Exhibit 10.33
EXECUTION COPY
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$25,000,000
PARITY DEBT CREDIT AGREEMENT
dated as of September 23, 2003
among
STAR GAS PROPANE, L.P.,
THE LENDERS NAMED HEREIN,
FLEET NATIONAL BANK,
as Syndication Agent,
WACHOVIA BANK, N.A.,
as Documentation Agent,
and
JPMORGAN CHASE BANK,
as Administrative Agent
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X.X. XXXXXX SECURITIES INC. and FLEET SECURITIES INC.,
as Co-Lead Arrangers and Joint Bookrunners
TABLE OF CONTENTS
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Article I DEFINITIONS .............................................................1
Section 1.01 Defined Terms ..................................................1
Section 1.02 Terms Generally ...............................................32
Section 1.03 Types of Borrowings ...........................................32
Article II THE CREDITS ...........................................................33
Section 2.01 Commitment to Make Loans ......................................33
Section 2.02 Loans .........................................................34
Section 2.03 Notice of Borrowings ..........................................36
Section 2.04 Notes; Repayment of Loans .....................................36
Section 2.05 Fees ..........................................................37
Section 2.06 Interest on Loans .............................................37
Section 2.07 Default Interest ..............................................38
Section 2.08 Alternate Rate of Interest ....................................38
Section 2.09 Termination and Reduction of Commitments ......................38
Section 2.10 Conversion and Continuation of Borrowings .....................39
Section 2.11 Mandatory Repayments and Prepayments. .........................41
Section 2.12 Optional Prepayments ..........................................43
Section 2.13 Reserve Requirements; Certain Changes in Circumstances ........44
Section 2.14 Change in Legality ............................................46
Section 2.15 Indemnity .....................................................46
Section 2.16 Pro Rata Treatment ............................................47
Section 2.17 Sharing of Setoffs ............................................47
Section 2.18 Payments ......................................................48
Section 2.19 Taxes .........................................................48
Section 2.20 Assignment of Commitments Under Certain Circumstances .........50
Section 2.21 Letters of Credit .............................................50
Article III REPRESENTATIONS AND WARRANTIES .......................................54
Section 3.01 Organization; Powers ..........................................54
Section 3.02 Authorization .................................................55
Section 3.03 Enforceability ................................................55
Section 3.04 Consents and Governmental Approvals ...........................56
Section 3.05 Business; Financial Statements ................................56
Section 3.06 No Material Adverse Change ....................................57
Section 3.07 Title to Properties; Possession Under Leases ..................57
Section 3.08 Subsidiaries ..................................................58
Section 3.09 Litigation; Compliance with Laws ..............................58
Section 3.10 Agreements ....................................................58
Section 3.11 Federal Reserve Regulations ...................................58
Section 3.12 Investment Company Act; Public Utility Holding Company
Act ........................................................59
Section 3.13 Use of Proceeds ...............................................59
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Section 3.14 Tax Returns ...................................................59
Section 3.15 No Material Misstatements .....................................59
Section 3.16 Employee Benefit Plans ........................................60
Section 3.17 Environmental and Safety Matters ..............................61
Section 3.18 Security Interests ............................................62
Section 3.19 Solvency ......................................................62
Section 3.20 Transactions with Affiliates ..................................62
Section 3.21 Ownership .....................................................62
Section 3.22 Insurance .....................................................63
Section 3.23 Labor Relations ...............................................63
Section 3.24 Changes, etc ..................................................63
Section 3.25 Indebtedness ..................................................63
Section 3.26 Business ......................................................63
Section 3.27 Chief Executive Office ........................................64
Section 3.28 Fixed Price Supply Contracts ..................................64
Section 3.29 Trading and Inventory Policies ................................64
Section 3.30 Parity Debt ...................................................65
Article IV CONDITIONS OF LENDING .................................................65
Section 4.01 Effectiveness .................................................65
Section 4.02 All Extensions of Credit ......................................71
Article V ACCOUNTING; FINANCIAL STATEMENTS; INSPECTION ...........................74
Section 5.01 Accounting ....................................................74
Section 5.02 Financial Statements ..........................................74
Section 5.03 Inspection ....................................................79
Article VI BUSINESS AND FINANCIAL COVENANTS ......................................80
Section 6.01 Indebtedness ..................................................80
Section 6.02 Liens, etc ....................................................83
Section 6.03 Investments, Guaranties, etc ..................................85
Section 6.04 Restricted Payments ...........................................86
Section 6.05 Transactions with Affiliates ..................................87
Section 6.06 Prohibited Stock and Indebtedness .............................88
Section 6.07 Consolidation, Merger, Sale of Assets, etc ....................88
Section 6.08 Partnership or Corporate Existence etc.; Business .............92
Section 6.09 Payment of Taxes and Claims ...................................92
Section 6.10 Compliance with ERISA .........................................93
Section 6.11 Maintenance of Properties; Insurance ..........................93
Section 6.12 Operative Agreements; Collateral Documents ....................94
Section 6.13 Chief Executive Office ........................................94
Section 6.14 Covenant to Secure Notes Equally ..............................94
Section 6.15 Compliance with Laws ..........................................95
Section 6.16 Further Assurances ............................................95
Section 6.17 Subsidiaries ..................................................95
Section 6.18 Use of Proceeds ...............................................97
Section 6.19 Accounting Changes ............................................97
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Section 6.20 Certain Real Property .........................................97
Section 6.21 Sale and Lease-Back Transactions ..............................98
Section 6.22 Acquisitions ..................................................98
Section 6.23 Impairment of Security Interests ..............................99
Section 6.24 Limitation on Restrictions on Subsidiary Dividends, etc .......99
Section 6.25 No Other Negative Pledges .....................................99
Section 6.26 Sales of Receivables ..........................................99
Section 6.27 Fixed Price Supply Contracts; Certain Policies ................99
Section 6.28 Certain Operations ...........................................100
Section 6.29 Independent Corporate Existence ..............................100
Article VII EVENTS OF DEFAULT ...................................................101
Section 7.01 Events of Default ............................................101
Section 7.02 Remedies .....................................................105
Article VIII THE AGENTS AND ISSUING BANK ........................................105
Section 8.01 Appointment and Authorization ................................105
Section 8.02 Liability of Agents ..........................................106
Section 8.03 Action by Agents .............................................106
Section 8.04 Notice of Default ............................................107
Section 8.05 Successor Agents .............................................107
Section 8.06 Agent and Affiliate ..........................................107
Section 8.07 Indemnification ..............................................108
Section 8.08 Credit Decision ..............................................108
Section 8.09 Intercreditor Agreement ......................................109
Article IX MISCELLANEOUS ........................................................109
Section 9.01 Notices ......................................................109
Section 9.02 Survival of Agreement ........................................110
Section 9.03 Binding Effect ...............................................111
Section 9.04 Successors and Assigns; Participations and Assignments .......111
Section 9.05 Expenses; Indemnity ..........................................114
Section 9.06 Right of Setoff ..............................................116
Section 9.07 Applicable Law ...............................................117
Section 9.08 Waivers; Amendment ...........................................117
Section 9.09 Interest Rate Limitation .....................................118
Section 9.10 Entire Agreement .............................................118
Section 9.11 Severability .................................................118
Section 9.12 Counterparts .................................................119
Section 9.13 Headings .....................................................119
Section 9.14 Jurisdiction; Consent to Service of Process; Waiver of
Jury Trial ................................................119
Section 9.15 Legend .......................................................120
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Schedules
Schedule 1.01A Lenders and Commitments
Schedule 1.01B Restricted Subsidiaries
Schedule 3.07(a) Real Property Not Owned or Leased
Schedule 3.07(b) Real Property Owned or Leased
Schedule 3.08 Subsidiaries
Schedule 3.09 Litigation
Schedule 3.14 State Taxes
Schedule 3.16 Employee Benefit Plans
Schedule 3.17 Environmental Matters
Schedule 3.18 Security Interests
Schedule 3.20 Transactions with Affiliates
Schedule 3.28 Fixed Price Supply Contracts
Schedule 6.29 Independent Corporate Existence
Exhibits
Exhibit A Form of Note
Exhibit B-1 Form of General Partner Consent and Agreement
Exhibit B-2 Form of Public Partnership Consent and Agreement
Exhibit C Form of Subsidiaries Consent and Agreement
Exhibit D Form of Intercompany Note
Exhibit E Form of Assignment and Acceptance
Exhibit F-1 Form of Opinion of Xxxxxxxx Xxxxx LLP
Exhibit F-2 Form of Opinion of Local Counsel to Borrower
Exhibit G Form of Perfection Certificate
Exhibit H Form of Supplemental Agreement
Exhibit I-1 Form of Notice of Borrowing
Exhibit I-2 Form of Borrowing Certificate
Exhibit J Form of Agreement of Parity Lenders and Supplement to
Intercreditor Agreement
Exhibit K Form of Compliance Certificate
Exhibit L Form of Exemption Certificate
Exhibit M Form of Solvency Certificate
Exhibit N Form of Cash Collateral Agreement
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PARITY DEBT CREDIT AGREEMENT dated as of September 23, 2003, among STAR GAS
PROPANE, L.P., a Delaware limited partnership (the "Borrower"), the Lenders (as
defined herein), WACHOVIA BANK, N.A., as documentation agent (in such capacity,
the "Documentation Agent"), FLEET NATIONAL BANK, as syndication agent (in such
capacity, the "Syndication Agent"), and JPMORGAN CHASE BANK, as administrative
agent.
W I T N E S S E T H :
WHEREAS, the Borrower is a party to that certain Parity Debt Credit
Agreement dated as of February 22, 2002 with the lenders named therein, Fleet
National Bank, as administrative agent, and Bank of America, N.A., as
documentation agent (as amended, the "Existing Parity Debt Credit Agreement").
WHEREAS, the Borrower has requested that the Lenders make extensions of
credit available to replace the Existing Parity Debt Credit Agreement; and
WHEREAS, the Lenders have agreed to replace the Existing Parity Debt Credit
Agreement and make extensions of credit to the Borrower upon the terms and
subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. As used in this Agreement, the following terms
shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any ABR Revolving Loan or ABR Term Loan.
"ABR Revolving Loan" shall mean any Revolving Loan bearing interest at a
rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"ABR Term Loan" shall mean any Term Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"Acquired Business Entity" means (i) any business entity the capital stock
or assets of which have been acquired substantially as an entirety by the
Borrower by purchase, merger or, consolidation, and (ii) any other assets which
were operated as an identifiable business unit, i.e., a branch or division of a
business entity and which have been acquired substantially as an entirety by the
Borrower.
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"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar Borrowing
for any Interest Period, the rate, rounded upwards to the nearest 1/100%,
obtained by dividing (a) the LIBO Rate for such Interest Period by (b) an amount
equal to 1 minus the Statutory Reserves, if any; provided, however, that if at
any time during such Interest Period the Statutory Reserves applicable to such
Eurodollar Borrowing changes, the Adjusted LIBO Rate shall automatically be
adjusted to reflect such change, effective as of the date of such change.
"Administrative Agent" shall mean JPMorgan Chase Bank, together with its
affiliates, as the administrative agent for the Lenders under this Agreement and
the other Loan Documents, together with any of its successors in such capacity.
"Affiliate", as applied to any Person, shall mean any other Person directly
or indirectly controlling or controlled by or under common control with such
Person; provided, that (i) for purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with") as used with respect to any Person shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether as a general
partner or through the ownership of voting securities or by contract or
otherwise, (ii) as applied to the Borrower, the term "Affiliate" shall include
Petro Holdings, Petro, all Subsidiaries of Petro, the General Partner and the
Public Partnership, and (iii) no Person which is an institution shall be deemed
to be an Affiliate of the Borrower solely by reason of ownership of the Facility
Obligations or other securities issued in exchange for the Facility Obligations
or by reason of having the benefits of any agreements or covenants contained in
this Agreement or the other Loan Documents.
"After Acquired Property" shall have the meaning assigned to such term in
Section 6.20.
"Agents" shall mean the Administrative Agent, the Syndication Agent and the
Documentation Agent.
"Aggregate Cost of Unmortgaged Property" shall have the meaning assigned to
such term in Section 6.20.
"Agreement" shall mean this Parity Debt Credit Agreement, as amended,
supplemented, restated or otherwise modified from time to time.
"Agreement of Lenders and Supplement to Intercreditor Agreement" shall mean
the Agreement of Lenders and Supplement to Intercreditor Agreement, dated as of
the date hereof, among the Borrower, the lenders party to the Working Capital
and Acquisition Facility Credit Agreement and the Trustee.
"Agreement of Parity Lenders and Supplement to Intercreditor Agreement"
shall mean the Agreement of Parity Lenders and Supplement to Intercreditor
Agreement, dated as of the date hereof, among the Borrower, the Lenders and the
Trustee, substantially in the form of Exhibit J hereto.
"Alternate Base Rate" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Federal Funds Effective Rate in effect on such day plus 0.50% and (b) the Prime
Rate in effect on such day. If the
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Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms hereof, the Alternate Base Rate shall be determined without regard to
clause (a) of the first sentence of this definition until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be effective on the effective date of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively, without notice to the Borrower.
"Applicable Margin" shall mean (a) with respect to any ABR Revolving Loan
or ABR Term Loan, the Applicable ABR Margin, and (b) with respect to any
Eurodollar Revolving Loan or Eurodollar Term Loan, the Applicable Eurodollar
Margin.
"Applicable ABR Margin" shall mean, with respect to any Revolving Loan or
Term Loan outstanding on any day:
(i) 0.625%, if such day falls within a Level I Pricing Period;
(ii) 0.875%, if such day falls within a Level II Pricing Period;
and
(iii) 1.125%, if such day falls within a Level III Pricing
Period.
"Applicable Eurodollar Margin" shall mean, with respect to any Revolving
Loan or Term Loan outstanding on any day.
(i) 1.625%, if such day falls within a Level I Pricing Period;
(ii) 1.875%, if such day falls within a Level II Pricing Period;
and
(iii) 2.125%, if such day falls within a Level III Pricing
Period.
"Assets" shall mean the productive assets of the Borrower and its
Restricted Subsidiaries which are used and useful in their business and
operations and are pledged as Collateral to the Trustee.
"Assignee" shall have the meaning set forth in Section 9.04(b)(i).
"Assignment and Acceptance" shall mean an assignment and acceptance entered
into by a Lender and an assignee, and accepted by the Administrative Agent, in
the form of Exhibit E or such other form as shall be approved by the
Administrative Agent.
"Audited Financial Statements" shall have the meaning assigned to such term
in Section 3.05(c).
"Available Cash", with respect to any calendar quarter, shall mean (a) the
sum of (i) all cash of the Borrower and the Restricted Subsidiaries on hand at
the end of such quarter and (ii) all additional cash of the Borrower and the
Restricted Subsidiaries on hand through available
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borrowings made after the end of such quarter (provided that, such borrowings
shall in no event exceed available borrowings as of the end of such quarter) at
the date of determination of Available Cash with respect to such quarter, less
(b) any cash reserves that the General Partner shall determine to be necessary
or appropriate in its reasonable discretion to (A) provide for the proper
conduct of the business of the Borrower and the Restricted Subsidiaries
(including cash reserves for future capital expenditures) or (B) provide funds
for distributions under Sections 5.4(a)(i), (ii) and (iii) or 5.4(b)(i) of the
MLP Agreement in respect of any one or more of the next four quarters or (C)
comply with applicable law or any loan agreement (including this Agreement and
the Note Agreements), mortgage, security agreement, debt instrument or other
agreement or obligation to which the Borrower or any Restricted Subsidiary is a
party or its assets are subject (including the payment of principal, Make Whole
Amount (as defined in the 1995 Note Agreement), if applicable, and interest in
respect of the Mortgage Notes, the 2000 Parity Notes, the 2001 Parity Notes, the
Notes and the notes under the Working Capital and Acquisition Facility Credit
Agreement); provided, that Available Cash shall exclude, without duplication,
(x) in each calendar quarter a reserve equal to at least 50% of the aggregate
amount of all interest payments in respect of all Indebtedness of the Borrower
and the Restricted Subsidiaries to be paid or to accrue in the next quarter
(assuming, in the case of Indebtedness incurred hereunder, that such
Indebtedness will bear interest at the then prevailing rate for Eurodollar Loans
of the applicable Class for one-month's duration, plus the Applicable Margin for
such Loans, and assuming in the case of other Indebtedness bearing interest at
fluctuating interest rates which cannot be determined in advance, that the
interest rate in effect on the last Business Day of the immediately preceding
calendar quarter will remain in effect until such Indebtedness is due to be
paid), (y) with respect to any Indebtedness of which principal and/or interest
is payable annually (provided, in the case of principal, that such Indebtedness
is secured equally and ratably with the Mortgage Notes), in the third calendar
quarter immediately preceding each calendar quarter in which any scheduled
principal and/or interest payment is due with respect to such Indebtedness (a
"payment quarter"), a reserve equal to at least 25% of the aggregate amount of
all principal and interest to be paid in respect of such Indebtedness secured
equally and ratably with the Mortgage Notes in such payment quarter; in the
second calendar quarter immediately preceding a payment quarter, a reserve equal
to at least 50% of the aggregate amount of all principal and interest to be paid
in respect of such Indebtedness in such payment quarter; and in the calendar
quarter immediately preceding a payment quarter, a reserve equal to at least 75%
of the aggregate amount of all principal and interest to be paid in respect of
such Indebtedness in such payment quarter and (z) with respect to the Mortgage
Notes and any other Indebtedness of which principal and/or interest is payable
semi-annually or otherwise less frequently than quarterly (provided, in the case
of principal, that such Indebtedness is secured equally and ratably with the
Mortgage Notes), in each calendar quarter a reserve equal to at least 50% of the
aggregate amount of all principal and interest to be paid in respect of the
Mortgage Notes and such other Indebtedness in the next quarter; provided,
further, that the amount of such reserve specified in clauses (x), (y) and (z)
of this definition for principal amounts to be paid shall be reduced by the
aggregate principal amount of all binding, irrevocable letters of credit
established to refinance such principal amounts.
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States.
"Borrower" shall have the meaning assigned to such term in the preamble
hereto.
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"Borrower Security Agreement" shall mean the Pledge and Security Agreement
dated as of December 13, 1995 among the Borrower, the General Partner, the
Restricted Subsidiaries and the Trustee, as amended, supplemented or otherwise
modified from time to time.
"Borrowing" shall mean a group of Loans of a single Class and Type made by
the Lenders on a single date and as to which a single Interest Period is in
effect. For purposes of Section 4.02, a "Borrowing" does not include a
conversion of any previously outstanding Revolving Loan into a Term Borrowing
pursuant to Section 2.01(b).
"Borrowing Certificate" shall have the meaning given to such term in
Section 4.02(l).
"Business" shall mean the operation by the Borrower and its Subsidiaries
(other than Petro Holdings or its Subsidiaries) of the wholesale and retail
sale, distribution and storage of propane gas, heating oil, diesel fuel and
gasoline and related petroleum derivative products and the provision of services
to customers, and the related retail sale of supplies and equipment, including
home appliances.
"Business Day" shall mean any day (other than a day which is a Saturday,
Sunday or legal holiday in the State of New York) on which banks are open for
business in New York, New York; provided, however, that when used in connection
with a Eurodollar Loan, the term "Business Day" shall also exclude any day on
which banks are not open for dealings in dollar deposits in the applicable
interbank market.
"Capital Contribution" shall mean the net cash proceeds received by the
Borrower from the General Partner or from the Public Partnership as a capital
contribution or as consideration for the issuance by the Borrower of additional
partnership interests, in each case for the sole purpose of funding the
expenditures referred to in Section 6.01(b).
"Capital Expenditures" shall mean, for any period, all amounts (whether
paid in cash or accrued as a liability) which would, in accordance with GAAP, be
included on a consolidated statement of cash flows of the Borrower and its
Restricted Subsidiaries for such period as additions to property, plant and
equipment, Capital Lease Obligations or other capital expenditures; provided
that, it is agreed that the Capital Expenditures of Unrestricted Subsidiaries
shall not be consolidated with those of the Borrower and its Restricted
Subsidiaries for purposes of calculating "Capital Expenditures."
"Capital Lease Obligations" of any Person shall mean the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP (as
opposed to being accounted for as operating lease expenses on an income
statement of such Person under GAAP) and, for the purposes of this Agreement,
the amount of such obligations at any time shall be the capitalized amount
thereof at such time determined in accordance with GAAP.
"Capital Stock" of any Person shall mean any and all shares, partnership,
limited liability company and other interests (general or limited), rights to
purchase, warrants, options,
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participations or other equivalents of or interests in (however designated) the
equity of such Person.
"Cash Collateral Agreement" shall mean the Cash Collateral Agreement dated
as of the date hereof among the Borrower, the Administrative Agent and the
Trustee, in the form of Exhibit N, as amended, supplemented or otherwise
modified from time to time.
"Cash Equivalents" shall mean:
(a) marketable obligations issued or unconditionally guaranteed by the
United States of America, or issued by any agency thereof and backed by the
full faith and credit of the United States, in each case maturing within
one year from the date of acquisition thereof;
(b) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within one year from the date of
acquisition thereof and having as at any date of determination the highest
generic rating obtainable from either Standard & Poor's Ratings Group or
Xxxxx'x Investors Service, Inc.;
(c) commercial paper maturing no more than 270 days from the date of
creation thereof and having as at any date of determination one of the two
highest generic ratings obtainable from either Standard & Poor's Ratings
Group or Xxxxx'x Investors Service, Inc.;
(d) certificates of deposit maturing one year or less from the date of
acquisition thereof issued by commercial banks incorporated under the laws
of the United States of America or any state thereof or the District of
Columbia or Canada, (I) the commercial paper or other short-term unsecured
debt obligations of which are rated either A-2 or better (or comparably if
the rating system is changed) by Standard & Poor's Ratings Group or Prime-2
or better (or comparably if the rating system is changed) by Xxxxx'x
Investors Service, Inc. or (II) the long-term debt obligations of which are
rated either AA- or better (or comparably if the rating system is changed)
by Standard & Poor's Ratings Group or Aa3 or better (or comparably if the
rating system is changed) by Xxxxx'x Investors Service, Inc. ("Permitted
Banks");
(e) bankers' acceptances eligible for rediscount under requirements of
the Board and accepted by Permitted Banks; and
(f) obligations of the type described in clause (a), (b), (c) or (d)
above purchased from a securities dealer designated as a "primary dealer"
by the Federal Reserve Bank of New York or from a Permitted Bank as
counterparty to a written repurchase agreement obligating such counterparty
to repurchase such obligations not later than 14 days after the purchase
thereof and which provides that the obligations which are the subject
thereof are held for the benefit of the Borrower or a Subsidiary by a
custodian which is a Permitted Bank and which is not a counterparty to the
repurchase agreement in question.
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"CERCLA" shall mean the Federal Comprehensive Environmental Response,
Compensation and Liability Act, as amended.
"Charges" shall have the meaning assigned to such term in Section 9.09.
"Class" shall have the meaning assigned to such term in Section 1.03.
"Closing Date" shall mean the date on which the conditions precedent set
forth in Section 4.01 shall have been satisfied, which date is September 23,
2003.
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Collateral" shall mean all the collateral pledged or purported to be
pledged pursuant to any of the Collateral Documents.
"Collateral Documents" shall mean the Security Agreements, the Subsidiaries
Consent and Agreement, the General Partner Consent and Agreement, the Public
Partnership Consent and Agreement, the Motor Vehicle Security Agreements, the
Perfection Certificate, the Lockbox Agreements, the Mortgages, the Intercreditor
Agreement, the Agreement of Parity Lenders and Supplement to Intercreditor
Agreement, the Cash Collateral Agreement, checking and deposit account
agreements and all other security agreements and other documents and instruments
executed and/or delivered pursuant to the terms hereof or thereof (including the
certificates of title referred to in Section 4.01(c) of the Borrower Security
Agreement) in order to secure the Facility Obligations, other Parity Debt, and
the Working Capital and Acquisition Facility Credit Agreement or perfect any
Lien granted for the benefit of the Lenders, the lenders under the Working
Capital and Acquisition Facility Credit Agreement and the holders of Parity Debt
pursuant thereto.
"Commitment" shall mean, with respect to each Lender, such Lender's
Revolving Credit Commitment.
"Commitment Fee" shall have the meaning assigned to such term in 0.
"Commodities Inventory" shall mean all inventory consisting of propane gas
and other petroleum derivative products of, and held for sale by, the Borrower
or any Restricted Subsidiary.
"Commodity Hedging Agreement" shall mean any agreement or arrangement
designed solely to protect the Borrower and the Restricted Subsidiaries against
fluctuations in the price of propane with respect to quantities of propane that
the Borrower and the Restricted Subsidiaries reasonably expect to purchase from
suppliers, sell to their customers or need for their inventory during the period
covered by such agreement or arrangement.
"Conduit Lender" shall mean any special purpose corporation organized and
administered by any Lender for the purpose of making Loans otherwise required to
be made by such Lender and designated by such Lender in a written instrument;
provided, that the designation by any Lender of a Conduit Lender shall not
relieve the designating Lender of any of
8
its obligations to fund a Loan under this Agreement if, for any reason, its
Conduit Lender fails to fund any such Loan, and the designating Lender (and not
the Conduit Lender) shall have the sole right and responsibility to deliver all
consents and waivers required or requested under this Agreement with respect to
its Conduit Lender, and provided, further, that no Conduit Lender shall (a) be
entitled to receive any greater amount pursuant to Section 2.13, 2.15, 2.19 or
9.05 than the designating Lender would have been entitled to receive in respect
of the extensions of credit made by such Conduit Lender or (b) be deemed to have
any Commitment.
"Confidential Information Memorandum" shall mean the Confidential
Information Memorandum dated August 2003 and furnished to certain Lenders.
"Consolidated Cash Flow" shall mean at any date of determination, for the
Reference Period with respect to such date of determination, (i) the sum of,
without duplication, the amounts for such period, taken as a single accounting
period, (a) Consolidated Net Income and (b) all amounts deducted in arriving at
such Consolidated Net Income in respect of (I) interest charges (including
amortization of debt discount and expense and imputed interest in Capital Lease
Obligations), (II) provisions for all taxes and reserves (including reserves for
deferred income taxes) and (III) non-cash items, including, without limitation,
non-cash expenses or losses incurred as a result of Statement of Financial
Accounting Standard Number 133 and the implementation of Statement of Financial
Accounting Standard Numbers 141 and 142, less (ii) without duplication, any
non-cash items added in the determination of such Consolidated Net Income for
such period. Consolidated Cash Flow shall be calculated after giving effect, on
a pro forma basis for the Reference Period with respect to any date of
determination to, without duplication, any asset sales or asset acquisitions
(including any asset acquisition giving rise to the need to make such
calculation as a result of the Borrower or any Restricted Subsidiary (including
any Person who becomes a Restricted Subsidiary as a result of such asset
acquisition) incurring, assuming or otherwise being liable for acquired
Indebtedness) occurring during the period commencing on the first day of such
Reference Period to and including the date of determination, as if such asset
sale or asset acquisition occurred on the first day of such Reference Period.
The pro forma calculations required by this definition will be determined in
accordance with GAAP, shall be certified by a Financial Officer of the Borrower,
and shall be calculated in a manner reasonably satisfactory to the Required
Lenders; provided, however, that such calculation shall be made (i) based on the
historical sales volume associated with any Eligible Propane Acquisition for the
Reference Period with respect to the date of such acquisition, less estimated
post-acquisition loss of sales volume (not to be less than three percent (3%)),
(ii) based on the actual cost to the Borrower of the volume of goods sold as
determined in clause (i) above, (iii) based on the pro forma expenses that would
have been incurred by the Borrower in the operation of such Eligible Propane
Acquisition if it had occurred on the first day of such period computed on the
basis of personnel expenses for employees retained or to be retained by the
Borrower in the operation of such Eligible Propane Acquisition and non-personnel
costs and expenses incurred by the Borrower or the General Partner in the
operation of the Business at similarly situated facilities of the Borrower and
the Restricted Subsidiaries, and (iv) without inclusion of the operations of any
Unrestricted Subsidiary.
"Consolidated Interest Expense" shall mean, as of any date of
determination, the total amount payable by the Borrower and its Restricted
Subsidiaries on a consolidated basis (it being understood that amounts payable
by Unrestricted Subsidiaries shall not be consolidated with the
9
Borrower or any Restricted Subsidiary for purposes of calculating Consolidated
Interest Expense), during the Reference Period with respect to such date of
determination, in respect of all interest charges (including amortization of
debt discount and expense and imputed interest on actual payments under Capital
Lease Obligations) during such Reference Period with respect to Indebtedness of
the Borrower and its Restricted Subsidiaries.
"Consolidated Net Income" shall mean, with reference to any period, the net
income (or deficit) of the Borrower and its Restricted Subsidiaries, for such
period (taken as a cumulative whole), after deducting all operating expenses,
provisions for all taxes and reserves (including reserves for deferred income
taxes) and all other proper deductions, all determined in accordance with GAAP
on a consolidated basis (it being understood that the net income of Unrestricted
Subsidiaries shall not be consolidated with the Borrower or any Restricted
Subsidiary for purposes of calculating Consolidated Net Income), after
eliminating all intercompany transactions and after deducting portions of income
properly attributable to minority interests, if any, in the stock and surplus of
Restricted Subsidiaries, provided, that there shall be excluded (a) the income
(or deficit) of any Person accrued prior to the date it becomes a Restricted
Subsidiary or is merged into or consolidated with the Borrower or a Restricted
Subsidiary, (b) the income (or deficit) of any Person (other than a Restricted
Subsidiary) in which the Borrower or any Restricted Subsidiary has an ownership
interest, except to the extent that any such income has been actually received
by the Borrower or such Restricted Subsidiary in the form of dividends or
similar distributions (but subject to the limitations specified in the proviso
below), (c) the undistributed earnings of any Restricted Subsidiary to the
extent that the declaration or payment of dividends or similar distributions by
such Restricted Subsidiary is not at the time permitted by the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Restricted Subsidiary, (d) any
restoration to income of any contingency reserve, except to the extent that
provision for such reserve was made out of income accrued during such period,
(e) any aggregate net gain (but not any aggregate net loss) during such period
arising from the sale, exchange or other disposition of capital assets (such
term to include all fixed assets, whether tangible or intangible, all inventory
sold in conjunction with the disposition of fixed assets, and all securities),
(f) any write-up of any asset, (g) any net gain from the collection of the
proceeds of life insurance policies, (h) any gain arising from the acquisition
of any securities, or the extinguishment, under GAAP, of any Indebtedness, of
the Borrower or any Restricted Subsidiary, (i) any net income or gain (but not
any net loss) during such period from any change in accounting, from any
discontinued operations or the disposition thereof, from any extraordinary
events or from any prior period adjustments, (j) any deferred credit
representing the excess of equity in any Restricted Subsidiary at the date of
acquisition over the cost of the investment in such Restricted Subsidiary, and
(k) in the case of a successor to the Borrower by consolidation or merger or as
a transferee of its assets, any earnings of the successor corporation prior to
such consolidation, merger or transfer of assets; provided, further, that
notwithstanding clause (b) above, there shall be excluded in all events the
income (or deficit) of Petro Holdings and its Subsidiaries, whether or not any
amounts are actually received by the Borrower or any Restricted Subsidiary from
or through Petro Holdings or any of its Subsidiaries in the form of dividends or
otherwise.
10
"Consolidated Net Worth" shall mean, as to the Borrower, the amount by
which
(a) the total assets of the Borrower and the Restricted Subsidiaries
appearing on a consolidated balance sheet of the Borrower and the
Restricted Subsidiaries prepared in accordance with GAAP as of the date of
determination (after eliminating all amounts properly attributable to
minority interests in the stock and surplus, if any, of the Restricted
Subsidiaries) exceeds
(b) total liabilities of the Borrower and the Restricted Subsidiaries
appearing on a consolidated balance sheet of the Borrower and the
Restricted Subsidiaries prepared in accordance with GAAP as of the date of
determination on a consolidated basis,
in each case after eliminating all intercompany transactions, and as to any
other Person, the amount by which
(i) the total assets of such Person and its Subsidiaries appearing on
a consolidated balance sheet of such Person and its Subsidiaries prepared
in accordance with GAAP as of the date of determination (after eliminating
all amounts properly attributable to minority interests in the stock and
surplus, if any, of its Subsidiaries) exceeds
(ii) total liabilities of such Person and its Subsidiaries appearing
on a consolidated balance sheet of such Person and its Subsidiaries
prepared in accordance with GAAP as of the date of determination on a
consolidated basis,
in each case after eliminating all intercompany transactions.
"Consolidated Pro Forma Debt Service" shall mean, as of any date of
determination, the total amount payable by the Borrower and the Restricted
Subsidiaries on a consolidated basis (it being understood that amounts payable
by Unrestricted Subsidiaries shall not be consolidated with the Borrower or any
Restricted Subsidiary for purposes of calculating Consolidated Pro Forma Debt
Service), during the four consecutive calendar quarters next succeeding the date
of determination, in respect of scheduled principal payments and all interest
charges (excluding amortization of debt discount and expense) with respect to
Indebtedness of the Borrower and the Restricted Subsidiaries outstanding on such
date of determination (other than all scheduled principal payments during any
such four consecutive calendar quarter period with respect to Funded Debt and
Facility B), after giving effect to any Indebtedness proposed to be incurred on
such date and to the substantially concurrent repayment of any other
Indebtedness, and (a) including actual payments under Capital Lease Obligations,
(b) assuming, in the case of Indebtedness (other than Indebtedness incurred
under the Working Capital and Acquisition Facility Credit Agreement and this
Facility) bearing interest at fluctuating interest rates which cannot be
determined in advance, that the rate in effect on such date will remain in
effect throughout such period, (c) assuming in the case of Indebtedness incurred
under the Working Capital and Acquisition Facility Credit Agreement and/or this
Facility, that (i) the interest payments payable during such four consecutive
calendar quarters next succeeding the date of determination will equal the
actual interest payments associated with the Working Capital and Acquisition
Facility Credit Agreement or this Facility, as the case may be, during the most
recent
00
xxxx xxxxxx xxxxxxxx, (xx) except for the twelve month period immediately prior
to the termination or final maturity thereof (unless extended or renewed), no
principal payments will be made under Facility A and (iii) principal payments
relating to Facility B and this Facility will become due based on the assumption
that the conversion to the fixed amortization schedule pursuant to Sections
2.01(c) and 2.11(c) of the Working Capital and Acquisition Facility Credit
Agreement and Sections 2.01(b) and 2.11(b) of this Agreement, as applicable, has
occurred, (d) treating the principal amount of all Indebtedness outstanding as
of such date of determination under a revolving credit or similar agreement
(other than the Working Capital and Acquisition Facility Credit Agreement and
this Agreement) as maturing and becoming due and payable on the scheduled
maturity date or dates thereof (including the maturity of any payment required
by any commitment reduction or similar amortization provision), without regard
to any provision permitting such maturity date to be extended, (e) including any
other debt repayments due within twelve months from such date of determination
and (f) excluding principal and interest payments in connection with the
Star/Petro Intercompany Subordinated Debt.
"Control" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ownership of voting securities, by contract or otherwise,
and "Controlling" and "Controlled" shall have meanings correlative thereto.
"Conversion Date" shall mean September 30, 2006.
"Current Assets" shall mean, as of any date, all assets which would, in
accordance with GAAP, be included on a consolidated balance sheet of the
Borrower and its Restricted Subsidiaries as of such date as current assets;
provided that, it is understood that the current assets of Unrestricted
Subsidiaries shall not be consolidated with those of the Borrower or any
Restricted Subsidiary for purposes of calculating Current Assets.
"Current Liabilities" shall mean, as of any date, without duplication, (a)
all liabilities which would, in accordance with GAAP, be included on a
consolidated balance sheet of the Borrower and its Restricted Subsidiaries as of
such date as current liabilities; provided, that it is understood that the
current liabilities of Unrestricted Subsidiaries shall not be consolidated with
those of the Borrower or any Restricted Subsidiary for purposes of calculating
Current Liabilities and (b) all Indebtedness as of such date in respect of
Facility A.
"Current Value" shall have the meaning assigned to such term in Section
6.20.
"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"Disqualified Stock" of any Person shall mean any Capital Stock of such
Person which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable), upon the happening
of any event or otherwise (a) matures or is mandatorily redeemable or subject to
any mandatory repurchase requirement, pursuant to a sinking fund obligation or
otherwise, (b) is convertible into or exchangeable or exercisable for
Indebtedness or Disqualified Stock or (c) is redeemable or subject to any
mandatory repurchase
12
requirement at the option of the holder thereof, in whole or in part, in each
case on or prior to the first anniversary of the Maturity Date.
"Documentation Agent" shall mean Wachovia Bank, N.A., in its capacity as
documentation agent for the Lenders hereunder, and its successors in such
capacity.
"dollars" or "$" shall mean lawful money of the United States of America.
"Eligible Propane Acquisitions" shall mean acquisitions by the Borrower or
any Restricted Subsidiary of controlling stock or all or any part of the assets
of Persons primarily engaged in the distribution of propane and, incidental
thereto, propane appliances, within (a) the continental United States of America
or (b) Canada or Puerto Rico, to the extent that the Trustee, for the benefit of
the Secured Parties, has a perfected first-priority security interest in such
acquired Capital Stock or assets of such Person pursuant to the Collateral
Agreements; provided, that any acquisition made by an Unrestricted Subsidiary
shall not constitute an Eligible Propane Acquisition. A Person shall be
"primarily engaged" in the distribution of propane and propane appliances within
the continental United States of America, Canada or Puerto Rico in the event
that at least eighty-five percent (85%) of its annual gross revenue is derived
from such distribution activities within such locations.
"Environmental Laws" shall mean the common law and all Federal, state,
local and foreign laws, rules or regulations relating to pollution or protection
of public health, safety or the environment, including laws relating to (a)
emissions, discharges, releases or threatened releases of any Hazardous Material
into the environment (including air, surface water, ground water or land) or (b)
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time, and the regulations and rules issued
thereunder.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Loan" shall mean any Eurodollar Revolving Loan or Eurodollar
Term Loan.
"Eurodollar Revolving Loan" shall mean any Revolving Loan bearing interest
at a rate determined by reference to the Adjusted LIBO Rate in accordance with
the provisions of Article II.
"Eurodollar Term Borrowing" shall mean a Borrowing comprised of Eurodollar
Term Loans.
"Eurodollar Term Loan" shall mean any Term Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in Article
VII.
"Excess Proceeds" shall mean the meaning specified in Section
6.07(c)(iii)(B).
13
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rule and regulations promulgated thereunder.
"Existing Credit Agreement" shall have the meaning assigned to such term in
the Working Capital and Acquisition Facility Credit Agreement.
"Existing Parity Debt Credit Agreement" shall have the meaning assigned to
such term in the recitals hereto.
"Existing Unmortgaged Property" shall have the meaning assigned to such
term in Section 6.20.
"Facilities Obligations" shall have the meaning assigned to such term in
the Working Capital and Acquisition Facility Credit Agreement.
"Facility" shall mean the Revolving Loans, the Letters of Credit and the
Term Loans provided or participated in by the Lenders to the Borrower pursuant
to this Agreement and the other Loan Documents.
"Facility A" shall have the meaning assigned to such term in the Working
Capital and Acquisition Facility Credit Agreement.
"Facility B" shall have the meaning assigned to such term in the Working
Capital and Acquisition Facility Credit Agreement.
"Facility Obligations" shall mean (a) the Borrower's obligations in respect
of the due and punctual payment of principal of and interest on (including
interest accruing after the maturity of the Loans and Letter of Credit
Disbursements not yet reimbursed by the Borrower as provided in Section 2.21 and
interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans and all amounts drawn under the Letters
of Credit, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, (b) all Fees, expenses, indemnities
and expense reimbursement obligations of the Borrower under this Agreement or
any other Loan Document, (c) all obligations of the Borrower to any Agent or
Lender under any Interest Rate Agreement and (d) all other obligations, monetary
or otherwise, of the Borrower or any other Loan Party under any Loan Document to
which it is a party, in each case, whether now owing or hereafter existing.
"Federal Funds Effective Rate" shall mean, for any day, the rate equal to
the weighted average (rounded upwards to the nearest 1/8%) of the rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, (a) as such weighted average is published for
such day (or, if such day is not a Business Day, for the immediately preceding
Business Day) by the Federal Reserve Bank of New York or (b) if such rate is not
so published for such Business Day, as determined by the Administrative Agent
using any reasonable means of determination. Each determination by the
Administrative Agent of the Federal Funds Effective Rate shall, in the absence
of manifest error, be conclusive.
14
"Fees" shall mean the Commitment Fee, the other fees payable pursuant to
Section 2.05 and the Letter of Credit Fees.
"Financial Officer" shall mean, as to any corporation, the chief financial
officer or principal accounting officer of such corporation and, as to any
partnership, an officer of its managing general partner who would qualify as a
Financial Officer of such general partner hereunder.
"Funded Debt", as applied to any Person, shall mean all Indebtedness of
such Person which by its terms or by the terms of any instrument or agreement
relating thereto matures more than one year from the date of the initial
creation thereof (including any current installment thereof due within one year
of the date of determination); provided, that Funded Debt shall include any
Indebtedness which does not otherwise come within the foregoing definition but
which is directly or indirectly renewable or extendible at the option of the
debtor to a date one year or more (including an option of the debtor under a
revolving credit or similar agreement obligating the lender or lenders to extend
credit over a period of one year or more) from the date of the initial creation
thereof; provided, further, that Funded Debt shall not include intercompany
Indebtedness permitted pursuant to Section 6.01(d).
"Funding Office" shall mean the office of the Administrative Agent
specified in Section 9.01 or such other office as may be specified from time to
time by the Administrative Agent as its funding office by written notice to the
Borrower and the Lenders.
"GAAP" shall mean generally accepted accounting principles in effect in the
United States from time to time.
"General Partner" shall mean Star Gas LLC or, after an Involuntary Removal,
any Person which replaces Star Gas LLC as sole general partner of the Borrower
and the Public Partnership in a Qualifying Involuntary Removal.
"General Partner Consent and Agreement" shall mean the General Partner
Consent and Agreement dated as of the date hereof among the General Partner and
the Trustee as to the consent and agreement of the General Partner in connection
with the General Partner Guarantee and the Partners Security Agreement, in the
form attached hereto as Exhibit B-1, as amended, supplemented or otherwise
modified from time to time.
"General Partner Guarantee Agreement" shall mean the Guarantee Agreement
between the General Partner and the Trustee dated as of March 25, 1999, as
amended, supplemented or otherwise modified from time to time.
"Governmental Authority" shall mean any Federal, state, local or foreign
governmental department, commission, board, bureau, authority, agency, court,
instrumentality or judicial or regulatory body or entity.
"Growth-Related Capital Expenditures" shall mean, with respect to any
Person, all capital expenditures by such Person made to improve or enhance the
existing capital assets or to increase the customer base of such Person or to
acquire or construct new capital assets (but excluding capital expenditures made
to maintain, up to the level thereof that existed at the time
15
of such expenditure, the operating capacity of the capital assets of such Person
as such assets existed at the time of such expenditure).
"Guaranty", as applied to any Person, shall mean any direct or indirect
liability, contingent or otherwise, of such Person with respect to any
indebtedness, lease, dividend or other obligation of another, including any such
obligation directly or indirectly guaranteed, endorsed (otherwise than for
collection or deposit in the ordinary course of business) or discounted or sold
with recourse by such Person, or in respect of which such Person is otherwise
directly or indirectly liable or any other obligation under any contract which,
in economic effect, is substantially equivalent to a guaranty, including any
such obligation of a partnership in which such Person is a general partner or of
a joint venture in which such Person is a joint venturer, and any such
obligation in effect guaranteed by such Person through any agreement (contingent
or otherwise) to purchase, repurchase or otherwise acquire such obligation or
any security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise), or to maintain the solvency or any balance sheet or
other financial condition of the obligor of such obligation, or to make payment
for any products, materials or supplies or for any transportation or services
regardless of the non-delivery or non-furnishing thereof, in any such case if
the purpose or intent of such agreement is to provide assurance that such
obligation will be paid or discharged, or that any agreements relating thereto
will be complied with, or that the holders of such obligation will be protected
against loss in respect thereof.
"Guarantee Agreements" shall mean the General Partner Guarantee Agreement
and the Subsidiaries Guarantee Agreement.
"Hazardous Materials" shall mean any toxic or hazardous substance or waste,
gasoline or petroleum (including crude oil or any fraction thereof) or petroleum
products, polychlorinated biphenyls, urea-formaldehyde insulation, asbestos or
asbestos-containing materials, pollutants, contaminants, radioactivity, and any
other materials or substances of any kind, whether or not any such substance is
defined as hazardous under any Environmental Law, that is regulated pursuant to
any Environmental Law or that could give rise to liability under any
Environmental Law.
"Hedging Agreement" shall mean any interest rate swap, collar, cap or
similar interest rate arrangement designed solely to protect the Borrower
against fluctuations in interest rates on Indebtedness outstanding or committed
under this Facility.
"Indebtedness", as applied to any Person, shall mean the following (without
duplication):
(a) any indebtedness for borrowed money which such Person has directly
or indirectly created, incurred or assumed;
(b) any indebtedness, whether or not for borrowed money, with respect
to which such Person has become directly or indirectly liable and which
represents the deferred purchase price (or a portion thereof) or has been
incurred to finance the purchase price (or a portion thereof) of any
property or service or business acquired by such Person, whether by
purchase, consolidation, merger or otherwise;
16
(c) all obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection with
the acquisition or property, assets or businesses, and all obligations upon
which interest charges are customarily paid;
(d) all indebtedness created or arising under any conditional sale or
other title retention agreement, or incurred as financing, in either case
with respect to property acquired by the Person (even though the rights and
remedies of the seller or bank under such agreement in the event of default
are limited to repossession or sale of such property);
(e) any Capital Lease Obligations to the extent such obligations
would, in accordance with GAAP, appear on a balance sheet of such Person;
(f) any indebtedness, whether or not for borrowed money, secured by
(or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien in respect of property
owned by such Person, whether or not such Person has assumed or become
liable for the payment of such indebtedness, provided, that the amount of
such Indebtedness if not so assumed shall in no event be deemed to be
greater than the fair market value from time to time (as determined in good
faith by such Person) of the property subject to such Lien;
(g) all Disqualified Stock of such Person valued at the greater of its
voluntary or involuntary maximum fixed repurchase price plus accrued
dividends;
(h) any Preferred Stock of any Subsidiary of such Person valued at the
sum of the liquidation preference thereof or any mandatory redemption
payment obligations in respect thereof plus, in either case, accrued
dividends thereon;
(i) any indebtedness of the character referred to in clause (a)
through (h) of this definition deemed to be extinguished under GAAP but for
which such Person remains legally liable;
(j) all obligations of such Person in respect of Interest Rate
Agreements; and
(k) all standby letters of credit (including the Letters of Credit) of
such Person and any indebtedness of any other Person of the character
referred to in clause (a) through (i) of this definition with respect to
which the Person whose Indebtedness is being determined has become liable
by way of a Guaranty.
Notwithstanding the foregoing, in determining the Indebtedness of the Borrower
and the Restricted Subsidiaries, there shall be excluded all undrawn commercial
letters of credit (not yet due and payable), trade accounts payable, accrued
interest and other accrued expenses and customer credit balances arising in the
ordinary course of business on ordinary terms. The Indebtedness of any Person
shall include the Indebtedness of any partnership in which such Person is a
general partner.
"Indemnified Party" shall have the meaning assigned to such term in Section
9.05(b).
17
"Intercompany Notes" shall mean the promissory notes of the Subsidiaries
issued to the Borrower as contemplated by Section 6.01(c), either (i) in the
form attached hereto as Exhibit D or (ii) such other form as may be satisfactory
to the Administrative Agent, representing all Indebtedness of the Subsidiaries
to the Borrower outstanding at any time.
"Intercreditor Agreement" shall mean the Intercreditor and Trust Agreement
dated as of December 13, 1995, among (i) the Borrower, the Public Partnership,
Star Gas LLC and the Restricted Subsidiaries, as trustor, (ii) HSBC Bank USA
(formerly known as Marine Midland Bank), as trustee, (iii) the note purchasers
named therein, (iv) the bank lenders named therein, (v) the Documentation Agent,
(vi) the Syndication Agent, and (vii) the Administrative Agent, as amended by
the First Amendment to Intercreditor and Trust Agreement dated as of May 31,
1996, the Second Amendment to Intercreditor and Trust Agreement dated as of
September 30, 2000, the Third Amendment to Intercreditor and Trust Agreement
dated as of October 25, 2002, and as supplemented by an Agreement of Parity
Lenders and Supplement to Intercreditor Agreement, dated as of March 15, 2001,
the Supplemental Agreement, dated as of March 25, 1999, the Agreement of Parity
Lenders and Supplement to Intercreditor Agreement, dated as of October 23, 2001,
the Agreement of Parity Lenders and Supplement to Intercreditor Agreement, dated
as of February 22, 2002, the Agreement of Lenders and Supplement to
Intercreditor Agreement and the Agreement of Parity Lenders and Supplement to
Intercreditor Agreement, and as further amended, supplemented or otherwise
modified from time to time.
"Interest Payment Date" shall mean, with respect to any Loan, the last day
of the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of any Eurodollar Borrowing with an Interest Period of more
than three months' duration, each day that would have been an Interest Payment
Date had successive Interest Periods of three months' duration been applicable
to such Borrowing and, in addition, in the case of any Eurodollar Borrowing, the
date of any refinancing or conversion of such Borrowing with or to a Borrowing
of a different Type.
"Interest Period" shall mean (a) as to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing or on the last day of the immediately
preceding Interest Period applicable to such Borrowing, as the case may be, and
ending on the numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is 1, 2, 3 or 6
months thereafter, as the Borrower may elect, and (b) as to any ABR Borrowing,
the period commencing on the date of such Borrowing or on the last day of the
immediately preceding Interest Period applicable to such Borrowing, as the case
may be, and ending on the earliest of (i) the last day of each March, June,
September and December and (ii) with respect to any Revolving Loan or Term Loan,
the Conversion Date or the Maturity Date, respectively; provided, however, that
if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless, in
the case of a Eurodollar Borrowing only, such next succeeding Business Day would
fall in the next calendar month, in which case such Interest Period shall end on
the next preceding Business Day. Interest shall accrue from and including the
first day of an Interest Period to, but excluding, the last day of such Interest
Period.
18
"Interest Rate Agreement" shall mean any interest rate swap, collar, cap,
foreign currency exchange agreement or other arrangement requiring payments
contingent upon interest or exchange rates.
"Inventory" shall mean Commodities Inventory and Non-Commodities Inventory.
"Investment", as applied to any Person, shall mean any direct or indirect
purchase or other acquisition by such Person of stock or other securities of any
other Person, or any direct or indirect loan, advance or capital contribution by
such Person to any other Person, and any other item which would be classified as
an "investment" on a balance sheet of such Person prepared in accordance with
GAAP, including any direct or indirect contribution by such Person of property
or assets to a joint venture, partnership or other business entity in which such
Person retains an interest. For the purposes of Section 6.03, the amount
involved in Investments made during any period shall be the aggregate cost to
the Borrower of all such Investments made during such period, determined in
accordance with GAAP, but without regard to unrealized increases or decreases in
value, or write-ups, write-downs or write-offs, of such investments and without
regard to the existence of any undistributed earnings or accrued interest with
respect thereto accrued after the respective dates on which such Investments
were made, less any net return of capital realized during such period upon the
sale, repayment or other liquidation of such Investment (determined in
accordance with GAAP, but without regard to any amounts received during such
period as earnings (in the form of dividends not constituting a return of
capital, interest or otherwise) on such Investment) or as loans from any Person
in whom such Investments have been made.
"Involuntary Removal" shall mean an involuntary removal of the General
Partner as the general partner of the Borrower pursuant to Section 12.2 of the
Partnership Agreement or as the general partner of the Public Partnership
pursuant to Section 13.2 of the MLP Agreement.
"Issuing Bank" shall mean, as to any Letter of Credit, JPMorgan Chase Bank,
in its capacity as the issuer of such Letter of Credit, and its successors in
such capacity.
"Legal Requirement" shall mean any law, statute, ordinance, decree,
requirement, order, judgment, rule or regulation (or published official
interpretation by any Governmental Authority of any of the foregoing) of any
Governmental Authority.
"Lender" shall mean each financial institution listed on the signature
pages hereof, each assignee which becomes a Lender pursuant to Section 9.04(b),
and their respective successors; provided, that unless the context otherwise
requires, each reference herein to the Lenders shall be deemed to include any
Conduit Lender.
"Letter Agreement" shall have the meaning set forth in Section 2.05(a).
"Letter of Credit Disbursement" shall mean a payment or disbursement made
by the Issuing Bank pursuant to a Letter of Credit.
"Letter of Credit Exposure" shall mean at any time the sum of (i) the
aggregate undrawn amount of all outstanding Letters of Credit, plus (ii) the
aggregate amount of all Letter of Credit Disbursements not yet reimbursed by the
Borrower as provided in Section 2.21, minus (iii) other
19
than for the purpose of determining compliance with Section 2.01 or Section
2.21(a), the aggregate principal amount of cash collateral in respect of Letters
of Credit deposited by the Borrower with the Administrative Agent and held
pursuant to the Cash Collateral Agreement as provided in Section 2.21(j). The
Letter of Credit Exposure of any Lender at any time shall mean its pro rata
share (based on such Lender's Revolving Credit Commitment Percentage) of the
aggregate Letter of Credit Exposure at such time.
"Letter of Credit Fees" shall mean the fees payable to the Issuing Bank and
the Lenders in respect of Letters of Credit pursuant to Section 2.21(e).
"Letters of Credit" shall mean any and all standby letters of credit issued
pursuant to Section 2.21(a).
"Level I Pricing Period" shall mean, subject to Section 2.06(c), any period
during which the Leverage Ratio is less than 3.50 to 1.00 and no Event of
Default has occurred and is continuing.
"Level II Pricing Period" shall mean, subject to Section 2.06(c), any
period during which the Leverage Ratio is greater than or equal to 3.50 to 1.00
but less than 4.00 to 1.00 and no Event of Default has occurred and is
continuing.
"Level III Pricing Period" shall mean, subject to Section 2.06(c), any
period which is not a Level I Pricing Period or a Level II Pricing Period.
"Leverage Ratio" as of any date shall mean the ratio of (a) Total Funded
Debt as of the last day of the Reference Period with respect to such date to (b)
Consolidated Cash Flow for such Reference Period.
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, the rate per annum determined on the basis of the rate for
deposits in dollars for a period equal to such Interest Period commencing on the
first day of such Interest Period appearing on Page 3750 of the Telerate screen
as of 11:00 A.M., London time, two Business Days prior to the beginning of such
Interest Period. In the event that such rate does not appear on Page 3750 of the
Telerate screen (or otherwise on such screen), the "LIBO Rate" shall be
determined by reference to such other comparable publicly available service for
displaying eurodollar rates as may be selected by the Administrative Agent or,
in the absence of such availability, by reference to the rate at which the
Administrative Agent is offered dollar deposits at or about 11:00 A.M., New York
City time, two Business Days prior to the beginning of such Interest Period in
the interbank eurodollar market where its eurodollar and foreign currency and
exchange operations are then being conducted for delivery on the first day of
such Interest Period for the number of days comprised therein.
"Lien", as to any Person, shall mean any mortgage, lien (statutory or
otherwise), pledge, reservation, right of entry, encroachment, easement, right
of way, restrictive covenant, license, charge, security interest or other
encumbrance in or on, or any interest or title of any vendor, lessor, lender or
other secured party to or of such Person under any conditional sale or other
title retention agreement or Capital Lease Obligation with respect to, any
property or asset owned or held by such Person, or the signing or filing of a
financing statement with respect to any of the
20
foregoing which names such Person as debtor, or the signing of any security
agreement with respect to any of the foregoing authorizing any other party as
the secured party thereunder to file any financing statement or any other
agreement to give or grant any of the foregoing. For the purposes of this
Agreement, a Person shall be deemed to be the owner of any asset which it has
placed in trust for the benefit of the holders of Indebtedness of such Person
and such trust shall be deemed to be a Lien if such Person remains legally
liable therefor, notwithstanding that such Indebtedness is or may be deemed to
be extinguished under GAAP.
"Loan Documents" shall mean (a) this Agreement, (b) the Notes, (c) the
Letters of Credit, (d) the Guarantee Agreements, (e) the Intercompany Notes, (f)
the Collateral Documents, (g) any Interest Rate Agreements entered into by the
Borrower with any Agent or Lender and (h) any Supplemental Agreements.
"Loan Parties" shall mean the Public Partnership, the General Partner, the
Borrower and the Restricted Subsidiaries.
"Loans" shall mean any or all of the Revolving Loans and the Term Loans.
"Lockbox Agreement" shall mean an agreement among any Lender or other bank,
the Borrower or any Restricted Subsidiary, and the Administrative Agent in
substantially the form attached as Exhibit O to the Working Capital and
Acquisition Facility Credit Agreement or in such other form as may be reasonably
satisfactory to the Administrative Agent.
"Make Whole Amount" shall have the meaning set forth in the 1995 Note
Agreement as in effect on December 13, 1995.
"Margin Stock" shall have the meaning assigned to such term under
Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) or prospects
(financial or otherwise) of the Borrower or the Business, (b) the ability of the
Borrower, the General Partner or any Restricted Subsidiary to perform its
obligations under this Agreement or any other Operative Agreement or (c) the
validity, enforceability, perfection or priority of this Agreement or any other
Operative Agreement or of the rights or remedies of any Lender or the Trustee.
"Material Contract" shall mean any "material contract" (within the meaning
of Item 601(b)(10) of Regulation S-K under the Exchange Act) except for employee
compensation plans, employee contracts and other employee compensation
arrangements approved by the General Partner or, prior to March 25, 1999, by
Star Gas Corporation, in its capacity as general partner of the Borrower.
"Maturity Date" shall mean September 30, 2008.
"Maximum Consolidated Pro Forma Debt Service" shall mean, as of any date of
determination, the highest total amount payable by the Borrower and the
Restricted Subsidiaries on a consolidated basis (it being understood that
amounts payable by Unrestricted Subsidiaries shall not be consolidated with the
Borrower or any Restricted Subsidiary for purposes of calculating Maximum
Consolidated Pro Forma Debt Service), during any period of four
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consecutive fiscal quarters, commencing with the fiscal quarter in which such
date of determination occurs and ending on the maturity date of the Mortgage
Notes, in respect of scheduled principal payments and all interest charges with
respect to all Indebtedness of the Borrower and the Restricted Subsidiaries
(other than all scheduled principal payments with respect to Facility B only to
the extent that the outstanding principal amount of Facility B is zero for a
period of at least 30 consecutive days during the two-year period prior to any
such date of determination) outstanding or to be outstanding, after giving
effect to any Indebtedness proposed to be incurred on such date and to the
substantially concurrent repayment of any other Indebtedness, and (a) including
actual payments under Capital Lease Obligations, (b) assuming, in the case of
Indebtedness (other than Indebtedness incurred under the Working Capital and
Acquisition Facility Credit Agreement and this Facility) bearing interest at
fluctuating interest rates which cannot be determined in advance, that the rate
in effect on such date will remain in effect throughout such period, (c)
assuming in the case of Indebtedness incurred under the Working Capital and
Acquisition Facility Credit Agreement and this Facility, that (i) the interest
payments payable during such four consecutive calendar quarters next succeeding
the date of determination will equal the actual interest payments associated
with the Working Capital and Acquisition Facility Credit Agreement or this
Facility, as the case may be, during the most recent four fiscal quarters, (ii)
except for the twelve-month period immediately prior to the termination or final
maturity thereof (unless extended or renewed), no principal payments will be
made under Facility A and (iii) principal payments relating to Facility B and
this Facility will become due based on the assumption that the conversion to the
fixed amortization schedule is exercised pursuant to Sections 2.01(c) and
2.11(c) of the Working Capital and Acquisition Facility Credit Agreement and
Sections 2.01(b) and 2.11(b) of this Agreement, as applicable, (d) treating the
principal amount of all Indebtedness outstanding as of such date of
determination under a revolving credit or similar agreement (other than the
Working Capital and Acquisition Facility Credit Agreement and this Facility) as
maturing and becoming due and payable on the scheduled maturity date or dates
thereof (including the maturity of any payment required by any commitment
reduction or similar amortization provision), without regard to any provision
permitting such maturity date to be extended, (e) including any other debt
repayments due within twelve months from such date of determination and (f)
excluding principal and interest payments in connection with the Star/Petro
Intercompany Subordinated Debt.
"Maximum Rate" shall have the meaning assigned to such term in Section
9.09.
"MLP Agreement" shall mean the Agreement of Limited Partnership of the
Public Partnership.
"Mortgage" shall mean each mortgage, assignment of rents, security
agreement and fixture filing, or deed of trust, assignment of rents and fixture
filing, or similar instrument creating and evidencing a lien on a real property
and other property and rights incidental thereto, which shall be substantially
in the form of Exhibit P to the Working Capital and Acquisition Facility Credit
Agreement, containing such schedules and including such exhibits as shall not be
inconsistent with the provisions of Section 4.01(e) or shall be necessary to
conform such instrument to applicable local law and which shall be dated the
date of delivery thereof and made by the owner of the real property described
therein for the benefit of the Trustee, as mortgagee (or beneficiary), assignee
and secured party for the benefit of the Secured Parties, as the same may be
amended, supplemented or otherwise modified from time to time.
22
"Mortgage Notes" shall mean the mortgage notes of the Borrower in the
aggregate principal amount of $85,000,000 8.04% First Mortgage Notes due
September 15, 2009 issued by the Borrower pursuant to the 1995 Note Agreement.
"Mortgaged Properties" shall mean the real properties identified on
Schedule 3.07(b) and each other real property subjected to a Mortgage under
Section 6.20 or otherwise.
"Motor Vehicle Security Agreements" shall mean the Security Agreements for
Motor Vehicles and other Rolling Stock between the Borrower or the Restricted
Subsidiary, as applicable, and the Trustee in the form of Exhibit D to the
Borrower Security Agreement, as amended, supplemented or otherwise modified from
time to time.
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Working Capital" as of any date shall mean the lesser of (a)(i)
Current Assets as of such date, minus (ii) Current Liabilities as of such date
and (b) $8,000,000.
"1995 Note Agreement" shall mean the Note Agreement dated as of December
13, 1995, among the Star Gas LLC, the Borrower and the investors named therein,
as amended by the First Amendment to Note Agreement dated as of May 31, 1996,
the Second Amendment to Note Agreement dated as of March 25, 1999, the Third
Amendment to Note Agreement dated as of September 30, 2000, the Fourth Amendment
to Note Agreement dated as of October 25, 2002, and as further amended,
supplemented or otherwise modified from time to time in accordance with the
Intercreditor Agreement.
"Non-Commodities Inventory" shall mean new household appliances, new parts
inventory and new supplies inventory which are held for sale by the Borrower or
its Restricted Subsidiaries in the normal course of business and which, upon
sale, will qualify for the full term of the original manufacturer's warranty, if
any.
"Non-Excluded Taxes" shall have the meaning assigned to such term in
Section 2.19.
"Note" shall mean a promissory note of the Borrower, substantially in the
form of Exhibit A, evidencing Revolving Loans and (after the Conversion Date)
Term Loans, and any substitutions or replacements therefor.
"Note Agreements" shall mean, collectively, the 1995 Note Agreement, the
2000 Note Agreement and the 2001 Note Agreement.
"Officers' Certificate" shall mean, as to any corporation, a certificate
executed on its behalf by the Chairman of the Board of Directors (if an officer)
or its President or one of its Vice Presidents and its Treasurer, or Controller,
or one of its Assistant Treasurers or Assistant Controllers, and, as to any
partnership, a certificate executed on behalf of such partnership by its general
partner in a manner which would qualify such certificate as an Officers'
Certificate of such general partner hereunder.
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"Operative Agreements" shall mean this Agreement, the Note Agreements, the
Collateral Documents, the MLP Agreement and the Partnership Agreement.
"Other Taxes" shall mean any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.
"Parent Consolidated Cash Flow" shall mean at any date of determination,
for the Reference Period with respect to such date of determination, (i) the sum
of, without duplication, the amounts for such period, taken as a single
accounting period, (a) Parent Consolidated Net Income and (b) all amounts
deducted in arriving at such Parent Consolidated Net Income in respect of (I)
interest charges (including amortization of debt discount and expense and
imputed interest in Capital Lease Obligations), (II) provisions for all taxes
and reserves (including reserves for deferred income taxes), (III) non-cash
items, including, without limitation, (x) non-cash expenses or losses incurred
as a result of Statement of Financial Accounting Standard Number 133 and the
implementation of Statement of Financial Accounting Standard Numbers 141 and 142
and (y) non-cash expenses related to unit appreciation rights, and (IV) Petro
Reorganization Expenses in an aggregate amount of up to $12,000,000, less (ii)
without duplication, any non-cash items added in the determination of such
Parent Consolidated Net Income for such period. Parent Consolidated Cash Flow
shall be calculated after giving effect, on a pro forma basis for the Reference
Period with respect to any date of determination to, without duplication, any
asset sales or asset acquisitions (including any asset acquisition giving rise
to the need to make such calculation as a result of the Borrower or any
Restricted Subsidiary (including any Person who becomes a Restricted Subsidiary
as a result of such asset acquisition) incurring, assuming or otherwise being
liable for acquired Indebtedness) occurring during the period commencing on the
first day of such Reference Period to and including the date of determination,
as if such asset sale or asset acquisition occurred on the first day of such
Reference Period. The pro forma calculations required by this definition will be
determined in accordance with GAAP, shall be certified by a Financial Officer of
the Public Partnership, and shall be calculated in a manner reasonably
satisfactory to the Required Lenders; provided, however, that such calculation
shall be made (i) based on the historical sales volume associated with any
acquisition of a related business for the Reference Period with respect to the
date of such acquisition, less estimated post-acquisition loss of sales volume
(not to be less than three percent (3%)), (ii) based on the actual cost to the
Borrower of the volume of goods sold as determined in clause (i) above, (iii)
based on the pro forma expenses that would have been incurred by the Borrower in
the operation of such related business if it had occurred on the first day of
such period computed on the basis of personnel expenses for employees retained
or to be retained by the Borrower in the operation of such related business and
non-personnel costs and expenses incurred by the Borrower or the General Partner
in the operation of the Business at similarly situated facilities of the
Borrower and the Restricted Subsidiaries, and (iv) without inclusion of the
operations of any Unrestricted Subsidiary.
"Parent Consolidated Funded Debt" as of any date shall mean all Funded Debt
of the Public Partnership and its Subsidiaries as of such date, excluding
Indebtedness under Facility A and Indebtedness incurred for working capital
purposes under the Petro Credit Agreement.
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"Parent Consolidated Interest Expense" shall mean as of any date of
determination, the total amount payable by the Public Partnership and its
Subsidiaries on a consolidated basis, during the Reference Period with respect
to such date of determination, in respect of all interest charges (including
amortization of debt discount and expense and imputed interest on actual
payments under Capital Lease Obligations) during such Reference Period with
respect to Indebtedness of the Public Partnership and its Subsidiaries.
"Parent Consolidated Net Income" shall mean, with reference to any period,
the net income (or deficit) of the Public Partnership and its Subsidiaries
(taken as a cumulative whole), after deducting all operating expenses,
provisions for all taxes and reserves (including reserves for deferred income
taxes) and all other proper deductions, all determined in accordance with GAAP
on a consolidated basis, after eliminating all intercompany transactions and
after deducting portions of income properly attributable to minority interests,
if any, in the stock and surplus of Subsidiaries, provided that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the date it
becomes a Subsidiary or is merged into or consolidated with the Public
Partnership or a Subsidiary, (b) the income (or deficit) of any Person (other
than a Subsidiary) in which the Public Partnership or any Subsidiary has an
ownership interest, except to the extent that any such income has been actually
received by the Public Partnership or such Subsidiary in the form of dividends
or similar distributions (but subject to the limitations specified in the
proviso below), (c) the undistributed earnings of any Subsidiary to the extent
that the declaration or payment of dividends or similar distributions by such
Subsidiary is not at the time permitted by the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to such Subsidiary, (d) any restoration to income of any
contingency reserve, except to the extent that provision for such reserve was
made out of income accrued during such period, (e) any aggregate net gain (but
not any aggregate net loss) during such period arising from the sale, exchange
or other disposition of capital assets (such term to include all fixed assets,
whether tangible or intangible, all inventory sold in conjunction with the
disposition of fixed assets, and all securities), (f) any write-up of any asset,
(g) any net gain from the collection of the proceeds of life insurance policies,
(h) any gain arising from the acquisition of any securities, or the
extinguishment, under GAAP, of any Indebtedness, of the Public Partnership or
any Subsidiary, (i) any net income or gain (but not any net loss) during such
period from any change in accounting, from any discontinued operations or the
disposition thereof, from any extraordinary events or from any prior period
adjustments, (j) any deferred credit representing the excess of equity in any
Subsidiary at the date of acquisition over the cost of the investment in such
Subsidiary, and (k) in the case of a successor to the Public Partnership by
consolidation or merger or as a transferee of its assets, any earnings of the
successor corporation prior to such consolidation, merger or transfer of assets.
"Parent Indenture" shall mean the Indenture, dated as of February 6, 2003,
among the Public Partnership, Star Gas Finance Company and Union Bank of
California, N.A., as Trustee, with respect to the Public Partnership's issuance
of 10 1/4% Senior Notes due 2013, as amended, modified, replaced, refinanced or
otherwise modified from time to time.
"Parent Material Adverse Effect" shall mean a material adverse effect on
(a) the business, operations, property, condition (financial or otherwise) or
prospects of the Public Partnership, the General Partner and the Borrower and
its Restricted Subsidiaries, taken as a whole, or (b) the
25
validity or enforceability of any of the Loan Documents or the rights or
remedies of the Administrative Agent, any Lender or the Trustee thereunder.
"Parity Debt" shall mean Indebtedness of the Borrower incurred in
accordance with Sections 6.01(a), 6.01(b), 6.01(e), 6.01(i) (but only to the
extent such Indebtedness under Section 6.01(i) is incurred to any Lender) or
6.01(g) and secured by the lien of the Collateral Documents in accordance with
Section 6.02(g) or 6.02(h). For purposes of clarification, "Parity Debt"
includes the 2000 Parity Notes and the 2001 Parity Notes.
"Parity Debt Agreements" shall have the meaning assigned to such term in
the Intercreditor Agreement.
"Participant" shall have the meaning set forth in Section 9.04(c)(i).
"Partners Security Agreement" shall mean the Amended and Restated Pledge
and Security Agreement among the Public Partnership, the General Partner and the
Trustee dated as of March 25, 1999, as amended, supplemented or otherwise
modified from time to time.
"Partnership Agreement" shall mean the Agreement of Limited Partnership of
the Borrower, as in effect on March 25, 1999, and as the same may from time to
time be amended, modified or supplemented in accordance with the terms thereof
and Section 6.12 hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor thereto.
"Perfection Certificate" shall mean a certificate from the Borrower
substantially in the form of Exhibit G.
"Permitted Exceptions" shall have the meaning set forth in Section 3.26.
"Permitted Insurers" shall mean insurers with ratings of A or better
according to Best's Insurance Reports (or a comparable rating agency for
insurance companies located outside of the United States and Canada) and with
assets of no less than $500,000,000.
"Person" shall mean any natural Person, corporation, business trust, joint
venture, association, company, limited liability company, partnership,
government (or any agency or political subdivision thereof) or other entity.
"Petro" shall mean Petroleum Heat and Power Co., Inc., a Minnesota
corporation.
"Petro Credit Agreement" shall mean the Second Amended and Restated Credit
Agreement, dated as of June 15, 2001, among Petroleum Heat and Power Co., Inc.,
the various financial institutions parties thereto from time to time, Bank of
America, N.A., as administrative agent, Fleet National Bank, as syndication
agent, and First Union National Bank, as documentation agent, as amended,
supplemented or otherwise modified from time to time.
"Petro Holdings" shall mean, collectively, Petro Holdings, Inc., a
Minnesota corporation, and its subsidiaries.
26
"Petro Holdings Dividends" shall mean the cash dividends or distributions
actually received by the Borrower or a Restricted Subsidiary from Petro Holdings
with respect to a calendar quarter during the 45 days immediately following any
such calendar quarter.
"Petro Reorganization Expenses" shall mean expenses relating to the
reorganization of Petro Holdings and its Subsidiaries, including but not limited
to severance pay, project consultants, project related travel expense, corporate
identity expense (e.g. repainting trucks), set-up and implementation fees of
outsourcing arrangements and salary of personnel to the extent relating to
services dedicated to the project and not related to operations in the ordinary
course of business.
"Plan" shall mean an "employee benefit plan" (as defined in Section 3(3) of
ERISA) subject to Title IV of ERISA which is or has been established or
maintained, or to which contributions are or have been made, by Star Gas
Corporation, in its former capacity as general partner of the Borrower, the
General Partner, the Borrower or any Related Person or to which Star Gas
Corporation, in its former capacity as general partner of the Borrower, the
General Partner, the Borrower or any Related Person is or has been obligated to
contribute, or an employee benefit plan as to which Star Gas Corporation, in its
former capacity as general partner of the Borrower, the General Partner, the
Borrower or any Related Person could be treated as a contributory sponsor under
Section 4069 or Section 4212 of ERISA if such plan were terminated.
"Preferred Stock", as applied to the Capital Stock of any Person, 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 Person.
"Prime Rate" shall mean the rate of interest per annum publicly announced
from time to time by the Administrative Agent as its Base Rate (which may not be
the lowest rate at which the Administrative Agent makes loans to borrowers) in
effect at its principal office in New York, New York. Each change in the Prime
Rate shall be effective on the date such change is adopted, without notice to
the Borrower.
"Pro Forma Balance Sheet" shall have the meaning assigned to such term in
Section 3.05(b).
"Public Partnership" shall mean Star Gas Partners, L.P., a Delaware limited
partnership.
"Public Partnership Consent and Agreement" shall mean the Public
Partnership Consent and Agreement dated as of the date hereof among the Public
Partnership and Trustee as to the consent and agreement of the Public
Partnership in connection with the Partners Security Agreement, in the form
attached hereto as Exhibit B-2, as amended, supplemented or otherwise modified
from time to time.
"Qualifying Involuntary Removal" shall mean any Involuntary Removal;
provided, that (a) the Person which shall become the general partner of the
Borrower and the Public Partnership shall be satisfactory to the Required
Lenders in their sole discretion or (b)(i) the ratio of (A) Total Funded Debt as
of the last day of the Reference Period with respect to the date of
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removal of the predecessor general partner to (B) Consolidated Cash Flow for
such Reference Period shall be no greater than 4.25 to 1.00, (ii) the ratio of
Consolidated Cash Flow to Maximum Consolidated Pro Forma Debt Service for such
Reference Period will be greater than 1.25 to 1.00 and (iii) within 60 days
after such Involuntary Removal, the successor general partner (which shall be a
corporation organized and existing under the laws of the United States of
America or any State thereof) shall expressly assume, by a written agreement
executed and delivered to the Trustee, in form satisfactory to the Trustee and
the Required Lenders, all the obligations of the "General Partner" under this
Agreement and the other Loan Documents.
"RCRA" shall mean the Federal Resource Conservation and Recovery Act, as
amended.
"Reference Period" with respect to any date of determination shall mean the
period of four consecutive fiscal quarters of the Borrower most recently
completed at least 45 days prior to such date, except that in connection with
any calculation required pursuant to Section 2.01(b) or 6.04, the "Reference
Period" with respect to any date of determination shall mean the period of four
consecutive fiscal quarters of the Borrower immediately preceding, or ending on,
such date of determination.
"Register" shall have the meaning assigned to such term in Section
9.04(b)(iv).
"Regulation T" shall mean Regulation T of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Related Person" shall mean any trade or business, whether or not
incorporated, which, as of any date of determination, would be treated as a
single employer together with the General Partner or the Borrower under Section
414 of the Code.
"Repayment Date" shall have the meaning assigned to such term in Section
2.11(b).
"Reportable Event" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the 30-day notice period
is waived under subsections .22, .23, .25, .27, or .28 of PBGC Reg. (S)4043.
"Required Lenders" shall mean, at any time, Lenders holding Loans and
participations in Letters of Credit, and having Commitments, representing in the
aggregate more than 50% of the sum at such time of (a) the aggregate principal
amount of the Loans outstanding, (b) the aggregate amount of the Letter of
Credit Exposure and (c) the aggregate amount of unused Commitments.
"Responsible Officer" shall mean the President, any Vice President, the
Chief Financial Officer, the Treasurer and the Secretary of the General Partner
and any other officer of the General Partner who is responsible for compliance
with or performance of any obligation under
28
this Agreement, the other Loan Documents or the other Operative Agreements and
any employee of the Borrower performing any of the above functions.
"Restricted Payment" shall mean, as to any Person, (a) any payment,
dividend or other distribution, direct or indirect, in respect of any
partnership interest (general or limited) or membership interest in, or on
account of any shares of any class of stock of, such Person, except a
distribution payable solely in additional partnership interests or membership
interests in, or shares of stock of, such Person, and (b) any payment, direct or
indirect, on account of the redemption, retirement, purchase or other
acquisition of any partnership interest or membership interest in, or any shares
of any class of stock of, such Person now or hereafter outstanding or of any
warrants, rights or options to acquire any such shares, except to the extent
that the consideration therefore consists of shares of stock of such Person.
"Restricted Subsidiary" shall mean any Wholly Owned Subsidiary of the
Borrower (excluding Petro Holdings and its direct and indirect subsidiaries) (a)
organized under the laws of the United States of America or any state thereof or
the District of Columbia, (b) none of the capital stock or ownership interests
of which is owned by Unrestricted Subsidiaries, (c) substantially all of the
operating assets of which are located in, and substantially all of the business
of which is conducted within the United States and which business consists of
the wholesale and retail sale, distribution and storage of propane gas and
related petroleum derivative products and/or the related retail sale of supplies
and equipment, including home appliances and (d) designated by the Borrower as a
Restricted Subsidiary in Schedule 1.01B or at a subsequent date; provided,
however, that (i) to the extent a newly formed or acquired Wholly Owned
Subsidiary satisfying the requirements of the foregoing clauses (a), (b) and (c)
is not declared either a Restricted Subsidiary or an Unrestricted Subsidiary
within 90 days of its formation or acquisition, such Wholly Owned Subsidiary
shall be deemed a Restricted Subsidiary and (ii) a Restricted Subsidiary may be
designated as an Unrestricted Subsidiary in accordance with the provisions of
Section 6.17.
"Revolving Credit Availability Period" shall mean the period from and
including the Closing Date to but excluding the earlier of (a) the Conversion
Date and (b) the termination of the Revolving Credit Commitments of the Lenders
in accordance with the terms hereof.
"Revolving Credit Borrowing" shall mean a Borrowing comprised of Revolving
Loans.
"Revolving Credit Commitment" shall mean, as to any Lender, the obligation
of such Lender, if any, to make Revolving Loans and participate in Letters of
Credit in the aggregate principal and/or face amount not to exceed the amount
set forth under the heading "Revolving Credit Commitment" opposite such Lender's
name on Schedule 1.01A hereto or in the Assignment and Acceptance pursuant to
which such Lender became a party hereto, as the same may be changed from time to
time pursuant to the terms hereof. The original amount of the Revolving Credit
Commitments of all the Lenders is $25,000,000. For clarification, upon the
Conversion Date, the term "Revolving Credit Commitment Percentage" shall refer
to each Lender's percentage of the Term Loans as determined in accordance with
Section 2.01(b).
"Revolving Credit Commitment Percentage" shall mean, for each Lender, the
percentage identified as its Revolving Credit Commitment Percentage on Schedule
1.01A hereto, as such
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percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 9.04 or as the same may be reduced from time to
time pursuant to Section 2.09. For clarification upon the Conversion Date, the
term "Revolving Credit Commitment Percentage" shall refer to each Lender's
percentage of the Term Loans as determined in accordance with Section 2.01(b).
"Revolving Loans" shall mean the revolving loans made by the Lenders to the
Borrower pursuant to Section 2.01(a). Each Revolving Loan shall be a Eurodollar
Revolving Loan or an ABR Revolving Loan.
"SEC" shall mean the Securities and Exchange Commission or any successor
thereto.
"Secured Parties" shall mean (a) the Lenders, (b) the Administrative Agent,
the Syndication Agent and the Documentation Agent, in their capacities as such
under each Loan Document, (c) each Agent or Lender with which the Borrower
enters into an Interest Rate Agreement, in its capacity as a party to such
agreement, (d) the beneficiaries of each indemnification obligation undertaken
by the Borrower or any of the Loan Parties under any Loan Document, (e) the
holders of any Parity Debt and (f) the successors and assigns of the foregoing.
"Security Agreements" shall mean the Partners Security Agreement and the
Borrower Security Agreement.
"Seller" shall mean, with respect to any Acquired Business Entity, the
Person from whom the Business acquires (whether by purchase, merger or
consolidation) such Acquired Business Entity.
"Single Employer Plan" shall mean any Plan which is not a Multiemployer
Plan.
"Solvent" shall have the meaning assigned to such term in Section 3.19.
"Star Gas LLC" shall mean Star Gas LLC, a Delaware limited liability
company and the successor general partner of the Borrower.
"Star/Petro" shall mean Star/Petro, Inc., a Minnesota corporation.
"Star/Petro Intercompany Subordinated Debt" shall mean the borrowings of
Star/Petro made from time to time pursuant to Section 6.01(d) from the Public
Partnership and evidenced by the Star/Petro Intercompany Subordinated Note,
which shall be fully subordinate to the prior payment in full of the principal
and premium, if any, and interest on the Notes.
"Star/Petro Intercompany Subordinated Note" shall mean the intercompany
note evidencing the Star/Petro Intercompany Subordinated Debt, which shall be
fully subordinate to the prior payment, in full, of the principal, interest and
premium, if any, on the Notes, with the terms as specified either (i) in the
form of Intercompany Note attached as Exhibit D hereto, but modified (as set
more fully forth in Section 6.04(c) hereof) to permit (x) principal and interest
payments to be made solely from proceeds of capital contributions or equity
investments indirectly made by the Public Partnership into Star/Petro and/or
dividends received from Petro
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Holdings and (y) interest payments in the event that the ratio of Consolidated
Cash Flow to Consolidated Interest Expense is greater than 2.0 to 1.0; provided
that, immediately prior to and after giving effect to such principal or interest
payments, no condition or event shall exist which constitutes an Event of
Default, or (ii) in such other form satisfactory to the Agents and the Lenders,
in the sole discretion of each.
"Statutory Reserves" shall mean the stated maximum rate (expressed as a
decimal) of all reserves (including any basic, supplemental, marginal or
emergency reserve or any reserve asset), if any, as from time to time in effect,
required by the Board and any other banking authority to which the
Administrative Agent is subject for any legal requirement to be maintained by
any Lender against (a) "Eurocurrency liabilities" as specified in Regulation D
of the Board, (b) any other category of liabilities that includes eurodollar
deposits by reference to which the LIBO Rate for any Eurodollar Borrowing is
determined, (c) the principal amount of or interest on any portion of any
Eurodollar Borrowing or (d) any other category of extensions of credit, or other
assets, that is based upon the LIBO Rate by a non-United States office of any of
the Lenders to United States residents, in each case without the benefits of
credits for prorations, exceptions or offsets that may be available to a Lender.
"Subsidiaries Consent and Agreement" shall mean the Subsidiaries Consent
and Agreement dated as of the date hereof among the Restricted Subsidiaries and
the Trustee as to the consent and agreement of the Restricted Subsidiaries in
connection with the Subsidiaries Guarantee Agreement and the Borrower Security
Agreement substantially in the form of Exhibit C, as amended, supplemented or
otherwise modified from time to time.
"Subsidiaries Guarantee Agreement" shall mean the Guarantee Agreement dated
as of December 13, 1995 among the Restricted Subsidiaries and the Trustee, as
amended, supplemented or otherwise modified from time to time.
"Subsidiary" shall mean any corporation, association, partnership, joint
venture or other business entity at least a majority (by number of votes) of the
stock of any class or classes (or equivalent interests) of which is at the time
owned by the Borrower or by one or more Subsidiaries of the Borrower or by the
Borrower and one or more Subsidiaries of the Borrower, if the holders of the
stock of such class or classes (or equivalent interests) (a) are ordinarily, in
the absence of contingencies, entitled to vote for the election of a majority of
the directors (or Persons performing similar functions) of such business entity,
even though the right so to vote has been suspended by the happening of such a
contingency, or (b) are at the time entitled, as such holders, to vote for the
election of the majority of the directors (or Persons performing similar
functions) of such business entity, whether or not the right so to vote exists
by reason of the happening of a contingency. Unless the context otherwise
requires, any reference to a Subsidiary shall mean a Subsidiary of the Borrower.
"Supplemental Agreement" shall mean an agreement between a Restricted
Subsidiary and the Trustee in the form attached hereto as Exhibit H, as amended,
supplemented or otherwise modified from time to time.
"Syndication Agent" has the meaning given to such term in the preamble
hereto.
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"Term Borrowing" shall mean a Borrowing comprised of Term Loans.
"Term Loans" shall have the meaning assigned to such term in Section
2.01(b). Each Term Loan shall be a Eurodollar Term Loan or an ABR Term Loan.
"Term-Out Effective Date" shall mean the date that is five Business Days
prior to the Conversion Date.
"Term-Out Option" shall have the meaning assigned to such term in Section
2.01(b).
"Title Company" shall mean such title insurance company as shall be
satisfactory to the Agents.
"Total Funded Debt" as of any date shall mean (a) all Funded Debt of the
Borrower and its Restricted Subsidiaries as of such date, including Indebtedness
in respect of the Mortgage Notes, this Facility and Facility B, but excluding
Indebtedness under Facility A, minus (b) Net Working Capital of the Borrower and
its Restricted Subsidiaries as of such date (or, if such Net Working Capital is
negative, plus the amount thereof).
"Tranche B Revolving Credit Commitments" shall have the meaning assigned to
such term in the Working Capital and Acquisition Facility Credit Agreement.
"Transferee" shall mean an Assignee or a Participant.
"Trustee" shall mean HSBC Bank USA (formerly known as Marine Midland Bank),
as Trustee under the Intercreditor Agreement, and its successors and assigns
thereunder.
"2000 Note Agreement" shall mean the Note Agreement dated as of March 30,
2000, among the Borrower, Star/Petro and the investors named therein, as amended
by the First Amendment to Note Agreement dated as of September 30, 2000, the
Second Amendment to Note Agreement dated as of October 25, 2002, and as further
amended, supplemented or otherwise modified from time to time in accordance with
the Intercreditor Agreement.
"2000 Parity Notes" shall mean the $12,500,000 8.67% First Mortgage Notes,
Series A, due March 30, 2012 and the $15,000,000 8.72% First Mortgage Notes,
Series B, due March 30, 2015 issued by the Borrower and Star/Petro pursuant to
the 2000 Note Agreement.
"2001 Note Agreement" shall mean the Note Agreement dated as of March 15,
2001, among the Borrower, Star/Petro and the investors named therein, as amended
by the First Amendment to Note Agreement dated as of October 25, 2002, and as
further amended, supplemented or otherwise modified from time to time in
accordance with the Intercreditor Agreement.
"2001 Parity Notes" shall mean the $7,500,000 7.62% First Mortgage Notes,
Series A, due April 1, 2008 and the $22,000,000 7.95% First Mortgage Notes,
Series B, due April 1, 2001 issued by the Borrower and Star/Petro pursuant to
the 2001 Note Agreement.
"Type" shall have the meaning assigned to such term in Section 1.03.
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"Unrestricted Subsidiary" shall mean any Wholly Owned Subsidiary other than
a Restricted Subsidiary which is organized under the laws of the United States
of America or any state thereof or the District of Columbia and substantially
all of the operating assets of which are located in, and substantially all of
the business of which is conducted within the United States and which business
consists of the wholesale and retail sale, distribution and storage of propane
gas and related petroleum derivative products and the related retail sale of
supplies and equipment, including home appliances; provided, that at all times
Petro Holdings and its subsidiaries shall be deemed Unrestricted Subsidiaries.
"Wholly Owned", as applied to any Subsidiary, shall mean a Subsidiary all
the outstanding Capital Stock (other than directors' qualifying shares, if
required by law) of which is at the time owned by the Borrower or by one or more
Wholly Owned Subsidiaries or by the Borrower and one or more Wholly Owned
Subsidiaries.
"Working Capital and Acquisition Facility Credit Agreement" shall mean that
certain Amended and Restated Credit Agreement dated as of the date hereof among
the Borrower, the lenders party thereto from time to time and the agents named
therein, as may be amended, supplemented, restated, replaced, refinanced or
otherwise modified from time to time; provided, that in the event such Credit
Agreement expires or is terminated the term "Working Capital and Acquisition
Facility Credit Agreement" as used herein shall mean such Credit Agreement in
the form in which it was in effect immediately prior to such expiration or
termination, and provided, further, that nothing in the immediately preceding
proviso shall be construed as an agreement or permission that the Working
Capital and Acquisition Facility Credit Agreement can expire or be terminated
prior to this Agreement.
Section 1.02 Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed references
to Articles and Sections of, and Exhibits and Schedules to, this Agreement
unless the context shall otherwise require. Unless otherwise expressly provided
herein, all terms of an accounting or financial nature used herein shall be
interpreted in accordance with GAAP, as in effect from time to time; provided,
however, that, for purposes of (a) making any calculation contemplated by the
provisions of Article II and (b) determining compliance with any covenant set
forth in Article VI, such terms shall be construed in accordance with GAAP as in
effect on the date of this Agreement applied on a basis consistent with the
application used in preparing the Audited Financial Statements. Unless otherwise
expressly required herein, all calculations with respect to the Borrower and the
Restricted Subsidiaries shall be made exclusive of any assets, liabilities,
income or losses of any Unrestricted Subsidiary. As used herein, the "knowledge"
of the Borrower includes the knowledge of each and every Loan Party. Unless
otherwise expressly provided herein, the word "day" means a calendar day.
Section 1.03 Types of Borrowings. The term "Borrowing" refers to the
portion of the aggregate principal amount of Loans of any Class outstanding
hereunder which bears interest of a specific Type and for a specific Interest
Period pursuant to a notice of Borrowing pursuant to Section 2.03. Each Lender's
ratable share of each Borrowing is referred to herein as a separate
33
"Loan". Borrowings, Loans, Letters of Credit and certain related terms hereunder
may be distinguished by "Class" and by "Type". The "Class" of a Loan or of a
Commitment to make such a Loan or of a Borrowing comprising such Loans or of a
Letter of Credit refers to whether such Loan is a Revolving Loan or a Term Loan,
each of which constitutes a Class. The "Type" of a Loan refers to whether such
Loan is an ABR Loan or a Eurodollar Loan. Borrowings and Loans may (but need
not) be identified both by Class and Type (e.g., a "Eurodollar Revolving Loan"
is a Loan which is both a Revolving Loan and a Eurodollar Loan).
ARTICLE II
THE CREDITS
Section 2.01 Commitment to Make Loans. (a) Subject to the terms and
conditions and relying upon the representations and warranties herein set forth,
each Lender agrees, severally and not jointly, to make Revolving Loans to the
Borrower, at any time and from time to time during the Revolving Credit
Availability Period, in an aggregate principal amount at any time outstanding
not to exceed the excess, if any, of (i) such Lender's Revolving Credit
Commitment over (ii) its Letter of Credit Exposure at such time, provided that,
in no event shall the Lenders be required to make any Revolving Loans if, after
giving effect to such Loans, the sum of (A) the aggregate principal amount of
outstanding Revolving Loans on any date plus (ii) the Letter of Credit Exposure
on such date exceed the aggregate Revolving Credit Commitments of all the
Lenders. On the Closing Date, subject to the satisfaction of the conditions
precedent set forth in Sections 4.01 and 4.02, the Lenders shall make Revolving
Loans to the Borrower in a minimum amount of $2,000,000. The Revolving Loans
made on the Closing Date shall initially be ABR Revolving Loans.
(b) At any time during the period beginning 60 days prior to the Conversion
Date and ending on the date that is 30 Business Days prior to the Conversion
Date, the Borrower in its sole discretion may elect (the "Term-Out Option") by
written notice to the Administrative Agent, (i) to convert all or a portion of
the Revolving Loans outstanding on the Conversion Date into term loans (each
such loan, a "Term Loan") on the Conversion Date and (ii) subject to the terms
of Section 2.21(a), to request an extension of the expiration of any Letter of
Credit outstanding on the Term-Out Effective Date to a date no later than the
date which is five Business Days prior to the Maturity Date. The Term-Out Option
shall become effective on the Term-Out Effective Date upon the receipt by the
Administrative Agent of an Officers' Certificate, dated as of the Term-Out
Effective Date, certifying as of such date, that:
(i) the ratio of Parent Consolidated Funded Debt to Parent
Consolidated Cash Flow as of the Term-Out Effective Date shall be no
greater than 5.00 to 1.00 (together with supporting calculations and pro
forma financial statements demonstrating compliance with such condition to
the satisfaction of the Agents);
(ii) neither the Borrower nor any of its Subsidiaries shall have
made any Restricted Payment since the date of the most recent Borrowing or
issuance of Letter of Credit if, on the date of such Restricted Payment,
the ratio of (x) Parent Consolidated Cash Flow to (y) Parent Consolidated
Interest Expense plus the aggregate amount of Restricted Payments made by
the Public Partnership to its equityholders during the
34
Reference Period with respect to such date, was less than 0.75 to 1.00
(together with supporting calculations and pro forma financial statements
demonstrating compliance with such condition to the satisfaction of the
Agents);
(iii) on the Term-Out Effective Date, the Public Partnership and
its Subsidiaries shall have in effect weather insurance coverage of at
least $12,500,000 on a consolidated basis;
(iv) the representations and warranties set forth in Article III
hereof and the representations and warranties of the Borrower and the other
Loan Parties set forth in the other Loan Documents shall be true and
correct in all material respects on and as of the Term-Out Effective Date
with the same effect as though made on and as of such date, except to the
extent such representations and warranties expressly relate to an earlier
date (in which case such representations and warranties shall be true and
correct in all material respects on and as of such earlier date);
(v) no Default or Event of Default shall have occurred and be
continuing as of the Term-Out Effective Date; and
(vi) the Tranche B Term-Out Effective Date (as defined in the
Working Capital and Acquisition Facility Credit Agreement) shall have
become, or will concurrently become, effective pursuant to the terms of
Section 2.01(c) of the Working Capital and Acquisition Facility Credit
Agreement.
(c) The Borrower may borrow, pay or prepay and reborrow Revolving Loans
during the Revolving Credit Availability Period, within the limits set forth in
Section 2.01(a) and upon the other terms and subject to the other conditions and
limitations set forth herein, provided, that subject to the terms and conditions
set forth herein, at all times, Indebtedness outstanding under the Facility
shall not be less than $2,000,000 until the earlier of (x) the date when the
Facility shall have been terminated in full through acceleration or otherwise or
(y) the date when the Facilities Obligations with respect to Facility B shall
have been paid in full in cash and the Tranche B Revolving Credit Commitments
shall have been fully terminated. Amounts paid or prepaid in respect of Term
Loans may not be reborrowed.
Section 2.02 Loans. (a) Each Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
respective Revolving Credit Commitments; provided, however, that the failure of
any Lender to make any Loan shall not in itself relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Lender shall
be responsible for the failure of any other Lender to make any Loan required to
be made by such other Lender). The Loans comprising each Borrowing shall be in
an aggregate principal amount which is (i) an integral multiple of $100,000 and
not less than $500,000 in the case of Eurodollar Loans and (ii) an integral
multiple of $100,000 in the case of ABR Loans (or, in the case of ABR Loans, an
aggregate principal amount equal to the remaining balance of the Revolving
Credit Commitments).
(b) A particular Borrowing of any Class shall consist solely of ABR Loans
or Eurodollar Loans of such Class, as the Borrower may request pursuant to
Section 2.03. Each
35
Lender may at its option fulfill its Commitment with respect to any Eurodollar
Loan by causing any domestic or foreign branch or Affiliate of such Lender to
make such Loan; provided, that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement and the applicable Note. Borrowings of more than one Type and
Eurodollar Loans bearing interest for more than one specific Interest Period may
be outstanding at the same time; provided, however, that the Borrower shall not
be entitled to request any Borrowing which, if made, would result in an
aggregate of more than five separate Eurodollar Loans of any Lender being
outstanding hereunder at any one time. For purposes of the foregoing, Loans
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Loans.
(c) Each Lender shall make a Loan in the amount of its pro rata portion, as
determined under Section 2.16, of each Borrowing hereunder on the proposed date
thereof by wire transfer of immediately available funds to the Administrative
Agent at the Funding Office, not later than 1:00 p.m., New York City time, and
the Administrative Agent shall by 3:00 p.m., New York City time, credit the
amounts so received to the general deposit account of the Borrower with the
Administrative Agent or, if a Borrowing shall not occur on such date because any
condition precedent herein specified shall not have been met, return the amounts
so received to the respective Lenders.
(d) If the Administrative Agent has not received from the Borrower the
payment required by Section 2.21(f) by 12:30 p.m., New York City time, on the
date on which the Issuing Bank has notified the Borrower and the Administrative
Agent that payment of a draft presented under any Letter of Credit of any Class
will be made, as provided in Section 2.21(f), the Administrative Agent will
promptly notify the Issuing Bank and each Lender of the Letter of Credit
Disbursement of such Class and, in the case of each Lender, its pro rata share
(based on such Lender's Revolving Credit Commitment Percentage of such Class) of
such Letter of Credit Disbursement. Not later than 2:00 p.m., New York City
time, on such date, each Lender shall make available its pro rata share, as so
determined, of such Letter of Credit Disbursement, in Federal or other funds
immediately available, to the Administrative Agent at the Funding Office, and
the Administrative Agent will promptly make such funds available to the Issuing
Bank. The Administrative Agent will promptly remit to each Lender that shall
have made such funds available its pro rata share, as so determined, of any
amounts subsequently received by the Administrative Agent from the Borrower in
respect of such Letter of Credit Disbursement.
(e) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing, or prior to the time of any required
payment by such Lender in respect of a Letter of Credit Disbursement, that such
Lender will not make available to the Administrative Agent such Lender's pro
rata portion of such Borrowing or payment, the Administrative Agent may assume
that such Lender has made such portion available to the Administrative Agent on
the date of such Borrowing or payment in accordance with Section 2.02(c) or (d),
as applicable, and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower or Issuing Bank, as applicable, on
such date a corresponding amount. If and to the extent that such Lender shall
not have made such portion available to the Administrative Agent, such Lender
and the Borrower severally agree to repay to the Administrative Agent forthwith
on demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower or the Issuing
36
Bank (or, if the Administrative Agent and the Issuing Bank are the same Person,
from the date of such payment in respect of a Letter of Credit Disbursement), as
applicable, until the date such amount is repaid to the Administrative Agent at,
(i) in the case of the Borrower, the interest rate applicable thereto pursuant
to Section 2.06 or 2.21(f), as applicable and (ii) in the case of such Lender,
the Federal Funds Effective Rate. If such Lender shall repay to the
Administrative Agent such corresponding amount in respect of a Borrowing, such
amount shall constitute such Lender's Loan as part of such Borrowing for
purposes of this Agreement.
(f) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Revolving Credit Borrowing if the Interest
Period requested with respect thereto would end after the Conversion Date.
Further, and notwithstanding any other provision of this Agreement to the
contrary, the Borrower shall not be entitled to request, nor shall any Lender be
required to make, any Eurodollar Loan during the existence of a Default or an
Event of Default unless the Required Lenders otherwise agree.
Section 2.03 Notice of Borrowings. The Borrower shall give the
Administrative Agent telephone notice (promptly confirmed in writing or by
telecopy in the form of Exhibit I-1 hereto) (a) in the case of a Eurodollar
Borrowing, not later than 11:00 a.m., New York City time, three Business Days
before a proposed borrowing and (b) in the case of an ABR Borrowing, not later
than 11:00 a.m., New York City time, on the Business Day of the proposed
borrowing. Such notice shall be irrevocable and shall in each case refer to this
Agreement and specify (i) the applicable Class and Type of such Borrowing; (ii)
the date of such Borrowing (which shall be a Business Day) and the amount
thereof; and (iii) if such Borrowing is to be a Eurodollar Borrowing, the
Interest Period with respect thereto. If no election as to the Type of Borrowing
is specified in any such notice, then the requested Borrowing shall be an ABR
Borrowing. If no Interest Period with respect to any Eurodollar Borrowing is
specified in any such notice, then the Borrower shall be deemed to have selected
an Interest Period of one month's duration. The Administrative Agent shall
promptly advise the Lenders of any notice given pursuant to this Section 2.03
and of each Lender's pro rata portion of the requested Borrowing.
Section 2.04 Notes; Repayment of Loans. The Loans made by each Lender shall
be evidenced by a Note, duly executed and delivered on behalf of the Borrower,
dated the Closing Date, in substantially the form attached hereto as Exhibit A
with the blanks appropriately filled, payable to the order of such Lender in a
principal amount equal to such Lender's Revolving Credit Commitment. The
outstanding principal balance of each Loan, as evidenced by the applicable Note,
shall be payable (a) subject to Section 2.01(b), in the case of a Revolving
Loan, on the Conversion Date and (b) in the case of a Term Loan, as provided in
Section 2.11. Each Note shall bear interest from the date of the first Borrowing
hereunder on the outstanding principal balance thereof as set forth in Section
2.06. Each Lender shall, and is hereby authorized by the Borrower to, endorse on
the schedule attached to each Note delivered to such Lender (or on a
continuation of such schedule attached to such Note and made a part thereof), or
otherwise to record in such Lender's internal records, an appropriate notation
evidencing the date and amount of each applicable Loan from such Lender, each
payment and prepayment of principal of any such Loan, each payment of interest
on any such Loan and the other information provided for on such schedule;
provided, however, that the failure of any Lender to make such a notation or any
error therein shall not affect the obligation of the Borrower to repay the Loans
made by such Lender in accordance with the terms of this Agreement and the
applicable Notes.
37
Section 2.05 Fees.
The Borrower shall pay to the Administrative Agent for the account of each
Lender, on the last day of March, June, September and December in each year, and
on the last day of the Revolving Credit Availability Period, a commitment fee (a
"Commitment Fee") on the average daily unused amount of the Revolving Credit
Commitment of such Lender during the preceding calendar quarter (or shorter
period commencing with the date of this Agreement or ending with the last day of
the Revolving Credit Availability Period), equal to (i) during any Level I
Pricing Period, 0.25% per annum, (ii) during any Level II Pricing Period, 0.375%
per annum and (iii) at all other times, 0.50% per annum. The "unused amount" of
the Revolving Credit Commitment of a Lender on any date means the amount of such
Lender's Revolving Credit Commitment on such date, less the sum of its
outstanding Revolving Loans on such date and its Letter of Credit Exposure on
such date. All Commitment Fees shall be computed on the basis of the actual
number of days elapsed in a year of 360 days. The Commitment Fee due to each
Lender shall commence to accrue from the date of this Agreement and shall cease
to accrue on the last day of the Revolving Credit Availability Period.
(a) The Borrower agrees to pay to the Administrative Agent, for its own
account, the fees set forth in the Letter Agreement dated August 19, 2003 (the
"Letter Agreement"), among the Administrative Agent, X.X. Xxxxxx Securities Inc.
and the Borrower, in the amounts and on the dates provided in the Letter
Agreement. Such fees shall be in addition to reimbursement of the Agents'
reasonable out- of-pocket expenses.
(b) All Fees shall be paid on the dates due, in immediately available
funds. Once paid, none of the Fees shall be refundable under any circumstances.
Section 2.06 Interest on Loans.
(a) Subject to Section 2.07, each Revolving Loan or Term Loan comprising an
ABR Borrowing shall bear interest for each day from the date such Loan is made
until it becomes due (computed on the basis of the actual number of days elapsed
over a year of 360 days, except that, with respect to ABR Loans the rate of
interest on which is calculated on the basis of the Prime Rate, the interest
thereon shall be calculated on the basis of a 365- (or 366-, as the case may be)
day year for the actual days elapsed) at a rate per annum equal to the Alternate
Base Rate, plus the Applicable ABR Margin.
(b) Subject to Section 2.07, each Revolving Loan or Term Loan comprising a
Eurodollar Borrowing shall bear interest for each day from the date such Loan is
made until it becomes due (computed on the basis of the actual number of days
elapsed over a year of 360 days) at a rate per annum equal to the Adjusted LIBO
Rate for the Interest Period in effect for such Borrowing, plus the Applicable
Eurodollar Margin.
(c) Any change in any Applicable Margin required hereunder shall be deemed
to occur five Business Days after the date the Borrower delivers its financial
statements required by Section 5.02(a) or (b), as the case may be, in respect of
its most recent fiscal quarter and the certificate required by Section 5.02(c);
provided, that if the Borrower fails to deliver such financial statements and
certificate on or before the date such statements and certificate are
38
required to be delivered pursuant to Section 5.02(a) or (b), as the case may be,
and Section 5.02(c), the Applicable Margin for the period from such required
date until the date such statements and certificate are actually delivered shall
be calculated as if a Level III Pricing Period were in effect, and after the
date such statements and certificate are actually delivered the Applicable
Margin shall be determined as otherwise provided for herein.
(d) Interest on each Loan shall be payable on the Interest Payment Dates
applicable to such Loan, except as otherwise provided in this Agreement. The
applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest Period or
day within an Interest Period, as the case may be, shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.
Section 2.07 Default Interest. If the Borrower shall default in the payment
of the principal of or interest on any Loan or any other amount becoming due
under this Agreement or any other Loan Document, by acceleration or otherwise,
interest shall accrue, to the extent permitted by law, on such defaulted amount
during the period from (and including) the date of such default to (but not
including) the date of actual payment (after as well as before judgment) at (a)
in the case of principal or interest on any Loan, the rate per annum (computed
on the basis of the actual number of days elapsed over a year of 360 days) that
would otherwise be applicable to such Loan pursuant to Section 2.06 as if a
Level III Pricing Period were in effect, plus 2.00% or (b) in the case of any
other amount, a rate per annum (computed on the basis of the actual number of
days elapsed over a year of 360 days) equal to the rate applicable to ABR
Revolving Loans pursuant to Section 2.06 as if a Level III Pricing Period were
in effect, plus 2.00%. The Borrower shall pay all such accrued but unpaid
interest from time to time upon demand.
Section 2.08 Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined that dollar deposits in the principal amounts of the Loans comprising
such Borrowing are not generally available in the applicable interbank market,
or that the rates at which such dollar deposits are being offered will not
adequately and fairly reflect the cost to any Lender of making or maintaining
its Eurodollar Loan during such Interest Period, or that reasonable means do not
exist for ascertaining the Adjusted LIBO Rate, the Administrative Agent shall,
as soon as practicable thereafter, give written or telecopy notice of such
determination to the Borrower and the Lenders. In the event of any such
determination, any request by the Borrower for a Eurodollar Borrowing pursuant
to Section 2.03 or 2.10 shall, until the Administrative Agent shall have advised
the Borrower and the Lenders that the circumstances giving rise to such notice
no longer exist, be deemed to be a request for an ABR Borrowing. Each
determination by the Administrative Agent hereunder shall be conclusive absent
manifest error.
Section 2.09 Termination and Reduction of Commitments. (a) The Revolving
Credit Commitments shall be automatically terminated at 5:00 p.m., New York City
time, on the Conversion Date.
(b) Upon at least three Business Days' prior irrevocable written or
telecopy notice to the Administrative Agent, the Borrower may at any time in
whole permanently terminate, or from time to time in part permanently reduce,
the Revolving Credit Commitments; provided,
39
however, that (i) the Borrower simultaneously reduce Facility B by a pro rata
amount, provided that, the Borrower may, at its option, elect the aggregate
amount of any such reduction to be applied, first, to this Facility, and,
second, to Facility B, (ii) in the event the Borrower permanently terminates or
reduces Facility B in whole, the Borrower shall simultaneously terminate or
reduce, as the case may be, this Facility, (iii) each partial reduction of the
Revolving Credit Commitments and Facility B shall be in a minimum collective
aggregate principal amount which is an integral multiple of $100,000 and not
less than $500,000 and (iv) no such termination or reduction of Revolving Credit
Commitments shall be permitted if, (1) after giving effect thereto and to any
prepayments of the Revolving Loans made on the effective date thereof,
Indebtedness outstanding under the Facility shall be less than $2,000,000 unless
the Facility Obligations are simultaneously paid in full in cash and the
Commitments under this Facility are fully terminated or (2) the sum of the
aggregate outstanding principal amount of Revolving Loans plus the Letter of
Credit Exposure would exceed the Revolving Credit Commitments.
(c) In the event, and on each occasion, that the Borrower is required to
prepay or repay the Revolving Loans and/or to provide cash collateral for the
Letters of Credit as provided in Section 2.11(c) or (d) and Section 2.11(f),
then on the date of such required action, the Revolving Credit Commitments shall
be automatically and permanently reduced by an amount equal to the sum of such
required payment and cash collateral; provided, however that (i) the Borrower
simultaneously reduce Facility B by a pro rata portion of the amount of such
prepayment or reduction determined pursuant to the allocation method set forth
in Section 4(d)(ii) of the Intercreditor Agreement, (ii) in the event the
Borrower prepays the amount of Facility B, in whole, the Borrower shall
simultaneously prepay this Facility in its entirety and (iii) in no event shall
any such reduction or prepayment reduce either (x) the outstanding Indebtedness
under this Facility to an amount less than $2,000,000 or (y) the outstanding
Indebtedness under Facility B to an amount less than $500,000, in each case,
unless the Facility Obligations are simultaneously paid in full in cash and the
Commitments are terminated in full. In addition, the Revolving Credit
Commitments shall be automatically and permanently reduced by the amount of
Excess Proceeds referred to in paragraph (c) or (d) of Section 2.11 which is
allocable to reduce such Commitments as provided in Section 2.11(f). For
purposes of applying the requirements of this Section 2.09(c), the amount of any
Excess Proceeds referred to in paragraph (c) or (d) of Section 2.11 which is
allocable to the Facility Obligations shall be calculated as if the definition
set forth in the last sentence of Section 2.11(c) included, in addition, the
maximum aggregate amount of the unused Revolving Credit Commitments.
(d) Each reduction in the Revolving Credit Commitments in accordance with
this Article II shall be made ratably among the Lenders in accordance with their
respective Revolving Credit Commitments. The Borrower shall pay to the
Administrative Agent for the account of the Lenders, on the date of each
termination or reduction of the Revolving Credit Commitments of any Class, the
Commitment Fees on the amount of the Revolving Credit Commitments of such Class
so terminated or reduced accrued to the date of such termination or reduction.
Section 2.10 Conversion and Continuation of Borrowings. The Borrower shall
have the right at any time upon prior irrevocable notice to the Administrative
Agent (a) not later than 11:00 a.m., New York City time, on the Business Day of
conversion, to convert any Eurodollar Borrowing into an ABR Borrowing, (b) not
later than 11:00 a.m., New York City time, three Business Days prior to
conversion or continuation, to convert any ABR Borrowing into a
40
Eurodollar Borrowing or to continue any Eurodollar Borrowing as a Eurodollar
Borrowing for an additional Interest Period and (c) not later than 11:00 a.m.,
New York City time, three Business Days prior to conversion, to convert the
Interest Period with respect to any Eurodollar Borrowing to another permissible
Interest Period, subject in each case to the following:
(i) each conversion or continuation shall be made pro rata among
the Lenders in accordance with the respective principal amounts of the
Loans comprising the converted or continued Borrowing;
(ii) the aggregate principal amount of such Borrowing converted
into or continued as (A) a Eurodollar Borrowing, shall be an integral
multiple of $100,000 and not less than $500,000 or (B) an ABR Borrowing,
shall be the lesser of (I) the remaining outstanding principal amount of
such Borrowing and (II) an integral multiple of $100,000;
(iii) each conversion or continuation shall be effected by each
Lender by applying the proceeds of the new Loan of such Lender resulting
from such conversion or continuation to the Loan (or portion thereof) of
such Lender being converted or continued; accrued interest on a Eurodollar
Loan (or portion thereof) being converted or continued shall be paid by the
Borrower at the time of conversion;
(iv) if any Eurodollar Borrowing is converted or continued at a
time other than the end of the Interest Period applicable thereto, the
Borrower shall pay, upon demand, any amounts due to the Lenders pursuant to
Section 2.15;
(v) any portion of a Borrowing maturing or required to be repaid
in less than one month may not be converted into or continued as a
Eurodollar Borrowing;
(vi) unless the Required Lenders otherwise agree, during the
existence of a Default or an Event of Default, the Borrower shall not be
entitled to elect to have any Borrowing converted into or continued as a
Eurodollar Borrowing;
(vii) any portion of a Borrowing which cannot be converted into
or continued as a Eurodollar Borrowing by reason of clause (v) or (vi)
above shall be automatically converted at the end of the Interest Period in
effect for such Borrowing into an ABR Borrowing; and
(viii) no Interest Period may be selected for any Eurodollar
Borrowing that would end later than a Repayment Date occurring on or after
the first day of such Interest Period if, after giving effect to such
selection, the aggregate outstanding amount of (A) Eurodollar Borrowings
with Interest Periods ending on or prior to such Repayment Date and (B) the
ABR Borrowings would not be at least equal to the principal amount of
Borrowings to be paid on such Repayment Date.
Each notice pursuant to this Section 2.10 shall be irrevocable and shall
refer to this Agreement and specify (I) the principal amount, the Type and, in
the case of a Eurodollar Borrowing, the Interest Period of the Borrowing that
the Borrower requests be converted or continued, (II) whether such Borrowing is
to be converted to or continued as a Eurodollar
41
Borrowing or an ABR Borrowing, (III) if such notice requests a conversion, the
date of such conversion (which shall be a Business Day) and (IV) if such
Borrowing is to be converted to or continued as a Eurodollar Borrowing, the
Interest Period with respect thereto. If no Interest Period is specified in any
such notice with respect to any conversion to or continuation as a Eurodollar
Borrowing, the Borrower shall be deemed to have selected an Interest Period of
one month's duration. The Administrative Agent shall advise the other Lenders of
any notice given pursuant to this Section 2.10 and of each Lender's pro rata
portion of any converted or continued Borrowing. If the Borrower shall not have
given notice in accordance with this Section 2.10 to continue any Borrowing into
a subsequent Interest Period (and shall not otherwise have given notice in
accordance with this Section 2.10 to convert such Borrowing), such Borrowing
shall, at the end of the Interest Period applicable thereto (unless repaid
pursuant to the terms hereof), automatically be continued into a new Interest
Period as an ABR Borrowing.
Section 2.11 Mandatory Repayments and Prepayments.
(a) On the Conversion Date, all Revolving Credit Borrowings not converted
into Term Loans pursuant to Section 2.01(b) shall be due and payable to the
extent not previously paid.
(b) Subject to adjustment as provided in Section 2.11(f) and Section
2.12(b), the Borrower shall repay the Term Loans and reduce the Letter of Credit
Exposure in quarterly installments, commencing on December 31, 2006, and
continuing on the last day of every third calendar month thereafter through
September 30, 2008 (the due date of each such installment being called a
"Repayment Date"); provided, that notwithstanding anything to the contrary
contained in this Agreement, in no event shall the aggregate amount of
outstanding Indebtedness under this Facility be less than $2,000,000 at any time
unless the Facility Obligations are simultaneously paid in full in cash and the
Commitments under this Facility are terminated in full. The amount of any such
installment payable on a Repayment Date shall, subject to the proviso in the
preceding sentence, be the amount, if any, necessary (after giving effect to any
reductions on account of the expiration after the Conversion Date of any Letters
of Credit) to reduce the sum of (i) the aggregate principal amount of the Term
Loans outstanding immediately after the Conversion Date and (ii) the Letter of
Credit Exposure outstanding immediately after the Conversion Date by an
aggregate percentage of such sum equal to the percentage set forth opposite such
Repayment Date below:
December 31, 2006 12.5%
March 31, 2007 25.0%
June 30, 2007 37.5%
September 30, 2007 50.0%
December 31, 2007 62.5%
March 31, 2008 75.0%
June 30, 2008 87.5%
September 30, 2008 100.0%
On the Repayment Date that is September 30, 2008, the Borrower shall repay the
remaining principal and interest owing on all outstanding Term Loans and fully
cash collateralize any then existing Letter of Credit Exposure. All payments
under this paragraph (c) shall be applied
42
(I) first, to repay any outstanding Term Loans and (II) second, after the Term
Loans have been paid in full, to reduce the Letter of Credit Exposure. Any such
payments so applied to reduce the Letter of Credit Exposure shall be deposited
with the Administrative Agent pursuant to the Cash Collateral Agreement as
provided in Section 2.21(j).
(c) If at any time the Borrower or any of the Restricted Subsidiaries
disposes of property or such property shall be damaged, destroyed or taken in
eminent domain or there shall be title insurance proceeds with respect to such
property, in any such case, with the result that there are Excess Proceeds, and
the Borrower does not apply such Excess Proceeds in the manner described in
Section 6.07(c)(iii)(B)(I), the Borrower shall prepay, upon notice as provided
in paragraph (e) of this Section 2.11 (which notice shall be given not later
than 180 days after the date of such sale of property), a principal amount of
the outstanding Facility Obligations equal to the amount of such remaining
Excess Proceeds allocable to the Facility Obligations, determined by allocating
such remaining Excess Proceeds pro rata among the Lenders, the lenders under the
Working Capital and Acquisition Facility Credit Agreement and the holders of
other Parity Debt, if any, outstanding on the date such prepayment is to be
made, according to the aggregate then unpaid principal amounts of the Facility
Obligations, the Facilities Obligations and other Parity Debt (and the Make
Whole Amount on the principal amount of the Mortgage Notes to be prepaid) in
accordance with the allocation method set forth in Section 4(d)(ii) of the
Intercreditor Agreement. For purposes of this Section 2.11, the "aggregate then
unpaid principal amount of the Facilities Obligations" shall equal the sum of
(A) the aggregate principal amount of the outstanding Loans (as defined in the
Working Capital and Acquisition Facility Credit Agreement), (B) the Letter of
Credit Exposure (as defined in the Working Capital and Acquisition Facility
Credit Agreement), and (C) the maximum aggregate amount of the unused Tranche A
Revolving Credit Commitments (as defined in the Working Capital and Acquisition
Facility Credit Agreement).
(d) In the event that damage, destruction or a taking shall occur in
respect of all or a portion of the properties subject to any of the Collateral
Documents, or there shall be proceeds under title insurance policies with
respect to any real property, all Net Insurance Proceeds (as defined in the
Mortgage), self-insurance amounts, Net Awards (as defined in the Mortgage) or
title insurance proceeds which, as of any date, shall not theretofore have been
applied to the cost of Restoration (as defined in the Mortgage) shall be deemed
to be proceeds of property disposed of voluntarily, shall be subject to the
provisions of Section 6.07(c) and, if subdivision (iii)(B)(I) of Section 6.07(c)
is applicable thereto, shall be subject to the prepayment provisions of
paragraph (c) of this Section 2.11; provided, that, if any such event or
circumstances (individually or together with all other related events and
circumstances) shall result in proceeds of more than $25,000,000 in the
aggregate, the Borrower shall not apply such proceeds to replacement or other
assets or undertake any Restoration without the prior written consent of the
Required Lenders.
(e) The Borrower will give the Administrative Agent irrevocable written
notice of each prepayment under paragraph (c) or (d) of this Section 2.11 not
less than 10 days and not more than 30 days prior to the date fixed for such
prepayment, in each case specifying such prepayment date, the aggregate
principal amount of the Facility Obligations to be prepaid, the aggregate
principal amount of the Facilities Obligations to be prepaid and the principal
amount of each issue of Parity Debt to be prepaid and the paragraph under which
such prepayment is to
43
be made. Each Lender shall receive, on the Business Day immediately preceding
the date scheduled for any such prepayment, a certificate of a Financial Officer
of the Borrower certifying that the applicable conditions of this Section 2.11
have been fulfilled and specifying the particulars of such fulfillment. Such
certificate shall set forth the principal amount of the Facility Obligations
being prepaid and specify how such amount was determined, and certify that such
amount has been computed in accordance with this Section 2.11.
(f) All mandatory prepayments of the Facility Obligations under paragraphs
(c) and (d) of this Section 2.11 shall be applied (i) first, to pay or prepay
any outstanding Revolving Loans or Term Loans and, to the extent that the
remaining amount of such prepayment is greater than the aggregate principal
amount of outstanding Loans, to reduce the Letter of Credit Exposure and (ii)
second, to permanently reduce any remaining unused Commitments as contemplated
by Section 2.09(c), provided that, in the event that any such prepayment would
reduce the outstanding Indebtedness under this Facility to an amount less than
$2,000,000 prior to the date that the Facility Obligations have been paid in
full in cash and the Commitments have been fully terminated, an amount equal to
the excess of (x) the amount of such prepayment minus (y) the sum of the
aggregate principal amount of outstanding Loans on the date of such prepayment
or reduction plus the Letter of Credit Exposure on such date shall be deposited
with the Administrative Agent pursuant to the Cash Collateral Agreement as
provided in Section 2.21(j). All such mandatory prepayments so applied on or
after the Conversion Date shall be applied to reduce the amount of scheduled
payments due under Section 2.11(b) after the date of such prepayment in the
inverse order of maturity (without affecting the requirement that such
prepayments be applied first to pay all outstanding Term Loans and only
thereafter to reduce the Letter of Credit Exposure). Subject to the foregoing
provisions, any such mandatory prepayment of Loans of any Class shall be applied
to prepay all ABR Loans of such Class before any Eurodollar Loans of such Class
are prepaid. Any such payments under paragraphs (c) and (d) of this Section 2.11
so applied to reduce the Letter of Credit Exposure shall be deposited with the
Trustee and applied as provided in the Intercreditor Agreement.
(g) In the event and on each occasion that the sum of (i) the aggregate
outstanding principal amount of the Revolving Loans and (ii) the Letter of
Credit Exposure exceeds the aggregate amount of the Revolving Credit Commitments
at such time, the Borrower shall immediately prepay Revolving Loans (and, to the
extent that the amount of such excess is greater than the aggregate principal
amount of outstanding Revolving Loans, reduce the Letter of Credit Exposure by
making a deposit with the Administrative Agent pursuant to the Cash Collateral
Agreement as provided in Section 2.21(j)) in an aggregate principal amount equal
to such excess.
(h) Each payment of Borrowings pursuant to this Section 2.11 shall be
accompanied by accrued interest on the principal amount paid to but excluding
the date of payment. The repayments and prepayments of the Loans required by the
respective subsections of this Section 2.11 and the optional prepayments
permitted by Section 2.12 are separate and cumulative, so that any one such
repayment or prepayment shall reduce any other repayment or prepayment only as
and to the extent expressly specified herein. All payments under this Section
2.11 shall be subject to Section 2.15, but otherwise shall be without premium or
penalty.
Section 2.12 Optional Prepayments. (a) Subject to Section 2.01(c) and
Section 2.12(b), the Borrower shall have the right at any time and from time to
time to prepay
44
any Borrowing or payment due under Section 2.11(b), in whole or in part, upon
prior written or telecopy notice (or telephone notice promptly confirmed by
written or telecopy notice) to the Administrative Agent (i) in the case of any
prepayment of amounts payable under Section 2.11(b), not later than 11:00 a.m.,
New York City time, three Business Days in advance of the proposed prepayment,
(ii) in the case of any prepayment of Eurodollar Revolving Loans, not later than
11:00 a.m., New York City time, three Business Days in advance of the proposed
prepayment and (iii) in the case of any prepayment of ABR Revolving Loans, not
later than 11:00 a.m., New York City time, on the Business Day of the proposed
prepayment; provided, however, that (A) the Borrower simultaneously reduce
Facility B pro rata, such that the prepayments made pursuant to this Section
2.12(a) and Section 2.12(a) of the Working Capital and Acquisition Facility
Credit Agreement shall be in equal dollar amounts; provided, that (i) the
Borrower may, at its option, elect the aggregate amount of such prepayments to
be applied, first, to this Facility and, second, to Facility B, provided,
further, that in no event shall such reduction or prepayment reduce the
aggregate outstanding Indebtedness under this Facility to an amount less than
$2,000,000 or the aggregate outstanding Indebtedness under Facility B to an
amount less than $500,000 at any time, in either case unless the Facility
Obligations are simultaneously paid in full in cash and the Commitments are
terminated in full, (B) each partial prepayment of ABR Loans shall be in a
minimum aggregate amount of $100,000 under each of Facility B and this Facility
and each partial prepayment of Eurodollar Loans shall be in an amount which is
an integral multiple of $100,000 under each of Facility B and this Facility and
not less than $500,000 under each of Facility B and this Facility, (C) in the
event that the Borrower prepays the lenders under Facility B with respect to the
term loans thereunder, in whole, the Borrower shall simultaneously prepay in
whole the Term Loans under this Facility and (D) a partial prepayment of a
Eurodollar Borrowing under this Section 2.12(a) shall not be made that would
result in the remaining aggregate outstanding principal amount thereof under
each of Facility B and this Facility being less than $500,000. Each notice of
prepayment of any Borrowing or payment due under Section 2.11(b) shall specify
the prepayment date, the Class, the Type and the Interest Period of the
Borrowing to be prepaid (in the case of a Eurodollar Borrowing), and the
principal amount thereof to be prepaid, shall be irrevocable and shall commit
the Borrower to prepay such Borrowing or payment by the amount stated therein on
the date stated therein.
(b) All prepayments under this Section 2.12 shall be subject to Section
2.15 but otherwise shall be without premium or penalty. All prepayments under
this Section 2.12 shall be accompanied by accrued interest on the principal
amount being prepaid to, but excluding, the date of payment. All prepayments
under this Section 2.12 of amounts payable under Section 2.11(b) shall be
applied to reduce the amount of scheduled payments of amounts due under Section
2.11(b) after the date of such prepayment in the inverse order of maturity
(without affecting the requirement that such prepayments be applied first to pay
all outstanding Term Loans and only thereafter to provide cash collateral in
respect of Letters of Credit) until the last four of such scheduled payments
shall have been repaid in full, and thereafter all such prepayments of amounts
payable under Section 2.11(b) shall be applied to reduce such remaining
scheduled payments pro rata. Subject to the foregoing provisions, any optional
prepayment of Loans of any Class pursuant to Section 2.12(a) shall be applied to
prepay all ABR Loans of such Class before any Eurodollar Loans of such Class are
prepaid.
Section 2.13 Reserve Requirements; Certain Changes in Circumstances. (a)
Notwithstanding any other provision herein, if after the date of this Agreement
any change in
45
applicable law or regulation or in the interpretation or administration thereof
by any Governmental Authority charged with the interpretation or administration
thereof (whether or not having the force of law) shall change the basis of
taxation of payments to any Lender of the principal of or interest on any
Eurodollar Loan made by such Lender or any Fees or other amounts payable
hereunder (other than changes in respect of taxes imposed on the overall net
income of such Lender by the jurisdiction in which such Lender has its principal
office or by any political subdivision or taxing authority therein), or shall
impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of or credit
extended by such Lender (except any such reserve requirement which is reflected
in the Adjusted LIBO Rate) or shall impose on such Lender or the applicable
interbank market any other condition affecting this Agreement or Eurodollar
Loans made by such Lender, and the result of any of the foregoing shall be to
increase the cost to such Lender of making or maintaining any Eurodollar Loan or
to reduce the amount of any sum received or receivable by such Lender hereunder
or under the Notes (whether of principal, interest or otherwise) or Letters of
Credit by an amount deemed by such Lender to be material, then from time to time
the Borrower shall pay to such Lender upon demand such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.
(b) If any Lender shall have determined that the adoption after the date
hereof of any law, rule, regulation, agreement or guideline regarding capital
adequacy, or any change in any of the foregoing or in the interpretation or
administration of any of the foregoing by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or any lending office of such Lender) or
any Lender's holding company with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender's capital or on the capital of such Lender's holding
company, if any, as a consequence of this Agreement, the Letters of Credit or
the Loans made by such Lender pursuant hereto to a level below that which such
Lender or such Lender's holding company could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's policies
and the policies of such Lender's holding company with respect to capital
adequacy) by an amount deemed by such Lender or such Lender's holding company to
be material, then from time to time the Borrower shall pay to such Lender upon
demand such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) A certificate of each Lender setting forth such amount or amounts as
shall be necessary to compensate such Lender or its holding company as specified
in paragraph (a) or (b) above, as the case may be, shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
each Lender the amount shown as due on any such certificate delivered by it
within 10 days after its receipt of the same.
(d) No Lender shall be entitled to compensation under this Section 2.13 for
any costs incurred or reductions suffered with respect to any date unless such
Lender shall have notified the Borrower that it will demand compensation for
such costs or reductions not more than 120 days after the later of (i) such date
and (ii) the date on which such Lender becomes aware of such costs or
reductions. Failure on the part of any Lender to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital
46
with respect to any period shall not constitute a waiver of such Lender's right
to demand compensation with respect to any other period. The protection of this
Section 2.13 shall be available to each Lender regardless of any possible
contention of the invalidity or inapplicability of the law, rule, regulation,
guideline or other change, condition or circumstances which shall have occurred
or been imposed.
Section 2.14 Change in Legality. (a) Notwithstanding any other provision
herein, if any change in any law or regulation or in the interpretation thereof
by any Governmental Authority charged with the administration or interpretation
thereof shall make it unlawful for any Lender to make or maintain any Eurodollar
Loan or to give effect to its obligations as contemplated hereby with respect to
any Eurodollar Loan, then, by written or telecopy notice to the Borrower and to
the Administrative Agent, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be made by
such Lender hereunder, whereupon any request by the Borrower for a
Eurodollar Borrowing shall, as to such Lender only, be deemed a request for
an ABR Borrowing unless such declaration shall be subsequently withdrawn;
and
(ii) require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall be
automatically converted to ABR Loans as of the effective date of such
notice as provided in Section 2.14(b).
In the event that any Lender shall exercise its rights under clause (i) or (ii)
above, all payments and prepayments of principal which would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such Lender
or the converted Eurodollar Loans of such Lender shall instead be applied to
repay the ABR Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.14, a notice to the Borrower by any
Lender shall be effective as to each Eurodollar Loan, if lawful, on the last day
of the Interest Period currently applicable to such Eurodollar Loan; in all
other cases such notice shall be effective on the date of receipt by the
Borrower.
Section 2.15 Indemnity. The Borrower shall indemnify each Lender against
any loss or expense which such Lender may sustain or incur as a consequence of
(a) any failure by the Borrower to fulfill on the date of any borrowing
hereunder the applicable conditions set forth in Article IV, (b) any failure by
the Borrower to borrow or to refinance, convert or continue any Loan hereunder
after irrevocable notice of such borrowing, refinancing, conversion or
continuation has been given pursuant to Section 2.03 or 2.10, (c) any payment,
prepayment or conversion of a Eurodollar Loan required by any other provision of
this Agreement or otherwise made or deemed made on a date other than the last
day of the Interest Period applicable thereto, (d) any default in payment or
prepayment of the principal amount of any Loan or any part thereof or interest
accrued thereon, as and when due and payable (at the due date thereof, whether
by scheduled maturity, acceleration, irrevocable notice of prepayment or
otherwise) or (e) the occurrence of any Event of Default, including, in each
such case, any loss or reasonable expense sustained or incurred or to be
sustained or incurred in liquidating or employing deposits
47
from third parties acquired to effect or maintain such Loan or any part thereof
as a Eurodollar Loan. Such loss or reasonable expense shall include an amount
equal to the excess, if any, as reasonably determined by such Lender, of (i) its
cost of obtaining the funds for the Loan being paid, prepaid, converted or not
borrowed, refinanced, converted or continued or not paid or prepaid (assumed to
be the Adjusted LIBO Rate applicable thereto) for the period from the date of
such payment, prepayment, conversion or failure to borrow, refinance, convert or
continue or failure to pay or prepay to the last day of the Interest Period for
such Loan (or, in the case of a failure to borrow, refinance, convert or
continue, the Interest Period for such Loan which would have commenced on the
date of such failure) over (ii) the amount of interest (as reasonably determined
by such Lender) that would be realized by such Lender in reemploying the funds
so paid, prepaid, converted or not borrowed, refinanced, converted or continued
for such period or Interest Period, as the case may be based upon the purchase
of debt securities customarily issued by the Treasury of the United States of
America which have a maturity date approximating the last Business Day of such
Interest Period). A certificate of any Lender setting forth any amount or
amounts which such Lender is entitled to receive pursuant to this Section 2.15
shall be delivered to the Borrower and shall be conclusive absent manifest
error. The Borrower shall pay each Lender the amount shown as due on any such
certificate delivered by it within 10 days after its receipt of the same.
Section 2.16 Pro Rata Treatment. Except as required under Section 2.13 or
2.14 and by the terms of this Agreement requiring pro rata treatment with
Facility B, each Borrowing, each payment or prepayment of principal of any
Borrowing, each payment of interest on the Loans, each payment of the Commitment
Fees, each reduction of the Commitments, each payment in respect of
participations in Letter of Credit Disbursements and each refinancing of any
Borrowing with, conversion of any Borrowing to, or continuation of any Borrowing
as a Borrowing of any Type shall be allocated pro rata among the Lenders in
accordance with their respective Commitments of the applicable Class (or, if
such Commitments shall have expired or been terminated, in accordance with the
respective principal amounts of their outstanding Loans of the applicable
Class). Each Lender agrees that in computing such Lender's portion of any
Borrowing to be made hereunder, the Administrative Agent may, in its discretion,
round each Lender's share of such Borrowing, computed in accordance with
Schedule 1.01A, to the next higher or lower whole dollar amount.
Section 2.17 Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrower, or pursuant to a secured claim under Section 506 of Title 11 of
the United States Code or other security or interest arising from, or in lieu
of, such secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise (except pursuant to Section 2.20),
or by any other means, obtain payment (voluntary or involuntary) in respect of
any Loan or Loans as a result of which the unpaid principal portion of its Loans
of any Class shall be proportionately less than the unpaid principal portion of
the Loans of such Class of any other Lender, it shall be deemed simultaneously
to have purchased from such other Lender at face value, and shall promptly pay
to such other Lender the purchase price for, a participation in such Loans of
such other Lender, so that the aggregate unpaid principal amount of the Loans
and participations in Loans of any Class held by each Lender shall be in the
same proportion to the aggregate unpaid principal amount of all Loans of such
Class then outstanding as the principal amount of its Loans of such Class prior
to such exercise of banker's lien, setoff or counterclaim
48
or other event was to the principal amount of all Loans of such Class
outstanding prior to such exercise of banker's lien, setoff or counterclaim or
other event; provided, however, that if any such purchase or purchases or
adjustments shall be made pursuant to this Section 2.17 and the payment giving
rise thereto shall thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such recovery and the purchase
price or prices or adjustment restored without interest (unless the party from
which such recovery is made is obligated by law to pay interest on the amount
recovered, in which case each of the Lenders shall be responsible for its pro
rata share of such interest). The Borrower expressly consents to the foregoing
arrangements and agrees that any Lender holding a participation in a Loan deemed
to have been so purchased may exercise any and all rights of banker's lien,
setoff or counterclaim with respect to any and all moneys owing by the Borrower
to such Lender by reason thereof as fully as if such Lender had made a Loan
directly to the Borrower in the amount of such participation.
Section 2.18 Payments. (a) The Borrower shall make each payment (including
principal of or interest on any Borrowing or any Fees or other amounts)
hereunder or under any other Loan Document not later than 12:00 noon, New York
City time, on the date when due in dollars to the Administrative Agent at the
Funding Office, in immediately available funds. Any such payment received after
such time on any date shall be deemed made on the next Business Day.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
interest or Fees, if applicable.
Section 2.19 Taxes. (a) All payments made by the Borrower under this
Agreement, the Notes and the Letters of Credit shall be made free and clear of,
and without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, assessments,
fees, deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding net income taxes
and franchise taxes (imposed in lieu of net income taxes) imposed on any Agent
or any Lender as a result of a present or former connection between such Agent
or such Lender and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from such Agent or such Lender having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement, the Notes or any Letters of Credit). If any such
non-excluded taxes, levies, imposts, duties, charges, fees deductions or
withholdings ("Non-Excluded Taxes") or Other Taxes are required to be withheld
from any amounts payable to any Agent or any Lender hereunder or under the Notes
or any Letters of Credit, the amounts so payable to such Agent or such Lender
shall be increased to the extent necessary to yield to such Agent or such Lender
(after payment of all Non-Excluded Taxes or Other Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts specified in this
Agreement, the Notes and any Letters of Credit, provided, however, that the
Borrower shall not be required to increase any such amounts payable to any
Lender that is not organized under the laws of the
49
United States of America or a state thereof if such Lender fails to comply with
the requirements of Section 2.19(d).
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes are payable by the Borrower, as
promptly as possible thereafter the Borrower shall send to the Administrative
Agent for its own account or for the account of the Documentation Agent, the
Syndication Agent or such other Lender, as the case may be, a certified copy of
an original official receipt received by the Borrower showing payment thereof.
If the Borrower fails to pay any Non-Excluded Taxes when due to the appropriate
taxing authority or fails to remit to the Administrative Agent the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Agents and the Lenders for any incremental taxes, interest or penalties that
may become payable by any Agent or any Lender as a result of any such failure.
(d) Each Lender (or Transferee) that is not a "U.S. Person" as defined in
Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to the
Borrower and the Administrative Agent (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or,
in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a statement substantially in the form of
Exhibit L and a Form W-8BEN, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to complete and deliver.
(e) The provisions of this Section 2.19 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document, or any investigation made by or on behalf
of any Agent or any Lender.
(f) Any Agent or Lender claiming any indemnity payment or additional
amounts payable pursuant to this Section 2.19 shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any certificate or
document reasonably requested in writing by the Borrower or to change the
jurisdiction of its applicable lending office if the making of such a
50
filing or change would avoid the need for or reduce the amount of any such
indemnity payment or additional amounts that may thereafter accrue and would
not, in the sole determination of such Agent or Lender, be otherwise
disadvantageous to such Lender.
(g) Nothing contained in this Section 2.19 shall require any Agent or
Lender to make available any of its tax returns (or any other information that
it deems to be confidential or proprietary).
(h) No Lender shall be entitled to claim any indemnity payment or
additional amount payable pursuant to this Section 2.19 with respect to any tax
unless such Lender shall have notified the Borrower that it will demand
compensation for such payment or amount not more than 120 days after the later
of (i) such date and (ii) the date on which such Lender becomes aware of the
costs or reductions giving rise to such claim. Failure on the part of any Lender
to demand any indemnity payment or any such additional amount with respect to
any period shall not constitute a waiver of such Lender's right to demand
compensation with respect to any other period. The protection of this Section
2.19 shall be available to each Lender regardless of any possible contention of
the invalidity or inapplicability of the law, rule, regulation, guideline or
other change, condition or circumstances which shall have occurred or been
imposed.
Section 2.20 Assignment of Commitments Under Certain Circumstances. In the
event that any Lender shall have delivered a notice or certificate pursuant to
Section 2.13 or 2.14, or the Borrower shall be required to pay additional
amounts to any Lender under Section 2.19, the Borrower shall have the right, at
its own expense, upon notice to such Lender and the Administrative Agent, to
require such Lender to transfer and assign without recourse (in accordance with
and subject to the provisions set forth in Section 9.04, including clause (v) of
the proviso to Section 9.04(b)) all its interests, rights and obligations under
this Agreement to another financial institution designated by the Borrower which
shall assume such obligations; provided, that (i) a similar assignment by such
Lender be made under the Working Capital and Acquisition Facility Credit
Agreement of all its interests, rights and obligations under the Working Capital
and Acquisition Facility Credit Agreement, (ii) no such assignment shall
conflict with any law, rule, regulation or order of any Governmental Authority
and (iii) the Borrower shall pay to the affected Lender (and shall take the same
actions under the Working Capital and Acquisition Facility Credit Agreement) in
immediately available funds on the date of such assignment the entire amount of
principal of and interest accrued to the date of payment on the Loans and
participations in Letter of Credit Disbursements made by it hereunder and all
other amounts accrued for its account or owed to it hereunder; provided,
further, that if prior to any such assignment the circumstances or event that
resulted in such Lender's notice or certificate under Section 2.13 or 2.14 or
demand for additional amounts under Section 2.19, as the case may be, shall
cease to exist or become inapplicable for any reason or if such Lender shall
waive its rights in respect of such circumstances or event under Section 2.13,
2.14 or 2,19, as the case may be, then such Lender shall not thereafter be
required to make any such assignment hereunder or under the Working Capital and
Acquisition Facility Credit Agreement.
Section 2.21 Letters of Credit.
(a) The Borrower may request the issuance of Letters of Credit, in a form
reasonably acceptable to the Administrative Agent and the Issuing Bank, for the
account of the Borrower, at
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any time and from time to time during the Revolving Credit Availability Period;
provided, that any Letter of Credit shall be issued only if, and each request by
the Borrower for the issuance of any Letter of Credit shall be deemed a
representation and warranty by the Borrower that, immediately following the
issuance of such Letter of Credit, the sum of (i) the Letter of Credit Exposure
and (ii) the aggregate principal amount of outstanding Revolving Loans shall not
exceed the aggregate amount of the Revolving Credit Commitments at such time,
provided that, in no event shall the sum of (A) the aggregate principal amount
of outstanding Revolving Loans on any date plus (ii) the Letter of Credit
Exposure on such date exceed the aggregate Revolving Credit Commitments of all
the Lenders and, provided, further, that the amount of all outstanding Tranche B
Letters of Credit (as defined in the Working Capital and Acquisition Facility
Credit Agreement) and the Letters of Credit shall not exceed $12,500,000. Each
Letter of Credit shall expire at the close of business on the earlier of (x) the
first anniversary of the date of issuance thereof and (y) five Business Days
prior to the Conversion Date (or, if the Term-Out Option has become effective
pursuant to Section 2.01(b), five Business Days prior to the Maturity Date)
unless such Letter of Credit expires by its terms on an earlier date; provided,
that any Letter of Credit with an expiration date on the first anniversary one
year from date of issuance may provide for the renewal thereof for additional
one-year periods but shall in no event extend beyond the date referred to in
clause (y) above. Each Letter of Credit shall provide for payments of drawings
in dollars.
(b) Each issuance of any Letter of Credit shall be made on at least two
Business Days' prior irrevocable written or telecopy notice (or such shorter
notice as shall be acceptable to the Issuing Bank) from the Borrower to the
Administrative Agent and the Issuing Bank specifying, on the Issuing Bank's
standard form or on such other form as is acceptable to the Issuing Bank, the
date of issuance, the date on which such Letter of Credit is to expire, the
amount of such Letter of Credit, the name and address of the beneficiary of such
Letter of Credit, and such other information as may be necessary or desirable to
complete such Letter of Credit. The Issuing Bank will give the Administrative
Agent prompt notice of the issuance and amount of such Letter of Credit and the
expiration date of such Letter of Credit (and the Administrative Agent shall
give prompt notice thereof to each Lender). The Issuing Bank also will give the
Administrative Agent a quarterly summary indicating the issuance of any Letter
of Credit and the amount thereof, the expiration of any Letter of Credit and the
amount thereof and the payment on any draft presented under any Letter of
Credit. The Administrative Agent will promptly provide the Lenders with copies
of each such quarterly summary.
(c) By the issuance of a Letter of Credit and without any further action on
the part of the Issuing Bank, the Administrative Agent or the Lenders in respect
thereof, the Issuing Bank hereby grants to each Lender, and each Lender hereby
acquires from the Issuing Bank, effective upon the issuance of such Letter of
Credit, a participation in such Letter of Credit equal to such Lender's pro rata
share (based on such Lender's Revolving Credit Commitment Percentage) of the
aggregate amount available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to the Administrative Agent, on behalf of the
Issuing Bank, in accordance with Section 2.02(d), such Lender's pro rata share
(based on such Lender's Revolving Credit Commitment Percentage) of each Letter
of Credit Disbursement made by the Issuing Bank and not reimbursed by the
Borrower when due in accordance with Section 2.21(f); provided, that the Lenders
shall not be
52
obligated to make any such payment with respect to any wrongful Letter of Credit
Disbursement made as a result of the gross negligence or willful misconduct of
the Issuing Bank.
(d) Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to Section 2.21(c) in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or Event of
Default, and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever (subject only to the proviso set forth in
Section 2.21(c)).
(e) During the Revolving Credit Availability Period, the Borrower shall pay
to the Administrative Agent, on the last day of March, June, September and
December in each year and on the date on which the Revolving Credit Commitments
shall be terminated as provided herein, (i) for the account of the Lenders,
ratably in proportion to their Revolving Credit Commitments, a fee on the
average daily aggregate amount available to be drawn under all outstanding
Letters of Credit during the preceding quarter (or shorter period commencing
with the date of this Agreement) at a rate per annum equal to the Applicable
Eurodollar Margin from time to time in effect during such period pursuant to
Section 2.06 and (ii) for the account of the Issuing Bank, a fee on the average
daily aggregate amount available to be drawn under all outstanding Letters of
Credit during the preceding quarter (or shorter period commencing with the date
of this Agreement) at a rate per annum equal to 0.125%. Such fees shall be
computed on the basis of the actual number of days elapsed in a year of 360
days. Such fees shall accrue from and including the date of this Agreement to
but excluding the last day of the Revolving Credit Availability Period. In
addition to the foregoing, the Borrower shall pay directly to the Issuing Bank,
for its account, payable within 15 days after demand therefor by the Issuing
Bank, the Issuing Bank's customary processing and documentation fees in
connection with the issuance or amendment of or payment on any Letter of Credit.
(f) The Borrower hereby agrees to reimburse the Issuing Bank for any
payment or disbursement made by the Issuing Bank under any Letter of Credit, by
making payment in immediately available funds to the Administrative Agent, in an
amount equal to the amount of such payment or disbursement, not later than 12:00
Noon, New York City time, on (i) the Business Day that the Borrower receives
notice of such draft, if such notice is received on such day prior to 10:00
A.M., New York City time, or (ii) if clause (i) above does not apply, the
Business Day immediately following the day that the Borrower receives such
notice, plus interest on the amount so paid or disbursed by the Issuing Bank, to
the extent not reimbursed prior to 3:00 p.m. (New York City time) on the date of
such payment or disbursement, from and including the date paid or disbursed to
but excluding the date the Issuing Bank is reimbursed by the Borrower therefor,
at a rate per annum equal to the rate applicable to ABR Revolving Loans during
such period pursuant to Section 2.06. If the Borrower shall fail to pay any
amount required to be paid by it under this Section 2.21(f) when due, such
unpaid amount shall bear interest as provided in Section 2.07. The Issuing Bank
shall give the Borrower prompt notice of each drawing under any Letter of
Credit, provided, that the failure to give any such notice shall in no way
affect, impair or diminish the Borrower's obligations hereunder. The
Administrative Agent shall promptly pay any such amounts received by it to the
Issuing Bank.
53
(g) The Borrower's obligation to reimburse Letter of Credit Disbursements
as provided in Section 2.21(f) shall be absolute, unconditional and irrevocable
and shall be performed strictly in accordance with the terms of this Agreement
under any and all circumstances whatsoever, and irrespective of:
(i) any lack of validity or enforceability of any Letter of
Credit or any other Loan Document;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower, any Subsidiary or any other Person may at any time have
against the beneficiary under any Letter of Credit, the Issuing Bank, any
Agent, any Lender or any other Person in connection with this Agreement,
any other Loan Document or any other related or unrelated agreement or
transaction;
(iii) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or failing to comply with the Uniform Customs and Practices for
Documentary Credits, as in effect from time to time, or any statement
therein being untrue or inaccurate in any respect;
(iv) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document which does not comply with the
terms of such Letter of Credit; provided, that such payment was not
wrongfully made as a result of the gross negligence or willful misconduct
of the Issuing Bank; and
(v) any other act or omission or delay of any kind or any other
circumstance or event whatsoever, whether or not similar to any of the
foregoing and whether or not foreseeable, that might, but for the
provisions of this Section 2.21(g), constitute a legal or equitable
discharge of the Borrower's obligations hereunder.
(h) It is expressly understood and agreed that, for purposes of determining
whether a wrongful payment under a Letter of Credit resulted from the Issuing
Bank's gross negligence or willful misconduct, (i) the Issuing Bank's acceptance
of documents that appear on their face to be in order, without responsibility
for further investigation, regardless of any notice or information to the
contrary, (ii) the Issuing Bank's exclusive reliance on the documents presented
to it under such Letter of Credit as to any and all matters set forth therein,
including the amount of any draft presented under such Letter of Credit, whether
or not the amount due to the beneficiary thereunder equals the amount of such
draft and whether or not any document presented pursuant to such Letter of
Credit proves to be insufficient in any respect (so long as such document on its
face appears to be in order), and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and (iii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute willful misconduct or gross negligence of
the Issuing Bank. It is further understood and agreed that, notwithstanding the
proviso to clause (iv) of Section 2.21(g), the Borrower's obligation hereunder
to reimburse Letter of Credit Disbursements will not be excused by the gross
negligence or willful misconduct of the Issuing Bank to the extent that such
Letter of Credit Disbursement actually discharged a liability
54
of, or otherwise benefited, or was recovered by, the Borrower; provided, that
the foregoing shall not be construed to excuse the Issuing Bank from liability
to the Borrower to the extent of any direct damages suffered by the Borrower
that are caused by the Issuing Bank's gross negligence or willful misconduct in
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof.
(i) The Issuing Bank shall, promptly following its receipt thereof, examine
all documents purporting to represent a demand for payment under a Letter of
Credit, including as to compliance with the Uniform Customs and Practices for
Documentary Credits, as then in effect. The Issuing Bank shall as promptly as
possible give telephonic notification, confirmed by telex or telecopy, to the
Administrative Agent and the Borrower of such demand for payment and whether the
Issuing Bank has made or will make a Letter of Credit Disbursement thereunder,
provided, that the failure to give such notice shall not relieve the Borrower of
its obligation to reimburse any such Letter of Credit Disbursement in accordance
with this Section 2.21. The Administrative Agent shall promptly give each Lender
notice thereof.
(j) In the event that the Borrower is required or elects pursuant to the
terms of this Agreement (other than Sections 2.11(f) and 7.01) to provide cash
collateral in respect of the Letter of Credit Exposure of any Class, the
Borrower shall deposit in an account with the Administrative Agent an amount in
cash equal to the Letter of Credit Exposure of such Class (or such lesser amount
as shall be required or elected hereunder). Any such deposit shall be held by
the Administrative Agent in accordance with the Cash Collateral Agreement. In
the event that the Borrower is required pursuant to the terms of Section 2.11(f)
or Section 7.01 of this Agreement to provide cash collateral in respect of the
Letter of Credit Exposure of any Class, the Borrower shall deposit such cash
collateral in an account with the Trustee pursuant to the Intercreditor
Agreement. Such deposit shall be held by the Trustee in accordance with the
Intercreditor Agreement. Any such deposit to be held by the Administrative Agent
or the Trustee, as provided herein, shall be accompanied by notice from the
Borrower, in form satisfactory to the Administrative Agent or the Trustee, as
the case may be, setting forth the basis for such deposit, identifying in
reasonable detail the Letters of Credit to which such deposit relates, and
setting forth any other information related to such deposit reasonably requested
by the Administrative Agent or the Trustee, as the case may be. The Borrower
shall promptly provide the Administrative Agent with a copy of any such notice
to the Trustee and shall promptly provide the Trustee with a copy of any such
notice to the Borrower.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Lenders that:
Section 3.01 Organization; Powers. Each of the Borrower and the Loan
Parties (a) is a limited partnership (in the case of the Borrower and the Public
Partnership) or a limited liability company or a corporation (in the case of the
other Loan Parties) duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has all requisite power
and authority to own its property and assets and to carry on its business as now
conducted and as proposed to be conducted, (c) is duly qualified or registered
to do business and is in good
55
standing as a foreign limited partnership (in the case of the Borrower and the
Public Partnership) or a limited liability company or corporation (in the case
of the other Loan Parties) in all jurisdictions in which the nature of their
respective activities or the character of the properties they own, lease or use
makes such qualification or registration necessary and in which the failure so
to qualify or to be so registered would have a Material Adverse Effect (and the
only such jurisdictions are, in the case of the Borrower and the Public
Partnership, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky,
Maine, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey,
New York, Ohio, Pennsylvania, Rhode Island, Texas, West Virginia and Wisconsin)
and (d) has the power and authority to execute, deliver and perform its
obligations under each of the Loan Documents and each other agreement or
instrument contemplated thereby to which it is or will be a party, to consummate
the transactions contemplated hereunder and, in the case of the Borrower, to
obtain extensions of credit hereunder.
Section 3.02 Authorization. The execution, delivery and performance by each
of the Borrower and the Loan Parties of each of the Loan Documents to which it
is or will be a party, the consummation of the transactions contemplated
hereunder and, in the case of the Borrower, the extensions of credit hereunder
(a) have been duly authorized by all requisite action and (b) will not (i)
violate (A) any provision of law, statute, rule or regulation, or of the
agreement of limited partnership, operating agreement, articles of incorporation
or other constitutive documents or by-laws of the Borrower and the other Loan
Parties, (B) any order of any Governmental Authority or (C) any provision of any
indenture, agreement or other instrument to which the Borrower or any of the
other Loan Parties is a party or by which any of them or any of their property
is or may be bound, including, without limitation, the Working Capital and
Acquisition Facility Credit Agreement, the Note Agreements or the Parity Debt
Agreements, (ii) be in conflict with, result in a breach of or constitute (alone
or with notice or lapse of time or both) a default or give rise to increased,
additional, accelerated or guaranteed rights of any Person under any such
indenture, agreement or other instrument, including, without limitation, the
Working Capital and Acquisition Facility Credit Agreement, the Note Agreements
or the Parity Debt Agreements or (iii) except for the Lien of the Collateral
Documents, result in the creation or imposition of any Lien upon or with respect
to any property or assets now owned or hereafter acquired by the Borrower or any
of the other Loan Parties.
Section 3.03 Enforceability. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Loan Document when
executed and delivered by the Borrower or any of the other Loan Parties does or
will constitute, the legal, valid and binding obligation of such party
enforceable against such party in accordance with its terms. The General Partner
Guarantee Agreement and the Subsidiaries Guarantee Agreement are in full force
and effect and constitute the legal, valid and binding obligations of each Loan
Party party thereto, and no default on the part of any party thereto exists
thereunder. The Partners Security Agreement, the Borrower Security Agreement,
the Cash Collateral Agreement and the Motor Vehicle Security Agreements are in
full force and effect and (i) constitute the valid and binding obligation of
each Loan Party party thereto, (ii) constitute a valid assignment of, and create
a valid, presently effective security interest of record in the property covered
thereby and all interests described therein, subject to no prior security
interest in any such personal property other than as specifically permitted
therein for the benefit of the Lenders under this Agreement, and (iii) no
default on the part of any such party exists thereunder. The Mortgages are in
full
56
force and effort and (a) constitute legal, valid and binding obligations of each
Loan Party party thereto, (b) constitute a valid first mortgage lien of record
on the real property and all other interests described therein which may be
subjected to a mortgage lien, subject only to Permitted Exceptions for the
benefit of the Lenders under this Agreement, and (c) constitute a valid
assignment of, and create a valid, presently effective security interest of
record in equipment and all other interests (other than real property interests)
described therein for the benefit of the Lenders under this Agreement, subject
to no prior security interest in such property other than as specifically
permitted therein, and no default on the part of any party thereto exists
thereunder. The Intercreditor Agreement is in full force and effect and
constitutes the legal, valid and binding obligation of each Loan Party party
thereto, and no default on the part of any party thereto shall exist thereunder.
All Operative Agreements, and all amendments thereto have been duly authorized,
executed and delivered by the respective parties thereto, are in full force and
effect and constitute the legal, valid and binding obligations of the Loan
Parties party thereto.
Section 3.04 Consents and Governmental Approvals. No consent or approval
of, registration or filing with or any other action by (a) any Governmental
Authority, (b) any creditor, including, without limitation, any creditor or
holder under the Working Capital and Acquisition Facility Credit Agreement, the
Note Agreements or the Parity Debt Agreements, or holder of any Capital Stock of
the Borrower, any of the other Loan Parties or any Affiliate thereof or (c) any
other Person is or will be required in connection with the transactions
contemplated hereby, this Facility or the performance by the Borrower or any of
the other Loan Parties of the Loan Documents to which it is or will be a party,
in each case except such as have been made or obtained and are in full force and
effect.
Section 3.05 Business; Financial Statements. (a) The Business includes, and
has in the past included, only (whether conducted by the Loan Parties or any of
their predecessors) the sale, distribution or storage of heating oil, propane
gas, diesel fuel and gasoline) and other related derivative petroleum products
and the provision of services to customers, and the related retail sale of
supplies and equipment, including home appliances.
(b) The Borrower has delivered to the Agents the unaudited pro forma
balance sheet of the Borrower as of June 30, 2003 (the "Pro Forma Balance
Sheet"). The Pro Forma Balance Sheet presents fairly the financial condition of
the Borrower as of that date in accordance with GAAP.
(c) The Borrower has heretofore furnished to the Lenders (i) (x) the
audited consolidated balance sheets of the Public Partnership and its
Subsidiaries as at September 30, 2000, September 30, 2001 and September 30,
2002, and the related consolidated statements of operations and of cash flows
for the fiscal years ended on such dates contained in the Public Partnership's
Annual Report on Form 10-K for the fiscal year ended September 30, 2002 filed
with the SEC, and (y) the audited consolidated balance sheets of the Borrower
and the Restricted Subsidiaries as at September 30, 2000, September 30, 2001 and
September 30, 2002, and the related consolidated statements of operations and of
cash flows for the fiscal years ended on such dates, in each case, accompanied
by the opinion of KPMG LLP, independent public accountants (collectively, the
Audited Financial Statements") and (ii) (A) the unaudited consolidated balance
sheet of the Borrower and its Subsidiaries as at June 30, 2003, and the related
unaudited statements of operations and cash flows for the nine-month period
ended on such date contained
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in the Public Partnership's Quarterly Report on Form 10-Q filed with the SEC for
the fiscal quarter ended June 30, 2003 and (B) the consolidated and
consolidating balance sheet of the Borrower and the Restricted Subsidiaries as
at June 30, 2003, and the related consolidated and consolidating statements
conforming to the requirements of Section 5.02(a) (the "Unaudited Financial
Statements"), and such Unaudited Financial Statements present fairly the
consolidated financial condition of the Public Partnership and its Subsidiaries
or the Borrower and the Restricted Subsidiaries, as the case may be, as at such
date, and the consolidated results of its operations and its consolidated cash
flows for the nine-month period then ended (subject to normal year-end audit
adjustments). All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as disclosed by the aforementioned firm
of accountants and disclosed therein). Except for borrowings under the Existing
Credit Agreement and the Existing Parity Debt Credit Agreement, the balance
sheets and the notes thereto included in the Audited Financial Statements
disclose all material liabilities, actual or contingent, of the Loan Parties as
of the dates thereof. Except for borrowings under the Existing Credit Agreement
and the Existing Parity Debt Credit Agreement and liabilities incurred in the
ordinary course of business since the date thereof (none of which, individually
or in the aggregate, would have a Material Adverse Effect), the Borrower does
not have any material guarantee obligations, contingent liabilities and
liabilities for taxes, or any long-term leases or unusual forward or long-term
commitments, including any interest rate or foreign currency swap or exchange
transaction or other obligation in respect of derivatives, that are not
reflected in the most recent financial statements referred to in this paragraph.
Notwithstanding the foregoing representation made in the two immediately
preceding sentences, such representation will be deemed breached (except for
purposes of Article IV hereof) only to the extent that such representation
involves undisclosed liabilities which could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect. The Audited
Financial Statements were prepared in accordance with GAAP applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto).
Section 3.06 No Material Adverse Change. As of the Closing Date, there has
occurred since September 30, 2002, no material adverse change, and there exists
no condition, event or occurrence that, individually or in the aggregate, could
reasonably be expected to result in a material adverse change, in the business,
operations, property or condition (financial or otherwise) of the Loan Parties.
Since the date of this Agreement, there has occurred no condition, event or
other occurrence that, individually or in the aggregate, has had, and there
exists no condition, event or other occurrence, that, individually or in the
aggregate, could reasonably be expected to have, a Material Adverse Effect.
Section 3.07 Title to Properties; Possession Under Leases. (a) The Borrower
and the Restricted Subsidiaries own or hold valid leasehold interests in all the
properties and assets used in the operation of the Business, except for
properties and assets set forth on Schedule 3.07(a). None of the properties and
assets set forth on Schedule 3.07(a) is material to the Business. Each of the
Borrower and the Restricted Subsidiaries has good and marketable title to, or
valid leasehold interests in, all its properties and assets, free and clear of
Liens, except for (i) minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties and assets for their intended purposes and (ii) Liens permitted by
Section 6.02.
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(b) Schedule 3.07(b) sets forth, as of the Closing Date, a true, complete
and correct list of (i) all real property owned by the Borrower and the
Restricted Subsidiaries; (ii) all real property leased by the Borrower or any
Restricted Subsidiary; and (iii) the location and use of each such property.
(c) Each of the Borrower and the Restricted Subsidiaries has complied with
all obligations under all material leases to which it is a party and all such
leases are in full force and effect. Each of the Borrower and the Restricted
Subsidiaries enjoys peaceful and undisturbed possession under all such material
leases.
Section 3.08 Subsidiaries. Schedule 3.08 sets forth as of the Closing Date
a list of all the Subsidiaries, the respective jurisdictions of organization
thereof and the percentage ownership interest, direct or indirect, of the
Borrower therein.
Section 3.09 Litigation; Compliance with Laws. (a) Except as set forth in
Schedule 3.09, there are no actions, suits or proceedings at law or in equity or
by or before any Governmental Authority now pending or, to the knowledge of the
Borrower, threatened against or affecting the Borrower, any other Loan Party or
any business, property or rights of the Borrower or any other Loan Party (i)
which involve any Loan Document or the transactions contemplated by this
Agreement or (ii) as to which there is a reasonable possibility of an adverse
determination and which, if adversely determined, could be reasonably expected
to result, individually or in the aggregate, in a Material Adverse Effect.
(b) Neither the Borrower nor any other Loan Party is in violation of any
law, rule or regulation, or in default with respect to any judgment, writ,
injunction or decree, of any Governmental Authority, where such violation or
default could be reasonably expected to result, individually or in the
aggregate, in a Material Adverse Effect. Except as set forth in Schedule 3.09,
neither the Borrower nor any other Loan Party has received any written
communication during the past three years from any Governmental Authority that
alleges that the Borrower or any other Loan Party or the Business is not in
compliance in any material respect with any law, rule or regulation or any
judgment, writ, injunction or decree.
Section 3.10 Agreements. Neither the Borrower nor any of the other Loan
Parties is a party to any agreement or instrument or subject to any corporate
restriction that has resulted or could reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect. As of the date
of this Agreement, neither the Borrower nor any of the Restricted Subsidiaries
is a party to any Material Contract and none of the assets or properties of the
Borrower or any Loan Party is or may be bound by any Material Contract.
Section 3.11 Federal Reserve Regulations. (a) Neither the Borrower nor any
of the other Loan Parties is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying Margin Stock.
(b) No part of the proceeds of any Loan and no Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose which entails a violation of, or which is
inconsistent with, the provisions of the regulations of the Board, including
Regulation T, U and X.
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Section 3.12 Investment Company Act; Public Utility Holding Company Act.
Neither the Borrower nor any of the other Loan Parties is (a) an "investment
company" as defined in, or subject to Regulation under, the Investment Company
Act of 1940, (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935 or (c) subject to
regulation as a "public utility" or a "public service corporation" or the
equivalent under any Federal or state law.
Section 3.13 Use of Proceeds. The proceeds of all Revolving Loans and the
Letters of Credit will be used solely (i) to fund the purchase price of any
Eligible Propane Acquisition by the Borrower or any Restricted Subsidiary or to
reimburse the Borrower or any Restricted Subsidiary for cash amounts paid by the
Borrower or such Restricted Subsidiary for the purchase price of any Eligible
Propane Acquisition made by the Borrower or such Restricted Subsidiary within
the six-month period immediately preceding the date of the Borrowing of the
Revolving Loans to which such proceeds relate (provided, in the case of an
acquisition of Capital Stock, that the Person so acquired becomes a Restricted
Subsidiary), (ii) to fund Growth-Related Capital Expenditures, (iii) for the
other purposes set forth in Section 6.01(b) of the Working Capital and
Acquisition Facility Credit Agreement, Section 10.1(b) of the Note Agreements
and the comparable provisions in the other Parity Debt Agreements and (iv) with
respect to the initial Borrowing on the Closing Date, to refinance the Existing
Parity Debt Credit Agreement.
Section 3.14 Tax Returns. Each of the Borrower and its Affiliates has filed
all tax returns required by law to be filed by it and has paid all taxes,
assessments and other governmental charges levied upon it or any of its
properties, assets, income or franchises which are due and payable, other than
(a) those which are not past due or are presently being contested in good faith
by appropriate proceedings diligently conducted for which such reserves or other
appropriate provisions, if any, as shall be required by GAAP have been made and
(b) in the case of any such Person other than the Borrower and the Restricted
Subsidiaries, those which could not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect. The Borrower is a limited
partnership not subject to taxation with respect to its income or gross receipts
under applicable Federal laws. The Borrower is a limited partnership not subject
to taxation with respect to its income or gross receipts under applicable state
laws, except for laws of the states set forth on Schedule 3.14, none of which
would, individually or in the aggregate, have a Material Adverse Effect. No tax
Lien has been filed and, to the knowledge of the Borrower and its Affiliates, no
claim is being asserted with respect to any such tax, fee or other charge.
Section 3.15 No Material Misstatements. (a) No information, report,
financial statement, exhibit or schedule furnished by or on behalf of the
Borrower or any of its Affiliates to any Agent or Lender in connection with the
negotiation of any Loan Document or included therein or delivered pursuant
thereto contained, contains or will contain any material misstatement of fact or
omitted, omits or will omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were, are
or will be made, not misleading. There is no fact known to the Borrower which
has or in the future would (so far as the Borrower can now foresee) have a
Material Adverse Effect which has not been set forth in this Agreement
(including the schedules hereto).
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(b) All representations and warranties of the Borrower and Star Gas
Corporation or Star Gas LLC, as applicable, set forth in the Note Agreements,
the Working Capital and Acquisition Facility Credit Agreement and other Parity
Debt Agreements were true and correct on and as of the date of such agreement
and will be true and correct in all material respects on and as of the Closing
Date with the same effect as though made on and as of the Closing Date, except
to the extent such representations and warranties expressly relate to an earlier
date (in which case such representations and warranties were true and correct in
all material respects on and as of such earlier date).
Section 3.16 Employee Benefit Plans. Except as disclosed in Schedule 3.16,
none of the General Partner, the Borrower or any Related Person of the General
Partner or the Borrower has ever established, maintained, contributed to or been
obligated to contribute to, and neither the Borrower nor any Related Person of
the Borrower has any liability or obligation with respect to, any Plan. Except
as disclosed in Schedule 3.16, neither the Borrower nor any Related Person of
the Borrower has assumed, either by agreement (including the Partnership
Agreement and the Operative Agreements), by operation of law or otherwise, any
liability or obligation with respect to any "employee benefit plan" (as defined
in ERISA) or any other compensation or benefit arrangement, agreement, policy,
practice or understanding. Neither the General Partner, nor the Borrower nor any
Related Person of the Borrower, or the General Partner has incurred any material
liability under Title IV of ERISA with respect to any Plan and no event or
condition exists or has occurred as a result of which such a liability could
reasonably be expected to be incurred. None of the General Partner, the Borrower
nor any Related Person of the General Partner or the Borrower has engaged in any
transaction, including the transactions contemplated hereunder, which could
subject the Borrower or any Related Person of the Borrower to liability pursuant
to Section 4069(a) or 4212(c) of ERISA. There has been no reportable event
(within the meaning of Section 4043(c) of ERISA) or any other event or condition
with respect to any Plan which presents a risk of the termination of, or the
appointment of a trustee to administer, any such Plan by the PBGC. No prohibited
transaction (within the meaning of Section 406 of ERISA or Section 4975 of the
Code) exists or has occurred with respect to any Plan which has subjected or
could reasonably be expected to subject the General Partner or the Borrower to a
material liability under Section 502(i) or 502(l) of ERISA or Section 4975 of
the Code. No liability to the PBGC (other than liability for premiums not yet
due) has been or is expected to be incurred with regard to any Plan by the
General Partner, the Borrower or any Related Person. Neither the General
Partner, nor the Borrower nor any Related Person of the General Partner or the
Borrower contributes or is obligated to contribute or has ever contributed or
been obligated to contribute to any Single Employer Plan that has at least two
contributing sponsors not under common control. The Borrower is not, nor is it
expected to become, a "substantial employer" as defined in Section 4001(a)(2) of
ERISA with respect to any Plan. Neither the General Partner nor the Borrower has
ever maintained or contributed to any plan or arrangement which provides
post-employment welfare benefits or coverage (other than continuation coverage
provided pursuant to Section 4980B of the Code). With respect to any
post-employment welfare benefit plan or arrangement (other than continuation
coverage provided pursuant to Section 4980B of the Code) established,
maintained, or contributed to, by any Related Person (or with respect to which a
Related Person is obligated to contribute), (i) the FAS 106 liabilities and the
assumptions used therefor accurately reflect the costs associated with the
rights and benefits of all participants and (ii) such benefits may be terminated
at any time without liability to the Borrower, General Partner or any Related
Party.
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Section 3.17 Environmental and Safety Matters. (a) Each of the Borrower and
the General Partner is in compliance with all Environmental Laws applicable to
it or to the Business or the Assets, except where such noncompliance would not
have a Material Adverse Effect. The Borrower has timely and properly applied for
renewal of all environmental permits or licenses that have expired or are about
to expire and are necessary for the conduct of the Business as now conducted and
as proposed to be conducted, except where the failure to timely and properly
reapply would not have a Material Adverse Effect. Schedule 3.17 lists (i) all
notices from Federal, state or local environmental agencies to the Borrower, the
General Partner or any Affiliate thereof citing environmental violations
affecting the Business or the Assets that have not been finally resolved and
disposed of, and no such violation, whether or not notice regarding such
violation is listed on Schedule 3.17, if ultimately resolved against such party,
would have a Material Adverse Effect and (ii) all current reports filed by the
Borrower, the General Partner or any Affiliate thereof with respect to the
Business or the Assets with any Federal, state or local environmental agency
having jurisdiction over the Business or the Assets, true and complete copies of
which reports have been made available to the Lenders. Notwithstanding any such
notice, except for matters the consequences of which will not have a Material
Adverse Effect, the Business and the Assets is currently being operated in all
respects within the limits set forth in such environmental permits or licenses
and any current noncompliance with such permits or licenses will not result in
any liability or penalty to the Borrower or the Subsidiaries or in the
revocation, loss or termination of any such environmental permits or licenses.
(b) All facilities located on the real property owned or leased by the Loan
Parties which are subject to regulation by RCRA are and have been operated in
compliance with RCRA, except where such noncompliance would not have a Material
Adverse Effect and none of the Borrower, the General Partner and their
Affiliates has received, or, to the knowledge of the Borrower, been threatened
with, a notice of violation of RCRA regarding such facilities.
(c) No Hazardous Materials are or have been located or present at any of
the real property owned or leased by the Loan Parties or any previously owned
properties in violation of any Environmental Law, which violation will have a
Material Adverse Effect, or in such circumstances as to give rise to liability,
which liability will have a Material Adverse Effect, and with respect to such
real property there has not occurred (i) any release or threatened release of
any such hazardous substance, (ii) any discharge or threatened discharge of any
substance into ground, surface, or navigable waters which violates any
Environmental Law or (iii) any assertion of any lien pursuant to Environmental
Laws resulting from any use, spill, discharge or clean-up of any hazardous or
toxic substance or waste, which occurrence referred to in clause (i), (ii) or
(iii) above will have a Material Adverse Effect.
(d) The Borrower has not received notice that it has been identified as a
potentially responsible party under CERCLA or any comparable state, local or
foreign law nor has the Borrower received any notification that any Hazardous
Materials that it has used, generated, stored, treated, handled, transported or
disposed of or arranged for transport for disposal or treatment of, or arranged
for disposal or treatment of, has been found at any site at which any
Governmental Authority or private party is conducting or plans to conduct a
remedial investigation or other action pursuant to any Environmental Law.
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(e) None of the matters disclosed in Schedule 3.17, either individually or
in the aggregate, involves a violation of or a liability under any Environmental
Law, the consequences of which will have a Material Adverse Effect.
Section 3.18 Security Interests. The Trustee for the benefit of the Secured
Parties will at all times have the Liens provided for in the Collateral
Documents and, subject to the filing by the Trustee of continuation statements
to the extent required by the Uniform Commercial Code, the Collateral Documents
will at all times constitute a valid and continuing lien of record and first
priority perfected security interest in all the Collateral referred to therein.
No filings or recordings, or amendments or supplements to any of the Collateral
Documents are required in order to perfect the security interests created under
the Collateral Documents, except for amendments, supplements, filings or
recordings listed on Schedule 3.18. All such amendments, supplements, listed
filings and recordings were made on or prior to the Closing Date, except as
otherwise expressly provided in Schedule 3.18.
Section 3.19 Solvency. Upon the making of the initial Loan or the issuance
of the initial Letter of Credit hereunder, each of the Borrower and the
Restricted Subsidiaries will be Solvent. "Solvent" means, with respect to any
Person, that (a) the sum of the assets of such Person, both at a fair valuation
and at present fair saleable value, will exceed the liabilities of such Person,
(b) such Person will have sufficient capital with which to conduct its business
as presently conducted and as proposed to be conducted and (c) such Person has
not incurred debts, and does not intend to incur debts, beyond its ability to
pay such debts as they mature. For purposes of the foregoing definition, "debts"
means any liabilities on claims, and "claim" means (i) a right to payment,
whether or not such right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (ii) a right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right to
an equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured. With respect to any
contingent liabilities, such liabilities shall be computed at the amount which,
in light of all the facts and circumstances existing at the time, represents the
amount which can reasonably be expected to become an actual or matured
liability.
Section 3.20 Transactions with Affiliates. Except as set forth in Schedule
3.20 and except for agreements and arrangements among the Borrower and Wholly
Owned Restricted Subsidiaries or among Wholly Owned Restricted Subsidiaries,
neither the Borrower nor any of the Subsidiaries is a party to, and none of the
properties and assets of the Borrower or any of the Subsidiaries is subject to
or bound by, any agreement or arrangement with, and neither the Borrower nor any
of the Subsidiaries is engaged in any transaction with, (a) any Affiliate of the
Borrower or any of the Subsidiaries or (b) any Affiliate of Petro or the General
Partner.
Section 3.21 Ownership. The only general partner of the Borrower is the
General Partner. The General Partner owns approximately 0.01% general
partnership interest in the Borrower. The only limited partner of the Borrower
is the Public Partnership. The Public Partnership owns a 99.99% limited partner
interest in the Borrower. The only general partner of the Public Partnership is
the General Partner.
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Section 3.22 Insurance. The Borrower and the Subsidiaries maintain with
Permitted Insurers policies of fire and casualty, liability, business
interruption and other forms of insurance in such amounts, with such deductibles
and against such risks and losses as are reasonable for the business and assets
of the Borrower and the Subsidiaries. All such policies are in full force and
effect, all premiums due and payable thereon have been paid (other than
retroactive or retrospective premium adjustments that are not yet, but may be,
required to be paid with respect to any period ending prior to the Closing Date
under comprehensive general liability and workmen's compensation insurance
policies) and no notice of cancellation or termination has been received with
respect to any such policy which has not been replaced on substantially similar
terms prior to the date of such cancellation. The activities and operations of
the Borrower and the Subsidiaries have been conducted in a manner so as to
conform in all material respects to all applicable provisions of such insurance
policies.
Section 3.23 Labor Relations. Neither the Borrower nor any of the
Subsidiaries is engaged in unfair labor practice that could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
There is (a) no unfair labor practice complaint pending against the Borrower or
any of the Subsidiaries or affecting the Business or, to the knowledge of the
Borrower, threatened against any of them, before the National Labor Relations
Board, (b) no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement pending against the Borrower or any of the
Subsidiaries or affecting the Business or, to the knowledge of the Borrower,
threatened against any of them, (c) no strike, labor dispute, slowdown or
stoppage pending against the Borrower or any of the Subsidiaries or, to the
knowledge of the Borrower, threatened against the Borrower or any of the
Subsidiaries, (d) to the knowledge of the Borrower, no union representation
question existing with respect to the employees of the Borrower or any of the
Subsidiaries and (e) to the knowledge of the Borrower, no union organizing
activities are taking place.
Section 3.24 Changes, etc. Except as contemplated by this Agreement or the
other Loan Documents, the Borrower and the other Loan Parties have not incurred
any material liabilities or obligations, direct or contingent, or entered into
any material transaction not in the ordinary course of business, and no events
have occurred which, individually or in the aggregate, could have a Material
Adverse Effect, and there has not been any Restricted Payment of any kind
declared, paid or made by the Borrower or the General Partner.
Section 3.25 Indebtedness. Other than the Indebtedness represented by the
Mortgage Notes, the 2000 Parity Notes and the 2001 Parity Notes, and the
Indebtedness incurred hereunder and under the Working Capital and Acquisition
Facility Credit Agreement, none of the Borrower and the Restricted Subsidiaries
has any secured or unsecured Indebtedness outstanding as of the Closing Date. As
of the Closing Date, no instrument or agreement to which the Borrower or any of
the Subsidiaries is a party or by which the Borrower or any of the Subsidiaries
is bound or which is applicable to the Borrower or any of the Subsidiaries
(other than this Agreement, the Note Agreements, the Working Capital and
Acquisition Facility Credit Agreement, the other Parity Debt Agreements and the
Parent Indenture) contains any restrictions on the incurrence by the Borrower or
any of the Restricted Subsidiaries of additional Indebtedness.
Section 3.26 Business. (a) The Borrower is in possession of and operating
in compliance in all respects with all franchises, grants, authorizations,
approvals, licenses, permits,
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easements, rights-of-way, consents, certificates and orders required to own,
lease or use its properties and to permit the conduct of the Business as now
conducted and proposed to be conducted, except for those franchises, grants,
authorizations, approvals, licenses, permits, easements, rights-of-way,
consents, certificates and orders (collectively, "Permitted Exceptions") (i)
which are not required at this time and are routine or administrative in nature
and are expected in the reasonable judgment of the Borrower to be obtained or
given in the ordinary course of business after the Closing Date, or (ii) which,
if not obtained or given, would not, individually or in the aggregate, have a
Material Adverse Effect.
(b) The Borrower has good and marketable title to all of its assets and
properties, subject to no Liens except those permitted under Section 6.02. The
Assets currently owned by the Borrower are all of the assets and properties
necessary to enable the Borrower to conduct the Business.
(c) (i) The Borrower has beneficial and (except in the case of motor
vehicles covered by certificates of title where the certificates of title have
been duly executed in favor of the Borrower, the Lien of the Trustee has been
duly provided for thereon and such certificates of title have been delivered to
the Borrower and/or the Trustee), record ownership of all properties (including
trademarks, tradenames and other intellectual property used in the Business),
easements and licenses comprising the Business and (ii) the Collateral Documents
(other than the Intercreditor Agreement), or proper notices, statements or other
instruments in respect thereof, have been duly recorded, published, registered
and filed as required by Sections 4.01(e) and 4.01(f). The Borrower holds all
right, title and interest in and to the trade name "Star Gas" necessary to
conduct the Business, and all other trademarks and trade names used in the
Business and holds exclusive right, title and interest in and to all customer
lists used in the Business.
Section 3.27 Chief Executive Office. The chief executive office of the
Borrower and the General Partner and the office where each maintains its records
relating to the transactions contemplated by the Loan Documents and the
Operative Agreements are located at 0000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000.
The Borrower is only organized in the State of Delaware and "Star Gas Propane,
L.P." is the name that appears in official filings in the State of Delaware. The
General Partner is only organized in the State of Delaware and "Star Gas LLC" is
the name that appears in official filings.
Section 3.28 Fixed Price Supply Contracts. None of the Borrower and the
Restricted Subsidiaries is a party to any contract for the purchase or supply by
such parties of propane or other product except where (a) the purchase price is
set with reference to a spot index or indices substantially contemporaneously
with the delivery of such product or (b) delivery of such propane or other
product is to be made no more than one year after the purchase price is agreed
to. All such contracts referred to in the foregoing clause (b) which are in
effect on the Closing Date are set forth in Schedule 3.28.
Section 3.29 Trading and Inventory Policies. The Borrower maintains a
trading policy to the effect that neither it nor any of the Restricted
Subsidiaries will trade any commodities. The Borrower maintains a supply
inventory position policy to the effect that neither it nor any of the
Restricted Subsidiaries will hold on hand, as of any date, more Commodities
Inventory than
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will be sold in the normal course of business during the following 90 days. The
Borrower and the Restricted Subsidiaries are in compliance with such policies.
Section 3.30 Parity Debt. The obligations evidenced by this Agreement and
any Notes hereunder constitute Parity Debt (as defined in the Intercreditor
Agreement) and this Agreement shall be considered a Parity Debt Agreement.
ARTICLE IV
CONDITIONS OF LENDING
Section 4.01 Effectiveness. This Agreement shall become effective when all
of the conditions precedent set forth in this Section 4.01 shall have been
satisfied:
(a) Each Lender shall have received counterparts of this Agreement signed
by each of the parties hereto.
(b) Each Lender shall have received duly executed Notes, dated the Closing
Date, complying with the provisions of Section 2.04.
(c) Each Lender shall have received duly authorized, executed and delivered
counterparts of (i) the General Partner Guarantee Agreement, and General Partner
Consent Agreement dated the Closing Date and (ii) the Subsidiaries Guarantee
Agreement, and Subsidiaries Consent and Agreement dated the Closing Date.
(d) The Administrative Agent shall have received satisfactory evidence that
the Working Capital and Acquisition Facility Credit Agreement shall have become
effective in accordance with its terms.
(e) The Trustee on behalf of the Secured Parties shall have a security
interest in the Collateral of the type and priority described in each Collateral
Document, perfected to the extent contemplated by Section 3.18 and each Lender
shall have received:
(i) duly authorized, executed and delivered counterparts of (A)
the Partners Security Agreement, duly executed by the General Partner and
the Public Partnership and any documents related thereto, (B) the Borrower
Security Agreement, duly executed by the Borrower, the General Partner and
the Restricted Subsidiaries and any documents related thereto, (C) the
Public Partnership Consent and Agreement dated the Closing Date, (D) the
Cash Collateral Agreement, duly executed by the Borrower, (E) the Motor
Vehicle Security Agreements duly executed by the Borrower or the Restricted
Subsidiary, as the case may be, and (F) a duly completed and executed
Perfection Certificate from the Borrower dated the Closing Date;
(ii) acknowledgment copies of Uniform Commercial Code financing
statements which create in favor of the Trustee for the benefit of the
Secured Parties a valid, legal and perfected security interest in or lien
on the Collateral that is the subject of the Security Agreements;
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(iii) certified copies of Requests for Information (form UCC-11),
or equivalent reports from an independent search service satisfactory to
the Lenders, listing (A) any judgment naming any Loan Party as judgment
debtor, (B) any tax lien that names any Loan Party as a delinquent taxpayer
in any of the jurisdictions referred to in clause (ii) above and (C) any
Uniform Commercial Code financing statement that names any Loan Party as
debtor or seller filed in any of the jurisdictions referred to in clause
(ii) above;
(iv) duly authorized, executed and delivered counterparts of each
Mortgage (including any amendments or supplements thereto) filed by the
Borrower, along with duly executed copies of all related documents,
including landlord waivers, subordination agreements and estoppel
certificates and legal opinions; and
(v) satisfactory evidence that the Intercreditor Agreement and
the Collateral Documents shall have been amended, to the extent necessary,
to secure the Facility Obligations on a pari passu basis with the Mortgage
Notes, the 2000 Parity Notes, the 2001 Parity Notes, the Facilities
Obligations and other Parity Debt, in each case, together with certified
true and complete copies of such agreements.
(f) The Trustee shall have received:
(i) a mortgagee's policy of title insurance, including mechanic's
lien coverage, with respect to the properties and facilities so identified
on Schedule 3.07(b), issued by a Title Company or Companies authorized to
issue title insurance in the states in which such properties or facilities
are located with satisfactory provisions for coinsurance or reinsurance,
insuring the interest of the Trustee under the Collateral Documents as
valid first liens on the Mortgaged Properties, free of Liens (other than
Liens permitted by Section 6.02) or other exceptions to title not approved
and accepted by the Lenders, such policies to be in an amount at least
equal to the amounts set forth opposite each of the individual properties
and facilities so identified on Schedule 3.07(b);
(ii) satisfactory copies of "As-Built" ALTA surveys with respect
to the properties and facilities so identified on Schedule 3.07(b),
certified to the Trustee and the Title Company or Companies;
(iii) satisfactory environmental reviews, audits and appraisals
of the properties of the Borrower and the Subsidiaries;
(iv) the original stock certificates representing all outstanding
Capital Stock of the Subsidiaries, along with undated stock powers endorsed
in blank and duly executed Intercompany Notes;
(v) each of (A) the original Intercompany Note, dated as of the
Closing Date, in the face amount of $10,000,000, made by each of
Star/Petro, Stellar Propane Service Corp. and Ohio Gas & Appliance Company
in favor of the Borrower and the General Partner, (B) the original
Intercompany Note, dated as of the Closing Date, in the face amount of
$25,000,000, made by Star/Petro in favor of the Borrower,
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(C) the original Intercompany Note, dated as of the Closing Date, in the
face amount of $25,000,000, made by Stellar Propane Service Corp. in favor
of the Borrower and (D) the original Intercompany Note, dated as of the
Closing Date, in the face amount of $25,000,000, made by Ohio Gas &
Appliance Company in favor of the Borrower, in each case, endorsed (without
recourse) in blank (or accompanied by an executed transfer form in blank)
by the pledgor thereof;
(vi) a certificate of the Borrower dated as of the Closing Date
duly executed by the Borrower addressed to the Trustee complying with
Section 6 of the Intercreditor Agreement, which shall specify the date and
principal amount of the Notes, the name, address and tax payer
identification number of the Lenders and which shall state that this
Agreement is a Parity Debt Agreement, that this Agreement is entitled to
the benefits of the Intercreditor Agreement and of the Security (as defined
in the Intercreditor Agreement) and funds held under Section 4 of the
Intercreditor Agreement and that this Agreement are subject to the terms of
the Intercreditor Agreement; and
(vii) a duly executed Agreement of Parity Lenders and Supplement
to Intercreditor Agreement.
(g) The Lenders shall have received opinions of Xxxxxxxx Xxxxx LLP, counsel
to the Borrower, substantially in the form of Exhibit F-1 hereto and local
counsel to the Borrower satisfactory to the Lenders in each jurisdiction
requested by the Lenders, substantially in the form of Exhibit F-2 hereto,
including, without limitation, an opinion from Xxxxxxxx Xxxxx LLP concerning the
parity nature of the Parity Debt to be dated the Closing Date and addressed to
the Lenders and addressed to the Trustee.
(h) The Administrative Agent shall have received:
(i) a certificate, dated the Closing Date and signed by a
Responsible Officer of each of the Loan Parties, confirming compliance with
the conditions precedent set forth in this Section 4.01;
(ii) a copy of the partnership agreement, certificate of
incorporation or other constitutive documents, including all amendments
thereto, of each of the Loan Parties, certified, to the extent applicable,
as of a recent date by the Secretary of State of the State of its
organization, and, to the extent applicable, a certificate as to the good
standing of each such party as of a recent date, from such Secretary of
State;
(iii) a certificate of the Secretary or Assistant Secretary of
each of the Loan Parties dated the Closing Date and certifying (A) that
attached thereto is a true and complete copy of the by-laws, operating
agreement or partnership agreement of such party, as applicable, as in
effect on the Closing Date and at all times since a date prior to the date
of the resolutions described in clause (B) below, (B) that attached thereto
is a true and complete copy of resolutions duly adopted by the Board of
Directors of such Loan Party (or, in the case of the Borrower and the
Public Partnership, of the General Partner) authorizing the execution,
delivery and performance of the Loan Documents to which such Loan Party is
or will be a party, and, in the case of the Borrower, the
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extensions of credit hereunder, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, (C) that
the certificate of incorporation, certificate of organization or other
constitutive documents of such Loan Party have not been amended since the
date of the last amendment thereto shown on the certificate of good
standing furnished pursuant to clause (ii) above and (D) as to the
incumbency and specimen signature of each officer executing any Loan
Document or any other document delivered in connection herewith on behalf
of such Loan Party;
(iv) a certificate of another officer as to the incumbency and
specimen signature of the Secretary or Assistant Secretary executing the
certificate pursuant to clause (iii) above;
(v) a certified true and complete copy of the Note Agreements,
the other Parity Debt Agreements, the Existing Parity Debt Credit
Agreement, together with all amendments and supplements thereto through the
Closing Date and, as requested by the Lenders, other Operative Agreements;
(vi) The conditions specified in Section 10.1(b), 10.1(f) or
10.1(i) of the Note Agreements, as applicable, Section 6.01(b), 6.01(f) or
6.01(h) of the Working Capital and Acquisition Facility Credit Agreement,
as applicable, and the comparable provisions in the Parity Debt Agreements
shall have been fulfilled and the Lenders shall have received such evidence
as they may reasonably request (including copies of certificates and
opinions required by such provisions) demonstrating fulfillment of the
conditions, including, without limitation, (1) the opinion referred to in
Section 4.01(g) hereof, (2) a copy of the opinion of Xxxxxxxx Xxxxx LLP
delivered to the Trustee to the effect that the Lien of the Security
Documents (as defined in the Intercreditor Agreement) has attached and is
perfected to the extent additional property and assets are being acquired
on the Closing Date and (3) a copy of the certificate of the Borrower to
the Trustee, in form and substance satisfactory to the Lenders in their
sole discretion, to the extent additional property and assets are being
acquired on the Closing Date, demonstrating that the principal amount of
the Indebtedness incurred hereunder does not exceed the lesser of the cost
to the Borrower of such property or assets and the fair market value of
such property or assets (as determined in good faith by the General
Partner); and
(vii) such other documents, opinions, certificates and agreements
in connection with this Facility, in form and substance satisfactory to the
Lenders, as they or their counsel shall reasonably request, including
counterpart originals or certified copies of all the other Operative
Agreements.
(i) Each Lender shall be satisfied with each of the following (it being
agreed that the execution of this Agreement shall demonstrate such
satisfaction):
(i) the results of, its due diligence investigation of (A) the
business, assets, condition (financial and otherwise), liabilities (actual
and contingent) and prospects of the Borrower, (B) litigation, tax,
accounting, labor, health and safety, environmental, insurance, pension and
other employee benefit matters and (C) real estate
69
leases, material contracts, debt agreements, property ownership, and
contingent liabilities of the Borrower and the Subsidiaries;
(ii) (A) the amount, terms and conditions (including maturity,
amortization, interest rates and fees, covenants, events of default,
redemption and other provisions) of the Mortgage Notes, the Working Capital
and Acquisition Facility Credit Agreement and the other Parity Debt
Agreements and (B) the ownership structure of the Borrower, the Public
Partnership and the General Partner;
(iii) there shall not have occurred and be continuing since the
date of the Letter Agreement a material adverse change in the market for
bank credit facilities similar in nature to this Facility or a material
disruption of, or a material adverse change in, financial, banking or
capital market conditions;
(iv) all legal matters and documentation incident to the Facility
and all corporate and other proceedings taken or to be taken in connection
therewith;
(v) such information as the Lenders may request as to the aging
and concentration of the accounts receivable of the Borrower and the
Subsidiaries and as to their inventory, and shall have completed and be
satisfied with their review thereof;
(vi) insurance, which shall be in full force and effect and which
complies with the provisions of this Agreement and the Collateral
Documents, and a report, on or prior to the Closing Date, from the
Borrower's independent insurance broker, Weeks & Xxxxxxxx, together with
any other evidence reasonably requested by the Agents, demonstrating that
the insurance required by Section 6.11 and by the terms of the other Loan
Documents is in effect and a certificate from a Responsible Officer of the
Borrower stating that the Public Partnership and its Subsidiaries have in
effect weather insurance coverage of at least $12,500,000 on a consolidated
basis; and
(vii) all agreements and transactions between any of the Borrower
and the Subsidiaries, on the one hand, and any of their Affiliates, on the
other hand.
(j) Since September 30, 2002, (x) there shall not have occurred or become
known any material adverse change or prospective material adverse change with
respect to the business, assets, operations, properties, condition (financial or
otherwise), liabilities (actual or contingent) or prospects of the Borrower from
that shown in the information and projections contained in the Confidential
Information Memorandum and (y) there has been no development or event that has
had or could reasonably be expected to have a Parent Material Adverse Effect.
(k) In the case of each Lender, each other Lender, the Administrative
Agent, the Issuing Bank, the Syndication Agent and the Documentation Agent shall
have simultaneously executed and delivered this Agreement.
(l) (i) The Borrower and the Restricted Subsidiaries shall have no
indebtedness or other liabilities to third parties (including affiliates),
whether accrued, absolute, contingent or threatened, and whether due or to
become due, except in respect of (A) Facility A, Facility B and this Facility,
(B) the Mortgage Notes and the Parity Debt, (C) accounts payable and other
70
liabilities disclosed in the financial statements referred to in Section 4.01(m)
and satisfactory in all respects to the Lenders, (D) intercompany Indebtedness
permitted by Section 6.01 and (E) liabilities (other than indebtedness for
borrowed money) incurred in the ordinary course of business since June 30, 2003
(none of which other liabilities, individually or in the aggregate, could have a
Material Adverse Effect) and (ii) any liens on or claims or encumbrances
affecting any assets or properties of the Borrower and the Subsidiaries or any
other Collateral (including the Capital Stock of the Borrower) shall have been
released in a manner satisfactory to the Agents.
(m) The Lenders shall have received (i) the Pro Forma Balance Sheet, the
Audited Financial Statements and the Unaudited Financial Statements referred to
in Section 3.05, and such financial statements shall not, in the reasonable
judgment of the Lenders, reflect any material adverse change in the consolidated
financial condition of Borrower and its consolidated Subsidiaries, as reflected
in the financial statements or projections contained in the Confidential
Information Memorandum, and (ii) satisfactory projections for the Borrower and
its Subsidiaries through the 2007 fiscal year.
(n) All governmental, regulatory, shareholder and third party consents
(including under the Intercreditor Agreement, the Parent Indenture and the Note
Agreements), approvals, filings, registrations and other actions required in
order to consummate the transactions contemplated by this Facility shall have
been obtained or made, as applicable, and shall remain in full force and effect,
in each case without the imposition of any condition or restriction which is, in
the judgment of the Lenders, materially adverse to the Borrower or any of the
Subsidiaries.
(o) There shall not be any pending proceeding requesting an injunction or
restraining order with respect to this Facility or challenging the validity or
enforceability of this Facility.
(p) The representations and warranties set forth in Article III hereof and
the representations and warranties of the Borrower and the other Loan Parties
set forth in the other Loan Documents shall be true and correct in all material
respects on and as of the Closing Date with the same effect as though made on
and as of the Closing Date, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all material
respects on and as of such earlier date). No Default or Event of Default shall
have occurred and be continuing.
(q) The Administrative Agent shall have received a satisfactory solvency
certificate from the Chief Financial Officer of the Borrower, substantially in
the form of Exhibit M, certifying to the solvency of the Borrower and its
Subsidiaries after giving effect to the transactions contemplated hereby.
(r) The Borrower shall have paid all Fees and other amounts due and payable
to any Agent or Lender on or prior to the Closing Date, including reimbursement
or payment of all reasonable out-of-pocket expenses required to be reimbursed or
paid by the Borrower under the Letter Agreement or under any Loan Document,
including, without limitation, all reasonable fees and expenses of legal counsel
to the Administrative Agent and the Lenders and all search and filing fees of a
company acceptable to the Lenders (to the extent invoices or statements therefor
have been received on or prior to the Closing Date). The Borrower shall also
have paid all fees,
71
expenses and other amounts due and payable in connection with the assignments of
commitments under the Working Capital and Acquisition Facility Credit Agreement
made on the Closing Date.
(s) On the Closing Date, the commitments under the Existing Parity Debt
Credit Agreement shall have been terminated, all loans outstanding thereunder
shall have been repaid in full, together with accrued interest thereon, all
letters of credit issued thereunder shall have been terminated and all other
amounts owing pursuant to the Existing Parity Debt Credit Agreement shall have
been repaid in full, and the Administrative Agent shall have received evidence
in form, scope and substance satisfactory to it that the matters set forth in
this subsection have been satisfied at such time.
(t) The Administrative Agent shall have received a Notice of Borrowing as
required by Section 2.03 or a notice requesting the issuance of each Letter of
Credit as required by Section 2.21(b), as applicable, in either case such notice
shall specify a borrowing of at least $2,000,000.
Section 4.02 All Extensions of Credit. The obligations of the Lenders to
make Loans hereunder, and the obligation of the Issuing Bank to issue Letters of
Credit hereunder, are subject to the satisfaction of the conditions precedent
set forth in this Section 4.02 on the date of each Borrowing and on the date of
issuance of each Letter of Credit:
(a) The Administrative Agent shall have received a notice of such Borrowing
as required by Section 2.03 or a notice requesting the issuance of a Letter of
Credit as required by Section 2.21(b), as applicable.
(b) The representations and warranties set forth in Article III hereof and
the representations and warranties of the Borrower and the other Loan Parties
set forth in the other Loan Documents shall be true and correct in all material
respects on and as of the date of such Borrowing or the date of the issuance of
such Letter of Credit with the same effect as though made on and as of such
date, except to the extent such representations and warranties expressly relate
to an earlier date (in which case such representations and warranties shall be
true and correct in all material respects on and as of such earlier date).
(c) At the time of and immediately after such Borrowing or the issuance of
such Letter of Credit, the aggregate outstanding principal amount of the Loans
of each Class and the Letter of Credit Exposure of each Class will not exceed
the limitations set forth in Sections 2.01 and 2.21, respectively.
(d) At the time of and immediately after such Borrowing or the issuance of
such Letter of Credit, no Default or Event of Default shall have occurred and be
continuing.
(e) If Capital Stock is being purchased with proceeds from such Revolving
Credit Borrowing, the Agents and the Trustee shall have received counterparts of
a Supplemental Agreement duly executed by the issuer of such Capital Stock (and
all terms of such Supplemental Agreement shall have been satisfied).
72
(f) In the case of any Revolving Credit Borrowing and Tranche B Revolving
Credit Borrowing (or series of related Revolving Credit Borrowings and Tranche B
Revolving Credit Borrowings (as defined in the Working Capital and Acquisition
Facility Credit Agreement) not in the ordinary course of business consistent
with past practice) in a principal amount, and/or any Letter of Credit and/or
Tranche B Letter of Credit (as defined in the Working Capital and Acquisition
Facility Credit Agreement) (or series of related Letters of Credit and/or
Tranche B Letters of Credit (as defined in the Working Capital and Acquisition
Facility Credit Agreement) not in the ordinary course of business consistent
with past practice) having a face amount, in excess of $1,500,000 to be used for
Growth-Related Capital Expenditures, (i) the Agents shall be satisfied with all
aspects of such Growth-Related Capital Expenditures, including all legal, tax
and accounting matters relating such Growth-Related Capital Expenditures and the
terms of all agreements and instruments to be entered into in connection with
such Growth-Related Capital Expenditures, (ii) the Agents shall be satisfied
with all legal matters and documentation incident to such Growth-Related Capital
Expenditures and all corporate and other proceedings taken or to be taken in
connection therewith and (iii) the Agents shall have received (A) all financial
information reasonably requested by the Agents in connection with such
Growth-Related Capital Expenditures and (B) a statement of sources and uses of
funds in connection with such Growth-Related Capital Expenditures, in each case
certified by a Financial Officer of the Borrower.
(g) All components of such acquisition or Growth-Related Capital
Expenditure shall be consummated in accordance with applicable laws and
regulations.
(h) All governmental, regulatory, shareholder and third party consents,
approvals, filings, registrations and other actions required in order to
consummate such acquisition or Growth-Related Capital Expenditure (other than
any such actions the absence of which could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect) shall have
been obtained or made and shall remain in full force and effect, without the
imposition of any condition or restriction which is, materially adverse to the
Borrower or any of the Subsidiaries.
(i) There shall not be any pending proceeding requesting an injunction or
restraining order with respect to such acquisition or Growth-Related Capital
Expenditure or challenging the validity or enforceability of such acquisition or
Growth-Related Capital Expenditure.
(j) In the case of any issuance of a Letter of Credit, immediately
following the issuance of such Letter of Credit, the aggregate undrawn amount of
the sum of all outstanding Letters of Credit and all Tranche B Letters of Credit
(as defined in the Working Capital and Acquisition Facility Credit Agreement)
shall not exceed $12,500,000.
(k) The Borrower shall have directly paid in full to any company acceptable
to the Lenders, all invoices of such company for any Uniform Commercial Code
Search (lien, tax or judgment) and filings and no such invoices shall be unpaid.
(l) The Administrative Agent shall have received a certificate,
substantially in the form of Exhibit I-2 hereto, of a Responsible Officer of the
Borrower dated as of the date of such Borrowing or issuance of Letter of Credit
(the "Borrowing Certificate"), certifying as of such date, that:
73
(i) (x) the proposed use of proceeds of such Borrowing or such
Letter of Credit complies with Section 3.13, describing such proposed use
and specifying the basis for such conclusion in reasonable detail, and (y)
such Borrowing or Letter of Credit is permitted under the Note Agreements,
the Parent Indenture and the Working Capital and Acquistion Facility Credit
Agreement, specifying the relevant exceptions thereunder for such purpose
(together with supporting calculations and pro forma financial statements
demonstrating compliance with such exception to the satisfaction of the
Agents);
(ii) at the time of and immediately after such Borrowing or
issuance of Letter of Credit, the Leverage Ratio as of the date of such
Borrowing or issuance (after giving effect to the acquisition or
Growth-Related Capital Expenditure for which such Borrowing or Letter of
Credit is being used) shall be no greater than 4.50 to 1.00; and, in the
case of each such Borrowing or issuance of each such Letter of Credit, the
Borrower shall have prepared and furnished to the Agents prior to such
Borrowing or issuance pro forma financial statements demonstrating the
fulfillment of such condition to the satisfaction of the Agents. For
purposes of calculating the Leverage Ratio as required by this Section
4.02(l)(ii), Consolidated Cash Flow for the Reference Period shall mean the
greater of (A) Consolidated Cash Flow for the most recent period of four
consecutive fiscal quarters prior to the date of determination and (B) 50%
of Consolidated Cash Flow for the most recent period of eight consecutive
fiscal quarters prior to the date of determination (together with
supporting calculations and pro forma financial statements demonstrating
compliance with such condition to the satisfaction of the Agents);
(iii) after giving effect to such Borrowing or issuance of Letter
of Credit requested to be made or issued hereunder, the ratio of Parent
Consolidated Funded Debt to Parent Consolidated Cash Flow as of the date of
such Borrowing or issuance of such Letter of Credit, as applicable, shall
be no greater than 5.00 to 1.00 (together with supporting calculations and
pro forma financial statements demonstrating fulfillment of such condition
to the satisfaction of the Agents);
(iv) neither the Borrower nor any of its Subsidiaries shall have
made any Restricted Payment since the date of the most recent Borrowing or
issuance of Letter of Credit if, on the date of such Restricted Payment,
the ratio of (x) Parent Consolidated Cash Flow to (y) Parent Consolidated
Interest Expense plus the aggregate amount of Restricted Payments made by
the Public Partnership to its equityholders during the Reference Period
with respect to such date, was less than 0.75 to 1.00 (together with
supporting calculations and pro forma financial statements demonstrating
fulfillment of such condition to the satisfaction of the Agents);
(v) as of the date of such Borrowing or issuance of such Letter
of Credit, the Public Partnership and its Subsidiaries shall have in effect
weather insurance coverage of at least $12,500,000 on a consolidated basis;
and
(vi) with respect to the Plans as to which any of Star Gas
Partners, L.P., the Borrower or any of their respective Subsidiaries or
Related Person of Star Gas Partners, L.P. or the Borrower may have any
liability, the excess of the present value of
74
the accrued benefits (vested and unvested) of the participants in each such
Plan over the assets of each such plan (each as determined on a projected
benefit obligation basis, based on the actuarial methods and assumptions
indicated in the most recent applicable actuarial valuation reports), does
not exceed an aggregate amount equal to $7,500,000 on such date.
(m) Since September 30, 2002, there has been no development or event that
has had or could reasonably be expected to have a Parent Material Adverse
Effect.
(n) Within 90 days after the Closing Date, the Borrower shall have provided
evidence satisfactory to the Administrative Agent with respect to each account
of the Borrower covered by an effective Lockbox Agreement under the Working
Capital and Acquisition Facility Credit Agreement as of the Closing Date either
that (i) the depositary banks under such Lockbox Agreement has been notified
that JPMorgan Chase Bank has replaced Fleet National Bank as the administrative
agent and has been instructed to redirect the monies required to be transferred
to an account of the Borrower with Fleet National Bank pursuant to the terms of
such Lockbox Agreement to an account of the Borrower with JPMorgan Chase Bank,
acknowledged in writing by such depositary bank or (ii) such account has been
closed.
Each Revolving Credit Borrowing hereunder and each request for the issuance of a
Letter of Credit hereunder shall be deemed to constitute a representation and
warranty by the Borrower on the date of such Borrowing or issuance that the
conditions in this Section 4.02 have been satisfied. For purposes of this
Section 4.02, the "issuance" of a Letter of Credit shall include any extension,
renewal or amendment of a Letter of Credit.
ARTICLE V
ACCOUNTING; FINANCIAL STATEMENTS; INSPECTION
The Borrower covenants and agrees with each Lender that so long as this
Agreement shall remain in effect or any Facility Obligations shall be unpaid,
and until the Commitments have been terminated and the Loans, together with
interest, Fees and all other Facility Obligations have been paid in full, all
Letters of Credit have been cancelled or have expired and all Letter of Credit
Disbursements have been reimbursed in full, unless the Required Lenders shall
otherwise consent in writing:
Section 5.01 Accounting. The Borrower will maintain, and will cause each
Restricted Subsidiary to maintain, a system of accounting established and
administered in accordance with GAAP, and will accrue, and will cause each
Restricted Subsidiary to accrue, all such liabilities as shall be required by
GAAP.
Section 5.02 Financial Statements. The Borrower will deliver to the
Lenders:
(a) as soon as practicable, but in any event within 45 days after the end
of each of the first three quarterly fiscal periods in each fiscal year of the
Borrower, consolidated (and (A) if the Restricted Subsidiaries constitute a
Substantial Portion (as defined below), then as to the Restricted Subsidiaries
or (B) if the Restricted Subsidiaries do not constitute a Substantial Portion,
but one or more Restricted Subsidiaries have outstanding Indebtedness owing to
Persons
75
other than the Borrower or any Restricted Subsidiary, other than the Star/Petro
Intercompany Subordinated Debt, then as to such Restricted Subsidiaries,
consolidating) balance sheets of the Borrower and the Restricted Subsidiaries as
at the end of such period and the related consolidated (and, as to statements of
income and cash flows, if applicable and as appropriate, consolidating)
statements of income, surplus or partners' capital, cash flows and stockholders'
equity of the Borrower and the Restricted 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 certified by the principal financial officer of the 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 (except as noted in the proviso that follows) applied on a basis
consistent with prior fiscal periods; provided, that, it is understood that the
financial statements provided in accordance with this Section 5.02(a) shall be
adjusted to show Petro Holdings as consolidated with the Borrower; provided,
that delivery within the time period specified above of copies of the Public
Partnership's Quarterly Report on Form 10-Q prepared in compliance with the
requirements therefor and filed with the SEC shall be deemed to satisfy the
requirements hereof, but only to the extent such reports otherwise satisfy the
requirements of this Section 5.02(a), so long as the Public Partnership does not
conduct any material business or activity other than holding Capital Stock of
the Borrower; and provided, further, that, for purposes of this Section 5.02,
"Substantial Portion" shall mean that either (X) the book value of the assets of
the Restricted Subsidiaries exceeds 5% of the book value of the consolidated
assets of the Borrower and the Restricted Subsidiaries or (Y) the Restricted
Subsidiaries account for more than 5% of the Consolidated Net Income of the
Borrower and its Restricted Subsidiaries (it being agreed that the net income of
Unrestricted Subsidiaries shall not be consolidated with the Borrower and the
Restricted Subsidiaries for purposes of this calculation of Consolidated Net
Income), in each case in respect of the four fiscal quarters ended as of the
date of the applicable financial statement; provided, that, with respect to
Star/Petro, (i) the book value of the common stock of Petro Holdings shall be
excluded from the determination of Substantial Portion in clause (X) above and
(ii) the income of Petro Holdings shall be excluded from the determination of
Substantial Portion in clause (Y) above;
(b) as soon as practicable, but in any event within 90 days after the end
of each fiscal year of the Borrower ending after the date of this Agreement,
consolidated (and (A) if the Restricted Subsidiaries constitute a Substantial
Portion, then as to the Restricted Subsidiaries or (B) if the Restricted
Subsidiaries do not constitute a Substantial Portion, but one or more Restricted
Subsidiaries have outstanding Indebtedness owing to Persons other than the
Borrower or any Restricted Subsidiary other than the Star/Petro Intercompany
Subordinated Debt, then as to such Restricted Subsidiaries, consolidating)
balance sheets of the Borrower and the Restricted Subsidiaries and the
consolidated balance sheet of the General Partner as at the end of such year and
the related consolidated (and, as to statements of income and cash flows, if
applicable and as appropriate, consolidating) statements of income, partners'
capital, cash flows and stockholders' equity of the Borrower and the Restricted
Subsidiaries and the consolidated statements of income, surplus, cash flow and
stockholders' equity of the General Partner for such fiscal year, setting forth
in each case in comparative form the consolidated and, where applicable and as
appropriate, consolidating figures for the previous fiscal year, all in
reasonable detail; provided, that, it is understood that the financial
statements provided in accordance with this
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Section 5.02(b) shall be adjusted to show Petro Holdings as consolidated with
the Borrower, provided, that delivery within the time periods specified above of
copies of the Public Partnership's Annual Report on Form 10-K prepared in
compliance with the requirements therefor and filed with the SEC shall be deemed
to satisfy the requirements hereof, but only to the extent such reports (X)
otherwise satisfy the requirements of this Section 5.02(b) so long as the Public
Partnership does not conduct any material business or activity other than
holding Capital Stock of the Borrower, (Y) are accompanied by a report thereon
of KPMG LLP or other independent public accountants of recognized national
standing selected by the Borrower and acceptable to the Required Lenders, which
report shall state that such consolidated financial statements present fairly
the financial position of the Borrower and its Restricted 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 and (Z)
in the case of such consolidated financial statements of the General Partner and
such consolidating financial statements of the Borrower certified by the
principal financial officer of the General Partner, as presenting fairly the
information contained therein, in accordance with GAAP applied on a basis
consistent with prior fiscal periods;
(c) together with each delivery of financial statements pursuant to
paragraphs (a) and (b) of this Section 5.02 (or, in the case of clause (vi)
below only, within 15 days thereafter), an Officers' Certificate of the Borrower
in the form of Exhibit K hereto (i) stating that the signers have reviewed the
terms of this Agreement and the other Loan Documents, and have made, or caused
to be made under their supervision, a review in reasonable detail of the
transactions and condition of the Borrower and the Restricted Subsidiaries
during the accounting period covered by such financial statements and that the
signers do not have knowledge of the existence and continuance as at the date of
such Officers' Certificate of any condition or event which constitutes an Event
of Default or Default or, if any such condition or event exists, specifying the
nature and period of existence thereof and what action the Borrower has taken or
is taking or proposes to take with respect thereto, (ii) stating whether, since
the date of the most recent financial statements previously delivered, there has
been any material change in GAAP applied in the preparation of the Borrower's
financial statements and, if so, describing such change, (iii) specifying the
amount available at the end of such accounting period for Restricted Payments in
compliance with Section 6.04 and showing in reasonable detail all calculations
required in arriving at such amount, (iv) demonstrating in reasonable detail, if
applicable, compliance during and at the end of such accounting period with the
restrictions contained in Sections 6.01(b), (d), (e) and (f), the last paragraph
of Section 6.01, 6.02(i), 6.03(iv) and 6.07(c)(iii), (v) if not specified in the
related financial statements being delivered pursuant to paragraphs (a) and (b)
above, specifying the aggregate amount of interest paid or accrued by the
Borrower and the Restricted Subsidiaries, and the aggregate amount of
depreciation, depletion and amortization charged on the books of the Borrower
and the Restricted Subsidiaries, during the fiscal period covered by such
financial statements, (vi) describing in reasonable detail the number and nature
of the parcels of real property, or rights thereto or interests therein, caused
to be released by the Borrower from the liens of the Security Documents pursuant
to the Intercreditor Agreement and in the case of the fee owned property, the
sales price of the fee owned property caused to be released by the Borrower
during such accounting period and (vii) specifying any adjustments that were
made to the definitions of "Consolidated Net Income"
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or "Consolidated Cash Flow" for any non-cash gains or losses recognized as a
result of Statement of Financial Accounting Standard Numbers 133, 141 and 142;
(d) together with each delivery of consolidated financial statements
pursuant to paragraph (b) of this Section 5.02, a written statement by the
independent public accountants giving the report thereon (i) stating that in
connection with their audit examination, the terms of this Agreement and the
other Loan Documents were reviewed to the extent considered necessary for the
purpose of expression of an opinion on the consolidated financial statements and
for making the statement contained in clause (ii) of this paragraph (d) (it
being understood that no special audit procedures in addition to those required
by generally accepted auditing standards then in effect in the United States
shall be required) and (ii) stating whether, in the course of their audit
examination, they obtained knowledge (and whether, as of the date of such
written statement, they have knowledge) of the existence and continuance of any
condition or event which constitutes an Event of Default or Default, and, if so,
specifying the nature and period of existence thereof;
(e) promptly upon receipt thereof, copies of all reports submitted to the
Borrower by independent public accountants in connection with each special audit
or each annual or interim audit of the books of the Borrower or any Restricted
Subsidiary made by such accountants, including the comment letter submitted by
the accountants to management in connection with their annual audit;
(f) promptly upon their becoming publicly available, copies of all
financial statements, reports, notices and proxy statements sent or made
available by the Borrower, the General Partner or the Public Partnership to all
of its security holders in compliance with the Exchange Act or any comparable
Federal or state laws relating to the disclosure by any Person of information to
its security holders, of all regular and periodic reports and all registration
statements and prospectuses filed by the Borrower, the General Partner or the
Public Partnership with any securities exchange or with the SEC (other than
registration statements on Form S-8), and of all press releases and other
statements made available by the Borrower, the General Partner or the Public
Partnership to the public concerning material developments in the business of
the Borrower, the General Partner or the Public Partnership, as the case may be;
(g) promptly, but in any event within five days, after any Responsible
Officer knows or should (in the course of the normal performance of his or her
duties) know that (i) any condition or event which constitutes an Event of
Default or Default has occurred or exists, or is expected to occur or exist,
(ii) any Lender has given any notice or taken any other action with respect to a
claimed Event of Default or Default or (iii) any Person has given any notice to
the Borrower or any Restricted Subsidiary or taken any other action with respect
to a claimed default or event or condition of the type referred to in Section
7.01(f), an Officers' Certificate of the Borrower describing the same and the
period of existence thereof and what action the Borrower has taken, is taking
and proposes to take with respect thereto;
(h) promptly, but in any event within five days, after any Responsible
Officer knows or should (in the course of the normal performance of his or her
duties) know of the commencement of or significant development in any material
litigation or material proceeding (including those regarding environmental
matters) with respect to the Borrower or affecting the
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Borrower, any Restricted Subsidiary or any of their assets, a written notice
describing in reasonable detail such commencement of or significant development
in such litigation or proceeding;
(i) promptly, but in any event within five days after any Responsible
Officer knows or should (in the course of the normal performance of his or her
duties) know that any of the events or conditions specified below with respect
to any Plan has occurred or exists, or is expected to occur or exist, a
statement setting forth details respecting such event or condition and the
action, if any, that the Borrower or any Related Person has taken, is taking and
proposes to take or cause to be taken with respect thereto (and a copy of any
notice or report filed with or given to or communication received from the PBGC,
the Internal Revenue Service or the Department of Labor with respect to such
event or condition):
(i) any reportable event, as defined in Section 4043(c) of ERISA
and the regulations issued thereunder;
(ii) the filing under Section 4041 of ERISA of a notice of intent
to terminate any Plan or the termination of any Plan;
(iii) a substantial cessation of operations within the meaning of
Section 4062(e) of ERISA under circumstances which could result in the
treatment of the Borrower or any Related Person as a substantial employer
under a "multiple employer plan" or the application of the provisions of
Section 4062, 4063 or 4064 of ERISA to the Borrower or any Related Person;
(iv) the taking of any steps by the PBGC or the institution by
the PBGC of proceedings under Section 4042 of ERISA for the termination of,
or the appointment of a trustee to administer, any Plan, or the receipt by
the Borrower or any Related Person of a notice from a Multiemployer Plan
that such action has been taken by the PBGC with respect to such
Multiemployer Plan;
(v) the complete or partial withdrawal by the Borrower or any
Related Person under Section 4063, 4203 or 4205 of ERISA from a Plan which
is a "multiple employer plan" or a Multiemployer Plan, or the receipt by
the Borrower or any Related Person of notice from a Multiemployer Plan
regarding any alleged withdrawal or that it intends to impose withdrawal
liability on the Borrower or any Related Person or that it is in
reorganization or is insolvent within the meaning of Section 4241 or 4245
of ERISA or that it intends to terminate under Section 4041A of ERISA or
from a "multiple employer plan" that it intends to terminate;
(vi) the taking of any steps concerning the threat or the
institution of a proceeding against the Borrower or any Related Person to
enforce Section 515 of ERISA;
(vii) the occurrence or existence of any event or series of
events which could result in a liability to the Borrower or any Related
Person pursuant to Section 4069(a) or 4212(c) of ERISA;
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(viii) the failure to make a contribution to any Plan, which
failure, either alone or when taken together with any other such failure,
is sufficient to result in the imposition of a lien on any property of the
Borrower or any Related Person pursuant to Section 302 of ERISA or Section
412(n) of the Code or could result in the imposition of a material tax or
material penalty pursuant to Section 4971 of the Code on the Borrower or
any Related Person;
(ix) the amendment of any Plan in a manner which would be treated
as a termination of such Plan under Section 4041 of ERISA or require the
Borrower or any Related Person to provide security to such Plan pursuant to
Section 307 of ERISA or Section 401(a)(29) of the Code; or
(x) the incurrence of liability in connection with the occurrence
of a "prohibited transaction" (within the meaning of Section 406 of ERISA
or Section 4975 of the Code);
(j) promptly, but in any event within five days, after an officer of any of
the Borrower, any Subsidiary or the General Partner receives any notice or
request from any Person (other than any agent, attorney or similar party
employed by the Borrower or the General Partner) for information, or if the
Borrower, any Subsidiary or the General Partner by an officer provides any
notice or information to any such Person (other than any agent, attorney or
similar party employed by the Borrower or the General Partner), concerning the
presence or release of any hazardous substance (as defined in CERCLA) or
hazardous waste (as defined in RCRA) or other contaminants (as defined by any
applicable Federal, state, local or foreign laws) within, on, from, relating to
or affecting any property owned, leased, or subleased by the Borrower or any
Subsidiary, copies of each such notice, request or information;
(k) as soon as available, and in any event no later than 30 days after the
end of each fiscal year of the Borrower, quarterly financial projections for the
next fiscal year, including all material assumptions to such projections;
(l) within 15 days of receipt, any management letter issued or provided by
the auditors of the Borrower or any Restricted Subsidiary; and
(m) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Borrower, any other
Loan Party or (to the extent such information relates to environmental matters
or any material litigation or proceeding) any Unrestricted Subsidiary, or in any
event compliance with the terms of any Loan Document, as any Lender may
reasonably request.
Section 5.03 Inspection. The Borrower will permit, or cause the General
Partner to permit, any authorized representatives designated by the Lenders to
visit and inspect any of the properties of the Borrower, any Restricted
Subsidiary and (to the extent relating to environmental or litigation matters)
any Unrestricted Subsidiary, and in any event any properties of the General
Partner or of the General Partner's subsidiaries relating to the Business,
including the books of account of the Borrower, the Restricted Subsidiaries,
such Unrestricted Subsidiaries, the General Partner and the General Partner's
subsidiaries, and to make copies and take extracts therefrom,
80
and to discuss its and their affairs, finances and accounts with its and their
officers and (with reasonable notice) independent public accountants (and by
this provision each of the Borrower and the General Partner authorizes such
accountants to discuss with such representatives the affairs, finances and
accounts of the Borrower, any Restricted Subsidiary, such Unrestricted
Subsidiaries, the General Partner or any of such subsidiaries of the General
Partner, as the case may be, all at such times and as often as may be
requested), provided, that the Borrower will bear the expense for the foregoing
if an Event of Default or Default has occurred and is continuing.
ARTICLE VI
BUSINESS AND FINANCIAL COVENANTS
The Borrower covenants and agrees with each Lender that so long as this
Agreement shall remain in effect or any Facility Obligations shall be unpaid,
and until the Commitments have been terminated and the Loans, together with
interest, Fees and all other Facility Obligations have been paid in full, all
Letters of Credit have been cancelled or have expired and all Letter of Credit
Disbursements have been reimbursed in full, unless the Required Lenders shall
otherwise consent in writing:
Section 6.01 Indebtedness. The Borrower will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, create, incur, assume,
guarantee or otherwise become or remain directly or indirectly liable with
respect to (collectively, "incur"), any Indebtedness, except that:
(a) the Borrower may become and remain liable with respect to the
Indebtedness evidenced by the Mortgage Notes, the 2000 Parity Notes, the 2001
Parity Notes and the Working Capital and Acquisition Facility Credit Agreement;
(b) the Borrower and the Restricted Subsidiaries may become and remain
liable with respect to Funded Debt incurred by the Borrower and the Restricted
Subsidiaries to finance the making of expenditures for the improvement, repair
or alteration of any Assets or the replacement of any Assets due to obsolescence
with like-kind property, or to renew, refund, refinance or replace any such
Funded Debt; provided, that (i) such Funded Debt is incurred to finance
improvements, repairs, alterations or replacements made within the period of 365
days ending on the date such Funded Debt is incurred, (ii) the aggregate
principal amount of Funded Debt does not exceed the amount of Capital
Contributions made during such 365-day period which are applied to finance the
making of such improvements, repairs, alterations or replacements and (iii) if
such Funded Debt is to be secured under the Collateral Documents as provided in
Section 6.02(h), the agreement or instrument pursuant to which such Funded Debt
is incurred (A) contains no financial or business covenants that are more
restrictive on the Borrower or its Subsidiaries than, or that are in addition
to, those contained in Section 10 of the Note Agreements (unless prior to or
simultaneously with the incurrence of such Funded Debt, the Note Agreements, the
Working Capital and Acquisition Facility Credit Agreement and the other loan
documents related thereto, this Agreement and the other Loan Documents are
amended to provide the benefits of such more restrictive covenants to the
Secured Parties thereunder) and (B) specifies no events of default (other than
with respect to the payment of
81
principal and interest on such Funded Debt or the accuracy of representations
and warranties made in connection with such agreement or instrument) which are
capable of occurring prior to the occurrence of the Events of Default specified
in Section 11 of the Note Agreements (unless prior to or simultaneously with the
incurrence of such Funded Debt, the Note Agreements, the Working Capital and
Acquisition Facility Credit Agreement and the other loan documents related
thereto, this Agreement and the other Loan Documents are amended to provide the
benefits of such events of default to the holders of the Notes, the Notes (as
defined in the Working Capital and Acquisition Facility Credit Agreement), the
Mortgage Notes, the 2000 Parity Notes, the 2001 Parity Notes and the other
Parity Debt, as applicable);
(c) any Restricted Subsidiary may become and remain liable with respect to
unsecured Indebtedness of such Restricted Subsidiary owing to the Borrower or to
another Restricted Subsidiary; provided, that such Indebtedness is created and
is outstanding under an agreement or instrument pursuant to which such
Indebtedness is subordinated to the Notes and the Indebtedness secured under the
Collateral Documents and is evidenced by an Intercompany Note pledged to the
Trustee pursuant to the Borrower Security Agreement;
(d) the Borrower and the Restricted Subsidiaries may become and remain
liable with respect to unsecured Indebtedness (including, without limitation, in
the case of Indebtedness of Star/Petro, the Star/Petro Intercompany Subordinated
Debt) owing to the General Partner or the Public Partnership; provided, that (i)
the aggregate principal amount of such Indebtedness of the Borrower and the
Restricted Subsidiaries outstanding at any time shall not be in excess of
$10,000,000 (plus the Star/Petro Intercompany Subordinated Debt), (ii) such
Indebtedness is created and is outstanding under an agreement or instrument, or
the Star/Petro Intercompany Subordinated Note, as the case may be, pursuant to
which such Indebtedness is subordinated to the Indebtedness secured under the
Collateral Documents at least to the extent provided in the subordination
provisions set forth in Exhibit D and (iii) such Indebtedness is evidenced by a
promissory note, or the Star/Petro Intercompany Subordinated Note, as the case
may be, in form and substance satisfactory to the Required Lenders which is
pledged to the Trustee pursuant to the Partners Security Agreement;
(e) the Borrower and the Restricted Subsidiaries may become and remain
liable with respect to Indebtedness, in addition to that otherwise permitted by
the foregoing paragraphs of this Section 6.01, if on the date the Borrower or a
Restricted Subsidiary becomes liable with respect to any such additional
Indebtedness and immediately after giving effect thereto and to the
substantially concurrent repayment of any other Indebtedness (i) the ratio of
Consolidated Cash Flow to Consolidated Pro Forma Debt Service is greater than
2.50 to 1.00 and (ii) the ratio of Consolidated Cash Flow to Maximum
Consolidated Pro Forma Debt Service is greater than 1.25 to 1.00; provided,
that, in addition to the foregoing, if such Indebtedness is Funded Debt incurred
by the Borrower or any Restricted Subsidiary to finance the making of
expenditures for the improvement or repair of or additions to the Assets, and if
such Indebtedness is to be secured under the Collateral Documents as provided in
Section 6.02(h), such Indebtedness shall be incurred pursuant to an agreement or
instrument which complies with the requirements set forth in clause (iii) of the
proviso to Section 6.01(b);
(f) the Borrower and any Restricted Subsidiary may become and remain liable
with respect to pre-existing Indebtedness relating to any Person, business or
assets acquired by the
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Borrower or such Restricted Subsidiary, as the case may be; provided, that (i)
no condition or event shall exist which constitutes an Event of Default or
Default, (ii) such Indebtedness was not incurred in anticipation of the
acquisition of such Person, business or assets, (iii) after giving effect to
such Person becoming a Restricted Subsidiary, or the acquisition of such
business or assets, the Borrower or such Restricted Subsidiary could incur at
least $1.00 of additional Indebtedness in compliance with the requirements set
forth in clauses (i) and (ii) of Section 6.01(e) and (iv) the acquisition of
such Person, business or assets is permitted by all other applicable provisions
of the Loan Documents, including Sections 6.03 and 6.22;
(g) so long as no Event of Default or Default has occurred and is
continuing, the Borrower and the Restricted Subsidiaries may become and remain
liable with respect to Indebtedness evidenced by Funded Debt incurred for any
refinancing, refunding or replacement of the Mortgage Notes, the 2000 Parity
Notes, the 2001 Parity Notes, the Existing Parity Debt Credit Agreement (in an
aggregate outstanding principal amount not in excess of $2,000,000) and the
Tranche B Notes (as defined in the Working Capital and Acquisition Facility
Credit Agreement); provided, that (i) the aggregate principal amount of such
Funded Debt shall not exceed the aggregate principal amount of such outstanding
Indebtedness being refinanced, refunded, or replaced together with any accrued
interest and Make Whole Amount with respect thereto, (ii) at the time of such
incurrence and after giving effect thereto, the ratio of Consolidated Cash Flow
to Consolidated Interest Expense shall exceed 2.25 to 1.00, (iii) the maturity
date of such Funded Debt shall not be sooner than the maturity date of such
Indebtedness being refinanced, refunded or replaced, (iv) such Funded Debt shall
be secured on a pari passu basis with Indebtedness secured by the Collateral
Documents; and (v) the proceeds of such Funded Debt are used to refinance,
refund or replace existing Indebtedness within 45 days after the incurrence of
such Funded Debt (such proceeds are to be held in a bank account with the
Administrative Agent (other than an account subject to the Cash Collateral
Agreement) and such proceeds shall be remitted to the Borrower only upon
delivery to the Administrative Agent by the Borrower of a certificate certifying
that such proceeds will be used solely to refinance, refund or replace existing
Indebtedness pursuant to this Section 6.01(g)), provided, further, that Funded
Debt incurred pursuant to this clause (g) shall not be deemed to be outstanding
Indebtedness of the Borrower for any purpose during the 45-day or lesser period
referred to above while such proceeds are held by the Administrative Agent so
long as the proceeds of such Funded Debt are placed in such account at the time
of incurrence and applied to such refinancing, refunding or replacement within
the 45-day period;
(h) so long as no Event of Default or Default has occurred and is
continuing, the Borrower and the Restricted Subsidiaries may become and remain
liable with respect to unsecured Indebtedness incurred for any extension,
renewal, refinancing, refunding or replacement of Indebtedness permitted
pursuant to subdivisions (a), (b), (e) or (f) of this Section 6.01; provided,
that (i) the principal amount of such unsecured Indebtedness to be incurred
shall not exceed the principal amount of such Indebtedness being extended,
renewed, refinanced, refunded or replaced together with any accrued interest
and, in the case of the Mortgage Notes, the 2000 Parity Notes and the 2001
Parity Notes, Make Whole Amount with respect thereto and (ii) such unsecured
Indebtedness to be incurred shall not mature prior to the stated maturity of
such Indebtedness being extended, renewed, refinanced, refunded or replaced;
83
(i) the Borrower may create and become liable with respect to any Hedging
Agreements and Commodity Hedging Agreements;
(j) any Restricted Subsidiary may become and remain liable with respect to
Indebtedness evidenced by the Collateral Documents; and
(k) the Borrower may become and remain liable with respect to unsecured
Indebtedness owing to a Seller in connection with the acquisition of an Acquired
Business Entity from such Seller, provided, that (i) the aggregate principal
amount of such Indebtedness of the Borrower at any time shall not exceed
$5,000,000, and (ii) the aggregate Consolidated Cash Flow generated by such
Acquired Business Entity for so long as such Indebtedness is outstanding shall
exceed the aggregate amount of all principal and interest that will become due
and payable on such Indebtedness until such Indebtedness is repaid in full.
Notwithstanding the foregoing, the aggregate principal amount of all
Indebtedness of all Restricted Subsidiaries at any time outstanding (other than
Indebtedness secured by the Collateral Documents) shall not exceed $10,000,000
(plus the Star/Petro Intercompany Subordinated Debt). For the purpose of this
Section 6.01, any Person becoming a Restricted Subsidiary after the date of this
Agreement shall be deemed to have become liable with respect to all of its then
outstanding Indebtedness at the time it becomes a Restricted Subsidiary, and any
Person extending, renewing or refunding any Indebtedness shall be deemed to have
become liable with respect to such Indebtedness at the time of such extension,
renewal or refunding. The Borrower or any Restricted Subsidiary shall be deemed
to have become liable with respect to any Indebtedness securing any real
property acquired by the Borrower or such Restricted Subsidiary, as the case may
be, at the time of such acquisition.
Section 6.02 Liens, etc. The Borrower will not, and will not permit any
Restricted Subsidiary to, directly or indirectly create, incur, assume or permit
to exist any Lien on or with respect to any property or asset (including any
document or instrument in respect of goods or accounts receivable) of the
Borrower or any Restricted Subsidiary, whether now owned or held or hereafter
acquired, or any income or profits therefrom (whether or not provision is made
for the equal and ratable securing of the Facility Obligations in accordance
with the provisions of Section 6.14), except:
(a) Liens for taxes, assessments or other governmental charges the payment
of which is not at the time required by Section 6.09;
(b) Liens of landlords and carriers, vendors, warehousemen, mechanics,
materialmen, repairmen and other like Liens incurred in the ordinary course of
business for sums not yet due or the payment of which is not at the time
required by Section 6.09, in each case not incurred or made in connection with
the borrowing of money, the obtaining of advances or credit or the payment of
the deferred purchase price of property;
(c) Liens (other than any Lien imposed by ERISA) incurred or deposits made
in the ordinary course of business (i) in connection with workers' compensation,
unemployment insurance and other types of social security or (ii) to secure (or
to obtain letters of credit that secure) the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases,
84
performance bonds, purchase, construction or sales contracts and other similar
obligations, in each case not incurred or made in connection with the borrowing
of money, the obtaining of advances or credit or the payment of the deferred
purchase price of property;
(d) any attachment or judgment Lien, unless the judgment it secures shall
not, within 60 days after the entry thereof, have been discharged or execution
thereof stayed pending appeal, or shall not have been discharged within 60 days
after expiration of any such stay;
(e) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances, which, in each case are
granted, entered into or created in the ordinary course of the business of the
Borrower or any Restricted Subsidiary and which do not interfere with the
ordinary conduct of the business of the Borrower or any Restricted Subsidiary;
(f) Liens on property or assets of any Restricted Subsidiary securing
Indebtedness of such Restricted Subsidiary owing to the Borrower or any other
Restricted Subsidiary;
(g) Liens created by any of the Collateral Documents;
(h) Liens created by any of the Collateral Documents securing Indebtedness
incurred in accordance with Section 6.01(b), 6.01(g) or 6.01(i) (but only to the
extent such Indebtedness under Section 6.01(i) is incurred to any Lender) or, to
the extent incurred to finance the making of capital improvements, repairs and
additions to the Borrower's Assets, Section 6.01(e) (but only to the extent such
Liens comply with the requirements thereof), provided, that (i) such Liens are
effected through an amendment to the Collateral Documents to the extent
necessary to provide the holders of such Indebtedness equal and ratable security
in the property and assets subject to the Collateral Documents with the Secured
Parties, (ii) the Collateral Documents are amended to the extent necessary to
extend the Lien thereof to any property or assets acquired or otherwise financed
with the proceeds of such Indebtedness, (iii) the Borrower has delivered to the
Trustee an Officers' Certificate demonstrating that the principal amount of such
Indebtedness does not exceed the lesser of the cost to the Borrower of such
property or assets and the fair market value of such property or assets (as
determined in good faith by the General Partner) and to the effect that the
amendments to the Collateral Documents required by this Section 6.02(h) and the
filing and recordation of such amendments and related supplements will not have
a Material Adverse Effect and that such incurrence of Indebtedness pursuant to
Section 6.01(b), 6.01(e), 6.01(g) or 6.01(i), as the case may be, complies in
all respects with the requirements of such Section and (iv) the Borrower has
delivered to the Trustee an opinion of counsel reasonably satisfactory to the
Trustee to the effect that the Lien of the Collateral Documents has attached and
is perfected with respect to such additional property and assets;
(i) Liens existing on any property of a newly-acquired Restricted
Subsidiary at the time of acquisition or existing prior to the time of
acquisition (and not created in anticipation of such acquisition) upon any
property acquired by the Borrower or any Restricted Subsidiary; provided, that
(i) any such Lien shall be confined solely to the item or items of property so
acquired and, if required by the terms of the instrument originally creating
such Lien, other property which is an improvement to or is acquired for specific
use in connection with such acquired property, (ii) such item or items of
property so acquired (other than property (which
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may include stock or other equity interests) subject to Liens existing prior to
the time of acquisition and not created in anticipation of such acquisition) are
not required to become part of the Mortgaged Properties under the terms of the
Collateral Documents, (iii) the principal amount of the Indebtedness secured by
any such Lien shall at no time exceed an amount equal to the lesser of (A) the
cost of such property to the Borrower or such Restricted Subsidiary, as the case
may be, and (B) the fair market value of such property (as determined in good
faith by the General Partner) at the time of such acquisition by the Borrower or
such Restricted Subsidiary, and (iv) any such Lien shall not have been created
or assumed in contemplation of such acquisition of a Restricted Subsidiary or
property by the Borrower or any Restricted Subsidiary;
(j) Liens in amounts not exceeding $100,000 incurred, required or provided
for under state law in connection with self-insurance arrangements;
(k) Liens arising from or constituting encumbrances or exceptions to title
to the Assets expressly permitted by the Collateral Documents;
(l) Liens securing Capital Lease Obligations of the Borrower or any other
Restricted Subsidiary, including, without limitation, protective filings,
provided that, (i) such Capital Lease Obligation is permitted under Section
6.01, (ii) such Liens shall be created substantially simultaneously with the
lease of fixed or capital assets, (iii) such Liens do not at any time encumber
any property other than the property financed by such Indebtedness and (iv) the
amount of Indebtedness secured thereby is not increased; and
(m) any Lien renewing, extending or refunding any Lien permitted by the
foregoing paragraphs of this Section 6.02; provided, that (i) the Indebtedness
secured by any such Lien shall not exceed the amount of such Indebtedness
outstanding immediately prior to the renewal, extension or refunding of such
Lien, (ii) no Assets encumbered by any such Lien other than the Assets
encumbered immediately prior to such renewal, extension or refunding shall be
encumbered thereby and (iii) the Indebtedness secured by any such Lien shall not
mature prior to the stated maturity of such Indebtedness outstanding immediately
prior to the renewal, extension or refunding of such Lien.
Section 6.03 Investments, Guaranties, etc
. The Borrower will not, and will not permit any Restricted Subsidiary to,
directly or indirectly (a) make or own any Investment in any Person or (b)
create or become liable with respect to any Guaranty, except:
(i) the Borrower or any Restricted Subsidiary may make and own
Investments in Cash Equivalents;
(ii) the Borrower and any Restricted Subsidiary may make and own
Investments in any Restricted Subsidiary or Investments in Capital Stock of
any Person which simultaneously therewith becomes a Restricted Subsidiary;
(iii) any Restricted Subsidiary may make and permit to be
outstanding Investments in the Borrower and may create or become liable
with respect to any Guarantee in respect of the Facility Obligations, the
Mortgage Notes, the Working
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Capital and Acquisition Facility Credit Agreement, the 2000 Parity Notes,
the 2001 Parity Notes and any other Parity Debt;
(iv) (A) the Borrower or any Restricted Subsidiary may make and
own Investments in the Capital Stock of, or contributions to capital in the
ordinary course of business of, any Unrestricted Subsidiary or joint
venture, except Petro Holdings and its Subsidiaries, if (i) immediately
after giving effect to the making of any such Investment the aggregate
amount of all such Investments made and outstanding pursuant to this
paragraph (iv) shall not at any time exceed $15,000,000 and (ii) the
aggregate amount of all investments made and outstanding pursuant to this
clause (iv) as of the end of any fiscal quarter of the Borrower shall not
exceed by more than $5,000,000 the amount of such investments as of the
immediately preceding fiscal quarter of the Borrower, in the cases of both
subclauses (i) and (ii) of this clause, disregarding any such investment
which on the date of determination could be made pursuant to clause (ii) of
this Section 6.03 and net of cash distributions received from all
Unrestricted Subsidiaries and joint ventures for such period, excluding
Petro Holdings, for such period, and (B) Star/Petro may make and own
Investments in Petro Holdings, but only with the proceeds of (x) borrowings
constituting Star/Petro Intercompany Subordinated Debt or (y) capital
contributions or equity investments indirectly made by the Public
Partnership in Star/Petro on or after March 25, 1999;
(v) the Borrower or any Restricted Subsidiary may make and own
Investments (A) constituting trade credits or advances to any Person
incurred in the ordinary course of business, (B) arising out of loans and
advances to employees for travel, entertainment and relocation expenses, in
each case incurred in the ordinary course of business or (C) acquired by
reason of the exercise of customary creditors' rights upon default or
pursuant to the bankruptcy, insolvency or reorganization of a debtor;
(vi) the Borrower or any Restricted Subsidiary may create or
become liable with respect to any Guaranty constituting an obligation,
warranty or indemnity, not guaranteeing Indebtedness of any Person, which
is undertaken or made in the ordinary course of business; and
(vii) the Borrower may create and become liable with respect to
Hedging Agreements and Commodity Hedging Agreements.
Section 6.04 Restricted Payments. (a) The Borrower will not directly or
indirectly declare, order, pay, make or set apart any sum for any Restricted
Payment, except that the Borrower may make, pay or set apart once during each
calendar quarter a Restricted Payment if (i) such Restricted Payment is in an
amount not exceeding Available Cash for the immediately preceding calendar
quarter determined as of the last day of such calendar quarter or thereafter up
to the date of declaration of such Restricted Payment, (ii) prior to and
immediately after giving effect to any such proposed action no condition or
event shall exist which constitutes an Event of Default or Default, (iii) the
ratio of Consolidated Cash Flow to Consolidated Interest Expense for the
Reference Period with respect to the date of such payment is greater than 1.75
to 1.00 and (iv) the Borrower shall have delivered to the Lenders, not later
than the date such Restricted Payment is declared (which declaration date shall
be at least 10 days prior to the date such
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Restricted Payment is made) an Officers' Certificate to the effect that such
Restricted Payment is permitted under this Section 6.04 and showing in
reasonable detail all calculations required in arriving at such conclusion,
including the calculation of the aggregate amount available at the end of the
preceding quarter for payment of cash distributions in compliance with this
Section 6.04; provided, that Star/Petro may prepay principal amounts outstanding
under the Star/Petro Intercompany Subordinated Debt if and only if (x) the funds
used for such prepayment have been received by Star/Petro directly or indirectly
as a capital contribution made by the Public Partnership or as a dividend from
Petro Holdings on or after March 25, 1999 and (y) prior to and immediately after
giving effect to any such prepayment no condition or event shall exist which
constitutes an Event of Default or Default. The Borrower will not, in any event,
directly or indirectly declare, order, pay or make any Restricted Payment except
for cash distributions payable to the holders of its Capital Stock.
(b) The Borrower may make, pay or set apart once within 45 days from the
last day of each calendar quarter a Restricted Payment in an amount equal to the
Petro Holdings Dividends, if any; provided, that the following conditions are
met: (i) such Restricted Payment is in an amount not exceeding the Petro
Holdings Dividends less any amounts used to pay principal or interest on the
Star/Petro Intercompany Subordinated Debt in accordance with this Agreement,
(ii) prior to and immediately after giving effect to such proposed Restricted
Payment no condition or event shall exist which constitutes an Event of Default
or Default under Section 7.01(b), (iii) prior to and immediately after giving
effect to such proposed Restricted Payment the ratio of Consolidated Cash Flow
plus the Petro Holdings Dividends to Consolidated Interest Expense (excluding
the interest payable on the Star/Petro Intercompany Subordinated Debt, if any)
for the Reference Period with respect to the date of such payment is greater
than 1.75 to 1.00, and (iv) the Borrower shall have given to the Lenders written
notice thereof on the date such Restricted Payment is declared, which date shall
be at least 10 days prior to the date such Restricted Payment is made. The
Borrower will not, in any event, directly or indirectly declare, order, pay or
make any Restricted Payment except in cash.
(c) Notwithstanding any other provision of the Star/Petro Intercompany
Subordinated Note, until all amounts due under the Notes, this Agreement and
each of the other Loan Documents have been paid in full, no principal or
interest payment on the Star/Petro Intercompany Subordinated Note may be made,
except (A) if the proceeds used for such repayment have been received from the
proceeds of capital contributions or equity investments indirectly made by the
Public Partnership in Star/Petro on or after March 25, 1999 or from the proceeds
of dividends received from Petro Holdings, (B) with respect to a payment of
interest on the Star/Petro Intercompany Subordinated Note, the ratio of
Consolidated Cash Flow to Consolidated Interest Expense is greater than 2.0 to
1.0 for the four quarters ending on the calendar quarter immediately preceding
such payment and (C) prior to and immediately after giving effect to any such
interest or principal payment, no condition or event shall exist which
constitutes an Event of Default or Default.
Section 6.05 Transactions with Affiliates. Except for the transactions or
conduct effected pursuant to the Operative Agreements as in effect on the
Closing Date, the Borrower will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, engage in any transaction with any
Affiliate of the Borrower, including the purchase, sale or exchange of assets or
the rendering of any service, except pursuant to the reasonable requirements of
the Borrower's
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or such Restricted Subsidiary's business and upon fair and reasonable terms that
are no less favorable to the Borrower or such Restricted Subsidiary, as the case
may be, than those which might be obtained in an arm's-length transaction at the
time such transaction is agreed upon from Persons which are not such an
Affiliate; provided, that the foregoing limitations and restrictions shall not
apply to any transaction between the Borrower and any Restricted Subsidiary or
between Restricted Subsidiaries.
Section 6.06 Prohibited Stock and Indebtedness. The Borrower will not:
(a) directly or indirectly sell, assign, pledge or otherwise dispose of any
Indebtedness or Capital Stock of (or warrants, rights or options to acquire
Capital Stock of) any Subsidiary, except (i) to a Restricted Subsidiary, (ii) in
the case of the sale of all the Capital Stock of a Restricted Subsidiary as an
entirety, as permitted under Section 6.07 and (iii) pursuant to the Collateral
Documents;
(b) permit any Restricted Subsidiary directly or indirectly to sell,
assign, pledge or otherwise dispose of any Indebtedness of (i) the Borrower or
(ii) any other Restricted Subsidiary, or any Capital Stock of (or warrants,
rights or options to acquire Capital Stock of) any other Subsidiary, except (A)
to, in the case of clause (i), the Borrower or, in all other cases, a Restricted
Subsidiary, (B) in the case of the sale of all the Capital Stock of a Restricted
Subsidiary as an entirety, as permitted under Section 6.07 and (c) pursuant to
the Collateral Documents;
(c) permit any Restricted Subsidiary to have outstanding any Preferred
Stock (other than Preferred Stock owned by the Borrower); or
(d) permit any Subsidiary directly or indirectly to issue or sell
(including in connection with a merger or consolidation of a Restricted
Subsidiary otherwise permitted by Section 6.07(a)) any of its Capital Stock (or
warrants, rights or options to acquire its Capital Stock) except to the Borrower
or a Restricted Subsidiary;
provided, that, (i) any Restricted Subsidiary may sell, assign or otherwise
dispose of Indebtedness of the Borrower if, assuming such Indebtedness were
incurred immediately after such sale, assignment or disposition, such
Indebtedness would be permitted under Section 6.01 (and, if such Indebtedness is
secured, such Lien would be permitted pursuant to Section 6.02) and (ii) subject
to compliance with Section 6.07(c), all Indebtedness and Capital Stock of any
Restricted Subsidiary owned by the Borrower may be simultaneously sold as an
entirety for a cash consideration at least equal to the fair value thereof (as
determined in good faith by the General Partner) at the time of such sale if
such Restricted Subsidiary does not at the time own (A) any Indebtedness of the
Borrower (other than Indebtedness which, if incurred immediately after such
transaction, would be permitted under Section 6.01) or (B) any Indebtedness or
Capital Stock in any other Restricted Subsidiary which is not also being
simultaneously sold as an entirety in compliance with this proviso.
Section 6.07 Consolidation, Merger, Sale of Assets, etc. The Borrower will
not, and will not permit any Restricted Subsidiary to, directly or indirectly:
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(a) consolidated with or merge into any other Person or permit any other
Person to consolidate with or merge into it, provided that:
(i) any Restricted Subsidiary may consolidate with or merge into the
Borrower or, except in the case of Star/Petro, another Restricted
Subsidiary if, in the case of a consolidation with or merger into the
Borrower, the Borrower shall be the surviving Person and if, immediately
after giving effect to such transaction, no condition or event shall exist
which constitutes an Event of Default or Default; and
(ii) any entity (other than a Restricted Subsidiary) may consolidate
with or merge into the Borrower or a Restricted Subsidiary if the Borrower
or such Restricted Subsidiary, as the case may be, shall be the surviving
Person and if, immediately after giving effect to such transaction, (A) the
Borrower (1) shall not have a Consolidated Net Worth (determined in
accordance with GAAP applied on a basis consistent with the financial
statements of the Borrower most recently delivered pursuant to Section
5.02(b)) of less than the Consolidated Net Worth of the Borrower
immediately prior to the effectiveness of such transaction, (2) shall not
be liable with respect to any Indebtedness or allow its property to be
subject to any Lien which it could not become liable with respect to or
allow its property to become subject to under this Agreement on the date of
such transaction, and (3) could incur, if the consolidating or merging
entity has outstanding Indebtedness, at least $1.00 of additional
Indebtedness in compliance with Section 6.01(e) after giving effect to such
transaction, (B) substantially all of the assets of the Borrower and the
Restricted Subsidiaries shall be located and substantially all of their
business shall be conducted within the continental United States, and (C)
no condition or event shall exist which constitutes an Event of Default or
Default; and
(iii) the Borrower may consolidate with or merge into any other entity
if (A) the surviving entity is a corporation or limited partnership
organized and existing under the laws of the United States of America or a
state thereof or the District of Columbia, with substantially all of its
properties located and its business conducted within the continental United
States, (B) such corporation or limited partnership expressly and
unconditionally assumes the obligations of the Borrower under this
Agreement, each of the other Loan Documents, and delivers to each Lender at
the time outstanding in connection with such assumption an opinion of
counsel reasonably satisfactory to the Required Lenders with respect to
such matters incident to such assumption as may be reasonably requested by
such holders, including, without limitation, as to the due authorization
and execution of the related agreement of assumption and the enforceability
of such agreement against such corporation or partnership, (C) immediately
after giving effect to such transaction, such corporation or limited
partnership (1) shall not have a Consolidated Net Worth (determined in
accordance with GAAP applied on a basis consistent with the financial
statements of the Borrower most recently delivered pursuant to Section
5.02(b)) of less than the Consolidated Net Worth of the Borrower
immediately prior to the effectiveness of such transaction, (2) shall not
be liable with respect to any Indebtedness or allow its property to be
subject to any Lien which it could not become liable with respect to or
allow its property to become subject to under this Agreement on the date of
such transaction and (3) could incur at least $1.00 of additional
Indebtedness in compliance with
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Section 6.01(e) after giving effect to such transaction, and (D)
immediately after giving effect to such transaction no condition or event
shall exist which constitutes an Event of Default or Default; or
(b) sell, lease, abandon or otherwise dispose of (i) all or substantially
all its assets or (ii) all Capital Stock of any Restricted Subsidiary as an
entirety; provided, that:
(A) any Restricted Subsidiary may sell, lease or otherwise
dispose of all or substantially all its assets to the Borrower or,
except in the case of Star/Petro, to a Restricted Subsidiary; and
(B) the Borrower may sell, lease or otherwise dispose of all or
substantially all its assets to any corporation or limited partnership
into which the Borrower could be consolidated or merged in compliance
with subdivision (a)(iii) of this Section 6.07; provided that, (1)
each of the conditions set forth in such subdivision (a)(iii) shall
have been fulfilled, and (2) no such disposition shall relieve the
Borrower from its obligations under this Agreement, the other
Operative Agreements or the Notes; or
(c) sell, lease, abandon or otherwise dispose of any property to any Person
other than the Borrower or any Restricted Subsidiary (except in a transaction
permitted by subdivision (a)(iii) or (b)(B) of this Section 6.07 or an
abandonment or other disposition of Inventory in the ordinary course of
business) unless:
(i) at least 80% of the consideration therefor shall be in the
form of cash consideration;
(ii) immediately after giving effect to such proposed disposition
no condition or event shall exist which constitutes an Event of Default or
Default;
(iii) either
(A) the aggregate net proceeds of all property so disposed
of (whether or not leased back) by the Borrower and all Restricted
Subsidiaries during the current fiscal year (including property
disposed of through dispositions of Capital Stock permitted under
Section 6.06 or sales of assets permitted under Section 6.07(b) and
including all proceeds under title insurance policies with respect to
real property and all Net Insurance Proceeds, self-insurance amount
and Net Awards (as defined in the Mortgage) with respect to property
lost as a result of damage, destruction or a taking which have not
been applied to the cost of Restoration (as defined in the Mortgage)),
less the sum of (x) the amount of all such net proceeds previously
applied in accordance with paragraph (iii)(B) of this Section 6.07(c)
and (y) an amount equal to the purchase price of any assets acquired
(so long as (1) such assets were acquired within 180 days prior to the
date of such disposal of property, (2) the purchase price of such
assets was not previously applied to reduce the amount of net proceeds
of property disposed of under this Section 6.07(c), (3) such assets
were acquired for subsequent replacement of the property so disposed
of or may be productively used in the
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United States in the conduct of the Business, (4) such assets are
subject to the Lien of the Collateral Documents and (5) to the extent
such assets were acquired (in whole or in part) with the proceeds of
Indebtedness, such Indebtedness has been repaid in full), shall not
exceed $5,000,000 during such fiscal year, and when aggregated with
such net proceeds of all prior transactions under this Section
6.07(c), shall not exceed $15,000,000;
(B) in the event that such net proceeds less the sum of (x)
the amount thereof previously applied in accordance with this
paragraph (iii)(B) and (y) an amount equal to the purchase price of
any assets acquired (so long as (1) such assets were acquired within
180 days prior to the date of such disposal of property, (2) the
purchase price of such assets was not previously applied to reduce the
amount of net proceeds of property disposed of under this Section
6.07(c), (3) such assets were acquired for subsequent replacement of
the property so disposed of or may be productively used in the United
States in the conduct of the Business, (4) such assets are subject to
the Lien of the Collateral Documents and (5) to the extent such assets
were acquired (in whole or in part) with the proceeds of Indebtedness,
such Indebtedness has been repaid in full)), during the current fiscal
year exceed $5,000,000 or, when aggregated with such net proceeds of
all prior transactions under this Section 6.07(c), exceed $15,000,000
(the amount of such excess net proceeds actually realized being herein
called "Excess Proceeds"), the Borrower shall promptly pay over to the
Trustee such Excess Proceeds not at the time held by the Trustee for
application by the Trustee (I) within 180 days of the date of the
disposal or loss of property, to the acquisition of assets in
replacement of the property so disposed of or lost or of assets which
may be productively used in the United States in the conduct of the
Business (and such newly acquired assets shall be subjected to the
Lien of the Collateral Documents) or to the cost of Restoration (as
defined in the Mortgage), or (II) to the extent of Excess Proceeds not
applied pursuant to the immediately preceding clause (I), to the
payment and/or prepayment of the Facility Obligations and Parity Debt,
if any, pursuant to Section 2.11, all as provided in Section 4(d) of
the Intercreditor Agreement and Section 2.11, and the Trustee shall
have received an Officers' Certificate from the General Partner
certifying that the consideration received for such property is at
least equal to its fair value (as determined in good faith by the
Board of Directors) and that such consideration has been applied in
accordance with the terms of this Agreement; and
(iv) in the case of any sale, lease or other disposition of
Collateral which includes real property (or any interest therein), or any
sale, lease or other disposition of Collateral resulting in the aggregate
net proceeds of all such sales, leases or other dispositions exceeding
$10,000,000, the Trustee shall have received an Officers' Certificate from
the General Partner certifying that such sale, lease or other disposition
is in the best interest of the Borrower and will not have a Material
Adverse Effect.
Notwithstanding the foregoing, the Borrower and any Restricted Subsidiary may
sell or dispose of (x) real property assets sold or disposed of within 12 months
of the acquisition of such assets and (y) all other assets sold or disposed of
within 6 months of the acquisition of such assets, in
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each case referred to in clause (x) or (y) constituting a portion of an acquired
business; provided, that (1) such assets are specifically designated to the
Administrative Agent in writing prior to such acquisition as assets to be
disposed of and (2) the Administrative Agent shall have received an Officers'
Certificate from the General Partner certifying that the consideration received
for such property is at least equal to its fair market value (as determined in
good faith by the General Partner). Such dispositions under this paragraph will
not be applied towards the cumulative limitations in paragraph (c)(iii)(A) of
this Section 6.07. The Lenders agree to take, at the expense of the Borrower,
all actions necessary to cause dispositions of Collateral made in compliance
with this Section 6.07 to be made free and clear of the liens created by the
Collateral Documents.
Section 6.08 Partnership or Corporate Existence etc.; Business. (a) (i) The
Borrower will at all times preserve and keep in full force and effect its
partnership existence and its status as a partnership not taxable as a
corporation for Federal income tax purposes; (ii) the Borrower will cause each
Restricted Subsidiary to keep in full force and effect its partnership or
corporate existence; and (iii) the Borrower will, and will cause each Restricted
Subsidiary to, at all times preserve and keep in full force and effect all of
its material rights and franchises (in each case except as otherwise
specifically permitted in Sections 6.06 and 6.07 and except that the partnership
or corporate existence of any Restricted Subsidiary, and any right or franchise
of the Borrower or any Restricted Subsidiary, may be terminated if, in the good
faith judgment of the General Partner, such termination is in the best interest
of the Borrower, is not disadvantageous to the Lenders in any material respect
and would not have a Material Adverse Effect).
(b) The Borrower will not be obligated to preserve its status as a
partnership not taxable as a corporation for Federal income tax purposes if (i)
the Borrower's failure to preserve such status shall be the result of an
amendment to the tax laws enacted by the Congress of the United States and (ii)
after giving effect to the loss of such status the ratio of Consolidated Cash
Flow to Maximum Consolidated Pro Forma Debt Service, determined as of the date
of the loss of such status, would be greater than 1.1 to 1.0, assuming, for the
purposes of the computation of Consolidated Cash Flow, that Consolidated Cash
Flow would be reduced by taxes at the applicable tax rate for the Borrower for
such period had the Borrower been taxable as a corporation.
(c) The Borrower will not, and will not permit any Restricted Subsidiary
to, engage in any line of business other than the Business in which the Borrower
or its Restricted Subsidiaries are engaged on the Closing Date and described in
the Public Partnership's SEC Form 10-K for the fiscal year ended September 30,
2000 and other activities incidental or related to the Business.
Section 6.09 Payment of Taxes and Claims. The Borrower will, and will cause
each Subsidiary to, pay all taxes, assessments and other governmental charges or
levies imposed upon it or any of its properties or assets or in respect of any
of its franchises, business, income or profits when the same become due and
payable, but in any event before any penalty or interest accrues thereon, and
all claims (including claims for labor, services, materials and supplies) for
sums which have become due and payable and which by law have or might become a
Lien upon any of its properties or assets, and promptly reimburse the Agents,
the Issuing Bank and the Lenders for any such taxes, assessments, charges or
claims paid by them; provided, that no such
93
tax, assessment, charge or claim need be paid or reimbursed if being contested
in good faith by appropriate proceedings promptly initiated and diligently
conducted and if such reserves or other appropriate provision, if any, as shall
be required by GAAP shall have been made therefor and be adequate in the good
faith judgment of the General Partner.
Section 6.10 Compliance with ERISA. The Borrower will not, and will not
permit any Subsidiary or Related Person of the Borrower to:
(a) (i) engage in any transaction in connection with which the Borrower or
any Related Person or Subsidiary could be subject to either a civil penalty
assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of
the Code, (ii) terminate (within the meaning of Title IV of ERISA) or withdraw
from any Plan in any manner, or take, or fail to take, any other action with
respect to any Plan (including a substantial cessation of operations within the
meaning of Section 4062(e) of ERISA), (iii) establish, maintain, contribute to
or become obligated to contribute to any welfare benefit plan (as defined in
Section 3(1) of ERISA) or other welfare benefit arrangement which provides
post-employment benefits, which cannot be unilaterally terminated by the
Borrower, (iv) fail to make full payment when due of all amounts which, under
the provisions of any Plan or applicable law, the Borrower or any Subsidiary or
Related Person of the Borrower is required to pay as contributions thereto,
result in the imposition of a Lien or permit to exist any material accumulated
funding deficiency, whether or not waived, with respect to any Plan, or (v)
engage in any transaction in connection with which the Borrower, any Subsidiary
or any Related Person of the Borrower could be subject to liability pursuant to
Section 4069(a) or 4212(c) of ERISA, if, as a result of any such event,
condition or transaction described in clauses (i) through (v) above, either
individually or together with any other such event or condition, could result in
(x) the imposition of a Lien on any assets or property of the Borrower or any
Related Person or (y) any liability to the Borrower, any Subsidiary or any
Related Person of the Borrower, which liability could have a Material Adverse
Effect; or
(b) as of any date of determination (i) permit the amount of unfunded
benefit liabilities under any Plan to exceed the current value of the assets of
any such Plan by more than $250,000 or (ii) permit the aggregate liability
incurred by the Borrower and any Subsidiary and Related Persons of the Borrower
pursuant to Title IV of ERISA with respect to one or more terminations of, or
one or more complete or partial withdrawals from, any Plan to exceed $1,000,000.
As used in this Section 6.10, the term "accumulated funding deficiency" has the
meaning specified in Section 302 of ERISA and Section 412 of the Code, the term
"current value" has the meaning specified in Section 3 of ERISA and the terms
"benefit liabilities" and "amount of unfunded benefit liabilities" have the
meanings specified in Section 4001 of ERISA.
Section 6.11 Maintenance of Properties; Insurance. (a) The Borrower will
maintain or cause to be maintained in working order and condition, in accordance
with normal industry standards, all material properties used or useful in the
business of the Borrower and the Restricted Subsidiaries and from time to time
will make or cause to be made all appropriate repairs, renewals and replacements
thereof.
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(b) The Borrower will, and will cause each of the Restricted Subsidiaries
to, keep its insurable properties adequately insured at all times by Permitted
Insurers; maintain such other insurance, to such extent and against such risks,
including fire and other risks insured against by extended coverage, as is
customary with companies in the same or similar businesses, including public
liability insurance against claims for personal injury or death or property
damage occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by it; maintain such other insurance as may be
required by law or any Collateral Document; and cause each such insurance policy
to name the Trustee, on behalf of the Secured Parties, as an additional insured
or loss payee thereunder. The Borrower will permit the Agents and an insurance
consultant retained by the Agents, at the expense of the Borrower, to review the
insurance policies maintained by the Borrower on an annual basis and will
implement any changes to such policies reasonably recommended by such
consultant.
Section 6.12 Operative Agreements; Collateral Documents. The Borrower will,
and will cause each Restricted Subsidiary to, perform and comply with all of its
obligations under each of the Operative Agreements to which it is a party, will
enforce each such Operative Agreement against each other party thereto and will
not accept the termination of any such Operative Agreement, unless the taking of
or omitting to take any such action would not have a Material Adverse Effect.
The Borrower will not, and will not permit any other Loan Party to, amend,
modify or supplement any Operative Agreement or its partnership agreement,
certificate of incorporation or by-laws without the prior written consent of the
Required Lenders; provided, that (i) the MLP Agreement and the Partnership
Agreement may be amended, modified or supplemented without the prior written
consent of the Required Lenders if such amendment, modification or supplement
would not have a Material Adverse Effect and the Borrower shall have delivered
to each Lender a copy of such proposed amendment, modification or supplement
together with an Officer's Certificate describing such proposed amendment,
modification or supplement and confirming that such proposed amendment,
modification or supplement would not have a Material Adverse Effect and (ii) the
Note Agreements may be amended, modified or supplemented without the prior
written consent of the Required Lenders if such amendment, modification or
supplement may be made without the written consent of any Lenders under the
Intercreditor Agreement.
Section 6.13 Chief Executive Office. The Borrower will not move its chief
executive office and the office at which it maintains its records relating to
the transactions contemplated by this Agreement and the Collateral Documents or
change its state of incorporation unless (a) not less than 45 days' prior
written notice of its intention to do so, clearly describing the new location or
state, shall have been given to the Trustee and each Lender and (b) such action,
reasonably satisfactory to the Trustee and each Lender, to maintain any security
interest in the property subject to the Collateral Documents at all times fully
perfected and in full force and effect shall have been taken.
Section 6.14 Covenant to Secure Notes Equally. The Borrower covenants that,
if it or any Restricted Subsidiary shall create or assume any Lien upon any of
its property or assets, whether now owned or hereafter acquired, other than
Liens permitted by the provisions of Section 6.02 (unless prior written consent
to the creation or assumption thereof shall have been obtained from the Required
Lenders), it will make or cause to be made effective provision whereby the
Facility Obligations will be secured by such Lien equally and ratably with any
and
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all other Indebtedness thereby secured so long as any such other Indebtedness
shall be so secured; provided, however, that the provision of such equal and
ratable security shall not constitute a cure or waiver of any related Event of
Default.
Section 6.15 Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all applicable statutes, rules, regulations, and
orders of, and all applicable restrictions imposed by, the United States of
America, foreign countries, states, provinces and municipalities, and of or by
any Governmental Authority, including any court, arbitrator or grand jury, in
respect of the conduct of their respective businesses and the ownership of their
respective properties or business (including, without limitation, Environmental
Laws), except such as are being contested in good faith by appropriate
proceedings promptly initiated and diligently conducted and if such reserve or
other appropriate provision, if any, as shall be required by GAAP shall have
been made therefor or the failure to so comply could not reasonably be expected
to have a Material Adverse Effect.
Section 6.16 Further Assurances. (a) At any time and from time to time
promptly, the Borrower shall, at its expense, execute and deliver to each Lender
and to the Trustee such further instruments and documents, and take such further
action, as may be required under applicable law or as the Lenders may from time
to time reasonably request, in order to further carry out the intent and purpose
of this Agreement and to establish and protect the rights, interests and
remedies created, or intended to be created, in favor of the Lenders.
(b) Without limitation of Section 6.16(a), the Borrower will, and will
cause the Subsidiaries to, perform any and all acts and execute any and all
documents (including the execution, amendment, supplementation, delivery and
recordation and filing of security agreements and financing statements and
continuation statements under the Uniform Commercial Code of any applicable
jurisdiction) for filing under the provisions of the Uniform Commercial Code and
the rules and regulations thereunder, or any other statute, rule or regulation
of any applicable foreign, Federal, state or local jurisdictions, including any
filings in the United States Patent and Trademark Office or similar foreign
office, which are necessary (or reasonably requested by the Agents), from time
to time, in order to grant and maintain in favor of the Trustee for the ratable
benefit of the Secured Parties a security interest in each item of the
Collateral of the type and priority described in the relevant Collateral
Document, perfected to the extent contemplated hereby and thereby.
(c) Without limitation of Section 6.16(a), the Borrower will, and will
cause the Subsidiaries to, deliver or cause to be delivered to the Lenders from
time to time such other documentation, consents, authorizations, approvals and
orders in form and substance satisfactory to the Agents, as the Agents shall
deem reasonably necessary or advisable to perfect or maintain the Liens for the
benefit of the Secured Parties, including assets which are required to become
Collateral after the Closing Date.
Section 6.17 Subsidiaries. (a) The Borrower may designate any Restricted
Subsidiary or newly acquired or formed Wholly Owned Subsidiary satisfying the
requirements in clauses (a), (b) and (c) of the definition of Restricted
Subsidiary as an Unrestricted Subsidiary or any Unrestricted Subsidiary or newly
acquired or formed Subsidiary as a Restricted Subsidiary, in each case subject
to satisfaction of the following conditions:
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(i) immediately before and after giving effect to such
designation no condition or event shall exist which constitutes an Event of
Default or Default;
(ii) immediately after giving effect to such designation, (A)
except in the case of a designation as a Restricted Subsidiary of an
Unrestricted Subsidiary that does not have any Indebtedness the Borrower
would be permitted to incur at least $1.00 of additional Indebtedness in
compliance with paragraphs (i) and (ii) of Section 6.01(e), (B) the
Borrower and the Restricted Subsidiary would not be liable with respect to
Indebtedness or any Guarantee, would not own any Investment and their
property would not be subject to any Lien which is not permitted by this
Agreement and (C) substantially all of the Borrower's assets will be
located, and substantially all of the Borrower's business will be
conducted, in the United States;
(iii) in the case of a designation as an Unrestricted Subsidiary,
(A) if such designation (and all other prior designations of Restricted
Subsidiaries or newly acquired or formed Subsidiaries as Unrestricted
Subsidiaries during the current fiscal year) were deemed to constitute a
sale by the Borrower of all the assets of the Subsidiary so designated,
such sale would be in compliance with paragraph (iii)(A) or Section 6.07(c)
and (B) if such designation (and all other prior designations of Restricted
Subsidiaries or newly acquired or formed Subsidiaries as Unrestricted
Subsidiaries during the current fiscal year) were deemed to constitute an
Investment by the Borrower in respect of all the assets of the Subsidiary
so designated, such Investment would be in compliance with clause (iv) of
Section 6.03, in each case with the net proceeds of such sale or the amount
of such Investment being deemed to equal the net book value of such assets
in the case of a Restricted Subsidiary or the cost of acquisition or
formation in the case of a newly acquired or formed Subsidiary; provided,
that this subdivision (iii) of this Section 6.17(a) shall not apply to an
acquisition or formation by the Borrower or a Restricted Subsidiary of a
newly acquired or formed Unrestricted Subsidiary to the extent such
acquisition or formation is funded solely by the net cash proceeds received
by the Borrower from the General Partner or from the Public Partnership as
a capital contribution or as consideration for the issuance by the Public
Partnership of additional limited partnership interests;
(iv) in the case of a designation of a Restricted Subsidiary as
an Unrestricted Subsidiary, such Restricted Subsidiary shall not have been
an Unrestricted Subsidiary prior to being designated a Restricted
Subsidiary;
(v) in the case of a designation of an Unrestricted Subsidiary as
a Restricted Subsidiary, such Unrestricted Subsidiary at the time of such
designation has a positive consolidated net worth;
(vi) the Borrower shall deliver to each Lender, within five
Business Days after any such designation, an Officers' Certificate stating
the effective date of such designation and confirming compliance with the
provisions of this Section 6.17;
(vii) in the case of the designation of any Unrestricted
Subsidiary as a Restricted Subsidiary, such new Restricted Subsidiary shall
be deemed to have (a) made
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or acquired all Investments owned by it and (b) incurred all Indebtedness
owing by it and all Liens to which it or any of its properties are subject,
on the date of such designation;
(viii) the Borrower shall designate Star/Petro as a Restricted
Subsidiary and, notwithstanding any other provision of this Section
6.17(a), shall not change such designation without the consent of the
Required Lenders; and
(ix) the Borrower shall designate Petro Holdings as an
Unrestricted Subsidiary and, notwithstanding any other provision of this
Section 6.17(a), shall not change such designation without the consent of
the Required Lenders.
(b) The Borrower will cause each Restricted Subsidiary, at the time it is
or is deemed to be designated as a Restricted Subsidiary, to execute and deliver
a Supplemental Agreement and satisfy all terms therein.
(c) The Borrower will not own any Subsidiaries other than Wholly Owned
Subsidiaries satisfying the requirements in clauses (a), (b) and (c) of the
definition of Restricted Subsidiary.
Section 6.18 Use of Proceeds. The Borrower will use the proceeds of the
Loans and will use the Letters of Credit only for the purposes set forth in
Section 3.13.
Section 6.19 Accounting Changes. The Borrower will not, and will not suffer
or permit any Restricted Subsidiary to, make any significant change in
accounting treatment or reporting practices, except as required by GAAP. The
Borrower will, and will cause each Restricted Subsidiary to, cause its fiscal
year to end on September 30 in each year.
Section 6.20 Certain Real Property. Without affecting the obligations of
the Borrower or any of the Restricted Subsidiaries under any of the Collateral
Documents, in the event that the Borrower or any Restricted Subsidiary, at any
time after the date hereof, whether directly or indirectly, acquires any
interest in any real property, including any fee or other ownership interest in
one or more properties with an aggregate cost in excess of $50,000, or any
interest under one or more leases of real property for a term in excess of three
years and involving aggregate average payments in excess of $100,000 per annum
(each such interest, an "After Acquired Property"), the Borrower will, or will
cause such Restricted Subsidiary to, as soon as practical provide written notice
thereof to the Administrative Agent, setting forth with specificity a
description of such After Acquired Property, the location of such After Acquired
Property, any structures or improvements thereon and an appraisal or its
good-faith estimate of the current value of such real property ("Current
Value"). The Administrative Agent shall provide notice to the Borrower of
whether the Required Lenders intend to cause the Borrower to grant and record a
Mortgage on such After Acquired Property; provided, that no new mortgage on such
After Acquired Property shall be required if the costs that would be incurred as
a result thereof are excessive in relation to the benefits conferred thereby in
the reasonable judgment of the Administrative Agent and the Required Lenders;
provided, further, that the amount secured by a new mortgage on After Acquired
Property located in the State of New York or the State of Florida shall not
exceed 125% of the purchase price of such After Acquired Property. In such
event, the Borrower or such Restricted Subsidiary shall execute and deliver to
the Administrative
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Agent a Mortgage, together with such of the documents or instruments referred to
in Sections 4.01(d) and 4.01(e) as the Agents shall require. If, at any time,
the aggregate cost to the Borrower and its Restricted Subsidiaries of each
interest in real property (x) acquired by the Borrower or any Restricted
Subsidiary, whether directly or indirectly, at any time after the Closing Date,
at a cost equal to or less than $50,000, (y) at such time, owned directly or
indirectly by the Borrower or any Restricted Subsidiary and (z) for which a
mortgage in favor of the Trustee is not in effect (the "Aggregate Cost of
Unmortgaged Property"), exceeds $500,000, the Borrower will as soon as
practical, and in any event within 10 Business Days, provide written notice
thereof to the Administrative Agent, setting forth with specificity a
description of each such interest in real property, the location of such real
property and an appraisal or its good-faith estimate of the current value of
each such real property. The Administrative Agent may require the Borrower or
the applicable Restricted Subsidiary to grant and record a mortgage in favor of
the Trustee on one or more of such real properties so that the Aggregate Cost of
Unmortgaged Property does not exceed $500,000, provided, that no new mortgage on
any such real property shall be required if the costs that would be incurred as
a result thereof are excessive in relation to the benefit that would be
conferred thereby. In the event a mortgage is required, the Borrower or such
Restricted Subsidiary shall execute and deliver to the Trustee a mortgage,
together with such documents or instruments as the Administrative Agent shall
require. In no event shall the title insurance policy for any such After
Acquired Property be in an amount which is less than the Current Value of such
After Acquired Property. Further, with regard to any interest in real property,
including any fee or other ownership interest in real property or any material
lease of real property, currently owned or held by the Borrower or any
Restricted Subsidiary and which is not being encumbered by a Mortgage of even
date herewith (each such interest, an "Existing Unmortgaged Property"), upon the
written request of the Required Lenders, the Borrower will, or will cause any
applicable Restricted Subsidiary to, execute and deliver to the Administrative
Agent a Mortgage, together with such of the documents or instruments referred to
in Section 4.01(d) and 4.01(e) as the Agents shall require. In no event shall
the title insurance policy for any such Existing Unmortgaged Property be in an
amount which is less than the Current Value of such Existing Unmortgaged
Property. The Borrower shall pay all fees and expenses, including reasonable
attorneys' fees and expenses and expenses of any customary environmental due
diligence, and all title insurance charges and premiums, in connection with the
obligations of the Borrower and the Restricted Subsidiaries under this Section
6.20.
Section 6.21 Sale and Lease-Back Transactions. The Borrower will not, and
will not cause or permit any of the Restricted Subsidiaries to, enter into any
arrangement, directly or indirectly, with any Person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, with an intent to rent or lease such property
or other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred.
Section 6.22 Acquisitions. Except as permitted by Section 6.07, the
Borrower will not, and will not cause or permit any of the Restricted
Subsidiaries to, purchase, lease or otherwise acquire (in one transaction or a
series of transactions) all or any substantial part of the assets of any other
Person, except that (a) the Borrower and any of the Restricted Subsidiaries may
purchase inventory in the ordinary course of business and (b) the Borrower or
any Restricted Subsidiary may engage in any such acquisition if no Event of
Default or Default has occurred
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and is continuing at the time of any such acquisition or would occur immediately
after giving effect thereto.
Section 6.23 Impairment of Security Interests. The Borrower will not, and
will not permit any of the Subsidiaries to, take or omit to take any action,
which action or omission might or would have the result of materially impairing
the security interests in favor of the Trustee on behalf of the Secured Parties
with respect to the Collateral, and the Borrower will not, and will not permit
any of the Subsidiaries to, grant to any Person (other than the Trustee on
behalf of the Secured Parties) any interest whatsoever in the Collateral.
Section 6.24 Limitation on Restrictions on Subsidiary Dividends, etc. The
Borrower will not, and will not cause or permit any of the Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to (a) pay dividends or make any other
distributions on or in respect of its Capital Stock, or pay any indebtedness
owed to the Borrower or any Restricted Subsidiary, (b) make loans or advances to
the Borrower or any Restricted Subsidiary or (c) transfer any of its properties
or assets to the Borrower or any Restricted Subsidiary, except for such
encumbrances or restrictions existing under or by reason of (i) customary
non-assignment provisions in any lease governing a leasehold interest or other
contract entered into in the ordinary course of business consistent with past
practices or (ii) this Agreement, the other Loan Documents and the Note
Agreements.
Section 6.25 No Other Negative Pledges. The Borrower will not, and will not
cause or permit any of the Restricted Subsidiaries to, directly or indirectly,
enter into any agreement prohibiting the creation or assumption of any Lien upon
the properties or assets of the Borrower or any Restricted Subsidiary, whether
now owned or hereafter acquired, or requiring an obligation to be secured if
some other obligation is secured, except for this Agreement, the Note Agreements
and the Working Capital and Acquisition Facility Credit Agreement.
Section 6.26 Sales of Receivables. The Borrower will not, and will not
cause or permit any of the Restricted Subsidiaries to, sell with recourse,
discount or otherwise sell or dispose of its notes or accounts receivable,
except for accounts receivable consisting of assets of an operating unit sold as
a going concern in accordance with all other provisions of this Agreement.
Section 6.27 Fixed Price Supply Contracts; Certain Policies. (a) The
Borrower will not, and will not permit any of the Restricted Subsidiaries to, at
any time be a party or subject to any contract for the purchase or supply by
such parties of propane or other product except where (i) the purchase price is
set with reference to a spot index or indices substantially contemporaneously
with the delivery of such product or (ii) delivery of such propane or other
product is to be made no more than one year after the purchase price is agreed
to.
(b) The Borrower will not amend, modify or waive the trading policy or
supply inventory position policy referred to in Section 3.29, except that the
Borrower may enter into Commodity Hedging Agreements as permitted under the
other provisions hereof. The Borrower will provide the Agents and the Lenders
with prompt written notice of any such new Commodity Hedging Agreement. Subject
to the foregoing exception, the Borrower and the Restricted Subsidiaries will
comply in all material respects with such policies at all times.
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Section 6.28 Certain Operations. The Borrower shall not permit Petro or any
of its Affiliates (other than the Borrower and the Restricted Subsidiaries) to
acquire a business which derives any revenues from the sale of propane if, after
giving effect to such acquisition, Petro's Pro Forma Propane Volumes (as defined
below) would equal or exceed the lesser of (a) 15% of the Borrower's reported
propane volumes sold for the most recently completed four fiscal quarters which
ended at least 90 days prior to the date of such acquisition and (b) 15 million
gallons of propane (such lesser amount, the "maximum permitted amount"). If as a
result of an acquisition, Petro's Pro Forma Propane Volumes exceeds the maximum
permitted amount, the Borrower shall not be in violation of this Section 6.28 if
within the period of 90 days following such acquisition the Borrower causes
Petro to complete the disposition of sufficient propane volume to reduce Petro's
Pro Forma Propane Volumes below the maximum permitted amount. For purposes of
this Section 6.28, "Petro's Pro Forma Propane Volumes" shall mean the actual
propane volumes sold by Petro and any of its Affiliates (other than the Borrower
and the Restricted Subsidiaries) for the most recently completed four fiscal
quarters which ended at least 90 days prior to the date of determination plus
the propane volumes sold of the propane business to be acquired for the most
recently completed four fiscal quarters which ended at least 90 days prior to
the date of determination. In addition, in the event Petro or any of its
Affiliates (other than the Borrower and the Restricted Subsidiaries) owns a
propane business, the Borrower shall not permit Petro or any such Affiliate to
accept as a customer (except for de minimis, unintentional and isolated
acceptances) any Person who is (or was during the last billing cycle of the
Borrower and the Restricted Subsidiaries) a customer of the Borrower and the
Restricted Subsidiaries.
Section 6.29 Independent Corporate Existence. (a) Except as set forth on
Schedule 6.29, the Borrower shall maintain, and shall cause each of its
Subsidiaries (other than Petro Holdings or its Subsidiaries) to maintain, books,
records and accounts that are separate from the books, records and accounts of
Petro or any of its Subsidiaries such that: (i) the revenues of the Borrower and
its Subsidiaries will be credited to the accounts of the Borrower and its
Subsidiaries only; (ii) all expenses incurred by the Borrower and its
Subsidiaries shall be paid only from the accounts of the Borrower and its
Subsidiaries (other than those paid by Petro and allocated to the Borrower in
the manner set forth in clause (c) of this Section); (iii) only officers and
employees of the General Partner, the Borrower and its Subsidiaries in their
capacity as such shall have the authority to make disbursements with respect to
the accounts of the Borrower and its Subsidiaries; (iv) there shall occur no
sharing of accounts or funds between the Borrower and its Subsidiaries, on the
one hand, and Petro or any of its Subsidiaries (other than the Borrower and its
Subsidiaries), on the other hand; and (v) all cash and funds of the Borrower and
its Subsidiaries shall be managed separately from the cash and funds of Petro or
any of its Subsidiaries (other than the Borrower and its Subsidiaries), and
there shall not occur any commingling, including for investment purposes, of
funds or assets of the Borrower and its Subsidiaries with the funds or assets of
Petro or any of its Subsidiaries.
(b) All full-time employees, consultants and agents of the Borrower and its
Subsidiaries (other than Petro Holdings or its Subsidiaries) shall be
compensated directly from the bank accounts of the General Partner, the Borrower
and such Subsidiaries (other than Petro Holdings or its Subsidiaries) for
services provided by such employees, consultants and agents and, to the extent
any employee, consultant or agent is also an employee, consultant or agent of
Petro or any of its Subsidiaries, the compensation of such employee, consultant
or agent shall be
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allocated in accordance with clause (c) of this Section among the Borrower and
its Subsidiaries, on the one hand, and Petro and any of its Subsidiaries, on the
other hand, on a basis which reasonably reflects the services rendered to the
Borrower and its Subsidiaries (other than Petro Holdings or its Subsidiaries).
(c) All overhead expenses (including telephone and other utility charges)
for items shared by the Borrower and its Subsidiaries, on the one hand, and
Petro or any of its Subsidiaries (other than Petro Holdings or its
Subsidiaries), on the other hand, shall be allocated on the basis of actual use
to the extent practicable and, to the extent such allocation is not practicable,
on a basis reasonably related to actual use.
(d) The Borrower shall not permit Petro or any of its Subsidiaries to be
named as a loss payee or additional insured on the insurance policy covering the
property of the Borrower or any of its Subsidiaries (other than Petro Holdings
or its Subsidiaries), or enter into an agreement with the holder of such policy
whereby in the event of a loss in connection with such property, proceeds are
paid to Petro and its Subsidiaries.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01 Events of Default. In case of the happening of any of the
following events ("Events of Default"):
(a) default shall be made in the payment of any principal of any Loan or
any reimbursement obligation in respect of a Letter of Credit when and as the
same shall become due and payable, whether at the due date thereof or at a date
fixed for prepayment thereof or by acceleration thereof or otherwise;
(b) default shall be made in the payment of any interest on any Loan or any
Fee or any other amount (other than an amount referred to in paragraph (a)
above) due under any Loan Document, when and as the same shall become due and
payable, and such default shall continue unremedied for a period of five
Business Days;
(c) default shall be made in the due observance or performance by the
Borrower or any Subsidiary of any covenant, condition or agreement contained in
Section 5.02(h) or any of Sections 6.01 through 6.08, inclusive, Section 6.10,
Section 6.11 (other than the failure to deliver any broker report on a timely
basis as required by Section 15.3 of the Mortgage) and Sections 6.17 through
6.28, inclusive, of this Agreement or in Section 4.21 or 4.23 of the Borrower
Security Agreement;
(d) default shall be made in the due observance or performance by the
Borrower or any other Loan Party of any covenant, condition or agreement
contained in any Loan Document (other than those specified in paragraph (a), (b)
or (c) above) and such default shall continue unremedied for a period of 30 days
after such default shall first have become known to any officer of any Loan
Party or written notice thereof shall have been received by the Borrower from
the Administrative Agent or any Lender;
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(e) any representation or warranty made in writing or deemed made by or on
behalf of the Borrower or any of its Affiliates in this Agreement or any other
Operative Agreement shall prove to have been false or incorrect in any material
respect on the date as of which made or deemed made;
(f) the Borrower or any Restricted Subsidiary (as principal or guarantor or
other surety) shall default in the payment of any amount of principal of or
premium or interest on Indebtedness which is outstanding in a principal amount
of at least $2,000,000 in the aggregate (other than the Facility Obligations) or
the Working Capital and Acquisition Facility Credit Agreement or on the Mortgage
Notes; or any event shall occur or condition shall exist in respect of any
Indebtedness which is outstanding in a principal amount of at least $2,000,000
or the Working Capital and Acquisition Facility Credit Agreement or the Mortgage
Notes or under any evidence of any such Indebtedness or the Working Capital and
Acquisition Facility Credit Agreement, the Mortgage Notes or of any mortgage,
indenture or other agreement relating to such Indebtedness or the Working
Capital and Acquisition Facility Credit Agreement or the Mortgage Notes, the
effect of which is to cause (or to permit one or more Persons to cause) such
Indebtedness or the Working Capital and Acquisition Facility Credit Agreement or
the Mortgage Notes to become due before its stated maturity or before its
regularly scheduled dates of payment or to permit the holders of such
Indebtedness or the Working Capital and Acquisition Facility Credit Agreement or
the Mortgage Notes to cause the Borrower or any Restricted Subsidiary to
repurchase or repay such Indebtedness or the Working Capital and Acquisition
Facility Credit Agreement or the Mortgage Notes, and such default, event or
condition shall continue for more than the period of grace, if any, specified
therein and shall not have been waived pursuant thereto;
(g) filing by or on the behalf of the Borrower or the General Partner of a
voluntary petition or an answer seeking reorganization, arrangement,
readjustment of its debts or for any other relief under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar act or law, state or Federal, now or
hereafter existing ("Bankruptcy Law"), or any action by the Borrower or the
General Partner for, or consent or acquiescence to, the appointment of a
receiver, trustee or other custodian of the Borrower, or the General Partner, or
of all or a substantial part of its property; or the making by the Borrower or
the General Partner of any assignment for the benefit of creditors; or the
admission by the Borrower or the General Partner in writing of its inability to
pay its debts as they become due;
(h) filing of any involuntary petition against the Borrower or the General
Partner in bankruptcy or seeking reorganization, arrangement, readjustment of
its debts or for any other relief under any Bankruptcy Law and an order for
relief by a court having jurisdiction in the premises shall have been issued or
entered therein; or any other similar relief shall be granted under any
applicable Federal or state law; or a decree or order of a court of competent
jurisdiction for the appointment of a receiver, liquidator, sequestrator,
trustee or other officer having similar powers over the Borrower or the General
Partner or over all or a part of its property shall have been entered; or the
involuntary appointment of an interim receiver, trustee or other custodian of
the Borrower or the General Partner or of all or a substantial part of its
property; or the issuance of a warrant of attachment, execution or similar
process against any substantial part of the property of the Borrower or the
General Partner; and continuance of any
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such event for 60 consecutive days unless dismissed, bonded to the satisfaction
of the court of competent jurisdiction or discharged;
(i) filing by or on the behalf of any Restricted Subsidiary of a voluntary
petition or an answer seeking reorganization, arrangement, readjustment of its
debts or for any other relief under any Bankruptcy Law, or any action by any
Restricted Subsidiary for, or consent or acquiescence to, the appointment of a
receiver, trustee or other custodian of such Restricted Subsidiary or of all or
a substantial part of its property; or the making by any Restricted Subsidiary
of any assignment for the benefit of creditors; or the admission by any
Restricted Subsidiary in writing of its inability to pay its debts as they
become due;
(j) filing of any involuntary petition against any Restricted Subsidiary in
bankruptcy or seeking reorganization, arrangement, readjustment of its debts or
for any other relief under any Bankruptcy Law and an order for relief by a court
of competent jurisdiction shall have been issued or entered therein; or any
other similar relief shall be granted under any applicable Federal or state law;
or a decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee or other officer
having similar powers over any Restricted Subsidiary or over all or a part of
its property shall have been entered; or the involuntary appointment of an
interim receiver, trustee or other custodian of any Restricted Subsidiary or of
all or a substantial part of its property; or the issuance of a warrant of
attachment, execution or similar process against any substantial part of the
property of any Restricted Subsidiary; and continuance of any such event for 60
consecutive days unless dismissed, bonded to the satisfaction of the court of
competent jurisdiction or discharged;
(k) a final judgment or judgments (which is or are non-appealable or which
has or have not been stayed pending appeal or as to which all rights to appeal
have expired or been exhausted) shall be rendered against the Borrower or any
Restricted Subsidiary for the payment of money in excess of $1,000,000 in the
aggregate and any one of such judgments shall not be discharged or execution
thereon stayed pending appeal within 45 days after the date due, or, in the
event of such a stay, such judgment shall not be discharged within 30 days after
such stay expires, or any action shall be legally taken by a judgment creditor
to levy upon assets or properties of the Borrower or any Restricted Subsidiary
to enforce any such judgment;
(l) any of the Loan Documents or other Operative Agreements shall at any
time, for any reason, cease to be in full force and effect or shall be declared
to be null and void in whole or in any material part by the final judgment
(which is non-appealable or has not been stayed pending appeal or as to which
all rights to appeal have expired or been exhausted) of any court or other
governmental or regulatory authority having jurisdiction in respect thereof, or
the validity or the enforceability of any of the Loan Documents or other
Operative Agreements shall be contested by or on behalf of the Borrower or any
other Loan Party, or the Borrower or any other Loan Party shall renounce any of
the Loan Documents or other Operative Agreements, or deny that it is bound by
the terms of any of the Loan Documents or other Operative Agreements;
(m) any Lien purported to be created by any Collateral Document shall cease
to be, or shall for any reason be asserted by the Borrower or any other Loan
Party not to be, a valid, perfected, first priority Lien on the securities,
properties or assets covered thereby, other than as a result of an act or
omission of any Agent or Lender;
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(n) any order, judgment or decree is entered in any proceedings against the
Borrower decreeing a split-up of the Borrower which requires the divestiture of
assets of the Borrower or the divestiture of the stock of a Restricted
Subsidiary which would not be permitted if such divestiture were considered a
partial disposition of assets pursuant to Section 6.07(c) and such order,
judgment or decree shall not be dismissed or execution thereon stayed pending
appeal within 30 days after entry thereof, or, in the event of such a stay, such
order, judgment or decree shall not be discharged within 30 days after such stay
expires;
(o) there shall occur at any time a change in Legal Requirements
specifically applicable to the Borrower or to the Business or to the business of
the wholesale and retail sale, distribution and storage of propane gas and
related petroleum derivative products and the related retail sale of supplies
and equipment, including home appliances which would have a Material Adverse
Effect and 60 days after the earlier of (i) such occurrence shall first have
become known to any officer of the Borrower or the General Partner or (ii)
written notice thereof shall have been received by the Borrower from the
Administrative Agent or any Lender, such Material Adverse Effect shall be
continuing; or
(p) any Governmental Authority revokes or fails to renew any material
license, permit or franchise of the Borrower or any Restricted Subsidiary, or
the Borrower or any Restricted Subsidiary for any reason loses any material
license, permit or franchise, or the Borrower or any Restricted Subsidiary
suffers the imposition of any restraining order, escrow, suspension or impound
of funds in connection with any proceeding (judicial or administrative) with
respect to any material license, permit or franchise;
then, and in every such event, and at any time thereafter during the continuance
of such event, the Administrative Agent may, and at the request of the Required
Lenders shall, take one or more of the following actions, at the same or
different times: (i) by notice to the Borrower terminate the Commitments and
they shall immediately terminate; (ii) by notice to the Borrower declare the
Loans then outstanding to be forthwith due and payable (in whole or, in the sole
discretion of the Required Lenders, from time to time in part), whereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Borrower accrued hereunder or under any other Loan Document, shall thereupon
become immediately due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding; (iii) require the Borrower to deposit cash collateral
with the Trustee pursuant to the Intercreditor Agreement in an amount not
exceeding the Letter of Credit Exposure; (iv) exercise any remedies available
under the Guarantee Agreements, the Collateral Documents or otherwise; or (v)
any combination of the foregoing; provided, that in the case of any of the
Events of Default with respect to the Borrower described in paragraph (g) or (h)
above, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and any unpaid
accrued Fees and all other liabilities of the Borrower accrued hereunder or
under any other Loan Document, shall automatically become due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrower, anything contained herein or
in any other Loan Document to the contrary notwithstanding.
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Section 7.02 Remedies. In case any one or more Events of Default or
Defaults shall occur and be continuing, (i) any Lender may proceed to protect
and enforce the rights of such Lender by an action at law, suit in equity or
other appropriate proceeding, whether for the specific performance of any
agreement contained herein or in any other Loan Document, or for an injunction
against a violation of any of the terms hereof or thereof, or in aid of the
exercise of any power granted hereby or thereby or by law or otherwise, and (ii)
the Trustee and the Lenders may exercise any rights or remedies in their
respective capacities under the Collateral Documents in accordance with the
provisions thereof. In case of a default in the payment or performance of any
provision hereof or of the Loan Documents, the Borrower will pay to each Lender
such further amount as shall be sufficient to cover the cost and expenses of
collection, including reasonable attorneys' fees, expenses and disbursements,
and any out-of-pocket costs and expenses of any such holder incurred in
connection with analyzing, evaluating, protecting, ascertaining, defending or
enforcing any of its rights as set forth herein or in any of the Loan Documents.
No course of dealing and no delay on the part of any Lender in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such Lender's rights, powers or remedies. No right, power or remedy conferred by
this Agreement or by any other Loan Document upon any Lender shall be exclusive
of any other right, power or remedy referred to herein or therein or now or
hereafter available at law, in equity, by statute or otherwise.
ARTICLE VIII
THE AGENTS AND ISSUING BANK
Section 8.01 Appointment and Authorization. (a) Each of the Lenders, and
each subsequent holder of any Note by its acceptance thereof, hereby irrevocably
appoints and authorizes each of the Agents and the Issuing Bank to take such
actions as agent on behalf of such Lender or holder and to exercise such powers
as are specifically delegated to such Agent or the Issuing Bank, as the case may
be, by the terms and provisions hereof and of the other Loan Documents, together
with such actions and powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement,
neither the Agents nor the Issuing Bank shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agents or
the Issuing Bank.
(b) The Administrative Agent is hereby expressly authorized by the Lenders
to, without hereby limiting any implied authority, and hereby agrees (in the
case of clause (ii) below, at the direction of the Required Lenders) to, (i)
receive on behalf of the Lenders all payments of principal of and interest on
the Loans and all other amounts due to the Lenders hereunder, and promptly to
distribute to each Lender its proper share of each payment so received; (ii)
give notice on behalf of each of the Lenders to the Borrower of any Event of
Default specified in this Agreement of which the Administrative Agent has actual
knowledge acquired in connection with its agency hereunder; and (iii) distribute
to each Lender copies of all notices, financial statements and other materials
delivered by the Borrower or any Subsidiary pursuant to this Agreement or any
other Loan Document as received by the Administrative Agent (other than
materials required hereunder to be delivered by the Borrower directly to the
Lenders).
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Section 8.02 Liability of Agents. Neither the Agents, the Issuing Bank, nor
any of their respective directors, officers, employees, attorneys-in-fact,
affiliates or agents, shall be liable as such for any action taken or omitted to
be taken by any of them in connection with this Agreement or any other Loan
Document, except for such party's own gross negligence or willful misconduct (as
found by a final and non-appealable decision of a court of competent
jurisdiction), or be responsible for any statement, warranty, recital or
representation herein or the contents of any document delivered in connection
herewith, or be required to ascertain or to make any inquiry concerning the
performance or observance by the Borrower or any Subsidiary of any of the terms,
conditions, covenants or agreements contained in any Loan Document. Neither the
Agents nor the Issuing Bank shall be responsible to the Lenders or the holders
of the Notes for the due execution, genuineness, validity, enforceability or
effectiveness of this Agreement, the Notes or any other Loan Documents or other
instruments or agreements. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes hereof until it shall have
received from the payee of such Note notice, given as provided herein, of the
transfer thereof in compliance with Section 9.04. Each of the Agents, the
Issuing Bank and the Lenders shall be entitled to rely, and shall be fully
protected in relying, upon any instrument, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including counsel to the Borrower),
independent accountants and other experts selected by the Administrative Agent.
Each of the Administrative Agent and the Issuing Bank shall be fully justified
in failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action. Neither the Agents, the
Issuing Bank nor any of their respective directors, officers, employees or
agents, shall have any responsibility to the Borrower on account of the failure
of or delay in performance or breach by any Lender of any of its obligations
hereunder or to any Lender on account of the failure of or delay in performance
or breach by any other Lender or the Borrower or any Subsidiary of any of their
respective obligations hereunder or under any other Loan Document or in
connection herewith or therewith. Each of the Agents and the Issuing Bank may
execute any and all duties hereunder by or through agents or employees, shall be
entitled to consult with legal counsel, independent public accountants and other
experts selected by it with respect to all matters arising hereunder and shall
not be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts. None of
Lenders identified in this Agreement as a "Documentation Agent" or "Syndication
Agent" shall have any obligation, liability, responsibility or duty under this
Agreement in such capacity other than those applicable to all Lenders as such.
Without limiting the foregoing, none of Lenders so identified as "Documentation
Agent" or "Syndication Agent" shall have or be deemed to have any fiduciary
relationship with any Lender. Each Lender acknowledges that is has not relied,
and will not rely, on any of Lenders so identified in deciding to enter into
this Agreement or in taking or not taking action hereunder.
Section 8.03 Action by Agents. The Lenders hereby acknowledge that none of
the Agents and the Issuing Bank shall be under any duty to take any
discretionary action permitted to be taken by it pursuant to the provisions of
this Agreement unless it shall be requested in writing
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to do so by the Required Lenders. The obligations of the Agents and the Issuing
Bank under the Loan Documents are only those expressly set forth herein and
therein.
Section 8.04 Notice of Default. Except for actual knowledge of non-payment,
the Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless the Administrative Agent
has received notice from a Lender or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders (or, if
so specified by this Agreement, all Lenders); provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
Section 8.05 Successor Agents. The Administrative Agent and the Issuing
Bank (except, in the case of the Issuing Bank, in respect of Letters of Credit
issued by it) may resign at any time by notifying the Lenders and the Borrower.
Upon any such resignation, the Required Lenders shall have the right to appoint
from among the Lenders a successor, whereupon such successor shall succeed to
the rights, powers and duties of either the Administrative Agent or Issuing
Bank, and the term "Administrative Agent" or "Issuing Bank" shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent or Issuing Bank's rights, powers and duties as
Administrative Agent or Issuing Bank shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent, Issuing
Bank or any of the parties to this Agreement or any holders of the Loans. If no
successor shall have been so appointed by the Required Lenders, and shall have
accepted such appointment, within 10 days after the retiring Agent or Issuing
Bank, as the case may be, gives notice of its resignation, then the retiring
Administrative Agent's or Issuing Bank's resignation shall nevertheless
thereupon become effective, and the retiring Administrative Agent or Issuing
Bank, as the case may be, may, on behalf of the Lenders, appoint a successor,
which shall be a commercial bank organized or licensed under the laws of the
United States of America or of any State thereof and having a combined capital
and surplus of at least $500,000,000 or an Affiliate of any such bank. Upon the
acceptance of any appointment as the Administrative Agent or Issuing Bank, as
the case may be, hereunder by a successor bank, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent or Issuing Bank and the retiring Administrative
Agent or Issuing Bank shall be discharged from its duties and obligations
hereunder. After the resignation of the Administrative Agent or the Issuing
Bank, as the case may be, hereunder, the provisions of this Article and Section
9.05 shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent or
Issuing Bank.
Section 8.06 Agent and Affiliate. With respect to the Loans made by it
hereunder, the Letters of Credit issued by it hereunder and the Notes issued to
it, each of the Agents and the Issuing Bank in its individual capacity and not
as an Agent or the Issuing Bank shall have the same rights and powers as any
other Lender and may exercise the same as though it were not an Agent or the
Issuing Bank. The term "Lender" or "Lenders" shall include each Agent in its
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individual capacity. Each of the Agents and the Issuing Bank (and its
Affiliates) may accept deposits from, lend money to and generally engage in any
kind of business and transactions with the Borrower or any Subsidiary or other
Affiliate thereof as if it were not an Agent or the Issuing Bank (or such
Affiliate thereof).
Section 8.07 Indemnification. Each Lender agrees (a) to reimburse each of
the Agents and the Issuing Bank, on demand, in the amount of its pro rata share
(based on its Commitment hereunder) of any expenses incurred for the benefit of
the Lenders by such Agent or the Issuing Bank, as the case may be, including
counsel fees and compensation of agents and employees paid for services rendered
on behalf of the Lenders, which shall not have been reimbursed by the Borrower
and (b) to indemnify and hold harmless each of the Agents, the Issuing Bank and
any of their respective directors, officers, employees, attorneys-in-fact,
affiliates or agents, promptly after demand, in the amount of such pro rata
share, from and against any and all liabilities, taxes, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may at any time be imposed on, incurred
by or asserted against it in its capacity as an Agent or the Issuing Bank or any
of them in any way relating to or arising out of this Agreement, any other Loan
Document, any documents contemplated by or referred herein or therein, the
transactions contemplated hereby or thereby or any action taken or omitted by it
or any of them under this Agreement or any other Loan Document, to the extent
the same shall not have been reimbursed by the Borrower; provided, that no
Lender shall be liable to any Agent or the Issuing Bank for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the gross negligence or willful
misconduct of such Agent or the Issuing Bank (as found by a final and
non-appealable decision of a court of competent jurisdiction).
Section 8.08 Credit Decision. Each Lender expressly acknowledges that
neither the Agents nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or affiliates have made any representations or
warranties to it and that no act by any Agent hereafter taken, including any
review of the affairs of a Loan Party or any affiliate of a Loan Party, shall be
deemed to constitute any representation or warranty by any Agent to any Lender.
Each Lender acknowledges that it has, independently and without reliance upon
the Agents, the Issuing Bank or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will independently and without reliance upon the Agents, the Issuing Bank or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement or any other Loan Document, any
related agreement or any document furnished hereunder or thereunder. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Agents hereunder, the Agents shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of the Agents or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
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Section 8.09 Intercreditor Agreement. The Lenders hereby authorize and
agree to be bound by the terms of the Intercreditor Agreement and authorize the
Administrative Agent, on behalf of the Lenders, to execute the Agreement of
Parity Lenders and Supplement to Intercreditor Agreement.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Notices. Notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy as follows:
(a) if to the Borrower, to it at:
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
E-mail: xxxxxxx@xxxx-xxx.xxx
(b) if to the Administrative Agent, to it at:
JPMorgan Chase Bank
Loan and Agency Services Group
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx/Xxxxxxx Xxxxx
Telecopy: (000) 000-0000
with a copy to:
JPMorgan Chase Bank
000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. XxXxxx, Xx.
Telecopy: (000) 000-0000
(c) if to the Documentation Agent, to it at:
Wachovia Bank, N.A.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxx
Telecopy no.: (000) 000-0000
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with a copy to
Wachovia Bank, N.A.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Telecopy no.: (000) 000-0000
(d) if to the Syndication Agent, to it at:
Fleet National Bank
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Telecopy no.: (000) 000-0000
with a copy to:
Fleet National Bank
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
Telecopy no.: (000) 000-0000
(e) if to a Lender, to it at its address on Schedule 1.01A hereto or in the
Assignment and Acceptance pursuant to which such Lender shall have become a
party hereto.
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by telecopy or on the date five Business Days after dispatch by
certified or registered mail if mailed, in each case delivered, sent or mailed
properly addressed) to such party as provided in this Section 9.01 or in
accordance with the latest unrevoked direction from such party given in
accordance with this Section 9.01; provided, that any notice, request or demand
to or upon the Administrative Agent or the Lenders shall not be effective until
received.
Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided, that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided, that
approval of such procedures may be limited to particular notices or
communications.
Section 9.02 Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders, the Agents and the Issuing Bank and shall
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survive the making by the Lenders of the Loans, the execution and delivery to
the Lenders of the Notes evidencing such Loans, and the issuance of the Letters
of Credit, regardless of any investigation made by the Lenders, the Agents or
the Issuing Bank or on their behalf, and shall continue in full force and effect
as long as (a) the principal of or any accrued interest on any Loan, any Fee,
any Letter of Credit Disbursement or any other amount payable under this
Agreement or any other Loan Document is outstanding and unpaid, (b) the
Commitments have not been terminated or (c) any Letter of Credit has not expired
or been terminated.
Section 9.03 Binding Effect. This Agreement shall become effective when the
conditions precedent set forth in Section 4.01 are satisfied (except that,
solely for the purpose of calculating any fees stated herein to commence to
accrue on the date of this Agreement, this Agreement shall become effective when
the conditions precedent set forth in Section 4.01(a) are satisfied).
Section 9.04 Successors and Assigns; Participations and Assignments. (a)
The provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns permitted
hereby (including any affiliate of the Issuing Lender that issues any Letter of
Credit), except that (i) the Borrower may not assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by the Borrower without such
consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this
Section.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees (each, an "Assignee") all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld) of:
(A) the Borrower, provided, that no consent of the Borrower
shall be required for an assignment to a Lender, an affiliate of a
Lender, an Approved Fund (as defined below) or, if an Event of Default
under Section 7.01(a), (b), (g), (h), (i) or (j) has occurred and is
continuing, any other Person;
(B) the Administrative Agent, provided, that no consent of
the Administrative Agent shall be required for an assignment of (x)
any Revolving Credit Commitment to an assignee that is a Lender with a
Revolving Credit Commitment immediately prior to giving effect to such
assignment or (y) all or any portion of a Term Loan to a Lender, an
Affiliate of a Lender or an Approved Fund; and
(C) in the case of an assignment of any Revolving Credit
Commitment, the Issuing Bank, provided, that no consent of the Issuing
Bank shall be required for an assignment of any Revolving Credit
Commitment to an assignee that is a Lender with a Revolving Credit
Commitment immediately prior to giving effect to such assignment.
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(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender, an
affiliate of a Lender or an Approved Fund or an assignment of the
entire remaining amount of the assigning Lender's Commitments or
Loans, the amount of the Commitments or Loans of the assigning Lender
subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $5,000,000 unless
each of the Borrower and the Administrative Agent (and, if applicable,
the Issuing Lender) otherwise consent, provided, that (1) no such
consent of the Borrower shall be required if an Event of Default under
Section 7.01(a), (b), (g), (h), (i) or (j) has occurred and is
continuing and (2) such amounts shall be aggregated in respect of each
Lender and its affiliates or Approved Funds, if any;
(B) each Lender shall simultaneously assign, and the
Assignee shall simultaneously take an assignment of, a pro rata
portion of the sum of the principal amount of the outstanding loans
under the Working Capital and Acquisition Facility Credit Agreement
and the unused amount of the commitment of the assigning lender under
the Working Capital and Acquisition Facility Credit Agreement and all
other interests, rights and obligations under the Working Capital and
Acquisition Facility Credit Agreement in accordance with the
provisions thereof, such that at all times (x) the Revolving Credit
Commitment Percentage of such Lender hereunder and the Tranche B
Revolving Credit Commitment Percentage (as defined in the Working
Capital and Acquisition Facility Credit Agreement) of such lender
under Facility B shall be the same and (y) the Revolving Credit
Commitment Percentage of such Lender hereunder and the Tranche A
Revolving Credit Commitment Percentage (as defined on the Working
Capital and Acquisition Facility Credit Agreement) of such lender
under Facility A shall be the same;
(C) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Acceptance, together
with a processing and recordation fee of $3,500; and
(D) the Assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an administrative questionnaire.
For the purposes of this Section 9.04, the terms "Approved
Fund" has the following meaning:
"Approved Fund" means any Person (other than a natural
person) that is engaged in making, purchasing, holding or
investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a
113
Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) below, from and after the effective date specified in
each Assignment and Acceptance the Assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of Sections 2.13, 2.15, 2.19
and 9.05). Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this Section 9.04 shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph
(c) of this Section.
(iv) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices a copy of each
Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments
of, and principal amount of the Loans and Letter of Credit Exposure owing
to, each Lender pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive, and the
Borrower, the Administrative Agent, the Issuing Lender and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower, the Issuing Lender and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an Assignee, the Assignee's
completed administrative questionnaire (unless the Assignee shall already
be a Lender hereunder), the processing and recordation fee referred to in
paragraph (b) of this Section and any written consent to such assignment
required by paragraph (b) of this Section, the Administrative Agent shall
accept such Assignment and Acceptance and record the information contained
therein in the Register. No assignment shall be effective for purposes of
this Agreement unless it has been recorded in the Register as provided in
this paragraph.
(c) (i) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Commitments and the
Loans owing to it); provided, that (A) such Lender's obligations under this
Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Administrative Agent, the Issuing Lender and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
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Agreement. Any agreement pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided, that such agreement may provide that such Lender
will not, without the consent of the Participant, agree to any amendment,
modification or waiver that (1) requires the consent of each Lender directly
affected thereby pursuant to the proviso to Section 9.08(b) and (2) directly
affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.13, 2.14, 2.15 and 2.19 to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to paragraph (b) of this
Section. To the extent permitted by law, each Participant also shall be entitled
to the benefits of Section 9.06 as though it were a Lender, provided, that such
Participant shall be subject to Section 2.17 as though it were a Lender.
(ii) A Participant shall not be entitled to receive any greater
payment under Section 2.13, 2.14 or 2.19 than the applicable Lender would
have been entitled to receive with respect to the participation sold to
such Participant, unless the sale of the participation to such Participant
is made with the Borrower's prior written consent. Any Participant that is
a Non-U.S. Lender shall not be entitled to the benefits of Section 2.19
unless such Participant complies with Section 2.19(d).
(d) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided, that no such pledge or assignment of a
security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or Assignee for such Lender as a party hereto.
(e) The Borrower, upon receipt of written notice from the relevant Lender,
agrees to issue Notes to any Lender requiring Notes to facilitate transactions
of the type described in paragraph (d) above.
(f) Notwithstanding the foregoing, any Conduit Lender may assign any or all
of the Loans it may have funded hereunder to its designating Lender without the
consent of the Borrower or the Administrative Agent and without regard to the
limitations set forth in Section 9.04(b). Each of the Borrower, each Lender and
the Administrative Agent hereby confirms that it will not institute against a
Conduit Lender or join any other Person in instituting against a Conduit Lender
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding under any state bankruptcy or similar law, for one year and one day
after the payment in full of the latest maturing commercial paper note issued by
such Conduit Lender; provided, however, that each Lender designating any Conduit
Lender hereby agrees to indemnify, save and hold harmless each other party
hereto for any loss, cost, damage or expense arising out of its inability to
institute such a proceeding against such Conduit Lender during such period of
forbearance.
Section 9.05 Expenses; Indemnity. (a) The Borrower agrees to pay (whether
or not the transactions contemplated hereby shall be consummated) all reasonable
out-of-pocket costs and expenses incurred by any Agent or the Issuing Bank in
connection with the preparation,
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execution and delivery of this Agreement and the other Loan Documents, the
closing of the Facility, the administration of the Facility or any amendment,
modification or waiver of the provisions hereof or thereof or incurred by any
Agent, the Issuing Bank or any Lender in connection with the enforcement or
protection of the rights of the Agents, the Issuing Bank and the Lenders under
this Agreement and the other Loan Documents or in connection with the Loans made
hereunder, the Notes issued hereunder or the Letters of Credit issued hereunder,
including the reasonable fees, charges and disbursements of (i) Xxxxxxx Xxxxxxx
& Xxxxxxxx LLP, counsel to the Administrative Agent, (ii) any third party
consultants retained to assist the Agents in analyzing any environmental,
insurance and other due diligence issues, (iii) any search and filing fees of
any company acceptable to the Lenders and (iv) in connection with any such
enforcement or protection, any other counsel for any Agent, the Issuing Bank or
any Lender.
(b) The Borrower agrees to indemnify each of the Agents, the Issuing Bank,
the affiliates of any Agent, the Issuing Bank, the Lenders, and their respective
directors, officers, employees, agents and Controlling Persons (each, an
"Indemnified Party") from and against any and all losses, claims (whether valid
or not), damages and liabilities, joint or several, to which such Indemnified
Party may become subject, related to or arising out of (i) the Facility and the
transactions contemplated hereby and thereby, (ii) the execution or delivery of
this Agreement or any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the performance by the parties hereto or thereto
of their respective obligations hereunder or thereunder or the consummation of
the other transactions contemplated hereby and thereby, (iii) the use of the
Letters of Credit or the proceeds of the Loans or (iv) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not any
Indemnified Party is a party thereto. The Borrower further agrees to reimburse
each Indemnified Party for all expenses (including reasonable attorneys' fees
and expenses) as they are incurred in connection with the investigation of,
preparation for or defense of any pending or threatened claim or any action or
proceeding arising therefrom. Notwithstanding the foregoing, the obligation to
indemnify any Indemnified Party under this Section 9.05(b) shall not apply in
respect of any loss, claim, damage or liability to the extent that a court of
competent jurisdiction shall have determined by final and nonappealable judgment
that such loss, claim, damage or liability resulted from such Indemnified
Party's gross negligence or willful misconduct.
(c) The Borrower agrees to indemnify each of the Agents, the Issuing Bank,
the Lenders and the other Indemnified Parties from and against any and all
losses, claims (whether valid or not), damages and liabilities, joint or
several, to which such Indemnified Party may become subject, related to or
arising out of (i) any Environmental Laws affecting the Borrower or any other
Loan Party or its properties or assets, (ii) any Hazardous Materials managed by
the Borrower or any other Loan Party, (iii) any event, condition or circumstance
involving environmental pollution, regulation or control affecting the Borrower
or any other Loan Party or its properties or assets or (iv) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnified Party is a party thereto. The Borrower further
agrees to reimburse each Indemnified Party for all expenses (including
reasonable attorneys' fees and expenses) as they are incurred in connection with
the investigation of, preparation for or defense of any pending or threatened
claim or any action or proceeding arising therefrom. Notwithstanding the
foregoing, the obligation to indemnify any Indemnified Party under this Section
9.05(c) shall not apply in respect of any loss, claim, damage or liability to
the extent that a court of competent jurisdiction shall have determined by final
and nonappealable judgment that
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such loss, claim, damage or liability resulted from such Indemnified Party's
gross negligence or willful misconduct.
(d) In the event that the foregoing indemnity is unavailable or
insufficient to hold an Indemnified Party harmless, then the Borrower will
contribute to amounts paid or payable by such Indemnified Party in respect of
such Indemnified Party's losses, claims, damages or liabilities in such
proportions as appropriately reflect the relative benefits received by and fault
of the Borrower and such Indemnified Party in connection with the matters as to
which such losses, claims, damages or liabilities relate and other equitable
considerations.
(e) If any action, proceeding or investigation is commenced, as to which
any Indemnified Party proposes to demand such indemnification, it shall notify
the Borrower with reasonable promptness; provided, however, that any failure by
such Indemnified Party to notify the Borrower shall not relieve the Borrower
from its obligations hereunder except to the extent the Borrower is prejudiced
thereby. The Borrower shall be entitled to assume the defense of any such
action, proceeding or investigation, including the employment of counsel and the
payment of all fees and expenses. Each Indemnified Party shall have the right to
employ separate counsel in connection with any such action, proceeding or
investigation and to participate in the defense thereof, but the fees and
expenses of such counsel shall be paid by such Indemnified Party, unless (i) the
Borrower has failed to assume the defense and employ counsel as provided herein,
(ii) the Borrower has agreed in writing to pay such fees and expenses of
separate counsel or (iii) an action, proceeding or investigation has been
commenced against such Indemnified Party and the Borrower and representation of
both the Borrower and such Indemnified Party by the same counsel would be
inappropriate because of actual or potential conflicts of interest between the
parties (in the case of any Agent or Lender, the existence of any such actual or
potential conflict of interest to be determined by such party, taking into
account, among other things, any relevant regulatory concerns). In the case of
any circumstance described in clause (i), (ii), or (iii) of the immediately
preceding sentence, the Borrower shall be responsible for the reasonable fees
and expenses of such separate counsel; provided, however, that the Borrower
shall not in any event be required to pay the fees and expenses of more than one
separate counsel (plus appropriate local counsel under the direction of such
separate counsel) for all Indemnified Parties. The Borrower shall be liable only
for settlement of any claim against an Indemnified Party made with the
Borrower's written consent.
(f) The provisions of this Section 9.05 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document, or any investigation made by or on behalf
of any Agent or Lender. All amounts due under this Section 9.05 shall be payable
on written demand therefor.
Section 9.06 Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any of and all the obligations of
the Borrower now or hereafter existing under this Agreement and the other Loan
Documents
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held by such Lender, irrespective of whether or not such Lender shall have made
any demand under this Agreement or such other Loan Document and although such
obligations may be unmatured. The rights of each Lender under this Section 9.06
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
Section 9.07 Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK.
Section 9.08 Waivers; Amendment. (a) No failure or delay of any Agent, the
Issuing Bank or any Lender in exercising any power or right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the Agents, the
Issuing Bank and the Lenders hereunder and under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies which they would
otherwise have. No waiver of any provision of this Agreement or any other Loan
Document or consent to any departure by the Borrower therefrom shall in any
event be effective unless the same shall be permitted by Section 9.08(b), and
then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. No notice or demand on the Borrower in any case
shall entitle the Borrower to any other or further notice or demand in similar
or other circumstances.
(b) None of this Agreement, the other Loan Documents and any provision
hereof or thereof may be waived, amended or modified, except pursuant to an
agreement or agreements in writing entered into by the Borrower and the Required
Lenders; provided, however, that no such waiver, amendment or modification shall
(i) decrease the principal amount of any Loan, extend the Maturity Date or the
Conversion Date, extend any Repayment Date or any date for the payment of any
interest on any Loan, or waive or excuse any such payment or any part thereof,
or decrease the rate of interest on any Loan, without the prior written consent
of each holder of a Note affected thereby, (ii) increase or extend the
Commitment or decrease the Commitment Fees or Letter of Credit Fees of any
Lender without the prior written consent of such Lender, (iii) postpone the date
fixed for any reimbursement of a Letter of Credit Disbursement without the prior
written consent of each Lender affected thereby, (iv) permit the release of any
material amount of Collateral under any Collateral Document or permit the
release of any material guarantor from the Guarantee Agreements without the
prior written consent of each Lender, (v) increase the aggregate Commitments of
the Lenders without the prior written consent of each Lender, (vi) amend or
modify the provisions of Section 2.01(b) or waive the conditions set forth
therein, the provisions of Section 2.11(f), the provisions of Section 2.16, the
provisions of Sections 9.04(a)(i), 9.04(b)(ii)(B), or any of the provisions of
Article II relating to the pro rata treatment between this Agreement and the
Working Capital and Acquisition Facility Credit Agreement, the provisions of
this Section 9.08 or the definition of "Required Lenders" or otherwise change
the percentage of the Commitments, the percentage of the aggregate unpaid
principal amount of the Notes or the number of Lenders which shall be required
for the Lenders or any of them to take any action under any provision of this
Agreement or any other Loan Document, without the prior written consent of each
Lender; provided, further, that no such agreement shall amend, modify or
otherwise affect the rights or duties of any Agent or the Issuing Bank hereunder
without the prior written consent of such Agent or the Issuing Bank, as
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applicable. Each Lender and each holder of a Note shall be bound by any waiver,
amendment or modification authorized by this Section 9.08 regardless of whether
its Note shall have been marked to make reference thereto, and any consent by
any Lender or holder of a Note pursuant to this Section 9.08 shall bind any
Person subsequently acquiring a Note from it, whether or not such Note shall
have been so marked.
(c) In the event that any waiver, amendment or modification requires the
prior written consent of each Lender pursuant to Section 9.08(b), and the
Borrower has obtained the approval of all but one Lender, the Borrower shall
have the right to replace such non-consenting Lender; provided that, (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event of
Default shall have occurred and be continuing at the time of such replacement,
(iii) the replacement financial institution shall purchase, at par, all Loans
and other amounts owing to such replaced Lender on or prior to the date of
replacement, (iv) the Borrower shall be liable to such replaced Lender under
Section 2.15 if any Eurodollar Loan owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto,
(v) the replacement financial institution, if not already a Lender, shall be
reasonably satisfactory to the Administrative Agent, (vi) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions of
Section 9.04(b) (provided that, the Borrower shall be obligated to pay the
registration and processing fee referred to therein) and (vii) any such
replacement shall not be deemed to be a waiver of any rights that the Borrower,
the Administrative Agent or any other Lender shall have against the replaced
Lender.
Section 9.09 Interest Rate Limitation. Notwithstanding anything herein or
in the Notes to the contrary, if at any time the applicable interest rate,
together with all fees and charges which are treated as interest under
applicable law (collectively the "Charges"), as provided for herein or in any
other document executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Lender, shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by such Lender in accordance with applicable law, the rate
of interest payable under the affected Note held by such Lender, together with
all Charges payable to such Lender, shall be limited to the Maximum Rate.
Section 9.10 Entire Agreement. This Agreement, the other Loan Documents,
the other Operative Agreements and the Letter Agreement constitute the entire
contract among the parties relative to the subject matter hereof and thereof.
Any agreement previously entered into among the parties with respect to the
subject matter hereof and thereof is superseded by this Agreement, the other
Loan Documents, the other Operative Agreements and the Letter Agreement. Nothing
in this Agreement, the other Loan Documents, the other Operative Agreements or
the Letter Agreement, expressed or implied, is intended to confer upon any
party, other than the parties hereto and the other Secured Parties, any rights,
remedies, obligations or liabilities under or by reason of this Agreement, the
other Loan Documents, the other Operative Agreements or the Letter Agreement.
Section 9.11 Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. The parties shall
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endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
Section 9.12 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract, and shall become effective as
provided in Section 9.03.
Section 9.13 Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
Section 9.14 Jurisdiction; Consent to Service of Process; Waiver of Jury
Trial. (a) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in New York, New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that any Agent, the Issuing Bank or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement or the other Loan Documents
against the Borrower or its properties in the courts of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
New York State court or Federal court of the United States of America sitting in
New York, New York. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 9.01. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.
(d) TO THE FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW, EACH OF THE
BORROWER, THE LENDERS, THE AGENTS AND THE ISSUING BANK HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
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Section 9.15 Legend. THIS AGREEMENT AND THE NOTES ARE SUBJECT TO THE TERMS
AND CONDITIONS CONTAINED IN THE INTERCREDITOR AGREEMENT WHICH, AMONG OTHER
THINGS, ESTABLISHES CERTAIN RIGHTS WITH RESPECT TO THE SECURITY FOR THIS
AGREEMENT AND THE NOTES AND THE SHARING OF PROCEEDS THEREOF WITH CERTAIN OTHER
SECURED CREDITORS. COPIES OF THE INTERCREDITOR AGREEMENT WILL BE FURNISHED TO
ANY LENDER (OR ANY TRANSFEREE THEREOF) UPON REQUEST TO THE BORROWER.
IN WITNESS WHEREOF, the Borrower, the Agents, the Issuing Bank and the
Lenders have caused this Agreement to be duly executed by their respective
authorized officers as of the day and year first above written.
STAR GAS PROPANE, L.P., as Borrower
By: STAR GAS LLC, its general partner
By:
-----------------------------------------
Name:
Title:
JPMORGAN CHASE BANK, as Administrative
Agent, as Issuing Bank and as a Lender
By:
-----------------------------------------
Name:
Title:
FLEET NATIONAL BANK, as Syndication Agent
and as a Lender
By:
-----------------------------------------
Name:
Title:
WACHOVIA BANK, N.A., as Documentation
Agent and as a Lender
By:
-----------------------------------------
Name:
Title:
