder of the then
outstanding shares of Preferred Stock (any such day, with respect to the Notes
to be issued on such day the "Note Closing Date"), may cause all or any part of
such then outstanding shares of Preferred Stock to be redeemed by issuing, in
exchange therefor, its Subordinated Notes due August 1, 1999 (the "Notes")
substantially in the form attached hereto as Exhibit E, provided, that the
amount of Preferred Stock exchanged on any Note Closing Date shall be not less
than 10,000 shares and increments of 2,000 shares in excess thereof. Dividends
on the Preferred Stock so redeemed shall cease to accrue on the Note Closing
Date and the Company will pay interest on the Notes, at the rate and on the
dates specified therein, on and after the Note Closing Date. As contemplated by
Section 1.3 of the First Amendment, Notes issued in exchange for any shares of
Preferred Stock shall bear interest at the rate of 12% per annum.
At 10:00 A.M. local time on any Note Closing Date, each holder of any then
outstanding shares of Preferred Stock to be exchanged shall deliver the
certificate or certificates evidencing such shares to the Company at the address
then designated for the receipt of notices in ss.11.9 hereof upon receipt from
the Company of the following:
(i) payment to such holder of an amount equal to all accrued and
unpaid cumulative dividends on the outstanding shares of Preferred Stock
held by such holder (whether or not earned or declared) to, but not
including, the Note Closing Date; and
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Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
(ii) Notes, dated the Note Closing Date, in the aggregate principal
amount (after giving effect to any mandatory redemptions made with respect
to the Preferred Stock on such Note Closing Date) which would then be
payable with respect to the Preferred Stock held by such holder in the
event of an involuntary liquidation, dissolution or winding up of the
Company.
The Notes delivered to each holder will be delivered in such denominations
and in such holder's name or the name of such nominee or nominees as such holder
may specify at least three days prior to the Note Closing Date. Unless any
holder shall otherwise request, the Notes to be delivered to each holder will be
in the form of a single Note registered in the name of such holder. All partial
exchanges of Preferred Stock shall be applied on all outstanding Preferred Stock
ratably in accordance with the liquidation preference thereof and in inverse
order of the date of original issuance thereof, but only in units of whole
shares, and to the extent that such ratable application shall not result in
non-fractional shares, the Company shall exchange, as nearly as practicable on
such Note Closing Date, that number of shares of Preferred Stock issued on each
date of issuance thereof (each such date a "Preferred Stock Closing Date") then
held by each holder that bears the same proportion to the total number of shares
to be exchanged as the total number of shares of Preferred Stock issued on such
Preferred Stock Closing Date held by such holder bears to the total number of
shares of Preferred Stock issued on such Preferred Stock Closing Date then
outstanding. Adjustment may be made by the Company to the end that successive
applications shall result in substantially ratable exchanges.
Section 4.2. Note Closing Conditions. Your obligation to exchange
Preferred Stock for Notes on each Note Closing Date shall be subject to the
performance by the Company of its agreements hereunder which by the terms hereof
are to be performed at or prior to the time of delivery of the Notes on such
Note Closing Date and to the following further conditions precedent and the
Company will use its best efforts to fulfill all of such conditions:
(a) Closing Certificates. On each Note Closing Date, all
representations and warranties of the Company set forth in ss.2.1 hereof
shall be true and correct, and concurrently with the delivery of Notes to
you on such Note Closing Date, you shall have received a certificate dated
such Note Closing Date to such effect, signed by a Chief Executive Officer
of the Company substantially in the form attached hereto as Exhibit F, the
truth and accuracy of which shall be a condition to your obligation to
purchase the Notes proposed to be sold to you.
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Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
(b) Legal Opinions. Concurrently with the delivery of Notes to you
on each Note Closing Date, you shall have received from Xxxxxxx and
Xxxxxx, who are acting as your special counsel in this transaction, and
from Xxxxxxxx Xxxxx Xxxxxxxx Xxxx & Ballon LLP, counsel for the Company
and Xxxxxx & Xxxxxxx, Minnesota counsel to the Company, their respective
opinions dated such Note Closing Date, in form and substance satisfactory
to you, and covering applicable matters set forth in Exhibits G, H and I,
respectively, hereto.
(c) Satisfactory Proceedings. All proceedings taken in connection
with the transactions contemplated by this Agreement, and all documents
necessary to the consummation thereof, shall be satisfactory in form and
substance to you and your special counsel, and you shall have received a
copy (executed or certified as may be appropriate) of all legal documents
or proceedings taken in connection with the consummation of said
transactions.
(d) Related Transactions. Prior to or concurrently with the exchange
of Notes for Preferred Stock on each Note Closing Date, the Company shall
have consummated the exchange of the entire principal amount of the Notes
scheduled to be exchanged on such Note Closing Date pursuant to this
Agreement and the other agreements referred to in ss.1.3.
SECTION 5. COMPANY COVENANTS.
From and after the First Note Closing Date and continuing so long as any
Notes remain outstanding:
Section 5.1. Corporate Existence, etc. The Company will preserve and keep
in force and effect, and will cause each Subsidiary to preserve and keep in
force and effect, its corporate existence and all licenses and permits necessary
to the proper conduct of its business, the absence of which would materially and
adversely affect the properties, business, prospects or the condition of the
Company and its Subsidiaries, provided that the foregoing shall not prevent any
transaction permitted by ss.5.9.
Section 5.2. Insurance. The Company will maintain, and will cause each
Subsidiary to maintain, insurance coverage by financially sound and reputable
insurers rated by A.M. Best & Company A-X or better, in such forms and amounts
and against such risks as are customary for corporations of established
reputation engaged in the same or a similar business and owning and operating
similar properties; provided, however, that if insurance coverage by an insurer
with such rating is not available for any such risk, then the Company shall
maintain insurance coverage, for such risk, by an insurer with the highest
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Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
rating for insurers which provide insurance coverage for such risk.
Section 5.3. Taxes, Claims for Labor and Materials, Compliance with Laws.
The Company will promptly pay and discharge, and will cause each Subsidiary
promptly to pay and discharge, all lawful taxes, assessments and governmental
charges or levies imposed upon the Company or such Subsidiary, respectively, or
upon or in respect of all or any part of the property or business of the Company
or such Subsidiary, all trade accounts payable in accordance with usual and
customary business terms, and all claims for work, labor or materials, which if
unpaid might become a lien or charge upon any property of the Company or such
Subsidiary; provided the Company or such Subsidiary shall not be required to pay
any such tax, assessment, charge, levy, account payable or claim if (i) the
validity, applicability or amount thereof is being contested in good faith by
appropriate actions or proceedings which will prevent the forfeiture or sale of
any property of the Company or such Subsidiary or any material interference with
the use thereof by the Company or such Subsidiary, and (ii) the Company or such
Subsidiary shall set aside on its books adequate reserves with respect thereto,
if required by generally accepted accounting principles. The Company will
promptly comply and will cause each Subsidiary to comply with all laws,
ordinances or governmental rules and regulations to which it is subject,
including without limitation, the Occupational Safety and Health Act of 1970,
the Employee Retirement Income Security Act of 1974 and all laws, ordinances,
governmental rules and regulations relating to environmental protection in all
applicable jurisdictions, the violation of which would materially and adversely
affect the properties, business, prospects, profits or condition of the Company
and its Subsidiaries or would result in any lien or charge upon any property of
the Company or any Subsidiary; provided the Company or such Subsidiary shall not
be required to pay any such tax, assessment, charge, levy, account payable or
claim if (i) the validity, applicability or amount thereof is being contested in
good faith by appropriate actions or proceedings which will prevent the
forfeiture or sale of any property of the Company or such Subsidiary or any
material interference with the use thereof by the Company or such Subsidiary,
and (ii) the Company or such Subsidiary shall set aside on its books adequate
reserves with respect thereto, if required by generally accepted accounting
principles.
Section 5.4. Maintenance, etc. The Company will maintain, preserve and
keep, and will cause each Subsidiary to maintain, preserve and keep, its
properties which are used or useful in the conduct of its business (whether
owned in fee or a leasehold
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Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
interest) in repair and working order as is customary for corporations of
established reputation engaged in the same or a similar business and owning and
operating similar properties and from time to time will make all necessary
repairs, replacements, renewals and additions so that at all times the
efficiency thereof shall be maintained.
Section 5.5. Nature of Business. Neither the Company nor any Subsidiary
will engage in any business if, giving effect thereto, less than 80% of the
Consolidated Operating Cash Flow of the Company for the 12 months ended with its
most recently ended fiscal quarter would be attributable to the distribution of
home heating oil (#2 fuel oil), propane and related products (including the
distribution of other petroleum products which were distributed by the Company
during its fiscal year ending December 31, 1996), all as determined in
accordance with generally accepted accounting principles.
Section 5.6. Limitations on Funded Debt. Neither the Company nor any of
its Subsidiaries will incur, create, assume, guarantee or otherwise become
liable for any additional Funded Debt unless, after giving effect thereto, the
Company's Consolidated EBITDA Coverage Ratio exceeds 2.0 to 1.
The foregoing restriction on additional Funded Debt shall not be
applicable to (i) Funded Debt incurred to refund, extend or renew up to an equal
amount of outstanding Funded Debt; provided, that, if any Funded Debt is
incurred for the purpose of refunding, extending or renewing any Indebtedness
which is subordinate to the Senior Notes, such Funded Debt must be subordinated
to the Senior Notes to the extent such Indebtedness is so subordinated, and (ii)
additional Funded Debt in an aggregate amount not to exceed $25 million at any
one time outstanding; provided, however, that Funded Debt incurred pursuant to
this subsection (ii) shall be deemed not to be outstanding for purposes of this
subsection (ii) if at the end of any period of four consecutive fiscal quarters
ending after the incurrence of such Funded Debt the Company's Consolidated
EBITDA Coverage Ratio exceeds 2.0 to 1.
Section 5.7. Subsidiary Stock. The Company shall not directly or
indirectly create, assume or suffer to exist any lien, charge or encumbrance on
any capital stock of any of its Subsidiaries. The Company shall not permit any
Subsidiary to issue or at any time to have outstanding any shares of preferred
stock, except as permitted underss.5.15.
Section 5.8. Dividends, Stock Purchases. The Company shall not declare or
pay any dividend or make any distribution on its capital stock or to its
shareholders or make any loan or advance to its shareholders (other than
dividends or distributions payable in its capital stock) or purchase, redeem or
otherwise
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Petroleum Heat and Power Co., Inc.
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acquire or retire for value, or permit any Subsidiary to purchase or otherwise
acquire for value, any capital stock of the Company (i) if at the time of such
action an Event of Default shall have occurred and be continuing, or (ii) if,
upon giving effect to such dividend, distribution, loan, advance, purchase,
redemption, or other acquisition or retirement, the aggregate amount expended
for all such purposes subsequent to December 31, 1987 (giving effect to any
repayments of such loans or advances), shall exceed the sum of (a) 50% of the
aggregate Cash Flow of the Company accrued on a cumulative basis for each of the
fiscal years subsequent to December 31, 1986, and (b) the aggregate net
proceeds, including the fair market value of property other than cash (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be conclusive), received by the Company from the issue or
sale after July 1, 1987, of capital stock of the Company, including capital
stock issued upon the conversion of, or exchange for, Indebtedness; provided,
however, that (x) the foregoing shall not prevent the payment of any dividend
within 60 days after the date of declaration of such dividend, if at said date
such declaration complied with this covenant; (y) in the event that the Company
purchases, redeems or otherwise acquires or retires any capital stock of the
Company in exchange for promissory notes of the Company then, so long as no
Preferred Stock shall remain outstanding and such promissory notes are junior
and subordinate to the Notes, the principal of and interest on such subordinated
promissory notes shall not be included for purposes of the foregoing until such
time as payments of principal or interest are made thereon; and (z)
notwithstanding the limitations of this ss.5.8, the Company may in each fiscal
year, so long as no Default or Event of Default shall have occurred and be
continuing, pay dividends on, and make mandatory or optional redemptions and
exchanges of, the Preferred Stock pursuant to this Agreement, it being
understood that any such dividends, redemptions and exchanges permitted by this
clause (z) shall be taken into account in determining the amount of any other
dividend, distribution, loan, advance, purchase, acquisition, redemption or
retirement to be made.
Section 5.9. Mergers, Consolidations and Sales of Assets. The Company
shall not consolidate with or merge into any other corporation or transfer all
or substantially all of its properties and assets as an entirety to any person,
unless:
(a) either the Company shall be the continuing person, or the person
(if other than the Company) formed by such consolidation or into which the
Company is merged or to which the properties and assets of the Company as
an entirety are transferred (i) shall be a corporation organized and
existing under the laws of the United States
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of America or any state thereof or the District of Columbia, (ii) shall
expressly assume all the obligations of the Company under the Note
Agreement, (iii) shall be a person with a consolidated net worth
immediately after such transaction at least equal to the Consolidated Net
Worth of the Company immediately prior to such transaction and (iv) would,
after giving effect to such transaction, be able to issue at least one
dollar ($1.00) of additional Funded Debt under the provisions of ss.5.6;
(b) immediately after giving effect to such transaction, no Event of
Default or no Default shall have occurred and be continuing; and
(c) the Company has delivered to the Noteholders an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer complies with this covenant.
Any sale or other transfer by the Company of a material part of any of its
properties or assets not in the ordinary course of business shall be for a price
which is not less than the fair market value of the property or assets so sold
or transferred, as determined in good faith by the Board of Directors of the
Company.
Notwithstanding the foregoing, any Subsidiary may consolidate with, merge
into or transfer all or part of its properties and assets to the Company or any
other Wholly-owned Subsidiary or Wholly-owned Subsidiaries.
Section 5.10. Guaranties. In addition to the other restrictions contained
herein, including, without limitation, the restrictions contained in ss.ss.5.6
and 5.15 hereof, the Company will not and will not permit any Subsidiary to
become or be liable in respect of any Guaranty except (i) any Guaranty of the
Company of any obligation of any Wholly-owned Subsidiary, (ii) any Guaranty of
any Subsidiary of any obligation of any Wholly-owned Subsidiary or of the
Company, and (iii) Guaranties of the Company which are limited in amount to a
stated maximum dollar exposure and included in Indebtedness permitted by this
Agreement.
Section 5.11. Repurchase of Notes. Neither the Company nor any Subsidiary
or Affiliate, directly or indirectly, may repurchase or make any offer to
repurchase any Notes unless the offer has been made to repurchase Notes, pro
rata, from all holders of the Notes at the same time and upon the same terms. In
case the Company repurchases any Notes, such Notes shall thereafter be cancelled
and no Notes shall be issued in substitution therefor.
Section 5.12. Transactions with Affiliates. The Company will not, and
will not permit any Subsidiary to, enter into or be a party to, any transaction
or arrangement with any Affiliate
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Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
(including without limitation, the purchase from, sale to or exchange of
property with, or the rendering of any service by or for, any Affiliate), except
upon fair and reasonable terms no less favorable to the Company or such
Subsidiary than would obtain in a comparable arm's-length transaction with a
Person other than an Affiliate, not detrimental to the interest of the Company
or such Subsidiary.
Section 5.13. Termination of Pension Plans. The Company will not and will
not permit any Subsidiary to permit any employee benefit plan maintained by it
to be terminated in a manner which could result in the imposition of a lien on
any property of the Company or any Subsidiary pursuant to Section 4068 of the
Employee Retirement Income Security Act of 1974, as amended, if the enforcement
of all such liens then in effect would have a material and adverse effect on the
properties, business, prospects or the condition of the Company and its
Subsidiaries.
Section 5.14. Reports and Rights of Inspection. The Company will keep,
and will cause each Subsidiary to keep, proper books of record and account in
which full and correct entries will be made of all dealings or transactions of
or in relation to the business and affairs of the Company or such Subsidiary, in
accordance with generally accepted principles of accounting consistently
maintained (except for changes disclosed in the financial statements furnished
to you pursuant to this ss.5.14 and concurred in by the independent public
accountants referred to in ss.5.14(b) hereof), and will furnish to you so long
as you are the holder of any Note and to each other institutional holder of the
then outstanding Notes (in duplicate if so specified below or otherwise
requested):
(a) Quarterly Statements. As soon as available and in any event
within 45 days after the end of each quarterly fiscal period (except the
last) of each fiscal year, duplicate copies of:
(1) consolidated balance sheets of the Company and its
Subsidiaries as of the close of such quarter setting forth in
comparative form the amount for the end of the preceding fiscal
year,
(2) consolidated statements of income and retained earnings of
the Company and its Subsidiaries for such quarterly period, setting
forth in comparative form the amount for the corresponding period of
the preceding fiscal year, and
(3) consolidated statements of cash flows of the Company and
its Subsidiaries for the portion of the fiscal year ending with such
quarter, setting forth in comparative form the amount for the
corresponding period of the preceding fiscal year,
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Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
all in reasonable detail and certified as complete and correct, by
the chief financial officer of the Company;
(b) Annual Statements. As soon as available and in any event within
90 days after the close of each fiscal year of the Company, duplicate
copies of:
(1) consolidated balance sheets of the Company and its
Subsidiaries as of the close of such fiscal year, and
(2) consolidated statements of income and retained earnings
and cash flows of the Company and its Subsidiaries for such fiscal
year,
in each case setting forth in comparative form the consolidated figures
for the preceding fiscal year, all in reasonable detail and accompanied by
a report thereon of a firm of independent public accountants of recognized
national standing selected by the Company to the effect that the
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied (except for
changes in application in which such accountants concur) and present
fairly the financial condition of the Company and its Subsidiaries and
that the examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted auditing
standards and accordingly, includes such tests of the accounting records
and such other auditing procedures as were considered necessary in the
circumstances;
(c) Audit Reports. Promptly upon receipt thereof, one copy of each
interim or special audit made by independent accountants of the books of
the Company or any Subsidiary;
(d) SEC and Other Reports. Promptly upon their becoming available,
one copy of each financial statement, report, notice or proxy statement
sent by the Company to stockholders generally and of each regular or
periodic report, and any registration statement or prospectus filed by the
Company or any Subsidiary with any securities exchange or the Securities
and Exchange Commission or any successor agency, and copies of any orders
in any proceedings to which the Company or any of its Subsidiaries is a
party, issued by any governmental agency, Federal or state, having
jurisdiction over the Company or any of its Subsidiaries;
(e) Requested Information. With reasonable promptness, such other
data and information (including information as to the ownership of the
capital stock of the Company) as you or any such institutional holder may
reasonably request;
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Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
(f) Officers' Certificates. Within the periods provided in
paragraphs (a) and (b) above, a certificate of the chief financial officer
of the Company stating that he has reviewed the provisions of this
Agreement and setting forth: (i) the information and computations (in
sufficient detail) required in order to establish whether the Company was
in compliance with the requirements of ss.5.6 through ss.5.13, inclusive,
at the end of the period covered by the financial statements then being
furnished, and (ii) whether there existed as of the date of such financial
statements and whether, to the best of his knowledge after reasonable
inquiry, there exists on the date of the certificate or existed at any
time during the period covered by such financial statements any Default or
Event of Default and, if any such condition or event exists on the date of
the certificate, specifying the nature and period of existence thereof and
the action the Company is taking and proposes to take with respect
thereto; and
(g) Accountants' Certificates. Within the period provided in
paragraph (b) above, a certificate of the accountants who render an
opinion with respect to such financial statements, stating that they have
reviewed this Agreement and stating further, whether in making their
audit, such accountants have become aware of any Default or Event of
Default under any of the terms or provisions of this Agreement, and if any
such condition or event then exists, specifying the nature and period of
existence thereof.
Without limiting the foregoing, the Company will permit you, so long as
you are the holder of any Note, and each institutional holder of the then
outstanding Notes (or such Persons as either you or such holder may designate)
to visit and inspect, any of the properties of the Company or any Subsidiary, to
examine all their 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, corporate staff and independent
public accountants (and by this provision the Company authorizes said
accountants to discuss with you the finances and affairs of the Company and its
Subsidiaries) all at such reasonable times and as often as may be reasonably
requested. The Company shall not be required to pay or reimburse you or any such
holder for expenses which you or any such holder may incur in connection with
any such visitation or inspection.
Section 5.15. Limitation on Indebtedness and Preferred Stock of
Subsidiaries. The Company will not permit any Subsidiary to incur or in any
manner be or become liable in respect of any
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Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
Indebtedness or issue or have outstanding any preferred stock except: (i)
Indebtedness or preferred stock issued to and held by the Company or a
Wholly-owned Subsidiary; provided, however, that any subsequent issuance or
transfer of any Capital Stock which results in any such Wholly-owned Subsidiary
ceasing to be a Wholly-owned Subsidiary or any subsequent transfer of such
Indebtedness or preferred stock (other than to the Company or a Wholly-owned
Subsidiary) will be deemed, in each case, to constitute the incurrence of such
Indebtedness or the issuance of such preferred stock, as the case may be, by the
issuer thereof; (ii) Indebtedness incurred or preferred stock of a Subsidiary
issued and outstanding on or prior to the date on which such Subsidiary was
acquired by the Company (other than Indebtedness incurred or preferred stock
issued in contemplation of, as consideration in, or to provide all or any
portion of the funds or credit support utilized to consummate, the transaction
or series of related transactions pursuant to which such Subsidiary became a
Subsidiary or was acquired by the Company), provided that at the time such
Subsidiary is acquired by the Company, after giving effect to such Indebtedness
or preferred stock of such Subsidiary, the Company's Consolidated EBITDA
Coverage Ratio exceeds 2. 0 to 1; (iii) Indebtedness or preferred stock (other
than Indebtedness or preferred stock described in clause (i), (ii), (iv) or (vi)
of this covenant) incurred or issued and outstanding on or prior to the January
26, 1994; (iv) Indebtedness of a Subsidiary consisting of guarantees issued by
such Subsidiary and outstanding on January 26, 1994 and Indebtedness of a
Subsidiary consisting of guarantees issued subsequent to such date, in each
case, to the extent such guarantee guarantees Bank Debt; (v) Indebtedness of a
Subsidiary (other than Indebtedness described in clause (iv) above) consisting
of guarantees of Funded Debt of the Company permitted by the first paragraph of
ss.5.6, provided that contemporaneously with the incurrence of such Indebtedness
by such Subsidiary, such Subsidiary issues a guarantee for the pro rata benefit
of the holders of the Notes; and (vi) Indebtedness or preferred stock issued in
exchange for, or the proceeds of which are used to refund or refinance,
Indebtedness or preferred stock referred to in the foregoing clause (ii) or
(iii); provided, however, that (1) the principal amount of such Indebtedness or
preferred stock so incurred or issued will not exceed the principal amount of
the Indebtedness or preferred stock so exchanged or refinanced and (2) the
Indebtedness or preferred stock so incurred or issued will (A) have a Stated
Maturity later than the Stated Maturity of the Indebtedness or preferred stock
being exchanged or refinanced and (B) will have an Average Life equal to or
greater than the
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Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
remaining Average Life of the Indebtedness or preferred stock so exchanged,
refunded or refinanced.
For purposes of this ss.5.15, the term "preferred stock" shall mean
Capital Stock of any class or classes (however designated) which is preferred as
to the payment of dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such corporation, over
shares of Capital Stock of any other class of such corporation.
Section 5.16. Limitation on Restrictions on Distributions from
Subsidiaries. The Company will not, and will not permit any Subsidiary to,
create or otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Subsidiary to: (i) pay
dividends or make any other distributions on its Capital Stock or pay any
Indebtedness owed to the Company, (ii) make any loans or advances to the Company
or (iii) transfer any of its property or assets to the Company, except: (1) any
encumbrance or restriction pursuant to an agreement in effect on the January 26,
1994; (2) any encumbrance or restriction with respect to a Subsidiary pursuant
to an agreement relating to any Indebtedness issued by such Subsidiary on or
prior to the date on which such Subsidiary was acquired by the Company (other
than Indebtedness issued in contemplation of, as consideration in, or to provide
all or any portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such Subsidiary
became a Subsidiary or was acquired by the Company) and outstanding on such
date; (3) any encumbrance or restriction pursuant to an agreement effecting a
refinancing of Indebtedness issued pursuant to an agreement referred to in the
foregoing clause (1) or (2) or contained in any amendment to an agreement
referred to in the foregoing clause (1) or (2); provided, however, that the
encumbrances and restrictions contained in any such refinancing agreement or
amendment are no less favorable to holders of the Notes than the encumbrances
and restrictions contained in such agreements; (4) any such encumbrance or
restriction consisting of customary nonassignment provisions in leases governing
leasehold interests to the extent such provisions restrict the transfer of the
lease; (5) in the case of clause (iii) above, restrictions contained in security
agreements securing Indebtedness of a Subsidiary to the extent such restrictions
restrict the transfer of the property subject to such security agreements; and
(6) any restriction with respect to a Subsidiary imposed pursuant to an
agreement entered into for the sale or disposition of all or substantially all
of the Capital Stock or assets of such Subsidiary pending the closing of such
sale or disposition.
SECTION 6. PREPAYMENT OF NOTES.
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Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
Section 6.1. Mandatory Prepayment on Change of Ownership. In the event the
Company has knowledge of a Change of Ownership, the Company will give written
notice (herein called "Company Notice") of such fact to all holders of the Notes
then outstanding. Said Company Notice shall be delivered within 30 days after
the occurrence of such Change of Ownership; provided, however that if the
Company does not then have knowledge of such fact, such Company Notice shall be
delivered upon receipt of such knowledge by the Company. The Company Notice
shall (i) provide a summary of the nature of the Change of Ownership giving rise
to the mandatory prepayment and a summary of the terms of, or a copy of, this
ss.6.1, and (ii) state the number of shares and percentage of each Class of
Voting Stock of the Company which shall continue to be beneficially owned and
controlled by the Xxxxx Group and/or the Xxxxxx Group (and specifying the number
of shares of each such class held of each such group), either directly or
indirectly, immediately after the occurrence of such Change of Ownership.
As used herein, the term "Change of Ownership" shall mean
(a) any issue, sale or other disposition of shares of common stock
of the Company which results in the number of shares of the common stock
beneficially owned by the Xxxxx Group being less than 15% of the issued
and outstanding shares of common stock (other than the Permitted Common
Stock defined below), other than (i) the issuance, in connection with an
underwritten public offering pursuant to a registration statement filed
with the Securities and Exchange Commission (a "public offering"), of
additional common stock ranking equally with Class A Common Stock as to
payment of dividends and as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of the Company
("Permitted Common Stock") or the issuance of any Permitted Common Stock
upon conversion of any convertible preferred stock issued pursuant to a
public offering, (ii) a sale or disposition of shares of common stock to
one or more members of the Xxxxxx Group, and (iii) a disposition of shares
of common stock to a testamentary trust, all beneficiaries of which are
members of the immediate family of a member of the Xxxxx Group and all
trustees of which are members of the Xxxxx Group and, under the terms of
the trust, have the power to vote such shares on all matters as to which
the holders of such shares have the power to vote, so long as, giving
effect to any of the events referred to in the foregoing clauses (i), (ii)
and (iii), the Xxxxx Group and the Xxxxxx Group together have beneficial
ownership (or, in the case of an event referred
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Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
to in the foregoing clause (iii), voting control) of a sufficient number
of shares of the capital stock of the Company to entitle them to elect,
and they do elect, at least the smallest number of directors that is
necessary to constitute a majority of the Company's Board of Directors;
(b) any event which results in the number of directors of the
Company's Board of Directors who are designated by the Xxxxx Group
constituting less than a majority of the Board; or
(c) any of the following events: (i) the holders of any of the
Public Debentures have the right to require the Company to purchase any
such Public Debentures pursuant to Section 4.08 of any of the Public
Indentures, (ii) any holder of 2002 Notes exercises its right to declare
any such notes to be due and payable pursuant to Section 2.1 of the
separate Note Agreements, dated as of February 1, 1997, relating thereto
(the "1997 Note Agreements"), (iii) any holder of 2001 Notes exercises its
right to declare any such notes to be due and payable pursuant to Section
5.2(A) of the Sixth Amendment and Restatement of Note Agreement, dated as
of February 1, 1997, relating thereto (the "Amendment and Restatement"),
(iv) the Company is required to make an offer to each holder of the 1997
Preferred Stock to redeem all or any part of such holder's 1997 Preferred
Stock pursuant to paragraph 5(a) of the Certificate of Designation, or (v)
any holder of 2002 Notes, 2001 Notes, 1997 Preferred Stock or Public
Debentures shall have received any consideration (whether in the form of
cash, a change in the rate of interest or dividends relating to such
notes, debentures or preferred stock, a change in any other provision of
the terms of such notes, debentures or preferred stock, or otherwise) to
amend, modify, waive or otherwise give up its right to declare any such
notes, debentures or preferred stock to be due and payable upon a "Change
of Ownership," as defined in the 1997 Note Agreements or the Amendment and
Restatement, or a "Change of Control" as defined in the Public Indentures
and the Certificate of Designation, as the case may be; provided, however,
that an amendment to or waiver or other modification of paragraph 5(a) of
the Certificate of Designation, Section 2.1 of the 1997 Note Agreements or
Section 5.2(A) of the Amendment and Restatement shall not, in the absence
of any consideration, constitute a Change of Ownership.
Upon the receipt of such Company Notice or, if no Company Notice is given,
upon the occurrence of a Change of Ownership, the holder or holders of any Notes
shall have the privilege, upon written notice to the Company declaring all Notes
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Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
held by such holder or holders serving such notice to become due and payable, to
have such Notes become due and payable, and thereupon such Notes shall become
due and payable on such date as the Company shall specify (which date shall be
not later than 90 days after such declaration), and the Company covenants and
agrees to prepay in full all Notes held by such holder or holders serving such
notice; provided, however, that in the event Company Notice has in fact been
given as hereinabove contemplated, such declaration shall be made within 30 days
after receipt of such Company Notice.
All prepayments on the Notes pursuant to this ss.6.1 shall be made by the
payment of the aggregate principal amount remaining unpaid on such Notes
together with accrued interest thereon to the date of such prepayment, plus a
premium equal to 1% of such prepaid principal.
Notwithstanding the provisions of ss.6.4, the Company may prepay all Notes
held by any holder or holders who serve such notice on the Company without
applying said prepayments ratably among all outstanding Notes.
Section 6.2. Optional Prepayments. In addition to the prepayments
required by ss.6.1 and upon compliance with ss.6.3, the Company shall have the
privilege, at any time and from time to time, of prepaying the outstanding
Notes, either in whole or in part (but if in part then in units of $100,000 or
an integral multiple of $10,000 in excess thereof) by payment of the principal
amount of each Note, or portion thereof to be prepaid, and accrued interest
thereon to the date of such prepayment, together with a premium equal to the
remainder of (x) the present value, discounted on a semiannually compounded
basis utilizing an interest factor equal to the Reinvestment Yield of such Note,
of the principal payments of such Note allocable to such prepayment and the
scheduled interest payments on such Note allocable to such prepayment (in the
case of any prepayment to be made on other than a regular interest payment date,
after deducting from the next succeeding regular interest payment the amount of
interest accrued to the prepayment date and required by this ss.6.2 to be paid
in conjunction with the prepayment) from the respective dates on which, but for
the prepayment under this ss.6.2, such principal payments and interest payments
would have been payable, minus (y) the principal amount of such Note to be
prepaid under this ss.6.2.
For purposes of ss.6.2, "Reinvestment Yield" of each Note shall mean the
lesser of (A) the interest rate borne by such Note and (B) the sum of 0.50% plus
the arithmetic mean of the two most recent weekly average yields to maturity for
actively traded marketable U.S. Treasury fixed interest rate securities
(adjusted to constant maturities equal to the remaining Weighted Average
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Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
Life to Maturity as of the date of the proposed prepayment of the Notes), as
published by the Federal Reserve Board in its Statistical Release H.15(519) for
the two calendar weeks ending on the Saturday next preceding such date or, if
such average is not published for such period, of such reasonably comparable
index as may be designated by the holder or holders of a least 66-2/3% of the
unpaid principal amount of the Notes to be prepaid for such period. If no
possible maturity exactly corresponds to such rounded Weighted Average Life to
Maturity, yields for the two most closely corresponding published maturities
shall be calculated pursuant to the immediately preceding sentence and the
Reinvestment Yield shall be interpolated from such yields on a straight-line
basis, rounding in each of such relevant periods to the nearest month.
The "Weighted Average Life to Maturity" of any Indebtedness means as at
the time of the determination thereof the number of years obtained by dividing
the then Remaining Dollar-years of such Indebtedness by the then outstanding
principal amount of such Indebtedness. The term "Remaining Dollar-years" of any
Indebtedness means the amount obtained by (1) multiplying the amount of the
repayment at final maturity, by the number of years (calculated at the nearest
one-twelfth) which will elapse between the date of determination of the Weighted
Average Life to Maturity of such Indebtedness and the date of that repayment at
final maturity.
Section 6.3. Notice of Prepayments. The Company will give notice of any
prepayment of the Notes pursuant to ss.6.2 to each holder thereof not less than
30 days nor more than 60 days before the date fixed for such optional prepayment
specifying (i) such date, (ii) the principal amount of the holder's Notes to be
prepaid on such date, and (iii) the accrued interest applicable to the
prepayment. Such notice of prepayment shall also certify all facts which are
conditions precedent to any such prepayment. The Company will also give written
notice to each holder by telex or other same-day written communication five days
prior to the date fixed for prepayment of the premium, if any, applicable to
such prepayment and the details of the calculations used to determine the amount
of any such premium. Notice of prepayment having been so given, the aggregate
principal amount of the Notes specified in such notice, together with the
premium, if any, and accrued interest thereon shall become due and payable on
the prepayment date.
Section 6.4. Allocation of Prepayments. All partial prepayments pursuant
toss.6.2 shall be applied on all outstanding Notes ratably in accordance with
the unpaid principal amounts thereof.
SECTION 7. SUBORDINATION OF NOTES.
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Section 7.1. Subordination to Senior Indebtedness. From and after the
issuance of any Notes, the indebtedness evidenced by the Notes, and any renewals
or extensions thereof, shall be wholly subordinate and junior in right of
payment to any and all Senior Indebtedness of the Company, whether outstanding
at the date of the Notes or incurred after such date, all in the manner and with
the force and effect hereafter set forth:
(a) In the event of any liquidation, dissolution or winding up of
the Company, or of any receivership, insolvency, bankruptcy, liquidation,
readjustment, reorganization, or other similar proceeding relative to the
Company or its property, all principal and interest owing on all Senior
Indebtedness shall first be paid in full before any payment is made upon
the indebtedness evidenced by the Notes; and in any such event any payment
or distribution of any kind or character, whether in cash, property or
securities (other than in securities or other evidences of indebtedness,
the payment of which is subordinated to the payment of all Senior
Indebtedness which may at the time be outstanding) which shall be made
upon or in respect of the Notes shall be paid over to the holders of such
Senior Indebtedness, pro rata, for application in payment thereof unless
and until such Senior Indebtedness shall have been paid or satisfied in
full;
(b) In the event that, pursuant to the terms of this Agreement, the
Notes are declared or become due and payable because of the occurrence of
any Event of Default described in ss.8.1 hereof or otherwise than at the
option of the Company, under circumstances when the foregoing clause (a)
shall not be applicable, the holders of the Notes shall be entitled to
payments only after there shall first have been paid in full all Senior
Indebtedness outstanding at the time the Notes so become due and payable
because of any such event, or payment shall have been provided for in a
manner satisfactory to the holders of such Senior Indebtedness; and
(c) During the continuance of any failure in the payment of either
principal or interest of any Senior Indebtedness when due, no payment of
principal, premium or interest shall be made on the Notes, nor shall any
acceleration of the maturity of the Notes pursuant to ss.8.3 hereof by any
holder of the Notes be effective unless the maturity of such Senior
Indebtedness has been accelerated, if either (i) notice (a "Payment
Blockage Notice") of such failure in writing or by telegram has been given
to the Company by any holder or holders of any Senior Indebtedness,
provided that judicial proceedings shall be commenced with respect to such
failure within one hundred eighty (180) days
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and shall be pending thereafter, or (ii) judicial proceedings shall be
pending in respect of such failure. No Payment Blockage Notice shall be
effective to preclude any payment on or acceleration of the Notes if
either (x) any other Payment Blockage Notice shall have been given within
the 360-day period ending with the date of such Payment Blockage Notice or
(y) an aggregate of three Payment Blockage Notices shall previously have
been given. Any Payment Blockage Notice that is given at a time when a
previous Payment Blockage Notice is in effect shall be disregarded for all
purposes of this Agreement, including any determination of the number of
Payment Blockage Notices that have been given for purposes of the
preceding sentence of this Section. Notwithstanding anything contained in
this ss.7.1(c) to the contrary, the holders of the Notes shall have the
right during the period from such Payment Blockage Notice to the
commencement of judicial proceedings to commence any action or proceeding
to (i) preserve any of their rights that would otherwise be extinguished
prior to the end of such period, and (ii) prevent a sale or transfer of
assets or stock or a merger in contravention of the terms of this
Agreement (it being understood that, in the case of both clauses (i) and
(ii) of this sentence, all Senior Indebtedness of the Company then or
thereafter due or declared to be due shall first be paid in full before
the holders of the Notes shall be entitled to receive any payment from the
Company of principal of, or premium or interest on, the Notes).
Section 7.2. Proofs of Claim. The holder of each Note undertakes and
agrees for the benefit of each holder of Senior Indebtedness to execute, verify,
deliver and file any proofs of claim, consents, assignments or other instruments
which any holder of Senior Indebtedness may at any time require in order to
prove and realize upon any rights or claims pertaining to the Notes and to
effectuate the full benefit of the subordination contained herein; and upon
failure of the holder of any Note so to do, any such holder of Senior
Indebtedness shall be deemed to be irrevocably appointed the agent and
attorney-in-fact of the holder of such Note to execute, verify, deliver and file
any such proofs of claim, consents, assignments or other instrument.
Section 7.3. No Waiver. No right of any holder of any Senior Indebtedness
to enforce subordination as herein provided shall at any time or in any way be
affected or impaired by any failure to act on the part of the Company or the
holders of Senior Indebtedness, or by any noncompliance by the Company with any
of the terms, provisions and covenants of the Notes or the Agreements under
which they are issued, regardless of any
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knowledge thereof that any such holder of Senior Indebtedness may have or be
otherwise charged with.
Section 7.4. Rights of Holders of Senior Indebtedness. The Company
agrees, for the benefit of the holders of Senior Indebtedness, that in the event
that any Note is declared due and payable before its expressed maturity because
of the occurrence of a default hereunder, the Company will give prompt notice in
writing of such happening to the holders of Senior Indebtedness.
Section 7.5. Rights of Holders of Notes. The foregoing provisions are
solely for the purpose of defining the relative rights of the holders of Senior
Indebtedness on the one hand, and the holders of the Notes on the other hand,
and nothing herein shall impair, as between the Company and the holders of the
Notes, the obligation of the Company which is unconditional and absolute, to pay
the principal, premium, if any, and interest on the Notes in accordance with
their terms, nor shall anything herein prevent the holders of the Notes from
exercising all remedies otherwise permitted by applicable law or hereunder upon
default hereunder, subject to the rights of the holders of Senior Indebtedness
as herein provided for.
SECTION 8. EVENTS OF DEFAULT WITH RESPECT TO NOTES AND REMEDIES THEREFOR.
Section 8.1. Events of Default. Any one or more of the following shall
constitute an "Event of Default" as the term is used herein:
(a) Default shall occur in the payment of interest on any Note when
the same shall have become due and such default shall continue for more
than five days; or
(b) Default shall occur in the making of any payment of the
principal of any Note or the premium thereon at the expressed or any
accelerated maturity date or at any optional or mandatory prepayment date;
or
(c) Default shall be made in the payment of the principal of or
interest on any Indebtedness of the Company (other than the Notes) or any
Subsidiary aggregating more than $2,000,000, as and when the same shall
become due and payable in accordance with its terms (including any
optional or required prepayment or redemption) and either (i) as the
result of such default such Indebtedness is declared (or, in the case of
Subordinated Indebtedness, may be declared) by the holders thereof to be,
or becomes in accordance with its terms, due and payable before its stated
maturity date or (ii) such default shall continue beyond the longer of 180
days or the period of grace, if any, allowed with respect thereto; or
(d) The Company shall default in complying with any covenant under
any indenture, agreement, or other instrument
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under which any Indebtedness (other than the Notes) of the Company or any
Subsidiary aggregating more than $2,000,000 may be issued and as the
result of such default the Indebtedness outstanding thereunder is declared
(or, in the case of Subordinated Indebtedness, may be declared) by the
holders thereof to be, or becomes in accordance with its terms, due and
payable before its stated maturity date; or
(e) Default shall occur in the observance or performance of any
covenant or agreement contained inss.5.6 throughss.5.13 or inss.ss.5.15 or
5.16 hereof;
(f) Default shall occur in the observance or performance of any
other provision of this Agreement which is not remedied within 30 days
after notice thereof to the Company by the holder of any Note; or
(g) If any representation or warranty made by the Company herein, or
made by the Company in any statement or certificate furnished by the
Company in connection with the consummation of the issuance and delivery
of the Notes or furnished by the Company pursuant hereto, is untrue in any
material respect as of the date of the issuance or making thereof; or
(h) The Company or any Subsidiary becomes insolvent or bankrupt, is
generally not paying its debts as they become due or makes an assignment
for the benefit of creditors, or the Company or any Subsidiary causes or
suffers an order for relief to be entered with respect to it under
applicable Federal bankruptcy law or applies for or consents to the
appointment of a custodian, trustee or receiver for the Company or such
Subsidiary or for the major part of the property of either; or
(i) A custodian, trustee or receiver is appointed for the Company or
any Subsidiary or for the major part of the property of either and is not
discharged within 30 days after such appointment; or
(j) Final judgment or judgments for the payment of money aggregating
in excess of $250,000 is or are outstanding against the Company or any
Subsidiary or against any property or assets of either and any one of such
judgments has remained unpaid, unvacated, unbonded or unstayed by appeal
or otherwise for a period of 30 days from the date of its entry; or
(k) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or
similar law or laws for the relief of debtors, are instituted by or
against the Company or any Subsidiary and, if instituted against the
Company or any
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Subsidiary, are consented to or are not dismissed within 60 days after
such institution.
Section 8.2. Notice to Holders. When any Event of Default described in
the foregoing ss.8.1 has occurred, or if the holder of any Note or of any other
evidence of Indebtedness of the Company gives any notice to the Company or takes
any other action known to the Company with respect to a claimed default, the
Company agrees to give notice within five business days of such event to all
holders of the Notes then outstanding, such notice to be in writing and sent by
registered or certified mail or by telegram.
Section 8.3. Acceleration of Maturities. When any Event of Default
described in paragraph (a) or (b) of ss.8.1 has happened and is continuing, any
holder of any Note may, and when any Event of Default described in paragraphs
(c) through (j), inclusive, of said ss.8.1 has happened and is continuing, the
holder or holders of 25% or more of the principal amount of Notes at the time
outstanding may, by notice in writing sent by registered or certified mail to
the Company, declare the entire principal and all interest accrued on all Notes
to be, and all Notes shall thereupon become, forthwith due and payable, without
any presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived. When any Event of Default described in paragraph (k) of
ss.8.1 has occurred, then all outstanding Notes shall immediately become due and
payable without presentment, demand or notice of any kind. Upon the Notes
becoming due and payable as a result of any Event of Default as aforesaid, the
Company will forthwith pay to the holders of the Notes the entire principal and
interest accrued on the Notes and, to the extent permitted by law, a premium in
the amount of the amount which would be payable if the Company then had elected
to prepay the Notes at a premium pursuant to ss.6.2. No course of dealing on the
part of any Noteholder nor any delay or failure on the part of any Noteholder to
exercise any right shall operate as a waiver of such right or otherwise
prejudice such holder's rights, powers and remedies. The Company further agrees,
to the extent permitted by law, to pay to the holder or holders of the Notes all
reasonable costs and expenses incurred by them in the collection of any Notes
upon any default hereunder or thereon, including reasonable compensation to such
holder's or holders' attorneys for all services rendered in connection
therewith.
Section 8.4. Rescission of Acceleration. The provisions of ss.8.3 are
subject to the condition that if the principal of and accrued interest on all or
any outstanding Notes have been declared immediately due and payable by reason
of the occurrence of any Event of Default described in paragraphs (a) through
(j), inclusive, of ss.8.1, the holders of 66-2/3% in aggregate principal
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amount of the Notes then outstanding may, by written instrument filed with the
Company, rescind and annul such declaration and the consequences thereof,
provided that at the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of any
monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all other sums
payable under the Notes and under this Agreement (except any principal,
interest or premium on the Notes which has become due and payable solely
by reason of such declaration underss.8.3) shall have been duly paid; and
(c) each and every other Default and Event of Default shall have
been made good, cured or waived pursuant toss.9.1; and provided further,
that no such rescission and annulment shall extend to or affect any
subsequent Default or Event of Default or impair any right consequent
thereto.
SECTION 9. AMENDMENTS, WAIVERS AND CONSENTS.
Section 9.1. Consent Required. Any term, covenant, agreement or condition
of this Agreement may, with the consent of the Company, be amended or compliance
therewith may be waived (either generally or in a particular instance and either
retroactively or prospectively), if the Company shall have obtained the consent
in writing of the holders of at least 66-2/3% of the then outstanding shares of
Preferred Stock and at least 66-2/3% in aggregate principal amount of the then
outstanding Notes; provided that without the written consent of the holders of
all of the Preferred Stock and Notes then outstanding, no such waiver,
modification, alteration or amendment shall be effective (i) which will change
the time of payment (including any prepayment required by ss.6.1) of the
principal of, or the interest on, any Note or change the principal amount
thereof or change the rate of interest thereon, or (ii) which will change any of
the provisions with respect to optional prepayments, or (iii) which will change
the percentage of holders of the Preferred Stock or Notes required to consent to
any such amendment, alteration or modification or any of the provisions of ss.7,
ss.8 or this ss.9. Each and every holder of Preferred Stock or Notes, by
acceptance thereof, shall undertake and agree to consider and respond to any
request made by the Company with respect to this ss.9 without unreasonable
delay.
Section 9.2. Effect of Amendment or Waiver. Any such amendment or waiver
shall apply equally to all of the holders of the Preferred Stock and Notes and
shall be binding upon them, upon each future holder of any Preferred Stock or
any Notes and upon the Company, whether or not such Preferred Stock or Notes
shall have been marked to indicate such amendment or waiver. No
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such amendment or waiver shall extend to or affect any obligation not expressly
amended or waived or impair any right consequent thereon.
SECTION 10. INTERPRETATION OF AGREEMENT; DEFINITIONS.
Section 10.1. Definitions. Unless the context otherwise requires, the
terms hereinafter set forth when used herein shall have the following meanings
and the following definitions shall be equally applicable to both the singular
and plural forms of any of the terms herein defined: "Affiliate" shall mean any
Person (other than a Subsidiary) (i) which directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control
with, the Company, (ii) which beneficially owns or holds 5% or more of any class
of the Voting Stock of the Company or (iii) 5% or more of the Voting Stock (or
in the case of a Person which is not a corporation, 5% or more of the equity
interest) of which is beneficially owned or held by the Company or a Subsidiary.
The term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of Voting Stock, by contract or otherwise.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or
dispositions) of shares of Capital Stock of a Subsidiary (other than
directors' qualifying shares), property or other assets (each referred to
for the purposes of this definition as a "disposition") by the Company or
any of its Subsidiaries (including any disposition by means of a merger,
consolidation or similar transaction) other than (i) a disposition by a
Subsidiary to the Company or by the Company or a Subsidiary to a
Wholly-owned Subsidiary, (ii) a disposition of property or assets at fair
market value in the ordinary course of business or (iii) a disposition of
obsolete assets in the ordinary course of business.
"Attributable Indebtedness" in respect of a Sale/Leaseback
Transaction means, as of the time of determination, the present value
(discounted at 12.07% compounded annually) of the total obligations of the
lessee for rental payments during the remaining term of the lease included
in such Sale/Leaseback Transaction (including any period for which such
lease has been extended).
"Average Life" means, as of the date of determination, with respect
to any Indebtedness or Preferred Stock, the quotient obtained by dividing
(i) the sum of the products of the numbers of years from the date of
determination to the dates of each successive scheduled principal payment
of such
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Petroleum Heat and Power Co., Inc.
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Indebtedness or redemption or similar payment with respect to such
Preferred Stock multiplied by the amount of such payment by (ii) the sum
of all such payments.
"Bank Debt" means, any loan agreement with a bank, finance company
or other financial institution, including principal premium (if any),
interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company to
the extent a claim for post filing interest is allowed in such
proceedings), fees, charges, expenses, reimbursement obligations,
guarantees and all other amounts payable thereunder or in respect thereof.
"Business Day" means each day which is not a Legal Holiday.
"Capital Stock" of any person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents
of or interests in (however designated) equity of such person, including
any Preferred Stock, but excluding any debt securities convertible into or
exchangeable for such equity.
"Capital Lease Obligations" of a person means any obligation which
is required to be classified and accounted for as a capital lease on the
face of a balance sheet of such person prepared in accordance with
generally accepted accounting principles; the amount of such obligation
will be the capitalized amount thereof, determined in accordance with
generally accepted accounting principles; and the Stated Maturity thereof
will 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 Flow", for any fiscal year, means the sum of (i) Consolidated
Net Income for such fiscal year and, (ii) to the extent the following
deferred charges are deducted in the calculation of Consolidated Net
Income, the amortization of customer lists and other deferred charges
included in the purchase price in connection with the acquisition of fuel
oil distributorships (other than legal, accounting, financing and other
transaction charges) and the amortization and depreciation of plant and
equipment of the Company and its Subsidiaries for such fiscal year
determined on a consolidated basis in accordance with generally accepted
accounting principles.
"Certificate of Designation" shall mean the Certificate of
Designation adopted by the Board of Directors of the Company on February
12, 1997, establishing the 1997 Preferred Stock and setting forth the
relative rights and
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preferences thereof, substantially in the form attached hereto as Exhibit
A.
The terms "Class A Common Stock", "Class B Common Stock" and "Class
C Common Stock" shall each mean the class of equity securities designated
as such in the Restated and Amended Articles of Incorporation of the
Company.
"Consolidated EBITDA Coverage Ratio" as of any date of determination
means the ratio of (i) the aggregate amount of EBITDA for the period of
the most recent four consecutive fiscal quarters ending at least 45 days
prior to the date of such determination to (ii) Consolidated Interest
Expense for such four fiscal quarters; provided, however, that (1) if the
Company or any Subsidiary has incurred any Indebtedness since the
beginning of such period that remains outstanding or if the transaction
giving rise to the need to calculate the Consolidated EBITDA Coverage
Ratio is an incurrence of Indebtedness, or both, EBITDA and Consolidated
Interest Expense for such period will be calculated after giving effect on
a pro forma basis to (A) such Indebtedness as if such Indebtedness had
been incurred on the first day of such period, (B) the discharge of any
other Indebtedness repaid, repurchased, defeased or otherwise discharged
with the proceeds of such new Indebtedness as if such discharge had
occurred on the first day of such period, and (C) the interest income
realized by the Company 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 Treasury Rate from the date
such proceeds were received through such date of determination, (2) if
since the beginning of such period the Company or any Subsidiary will have
made any Asset Disposition, EBITDA for such period will be reduced by an
amount equal to EBITDA (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 EBITDA (if negative), directly
attributable thereto for such period and Consolidated Interest Expense for
such period will be reduced by an amount equal to the Consolidated
Interest Expense directly attributable to any Indebtedness of the Company
or any Subsidiary repaid, repurchased, defeased or otherwise discharged
with respect to the Company and its continuing Subsidiaries in connection
with such Asset Dispositions for such period (or, if the Capital Stock of
any Subsidiary is sold, the Consolidated Interest Expense for such period
directly attributable to the Indebtedness of such Subsidiary to the extent
the Company and its continuing Subsidiaries are no longer liable for such
Indebtedness
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after such sale) and (3) if since the beginning of such period the Company
or any Subsidiary (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, EBITDA and Consolidated Interest Expense for such
period will be calculated after giving pro forma effect thereto (including
the incurrence of any Indebtedness) as if such Investment or acquisition
occurred on the first day of such period. 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
Consolidated Interest Expense associated with any Indebtedness incurred in
connection therewith the pro forma calculations will be determined in good
faith by a responsible financial or accounting Officer of the Company;
provided, however, that such Officer shall assume (i) the historical sales
and gross profit margins associated with such assets for the most recent
consecutive 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 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 the Company
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.
"Consolidated Indebtedness" shall mean Indebtedness of the Company
and its Subsidiaries on a consolidated basis as determined in accordance
with generally accepted accounting principles.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its Subsidiaries, determined on a
consolidated basis, including (i) interest expense in respect of money
borrowed and interest expense attributable to capital leases, (ii)
amortization of debt discount, (iii) capitalized interest, (iv) non-cash
interest expense, (v) commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing,
(vi) interest actually paid by the Company or any such Subsidiary under
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any guarantee of Indebtedness or other obligation of any other Person,
(vii) net costs associated with Hedging Obligations (including
amortization of fees), Preferred Stock dividends in respect of all
Preferred Stock of Subsidiaries held by persons other than the Company or
a Wholly-owned Subsidiary, (ix) the cash contributions to any employee
stock ownership plan or similar trust to the extent such contributions are
used by such plan to pay interest or fees to any person (other than the
Company) in connection with loans incurred by such plan or trust to
purchase newly issued or treasury shares of the Company (but excluding
interest expense associated with the accretion of principal on a
non-interest bearing or other discount security) and (x) to the extent not
already included in Consolidated Interest Expense, the interest expense
attributable to Indebtedness of another person that is guaranteed by the
Company or any of its Subsidiaries less interest income (exclusive of
deferred financing fees) of the Company and its Subsidiaries determined on
a consolidated basis in accordance with generally accepted accounting
principles; provided, however, that Consolidated Interest Expense shall
include such interest as may be paid by the Company or any Subsidiary to
Star Gas only to the extent the amount of such interest paid during any
period exceeds the dividends or other distributions on the Capital Stock
of Star Gas distributed to the Company or any Subsidiary during such
period.
"Consolidated Net Income" of a person, for any period, means the
aggregate of the Net Income of such person and its Subsidiaries for such
period, determined on a consolidated basis in accordance with generally
accepted accounting principles, provided that (i) the Net Income of any
other person (other than a Subsidiary) in which such person has an
interest will be included only to the extent of the amount of dividends or
distributions paid to such person, (ii) the Net Income of any person
acquired by such person in a pooling of interests transaction for any
period prior to the date of such acquisition will be excluded, (iii) any
Net Income of any Subsidiary will be excluded if such Subsidiary is
subject to restrictions, directly or indirectly, on the payment of
dividends or the making of distributions by such Subsidiary, directly or
indirectly, to such person, except that (A) such person's equity in the
Net Income of any such Subsidiary for such period will be included in such
Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Subsidiary during such period to such person as a
dividend or other distribution (subject,
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in the case of a dividend or other distribution to another subsidiary, to
the limitation contained in this clause) and (B) such person's equity in a
net loss of any such Subsidiary for such period will be included in
determining such Consolidated Net Income, (iv) the cumulative effect of a
change in accounting principles will be excluded, and (v) dividends or
other distributions on the Capital Stock of Star Gas distributed to the
Company or any Subsidiary by Star Gas shall be included in Consolidated
Net Income of the Company only to the extent such dividends or other
distributions exceed during any period the amount of interest paid to Star
Gas by the Company or any Subsidiary during such period.
"Consolidated Net Worth" means the total consolidated stockholders'
equity of the Company and its consolidated Subsidiaries determined on a
consolidated basis in accordance with generally accepted accounting
principles.
"Consolidated Operating Cash Flow", for any period, means the sum of
(i) Consolidated Net Income for such period and (ii) depreciation and
amortization expense of the Company and its Subsidiaries for such period,
as determined in accordance with generally accepted accounting principles.
Consolidated Operating Cash Flow of the Company and its Subsidiaries shall
include the sum of the items enumerated in clauses (i) and (ii) above of
all persons (and each of their subsidiaries, if any, on a consolidated
basis) then or theretofore acquired for the 12 months ended with the most
recently completed fiscal quarter for such person. Consolidated Operating
Cash Flow of such acquired persons shall be determined on a pro forma
basis, giving effect to the financial results of such persons as if they
had been owned by the Company for the twelve months immediately preceding
the date of acquisition of such persons.
"Default" shall mean any event or condition, the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute
an Event of Default as defined in ss.8.1.
"EBITDA" for any period means the Consolidated Net Income for such
period (but without giving effect to adjustments, accruals, deductions or
entries resulting from purchase accounting, extraordinary losses or gains
and any gains or losses from any Asset Dispositions), plus the following
to the extent deducted in calculating such Consolidated Net Income: (i)
income tax expense, (ii) Consolidated Interest Expense, (iii) depreciation
expense, (iv) amortization expense and (v) all other non-cash expenses.
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"Exchange Indenture" shall mean the Exchange Debenture Indenture
substantially in the form appended as Annex A to the Certificate of
Designation. "First Amendment" shall have the meaning set forth therefor
in the introductory paragraphs to this Agreement.
"Funded Debt" as applied to any person, means (a) Indebtedness
incurred by such person with a stated maturity of more than one year from
the date of incurrence; (b) any Indebtedness which, regardless of its
term, may be renewed or extended at the option of the obligor to a date
more than one year from the date of incurrence; and (c) any Indebtedness
which by its terms or pursuant to the agreement under which it is issued,
regardless of its term, may be paid with the proceeds of other
Indebtedness, which may be incurred pursuant to the terms of such
first-mentioned Indebtedness or the agreement under which such first
Indebtedness is issued, which other Indebtedness has a stated maturity
more than one year from the incurrence of such first-mentioned
Indebtedness; excluding in each case (a), (b) and (c) Working Capital
Borrowings.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments
for deposit or collection) of such Person guaranteeing or in effect
guaranteeing any Indebtedness, dividend or other obligation, of any other
Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred
through an agreement, contingent or otherwise, by such Person: (i) to
purchase such Indebtedness or obligation or any property or assets
constituting security therefor, (ii) to advance or supply funds (x) for
the purchase or payment of such Indebtedness or obligation, (y) to
maintain working capital or other balance sheet condition or otherwise to
advance or make available funds for the purchase or payment of such
Indebtedness or obligation, or (iii) to lease property or to purchase
Securities or other property or services primarily for the purpose of
assuring the owner of such Indebtedness or obligation of the ability of
the primary obligor to make payment of the Indebtedness or obligation, or
(iv) otherwise to assure the owner of the Indebtedness or obligation of
the primary obligor against loss in respect thereof. For the purposes of
all computations made under this Agreement, a Guaranty in respect of any
Indebtedness for borrowed money shall be deemed to be Indebtedness equal
to the principal amount of such Indebtedness for borrowed money which has
been guaranteed, and a Guaranty in respect of any other
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obligation or liability or any dividend shall be deemed to be Indebtedness
equal to the maximum aggregate amount of such obligation, liability or
dividend.
"Hedging Obligations" of any person means the obligations of such
person pursuant to any interest rate swap agreement, foreign currency
exchange agreement, interest rate collar agreement, option or futures
contract or other similar agreement or arrangement designed to protect
such person against changes in interest rates or foreign exchange rates.
"Indebtedness" of any person means, without duplication,
(i) the principal of (A) indebtedness of such person for money
borrowed and (B) indebtedness evidenced by notes, debentures, bonds
or other similar instruments for the payment of which such person is
responsible or liable;
(ii) all Capital Lease Obligations of such person and all
Attributable Indebtedness in respect of Sale/Leaseback Transactions
entered into by such person;
(iii) all obligations of such person issued or assumed as the
deferred purchase price of property, all conditional sale
obligations of such person and all obligations of such person under
any title retention agreement (but excluding trade accounts payable
arising in the ordinary course of business);
(iv) all obligations of such person for the reimbursement of
any obligor on any letter of credit, banker's acceptance or similar
credit transaction (other than obligations with respect to letters
of credit securing obligations (other than obligations described in
(i) through (iii) above) entered into in the ordinary course of
business of such person to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the third Business Day following receipt by
such person of a demand for reimbursement following payment on the
letter of credit);
(v) all obligations of the type referred to in clauses (i)
through (iv) of other persons and all dividends of other persons for
the payment of which, in either case, such person is responsible or
liable, directly or indirectly, as obligor, guarantor or otherwise,
including any guarantees of such obligations
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and dividends, including by means of any agreement which has the
economic effect of a guarantee; and
(vi) all obligations of the type referred to in clauses (i)
through (v) of other persons secured by any Lien on any property or
asset of such person (whether or not such obligation is assumed by
such person), the amount of such obligation being deemed to be the
lesser of the value of such property or assets or the amount of the
obligation so secured.
"1997 Preferred Stock" shall have the meaning set forth therefor in
ss.3.4.
"Person" shall mean an individual, partnership, corporation, trust
or unincorporated organization, and a government or agency or political
subdivision thereof.
"Public Debentures" shall mean, collectively, the Company's 12-1/4%
Subordinated Debentures due 2005, 10-1/8% Subordinated Notes due 2003 and
9-3/8% Subordinated Debentures due 2006.
"Public Indentures" shall mean, collectively, (i) the Indenture
dated as of February 9, 1995, the Indenture dated as of April 1, 1993 and
the Indenture dated as of February 3, 1994, each between the Company and
Chemical Bank (now Chase Manhattan Bank), as Trustee thereunder, (ii) the
Exchange Indenture and (iii) any other indenture or other agreement under
which the Company may issue Subordinated Indebtedness.
"Security" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
"Senior Indebtedness" is defined as Indebtedness which the Company
is permitted to have outstanding at any time under the provisions of the
Agreement, except Indebtedness which by its terms is not superior in right
of payment to the Notes. Senior Indebtedness, however, shall not include
(a) indebtedness or amounts owed for compensation to employees, or for
goods or materials purchased in the ordinary course of business, or for
services or (b) indebtedness of the Company to a Subsidiary or Affiliate
for money borrowed or advances from such Subsidiary or Affiliate. The
Company's outstanding Public Debentures will not constitute Senior
Indebtedness and will rank pari passu with the Notes.
"Senior Notes" shall mean the $60,000,000 aggregate principal amount
Senior Notes of the Company issued or to be issued under the separate Note
Purchase Agreements each dated as of February 1, 1997 and between the
Company and each of the respective Purchasers named therein.
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"Xxxxx Group" shall mean the Estate of Xxxxxx X. Xxxxx and trusts
created thereunder, Xxxxxx X. Xxxxx, Xxxx X. Xxxxx, Xxxxxx X. Xxxxxxx,
Xxxxxx Xxxxxx and Xxxxxxx Ean Xxxxx and any trust over which such person
have sole voting power.
"Star Gas" shall mean Star Gas Corporation, a Delaware corporation.
"Stated Maturity" means, with respect to any Indebtedness, the date
specified in such Indebtedness, or in any agreement pursuant to which such
Indebtedness was incurred, as the fixed date on which the principal of
such Indebtedness is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the
repurchase of such Indebtedness at the option of the holder thereof upon
the happening of any contingency unless such contingency has occurred).
"Subordinated Indebtedness" shall mean all Indebtedness of the
Company, other than Senior Indebtedness.
The term "Subsidiary" means (i) a corporation a majority of whose
capital stock with voting power, under ordinary circumstances, to elect
directors is at the time, directly or indirectly, owned by the Company, by
the Company and a Subsidiary of the Company or by a Subsidiary of the
Company or (ii) any other person (other than a corporation) in which the
Company, a Subsidiary of the Company or the Company and a Subsidiary of
the Company, direct or indirectly, at the date of determination thereof,
has at least 50% ownership interest or over which it exercises control;
provided, however, that Star Gas, and any Person owned or controlled
directly or indirectly by Star Gas, shall not be a Subsidiary.
"Xxxxxx Group" means (i) all the holders of Class C Common Stock of
the Company as listed on Schedule II hereto who are not members of the
Xxxxx Group, (ii) any person who is, or concurrently with the transfer of
shares to such person becomes, a party to the shareholders agreement among
the holders of Class C Common Stock of the Company dated November 25,
1986, as amended and restated through the Effective Date, and (iii) any
trust over which persons described in clause (i) or (ii) have sole voting
power.
"Treasury Rate" as of any date of determination means the yield to
maturity at the time of computation of United States Treasury securities
with a constant maturity (as compiled and published in the most recent
Federal Reserve Statistical Release H.15(519) which has become publicly
available at least two business days prior to such date of determination
(or, if such Statistical Release is no longer
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published, any publicly available source of similar market date)) of one
year.
"2001 Notes" shall mean, collectively, the $6,250,000 original
aggregate principal amount 14.10% Subordinated Notes of the Company due
January 15, 2001 and the $6,250,000 original aggregate principal amount
14.10% Senior Notes of the Company due January 15, 2001 outstanding under
the Sixth Amendment and Restatement of Note Agreement dated as of February
1, 1997 between the Company and the Purchasers named therein.
"2002 Notes" shall mean the $60,000,000 aggregate principal amount
Senior Notes of the Company due October 1, 2002 issued or to be issued
under the separate Note Agreements, each dated as of February 1, 1997
between the Company and the respective Purchasers named therein.
"Voting Stock" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled
to elect a majority of the corporate directors (or Persons performing
similar functions).
"Wholly-owned" when used in connection with any Subsidiary shall
mean a Subsidiary of which all of the issued and outstanding shares of
stock (except shares required as directors' qualifying shares) shall be
owned by the Company and/or one or more of its Wholly-owned Subsidiaries.
"Working Capital Borrowings" shall mean, on any date of
determination, all Indebtedness of the Company and its Subsidiaries on a
consolidated basis incurred to finance current assets, excluding the
excess of current liabilities over current assets on such date (determined
in accordance with generally accepted accounting principles).
Section 10.2. Accounting Principles. Where the character or amount of any
asset or liability or item of income or expense is required to be determined or
any consolidation or other accounting computation is required to be made for the
purposes of this Agreement, the same shall be done in accordance with generally
accepted accounting principles, to the extent applicable, except where such
principles are inconsistent with the requirements of this Agreement.
Section 10.3. Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether the action in
question is taken directly or indirectly by such Person.
SECTION 11. MISCELLANEOUS.
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Section 11.1. Designation of Observers; Until such time as the Restated
and Amended Articles of Incorporation have been amended as required by ss.5.17,
if and whenever (a) dividends on the Preferred Stock shall be in arrears and
shall not have been fully paid or shall not have been declared and a sum
sufficient for the payment thereof set aside, for four semi-annual dividends
(whether consecutive or not) on all shares of the Preferred Stock at the time
outstanding, (b) any mandatory redemption payment to be made pursuant to Article
III, paragraph 1(b) or (c) of the Restated and Amended Articles of Incorporation
of the Company shall not be made on the date specified for such redemption of
Preferred Stock pursuant thereto or (c) a Voting Rights Triggering Event occurs
under Section 7(c) of the Certificate of Designation, then and in any such event
(i) each holder of 40% or more of the then outstanding shares of Preferred Stock
and, (ii) if at the time specified in (a) or (b) above there shall be no holder
of 40% or more of the then outstanding shares of Preferred Stock, the holders of
66-2/3% or more, in the aggregate, of the then outstanding shares of Preferred
Stock, shall have the right, by written instrument filed with the Secretary of
the Company, to appoint an observer who shall be entitled (i) to receive the
same notice in respect of all meetings (both regular and special) of the Board
of Directors of the Company (the "Board") as are required to be furnished to
members of the Board by law or by the Articles or By-laws of the Company, (ii)
to attend all meetings of the Board, (iii) to receive all information and
reports and all requests for written consent which are furnished to members of
the Board and (iv) to participate in all discussions conducted at meetings of
the Board. Such observers shall not constitute members of the Board and shall
not be entitled to vote on any matters presented to the Board. In the event the
Company shall at any time fail to perform fully and completely its obligations
under this Section 11.1, any holder of shares of Preferred Stock shall, in
addition to all other rights or remedies available at law or in equity, have the
right to petition any court with jurisdiction in the premises for an order
enjoining the Company specifically to perform said obligations, it being
recognized that monetary damages are not adequate compensation for any such
failure. Such right of each holder of 40% or more of the then outstanding shares
of Preferred Stock (or of the holders of 66-2/3% or more of the then outstanding
shares of Preferred Stock) may be exercised until (a) all dividends in arrears
on the Preferred Stock shall have been paid in full or declared and funds
sufficient therefore set aside and (b) all mandatory redemption payments shall
have been made, and when such dividends and payments have been so paid or
provided for such right of each holder of 40% or more of the then outstanding
shares of Preferred
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Stock (or of the holders of 66-2/3% or more of the then outstanding shares of
Preferred Stock) shall cease, but subject always to the same provisions for the
vesting of such rights in the case any one semi-annual dividend payment shall in
the future be in arrears or any mandatory redemption payment shall in the future
not be made when due.
If, at any time at which the holders of the Preferred Stock shall have
appointed observers as provided above and while the holders of Preferred Stock
shall be entitled to appoint observers as provided above, one or both of such
observers shall retire, resign or die, the holder or holders of Preferred Stock
who appointed such observer or observers shall be entitled to appoint a
replacement observer or observers in the manner set forth above.
Section 11.2. Agreement to Amend Charter. At the first meeting of the
shareholders of the Company which occurs after the Effective Date, and in any
event not later than August 1, 1997, the Company shall submit to and recommend
for approval by its shareholders an amendment to the Restated and Amended
Articles of Incorporation of the Company, in a form approved in writing by the
holders of the Preferred Stock, pursuant to which terms relating to voting
rights and rights upon Change of Ownership applicable to the Preferred Stock
will be conformed to the corresponding terms applicable to the 1997 Preferred
Stock and the definition of "Change of Ownership" set forth in such Restated and
Amended Articles of Incorporation applicable to the Preferred Stock will be
conformed to the definition thereof set forth in ss.6.1 hereof; provided that,
except as specifically provided in this ss.11.2, no amendments or other
modifications will be made to any terms of the Restated and Amended Articles of
Incorporation applicable to the Preferred Stock.
Section 11.3. Direct Payment. Notwithstanding anything to the contrary in
this Agreement, the Restated and Amended Articles of Incorporation of the
Company, the Preferred Stock or the Notes, in the case of any Preferred Stock or
Notes owned by you or your nominee or owned by any other institutional holder
which has given written notice to the Company requesting that the provisions of
this Section shall apply, the Company will promptly and punctually pay when due
all amounts payable with respect to such Preferred Stock or Notes, without any
presentment thereof, directly to you or such subsequent holder at your address
set forth in Schedule I hereto or at such other address as you or such
subsequent holder may from time to time designate in writing to the Company or,
if a bank account is designated for you on Schedule I to this Agreement or in
any written notice to the Company from you or any such subsequent holder, the
Company will make such payments in immediately available funds to such bank
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account, marked for attention as indicated, or in such other manner or to such
other account of yours or of such holder in any bank in the United States as you
or any such subsequent holder may from time to time direct in writing.
The holder of any Preferred Stock to which this Section applies agrees
that in the event it shall sell or transfer any such Preferred Stock it will,
prior to the delivery of any certificate evidencing such Preferred Stock, make a
notation thereon of the number of shares, if any, evidenced by such certificate
which have been redeemed and the date to which dividends have been paid with
respect to the shares evidenced by such Certificate.
The holder of any Notes to which this Section applies agrees that in the
event it shall sell or transfer any such Notes it will, prior to the delivery
thereof, make a notation thereon of all principal, if any, prepaid on such Notes
and the date to which interest has been paid on such Notes.
With respect to Preferred Stock or Notes to which this Section applies,
the Company shall be entitled to presume conclusively that the holder remains
the holder thereof until the Company shall have received notice from such holder
of the transfer of such Preferred Stock or Notes and of the name and address of
the transferee, or such Preferred Stock or Notes shall have been presented to
the Company in the manner described in ss.11.4 hereof.
Section 11.4. Registration and Transfers of the Notes. The Company shall
cause to be kept at its principal office a register for the registration and
transfer of the Notes (hereinafter called the "Note Register"), and the Company
will register or transfer or cause to be registered or transferred, as
hereinafter provided and under such reasonable regulations as it may prescribe,
any Note issued pursuant to this Agreement.
At any time and from time to time the registered holder of any Note which
has been duly registered as hereinabove provided may transfer such Note upon
surrender thereof at the principal office of the Company duly endorsed or
accompanied by a written instrument of transfer duly executed by the registered
holder of such Note or its attorney duly authorized in writing.
The Person in whose name any registered Note shall be registered shall be
deemed and treated as the owner and holder thereof for all purposes of this
Agreement. Payment of or on account of the principal, premium, if any, and
interest on any registered Note shall be made to or upon the written order of
such registered holder.
Section 11.5. Exchange of Preferred Stock and Notes. (a) At any time, and
from time to time, upon not less than ten days' notice to that effect given by
the holder of any Preferred Stock
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Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
initially delivered or any Preferred Stock substituted therefor pursuant to the
provisions of this Agreement and, upon surrender of the certificate or
certificates evidencing such Preferred Stock at its office, the Company will
deliver, in exchange therefor without expense to the holder, except as set forth
below, certificates for the same number of outstanding shares of Preferred Stock
as were then evidenced by the certificate so surrendered in any denomination of
whole shares as such holder shall specify, dated as of the date of transfer.
Such certificates shall be registered in the name of such Person or Persons as
may be designated by such holder. The Company may require payment of a sum
sufficient to cover any stamp tax or governmental charge imposed upon such
exchange or transfer.
(b) At any time, and from time to time, upon not less than ten days'
notice to that effect given by the holder of any Note initially delivered or of
any Note substituted therefor pursuant to ss.11.4, this ss.11.5 or ss.11.6, and,
upon surrender of such Note at its office, the Company will deliver in exchange
therefor, without expense to the holder, except as set forth below, Notes for
the same aggregate principal amount as the then unpaid principal amount of the
Note so surrendered, in the denomination of $100,000 or any amount in excess
thereof as such holder shall specify (or such lesser amount as may be necessary
to reflect any Note with an outstanding principal amount of less than $100,000),
dated as of the date to which interest has been paid on the Note so surrendered
or, if such surrender is prior to the payment of any interest thereon, then
dated as of the date of issue, payable to such Person or Persons, or order, as
may be designated by such holder, and otherwise of the same form and tenor as
the Notes so surrendered for exchange. The Company may require the payment of a
sum sufficient to cover any stamp tax or governmental charge imposed upon such
exchange or transfer.
Section 11.6. Loss, Theft, etc. of Preferred Stock or Notes. Upon receipt
of evidence satisfactory to the Company of the loss, theft, mutilation or
destruction of any certificate evidencing Preferred Stock or any Note, and in
the case of any such loss, theft or destruction upon delivery of a bond of
indemnity in such form and amount as shall be reasonably satisfactory to the
Company, or in the event of such mutilation upon surrender and cancellation of
the certificate or Note, the Company will make and deliver without expense to
the holder thereof, a new certificate or Note, of like tenor, in lieu of such
lost, stolen, destroyed or mutilated certificate or Note. If the initial
Purchasers or any subsequent institutional holder is the owner of any such lost,
stolen or destroyed certificate or Note, then the affidavit of an authorized
officer of such owner, setting forth the fact of loss, theft or destruction and
of its ownership of
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the certificate or Note at the time of such loss, theft or destruction shall be
accepted as satisfactory evidence thereof and no further indemnity shall be
required as a condition to the execution and delivery of a new certificate or
Note other than the written agreement of such owner to indemnify the Company.
Section 11.7. Repurchase of Preferred Stock or Notes. Except as
specifically provided herein or in the Restated and Amended Articles of
Incorporation of the Company, neither the Company nor any Subsidiary or
Affiliate, directly or indirectly, may repurchase, or make any offer to
repurchase, any Preferred Stock or Notes unless the offer has been made to
repurchase such Preferred Stock or Notes, pro rata, from all holders thereof at
the same time and upon the same terms. In case the Company repurchases any
Preferred Stock or Notes, such Preferred Stock or Notes shall thereafter be
cancelled and, except as provided in ss.4 hereof, no Preferred Stock or Notes
shall be issued in substitution therefor.
Section 11.8. Expenses, Stamp Tax Indemnity. Whether or not the
transactions herein contemplated shall be consummated, the Company agrees to pay
directly all of your out-of-pocket expenses in connection with the preparation,
execution and delivery of this Agreement and the transactions contemplated
hereby, including but not limited to the reasonable charges and disbursements of
Xxxxxxx and Xxxxxx, your special counsel, duplicating and printing costs and
charges for shipping the Preferred Stock or Notes, adequately insured to you at
your home office or at such other place as you may designate and all such
expenses relating to any amendment, waivers or consents pursuant to the
provisions hereof. The Company also agrees that it will pay and save you
harmless against any and all liability with respect to stamp and other taxes, if
any, which may be payable or which may be determined to be payable in connection
with the execution and delivery of this Agreement or the Preferred Stock or
Notes, whether or not any Preferred Stock or Notes are then outstanding. The
Company agrees to protect and indemnify you against any liability for any and
all brokerage fees and commissions payable or claimed to be payable to any
Person in connection with the transactions contemplated by this Agreement.
Section 11.9. Notices. All communications provided for hereunder shall be
in writing and, if to you, delivered or mailed by registered or certified mail
or air express courier, addressed to you at your address appearing on Schedule I
hereto or such other address as you or the subsequent holder of any Preferred
Stock or Notes may designate to the Company in writing, and if to the Company,
delivered or mailed by registered or certified mail or air express courier to
the Company at Post Office Box 1457, Stamford, Connecticut 06904, Attention:
President or to such
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other address as the Company may in writing designate to you or to a subsequent
holder of the Preferred Stock or Notes.
Section 11.10. Successors and Assigns. This Agreement shall be binding
upon each of the parties hereto and its respective successors and assigns and
shall inure to its benefit and to the benefit of its successors and assigns,
including each successive holder or holders of any Preferred Stock or Notes and
to the benefit of the Company and its successor and assigns.
Section 11.11. Survival of Covenants and Representations. All covenants,
representations and warranties made by the Company herein and in any
certificates delivered pursuant hereto, whether or not in connection with the
Effective Date or the Note Closing Date, shall survive the closings and the
delivery of this Agreement and the Preferred Stock and Notes.
Section 11.12. Severability. Should any part of this Agreement for any
reason be declared invalid, such decision shall not affect the validity of any
remaining portion, which remaining portion shall remain in force and effect as
if this Agreement had been executed with the invalid portion thereof eliminated
and it is hereby declared the intention of the parties hereto that they would
have executed the remaining portion of this Agreement without including therein
any such part, parts, or portion which may, for any reason, be hereafter
declared invalid.
Section 11.13. Governing Law. This Agreement and the Preferred Stock and
Notes issued and sold hereunder shall be governed by and construed in accordance
with New York law.
Section 11.14. Captions. The descriptive headings of the various Sections
or parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
ARTICLE II
AMENDMENTS TO SCHEDULES AND
EXHIBITS TO EXISTING PURCHASE AGREEMENTS
Schedules I and II and Exhibits A through L of the Existing Purchase
Agreements are hereby amended in their entirety so that the same shall
henceforth read as provided in Schedule I and II and Exhibits A through Exhibit
K attached hereto.
ARTICLE III
MISCELLANEOUS
Section 3.1. Ratification of Existing Purchase Agreements. Except as
amended and restated herein, the terms and provisions of the Existing Purchase
Agreements and the Preferred Stock are hereby ratified, confirmed and approved
in all respects.
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Section 3.2. Counterparts. This Agreement may be executed in any number
of counterparts, each executed counterpart constituting an original but
altogether one and the same instrument.
Section 3.3. Fees and Expenses. The Company agrees to pay all reasonable
fees and expenses of you and your special counsel connection with the
preparation of this Agreement.
Section 3.4. References to Original Purchase Agreements. Any and all
notices, requests, certificates and any other instruments, including the
Preferred Stock, may refer to the Original Purchase Agreements or the Existing
Purchase Agreements or the Purchase Agreements dated as of August 1, 1989
without making specific reference to this Agreement, but nevertheless all such
references shall be deemed to include this Agreement unless the context shall
otherwise require.
Section 3.5. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York.
Section 3.6. Consent to Issuance of 1997 Preferred Stock. Pursuant to
Article III, paragraph (1)(g)(iv) of the Restated and Amended Articles of
Incorporation of the Company, each of you hereby consents to the Company's
issuance of 1,200,000 shares (of the 2,000,000 shares authorized) of its 1997
Preferred Stock pursuant to the terms of the Certificate of Designation.
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Signature Page
The execution hereof by you shall constitute a contract
between us for the uses and purposes hereinabove set forth, and this Agreement
may be executed in any number of counterparts, each executed counterpart
constituting an original but all together only one agreement.
PETROLEUM HEAT AND POWER CO., INC.
By
Its
Accepted as of the date first above written.
[VARIATION]
By
Its
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TOTAL NUMBER OF
SHARES OF PREFERRED AMOUNT OF LIQUIDATION
NAME AND ADDRESS STOCK HELD ON THE PREFERENCE REPRESENTED
OF HOLDERS EFFECTIVE DATE BY SUCH SHARES
XXXX XXXXXXX MUTUAL LIFE 25,000 $2,500,000
INSURANCE COMPANY
(for the General Account)
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Payments
All payments on or in respect of the Preferred Stock or Notes shall be made by
bank wire transfer of Federal or other immediately available funds for credit no
later than 12 noon Boston time (which shall identify each payment as "Petroleum
Heat and Power Co., Inc., Preferred Stock, dividend or other payment" or
"Petroleum Heat and Power Co., Inc., Subordinated Notes due 1999, principal or
interest or other payments", as the case may be) to:
The First National Bank of Boston
(ABA #011 000 000)
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Insurance Division
for the account of Xxxx Xxxxxxx
Mutual Life Insurance Company's
Private Placement Collection Account
Account No. 541-55417
on order of Petroleum Heat and
Power Co., Inc.
Notices
Contemporaneous with the above wire transfer, advice setting forth (1) (a) the
full name and dividend rate of the Preferred Stock and (b) allocation of payment
between dividends and redemptions, or (2) (a) the full name, interest rate and
maturity date of the Notes or other obligations and (b) allocation of payment
between principal and interest and any special payment; and (3) name and address
of Bank (or Trustee) from which wire transfer was sent, and all notices with
respect to prepayments or redemptions, both scheduled and unscheduled, whether
partial or in full, and notice of maturity, shall be delivered or mailed to:
Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
Xxxx Xxxxxxx Mutual Life
Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Accounting Division T-10
All other communications which shall include, but not be limited to, financial
statements and certificates of compliance with financial covenants, shall be
delivered or mailed to:
Xxxx Xxxxxxx Mutual Life
Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Bond and Corporate Finance Department, T-57
Name of Nominee in which Certificates are to be issued: None
Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
TOTAL NUMBER OF
SHARES OF PREFERRED AMOUNT OF LIQUIDATION
NAME AND ADDRESS STOCK HELD ON THE PREFERENCE REPRESENTED
OF HOLDERS EFFECTIVE DATE BY SUCH SHARES
XXXX XXXXXXX MUTUAL 37,500 $3,750,000
LIFE INSURANCE COMPANY
(Guaranteed Benefit Sub-Account)
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Payments
All payments on or in respect of the Preferred Stock or Notes shall be made by
bank wire transfer of Federal or other immediately available funds for credit no
later than 12 noon Boston time (which shall identify each payment as "Petroleum
Heat and Power Co., Inc., Preferred Stock, dividend or other payment" or
"Petroleum Heat and Power Co., Inc., Subordinated Notes due 1999, principal or
interest or other payments", as the case may be) to:
The First National Bank of Boston
(ABA #011 000 000)
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Insurance Division
for the account of Xxxx Xxxxxxx
Mutual Life Insurance Company's
Private Placement Collection Account
Account No. 541-55417
on order of Petroleum Heat and
Power Co., Inc.
Notices
Contemporaneous with the above wire transfer, advice setting forth (1) (a) the
full name and dividend rate of the Preferred Stock and (b) allocation of payment
between dividends and redemptions, or (2) (a) the full name, interest rate and
maturity date of the Notes or other obligations and (b) allocation of payment
between principal and interest and any special payment; and (3) name and address
of Bank (or Trustee) from which wire transfer was sent, and all notices with
respect to prepayments or redemptions, both scheduled and unscheduled, whether
partial or in full, and notice of maturity, shall be delivered or mailed to:
Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
Xxxx Xxxxxxx Mutual Life
Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Accounting Division T-10
All other communications which shall include, but not be limited to, financial
statements and certificates of compliance with financial covenants, shall be
delivered or mailed to:
Xxxx Xxxxxxx Mutual Life
Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Bond and Corporate Finance Department, T-57
Name of Nominee in which Certificates are to be issued: None
Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
TOTAL NUMBER OF
SHARES OF PREFERRED AMOUNT OF LIQUIDATION
NAME AND ADDRESS STOCK HELD ON THE PREFERENCE REPRESENTED
OF HOLDERS EFFECTIVE DATE BY SUCH SHARES
THE NORTHWESTERN MUTUAL 62,500 $6,250,000
LIFE INSURANCE COMPANY
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Securities Department
Telefacsimile Number: (000) 000-0000
Payments
All payments on or in respect of the Preferred Stock or Notes shall be made by
bank wire transfer of immediately available funds for credit no later than 12
noon Boston time (which shall identify each payment as "Petroleum Heat and Power
Co., Inc., Preferred Stock, dividend or other payment" or " Petroleum Heat and
Power Co., Inc., Subordinated Notes due 1999, principal or interest or other
payments", as the case may be) to:
Bankers Trust Company
(ABA #0210-01033)
00 Xxxx Xxxxxx
Xxxxxxxxx Xxxx 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
for credit to The Northwestern Mutual Life
Insurance Company's Account No. 00-00-000
Notices
All notices and communications, to be addressed as first provided above, except
notices with respect to payment, and written confirmation of each such payment,
to be addressed Attention: Investment Operations, Telefacsimilie Number (414)
299-2111
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
EXHIBIT A
CERTIFICATE OF DESIGNATION
[TO COME]
Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
PETROLEUM HEAT AND POWER, INC.
THIRD AMENDMENT
CLOSING CERTIFICATE
The Holders of 1989 Preferred Stock listed on Schedule I to the Third Amendment
referred to below
This certificate is delivered in compliance with the requirements of the
Third Amendment and Restatement of Purchase Agreement dated as of February 1,
1997 (the "Third Amendment") entered into by the undersigned, Petroleum Heat and
Power, Inc., a Minnesota corporation (the "Company"), with each of you, as a
condition and concurrently with the effectuation on the date hereof of the Third
Amendment. Capitalized terms used herein shall have the same meanings as in the
Third Amendment.
The undersigned represents and warrants to each of you as follows:
1. The undersigned is the duly elected, qualified and acting
________ of the Company and is familiar with the operations, records and
affairs of the Company;
2. The representations and warranties of the Company set forth in
Section 3 of the Third Amendment are true and correct on and with respect
to the date hereof;
3. The Company has performed all of its obligations under the Third
Amendment which are to be performed on or prior to the date hereof;
4. No Default or Event of Default has occurred and is continuing;
and
5. As of the date hereof, the 1997 Preferred Stock has been duly and
validly issued and is fully paid and non-assessable.
Dated: February ____, 1997
PETROLEUM HEAT AND POWER, INC.
By
Its ____________________
Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
DESCRIPTION OF XXXXXXX AND CUTLER'S
CLOSING OPINION
The closing opinion of Xxxxxxx and Xxxxxx, special counsel to the holders
of the Preferred Stock (the "Holders"), called for by ss.3.2 of the Third
Amendment and Restatement of Purchase Agreement (the "Amendment and
Restatement"), shall be dated the Effective Date and addressed to the Holders,
shall be satisfactory in form and substance to the Holders and shall be to the
effect that:
(1) The Company is a corporation, duly organized and existing and in good
standing under the laws of the State of Minnesota and has all requisite
corporate power and authority to enter into and perform the Amendment and
Restatement;
(2) The Amendment and Restatement has been duly authorized, executed and
delivered by the Company and all provisions of the Amendment and Restatement
pertaining to the Preferred Stock and other matters (other than the Notes)
constitute the legal, valid and binding agreements of the Company enforceable
against the Company in accordance with their terms, except as such terms may be
limited by bankruptcy, insolvency or similar laws and legal and equitable
principles affecting or limiting the enforcement of creditors' rights generally;
(3) No approval, consent or withholding of objection on the part of, or
filing, registration or qualification with, any United States governmental body,
Federal, state or local, is necessary in connection with the execution and
delivery of the Amendment and Restatement. The opinion of Xxxxxxx and Xxxxxx
shall also state that the opinion of Philips Xxxxx Xxxxxxxx Xxxx & Ballon LLP
called for by ss.3.2 is satisfactory in scope and form to Xxxxxxx and Xxxxxx and
that, in their opinion, the Holders are justified in relying thereon and shall
cover such other matters relating to the execution and delivery of the Amendment
and Restatement as the Holders may reasonably request. With respect to matters
of fact upon which such opinion is based, Xxxxxxx and Xxxxxx may rely on
appropriate certificates of public officials and officers of the Company.
Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
DESCRIPTION OF XXXXXXXX XXXXX XXXXXXXX XXXX & BALLON LLP'S
PREFERRED STOCK CLOSING OPINION
The closing opinion of Xxxxxxxx Xxxxx Xxxxxxxx Xxxx & Ballon LLP, which is
called for by ss.3.2 of the Third Amendment and Restatement of Purchase
Agreements (the "Amendment and Restatement"), shall be dated the Effective Date
and addressed to the Holders, shall be satisfactory in scope and form to the
Holders and shall cover the matters referred to in paragraphs 1, 2 and 3 of
Exhibit C and shall also be to the effect that:
(1) The Certificate of Designation of the Company in the form attached to
the Amendment and Restatement as Exhibit A has been duly adopted by all
necessary corporate action on the part of the Company, has been filed with the
Secretary of State of the State of Minnesota and constitutes the legal and valid
Certificate of Designation of the Company;
(2) Each Subsidiary is a corporation duly organized, legally existing and
in good standing under the laws of its jurisdiction of incorporation and is duly
licensed or qualified and is in good standing in each jurisdiction in which the
character of the properties owned or leased by it or the nature of the business
transacted by it makes such licensing or qualification necessary and all of the
issued and outstanding shares of capital stock of each such Subsidiary have been
duly issued, are fully paid and non-assessable and are owned by the Company, by
one or more wholly-owned Subsidiaries, or by the Company and one or more
wholly-owned Subsidiaries;
(3) The Company has full power and authority and is duly authorized to
conduct the activities in which it is now engaged and is duly licensed or
qualified and is in good standing as a foreign corporation in each jurisdiction
in which the character of the properties owned or leased by it or the nature of
the business transacted by it makes such licensing or qualification necessary
and all of the issued and outstanding shares of capital stock of the Company
have been duly issued, are fully paid and non-assessable;
(4) None of the transactions contemplated in the Amendment and Restatement
will violate or result in a violation of Section 7 of the Securities Exchange
Act of 1934, as amended, or any regulations issued pursuant thereto, including,
without limitation, Regulations, G, T and X of the Board of Governors of the
Federal Reserve System (12 CFR, Chapter II);
(5) To the best of such counsel's knowledge and belief, after due inquiry,
the Company is not a party under or bound by any contract, indenture, agreement,
instrument, order of any court, or governmental agency, rule or regulation known
to such counsel, or any note, debenture, bond, or other security known to such
counsel, under the terms of or pursuant to which the Company's right and
obligation to declare and pay the dividends on the Preferred Stock or to
otherwise make distributions in respect of the Preferred Stock or to make
mandatory redemptions of shares of the Preferred Stock pursuant to the
provisions of the Restated and Amended Articles of Incorporation of the Company
is expressly limited or restricted (not including as such covenants or other
provisions requiring the maintenance of levels of shareholders' equity, net
worth, cash flow and current assets);
Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
(6) The 1997 Preferred Stock when issued by the Company will be duly and
validly issued, fully paid and non-assessable; and
(7) No approval, consent or withholding of objection on the part of, or
filing, registration or qualification with, any governmental body, Federal,
state or local, is necessary in connection with the execution and delivery of
the Amendment and Restatement.
With respect to matters of fact on which the opinion of Xxxxxxxx Xxxxx
Xxxxxxxx Xxxx & Ballon LLP is based, such counsel shall be entitled to rely on
appropriate certificates of public officials and officers of the Company.
Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
PETROLEUM HEAT AND POWER CO., INC.
______ SUBORDINATED NOTE
DUE AUGUST 1, 1999
No. R- ________________, 19__
PETROLEUM HEAT AND POWER CO., INC., a Minnesota corporation (the
"Company"), for value received, hereby promises to pay to
or registered assigns,
on the first day of August, 1999
the principal amount of
DOLLARS ($_____________)
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the
rate of ____% per annum from the date hereof until maturity, payable
semi-annually on the first day of each February and August in each year
commencing on the first such date after the date of issue hereof, and at
maturity. The Company agrees to pay interest on overdue principal and premium,
if any, and (to the extent legally enforceable) on any overdue installment of
interest, at the rate of ____% per annum after due, whether by acceleration or
otherwise, until paid. The principal hereof and interest hereon and premium, if
any, are payable at the principal office of the Company in Stamford, Connecticut
in coin or currency of the United States of America which at the time of payment
shall be legal tender for the payment of public and private debts.
This Note is one of the Subordinated Notes of the Company in the aggregate
principal amount not to exceed $25,000,000 issued or to be issued under and
pursuant to the terms and provisions of separate and several Purchase Agreements
each dated as of August 1, 1989, entered into by the Company with the original
purchasers therein referred to (as amended and restated, the "Purchase
Agreements") and this Note and the holder hereof are entitled equally and
ratably with the holders of all other Notes outstanding under the Purchase
Agreements to all the benefits and security provided for thereby or referred to
therein, to which Purchase Agreements reference is hereby made for the statement
thereof.
Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
This Note and the other Notes outstanding under the Purchase Agreements
may be declared due prior to their expressed maturity dates, all in the events,
on the terms and in the manner and amounts as provided in the Purchase
Agreements.
The Notes are not subject to prepayment or redemption at the option of the
Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in Section
6 of the Purchase Agreements.
This Note and the indebtedness evidenced hereby is and shall at all times
be and remain junior and subordinate in right of payment to any and all Senior
Indebtedness of the Company as defined in the Purchase Agreements, all to the
extent more fully set forth in said Purchase Agreements.
This Note is registered on the books of the Company and is transferable
only by surrender thereof at the principal office of the Company duly endorsed
or accompanied by a written instrument of transfer duly executed by the
registered holder of this Note or its attorney duly authorized in writing.
Payment of or on account of principal, premium, if any, and interest on this
Note shall be made only to or upon the order in writing of the registered
holder.
PETROLEUM HEAT AND POWER CO., INC.
By
Its
Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
PETROLEUM HEAT AND POWER CO., INC.
NOTE CLOSING CERTIFICATE
[To Be Addressed to Holders
of Preferred Stock]
Ladies and Gentlemen:
This certificate is delivered to you in compliance with the requirements
of the separate Purchase Agreements dated as of August 1, 1989 (as amended, the
"Agreements"), entered into by the undersigned, Petroleum Heat and Power Co.,
Inc., a Minnesota corporation (the "Company"), with each of you, and as an
inducement to and as part of the consideration for your exchange on this date of
shares of Series A Exchangeable Preferred Stock (the "Preferred Stock") of the
Company, for ____% Subordinated Notes due August 1, 1999 (the "Notes") of the
Company pursuant to the Agreements. The terms which are capitalized herein shall
have the same meanings as in the Agreements.
The Company represents and warrants to you as of the date hereof that each
and every representation and warranty of the Company set forth in Section 2.1 of
the Agreements are true and correct as of the date hereof.
The Company further represents and warrants to you as of the date hereof
that the proceeds of the Notes being issued on the date hereof (such proceeds
being the shares of Preferred Stock being exchanged) will be used [Description
of use of proceeds] and will not be used in a manner which would violate or
result in a violation of Section 7 of the Securities Act of 1934, as amended, or
any regulation issued pursuant thereto, including, without limitation,
Regulations G, T and X of the Board of Governors of the Federal Reserve System,
12 C.F.R. Chapter II. The Company further represents and warrants to you as of
the date hereof that [either] neither the Company nor any Subsidiary owns or
intends to carry or purchase any "margin security" within the meaning of said
Regulation G and none of the proceeds of the Notes, will be used to purchase, or
refinance, any borrowing, the proceeds of which were used to purchase any
"security" within the meaning of the Securities Exchange Act of 1934, as amended
[or] the Company does own or intend to carry or purchase any margin security or
use the proceeds of the Notes as aforesaid, and the Company has so notified you
of such fact in writing, and you have not objected in writing on the grounds
that such ownership or intention to purchase or carry would cause you or the
Company to be in violation of Regulations G, T and X or the Securities Act of
1934.
Dated:
PETROLEUM HEAT AND POWER CO., INC.
By
Its
Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
DESCRIPTION OF NOTE CLOSING OPINION OF
SPECIAL COUNSEL TO HOLDERS
The closing opinion of special counsel to the holders of Preferred Stock
(the "Holders"), called for by ss.4.2 of the Purchase Agreements, shall be dated
the Note Closing Date and addressed to the Holders, shall be satisfactory in
form and substance to the Holders and shall be to the effect that:
(1) The Company is a corporation, duly organized and existing and in good
standing under the laws of the State of Minnesota, has all requisite corporate
power and authority to enter into and perform the Purchase Agreements and to
issue the Notes and incur the Indebtedness to be evidenced thereby;
(2) The Purchase Agreements have been duly authorized, executed and
delivered by the Company and all provisions of the Purchase Agreements
pertaining to the Notes and other matters (other than the Preferred Stock)
constitute the legal, valid and binding agreements of the Company enforceable
against the Company in accordance with their terms, except as such terms may be
limited by bankruptcy, insolvency or similar laws and legal and equitable
principles affecting or limiting the enforcement of creditors' rights generally;
(3) The Notes have been duly authorized by proper corporate action on the
part of the Company, have been duly executed by authorized officers of the
Company and delivered and constitute the legal, valid and binding obligations of
the Company enforceable in accordance with their terms, except as such terms may
be limited by bankruptcy, insolvency or similar laws and legal and equitable
principles affecting or limiting the enforcement of creditors' rights generally;
(4) No approval, consent or withholding of objection on the part of, or
filing, registration or qualification with, any United States governmental body,
Federal, state or local, is necessary in connection with the execution and
delivery of the Purchase Agreements or the Notes; and
(5) The issuance and delivery of the Notes in exchange for the Preferred
Stock under the circumstances contemplated by the Purchase Agreements is an
exempt transaction under the Securities Act of 1933, as amended, and does not
under existing law require the registration of the Notes under the Securities
Act of 1933, as amended, or the qualification of an indenture in respect thereof
under the Trust Indenture Act of 1939.
The opinion of special counsel to the Holders shall also state that the
opinion of counsel to the Company called for by ss.4.2 of the Purchase
Agreements is satisfactory in scope and form to special counsel to the Holders
and that, in their opinion, the Holders are justified in relying thereon and
shall cover such other matters relating to the exchange of the Preferred Stock
for the Notes as the Holders may reasonably request. With respect to matters of
fact upon which such opinion is based, special counsel to the Holders may rely
on appropriate certificates of public officials and officers of the Company.
Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
DESCRIPTION OF NOTE CLOSING OPINION OF
COUNSEL TO THE COMPANY
The closing opinion of counsel to the Company, which is called for by
ss.4.2 of the Purchase Agreement, shall be dated the Note Closing Date and
addressed to the holders of Preferred Stock (the "Holders"), shall be
satisfactory in scope and form to the Holders and shall cover the matters
referred to in paragraphs 1 through 5 of Exhibit G and shall also be to the
effect that: The issuance and delivery of the Notes in exchange for the
Preferred Stock and the performance by the Company of the Purchase Agreements as
they pertain to the Notes and other matters (other than the Preferred Stock) do
not conflict with or result in any breach of any of the provisions of or
constitute a default under or result in the creation or imposition of any lien
or encumbrance upon any of the property of the Company pursuant to the
provisions of the Articles of Incorporation, Certificate of Designation or
By-laws of the Company or any agreement or other instrument known to such
counsel after due investigation to which the Company is a party or by which the
Company may be bound.
With respect to matters of fact on which such opinion is based, such
counsel shall be entitled to rely on appropriate certificates of public
officials and officers of the Company.
Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
DESCRIPTION OF NOTE CLOSING OPINION OF
MINNESOTA COUNSEL TO THE COMPANY
The closing opinion of Xxxxxx & Xxxxxxx, which is called for by ss.4.2 of
the Purchase Agreement, shall be dated the Note Closing Date and addressed to
the Holders, shall be satisfactory in form and substance to the Holders and
shall be to the effect that:
(1) The Company is a corporation, duly organized and existing and in good
standing under the laws of the State of Minnesota, has all requisite corporate
power and authority to enter into and perform the Purchase Agreements and to
issue the Notes and incur the Indebtedness to be evidenced thereby;
(2) The Purchase Agreements and the Notes have been duly authorized by
proper corporate action on the part of the Company;
(3) No approval, consent or withholding of objection on the part of, or
filing, registration or qualification with, any Minnesota governmental body,
state or local, is necessary in connection with the execution and delivery of
the Purchase Agreements or the Notes; and With respect to matters of fact upon
which the opinion of Xxxxxx & Xxxxxxx is based, such counsel may rely on
appropriate certificates of public officials and officers of the Company.
Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
SUBSIDIARIES OF THE COMPANY
1. SUBSIDIARIES:
JURISDICTION OF PERCENTAGE OF VOTING
NAME OF SUBSIDIARY INCORPORATION STOCK OWNED BY
COMPANY AND EACH
OTHER SUBSIDIARY
X. X. Xxxxxxx Company Washington, D.C. 100%
C.B.W. Realty Corp. of Connecticut Connecticut 100%
Marex Corporation Maryland 100%
Maxwhale Corp. Minnesota 100%
Ocennet Fuel Oil Corp. Connecticut 100%
Ortep of Connecticut, Inc. Connecticut 100%
Ortep of New Jersey, Inc. New Jersey 100%
Ortep of Pennsylvania, Inc. Pennsylvania 100%
Ortep of Staten Island, Inc. New York 100%
Petro/Crystal Corp. New York 100%
Petro, Inc. Delaware 100%
Public Fuel Services Co., Inc. New York 100%
Reliance Utilities Corp. New York 100%
Petroleum Heat and Power Co., Inc.
Third Amendment and Restatement of Purchase Agreement
DESCRIPTION OF DEBT AND LEASES
1. Current Debt of the Company and its Subsidiaries outstanding as of January
31, 1997 is as follows:
Current portion of 14.10% Subordinated Notes $1,050,000
Current portion of 14.10% Senior Notes 1,050,000
Current portion of other Long-Term Debt 947,000
Working capital borrowings 35,000,000
-----------
$38,047,000
===========
2. Funded Debt of the Company and its Subsidiaries outstanding as of January
31, 1997 is as follows:
Senior and Subordinated Notes due 10/01/1998 $60,000,000
14.10% Senior and Subordinated Notes 6,200,000
10.125% Subordinated Notes 50,000,000
9-3/8% Subordinated Debentures 75,000,000
12-1/4% Subordinated Debentures 81,250,000
Other Long-Term Notes 16,687,000
------------
$289,137,000
============
3. Long-Term Leases of the Company and its Subsidiaries outstanding as of
January 31, 1997 are as follows:
Leased Facilities $22,500,000
4. Capitalized Leases of the Company and its Subsidiaries outstanding as of
January 31, 1997 are as follows:
None.
