DRAFT OF FEBRUARY 13, 1997
PETROLEUM HEAT AND POWER CO., INC.
NOTE AGREEMENT
Dated as of February 1, 1997
Re: $60,000,000 Senior Notes
Due October 1, 2002
TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION HEADING PAGE
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.........................1
Section 1.1. Description of Notes....................................1
Section 1.2. Description of Old Notes................................2
Section 1.3. Commitment, Closing Date................................2
Section 1.4. Other Agreements........................................3
SECTION 2. PREPAYMENT OF NOTES.........................................3
Section 2.1. Required Prepayments....................................3
Section 2.2. Mandatory Prepayment on Change of Ownership.............3
Section 2.3. Optional Prepayments....................................5
Section 2.4. Notice of Prepayments...................................5
Section 2.5. Allocation of Prepayments...............................6
Section 2.6. Direct Payment..........................................6
SECTION 3. REPRESENTATIONS.............................................6
Section 3.1. Representations of the Company..........................6
Section 3.2. Representations of the Purchasers.......................7
SECTION 4. CLOSING CONDITIONS..........................................7
Section 4.1. Closing Certificates....................................7
Section 4.2. Legal Opinions..........................................7
Section 4.3. Related Transactions....................................7
Section 4.4. Consummation of Sale of Preferred Stock.................7
Section 4.5. Payment of Special Counsel Fees.........................7
Section 4.6. Private Placement Numbers...............................8
Section 4.7. Satisfactory Proceedings................................8
Section 4.8. Waiver of Conditions....................................8
SECTION 5. COMPANY COVENANTS...........................................8
Section 5.1. Corporate Existence, etc................................8
Section 5.2. Insurance...............................................8
Section 5.3. Taxes, Claims for Labor and Materials,
Compliance with Laws..................................8
Section 5.4. Maintenance, Etc........................................9
Section 5.5. Nature of Business......................................9
Section 5.6. Limitations on Funded Debt..............................9
Section 5.7. Subsidiary Stock.......................................10
Section 5.8. Dividends, Stock Purchases.............................10
Section 5.9. Mergers, Consolidations and Sales of Assets............10
Section 5.10. Guaranties.............................................11
Section 5.11. Repurchase of Notes....................................11
Section 5.12. Transactions with Affiliates...........................11
Section 5.13. Termination of Pension Plans...........................12
Section 5.14. Reports and Rights of Inspection.......................12
Section 5.15. Limitation on Indebtedness and Preferred Stock
of Subsidiaries......................................14
Section 5.16. Limitation on Restrictions on Distributions from
Subsidiaries.........................................15
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR....................15
Section 6.1. Events of Default......................................15
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Section 6.2. Notice to Holders......................................17
Section 6.3. Acceleration of Maturities.............................17
Section 6.4. Rescission of Acceleration.............................18
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS...........................18
Section 7.1. Consent Required.......................................18
Section 7.2. Effect of Amendment or Waiver..........................18
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS...................19
Section 8.1. Definitions............................................19
Section 8.2. Accounting Principles..................................29
Section 8.3. Directly or Indirectly.................................29
SECTION 9. MISCELLANEOUS..............................................29
Section 9.1. Registration and Transfers of the Notes................29
Section 9.2. Exchange of Notes......................................29
Section 9.3. Loss, Theft, etc. of Notes.............................30
Section 9.4. Expenses, Stamp Tax Indemnity..........................30
Section 9.5. Powers and Rights Not Waived...........................30
Section 9.6. Notices................................................31
Section 9.7. Designation of Notes as Designated Senior Debt.........31
Section 9.8. Successors and Assigns.................................31
Section 9.9. Survival of Covenants and Representations..............31
Section 9.10. Severability...........................................31
Section 9.11. Governing Law..........................................31
Section 9.12. Captions...............................................31
ATTACHMENTS TO NOTE AGREEMENT:
Schedule I -- Names and Addresses of Purchasers
Schedule II -- Names of Beneficial Owners of Class C Common Stock
Exhibit A -- Form of Senior Note due October 1, 2002
Exhibit B -- Closing Certificate of the Company
Exhibit C -- Description of Special Counsel's Closing Opinion
Exhibit D -- Description of Closing Opinion of Counsel to the Company
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Petroleum Heat and Power Co., Inc. Note Agreement
PETROLEUM HEAT AND POWER CO., INC.
Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
NOTE AGREEMENT
Re: $60,000,000 Senior Notes Due October 1, 2002
Dated as of
February 1, 1997
To the Purchaser named in Schedule I hereto which is a signatory of this
Agreement
Gentlemen:
The undersigned, PETROLEUM HEAT AND POWER CO., INC., a Minnesota
corporation (the "Company"), agrees with you as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.
Section 1.1. Description of Notes. The Company will authorize the issue
and sale of:
(a) $40,000,000 aggregate principal amount of its Senior Notes,
Series A, to be dated October 1, 1996, to bear interest at the rate of (i)
during the period from October 1, 1996 to but not including October 1,
1998, 11.85% per annum and (ii) during the period from and including
October 1, 1998 until maturity, 10.9% per annum, and to be expressed to
mature on October 1, 2002 (the "Series A Notes");
(b) $15,000,000 aggregate principal amount of its Senior Notes,
Series B, to be dated October 1, 1996, to bear interest at the rate of (i)
during the period from October 1, 1996 to but not including October 1,
1998, 12.17% per annum and (ii) during the period from and including
October 1, 1998 until maturity, 10.9% per annum, and to be expressed to
mature on October 1, 2002 (the "Series B Notes"); and
(c) $5,000,000 aggregate principal amount of its Senior Notes,
Series C, to be dated October 1, 1996, to bear interest at the rate of (i)
during the period from October 1, 1996 to but not including October 1,
1998, 12.18% per annum and (ii) during the period from and including
October 1, 1998 until maturity, 10.9% per annum, and to be expressed to
mature on October 1, 2002 (the "Series C Notes").
The Series A Notes, the Series B Notes and the Series C Notes are
hereinafter referred to collectively as the "Notes." The Series A Notes, the
Series B Notes and the Series C Notes are each herein referred to as Notes of a
"Series." The Notes shall be substantially in the form attached hereto as
Exhibit A. Interest on the Notes shall be payable semi-annually on the first day
of each April and October in each year (commencing on the first such date after
the date of issue) and at maturity. The Notes of each Series shall bear interest
during any period on overdue principal and premium, if any, and (to the extent
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Petroleum Heat and Power Co., Inc. Note Agreement
enforceable) on any overdue installment of interest at the applicable Overdue
Rate after the date due, whether by acceleration or otherwise, until paid.
Interest on the Notes shall be computed on the basis of a 360-day year of twelve
30-day months. The Notes are not subject to prepayment or redemption at the
option of the Company prior to their expressed maturity dates except on the
terms and conditions and in the amounts and with the premium, if any, set forth
in Section 2 of this Agreement. The term "Notes" as used herein shall include
each Note delivered pursuant to this Agreement and the separate agreements with
the other purchasers named in Schedule I. You and the other purchasers named in
Schedule I are hereinafter sometimes referred to as the "Purchasers".
Section 1.2. Description of Old Notes. Pursuant to the separate Note
Agreements dated as of September 1, 1988 between the Company and each of the
respective Purchasers named therein, the Company has heretofore issued (i)
$30,000,000 aggregate principal amount of its Subordinated Notes due October 1,
1998 (the "Old Subordinated Notes") and (ii) $30,000,000 aggregate principal
amount of its Senior Notes due October 1, 1998 (the "Old Senior Notes" and,
collectively with the Old Subordinated Notes, the "Old Notes"). The Purchasers
of the Notes hereunder are also the current holders of the Old Notes.
Section 1.3. Commitment, Closing Date. Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to you, and you
agree to purchase from the Company, Notes of the Company in the aggregate
principal amount set forth opposite your name in Schedule I and the Notes shall
be paid for by delivery to the Company of an equal principal amount of Old Notes
which bear the same interest rate (to but not including October 1, 1998) as the
Notes being purchased on the Closing Date hereinafter mentioned; provided that
the Old Notes surrendered in exchange for the Notes will be canceled with no
interest due thereon.
The exchange of the Old Notes for the Notes will be made at the offices of
Xxxxxxx and Xxxxxx, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, subject to
satisfaction of the conditions precedent set forth in ss.4 hereof (the "Closing
Conditions"), on February 18, 1997 or, in the event that all Closing Conditions
have not been satisfied as of February 18, 1997, such later date on or prior to
February 28, 1997 as of which all such Closing Conditions have been satisfied
(such date or such later date is herein referred to as the "Closing Date"). The
Notes delivered to you on the Closing Date will be delivered to you in the form
of a single registered Note for the full amount of your purchase (unless
different denominations are
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Petroleum Heat and Power Co., Inc. Note Agreement
specified by you), registered in your name or in the name of such nominee as you
may specify and in substantially the form attached hereto as Exhibit A, all as
you may specify at any time prior to the date fixed for delivery.
Section 1.4. Other Agreements. Simultaneously with the execution and
delivery of this Agreement, the Company is entering into similar agreements with
the other Purchasers under which such other Purchasers agree to purchase from
the Company the principal amount of Notes set opposite such Purchasers' names in
Schedule I, and your obligation and the obligations of the Company hereunder are
subject to the execution and delivery of the similar agreements by the other
Purchasers. This Agreement and said similar agreements with the other Purchasers
are herein collectively referred to as the "Agreements". The obligations of each
Purchaser shall be several and not joint and no Purchaser shall be liable or
responsible for the acts of any other Purchaser.
SECTION 2. PREPAYMENT OF NOTES.
Section 2.1. Required Prepayments. The Company agrees that on October 1,
2000 and on October 1, 2001, it will prepay and apply and there shall become due
and payable on the principal indebtedness evidenced by the Notes an amount equal
to the lesser of (i) $15,000,000 or (ii) the principal amount of the Notes then
outstanding. The entire remaining principal amount of the Notes shall become due
and payable on October 1, 2002. No premium shall be payable in connection with
any required prepayment made pursuant to this ss.2.1.
In the event of any prepayment, redemption, purchase or other acquisition
by the Company of less than all of the Notes other than a prepayment pursuant to
this ss.2.1 each subsequent prepayment required to be made pursuant to this
ss.2.1 shall be reduced in the proportion that the principal amount of such
prepayment, redemption, purchase or other acquisition bears to the unpaid
principal amount of the Notes immediately prior to such prepayment, redemption,
purchase or other acquisition (after giving effect to any prepayment made
pursuant to this ss.2.1 on the date of such prepayment, redemption, purchase or
other acquisition).
Section 2.2. Mandatory Prepayment on Change of Ownership. In the event
the Company has knowledge of a Change of Ownership the Company will give written
notice (herein called "Company Notice") of such fact to all holders of the Notes
then outstanding. Said Company Notice shall be delivered within 30 days after
the occurrence of such Change of Ownership; provided, however that if the
Company does not then have knowledge of such fact, such Company Notice shall be
delivered upon receipt of such knowledge by the Company. The Company Notice
shall state the
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Petroleum Heat and Power Co., Inc. Note Agreement
number of shares and percentage of each class of Voting Stock of the Company
which shall continue to be beneficially owned and controlled by the Xxxxx Group
and/or the Xxxxxx Group (and specifying the number of shares of each such class
held by each group), either directly or indirectly, immediately after the
occurrence of such Change of Ownership.
As used herein, the term "Change of Ownership" shall mean
(a) any issue, sale or other disposition of shares of common stock
of the Company which results in the number of shares of the common stock
beneficially owned by the Xxxxx Group being less than 15% of the issued
and outstanding shares of common stock (other than the Permitted Common
Stock defined below), other than (i) the issuance, in connection with an
underwritten public offering pursuant to a registration statement filed
with the Securities and Exchange Commission (a "public offering"), of
additional common stock ranking equally with Class A Common Stock as to
payment of dividends and as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of the Company
("Permitted Common Stock") or the issuance of any Permitted Common Stock
upon the conversion of any convertible preferred stock issued pursuant to
a public offering, (ii) a sale or disposition of shares of common stock to
one or more members of the Xxxxxx Group, and (iii) a disposition of shares
of common stock to a testamentary trust, all beneficiaries of which are
members of the immediate family of a member of the Xxxxx Group and all
trustees of which are members of the Xxxxx Group and, under the terms of
the trust, have the power to vote such shares on all matters as to which
the holders of such shares have the power to vote, so long as, giving
effect to any of the events referred to in the foregoing clauses (i), (ii)
and (iii), the Xxxxx Group and the Xxxxxx Group together have beneficial
ownership (or, in the case of an event referred to in the foregoing clause
(iii), voting control) of a sufficient number of shares of the capital
stock of the Company to entitle them to elect, and they do elect, at least
the smallest number of directors that is necessary to constitute a
majority of the Company's Board of Directors;
(b) any event which results in the number of directors of the
Company's Board of Directors who are designated by the Xxxxx Group
constituting less than a majority of the Board; or
(c) any of the following events: (i) the holders of any of the
Public Debentures have the right to require the Company to purchase any
such Public Debentures pursuant
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Petroleum Heat and Power Co., Inc. Note Agreement
to Section 4.08 of any of the Public Indentures, (ii) any holder of 2001
Notes exercises its right to declare any such notes to be due and payable
pursuant to Section 5.2(A) of the Sixth Amendment and Restatement of Note
Agreement, dated as of February 1, 1997, relating thereto (the "Sixth
Amendment and Restatement"), (iii) the Company is required to make an
offer to each holder of the 1997 Preferred Stock to redeem all or any part
of such holder's 1997 Preferred Stock pursuant to paragraph 5(a) of the
Certificate of Designation, (iv) the Company is required to make an offer
to each holder of the 1989 Preferred Stock to redeem all or any part of
such holder's 1989 Preferred Stock pursuant to Article III (1)(c) of the
Restated and Amended Articles of Incorporation of the Company, (v) any
holder of any Subordinated Indebtedness issued in exchange for the 1989
Preferred Stock exercises its rights to declare such notes to be due and
payable pursuant to Section 6.1 of the 1989 Preferred Stock Purchase
Agreements or (vi) any holder of 2001 Notes, Public Debentures, 1997
Preferred Stock or 1989 Preferred Stock shall have received any
consideration (whether in the form of cash, a change in the rate of
interest or dividends relating to such notes, debentures or preferred
stock, a change in any other provision of the terms of such notes,
debentures or preferred stock, or otherwise) to amend, modify, waive or
otherwise give up its right to declare any such notes, debentures or
preferred stock to be due and payable upon a "Change of Ownership," as
defined in the 1989 Preferred Stock Purchase Agreements, the Sixth
Amendment and Restatement or the Restated and Amended Articles of
Incorporation of the Company, or a "Change of Control" as defined in the
Public Indentures or the Certificate of Designation, as the case may be;
provided, however, that an amendment to or waiver or other modification of
Article III (1)(c) of the Restated and Amended Articles of Incorporation
of the Company, paragraph 5(a) of the Certificate of Designation, Section
6.1 of the 1989 Preferred Stock Purchase Agreements or Section 5.2(A) of
the Sixth Amendment and Restatement shall not, in the absence of any
consideration, constitute a Change of Ownership.
Upon the receipt of such Company Notice or, if no Company Notice is given,
upon the occurrence of a Change of Ownership the holder or holders of any Notes
shall have the privilege, upon written notice to the Company declaring all Notes
held by such holder or holders serving such notice to become due and payable,
and thereupon such Notes shall become due and payable on such date as the
Company shall specify (which date
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Petroleum Heat and Power Co., Inc. Note Agreement
shall be not later than 90 days after such declaration), and the Company
covenants and agrees to prepay in full all Notes held by such holder or holders
serving such notice; provided, however, that in the event Company Notice has in
fact been given as hereinabove contemplated, such declaration shall be made
within 30 days after receipt of such Company Notice.
All prepayments on the Notes pursuant to this ss.2.2 shall be made by the
payment of the aggregate principal amount remaining unpaid on such Notes
together with accrued interest thereon to the date of such prepayment, plus a
premium equal to 1% of such prepaid principal.
Notwithstanding the provisions of ss.2.5, the Company may prepay all Notes
held by any holder or holders who serve such notice on the Company without
applying said prepayments ratably among all outstanding Notes.
Section 2.3. Optional Prepayments. In addition to the prepayments
required by ss.2.1 and ss.2.2 and upon compliance with ss.2.4, the Company shall
have the privilege, at any time and from time to time of prepaying the
outstanding Notes, either in whole or in part (but if in part then in units of
$100,000 or an integral multiple of $10,000 in excess thereof) by payment of the
principal amount of each Note, or portion thereof to be prepaid, and accrued
interest thereon to the date of such prepayment, together with, if such
prepayment is made on or prior to March 31, 2002, a premium equal to the
Make-Whole Amount determined as of two Business Days prior to the date of such
prepayment pursuant to this ss.2.3.
Section 2.4. Notice of Prepayments. The Company will give notice of any
prepayment of the Notes pursuant to ss.2.3 to each holder thereof not less than
30 days nor more than 60 days before the date fixed for such optional prepayment
specifying (i) such date, (ii) the principal amount of the holder's Notes to be
prepaid on such date, (iii) the accrued interest applicable to the prepayment,
(iv) that a premium may be payable, (v) the date when such premium will be
calculated, (vi) the estimated premium, and (vii) a copy of the Bloomberg
Financial Markets Services Screen from which the Reinvestment Yield was
calculated. Such notice of prepayment shall also certify all facts which are
conditions precedent to any such prepayment. Notice of prepayment having been so
given, the aggregate principal amount of the Notes specified in such notice,
together with the premium, if any, and accrued interest thereon shall become due
and payable on the prepayment date specified in said notice. Two Business Days
prior to the prepayment date specified in such notice, the Company shall provide
each holder written notice of the premium, if any, payable in connection with
such prepayment and, whether
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Petroleum Heat and Power Co., Inc. Note Agreement
or not any premium is payable, a reasonably detailed computation of the
Make-Whole Amount.
Section 2.5. Allocation of Prepayments. All partial prepayments pursuant
toss.2.3 shall be applied on all outstanding Notes ratably in accordance with
the unpaid principal amounts thereof.
Section 2.6. Direct Payment. Notwithstanding anything to the contrary in
this Agreement or the Notes, in the case of any Note owned by a Purchaser or its
nominee or owned by any other institutional holder who has given written notice
to the Company requesting that the provisions of this Section shall apply, the
Company will promptly and punctually pay when due the principal thereof and
premium, if any, and interest thereon, without any presentment thereof directly
to such Purchaser or such subsequent holder at the address of such Purchaser set
forth in Schedule I or at such other address as such Purchaser or such
subsequent holder may from time to time designate in writing to the Company or,
if a bank account is designated for such Purchaser on Schedule I hereto or in
any written notice to the Company from such Purchaser or any such subsequent
holder, the Company will make such payments in immediately available funds to
such bank account, marked for attention as indicated, or in such other manner or
to such other account of such Purchaser or such holder in any bank in the United
States as the Purchaser or any such subsequent holder may from time to time
direct in writing. The Company will cause such payments to be made by noon,
Eastern time, on the date such payment is due. Any such payment which is
received after noon, Eastern time, on any business day shall, for all purposes
of this Agreement and the Notes, be deemed to have been received on the
following business day. The holder of any Notes to which this Section applies
agrees that in the event it shall sell or transfer any such Notes (i) it will,
prior to the delivery of such Notes (unless it has already done so), make a
notation thereon of all principal, if any, prepaid on such Notes and will also
note thereon the date to which interest has been paid on such Notes, and (ii) it
will promptly notify the Company of the name and address of the transferee of
any Notes so transferred. With respect to Notes to which this Section applies,
the Company shall be entitled to presume conclusively that the original or such
subsequent institutional holder as shall have requested the provisions hereof to
apply to its Notes remains the holder of such Notes until (y) the Company shall
have received notice of the transfer of such Notes, and of the name and address
of the transferee, or (z) such Notes shall have been presented to the Company as
evidence of the transfer.
SECTION 3. REPRESENTATIONS.
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Petroleum Heat and Power Co., Inc. Note Agreement
Section 3.1. Representations of the Company. The Company represents and
warrants that all representations set forth in the form of certificate attached
hereto as Exhibit B are true and correct as of the date hereof and are
incorporated herein by reference with the same force and effect as though herein
set forth in full.
Section 3.2. Representations of the Purchasers. You represent, and in
entering into this Agreement the Company understands, that you are acquiring the
Notes for the purpose of investment and not with a view to the resale or
distribution thereof, and that you have no present intention of selling,
negotiating or otherwise disposing of the Notes; provided that the disposition
of your property shall at all times be and remain within your control.
SECTION 4. CLOSING CONDITIONS.
Your obligation to purchase the Notes on the Closing Date shall be subject
to the performance by the Company of its agreements hereunder which by the terms
hereof are to be performed at or prior to the time of delivery of the Notes on
the Closing Date and to the following further conditions precedent:
Section 4.1. Closing Certificates. Concurrently with the delivery of Notes
to you on the Closing Date, you shall have received a certificate dated the
Closing Date, signed by the President or a Vice President of the Company
substantially in the form attached hereto as Exhibit B, the truth and accuracy
of which shall be a condition to your obligation to purchase the Notes proposed
to be sold to you.
Section 4.2. Legal Opinions. Concurrently with the delivery of Notes to
you on the Closing Date, you shall have received from Xxxxxxx and Xxxxxx, who
are acting as your special counsel in this transaction, and from Xxxxxxxx Xxxxx
Xxxxxxxx Xxxx & Ballon LLP, counsel for the Company, their respective opinions
dated the Closing Date, in form and substance satisfactory to you, and covering
applicable matters set forth in Exhibits C and D, respectively, hereto.
Section 4.3. Related Transactions. Prior to or concurrently with the
issuance and sale of Notes to you on the Closing Date, the Company shall have
consummated the sale of the entire principal amount of the Notes scheduled to be
sold on the Closing Date pursuant to this Agreement and the other Agreements
referred to in ss.1.3.
Section 4.4. Consummation of Sale of Preferred Stock. Prior to or
concurrently with the issuance and sale of the Notes to you on the Closing Date,
the Company shall have consummated the issuance and sale pursuant to Rule 144A
under the Securities Act of 1933, as amended, of $30,000,000 aggregate
liquidation preference of its Exchangeable Preferred Stock, which
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Petroleum Heat and Power Co., Inc. Note Agreement
Exchangeable Preferred Stock may not be redeemed at the option of the Company at
any time prior to the sixth anniversary of the Closing Date and which may only
be exchangeable for subordinated debentures as set forth in the Certificate of
Designation (the "1997 Preferred Stock").
Section 4.5. Payment of Special Counsel Fees. Without limiting the
provisions of ss.9.4, the Company shall have paid on the Closing Date the
reasonable fees, charges and disbursements of the Purchasers' special counsel
referred to in ss.4.2 above to the extent reflected in a statement of such
counsel rendered to the Company at least one Business Day prior to the Closing
Date.
Section 4.6. Private Placement Numbers. A Private Placement Number issued
by Standard & Poor's CUSIP Service Bureau (in cooperation with the Securities
Valuation Office of the National Association of Insurance Commissioners) shall
have been obtained for each Series of the Notes.
Section 4.7. Satisfactory Proceedings. All proceedings taken in
connection with the transactions contemplated by this Agreement, and all
documents necessary to the consummation thereof, shall be satisfactory in form
and substance to you and your special counsel, and you shall have received a
copy (executed or certified as may be appropriate) of all legal documents or
proceedings taken in connection with the consummation of said transactions.
Section 4.8. Waiver of Conditions. If on the Closing Date the Company
fails to tender to you the Notes to be issued to you on such date or if the
conditions specified in this ss.4 have not been fulfilled, you may thereupon
elect to be relieved of all further obligations under this Agreement. Without
limiting the foregoing, if the conditions specified in this ss.4 have not been
fulfilled, you may waive compliance by the Company with any such condition to
such extent as you may in your sole discretion determine. Nothing in this ss.4.8
shall operate to relieve the Company of any of its obligations hereunder or to
waive any of your rights against the Company.
SECTION 5. COMPANY COVENANTS.
From and after the Closing Date and continuing so long as any amount
remains unpaid on any Note:
Section 5.1. Corporate Existence, etc. The Company will preserve and keep
in force and effect, and will cause each Subsidiary to preserve and keep in
force and effect, its corporate existence and all licenses and permits necessary
to the proper conduct of its business, the absence of which would materially and
adversely affect the properties, business, prospects or the condition of the
Company and its Subsidiaries, provided that the foregoing shall not prevent any
transaction permitted by ss.5.9.
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Petroleum Heat and Power Co., Inc. Note Agreement
Section 5.2. Insurance. The Company will maintain, and will cause each
Subsidiary to maintain, insurance coverage by financially sound and reputable
insurers rated by A.M. Best & Company A-X or better, in such forms and amounts
and against such risks as are customary for corporations of established
reputation engaged in the same or a similar business and owning and operating
similar properties; provided, however, that if insurance coverage by an insurer
with such rating is not available for any such risk, then the Company shall
maintain insurance coverage, for such risk, by an insurer with the highest
rating for insurers which provide insurance coverage for such risk.
Section 5.3. Taxes, Claims for Labor and Materials, Compliance with Laws.
The Company will promptly pay and discharge, and will cause each Subsidiary
promptly to pay and discharge, all lawful taxes, assessments and governmental
charges or levies imposed upon the Company or such Subsidiary, respectively, or
upon or in respect of all or any part of the property or business of the Company
or such Subsidiary, all trade accounts payable in accordance with usual and
customary business terms, and all claims for work, labor or materials, which if
unpaid might become a lien or charge upon any property of the Company or such
Subsidiary; provided the Company or such Subsidiary shall not be required to pay
any such tax, assessment, charge, levy, account payable or claim if (i) the
validity, applicability or amount thereof is being contested in good faith by
appropriate actions or proceedings which will prevent the forfeiture or sale of
any property of the Company or such Subsidiary or any material interference with
the use thereof by the Company or such Subsidiary, and (ii) the Company or such
Subsidiary shall set aside on its books adequate reserves with respect thereto,
if required by generally accepted accounting principles. The Company will
promptly comply and will cause each Subsidiary to comply with all laws,
ordinances or governmental rules and regulations to which it is subject,
including without limitation, the Occupational Safety and Health Act of 1970,
the Employee Retirement Income Security Act of 1974 and all laws, ordinances,
governmental rules and regulations relating to environmental protection in all
applicable jurisdictions, the violation of which would materially and adversely
affect the properties, business, prospects, profits or condition of the Company
and its Subsidiaries or would result in any lien or charge upon any property of
the Company or any Subsidiary; provided the Company or such Subsidiary shall not
be required to pay any such tax, assessment, charge, levy, account payable or
claim if (i) the validity, applicability or amount thereof is being contested in
good faith by appropriate actions or
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Petroleum Heat and Power Co., Inc. Note Agreement
proceedings which will prevent the forfeiture or sale of any property of the
Company or such Subsidiary or any material interference with the use thereof by
the Company or such Subsidiary, and (ii) the Company or such Subsidiary shall
set aside on its books adequate reserves with respect thereto, if required by
generally accepted accounting principles.
Section 5.4. Maintenance, Etc. The Company will maintain, preserve and
keep, and will cause each Subsidiary to maintain, preserve and keep, its
properties which are used or useful in the conduct of its business (whether
owned in fee or a leasehold interest) in repair and working order as is
customary for corporations of established reputation engaged in the same or a
similar business and owning and operating similar properties and from time to
time will make all necessary repairs, replacements, renewals and additions so
that at all times the efficiency thereof shall be maintained.
Section 5.5. Nature of Business. Neither the Company nor any Subsidiary
will engage in any business if, after giving effect thereto, less than 80% of
the Consolidated Operating Cash Flow of the Company for the 12 months ended with
its most recently ended fiscal quarter would be attributable to the distribution
of home heating oil (#2 fuel oil), propane and related products (including the
distribution of other petroleum products which were distributed by the Company
during its fiscal year ending December 31, 1996), all as determined in
accordance with generally accepted accounting principles.
Section 5.6. Limitations on Funded Debt. Neither the Company nor any of
its Subsidiaries will incur, create, assume, guarantee or otherwise become
liable for any additional Funded Debt unless, after giving effect thereto, the
Company's Consolidated EBITDA Coverage Ratio exceeds 2.0 to 1.
The foregoing restriction on additional Funded Debt shall not be
applicable to (i) Funded Debt incurred to refund, extend or renew up to an equal
amount of outstanding Funded Debt; provided, that, if any Funded Debt is
incurred for the purpose of refunding, extending or renewing any Indebtedness
which is subordinate to the Notes, such Funded Debt must be subordinated to the
Notes to the extent such Indebtedness is so subordinated, and (ii) additional
Funded Debt in an aggregate amount not to exceed $25 million at any one time
outstanding; provided, however, that Funded Debt incurred pursuant to this
subsection (ii) shall be deemed not to be outstanding for purposes of this
subsection (ii) if at the end of any period of four consecutive fiscal quarters
ending after the incurrence of such Funded Debt the Company's Consolidated
EBITDA Coverage Ratio exceeds 2.0 to 1.
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Petroleum Heat and Power Co., Inc. Note Agreement
Section 5.7. Subsidiary Stock. The Company shall not directly or
indirectly create, assume or suffer to exist any lien, charge or encumbrance on
any capital stock of any of its Subsidiaries. The Company shall not permit any
Subsidiary to issue or at any time to have outstanding any shares of Preferred
Stock except as permitted under ss.5.15.
Section 5.8. Dividends, Stock Purchases. The Company shall not declare or
pay any dividend or make any distribution on its capital stock or to its
shareholders or make any loan or advance to its shareholders (other than
dividends or distributions payable in its capital stock) or purchase, redeem or
otherwise acquire or retire for value, or permit any Subsidiary to purchase or
otherwise acquire for value, any capital stock of the Company (i) if at the time
of such action an Event of Default shall have occurred and be continuing, or
(ii) if, upon giving effect to such dividend, distribution, loan, advance,
purchase, redemption, or other acquisition or retirement, the aggregate amount
expended for all such purposes subsequent to December 31, 1987, (giving effect
to any repayments of such loans or advances), shall exceed the sum of (a) 50% of
the aggregate Cash Flow of the Company accrued on a cumulative basis for each of
the fiscal years subsequent to December 31, 1986 and (b) the aggregate net
proceeds, including the fair market value of property other than cash (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be conclusive), received by the Company from the issue or
sale after July 1, 1987, of capital stock of the Company, including capital
stock issued upon the conversion of, or exchange for, Indebtedness; provided,
however, that (x) the foregoing shall not prevent the payment of any dividend
within 60 days after the date of declaration of such dividend, if at said date
such declaration complied with this covenant; and (y) that in the event that the
Company purchases, redeems or otherwise acquires or retires any capital stock of
the Company in exchange for promissory notes of the Company then, so long as
such promissory notes are junior and subordinate to the Notes, the principal of
and interest on such subordinated promissory notes shall not be included for
purposes of the foregoing until such time as payments of principal or interest
are made thereon.
Section 5.9. Mergers, Consolidations and Sales of Assets. The Company
shall not consolidate with or merge into any other corporation or transfer all
or substantially all of its properties and assets as an entirety to any person,
unless:
(a) either the Company shall be the continuing person, or the person
(if other than the Company) formed by such consolidation or into which the
Company is merged or to which the properties and assets of the Company as
an
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Petroleum Heat and Power Co., Inc. Note Agreement
entirety are transferred (i) shall be a corporation organized and existing
under the laws of the United States of America or any state thereof or the
District of Columbia, (ii) shall expressly assume all the obligations of
the Company under the Note Agreement, (iii) shall be a person with a
consolidated net worth immediately after such transaction at least equal
to the Consolidated Net Worth of the Company immediately prior to such
transaction and (iv) would, after giving effect to such transaction, be
able to issue at least one dollar ($1.00) of additional Funded Debt under
the provisions of ss.5.6;
(b) immediately after giving effect to such transaction, no Event of
Default or no Default shall have occurred and be continuing; and
(c) the Company has delivered to the Noteholders an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer complies with this covenant.
Any sale or other transfer by the Company of a material part of any of its
properties or assets not in the ordinary course of business shall be for a price
which is not less than the fair market value of the property or assets so sold
or transferred, as determined in good faith by the Board of Directors of the
Company.
Notwithstanding the foregoing, any Subsidiary may consolidate with, merge
into or transfer all or part of its properties and assets to the Company or any
other Subsidiary or Subsidiaries.
Section 5.10. Guaranties. In addition to the other restrictions contained
herein, including, without limitation, the restrictions contained in ss.ss.5.6
and 5.15 hereof, the Company will not and will not permit any Subsidiary to
become or be liable in respect of any Guaranty except (i) any Guaranty of the
Company of any obligation of any Subsidiary, (ii) any Guaranty of any Subsidiary
of any obligation of any other Subsidiary or of the Company, and (iii)
Guaranties of the Company which are limited in amount to a stated maximum dollar
exposure and included in Indebtedness.
Section 5.11. Repurchase of Notes. Neither the Company nor any Subsidiary
or Affiliate, directly or indirectly, may repurchase or make any offer to
repurchase any Notes unless the offer has been made to repurchase Notes, pro
rata, from all holders of the Notes at the same time and upon the same terms. In
case the Company repurchases any Notes, such Notes shall thereafter be cancelled
and no Notes shall be issued in substitution therefor.
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Petroleum Heat and Power Co., Inc. Note Agreement
Section 5.12. Transactions with Affiliates. The Company will not, and
will not permit any Subsidiary to, enter into or be a party to, any transaction
or arrangement with any Affiliate (including without limitation, the purchase
from, sale to or exchange of property with, or the rendering of any service by
or for, any Affiliate), except upon fair and reasonable terms no less favorable
to the Company or such Subsidiary than would obtain in a comparable arm's-length
transaction with a Person other than an Affiliate, nor detrimental to the
interest of the Company or such Subsidiary.
Section 5.13. Termination of Pension Plans. The Company will not and will
not permit any Subsidiary to permit any employee benefit plan maintained by it
to be terminated in a manner which could result in the imposition of a lien on
any property of the Company or any Subsidiary pursuant to Section 4068 of the
Employee Retirement Income Security Act of 1974, as amended, if the enforcement
of all such liens then in effect would have a material and adverse effect on the
properties, business, prospects or the condition of the Company and its
Subsidiaries.
Section 5.14. Reports and Rights of Inspection. The Company will keep, and
will cause each Subsidiary to keep, proper books of record and account in which
full and correct entries will be made of all dealings or transactions of or in
relation to the business and affairs of the Company or such Subsidiary, in
accordance with generally accepted principles of accounting consistently
maintained (except for changes disclosed in the financial statements furnished
to you pursuant to this ss.5.14 and concurred in by the independent public
accountants referred to in ss.5.14(b) hereof), and will furnish to you so long
as you are the holder of any Note and to each other institutional holder of the
then outstanding Notes (in duplicate if so specified below or otherwise
requested):
(a) Quarterly Statements. As soon as available and in any event
within 45 days after the end of each quarterly fiscal period (except the
last) of each fiscal year, duplicate copies of:
(1) consolidated balance sheets of the Company and its
Subsidiaries as of the close of such quarter setting forth in
comparative form the amount for the end of the preceding fiscal
year,
(2) consolidated statements of income and retained earnings of
the Company and its Subsidiaries for such quarterly period, setting
forth in comparative form the amount for the corresponding period of
the preceding fiscal year, and
(3) consolidated statements of cash flows of the Company and
its Subsidiaries for the portion of the
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Petroleum Heat and Power Co., Inc. Note Agreement
fiscal year ending with such quarter, setting forth in comparative
form the amount for the corresponding period of the preceding fiscal
year,
all in reasonable detail and certified as complete and correct, by the
chief financial officer of the Company;
(b) Annual Statements. As soon as available and in any event within
90 days after the close of each fiscal year of the Company, duplicate
copies of:
(1) consolidated balance sheets of the Company and its
Subsidiaries as of the close of such fiscal year, and
(2) consolidated statements of income and retained earnings
and cash flows of the Company and its Subsidiaries for such fiscal
year,
in each case setting forth in comparative form the consolidated figures
for the preceding fiscal year, all in reasonable detail and accompanied by
an opinion thereon of a firm of independent public accountants of
recognized national standing selected by the Company to the effect that
the consolidated financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied (except
for changes in application in which such accountants concur) and present
fairly the financial condition of the Company and its Subsidiaries and
that the examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted auditing
standards and accordingly, includes such tests of the accounting records
and such other auditing procedures as were considered necessary in the
circumstances;
(c) Audit Reports. Promptly upon receipt thereof, one copy of each
interim or special audit made by independent accountants of the books of
the Company or any Subsidiary;
(d) SEC and Other Reports. Promptly upon their becoming available,
one copy of each financial statement, report, notice or proxy statement
sent by the Company to stockholders generally and of each regular or
periodic report, and any registration statement or prospectus filed by the
Company or any Subsidiary with any securities exchange or the Securities
and Exchange Commission or any successor agency, and copies of any orders
in any proceedings to which the Company or any of its Subsidiaries is a
party, issued by any governmental agency, Federal or state, having
jurisdiction over the Company or any of its Subsidiaries;
(e) Requested Information. With reasonable promptness, such other
data and information (including
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Petroleum Heat and Power Co., Inc. Note Agreement
information as to the ownership of the capital stock of the Company) as
you or any such institutional holder may reasonably request;
(f) Officers' Certificates. Within the periods provided in
paragraphs (a) and (b) above, a certificate of the chief financial officer
of the Company stating that he has reviewed the provisions of this
Agreement and setting forth: (i) the information and computations (in
sufficient detail) required in order to establish whether the Company was
in compliance with the requirements of ss.5.6 through ss.5.13, inclusive,
and ss.5.15 at the end of the period covered by the financial statements
then being furnished, and (ii) whether there existed as of the date of
such financial statements and whether, to the best of his knowledge after
reasonable inquiry, there exists on the date of the certificate or existed
at any time during the period covered by such financial statements any
Default or Event of Default and, if any such condition or event exists on
the date of the certificate, specifying the nature and period of existence
thereof and the action the Company is taking and proposes to take with
respect thereto; and
(g) Accountant's Certificates. Within the period provided in
paragraph (b) above, a certificate of the accountants who render an
opinion with respect to such financial statements, stating that they have
reviewed this Agreement and stating further, whether in making their
audit, such accountants have become aware of any Default or Event of
Default under any of the terms or provisions of this Agreement, and if any
such condition or event then exists, specifying the nature and period of
existence thereof.
Without limiting the foregoing, the Company will permit you, so long as
you are the holder of any Note, and each institutional holder of the then
outstanding Notes (or such Persons as either you or such holder may designate)
to visit and inspect, any of the properties of the Company or any Subsidiary, to
examine all their books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs, finances
and accounts with their respective officers, corporate staff and independent
public accountants (and by this provision the Company authorizes said
accountants to discuss with you the finances and affairs of the Company and its
Subsidiaries) all at such reasonable times and as often as may be reasonably
requested. The Company shall not be required to pay or reimburse you or any such
holder for expenses which you or any such holder may incur in connection with
any such visitation or inspection.
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Petroleum Heat and Power Co., Inc. Note Agreement
Section 5.15. Limitation on Indebtedness and Preferred Stock of
Subsidiaries. The Company will not permit any Subsidiary to incur or in any
manner be or become liable in respect of any Indebtedness or issue or have
outstanding any Preferred Stock except: (i) Indebtedness or Preferred Stock
issued to and held by the Company or a Wholly-owned Subsidiary; provided,
however, that any subsequent issuance or transfer of any Capital Stock which
results in any such Wholly-owned Subsidiary ceasing to be a Wholly-owned
Subsidiary or any subsequent transfer of such Indebtedness or Preferred Stock
(other than to the Company or a Wholly-owned Subsidiary) will be deemed, in each
case, to constitute the incurrence of such Indebtedness or the issuance of such
Preferred Stock, as the case may be, by the issuer thereof; (ii) Indebtedness
incurred or Preferred Stock of a Subsidiary issued and outstanding on or prior
to the date on which such Subsidiary was acquired by the Company (other than
Indebtedness incurred or Preferred Stock issued in contemplation of, as
consideration in, or to provide all or any portion of the funds or credit
support utilized to consummate, the transaction or series of related
transactions pursuant to which such Subsidiary became a Subsidiary or was
acquired by the Company), provided that at the time such Subsidiary is acquired
by the Company, after giving effect to such Indebtedness or Preferred Stock of
such Subsidiary, the Company's Consolidated EBITDA Coverage Ratio exceeds 2.0 to
1; (iii) Indebtedness or Preferred Stock (other than Indebtedness or Preferred
Stock described in clause (i), (ii), (iv) or (vi) of this covenant) incurred or
issued and outstanding on or prior to January 26, 1994; (iv) Indebtedness of a
Subsidiary consisting of guarantees issued by such Subsidiary and outstanding on
January 26, 1994 and Indebtedness of a Subsidiary consisting of guarantees
issued subsequent to such date, in each case, to the extent such guarantee
guarantees Bank Debt; (v) Indebtedness of a Subsidiary (other than Indebtedness
described in clause (iv) above) consisting of guarantees of Funded Debt of the
Company permitted by the first paragraph of Section 5.6, provided that
contemporaneously with the incurrence of such Indebtedness by such Subsidiary,
such Subsidiary issues a guarantee for the pro rata benefit of the holders of
the Notes; and (vi) Indebtedness or Preferred Stock issued in exchange for, or
the proceeds of which are used to refund or refinance, Indebtedness or Preferred
Stock referred to in the foregoing clause (ii) or (iii); provided, however, that
(1) the principal amount of such Indebtedness or Preferred Stock so incurred or
issued will not exceed the principal amount of the Indebtedness or Preferred
Stock so exchanged or refinanced and (2) the Indebtedness or Preferred Stock so
incurred or issued will (A) have a Stated Maturity later than the Stated
Maturity of the
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Petroleum Heat and Power Co., Inc. Note Agreement
Indebtedness or Preferred Stock being exchanged or refinanced and (B) will have
an Average Life equal to or greater than the remaining Average Life of the
Indebtedness or Preferred Stock so exchanged, refunded or refinanced.
Section 5.16. Limitation on Restrictions on Distributions from
Subsidiaries. The Company will not, and will not permit any Subsidiary to,
create or otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Subsidiary to: (i) pay
dividends or make any other distributions on its Capital Stock or pay any
Indebtedness owed to the Company, (ii) make any loans or advances to the Company
or (iii) transfer any of its property or assets to the Company, except: (1) any
encumbrance or restriction pursuant to an agreement in effect on January 26,
1994; (2) any encumbrance or restriction with respect to a Subsidiary pursuant
to an agreement relating to any Indebtedness issued by such Subsidiary on or
prior to the date on which such Subsidiary was acquired by the Company (other
than Indebtedness issued in contemplation of, as consideration in, or to provide
all or any portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such Subsidiary
became a Subsidiary or was acquired by the Company) and outstanding on such
date; (3) any encumbrance or restriction pursuant to an agreement effecting a
refinancing of Indebtedness issued pursuant to an agreement referred to in the
foregoing clause (1) or (2) or contained in any amendment to an agreement
referred to in the foregoing clause (1) or (2); provided, however, that the
encumbrances and restrictions contained in any such refinancing agreement or
amendment are no less favorable to holders of the Notes than the encumbrances
and restrictions contained in such agreements; (4) any such encumbrance or
restriction consisting of customary nonassignment provisions in leases governing
leasehold interests to the extent such provisions restrict the transfer of the
lease; (5) in the case of clause (iii) above, restrictions contained in security
agreements securing Indebtedness of a Subsidiary to the extent such restrictions
restrict the transfer of the property subject to such security agreements; and
(6) any restriction with respect to a Subsidiary imposed pursuant to an
agreement entered into for the sale or disposition of all or substantially all
of the Capital Stock or assets of such Subsidiary pending the closing of such
sale or disposition.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
Section 6.1. Events of Default. Any one or more of the following shall
constitute an "Event of Default" as the term is used herein:
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Petroleum Heat and Power Co., Inc. Note Agreement
(a) Default shall occur in the payment of interest on any Note when
the same shall have become due and such default shall continue for more
than five days; or
(b) Default shall occur in the making of any payment of the
principal of any Note or the premium thereon at the expressed or any
accelerated maturity date; or
(c) Default shall be made in the payment of the principal of or
interest on any Indebtedness of the Company (other than the Notes) or any
Subsidiary aggregating more than $2,000,000, as and when the same shall
become due and payable in accordance with its terms (including any
optional or required prepayment or redemption) and either (i) as the
result of such default such Indebtedness is declared (or, in the case of
Subordinated Indebtedness, may be declared) by the holders thereof to be,
or becomes in accordance with its terms, due and payable before its stated
maturity date or (ii) such default shall continue beyond the longer of 180
days or the period of grace, if any, allowed with respect thereto; or
(d) The Company shall default in complying with any covenant under
any indenture, agreement, or other instrument under which any Indebtedness
(other than the Notes) of the Company or any Subsidiary aggregating more
than $2,000,000 may be issued and as the result of such default the
Indebtedness outstanding thereunder is declared (or, in the case of
Subordinated Indebtedness, may be declared) by the holders thereof, to be
or becomes, in accordance with its terms, due and payable before its
stated maturity date; or
(e) Default shall occur in the observance or performance of any
covenant or agreement contained inss.5.6 throughss.5.13 or inss.ss.5.15 or
5.16 hereof; or
(f) Default shall occur in the observance or performance of any
other provision of this Agreement which is not remedied within 30 days
after notice thereof to the Company by the holder of any Note; or
(g) If any representation or warranty made by the Company herein, or
made by the Company in any statement or certificate furnished by the
Company in connection with the consummation of the issuance and delivery
of the Notes or furnished by the Company pursuant hereto, is untrue in any
material respect as of the date of the issuance or making thereof; or
(h) The Company or any Subsidiary becomes insolvent or bankrupt, is
generally not paying its debts as they become due or makes an assignment
for the benefit of creditors, or the Company or any Subsidiary causes or
suffers an order for relief to be entered with respect to it under
applicable
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Petroleum Heat and Power Co., Inc. Note Agreement
Federal bankruptcy law or applies for or consents to the appointment of a
custodian, trustee or receiver for the Company or such Subsidiary or for
the major part of the property of either; or
(i) A custodian, trustee or receiver is appointed for the Company or
any Subsidiary or for the major part of the property of either and is not
discharged within 30 days after such appointment; or
(j) Final judgment or judgments for the payment of money aggregating
in excess of $250,000 is or are outstanding against the Company or any
Subsidiary or against any property or assets of either and any one of such
judgments has remained unpaid, unvacated, unbonded or unstayed by appeal
or otherwise for a period of 30 days from the date of its entry; or
(k) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or
similar law or laws for the relief of debtors, are instituted by or
against the Company or any Subsidiary and, if instituted against the
Company or any Subsidiary, are consented to or are not dismissed within 60
days after such institution.
Section 6.2. Notice to Holders. When any Event of Default described in the
foregoing ss.6.1 has occurred, or if the holder of any Note or of any other
evidence of Indebtedness of the Company gives any notice to the Company or takes
any other action known to the Company with respect to a claimed default, the
Company agrees to give notice within five business days of such event to all
holders of the Notes then outstanding, such notice to be in writing and sent by
registered or certified mail or by telegram.
Section 6.3. Acceleration of Maturities. When any Event of Default
described in paragraph (a) or (b) of ss.6.1 has happened and is continuing, any
holder of any Note may, and when any Event of Default described in paragraphs
(c) through (j), inclusive, of said ss.6.1 has happened and is continuing, the
holder or holders of 25% or more of the principal amount of Notes at the time
outstanding may, by notice in writing sent by registered or certified mail to
the Company, declare the entire principal and all interest accrued on all Notes
to be, and all Notes shall thereupon become, forthwith due and payable, without
any presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived. When any Event of Default described in paragraph (k) of
ss.6.1 has occurred, then all outstanding Notes shall immediately become due and
payable without presentment, demand or notice of any kind. Upon the Notes
becoming due and payable as a result of any Event of Default as aforesaid, the
Company will forthwith pay to the
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Petroleum Heat and Power Co., Inc. Note Agreement
holders of the Notes the entire principal and interest accrued on the Notes and,
to the extent permitted by law and if such Notes so become due and payable on or
prior to March 31, 2002, a premium equal to the Make-Whole Amount determined as
of the date on which the Notes shall so become due and payable. No course of
dealing on the part of any Noteholder nor any delay or failure on the part of
any Noteholder to exercise any right shall operate as a waiver of such right or
otherwise prejudice such holder's rights, powers and remedies. The Company
further agrees, to the extent permitted by law, to pay to the holder or holders
of the Notes all reasonable costs and expenses incurred by them in the
collection of any Notes upon any default hereunder or thereon, including
reasonable compensation to such holder's or holders' attorneys for all services
rendered in connection therewith.
Section 6.4. Rescission of Acceleration. The provisions of ss.6.3 are
subject to the condition that if the principal of and accrued interest on all or
any outstanding Notes have been declared immediately due and payable by reason
of the occurrence of any Event of Default described in paragraphs (a) through
(j), inclusive, of ss.6.1, the holders of 66-2/3% in aggregate principal amount
of the Notes then outstanding may, by written instrument filed with the Company,
rescind and annul such declaration and the consequences thereof, provided that
at the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of any
monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all other sums
payable under the Notes and under this Agreement (except any principal,
interest or premium on the Notes which has become due and payable solely
by reason of such declaration underss.6.3) shall have been duly paid; and
(c) each and every other Default and Event of Default shall have
been made good, cured or waived pursuant toss.7.1; and provided further,
that no such rescission and annulment shall extend to or affect any
subsequent Default or Event of Default or impair any right consequent
thereto.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.
Section 7.1. Consent Required. Any term, covenant, agreement or condition
of this Agreement may, with the consent of the Company, be amended or compliance
therewith may be waived (either generally or in a particular instance and either
retroactively or prospectively), if the Company shall have obtained the consent
in writing of the holders of at least 66-2/3% in aggregate principal amount of
outstanding Notes; provided that without the written consent of the holders of
all of the Notes then outstanding, no such waiver, modification,
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Petroleum Heat and Power Co., Inc. Note Agreement
alteration or amendment shall be effective (i) which will extend the time of
payment (including any prepayment required by ss.2.1) of the principal of or the
interest on any Note or reduce the principal amount thereof or change the rate
of interest thereon, or (ii) which will change any of the provisions with
respect to optional prepayments, or (iii) which will change the provisions with
respect to mandatory prepayment upon a change of ownership of the Company, or
(iv) which will change the percentage of holders of the Notes required to
consent to any such amendment, alteration or modification or any of the
provisions of this ss.7 or ss.6.
Section 7.2. Effect of Amendment or Waiver. Any such amendment or waiver
shall apply equally to all of the holders of the Notes and shall be binding upon
them, upon each future holder of any Note and upon the Company, whether or not
such Note shall have been marked to indicate such amendment or waiver. No such
amendment or waiver shall extend to or affect any obligation not expressly
amended or waived or impair any right consequent thereon.
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS.
Section 8.1. Definitions. Unless the context otherwise requires, the terms
hereinafter set forth when used herein shall have the following meanings and the
following definitions shall be equally applicable to both the singular and
plural forms of any of the terms herein defined:
"Affiliate" shall mean any Person (other than a Subsidiary) (i) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Company, (ii) which
beneficially owns or holds 5% or more of any class of the Voting Stock of the
Company or (iii) 5% or more of the Voting Stock (or in the case of a Person
which is not a corporation, 5% or more of the equity interest) of which is
beneficially owned or held by the Company or a Subsidiary. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of Voting Stock, by contract or otherwise.
"Asset Disposition" means any sale, lease, transfer or other disposition
(or series of related sales, leases, transfers or dispositions) of shares of
Capital Stock of a Subsidiary (other than directors' qualifying shares),
property or other assets (each referred to for the purposes of this definition
as a "disposition") by the Company or any of its Subsidiaries (including any
disposition by means of a merger, consolidation or similar transaction) other
than (i) a disposition by a Subsidiary to the Company or by the Company or a
Subsidiary to a Wholly-owned Subsidiary, (ii) a disposition of property or
assets
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Petroleum Heat and Power Co., Inc. Note Agreement
at fair market value in the ordinary course of business or (iii) a disposition
of obsolete assets in the ordinary course of business.
"Attributable Indebtedness" in respect of a Sale/Leaseback Transaction
means, as of the time of determination, the present value (discounted at the
average interest rate borne by the Notes, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with respect to any
Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the sum
of the products of the numbers of years from the date of determination to the
dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (ii) the sum of all such payments.
"Bank Debt" means any loan agreement with a bank, finance company or other
financial institution, including principal, premium (if any), interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company to the extent a claim
for post filing interest is allowed in such proceedings), fees, charges,
expenses, reimbursement obligations, guarantees and all other amounts payable
thereunder or in respect thereof.
"Business Day" means each day which is not a Legal Holiday.
"Capital Stock" of any person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such person, including any Preferred
Stock, but excluding any debt securities convertible into or exchangeable for
such equity.
"Capital Lease Obligations" of a person means any obligation which is
required to be classified and accounted for as a capital lease on the face of a
balance sheet of such person prepared in accordance with generally accepted
accounting principles; the amount of such obligation will be the capitalized
amount thereof, determined in accordance with generally accepted accounting
principles; and the Stated Maturity thereof will be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a penalty.
"Cash Flow", for any fiscal year, means the sum of (i) Consolidated Net
Income for such fiscal year and (ii) to the extent the following deferred
charges are deducted in the calculation of Consolidated Net Income, the
amortization of
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Petroleum Heat and Power Co., Inc. Note Agreement
customer lists and other deferred charges included in the purchase price in
connection with the acquisition of fuel oil distributorships (other than legal,
accounting, financing and other transaction charges) and the amortization and
depreciation of plant and equipment of the Company and its Subsidiaries for such
fiscal year determined on a consolidated basis in accordance with generally
accepted accounting principles.
"Certificate of Designation" shall mean the Certificate of Designation
adopted by the Board of Directors of the Company on February 12, 1997
establishing the 1997 Preferred Stock and setting forth the relative rights and
preferences thereof.
The terms "Class A Common Stock", "Class B Common Stock" and "Class C
Common Stock" shall each mean the class of equity securities designated as such
in the Restated and Amended Articles of Incorporations of the Company.
"Consolidated EBITDA Coverage Ratio" as of any date of determination means
the ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters ending at least 45 days prior to the
date of such determination to (ii) Consolidated Interest Expense for such four
fiscal quarters; provided, however, that (1) if the Company or any Subsidiary
has incurred any Indebtedness since the beginning of such period that remains
outstanding or if the transaction giving rise to the need to calculate the
Consolidated EBITDA Coverage Ratio is an incurrence of Indebtedness, or both,
EBITDA and Consolidated Interest Expense for such period will be calculated
after giving effect on a pro forma basis to (A) such Indebtedness as if such
Indebtedness had been incurred on the first day of such period, (B) the
discharge of any other Indebtedness repaid, repurchased, defeased or otherwise
discharged with the proceeds of such new Indebtedness as if such discharge had
occurred on the first day of such period, and (C) the interest income realized
by the Company and its Subsidiaries on the proceeds of such Indebtedness, to the
extent not yet applied at the date of determination, assuming such proceeds
earned interest at the Treasury Rate from the date such proceeds were received
through such date of determination, (2) if since the beginning of such period
the Company or any Subsidiary will have made any Asset Disposition, EBITDA for
such period will be reduced by an amount equal to EBITDA (if positive) directly
attributable to the assets which are the subject of such Asset Disposition for
such period, or increased by an amount equal to EBITDA (if negative), directly
attributable thereto for such period and Consolidated Interest Expense for such
period will be reduced by an amount equal to the Consolidated Interest Expense
directly attributable to any Indebtedness of the Company or any Subsidiary
repaid, repurchased, defeased or otherwise discharged
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Petroleum Heat and Power Co., Inc. Note Agreement
with respect to the Company and its continuing Subsidiaries in connection with
such Asset Dispositions for such period (or, if the Capital Stock of any
Subsidiary is sold, the Consolidated Interest Expense for such period directly
attributable to the Indebtedness of such Subsidiary to the extent the Company
and its continuing Subsidiaries are no longer liable for such Indebtedness after
such sale) and (3) if since the beginning of such period the Company or any
Subsidiary (by merger or otherwise) will have made an Investment in any
Subsidiary (or any person which becomes a Subsidiary) or an acquisition of
assets, including any acquisition of assets occurring in connection with a
transaction causing a calculation to be made hereunder, which constitutes all or
substantially all of the assets of an operating unit of a business, EBITDA and
Consolidated Interest Expense for such period will be calculated after giving
pro forma effect thereto (including the incurrence of any Indebtedness) as if
such Investment or acquisition occurred on the first day of such period. For
purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto, and
the amount of Consolidated Interest Expense associated with any Indebtedness
incurred in connection therewith the pro forma calculations will be determined
in good faith by a responsible financial or accounting officer of the Company;
provided, however, that such officer shall assume (i) the historical sales and
gross profit margins associated with such assets for the most recent consecutive
12-month period ended prior to the date of purchase for which financial
statements are available (provided that the first month of such period will be
no more than 18 months prior to such date of purchase), less estimated
post-acquisition loss of customers (not to be less than 5%) and (ii) other
expenses as if such assets had been owned by the Company since the first day of
such period. If any Indebtedness bears a floating rate of interest and is being
given pro forma effect, the interest on such Indebtedness will be calculated as
if the rate in effect on the date of determination had been the applicable rate
for the entire period.
"Consolidated Indebtedness" shall mean Indebtedness of the Company and its
Subsidiaries on a consolidated basis as determined in accordance with generally
accepted accounting principles.
"Consolidated Interest Expense" means, for any period, the total interest
expense of the Company and its Subsidiaries, determined on a consolidated basis,
including (i) interest expense in respect of money borrowed and interest expense
attributable to capital leases, (ii) amortization of debt discount, (iii)
capitalized interest, (iv) non-cash interest
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Petroleum Heat and Power Co., Inc. Note Agreement
expense, (v) commissions, discounts and other fees and charges owed with respect
to letters of credit and bankers' acceptance financing, (vi) interest actually
paid by the Company or any such Subsidiary under any guarantee of Indebtedness
or other obligation of any other Person, (vii) net costs associated with Hedging
Obligations (including amortization of fees), (viii) Preferred Stock dividends
in respect of all Preferred Stock of Subsidiaries held by persons other than the
Company or a Wholly-owned Subsidiary, (ix) the cash contributions to any
employee stock ownership plan or similar trust to the extent such contributions
are used by such plan to pay interest or fees to any person (other than the
Company) in connection with loans incurred by such plan or trust to purchase
newly issued or treasury shares of the Company (but excluding interest expense
associated with the accretion of principal on a non-interest bearing or other
discount security) and (x) to the extent not already included in Consolidated
Interest Expense, the interest expense attributable to Indebtedness of another
person that is guaranteed by the Company or any of its Subsidiaries less
interest income (exclusive of deferred financing fees) of the Company and its
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles; provided, however, that Consolidated Interest
Expense shall include such interest as may be paid by the Company or any
Subsidiary to Star Gas only to the extent the amount of such interest paid
during any period exceeds the dividends or other distributions on the Capital
Stock of Star Gas distributed to the Company or any Subsidiary during such
period.
"Consolidated Net Income" of a person, for any period, means the aggregate
of the Net Income of such person and its Subsidiaries for such period,
determined on a consolidated basis in accordance with generally accepted
accounting principles, provided that (i) the Net Income of any other person
(other than a Subsidiary) in which such person has an interest will be included
only to the extent of the amount of dividends or distributions paid to such
person, (ii) the Net Income of any person acquired by such person in a pooling
of interests transaction for any period prior to the date of such acquisition
will be excluded, (iii) any Net Income of any Subsidiary will be excluded if
such Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Subsidiary, directly
or indirectly, to such person, except that (A) such person's equity in the Net
Income of any such Subsidiary for such period will be included in such
Consolidated Net Income up to the aggregate amount of cash actually distributed
by such Subsidiary during such period to such person as a dividend or other
distribution (subject, in the
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Petroleum Heat and Power Co., Inc. Note Agreement
case of a dividend or other distribution to another subsidiary, to the
limitation contained in this clause) and (B) such person's equity in a net loss
of any such Subsidiary for such period will be included in determining such
Consolidated Net Income, (iv) the cumulative effect of a change in accounting
principles will be excluded and (v) dividends or other distributions on the
Capital Stock of Star Gas distributed to the Company or any Subsidiary by Star
Gas shall be included in Consolidated Net Income of the Company only to the
extent such dividends or other distributions exceed during any period the amount
of interest paid to Star Gas by the Company or any Subsidiary during such
period.
"Consolidated Net Worth" means the total consolidated stockholders' equity
of the Company and its consolidated Subsidiaries determined on a consolidated
basis in accordance with generally accepted accounting principles.
"Consolidated Operating Cash Flow", for any period, means the sum of (i)
Consolidated Net Income for such period and (ii) depreciation and amortization
expense of the Company and its Subsidiaries for such period, as determined in
accordance with generally accepted accounting principles. Consolidated Operating
Cash Flow of the Company and its Subsidiaries shall include the sum of the items
enumerated in clauses (i) and (ii) above of all persons (and each of their
subsidiaries, if any, on a consolidated basis) then or theretofore acquired for
the 12 months ended with the most recently completed fiscal quarter for such
person. Consolidated Operating Cash Flow of such acquired persons shall be
determined on a pro forma basis, giving effect to the financial results of such
persons as if they had been owned by the Company for the twelve months
immediately preceding the date of acquisition of such persons.
"Default" shall mean any event or condition, the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute an
Event of Default as defined in ss.6.1.
"EBITDA" for any period means the Consolidated Net Income for such period
(but without giving effect to adjustments, accruals, deductions or entries
resulting from purchase accounting, extraordinary losses or gains and any gains
or losses from any Asset Dispositions), plus the following to the extent
deducted in calculating such Consolidated Net Income: (i) income tax expense,
(ii) Consolidated Interest Expense, (iii) depreciation expense, (iv)
amortization expense and (v) all other noncash expenses.
Exchange Indenture" shall mean the Exchange Debenture Indenture
substantially in the form appended as Annex A to the Certificate of Designation.
"Funded Debt" as applied to any person, means (a) Indebtedness incurred by
such person with a stated maturity of
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Petroleum Heat and Power Co., Inc. Note Agreement
more than one year from the date of incurrence; (b) any Indebtedness which,
regardless of its term, may be renewed or extended at the option of the obligor
to a date more than one year from the date of incurrence; and (c) any
Indebtedness which by its terms or pursuant to the agreement under which it is
issued, regardless of its term, may be paid with the proceeds of other
Indebtedness, which may be incurred pursuant to the terms of such
first-mentioned Indebtedness or the agreement under which such first
Indebtedness is issued, which other Indebtedness has a stated maturity more than
one year from the incurrence of such first-mentioned Indebtedness; excluding in
each case (a), (b) and (c) Working Capital Borrowings.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation, of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (i) to purchase such Indebtedness or obligation or
any property or assets constituting security therefor, (ii) to advance or supply
funds (x) for the purchase or payment of such Indebtedness or obligation, (y) to
maintain working capital or other balance sheet condition or otherwise to
advance or make available funds for the purchase or payment of such Indebtedness
or obligation, or (iii) to lease property or to purchase Securities or other
property or services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the primary obligor to make payment
of the Indebtedness or obligation, or (iv) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under this Agreement, a
Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness for borrowed
money which has been guaranteed, and a Guaranty in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness equal
to the maximum aggregate amount of such obligation, liability or dividend.
"Hedging Obligations" of any person means the obligations of such person
pursuant to any interest rate swap agreement, foreign currency exchange
agreement, interest rate collar agreement, option or futures contract or other
similar agreement or arrangement designed to protect such person against changes
in interest rates or foreign exchange rates.
"Indebtedness" of any person means, without duplication,
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Petroleum Heat and Power Co., Inc. Note Agreement
(i) the principal of (A) indebtedness of such person for money
borrowed and (B) indebtedness evidenced by notes, debentures, bonds or
other similar instruments for the payment of which such person is
responsible or liable;
(ii) all Capital Lease Obligations of such person and all
Attributable Indebtedness in respect of Sale/Leaseback Transactions
entered into by such person;
(iii) all obligations of such person issued or assumed as the
deferred purchase price of property, all conditional sale obligations of
such person and all obligations of such person under any title retention
agreement (but excluding trade accounts payable arising in the ordinary
course of business);
(iv) all obligations of such person for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction (other than obligations with respect to letters of credit
securing obligations (other than obligations described in (i) through
(iii) above) entered into in the ordinary course of business of such
person to the extent such letters of credit are not drawn upon or, if and
to the extent drawn upon, such drawing is reimbursed no later than the
third Business Day following receipt by such person of a demand for
reimbursement following payment on the letter of credit);
(v) all obligations of the type referred to in clauses (i) through
(iv) of other persons and all dividends of other persons for the payment
of which, in either case, such person is responsible or liable, directly
or indirectly, as obligor, guarantor or otherwise, including any
guarantees of such obligations and dividends, including by means of any
agreement which has the economic effect of a guarantee; and
(vi) all obligations of the type referred to in clauses (i) through
(v) of other persons secured by any Lien on any property or asset of such
person (whether or not such obligation is assumed by such person), the
amount of such obligation being deemed to be the lesser of the value of
such property or assets or the amount of the obligation so secured.
"Investment" in any person means any loan or advance to, any guarantee of,
any acquisition of any Capital Stock, equity interest, obligation or other
security of, or capital contribution or other investment in, such person.
Investments will exclude advances to customers and suppliers in the ordinary
course of business.
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Petroleum Heat and Power Co., Inc. Note Agreement
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in The City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Lien" means any mortgage, pledge, security interest, conditional sale or
other title retention agreement or other similar lien.
"Make-Whole Amount" means, with respect to any Note, an amount equal to
the excess, if any, of the Discounted Value of the Remaining Scheduled Payments
with respect to the Called Principal of such Note over the amount of such Called
Principal, provided that the Make-Whole Amount may in no event be less than
zero. For the purposes of determining the Make-Whole Amount, the following terms
have the following meanings:
"Called Principal" means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to ss.2.3 or has become or is
declared to be immediately due and payable pursuant to ss.6.3, as the
context requires.
"Discounted Value" means, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called Principal of
any Note, the Reinvestment Yield Adjustment Percentage over the yield to
maturity implied by (i) the yields reported, as of 10:00 A.M. (New York
City time) on the second Business Day preceding the Settlement Date with
respect to such Called Principal, on the display designated as "Page PX1"
on the Bloomberg Financial Markets Services Screen (or such other display
as may replace Page PX1 on the Bloomberg Financial Markets Services
Screen) for actively traded U.S. Treasury securities having a maturity
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date, or (ii) if such yields are not reported as of such time
or the yields reported as of such time are not ascertainable, the Treasury
Constant Maturity Series Yields reported, for the latest day for which
such yields have been so reported as of the second Business Day
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Petroleum Heat and Power Co., Inc. Note Agreement
preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded U.S. Treasury securities having
a constant maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date. Such implied yield will be
determined, if necessary, by (a) converting U.S. Treasury xxxx quotations
to bond-equivalent yields in accordance with accepted financial practice
and (b) interpolating linearly between (1) the actively traded U.S.
Treasury security with the duration closest to and greater than the
Remaining Average Life and (2) the actively traded U.S. Treasury security
with the duration closest to and less than the Remaining Average Life.
"Reinvestment Yield Adjustment Percentage" means (i) for any payment
or prepayment of the Notes to be made at any time on or prior to September
30, 2000, 0.50% and (ii) for any payment or prepayment of the Notes to be
made after September 30, 2000 and on or prior to March 31, 2002, 1.25%.
"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum of
the products obtained by multiplying (a) the principal component of each
Remaining Scheduled Payment with respect to such Called Principal by (b)
the number of years (calculated to the nearest one-twelfth year) that will
elapse between the Settlement Date with respect to such Called Principal
and the scheduled due date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to
its scheduled due date, provided that if such Settlement Date is not a
date on which interest payments are due to be made under the terms of the
Notes, then the amount of the next succeeding scheduled interest payment
will be reduced by the amount of interest accrued to such Settlement Date
and required to be paid on such Settlement Date pursuant to ss.2.3 or
ss.6.3.
"Settlement Date" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
ss.2.3 or has become or is declared to be immediately due and payable
pursuant to ss.6.3, as the context requires.
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Petroleum Heat and Power Co., Inc. Note Agreement
"Net Income" of any person means the net income (loss) of such person,
determined in accordance with generally accepted accounting principles;
excluding, however, from the determination of Net Income any gain (but not loss)
realized upon the sale or other disposition (including, without limitation,
dispositions pursuant to leaseback transactions) of any real property or
equipment of such person, which is not sold or otherwise disposed of in the
ordinary course of business, or of any capital stock of such person or
subsidiary owned by such person.
"1989 Preferred Stock" shall mean the Exchangeable Preferred Stock of the
Company in the aggregate original liquidation preference of $25,000,000 issued
under the 1989 Preferred Stock Purchase Agreements.
"1989 Preferred Stock Purchase Agreements" shall mean the separate
Purchase Agreements dated as of August 1, 1989 between the Company and the
respective Purchasers named therein, as amended by the First and Second
Amendments thereto and as amended and restated by the Third Amendment and
Restatement of Purchase Agreements dated as of February 1, 1997 among the
Company and the holders of 1989 Preferred Stock named therein, as such Purchase
Agreements may be amended, modified or restated.
"1997 Preferred Stock" shall have the meaning set forth therefor in
ss.4.4.
"Officer" means the Chairman of the Board, the Chief Executive Officer,
the President, any Vice President, the Treasurer or the Secretary of the
Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Overdue Rate" shall mean, with respect to any Series of Notes during any
period, a rate of interest equal to the sum of (i) the annual rate of interest
otherwise borne by the Notes of such Series during such period (or, in the case
of amounts due or overdue but not paid at maturity, the annual rate of interest
otherwise borne by the Notes of such Series immediately prior to maturity) plus
(ii) 2% per annum.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political subdivision
thereof.
"Preferred Stock," as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Public Debentures" shall mean, collectively, the Company's 12-1/4%
Subordinated Debentures due 2005, 10-1/8% Subordinated Notes due 2003 and 9-3/8%
Subordinated Debentures due 2006.
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Petroleum Heat and Power Co., Inc. Note Agreement
"Public Indentures" shall mean, collectively, (i) the Indenture dated as
of February 9, 1995, the Indenture dated as of April 1, 1993 and the Indenture
dated as of February 3, 1994, each between the Company and Chemical Bank (now
Chase Manhattan Bank), as Trustee thereunder, (ii) the Exchange Indenture and
(iii) any other indenture or other agreement under which the Company may issue
Subordinated Indebtedness.
"Sale/Leaseback Transaction" means an arrangement relating to property now
owned or hereafter acquired whereby the Company or a Subsidiary transfers such
property to a person and the Company or a Subsidiary leases it from such person.
"Security" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
"Xxxxx Group" means the Estate of Xxxxxx X. Xxxxx and trusts created
thereunder, Xxxxxx X. Xxxxx, Xxxx X. Xxxxx, Xxxxxx X. Xxxxxxx, Xxxxxx Xxxxxx and
Xxxxxxx Ean Xxxxx and any trust over which such persons have the sole voting
power.
"Star Gas" shall mean Star Gas Corporation, a Delaware corporation.
"Stated Maturity" means, with respect to any Indebtedness, the date
specified in such Indebtedness, or in any agreement pursuant to which such
Indebtedness was incurred, as the fixed date on which the principal of such
Indebtedness is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
Indebtedness at the option of the holder thereof upon the happening of any
contingency unless such contingency has occurred).
"Subordinated Indebtedness" shall mean any Indebtedness of the Company
which by its terms is subordinated or junior in right of payment to the Notes.
The term "Subsidiary" means (i) a corporation a majority of whose capital
stock with voting power, under ordinary circumstances, to elect directors is at
the time, directly or indirectly, owned by the Company, by the Company and a
Subsidiary of the Company or by a Subsidiary of the Company or (ii) any other
person (other than a corporation) in which the Company, a Subsidiary of the
Company or the Company and a Subsidiary of the Company, direct or indirectly, at
the date of determination thereof, has at least 50% ownership interest or over
which it exercises control; provided, however, that Star Gas, and any Person
owned or controlled directly or indirectly by Star Gas, shall not be a
Subsidiary.
"Xxxxxx Group" means (i) all the holders of Class C Common Stock of the
Company as listed on Schedule II hereto who are not members of the Xxxxx Group,
(ii) any person who is, or concurrently with the transfer of shares to such
person becomes,
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Petroleum Heat and Power Co., Inc. Note Agreement
a party to the shareholders agreement among the holders of Class C Common Stock
of the Company dated November 25, 1986, as amended and restated through the
Closing Date, and (iii) any trust over which persons described in clause (i) or
(ii) have sole voting power.
"Treasury Rate" as of any date of determination means the yield to
maturity at the time of computation of United States Treasury securities with a
constant maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15(519) which has become publicly available at least two
business days prior to such date of determination (or, if such Statistical
Release is no longer published, any publicly available source of similar market
date)) of one year.
"Voting Stock" shall mean Securities of any class or classes, the holders
of which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
"Wholly-owned" when used in connection with any Subsidiary shall mean a
Subsidiary of which all of the issued and outstanding shares of stock (except
shares required as directors' qualifying shares) and all Indebtedness for
borrowed money shall be owned by the Company and/or one or more of Petroleum
Heat and Power Co., Inc. Note Agreement its Wholly-owned Subsidiaries.
"Working Capital Borrowings" shall mean, on any date of determination, all
Indebtedness of the Company and its Subsidiaries on a consolidated basis
incurred to finance current assets, excluding from such definition of Working
Capital Borrowings (but not from the definition of Indebtedness) the excess of
current liabilities over current assets on such date (determined in accordance
with generally accepted accounting principles).
Section 8.2. Accounting Principles. Where the character or amount of any
asset or liability or item of income or expense is required to be determined or
any consolidation or other accounting computation is required to be made for the
purposes of this Agreement, the same shall be done in accordance with generally
accepted accounting principles, to the extent applicable, except where such
principles are inconsistent with the requirements of this Agreement.
Section 8.3. Directly or Indirectly. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether the action in question
is taken directly or indirectly by such Person.
SECTION 9. MISCELLANEOUS.
Section 9.1. Registration and Transfers of the Notes. The Company shall
cause to be kept at its principal office a register
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Petroleum Heat and Power Co., Inc. Note Agreement
for the registration and transfer of the Notes (hereinafter called the "Note
Register"), and the Company will register or transfer or cause to be registered
or transferred, as hereinafter provided and under such reasonable regulations as
it may prescribe, any Note issued pursuant to this Agreement.
At any time and from time to time the registered holder of any Note which
has been duly registered as hereinabove provided may transfer such Note upon
surrender thereof at the principal office of the Company duly endorsed or
accompanied by a written instrument of transfer duly executed by the registered
holder of such Note or its attorney duly authorized in writing.
The Person in whose name any registered Note shall be registered shall be
deemed and treated as the owner and holder thereof for all purposes of this
Agreement. Payment of or on account of the principal, premium, if any, and
interest on any registered Note shall be made to or upon the written order of
such registered holder.
Section 9.2. Exchange of Notes. At any time, and from time to time, upon
not less than ten days' notice to that effect given by the holder of any Note
initially delivered or of any Note substituted therefor pursuant to ss.9.1, this
ss.9.2 or ss.9.3, and, upon surrender of such Note at its office, the Company
will deliver in exchange therefor, without expense to the holder, except as set
forth below, Notes for the same aggregate principal amount as the then unpaid
principal amount of the Note so surrendered, in the denomination of $100,000 or
any amount in excess thereof as such holder shall specify, dated as of the date
to which interest has been paid on the Note so surrendered or, if such surrender
is prior to the payment of any interest thereon, then dated as of the date of
issue, payable to such Person or Persons, or order, as may be designated by such
holder, and otherwise of the same form and tenor as the Notes so surrendered for
exchange. The Company may require the payment of a sum sufficient to cover any
stamp tax or governmental charge imposed upon such exchange or transfer.
Section 9.3. Loss, Theft, etc. of Notes. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of any
Note, and in the case of any such loss, theft or destruction upon delivery of a
bond of indemnity in such form and amount as shall be reasonably satisfactory to
the Company, or in the event of such mutilation upon surrender and cancellation
of the Note, the Company will make and deliver without expense to the holder
thereof, a new Note, of like tenor, in lieu of such lost, stolen, destroyed or
mutilated Note. If the Purchaser or any subsequent institutional holder is the
owner of any such lost, stolen or destroyed Note, then the affidavit of an
authorized officer of such owner,
-35-
Petroleum Heat and Power Co., Inc. Note Agreement
setting forth the fact of loss, theft or destruction and of its ownership of the
Note at the time of such loss, theft or destruction shall be accepted as
satisfactory evidence thereof and no further indemnity shall be required as a
condition to the execution and delivery of a new Note other than the written
agreement of such owner to indemnify the Company.
Section 9.4. Expenses, Stamp Tax Indemnity. Whether or not the
transactions herein contemplated shall be consummated, the Company agrees to pay
directly all of your out-of-pocket expenses in connection with the preparation,
execution and delivery of this Agreement and the transactions contemplated
hereby, including but not limited to the reasonable charges and disbursements of
Xxxxxxx and Xxxxxx, your special counsel, duplicating and printing costs and
charges for shipping the Notes, adequately insured to you at your home office or
at such other place as you may designate, and all such expenses relating to any
amendment, waivers or consents pursuant to the provisions hereof. The Company
also agrees that it will pay and save you harmless against any and all liability
with respect to stamp and other taxes, if any, which may be payable or which may
be determined to be payable in connection with the execution and delivery of
this Agreement or the Notes, whether or not any Notes are then outstanding. The
Company agrees to protect and indemnify you against any liability for any and
all brokerage fees and commissions payable or claimed to be payable to any
Person in connection with the transactions contemplated by this Agreement.
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative. No delay
or failure on the part of the holder of any Note in the exercise of any power or
right shall operate as a waiver thereof; nor shall any single or partial
exercise of the same preclude any other or further exercise thereof, or the
exercise of any other power or right, and the rights and remedies of the holder
of any Note are cumulative to and are not exclusive of any rights or remedies
any such holder would otherwise have, and no waiver or consent, given or
extended pursuant to ss.7 hereof, shall extend to or affect any obligation or
right not expressly waived or consented to.
Section 9.6. Notices. All communications provided for hereunder shall be
in writing and, if to you, delivered or mailed by registered or certified mail,
addressed to you at your address appearing on Schedule I to this Agreement or
such other address as you or the subsequent holder of any Note initially issued
to you, may designate to the Company in writing, and if to the Company,
delivered or mailed by registered or certified mail to the Company at Xxxx
Xxxxxx Xxx 0000, Xxxxxxxx, Xxxxxxxxxxx 00000, Attention: President, or to such
other address as the
-36-
Petroleum Heat and Power Co., Inc. Note Agreement
Company may in writing designate to you or to a subsequent holder of the Note
initially issued to you.
Section 9.7. Designation of Notes as Designated Senior Debt. The Company
hereby designates and agrees that the Notes are and will be Designated Senior
Debt (as defined in and for purposes of the Public Indentures).
Section 9.8. Successors and Assigns. This Agreement shall be binding upon
you and your successors and assigns, including each successive holder or holders
of any Notes, and the Company and its successors and assigns and shall inure to
your benefit and to the benefit of your successors and assigns, including each
successive holder or holders of any Notes and to the benefit of the Company and
its successor and assigns.
Section 9.9. Survival of Covenants and Representations. All covenants,
representations and warranties made by the Company herein and in any
certificates delivered pursuant hereto, whether or not in connection with the
Closing Date, shall survive the closing and the delivery of this Agreement and
the Notes.
Section 9.10. Severability. Should any part of this Agreement for any
reason be declared invalid, such decision shall not affect the validity of any
remaining portion, which remaining portion shall remain in force and effect as
if this Agreement had been executed with the invalid portion thereof eliminated
and it is hereby declared the intention of the parties hereto that they would
have executed the remaining portion of this Agreement without including therein
any such part, parts, or portion which may, for any reason, be hereafter
declared invalid.
Section 9.11. Governing Law. This Agreement and the Notes issued and sold
hereunder shall be governed by and construed in accordance with New York law.
Section 9.12. Captions. The descriptive headings of the various Sections
or parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
-37-
Petroleum Heat and Power Co., Inc. Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
PETROLEUM HEAT AND POWER CO., INC.
By
Its
Accepted as of February 1, 1997.
[VARIATION]
By
Its
[By
Its ]
-38-
Petroleum Heat and Power Co., Inc. Note Agreement
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
XXXX XXXXXXX MUTUAL LIFE Series B - $ 2,812,500.00
INSURANCE COMPANY (for the General Account) Series C - $ 937,499.99
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Payments
All payments on or in respect of the Notes shall be made by bank wire transfer
of Federal or other immediately available funds (which shall identify each
payment as "Petroleum Heat and Power Co., Inc., Senior Notes due 2002, principal
or interest or other payments") to:
The First National Bank of Boston
(ABA #011 000 390)
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Insurance Division
for the account of Xxxx Xxxxxxx
Mutual Life Insurance Company
Private Placement Collection Account
Account Number 541-55417
On Order of: [Name of Issuer and PPN]
Notices
Contemporaneous with the above wire transfer, advice setting forth (1) the full
name, interest rate and maturity date of the Notes or other obligations; (2)
allocation of payment between principal and interest and any special payment;
and (3) name and address of Bank (or Trustee) from which wire transfer was sent,
shall be delivered or mailed to:
Petroleum Heat and Power Co., Inc. Note Agreement
Xxxx Xxxxxxx Mutual Life
Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Securities Accounting Division T-10
All notices with respect to prepayments, both scheduled and unscheduled, whether
partial or in full, and notice of maturity shall be delivered or mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Securities Accounting Division T-10
All other communications which shall include, but not be limited to, financial
statements and certificates of compliance with financial covenants, shall be
delivered or mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Bond and Corporate Finance Department, T-57
Name of Nominee in which Notes are to be issued:
Xxxx Xxxxxxx Mutual Life Insurance Company
Taxpayer I.D. Number: 00-0000000
Petroleum Heat and Power Co., Inc. Note Agreement
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
XXXX XXXXXXX MUTUAL LIFE Series B - $ 2,187,500.00
INSURANCE COMPANY (Guaranteed Benefit Sub-Account) Series C - $ 729,166.67
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Payments
All payments on or in respect of the Notes shall be made by bank wire transfer
of Federal or other immediately available funds (which shall identify each
payment as "Petroleum Heat and Power Co., Inc., Senior Notes due 2002, principal
or interest or other payments") to:
The First National Bank of Boston
(ABA #011 000 390)
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Insurance Division
for the account of Xxxx Xxxxxxx
Mutual Life Insurance Company
Private Placement Collection Account
Account No. 541-55417
On Order of: [Name of Issuer and PPN]
Notices
Contemporaneous with the above wire transfer, advice setting forth (1) the full
name, interest rate and maturity date of the Notes or other obligations; (2)
allocation of payment between principal and interest and any special payment;
and (3) name and address of Bank (or Trustee) from which wire transfer was sent,
shall be delivered or mailed to:
Petroleum Heat and Power Co., Inc. Note Agreement
Xxxx Xxxxxxx Mutual Life
Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Securities Accounting Division T-10
All notices with respect to prepayments, both scheduled and unscheduled, whether
partial or in full, and notice of maturity shall be delivered or mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Securities Accounting Division T-10
All other communications which shall include, but not be limited to, financial
statements and certificates of compliance with financial covenants, shall be
delivered or mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Bond and Corporate Finance Department, T-57
Name of Nominee in which Notes are to be issued:
Xxxx Xxxxxxx Mutual Life Insurance Company
Taxpayer I.D. Number: 00-0000000
Petroleum Heat and Power Co., Inc. Note Agreement
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
XXXX XXXXXXX MUTUAL LIFE Series A - $3,333,333.34
INSURANCE COMPANY
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Payments
All payments on or in respect of the Notes shall be made by bank wire transfer
of Federal or other immediately available funds (which shall identify each
payment as "Petroleum Heat and Power Co., Inc., Senior Notes due 2002, principal
or interest or other payments") to: The First National Bank of Boston
(ABA #011 000 390)
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Insurance Division
for the account of Xxxx Xxxxxxx
Mutual Life Insurance Company
Private Placement Collection Account
Account No. 541-55417
On Order of: [Name of Issuer and PPN]
Notices
Contemporaneous with the above wire transfer, advice setting forth (1) the full
name, interest rate and maturity date of the Notes or other obligations; (2)
allocation of payment between principal and interest and any special payment;
and (3) name and address of Bank (or Trustee) from which wire transfer was sent,
shall be delivered or mailed to:
Petroleum Heat and Power Co., Inc. Note Agreement
Xxxx Xxxxxxx Mutual Life
Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Securities Accounting Division T-10
All notices with respect to prepayments, both scheduled and unscheduled, whether
partial or in full, and notice of maturity shall be delivered or mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Securities Accounting Division T-10
All other communications which shall include, but not be limited to, financial
statements and certificates of compliance with financial covenants, shall be
delivered or mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Bond and Corporate Finance Department, T-57
Name of Nominee in which Notes are to be issued:
Xxxx Xxxxxxx Mutual Life Insurance Company
Taxpayer I.D. Number: 00-0000000
Petroleum Heat and Power Co., Inc. Note Agreement
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
XXXXXXX & CO. Series A - $10,000,000
c/o Bankers Trust Company
P. O. Box 000
Xxxxxxx Xxxxx Xxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Payments
All payments on or in respect of the Notes shall be made by bank wire transfer
of Federal or other immediately available funds (which shall identify each
payment as "Petroleum Heat and Power Co., Inc., Senior Notes due 2002, principal
or interest or other payments") to: Bankers Trust Company
(ABA #021-001-033)
Account of Xxxxxxx & Co.
Account Number: 00-000-000
On Order of: [Name of Issuer and PPN]
Notices
Contemporaneous with the above wire transfer, advice setting forth (1) the full
name, interest rate and maturity date of the Notes or other obligations; (2)
allocation of payment between principal and interest and any special payment;
and (3) name and address of Bank (or Trustee) from which wire transfer was sent,
shall be delivered or mailed to:
Petroleum Heat and Power Co., Inc. Note Agreement
Xxxxxxx & Co.
c/o Bankers Trust Company
P. O. Xxx 000
Xxxxxxx Xxxxx Xxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy to:
Xxxx Xxxxxxx Mutual Life Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Securities Accounting Division T-10
All notices with respect to prepayments, both scheduled and unscheduled, whether
partial or in full, and notice of maturity shall be delivered or mailed to:
c/o Bankers Trust Company
P. O. Xxx 000
Xxxxxxx Xxxxx Xxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy to:
Xxxx Xxxxxxx Mutual Life Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Securities Accounting Division T-10
All other communications which shall include, but not be limited to, financial
statements and certificates of compliance with financial covenants, shall be
delivered or mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Bond and Corporate Finance Department, T-57
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
Petroleum Heat and Power Co., Inc. Note Agreement
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
MELLON BANK, N.A., as Trustee for Series A - $3,333,333.33
the Long-Term Investment Trust Series B - $1,250,000.00
One Mellon Bank Center Series C - $ 416,666.67
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxxxxx Xxxx
Payments
All payments on or in respect of the Notes shall be made by bank wire transfer
of Federal or other immediately available funds (which shall identify each
payment as "Petroleum Heat and Power Co., Inc., Senior Notes due 2002, principal
or interest or other payments") to:
Federal Reserve Bank of Boston
A/C Boston Safe Deposit & Trust Company
ABA #: 000000000
DDA: 125261
Ref: XXXX 000000
Notices
Contemporaneous with the above wire transfer, advice setting forth (1) the full
name, interest rate and maturity date of the Notes or other obligations; (2)
allocation of payment between principal and interest and any special payment;
and (3) name and address of Bank (or Trustee) from which wire transfer was sent,
shall be delivered or mailed to:
Mellon Bank, N.A.
Three Mellon Bank Center
Room 153-3610
Attention: Principal & Interest Unit
Pittsburgh, Pennsylvania 15259-0001
Petroleum Heat and Power Co., Inc. Note Agreement
All other communications shall be delivered or mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. XxxXxxx, Bond and Corporate Finance
Dept., T-57
with a copy to:
Mellon Bank, N.A.
One Mellon Bank Center, Room 151-1935
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxxxxx Xxxx
Name of Nominee in which Notes are to be issued: MELLON BANK, N.A., TRUSTEE
UNDER THE LONG-TERM INVESTMENT TRUST DATED OCTOBER 1, 1996
Taxpayer I.D. Number: 00-0000000
Petroleum Heat and Power Co., Inc. Note Agreement
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
MELLON BANK, N.A., as Trustee for the
NYNEX Master Pension Trust Series A - $2,000,000.00
One Mellon Bank Center Series B - $ 750,000.00
Xxxxxxxxxx, Xxxxxxxxxxxx 00000 Series C - $ 250,000.00
Attention: Xxxxxxxxxx X. Xxxx
Payments
All payments on or in respect of the Notes shall be made by bank wire transfer
of Federal or other immediately available funds (which shall identify each
payment as "Petroleum Heat and Power Co., Inc., Senior Notes due 2002, principal
or interest or other payments") to:
Federal Reserve Bank of Boston
A/C Boston Safe Deposit and Trust Company
ABA #: 000000000
DDA: 16-229-9
Reference: NYNEX: NYXF 1783332
Notices
Contemporaneous with the above wire transfer, advice setting forth (1) the full
name, interest rate and maturity date of the Notes or other obligations; (2)
allocation of payment between principal and interest and any special payment;
and (3) name and address of Bank (or Trustee) from which wire transfer was sent,
shall be delivered or mailed to:
Petroleum Heat and Power Co., Inc. Note Agreement
Mellon Bank, N.A.
One Mellon Bank Center, Room 3346
Pittsburgh, Pennsylvania 15258-0001
Attention: Xxxx Xxxxxx
All other communications shall be delivered or mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. XxxXxxx
Bond and Corporate Finance Department, T-57
Telefacsimile Number: (000) 000-0000
with a copy to:
Mellon Bank, N.A.
One Mellon Bank Center, Room 1935
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxxxxx X. Xxxx
Name of Nominee in which Notes are to be issued: MELLON BANK, N.A., TRUSTEE
UNDER MASTER TRUST AGREEMENT OF NYNEX CORPORATION DATED JANUARY 1, 1984 FOR
EMPLOYEE PENSION PLANS-NYNEX-XXXX XXXXXXX-PRIVATE PLACEMENT
Taxpayer I.D. Number: 00-0000000
Petroleum Heat and Power Co., Inc. Note Agreement
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
XXXX XXXXXXX VARIABLE LIFE Series A - $1,333,333.33
INSURANCE COMPANY (for the General Account) Series C - $ 166,666.67
Xxxx Xxxxxxx Place Series B - $ 500,000.00
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Payments
All payments on or in respect of the Notes shall be made by bank wire transfer
of Federal or other immediately available funds (which shall identify each
payment as "Petroleum Heat and Power Co., Inc., Senior Notes due 2002, principal
or interest or other payments") to:
The First National Bank of Boston
(ABA #011 000390)
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Insurance Division for the account of Xxxx Xxxxxxx Variable Life
Insurance Company Private Placement Collection Account Account Number 541-55417
On Order of: [Name of Issuer and PPN]
Notices
Contemporaneous with the above wire transfer, advice setting forth (1) the full
name, interest rate and maturity date of the Notes or other obligations; (2)
allocation of payment between principal and interest and any special payment;
and (3) name and address of Bank (or Trustee) from which wire transfer was sent,
shall be delivered or mailed to:
Petroleum Heat and Power Co., Inc. Note Agreement
Xxxx Xxxxxxx Variable Life
Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Securities Administration T-56
All notices with respect to prepayments, both scheduled and unscheduled, whether
partial or in full, and notice of maturity shall be delivered or mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Securities Accounting Division T-10
All other communications which shall include, but not be limited to, financial
statements and certificates of compliance with financial covenants, shall be
delivered or mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Bond and Corporate Finance Department, T-57
Name of Nominee in which Notes are to be issued: Xxxx Xxxxxxx Variable Life
Insurance Company
Taxpayer I.D. Number: 00-0000000
Petroleum Heat and Power Co., Inc. Note Agreement
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
THE NORTHWESTERN MUTUAL LIFE Series A - $10,000,000
INSURANCE COMPANY Series B - $ 3,750,000
000 Xxxx Xxxxxxxxx Xxxxxx Series C - $ 1,250,000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Securities Department
Telefacsimile Number: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Petroleum Heat and Power Co., Inc., Senior Notes due 2002, principal or
interest") to:
Bankers Trust Company
(ABA #0210-01033)
00 Xxxx Xxxxxx
Insurance Xxxx 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
for credit to The Northwestern Mutual Life
Insurance Company's Account No. 00-000-000
Notices
All notices and communications, to be addressed as first provided
above, except notices with respect to payment, and written
confirmation of each such payment, to be addressed Attention:
Investment Operations, Telefacsimile Number (000) 000-0000. Name of
Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
Petroleum Heat and Power Co., Inc. Note Agreement
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY Series A - $10,000,000
000 Xxxx Xxxxxx Series B - $ 3,750,000
Xxx Xxxxxx, Xxxx 00000-0000 Series C - $ 1,250,000
Attention: Investment Department,
Securities Division
Telefacsimile: (000) 000-0000
Confirmation: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Petroleum Heat and Power Co., Inc. Senior Notes due 0000, Xxxx Xx. 0-X-00000
for Series A, 1-B-60044 for Series B and 1-B-60045 for Series C, principal or
interest and/or premium") to:
Norwest Bank Iowa, N.A.
ABA #073 000 228
Seventh and Xxxxxx Xxxxxxx
Xxx Xxxxxx, Xxxx 00000
for credit to Principal Mutual
Life Insurance Company's
General Account No. 014752
OBI:PFGSE(S) B____ ( ) Principal $_____ Interest $_____
Notices
All notices concerning payment on or in respect of the Notes, to:
Principal Mutual Life Insurance Company
000 Xxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
Attention: Investment Accounting and Treasury - Securities
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
All notices and communications other than those in respect to payments to be
addressed as provided above. Name of Nominee in which Notes are to be issued:
None
Taxpayer I.D. Number: 00-0000000
Petroleum Heat and Power Co., Inc. Note Agreement
OWNERS OF BENEFICIAL INTEREST OF
COMPANY'S CLASS C COMMON STOCK
SHAREHOLDER NUMBER OF SHARES
Xxxxxxx Ean Xxxxx 113,423
Xxxxxx X. Xxxxxxx 129,019
Xxxxxx Xxxxxx 75,615
Xxxx X. Xxxxx 201,641
Xxxxxx X. Xxxxx 477,716
Jorg Bennemann 4,000
Brentwood Corp. 120,985
Xxxxxx Xxxx 25,400
Gabes S.A. 124,314
Barcel Corporation 151,231
Xxxxxxxx Xxxxxx 9,038
Tortosa GmbH 298,717
Minneford Corp. 12,000
Xxxxxxxx Xxxxxxx 35,287
Mortimer Corp. 63,013
Xxxxxxx X'Xxxxxxx 302,461
Xxxxxxxx Xxxxxx 9,038
X.X. Xxxxxxx & Co. 31,808
Xxx Xxxxxxx 38,481
Ravenna Financial Corp. 15,123
Xxxxxxx X. Xxxxxx 15,123
Wrinston Financial, S.A. 30,246
Altama Financiera, S.A. 15,123
Hanseatic Corporation 298,717
Petroleum Heat and Power Co., Inc. Note Agreement
PETROLEUM HEAT AND POWER CO., INC.
Senior Note
Due October 1, 2002
No. R- __________________, 19____
$
PETROLEUM HEAT AND POWER CO., INC., a Minnesota corporation (the
"Company"), for value received, hereby promises to pay to
or registered assigns,
on the first day of October, 2002
the principal amount of
DOLLARS ($____________)
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the
rate of (i) from the date hereof to but not including October 1, 1998,
_________% per annum and (ii) from and including October 1, 1998 until maturity,
_________% per annum, payable semi-annually on the first of each April and
October in each year commencing with the first such date after the date of issue
hereof, and at maturity. The Company agrees to pay interest during any period on
overdue principal and premium, if any, and (to the extent legally enforceable)
on any overdue installment of interest, at the Overdue Rate (as defined in the
Note Agreements described below), whether by acceleration or otherwise, until
paid. Both the principal hereof and interest hereon are payable at the principal
office of the Company in Stamford, Connecticut in coin or currency of the United
States of America which at the time of payment shall be legal tender for the
payment of public and private debts.
Petroleum Heat and Power Co., Inc. Note Agreement
This Note is one of the Senior Notes of the Company in the aggregate
principal amount of $60,000,000 issued or to be issued under and pursuant to the
terms and provisions of separate and several Note Agreements each dated as of
February 1, 1997, entered into by the Company with the original purchasers
therein referred to and this Note and the holder hereof are entitled equally and
ratably with the holders of all other Notes outstanding under the Note
Agreements to all the benefits and security provided for thereby or referred to
therein, to which Note Agreements reference is hereby made for the statement
thereof.
This Note and the other Notes outstanding under the Note Agreements may be
declared due prior to their expressed maturity dates, all in the events, on the
terms and in the manner and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption at the option of the
Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in Section
2 of the Note Agreements.
This Note is registered on the books of the Company and is transferable
only by surrender thereof at the principal office of the Company duly endorsed
or accompanied by a written instrument of transfer duly executed by the
registered holder of this Note or its attorney duly authorized in writing.
Payment of or on account of principal, premium, if any, and interest on this
Note shall be made only to or upon the order in writing of the registered
holder.
PETROLEUM HEAT AND POWER CO., INC.
By
Its
Petroleum Heat and Power Co., Inc. Note Agreement
PETROLEUM HEAT AND POWER CO., INC.
CLOSING CERTIFICATE
Xxxx Xxxxxxx Mutual Life The Northwestern Mutual
Insurance Company Life Insurance Company
Xxxxxx, Xxxxxxxxxxxxx 00000 Xxxxxxxxx, Xxxxxxxxx 00000
Mellon Bank, N.A. Principal Mutual Life
Xxxxxxxxxx, Xxxxxxxxxxxx 00000 Insurance Company
Xxx Xxxxxx, Xxxx 00000
Xxxx Xxxxxxx Variable Life
Insurance Company Xxxxxxx & Co.
Xxxxxx, Xxxxxxxxxxxxx 00000 x/x Xxxxxxx Xxxxx Xxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
This certificate is delivered to you in compliance with the requirements
of the separate and several Note Agreements dated as of February 1, 1997, (the
"Agreements") entered into by the undersigned, Petroleum Heat and Power Co.,
Inc., a Minnesota corporation (the "Company"), with each of you, respectively,
and as an inducement to and as part of the consideration for your purchase on
this date aggregating $60,000,000 principal amount of the Senior Notes due
October 1, 2002 (the "Notes") of the Company pursuant to the Agreements. The
terms which are capitalized herein shall have the same meanings as in the
Agreements.
The Company represents and warrants to each of you as follows:
1. Subsidiaries. Annex A attached hereto states the name of each of
the Company's Subsidiaries, its jurisdiction of incorporation and the
percentage of its Voting Stock owned by the Company and/or its
Subsidiaries. The Company and each Subsidiary has good and marketable
title to all of the shares it purports to own of the stock of each
Subsidiary, free and clear in each case of any lien. All such shares have
been duly issued and are fully paid and non-assessable.
Petroleum Heat and Power Co., Inc. Note Agreement
2. Corporate Organization and Authority. The Company, and each
Subsidiary,
(a) is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation;
(b) has all requisite power and authority and all necessary
licenses and permits to own and operate its properties and to carry
on its business as now conducted and as presently proposed to be
conducted; and
(c) is duly licensed or qualified and is in good standing as a
foreign corporation in each jurisdiction wherein the nature of the
business transacted by it or the nature of the property owned or
leased by it makes such licensing or qualification necessary.
3. Business and Property. You have heretofore been furnished with a
copy of the Company's Preliminary Offering Memorandum dated January 29,
1997 prepared by Xxxxxxxxx Xxxxxx & Xxxxxxxx Securities Corporation
regarding the issuance and sale of the Company's 1997 Preferred Stock
referred to in Section 4.4 of the Agreements (the "Memorandum") which
generally sets forth the business conducted and proposed to be conducted
by the Company and its Subsidiaries and the principal properties of the
Company and its Subsidiaries.
4. Financial Statements. (a) The consolidated balance sheets of the
Company and its Subsidiaries as of December 31 in each of the years 1991
to 1995 both inclusive, and the statements of income and retained earnings
and changes in financial position for the fiscal years ended on said dates
accompanied by a report thereon containing an opinion unqualified as to
scope limitations imposed by the Company and otherwise without
qualification except as therein noted, by KPMG Peat Marwick LLP, have been
prepared in accordance with generally accepted accounting
Petroleum Heat and Power Co., Inc. Note Agreement
principles consistently applied except as therein noted, are correct and
complete and present fairly the financial position of the Company and its
Subsidiaries as of such dates and the results of their operations and
changes in their financial position for such periods. The unaudited
consolidated balance sheets of the Company and its Subsidiaries as of
September 30, 1996, and the unaudited statements of income and retained
earnings and changes in financial position for the nine-month period ended
on said date prepared by the Company have been prepared in accordance with
generally accepted accounting principles consistently applied, are correct
and complete and present fairly the financial position of the Company and
its Subsidiaries as of said date and the results of their operations and
changes in their financial position for such period.
(b) Since December 31, 1995, there has been no change in the
condition, financial or otherwise, of the Company and its
Subsidiaries as shown on the consolidated balance sheet as of such
date except changes in the ordinary course of business, none of
which individually or in the aggregate has been materially adverse.
5. Indebtedness. Annex B attached hereto correctly describes all
Current Debt, Funded Debt, Capitalized Leases and Long-Term Leases of the
Company and its Subsidiaries outstanding as of January 31, 1997.
6. Full Disclosure. Neither the financial statements referred to in
paragraph 4 nor the Agreements, the Memorandum or any other written
statement furnished by the Company to you in connection with the
Petroleum Heat and Power Co., Inc. Note Agreement
negotiation of the sale of the Notes, contains any untrue statement of a
material fact or omits a material fact necessary to make the statements
contained therein or herein not misleading. There is no fact peculiar to
the Company or its Subsidiaries which the Company has not disclosed to you
in writing which materially affects adversely nor, so far as the Company
can now foresee, will materially affect adversely the properties,
business, prospects, profits or condition (financial or otherwise) of the
Company and its Subsidiaries.
7. Pending Litigation. There are no proceedings pending or, to the
knowledge of the Company threatened, against or affecting the Company or
any Subsidiary in any court or before any governmental authority or
arbitration board or tribunal which involve the possibility of materially
and adversely affecting the properties, business, prospects, profits or
condition (financial or otherwise) of the Company and its Subsidiaries.
Neither the Company nor any Subsidiary is in default with respect to any
order of any court or governmental authority or arbitration board or
tribunal.
8. Title to Properties. The Company and each Subsidiary has good and
marketable title in fee simple (or its equivalent under applicable law) to
all the real property and has good title to all the other property it
purports to own, including that reflected in the most recent balance sheet
referred to in paragraph 4 except as sold or otherwise disposed of in the
ordinary course of business and except for liens disclosed in notes to the
financial statements referred to in paragraph 4 hereof or
Petroleum Heat and Power Co., Inc. Note Agreement
otherwise permitted by the Agreements.
9. Patents and Trademarks. The Company and each Subsidiary owns or
possesses all the patents, trademarks, trade names, service marks,
copyright, licenses and rights with respect to the foregoing necessary for
the present and planned future conduct of its business, without any known
conflict with the rights of others.
10. Sale is Legal and Authorized. The sale of the Notes and
compliance by the Company with all of the provisions of the Agreements and
the Notes--
(a) are within the corporate powers of the Company and have
been duly authorized by proper corporate action on the part of the
Company; and
(b) will not violate any provisions of any law or any order of
any court or governmental authority or agency and will not conflict
with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under the Articles of
Incorporation or By-laws of the Company or any indenture or other
agreement or instrument to which the Company is a party or by which
it may be bound or result in the imposition of any liens or
encumbrances on any property of the Company.
11. No Defaults; Performance of Obligations. (a) No Default or Event
of Default as defined in the Agreements has occurred and is continuing.
The Company is not in default in the payment of principal or interest on
any Indebtedness for borrowed money and is not in default under any
instrument or instruments or agreements under and subject to which any
Indebtedness for borrowed money has been issued and no event has occurred
and is continuing under the provisions of any such instrument or agreement
which with the lapse of time or the giving of notice, or both, would
constitute an event of default thereunder.
Petroleum Heat and Power Co., Inc. Note Agreement
(b) The Company has performed all of its obligations under the
Agreements which are to be performed on or prior to the date hereof,
including, without limitation, the issuance of the 1997 Preferred
Stock as contemplated by Section 4.4. As of the date hereof, the
1997 Preferred Stock has been duly and validly issued and is fully
paid and non-assessable.
12. Governmental Consent. No approval, consent or withholding of
objection on the part of any regulatory body, state, Federal or local, is
necessary in connection with the execution and delivery by the Company of
the Agreements or the Notes or compliance by the Company with any of the
provisions of the Agreements or the Notes.
13. Taxes. All tax returns required to be filed by the Company or
any Subsidiary in any jurisdiction have, in fact, been filed, and all
taxes, assessments, fees and other governmental charges upon the Company
or any Subsidiary or upon any of their respective properties, income or
franchises, which are shown to be due and payable in such returns have
been paid. The Company does not know of any proposed additional tax
assessment against it for which adequate provision has not been made on
its accounts. The Federal income tax liability of the Company and its
Subsidiaries has been finally determined by the Internal Revenue Service
and satisfied for all taxable years up to and including the taxable year
ended December 31, 1991 and no controversy in respect of a material amount
of additional income taxes due since said date is pending or to the
knowledge of the Company threatened. The provisions for taxes on the books
Petroleum Heat and Power Co., Inc. Note Agreement
of the Company and each Subsidiary are adequate for all open years, and
for its current fiscal period.
14. Use of Proceeds. The net proceeds from the sale of the Notes
(being the Old Notes surrendered in exchange therefor) will be used for
corporate purposes. None of the transactions contemplated in the
Agreements (including, without limitation thereof, the use of proceeds
from the issuance of the Notes) will violate or result in a violation of
Section 7 of the Securities Exchange Act of 1934, as amended, or any
regulation issued pursuant thereto, including, without limitation,
Regulations G, T and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R., Chapter II. Neither the Company nor any Subsidiary owns
or intends to carry or purchase any "margin stock" within the meaning of
said Regulation G. None of the proceeds from the sale of the Notes will be
used to purchase, or refinance any borrowing, the proceeds of which were
used to purchase any " security" within the meaning of the Securities
Exchange Act of 1934, as amended.
15. Private Offering. Neither the Company, directly or indirectly,
nor any agent on its behalf has offered or will offer the Notes or any
similar Security or has solicited or will solicit an offer to acquire the
Notes or any similar Security from or has otherwise approached or
negotiated or will approach or negotiate in respect of the Notes or any
similar Security with any Person other than you. Neither the Company,
directly or indirectly, nor any agent on its behalf has offered or will
offer the Notes or any similar Security or has solicited or will
Petroleum Heat and Power Co., Inc. Note Agreement
solicit an offer to acquire the Notes or any similar Security from any
Person so as to bring the issuance and sale of the Notes within the
provisions of Section 5 of the Securities Act of 1933, as amended.
16. Employee Retirement Income Security Act of 1974. The
consummation of the transactions provided for in the agreement and
compliance by the Company with the provisions thereof and the Notes issued
thereunder will not involve any prohibited transaction within the meaning
of the Employee Retirement Income Security Act of 1974 ("ERISA") or
Section 4975 of the Internal Revenue Code of 1954, as amended. No
"employee pension benefit plans", as defined in ERISA ("Plans"),
maintained by the Company or any Person which is under common control with
the Company within the meaning of Section 4001(b) of ERISA, nor any trusts
created thereunder, have incurred any "accumulated funding deficiency" as
defined in Section 302 of ERISA nor did the present value of all benefits
vested under all Plans exceed, as of January 1, 1996, the last annual
valuation date, the value of the assets of the Plans allocable to such
vested benefits by more than $7,200,000.
17. Party in Interest. The Company is neither a "party in interest"
(as defined in title I, Section 3(14) of ERISA) nor a "disqualified
person" (as defined in Section 497(e) (2) of the Internal Revenue Code of
1986, as amended), with respect to any plan identified pursuant to
paragraphs (e) or (f) of ss.3.2 of the Note Agreements; and, with respect
to any plan identified pursuant to ss.3.2(e) of the Note Agreements,
neither it nor any
Petroleum Heat and Power Co., Inc. Note Agreement
"affiliate" (as defined in Section V(c) of PTE 84-14) is described in the
proviso to said ss.3.2(e) of the Note Agreements.
Dated: February ___, 1997
PETROLEUM HEAT AND POWER CO., INC.
By
Its
Petroleum Heat and Power Co., Inc. Note Agreement
SUBSIDIARIES OF THE COMPANY
1. SUBSIDIARIES:
PERCENTAGE OF VOTING
STOCK OWNED BY COMPANY
JURISDICTION OF AND EACH OTHER
NAME OF SUBSIDIARY INCORPORATION SUBSIDIARY
X. X. Xxxxxxx Company Washington, D.C. 100%
C.B.W. Realty Corp. of
Connecticut Connecticut 100%
Marex Corporation Maryland 100%
Maxwhale Corp. Minnesota 100%
Ocennet Fuel Oil Corp. Connecticut 100%
Ortep of Connecticut, Inc. Connecticut 100%
Ortep of New Jersey, Inc. New Jersey 100%
Ortep of Pennsylvania, Inc. Pennsylvania 100%
Ortep of Staten Island, Inc. New York 100%
Petro/Crystal Corp. New York 100%
Petro, Inc. Delaware 100%
Public Fuel Services Co., Inc. New York 100%
Reliance Utilities Corp. New York 100%
Petroleum Heat and Power Co., Inc. Note Agreement
DESCRIPTION OF DEBT AND LEASES
1. Current Debt of the Company and its Subsidiaries outstanding as of January
31, 1997 is as follows:
Current portion of 14.10% Subordinated Notes $1,050,000
Current portion of 14.10% Senior Notes` 1,050,000
Current portion of other Long-Term Debt 947,000
Working capital borrowings 35,000,000
----------
$38,047,000
===========
2. Funded Debt of the Company and its Subsidiaries outstanding as of January
31, 1997 is as follows:
Senior and Subordinated Notes due 10/01/1998 $60,000,000
14.10% Senior and Subordinated Notes 6,200,000
10.125% Subordinated Notes 50,000,000
9-3/8% Subordinated Debentures 75,000,000
12-1/4% Subordinated Debentures 81,250,000
Other Long-Term Notes 16,687,000
----------
$289,137,000
3. Long-Term Leases of the Company and its Subsidiaries outstanding as of
January 31, 1997 are as follows:
Leased Facilities $22,500,000
4. Capitalized Leases of the Company and its Subsidiaries outstanding as of
January 31, 1997 are as follows:
None.
Petroleum Heat and Power Co., Inc. Note Agreement
DESCRIPTION OF SPECIAL COUNSEL'S CLOSING OPINION
The closing opinion of Xxxxxxx and Xxxxxx, special counsel to the
Purchasers, called for by ss.4.2 of the Note Agreement on the Closing Date,
shall be dated the Closing Date and addressed to the Purchasers, shall be
satisfactory in form and substance to the Purchasers and shall be to the effect
that:
1. The Company is a corporation, validly existing and in good
standing under the laws of the State of Minnesota and has the corporate
power and the corporate authority to execute and deliver the Note
Agreements and to issue the Notes.
2. The Note Agreements have been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed and
delivered by the Company and constitute the legal, valid and binding
contract of the Company enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent conveyance and similar laws
affecting creditors' rights generally, and general principles of equity
(regardless of whether the application of such principles is considered in
a proceeding in equity or at law).
3. The Notes have been duly authorized by all necessary corporate
action on the part of the Company, and the Notes being delivered on the
date hereof have been duly executed and delivered by the Company and
constitute the legal, valid and binding obligations of the Company
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting creditors'
rights generally, and general principles of equity (regardless of whether
the application of such principles is considered in a proceeding in equity
or at law).
4. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Agreements do not, under existing
law, require the registration of the Notes under the Securities Act of
1933, as amended, or the qualification of an indenture under the Trust
Indenture Act of 1939, as amended.
The opinion of Xxxxxxx and Xxxxxx shall also state that the opinion of
Philips Nizer Xxxxxxxx Xxxx & Ballon LLP is satisfactory in scope and form to
Xxxxxxx and Xxxxxx and that, in their opinion, the Purchasers are justified in
relying thereon and shall cover such other matters relating to the sale of the
Notes as the Purchasers may reasonably request. With respect to matters of fact
upon which such opinion is based, Xxxxxxx and Xxxxxx may rely on appropriate
certificates of public officials and officers of the Company.
Petroleum Heat and Power Co., Inc. Note Agreement
DESCRIPTION OF CLOSING OPINION OF COUNSEL TO THE COMPANY
The closing opinion of Philips Nizer Xxxxxxxx Xxxx & Ballon LLP, counsel
for the Company, which is called for by ss.4.2 of the Note Agreement, shall be
dated the Closing Date and addressed to the Purchasers, shall be satisfactory in
scope and form to the Purchasers and shall cover the matters referred to in
paragraphs 1 through 4 of Exhibit C and shall also be to the effect that:
(1) The Company has full power and authority and is duly authorized
to conduct the activities in which it is now engaged and is duly licensed
or qualified and is in good standing as a foreign corporation in each
jurisdiction in which the character of the properties owned or leased by
it or the nature of the business transacted by it makes such licensing or
qualification necessary;
(2) Each Subsidiary is a corporation duly organized, legally
existing and in good standing under the laws of its jurisdiction of
incorporation and is duly licensed or qualified and is in good standing in
each jurisdiction in which the character of the properties owned or leased
by it or the nature of the business transacted by it makes such licensing
or qualification necessary and all of the issued and outstanding shares of
capital stock of each such Subsidiary have been duly issued, are fully
paid and non-assessable and are owned by the Company, by one or more
Subsidiaries, or by the Company and one or more Subsidiaries;
(3) The issuance and sale of the Notes and the execution, delivery
and performance by the Company of the Note Agreements do not conflict with
or result in any breach of any of the provisions of or constitute a
default under or result in the creation or imposition of any lien or
encumbrance upon any of the property of the Company pursuant to the
provisions of the Certificate of Incorporation or By-laws of the Company
or any agreement or other instrument known to such counsel after
reasonable inquiry to which the Company is a party or by which the Company
may be bound;
(4) No approval, consent or withholding of objection on the part of,
or filing, registration or qualification with, any governmental body,
Federal, state or local, is necessary in connection with the execution and
delivery of the Note Agreements or the Notes;
(5) The Notes are Designated Senior Debt (as defined in and for the
purposes of the Public Debentures); and
(6) The 1997 Preferred Stock when issued by the Company will be duly
and validly issued, fully paid and non-assessable. The opinion of Philips
Nizer Xxxxxxxx Xxxx & Ballon LLP shall cover such other matters relating
to the sale of the Notes as the Purchasers may reasonably request.
