EXHIBIT 99.3
EXECUTION COPY
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SECOND AMENDMENT dated as of October 21, 1997
(this "Second Amendment"), to the Credit Agreement
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dated as of December 13, 1995 (as amended to the
date hereof, the "Credit Agreement"), among Star
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Gas Propane, L.P., a Delaware limited partnership
(the "Borrower"), the lenders party thereto, The
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First National Bank of Boston (now known as
BankBoston, N.A.), as Administrative Agent (the
"Administrative Agent"), and NationsBank, N.A., as
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Documentation Agent (the "Documentation Agent",
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and together with the Administrative Agent, the
"Agents").
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The Borrower has requested the Agents and the Lenders to amend the Credit
Agreement to, among other things, permit the Borrower to use the proceeds of a
Tranche B Revolving Loan to effect an Eligible Propane Acquisition by the
Borrower by means of satisfying certain acquisition indebtedness incurred by the
General Partner (in its individual capacity and not in its capacity as a general
partner of the Borrower). The parties hereto have agreed, subject to the terms
and conditions hereof, to amend the Credit Agreement as provided herein.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement (the Credit Agreement,
as amended by, and together with, this Second Amendment, and as hereinafter
amended, modified, extended or restated from time to time, being called the
"Amended Agreement").
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Accordingly, the parties hereto hereby agree as follows:
SECTION 1.01. Amendments to Section 1.01. (a) The following definitions
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are hereby added to Section 1.01 of the Amended Agreement in alphabetical order:
""Assumption Agreement" shall mean the Assignment and
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Assumption Agreement dated October 21, 1997, executed by the
Borrower and pursuant to which the Borrower assumes the
obligations of the General Partner under the Pearl Gas
Acquisition Loan.
"Escrow Agreement" shall mean that certain Escrow Agreement
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dated October 21, 1997 by and among the Sellers (as defined in the
GP Credit Documents), the General Partner and BankBoston, N.A., as
escrow agent.
"GP Credit Documents" shall mean, collectively, (i) that
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certain Credit Agreement dated as of October 21, 1997 between
the General Partner (in its individual capacity and not in its
capacity as a general partner of the Borrower), as borrower
thereunder, and BankBoston, N.A. and NationsBank, N.A., as
lenders thereunder and (ii) all documents and instruments
executed in connection therewith or pursuant thereto."
"Pearl Gas Acquisition Loan" shall mean certain loans made
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to the General Partner (in its individual capacity and not in its
capacity as a general partner of the Borrower) pursuant to the
terms and conditions of the GP Credit Documents in an aggregate
principal amount of $23,000,000 for the purpose of acquiring 100%
of the issued and outstanding Capital Stock of Pearl Gas Co.,
an Ohio corporation, and the fees and expenses associated therewith."
(b) The definition of "Tranche A Maturity Date" in Section 1.01 of the
Credit Agreement is hereby deleted in its entirety and the following is
substituted in lieu thereof:
""Tranche A Maturity Date" shall mean December 31, 1999."
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SECTION 1.02. Amendment to Section 3.13. Section 3.13(b) of the Credit
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Agreement is hereby amended by deleting the word "and" immediately preceding the
"(ii)" and substituting in lieu thereof a comma and adding the following to the
end of such section, immediately preceding the period:
", and (iii) as long as all conditions precedent to the
release of the proceeds of the Pearl Gas Acquisition Loan from
escrow, as set forth in Section 3 of the Escrow Agreement, have
been satisfied in full and as long as the Borrower has executed
and delivered the Assumption Agreement to the Agents, to repay
all principal and interest then due and owing on the Pearl Gas
Acquisition Loan."
SECTION 1.03. Amendment to Section 4.03. Section 4.03(a) of the Credit
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Agreement is hereby deleted in its entirety and the following is substituted in
lieu thereof:
"(a) At the time of and immediately after any Tranche B
Revolving Credit Borrowing made or any Tranche B Letter of
Credit issued after December 31, 1996, the Leverage Ratio as
of the date of such Borrowing or issuance (after giving affect
to the acquisition or Growth-Related Capital Expenditure for
which such Borrowing or Letter of Credit is being used) shall
be no greater than 4.50:1.0; provided that at the time of and
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immediately after the Borrowing made for the purpose set forth
in Section 3.13(b)(iii), the Leverage Ratio as of
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the date of such Borrowing (after giving affect thereto) shall
be no greater than 4.75:1.00; 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."
SECTION 1.04. Amendment to Section 6.31. Section 6.31(a) of the Credit
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Agreement is hereby deleted in its entirety and the following is hereby
substituted in lieu thereof:
"(a) The Borrower will not permit the ratio on any day
(the "date of determination") of (i) Total Funded Debt as of
the last day of the Reference Period with respect to such date
of determination to (ii) Consolidated Cash Flow for such
Reference Period to be greater than the ratio set forth below
opposite the calendar period during which such date of
determination occurs:
Calendar Period Ratio
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January 1, 1996 through 5.00 : 1.00
June 30, 1997
July 1, 1997 through 4.75 : 1.00
September 30, 1997
October 1, 1997 through 4.95 to 1.00
December 31, 1997
After December 31, 1997 4.50 to 1.00"
SECTION 1.05. Addition of Section 6.33. A new Section 6.33 is hereby
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added to the Credit Agreement as follows:
"SECTION 6.33. Covenants regarding Pearl Gas Acquisition.
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The Borrower agrees that it will not execute and deliver the
Assumption Agreement unless and until all conditions precedent
to the advance of a Tranche B Revolving Loan hereunder in a
principal amount of at least $21,000,000 have been satisfied
in full. In the event the Borrower elects to execute and
deliver the Assumption Agreement, then the Borrower shall
repay the Pearl Gas Acquisition Loan, in part, with proceeds
of a Tranche B Revolving Loan in a principal amount of at
least $21,000,000 hereunder prior to the maturity thereof.
Additionally, the Borrower agrees to take such actions as
are necessary to accomplish the following: (a) all UCC-1
financing statements required to be filed in appropriate
jurisdictions in order to perfect the liens and security
interests of the Trustee (on behalf of the holders of the
Mortgage Notes and the Lenders
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hereunder) in and to all personal property of Pearl Gas that
is of the type in which a security interest can be perfected
under Article 8 or Article 9 of the UCC, shall be filed in the
appropriate jurisdictions on or before October 29, 1997; (b)
Lockbox Accounts in favor of the Trustee covering all Deposit
Accounts of Pearl Gas shall be executed and delivered to the
Trustee, and the liens and security interests of the Trustee
perfected in such Deposit Accounts, on or before November 21,
1997; (c) Mortgages covering all real property of Pearl Gas
shall be recorded in the appropriate jurisdiction, the liens
and security interests created pursuant thereto shall be
perfected pursuant to the terms of Section 6.22, and the terms
of Section 6.22 shall be, in all respects, satisfied with
respect to such real properties, on or before December 19,
1997; (d) landlord's lien waivers, bailee agreements and
similar instruments covering Equipment or Inventory of Pearl
Gas shall be obtained, in form and substance acceptable to the
Agent and the Required Lenders, with respect to Equipment or
Inventory of Pearl Gas that is located on properties that are
not owned by Pearl Gas, or that is in the possession of third
parties, on or before December 19, 1997; provided, that,
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nothing in this clause (e) shall require the Borrower to
perfect security interests in propane tanks that are commonly
referred to as "customer tanks," and (f) Motor Vehicle titles
covering all Motor Vehicles owned by Pearl Gas, and issued to
indicate the existence of liens and security interests in favor
of the Trustee in accordance with applicable law, shall be
delivered to the Trustee on or before March 22, 1998."
SECTION 1.06. Representations and Warranties. The Borrower hereby
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represents and warrants to each of the Agents and the Lenders, as follows:
(a) The representations and warranties set forth in Article
III of the Agreement, and in each other Loan Document, are true
and correct in all material respects on and as of the date hereof
and on and as of the Second Amendment Effective Date with the same
effect as if made on and as of the date hereof or the Second
Amendment Effective Date, as the case may be, except to the extent
such representations and warranties expressly relate solely to an
earlier date.
(b) Each of the Borrower and the Subsidiaries is in compliance
with all the terms and conditions of the Agreement and the other
Loan Documents on its part to be observed or performed and no
Default or Event of Default has occurred or is continuing.
(c) The execution, delivery and performance by the Borrower
of this Second Amendment, the Assumption
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Agreement and the transactions contemplated thereby have been
duly authorized by the Borrower.
(d) This Second Amendment constitutes the legal, valid
and binding obligation of the Borrower, enforceable against it
in accordance with its terms.
(e) The execution, delivery and performance by the
Borrower of this Second Amendment (i) will not violate (A)
any provision of law, statute, rule or regulation, or of the
agreement of limited partnership of the Borrower, (B) any order
of any Governmental Authority or (C) any provision of any
indenture, agreement or other instrument to which the Borrower
is a party or by which it or any of its property may be bound
and (ii) do not require any consents under, result in a breach
of or constitute (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.
(f) The Administrative Agent shall have received duly
executed counterparts of the Security Agreement for Motor Vehicles
and Other Rolling Stock dated as of October 22, 1997 between the
Borrower and the Trustee.
SECTION 1.07. Effectiveness. This Second Amendment shall become effective
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only upon satisfaction of the following conditions precedent (the first date
upon which each such condition has been satisfied being herein called the
"Second Amendment Effective Date"):
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(a) the Administrative Agent shall have received duly executed
counterparts of this Second Amendment which, when taken together,
bear the authorized signatures of the Borrower and the Lenders.
(b) The Agents shall be satisfied that the representations and
warranties set forth in Section 1.06 are true and correct on and as
of the Second Amendment Effective Date.
(c) There shall not be any action pending or any judgment,
order or decree in effect which, in the judgment of the Agents or
the Lenders, is likely to restrain, prevent or impose materially
adverse conditions upon performance by the Borrower of its
obligations under the Amended Agreement.
(d) The Agents shall have received such other documents,
legal opinions, instruments and certificates relating to this
Second Amendment as they shall reasonably request and such other
documents, legal opinions, instruments and certificates shall
be satisfactory in form and substance to the Agents and the
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Lenders. All corporate and other proceedings taken or to be
taken in connection with this Second Amendment and all documents
incidental thereto, whether or not referred to herein, shall be
satisfactory in form and substance to the Administrative Agent
and the Lenders.
(e) The Agents shall have received such financial information
and financial projections, prepared on a pro forma basis after giving
effect to the assumption of the Pearl Gas Acquisition Loan by the
Borrower and transactions contemplated by the Contribution Agreement
as it reasonably requires and the Agents and the Lenders shall be
reasonably satisfied with the same.
(f) The Borrower shall have (i) deposited in escrow with
BankBoston, N.A. an amount (the "Escrowed Sum") equal to the
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difference between (x) the Purchase Price to be paid by the
General Partner (in its individual capacity and not as the
general partner of the Borrower) to the Sellers pursuant to the
Acquisition Agreement and (y) $21,000,000, and (b) delivered
irrevocable written instructions to BankBoston, N.A., to apply
the Escrowed Sums to satisfy, to the extent of such funds, the
Pearl Gas Acquisition Loan, upon the satisfaction of all
conditions set forth in Section 3 of the Escrow Agreement.
SECTION 1.08. APPLICABLE LAW. THIS SECOND AMENDMENT SHALL BE GOVERNED BY,
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AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO
THE EXTENT THAT THE FEDERAL LAWS OF THE UNITED STATES OF AMERICA MAY APPLY.
SECTION 1.09. Expenses. The Borrower shall pay all reasonable out-of-
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pocket expenses incurred by the Agents and the Lenders in connection with the
preparation, negotiation, execution, delivery and enforcement of this Second
Amendment, including, but not limited to, the reasonable fees and disbursements
of counsel.
SECTION 1.10. Counterparts. This Second Amendment may be executed in any
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number of counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one agreement.
SECTION 1.11. Loan Documents. Except as expressly set forth herein, the
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amendments provided herein shall not by implication or otherwise limit,
constitute a waiver of, or otherwise affect the rights and remedies of the
Lenders, the Agents, the Trustee or the other Secured Parties under the Amended
Agreement or any other Loan Document, nor shall they constitute a waiver of any
Default or Event of Default, nor shall they alter, modify, amend or in any way
affect any of the terms, conditions, obligations, covenants or agreements
contained in the Amended Agreement or any other Loan Document. Each of the
amendments provided herein shall apply and be effective only with respect to the
provisions of the Amended
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Agreement specifically referred to by such amendments. Except as expressly
amended herein, the Amended Agreement and the other Loan Documents shall
continue in full force and effect in accordance with the provisions thereof. As
used in the Amended Agreement, the terms "Agreement", "herein", "hereinafter",
"hereunder", "hereto" and words of similar import shall mean, from and after the
date hereof, the Amended Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be duly executed by their duly authorized officers, all as of the date first
above written.
STAR GAS PROPANE, L.P., as Borrower
By: Star Gas Corporation, its General Partner
by _______________________________________
Name:
Title:
BANKBOSTON, N.A.,
as Administrative Agent and as a Lender
by _________________________________________________
Name:
Title:
NATIONSBANK, N.A., as Documentation Agent
and as a Lender
by _________________________________________________
Name:
Title:
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