Exhibit 10.30
WAIVER AND THIRD AMENDMENT
TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This WAIVER AND THIRD AMENDMENT TO SECOND AMENDED AND RESTATED
CREDIT AGREEMENT (this "Amendment"), dated as of April 25, 2002, is entered into
by and among PETROLEUM HEAT AND POWER CO., INC., a Minnesota corporation (the
"Borrower"), each of the financial institutions referred to as Lenders in the
Existing Credit Agreement referred to below (collectively, the "Lenders"), BANK
OF AMERICA, N.A. ("BofA"), as administrative agent for the Lenders (in such
capacity, the "Agent") and as issuer of certain letters of credit (in such
capacity, the "Issuer"), and amends that certain Second Amended and Restated
Credit Agreement, dated as of June 15, 2001 (the "Existing Credit Agreement" and
as the same may be amended, supplemented or modified and in effect from time to
time, the "Credit Agreement"), by and among the Borrower, the Lenders from time
to time party to the Credit Agreement, the Agent, the Issuer, Fleet National
Bank, as Syndication Agent, and First Union National Bank, as Documentation
Agent. Capitalized terms used and not otherwise defined in this Amendment shall
have the same meanings in this Amendment as set forth in the Credit Agreement,
and the rules of interpretation set forth in Section 1.3 of the Credit Agreement
shall be applicable to this Amendment.
RECITAL
WHEREAS, the Borrower has requested that the Lenders (i) reset
the Consolidated Cash Flow to Interest Expense Ratio and Leverage Ratio
covenants, (ii) as contemplated by the second sentence of Section 1.4 of the
Credit Agreement, set forth the agreement of the parties that the effect of
Statements 133, 141 and 142 of the Financial Accounting Standards Board on the
Obligors' financial data is to be disregarded for purposes of calculating
Available Cash, the Consolidated Cash Flow to Interest Expense Ratio and the
Leverage Ratio under the Credit Agreement (but for no other purpose), (iii)
amend certain other provisions of the Existing Credit Agreement and (iv) waive
any failure of the Borrower to comply with Section 8.2.4(a) and (b) of the
Existing Credit Agreement during the period from January 1, 2002 to the
Amendment Effective Date (as defined below), and the Required Lenders, on the
terms and subject to the conditions set forth herein, have agreed to do so.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and agreements set forth below and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:
SECTION 1. Waiver.
(a) In accordance with Section 11.1 of the Credit Agreement
and, on the terms of this Amendment and subject to the satisfaction of the
conditions precedent set forth in Section 3 below, on a one time basis, the
Required Lenders hereby waive compliance with Section 8.2.4(a) and (b) of the
Existing Credit Agreement during the period from January 1, 2002 to the
Amendment Effective Date.
(b) The waiver given herein is a one time waiver strictly limited to
its terms and shall not have any force and effect other than as expressly set
forth herein. The Agent and the Lenders specifically retain all their present
and future rights under the Credit Agreement, including rights in connection
with the representations, conditions and covenants thereof, except as
specifically modified by the limited waiver described in Section 1(a). No
further waiver, either of additional terms or for any additional period, or
consents of any kind, shall be implied from the waiver granted herein. Without
limiting the foregoing, the Borrower expressly acknowledges that neither the
Agent nor any Lender has made any statement, promise or commitment, or given any
promise or assurance, express or implied, that any waiver would be granted in
the future.
SECTION 2. Amendments and Agreements. On the terms of this Amendment
and subject to the satisfaction of the conditions precedent set forth in Section
3 below and, with respect to Section 2(a), (d), (e), (f) and (h) below, the
continuing condition set forth in Section 4 below:
(a) The definition of "Consolidated Cash Flow" set forth in Section 1.1
of the Existing Credit Agreement is hereby amended by inserting the following
proviso immediately prior to the period at the end of the first sentence of such
definition:
"; provided, that solely for purposes of calculating Available
Cash, the Consolidated Cash Flow to Interest Expense Ratio and the Leverage
Ratio (but not for purposes of calculating the Pricing Ratio), Consolidated Cash
Flow shall be determined without giving effect to any non-cash gains or losses
incurred as a result of Financial Accounting Standards Board Statement 133 and
the implementation of Financial Accounting Standards Board Statements 141 and
142"
(b) The definition of "Loan Document" set forth in Section 1.1 of the
Existing Credit Agreement is hereby amended to read in its entirety as follows:
"Loan Document" means this Agreement, the Notes, the Guarantee
Agreements, the Security Documents, the L/C-Related Documents, the Intercreditor
Agreement, the letter agreement referred to in Section 3.3.4 and any other fee
letter, pledge agreement, security agreement, guaranty, mortgage, subordination
agreement or other agreement delivered from time to time to the Agent under or
in connection with this Agreement, as the same may be amended, supplemented,
restated or otherwise modified from time to time.
(c) Section 6.2 of the Existing Credit Agreement is hereby amended by
inserting the following provision as Section 6.2.5 of the Credit Agreement:
6.2.5 Compliance Certificate. With respect to any Borrowing of
Facility C Loans or Issuance of Facility C Letters of Credit, the Borrower shall
have delivered to the Agent a certificate of a Responsible Officer of the
Borrower certifying and demonstrating that, after giving effect to such
Borrowing or Issuance, (a) Holdings, the Borrower and the Material Subsidiaries
will be in compliance with the Leverage Ratio covenant set forth in Section
8.2.4(a) and (b) Holdings, the Borrower and the Material Subsidiaries will be in
compliance with the Consolidated Cash Flow to Interest Expense Ratio covenant
set forth in Section 8.2.4(b).
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(d) Section 8.2.4(a) of the Existing Credit Agreement is hereby
amended to read in its entirety as follows:
(a) the Leverage Ratio based upon the most recent four Fiscal
Quarters to exceed the following respective amounts at any time during
the following respective periods:
Period Leverage Ratio
------ --------------
January 1, 2002 through March 31, 5.75 to 1
2002
April 1, 2002 through June 30, 6.00 to 1
2002
July 1, 2002 through September 30, 5.75 to 1
2002
October 1, 2002 through 5.00 to 1
December 31, 2002
January 1, 2003 and thereafter 4.00 to 1
(e) Section 8.2.4(b) of the Existing Credit Agreement is hereby
amended to read in its entirety as follows:
(b) the Consolidated Cash Flow to Interest Expense Ratio to be
equal to or less than the following respective amounts at any time
during the following respective periods:
Consolidated Cash
Flow to Interest
Period Expense Ratio
------ -------------
January 1, 2002 through March 31, 1.85 to 1
2002
April 1, 2002 through June 30, 1.80 to 1
2002
July 1, 2002 through September 30, 1.90 to 1
2002
October 1, 2002 through 2.00 to 1
December 31, 2002
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January 1, 2003 and thereafter 2.50 to 1
(f) Section 8.2.2(a)(iv) of the Existing Credit Agreement is
hereby amended to read in its entirety as follows:
(iv) additional secured Indebtedness of Holdings, the
Borrower and the Material Subsidiaries in excess of
Indebtedness permitted by clauses (i) and (ii) above, if (A)
Holdings, the Borrower and the Material Subsidiaries are in
compliance with the Consolidated Cash Flow to Interest Expense
Ratio covenant set forth in Section 8.2.4(b) after giving
effect to any Indebtedness being incurred and the repayment of
any Indebtedness being refinanced, (B) Holdings, the Borrower
and the Material Subsidiaries are in compliance with the
Leverage Ratio covenant set forth in Section 8.2.4(a) after
giving effect to any Indebtedness being incurred and the
repayment of any Indebtedness being refinanced, (C) in the
case of Indebtedness (other than Borrower notes) incurred in
connection with Capitalized Lease Liabilities, the obligations
incurred do not exceed the fair market value of such property
or assets (as determined in good faith by the Board of
Directors of the Borrower), (D) to the extent such
Indebtedness is pari passu with the other Senior Debt, the
creditors in respect of such additional Indebtedness shall
have become parties to the Intercreditor Agreement and the
Intercreditor Agreement shall have been amended, if necessary,
to reflect such additional Indebtedness and otherwise shall be
in form and substance satisfactory to the Agent and the
Lenders, (E) to the extent such Indebtedness is subordinate to
the Senior Debt, such Indebtedness constitutes Permitted
Subordinated Debt, (F) in the case of Indebtedness incurred in
connection with Secured Interest Rate Contracts, the
obligations incurred shall be Permitted Secured Interest Rate
Contract Obligations, (G) in the case of Indebtedness the
proceeds of which shall be used to refinance, refund, renew or
otherwise repay Senior Debt, Holdings, the Borrower and the
Material Subsidiaries shall not be required to satisfy the
conditions set forth in clauses (A) and (B) of this Section
8.2.2(a)(iv) if (1) the other conditions set forth in this
Section 8.2.2(a)(iv) are satisfied and (2) such Indebtedness
meets all of the requirements specified in the proviso set
forth in the penultimate paragraph of this Section 8.2.2(a)
and (H) no Default or Event of Default would exist after
incurring such Indebtedness;
(g) The penultimate paragraph of Section 8.2.2(a) of the
Existing Credit Agreement is hereby amended by replacing the comma at the end of
clause (x) of such paragraph with the word "and".
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(h) Exhibit G to the Existing Credit Agreement is hereby
replaced with Exhibit G to this Amendment.
(i) The Borrower agrees to pay to the Agent, for the account of
the Lenders, the amendment fees specified in the letter agreement dated April
25, 2002 between the Borrower and the Agent (the "Amendment Fee Letter"), in
each case at the times specified in the Amendment Fee Letter.
SECTION 3. Conditions Precedent to the Effectiveness of this
Amendment. The effectiveness of the one time waiver granted pursuant to Section
1 above and the amendment and agreements contained in Section 2 above is
conditioned upon, and such waiver, amendments and agreements shall not be
effective until, each of the following conditions has been satisfied (the first
date on which all of the following conditions have been satisfied being referred
to herein as the "Amendment Effective Date"), and shall, solely in the case of
the one time waiver granted pursuant to Section 1 above and the amendments
contained in Section 2(a), (d), (e), (f) and (h) above, only be effective
thereafter so long as the continuing condition contained in Section 4 below is
complied with:
(a) (i) The Agent shall have received, on behalf of the
Lenders, this Amendment, duly executed and delivered by the Borrower, the Agent,
the Issuer and the Required Lenders, and the Amendment Fee Letter, duly executed
and delivered by the Borrower and the Agent, and (ii) each of the other Obligors
shall have acknowledged, agreed and consented to this Amendment and, if
applicable, reaffirmed the Guarantee Agreement to which such Obligor is a party
by executing and delivering the Guarantor Confirmation attached to this
Amendment.
(b) The Agent shall have received, on behalf of the Lenders,
copies of (i) corporate resolutions of the board of directors of the Borrower
authorizing and ratifying the transactions contemplated hereby, certified as of
the Amendment Effective Date by the Secretary or an Assistant Secretary of the
Borrower, and (ii) certified charter documents and a good standing certificate
for the Borrower from its jurisdiction of incorporation.
(c) The representations and warranties set forth in this
Amendment shall be true and correct as of the Amendment Effective Date.
(d) The Agent shall have received a legal opinion satisfactory
to it from counsel to the Obligors as to the matters set forth in Section 5(a),
(b), (c), (d) and (e) below and any other matters requested by the Agent.
(e) No Facility C Working Capital Loan shall be outstanding.
(f) The Borrower shall have paid to the Agent, for the account
of the Lenders, the amendment fees due and payable on the Amendment Effective
Date pursuant to the Amendment Fee Letter.
SECTION 4. Continuing Condition to Effectiveness of Amendment and
Waiver. The waiver set forth in Section 1 above and the amendments contained in
Section 2(a), (d), (e), (f) and (h) above shall be subject to, in addition to
the conditions set forth in Section 3 above, the
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condition that at no time after April 25, 2002 shall the Borrower (a) use the
proceeds of the Facility A Loans, Swing Loans or Facility C Loans, or request
the issuance of Facility A Letters of Credit or Facility C Letters of Credit, to
refinance, refund, renew or otherwise repay any Indebtedness of Holdings, the
Borrower or any Material Subsidiary (other than the Obligations) or (b) use the
proceeds of the Facility C Loans, or request the issuance of Facility C Letters
of Credit, for working capital purposes. If at any time after April 25, 2002 the
Borrower shall (x) use the proceeds of the Facility A Loans, Swing Loans or
Facility C Loans, or request the issuance of Facility A Letters of Credit or
Facility C Letters of Credit, to refinance, refund, renew or otherwise repay any
Indebtedness of Holdings, the Borrower or any Material Subsidiary (other than
the Obligations) or (y) use the proceeds of the Facility C Loans, or request the
issuance of Facility C Letters of Credit, for working capital purposes, then the
waiver set forth in Section 1 above and the amendments contained in Section (a),
(d), (e), (f) and (h) above shall automatically and immediately terminate and be
rescinded, the provisions of Section 8.2.4(a) and (b) of the Existing Credit
Agreement shall be retroactively reinstated and any Default or Event of Default
which would have existed by reason of the failure to comply with Section
8.2.4(a) and (b) of the Existing Credit Agreement shall be retroactively
reinstated, except that the amendments and agreements contained in Section 2(b),
(c), (g) and (i) shall remain in effect for all purposes. Upon such termination
and rescission, the Agent and the Lenders shall have all of their rights and
remedies under the Credit Agreement, including any rights and remedies arising
from a Default or Event of Default occasioned by the failure to comply with
Section 8.2.4(a) and (b).
SECTION 5. Representations and Warranties. In order to induce
the Agent, the Issuer and the Lenders to enter into this Amendment and to amend
the Existing Credit Agreement in the manner provided in this Amendment, the
Borrower represents and warrants to the Agent, the Issuer and each Lender as of
the Amendment Effective Date as follows:
(a) Power and Authority. The Borrower has all requisite
corporate power and authority to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, the Existing
Credit Agreement as amended by this Amendment (hereafter referred to as the
"Amended Credit Agreement").
(b) Authorization of Agreements. The execution and delivery of
this Amendment by the Borrower and the performance of the Amended Credit
Agreement by the Borrower have been duly authorized by all necessary action, and
this Amendment has been duly executed and delivered by the Borrower. All of the
Obligors other than the Borrower have executed and delivered this Amendment or
the Guarantor Confirmation attached to this Amendment, as applicable.
(c) Enforceability. Each of this Amendment and the Amended
Credit Agreement constitutes the legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with its terms, except
as may be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights in general. The enforceability of the
obligations of the Borrower hereunder is subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
6
(d) No Conflict. The execution and delivery by the Borrower of
this Amendment and the performance by the Borrower of each of this Amendment and
the Amended Credit Agreement do not and will not (i) contravene, in any material
respect, any provision of any law, regulation, decree, ruling, judgment or order
that is applicable to the Borrower or its properties or other assets, (ii)
result in a breach of or constitute a default under the charter, bylaws or other
organizational documents of the Borrower or any material agreement, indenture,
lease or instrument binding upon the Borrower or its properties or other assets
or (iii) result in the creation or imposition of any Liens on its properties
other than as permitted under the Credit Agreement.
(e) Governmental Consents. No authorization or approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
the Borrower of this Amendment.
(f) Representations and Warranties in the Credit Agreement. The
Borrower confirms that as of the Amendment Effective Date the representations
and warranties contained in Article VII of the Credit Agreement are (before and
after giving effect to this Amendment) true and correct in all material respects
(except to the extent any such representation and warranty is expressly stated
to have been made as of a specific date, in which case it shall be true and
correct as of such specific date) and that no Default has occurred and is
continuing.
SECTION 6. Miscellaneous.
(a) Reference to and Effect on the Existing Credit Agreement and
the other Loan Documents.
(i) Except as specifically amended by this Amendment and
the documents executed and delivered in connection herewith, the Existing Credit
Agreement and the other Loan Documents shall remain in full force and effect and
are hereby ratified and confirmed.
(ii) The execution and delivery of this Amendment and
performance of the Amended Credit Agreement shall not, except as expressly
provided herein, constitute a waiver of any provision of, or operate as a waiver
of any right, power or remedy of the Agent or the Lenders under, the Existing
Credit Agreement or any of the other Loan Documents.
(iii) On and after the Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Credit Agreement, and each
reference in the other Loan Documents to the "Credit Agreement", "thereunder",
"thereof" or words of like import referring to the Credit Agreement, shall mean
and be a reference to the Credit Agreement as amended by this Amendment.
(iv) This Amendment shall be a Loan Document for all
purposes of the Credit Agreement and the other Loan Documents.
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(b) Expenses. The Borrower acknowledges that all costs and
expenses of the Agent incurred in connection with this Amendment will be paid in
accordance with Section 11.3 of the Existing Credit Agreement.
(c) Headings. Section and subsection headings in this Amendment
are included for convenience of reference only and shall not constitute a part
of this Amendment for any other purpose or be given any substantive effect.
(d) Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Transmission by
telecopier of an executed counterpart of this Amendment shall be deemed to
constitute due and sufficient delivery of such counterpart.
(e) Governing Law. This Amendment shall be governed by and
construed according to the laws of the State of New York.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of the date first above written.
PETROLEUM HEAT AND POWER CO., INC.
By:_______________________________
Name:
Title:
Acknowledged and Agreed:
PETRO HOLDINGS, INC.
By:______________________________
Name:
Title:
STAR GAS PARTNERS, L.P.
By: Star Gas LLC, its General Partner
By:_______________________________
Name:
Title:
BANK OF AMERICA, N.A., as Agent
By:_______________________________
Name: Xxxxx Xxxxx
Title: Vice President
[SIGNATURES CONTINUED ON NEXT PAGE]
BANK OF AMERICA, N.A., as Issuer and a Lender
By:___________________________________________
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
XX XXXXXX CHASE BANK (formerly known as
The Chase Manhattan Bank), as a Lender
By:____________________________________
Name:
Title:
SIGNATURES CONTINUED ON NEXT PAGE]
CIBC INC., as a Lender
By:________________________________
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
CITIZENS BANK OF MASSACHUSETTS, as a Lender
By:___________________________________________
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
FIRST UNION NATIONAL BANK, as a Lender
By:____________________________________
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
FLEET NATIONAL BANK, as a Lender
By:__________________________________________
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
ISRAEL DISCOUNT BANK OF NEW YORK, as a Lender
By:___________________________________________
Name:
Title:
By:___________________________________________
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
ROYAL BANK OF CANADA, as a Lender
By:_____________________________________
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
UNION BANK OF CALIFORNIA, N.A., as a Lender
By:__________________________________________
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
GUARANTOR CONFIRMATION
Each of the undersigned hereby (i) acknowledges and consents to the
foregoing Waiver and Third Amendment to Second Amended and Restated Credit
Agreement, (ii) reaffirms the terms of its respective Guarantee Agreement in
favor of the Trustee, (iii) acknowledges that such Guarantee Agreement remains
in full force and effect in accordance with its terms and (iv) confirms that the
obligations of the Borrower under the foregoing Waiver and Third Amendment to
Second Amended and Restated Credit Agreement and under the Amendment Fee Letter
referred to therein are "Guaranteed Obligations" as used in the Guarantee
Agreement to which it is a party.
Dated as of April 25, 2002
PETRO HOLDINGS, INC.
By:____________________________________________
Name:
Title:
STAR GAS PARTNERS, L.P.
By: Star Gas LLC, its General Partner
By:____________________________________________
Name:
Title:
XXXXXX OIL CO., L.P.
By: Xxxxxx Oil Co., Inc., its General Partner
By:____________________________________________
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
PETRO, INC.
ORTEP OF CONNECTICUT, INC.
MAXWHALE CORP.
ORTEP OF PENNSYLVANIA, INC.
MAREX CORPORATION
X.X. XXXXXXX COMPANY
STAR GAS CORPORATION
XX XXXX, INC.
XXXXXX OIL CO., INC.
REGION OIL PLUMING, HEATING AND COOLING CO., INC.
By:_____________________________________________
Name:
Title:
EXHIBIT G
FORM OF COMPLIANCE CERTIFICATE
Financial
Statement Date: _____________, ____
Reference is made to that certain Second Amended and Restated Credit
Agreement, dated as of June 15, 2001 (as amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among Petroleum
Heat and Power Co, Inc., a Minnesota corporation (the "Borrower"), the several
financial institutions from time to time party to the Credit Agreement (the
"Lenders") and Bank of America, N.A., as agent for the Lenders (in such
capacity, the "Agent") and as Issuer of certain Letters of Credit, including the
Existing Letters of Credit. Unless otherwise defined herein, capitalized terms
used herein have the respective meanings assigned to them in the Credit
Agreement.
The undersigned, pursuant to Section 8.1.1(c), of the Credit Agreement
hereby certifies as of the date hereof that he/she is the Responsible Officer of
the [Borrower] [and Star Gas Partners], and that, as such, he/she is authorized
to execute and deliver this Certificate to the Lenders, the Issuer and the Agent
on the behalf of [the Borrower] [Star Gas Partners], and that:
[Use the following paragraph if this Certificate is delivered in
connection with the financial statements required by subsection [8.1.1(a)] of
the Credit Agreement.]
1. (i) Attached as Schedule 1 hereto are (a) a true and correct
copy of the unaudited consolidated (and in the case of Holdings, consolidating)
balance sheets of the Holdings, the Borrower and the Material Subsidiaries as at
the end of the Fiscal Quarter ended __________, ____ and (b) the related
consolidated (and, as to statements of income and cash flows, if applicable and
to the extent that such are being prepared appropriate, consolidating)
statements of income, surplus, cash flows and stockholders' equity of the
Holdings, the Borrower and the Material Subsidiaries for such period and for the
period from the beginning of the current Fiscal Year to the end of such
quarterly period, setting forth in each case in comparative form the
consolidated and, where applicable and as appropriate, consolidating figures for
the corresponding periods of the previous Fiscal Year, all in reasonable detail
and such financial statements, present in all material respects, the information
contained therein (subject to changes resulting from normal year-end
adjustments), in accordance with GAAP applied on a basis consistent with prior
fiscal periods.
(ii) Attached as Schedule 1 hereto are (a) a true and correct
copy of the unaudited consolidated (and to the extent that such are beings,
prepared, consolidating) balance sheets of the Star Gas Partners and its
Subsidiaries as at the end of the Fiscal Quarter ended __________, ____ and (b)
the related consolidated (and, as to statements of income and cash flows, if
applicable and to the extent that such are being prepared appropriate,
consolidating) statements of income, surplus or partners' capital and cash flows
of Star Gas Partners and its Subsidiaries for such period and for the period
from the beginning of the current Fiscal Year to
G-1
the end of such quarterly period, setting forth in each case in comparative form
the consolidated and, where applicable and as appropriate, consolidating figures
for the corresponding periods of the previous Fiscal Year, and such financial
statements of the Managing General Partner as presenting fairly, in all material
respects, the information contained therein (subject to changes resulting from
normal year-end adjustments), in accordance with GAAP applied on a basis
consistent with prior fiscal periods.
or
[Use the following paragraph if this Certificate is delivered in
connection with the financial statements required by subsection [8.1.1 (b)] of
the Credit Agreement.]
1. (i) Attached as Schedule 1 hereto are (a) a true and correct
copy of the audited consolidated (and in the case of Holdings, consolidating)
balance sheets of the Holdings, the Borrower and the Material Subsidiaries as at
the end of the Fiscal Year ended __________________, ____, and (b) the related
consolidated (and, as to statements of income and cash flows, if applicable and
to the extent that such are being prepared as appropriate, consolidating)
statements of income, cash flows and stockholders' equity of Holdings, the
Borrower and the Material Subsidiaries for such Fiscal Year, setting forth in
comparative form the consolidated and, consolidating figures for the previous
Fiscal Year, all in reasonable detail, and accompanied by a report thereon of
KPMG LLP which report contains no limitation on the scope of the audit and no
material qualification or exception and states that such consolidated financial
statements present fairly in all material respects the financial position of
Holdings, the Borrower and the Material Subsidiaries as at the dates indicated
and the results of their operations and cash flows for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years and that the
audit by such accountants in connection with such consolidated financial
statements has been made in accordance with GAAP.
(ii) Attached as Schedule 1 hereto are (a) a true and correct
copy of the audited consolidated (and to the extent that such are being
prepared, consolidating) balance sheets of the Star Gas Partners and its
Subsidiaries as at the end of the Fiscal Year ended __________________, ____,
and (b) the related consolidated (and, as to statements of income and cash
flows, if applicable and to the extent that such are being prepared as
appropriate, consolidating) statements of income, partners' capital and cash
flows of Star Gas Partners and its Subsidiaries for such Fiscal Year, setting
forth in comparative form the consolidated and, consolidating figures for the
previous Fiscal Year, all in reasonable detail, and accompanied by a report
thereon of KPMG LLP which report contains no limitation on the scope of the
audit and no material qualification or exception and states that such
consolidated financial statements present fairly in all material respects the
financial position of Star Gas Partners its Material Subsidiaries as at the
dates indicated and the results of their operations and cash flows for the
periods indicated in conformity with GAAP applied on a basis consistent with
prior years and that the audit by such accountants in connection with such
consolidated financial statements has been made in accordance with GAAP.
2. The undersigned has reviewed and is familiar with the terms of
the Credit Agreement and the other Loan Documents and has made, or has caused to
be made under his/her supervision, a review in reasonable detail of the
transactions and condition of the Holding, the
G-2
Borrower and its Material Subsidiaries [Star Gas Partners] during the accounting
period covered by the attached financial statements.
3. As of the date hereof, no Default or Event of Default has occurred
and is continuing.
4. The following financial covenant analyses and other information set
forth on Schedule 2 attached hereto are true and accurate on and as of the date
of this Certificate.
IN WITNESS WHEREOF, the undersigned has executed this certificate as
of [__________ __, ____].
PETROLEUM HEAT AND POWER COMPANY, INC.
By: _________________________________
Name:
Title:
STAR GAS PARTNERS, L.P.
By: Star Gas LLC, its managing
general partner
By: ______________________________
Name:
Title:
G-3
For the fiscal
quarter/year ended___________,
____ ("Computation Date")
SCHEDULE 2
to the Compliance Certificate
Actual Required/Permitted
I. Section 8.2.4(a) Funded Debt to Consolidated Cash
Flow Ratio:
A. All interest bearing Indebtedness of Holdings, the $___________
Borrower and Material Subsidiaries as of the
Computation Date (excluding Facility A Loans,
Swing Loans and amounts not drawn in respect
of Facility A Letters of Credit and Facility B
Letters of Credit)
B. Capitalized Lease Liabilities $___________
C. Synthetic Lease Obligations $___________
D. The sum of A, B and C $___________
E. Consolidated Cash Flow as stated in item III(H) $___________
F. Ratio of D to E _____________ At all times less than or equal to the
following respective amounts during the
following respective periods:
Period Leverage Ratio
------ --------------
January 1, 2002 through 5.75 to 1
March 31, 2002
April 1, 2002 through 6.00 to 1
June 30, 2002
July 1, 2002 through 5.75 to 1
September 30, 2002
October 1, 2002 through 5.00 to 1
December 31, 2002
January 1, 2003 and 4.00 to 1
thereafter
Actual Required/Permitted
------ ------------------
II. Section 8.2.4(b) Ratio of Consolidated Cash Flow to
Interest Expense Ratio:
A. Consolidated Cash Flow as stated in III(H) $__________
B. Consolidated Interest Expense for Holdings, $__________
the Borrower and its Material Subsidiaries as of
the computation date
C. Ratio of A to B ___________ At all times greater than or equal to the
following respective amounts during the
following respective periods:
Consolidated
Cash Flow to
Interest
Expense
Period Ratio
------ -----
January 1, 2002 through 1.85 to 1
March 31, 2002
April 1, 2002 through 1.80 to 1
June 30, 2002
July 1, 2002 through 1.90 to 1
September 30, 2002
October 1, 2002 through 2.00 to 1
December 31, 2002
January 1, 2003 and 2.50 to 1
thereafter
III. Consolidated Cash Flow of Holdings, the Borrower and
its Material Subsidiaries as of the computation date:
A. Consolidated Net Income $__________
B. Consolidated extraordinary loss realized in $__________
connection with asset sales
C. Consolidated extraordinary gain realized in $__________
connection with asset sales
D. Consolidated income tax expense $__________
E. Consolidated Interest Expense $__________
F. Consolidated depreciation and amortization $__________
2
Actual Required/Permitted
------ ------------------
G. All other non cash expenses to the extent $__________
deducted in computing Consolidated Net Income as
indicated on the income statements of Holdings,
the Borrower and the Material Subsidiaries
H. The sum of items A, B, D, E, F and G $__________
IV. Section 8.2.4(c) Current Assets to Current Liabilities:
A. Current Assets $__________
B. Current Liabilities $__________
C. Ratio of A to B ___________ From December 31 through June 30 of each
year, must be equal to or greater than 1.00
to 1; and
From July 1 through December 30 of each
year, must be equal to or greater than
0.85 to 1.
V. Section 8.2.2(a) Restriction on Indebtedness:
A. The amount of additional secured Indebtedness $__________
incurred pursuant to Section 8.2.2(a)(iv) and (v)
B. In the case of Capitalized Lease Liabilities, the $__________
fair market value of such property or assets
VI. Section 8.2.2(b) Restriction on Star Gas Partners
Indebtedness:
A. SGP Consolidated Pro Forma Operating Cash $__________
Flow (set forth method of calculation)
B. SGP Consolidated Pro Forma Interest Expense $__________
(set forth method of calculation)
C. Ratio of A to B ___________ Greater than 2.00 to 1
D. Schedule of Contingent Liabilities of Star Aggregate amount not to exceed
Gas Partners incurred under or pursuant to $50,000,000
Section 8.2.2(b)(ii):
VII. Sections 8.2.5 and 8.2.6 Investments:
A. List of Investments
3
Actual Required/Permitted
------ ------------------
B. Total Aggregate Amount $__________
C. Amount of Restricted Payment for Holdings, $__________
the Borrower and the Material Subsidiaries
D. Amount of Restricted Investments for
Holdings, the Borrower and Material Subsidiaries
E. Available Cash
(i) Consolidated Cash Flow (excluding pro forma $__________
cash flow for acquisitions and dispositions)
(ii) 50% of unsecured subordinated indebtedness $__________
incurred after Xxxxx 00, 0000
(xxx) Net proceeds of new equity issued and $__________
capital contributions made after March 25,
1999
(iv) Consolidated Interest Expense $__________
(v) Maintenance Capital Expenditures $__________
(vi) Restricted Payments $__________
(vii) Cash income taxes $__________
(viii) Sum of $15,000,000 plus $________ plus $__________
items (i) - (iii) above
(ix) Sum of items (iv) - (vii) above $__________
(x) Item (viii) above minus item (ix) above $__________
VIII. Section 8.2.6 SGP Consolidated Pro Forma Operating
Cash Flow to SGP Consolidated Pro Forma Interest
Expense:
A. SGP Consolidated Pro Forma Operating Cash $__________
Flow (set forth calculation)
B. SGP Consolidated Pro Forma Interest Expense $__________
C. Ratio of A to B __________ Greater than 1.75 to 1
4
Actual Required/Permitted
------ ------------------
IX. Section 8.2.8:
A. List each Asset Disposition and date of
disposition
B. Consolidated Total Assets of Holdings $__________
C. 10% of Item B $__________
D. Net after tax proceeds from Disposition $__________
X. Section 8.2.13:
A. Aggregate Amount of obligations of Holdings, $__________ Equal to or less than $15,000,000 in any
the Borrower and the Material Subsidiaries in Fiscal Year
respect of Operating Leases
B. Amount of obligations of Star Gas Partners $__________ $0
in respect of leases
XI. Section 8.2.16:
A. Capital Expenditures of Holdings, the $__________
Borrower and the Material Subsidiaries other
than in the Fuel Oil Distribution Business
B. 10% Consolidated tangible assets of $__________
Holdings, the Borrower and the Material
Subsidiaries (permitted)
XII. Section 8.1.11:
A. Actual dates of 45 day clean down period
5
