EXHIBIT 10.10
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FIRST AMENDMENT dated as of September 23, 1996 (this
"Amendment") to the Credit Agreement dated as of February
28, 1996 (the "Agreement"), among the financial
institutions party thereto (the "Lenders"), THE CHASE
MANHATTAN BANK, a New York banking corporation ("Chase"),
as agent for the Lenders (in such capacity, the
"Administrative Agent") and BANK OF AMERICA, ILLINOIS, as
Co-Agent.
The Borrower has requested that certain definitions and financial covenants
contained in the Agreement be amended as set forth herein. The Borrower has also
requested that the Agreement be amended to permit the Borrower to obtain credit
in the form of Swingline Loans at any time and from time to time prior to the
Working Capital Maturity Date. The Administrative Agent and the Lenders are
willing to so amend the Agreement and Chase is willing to extend credit to the
Borrower in the form of Swingline Loans, in each case pursuant to the terms and
subject to the conditions set forth herein.
Capitalized terms used but not defined herein shall have the meanings assigned
to them in the Agreement.
Accordingly, in consideration of the mutual agreements herein contained and
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Amendments to Definitions and Financial Covenants.
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(a) Section 1.01 of the Agreement is hereby amended by:
(i) Adding the following new definitions in their proper alphabetical order:
"Amendment Effective Date" shall mean the date on which the conditions to
effectiveness specified in Section 4 of the First Amendment to this
Agreement shall have been satisfied.
"Interest Rate Agreement" shall mean any fully matched interest rate swap
entered into with the intent to protect the Borrower against fluctuations in
interest rates and entered into as a bona fide hedging arrangement and not for
purposes of investment or speculation. "Investment" shall mean, as applied to
any person, any direct or indirect purchase or other acquisition by such person
of stock or other securities of any person, or any direct or indirect loan,
advance or capital contribution by such person to any other person, any other
item which would be classified as an "investment" on a balance sheet of such
person prepared in accordance with GAAP, including without limitation any direct
or indirect contribution by such person of property or assets to a joint
venture, partnership or other business entity in which such person retains an
interest (it being understood that a direct or indirect purchase or other
acquisition by such person of assets of any other person (other than stock or
other securities) shall not constitute an "Investment" for purposes of this
Agreement).
(ii) Deleting from the definition of "Leverage Ratio" the words "half
of"; and deleting from such definition the word "eight" and
replacing it with "four."
(iii) Deleting therefrom the definition of "Permitted Investments."
(b) Section 6.04 of the Agreement is hereby deleted in its entirety and
replaced with the following new Section 6.04:
SECTION 6.04. Investments, Loans and Advances. Directly or indirectly
purchase or own any stock, obligations or securities of, or any other
interest in, or make any capital contribution to, any person, or make or
permit to remain outstanding any loan or advance to, or guarantee,
endorse or otherwise be or become contingently liable, directly or
indirectly, in connection with the obligations of any person, or make
any other Investment, except:
(a) Investments (i) arising out of loans and advances to employees
incurred in the ordinary course of business, (ii) arising out of
extensions of trade credit or advances to third parties in the
ordinary course of business and (iii) acquired by reason of the
exercise of customary creditors' rights upon default or pursuant
to the bankruptcy, insolvency or reorganization of a debtor;
(b) Guarantees that constitute Indebtedness to the extent permitted
by Sections 6.01, 6.12 and 6.13 and other Guarantees that are not
Guarantees of Indebtedness and are undertaken in the ordinary
course of business;
(c) Investment in (collectively, "Cash Equivalents")
(i) marketable obligations issued or unconditionally
guaranteed by the United States of America, or issued by
any agency thereof and backed by the full faith and credit
of the United States of America, in each case maturing
within one year or less from the date of acquisition
thereof,
(ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of
any such state or any public instrumentality thereof
maturing within one year from the date of acquisition
thereof and having as at such date the highest rating
obtainable from either Standard & Poor's Rating Group or
Xxxxx'x Investors Service, Inc.,
(iii) commercial paper maturing no more than 270 days from the
date of creation thereof and having as at the date of
acquisition thereof one of the two highest ratings
obtainable from either Standard & Poor's Rating Group or
Xxxxx'x Investors Service, Inc.,
(iv) certificates of deposit maturing one year or less from the date of
acquisition thereof issued by commercial banks incorporated under the laws of
the United States of America or any state thereof or the District of Columbia or
Canada or issued by the United States branch of any commercial bank organized
under the laws of any country in Western Europe or Japan, with capital and
stockholders' equity of at least $500,000,000 (or the equivalent in the currency
of such country), (A) the commercial paper or other short term unsecured debt
obligations of which are as at such date are rated either A-2 or better (or
comparably if the rating system is changed) by Standard & Poor's Rating Group or
Prime-2 or better (or comparably if the rating system is changed) by Xxxxx'x
Investors Service, Inc. or (B) the long-term debt obligations of which are as at
such date rated either A or better (or comparably if the rating system is
changed) by Standard & Poor's Rating Group or A-2 or better (or comparably if
the rating system is changed) by Xxxxx'x Investors Service, Inc. ("Permitted
Banks"),
(v) Eurodollar time deposits having a maturity of less than
270 days from the date of acquisition thereof purchased
directly from any Permitted Bank,
(vi) bankers' acceptances eligible for rediscount under
requirements of The Board of Governors of the Federal
Reserve System and accepted by Permitted Banks, and
(vii) obligations of the type described in clauses (i), (ii), (iii),
(iv) or (v) above purchased from a securities dealer designated as a
"primary dealer" by the Federal Reserve Bank of New York or from a
Permitted Bank as counterparty to a written repurchase agreement obligating
such counterparty to repurchase such obligations not later than 14 days
after the purchase thereof and which provides that the obligations which
are the subject thereof are held for the benefit of the Borrower or a
Subsidiary by a custodian which is a Permitted Bank and which is not a
counterparty to the repurchase agreement in question;
(d) liabilities with respect to any Interest Rate Agreements; and
(e) investments made by a Subsidiary in the Borrower.
(c) Clause (1) of Section 6.01 of the Agreement is hereby deleted in its
entirety and replaced with the following provision:
"(1) Indebtedness incurred by the Borrower (i) to finance the acquisitions,
improvements or repairs (to the extent such improvements and repairs may be
capitalized on the books of the Borrower in accordance with GAAP) of, or
additions to, the property and assets of the Borrower, or (ii) to replace,
extend, renew, refund or refinance any such Indebtedness, provided that the
aggregate principal amount of Indebtedness incurred in connection with any such
replacement, extension, renewal, refunding or refinancing shall not exceed the
outstanding principal amount of Indebtedness so replaced, extended, renewed,
refunded or refinanced; and provided, further, that the aggregate principal
amount of Indebtedness incurred under this clause (1) and outstanding at any
time shall not exceed (A) $25,000,000 plus (B) an amount equal to the aggregate
net proceeds received by the Borrower as consideration for the issuance by the
Borrower of additional partnership interests or as a capital contribution in
each case for the purpose of financing such acquisitions, improvements, repairs
or additions less (C) any amount of excess proceeds used to permanently reduce
the Acquisition Loan Commitments pursuant to Section 2.09(b)."
(d) Section 6.02 of the Agreement is hereby amended by deleting the word
"and" at the end of clause (1) thereof, by removing the period at the
end of clause (m) thereof and replacing it with a semicolon and by
adding at the end thereof the following new clauses (n) and (o):
"(n) any Lien created to secure all or any part of the purchase price, or
to secure Indebtedness (other than Indebtedness permitted under clauses (b) and
(l) of Section 6.01) incurred or assumed to pay all or any part of the purchase
price or cost of construction, of property acquired or constructed by the
Borrower or a Subsidiary after the date hereof, provided that (i) any such Lien
shall be confined solely to the item or items of such property (or improvement
therein) so acquired or constructed and, if required by the terms of the
instrument creating such Lien, other property (or improvement thereon) which is
an improvement to such acquired or constructed property, (ii) any such Lien
shall be created contemporaneously with, or within 10 Business Days after, the
acquisition or construction of such property, and (iii) such Lien does not
exceed an amount equal to 85% (100% in the case of Capital Lease Obligations) of
the Board of Supervisors of the Borrower) at the time of acquisition thereof;
and
(o) Liens securing Indebtedness (including interests of lessors under
Capital Lease Obligations) permitted by Section 6.01, so long as immediately
after giving effect thereto, the aggregate amount of the Indebtedness secured by
such Liens shall not exceed 2.5% of Total Assets (as defined in the Note
Agreement)."
(e) Section 6.09(b) of the Agreement is hereby amended by adding the
following provision after the phrase "waives any condition precedent or default"
in the next to last line thereof:
", or entails the incurrence of additional Indebtedness by the Borrower
under the Notes, the Note Agreement, any Refinancing Notes or any
Refinancing Note Agreement (provided that subsequent to such additional
Indebtedness, the Borrower shall remain in compliance with Sections
6.11, 6.12, 6.13 and 6.15 hereof and provided further that such
additional Indebtedness shall be on terms and conditions no more
restrictive than the terms and conditions contained in the Note
Agreement)"
(f) Section 6.12 of the Agreement is hereby amended by deleting the chart
contained therein and replacing it with the following chart:
Quarter Ending During the Period Leverage Ratio
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Effective Date - March 31, 1998 5.25 to 1.00
April 1, 1998 - March 31, 1999 4.75 to 1.00
April 1, 1999 - March 31, 2000 4.50 to 1.00
Thereafter 4.25 to 1.00
SECTION 2. Amendments to Add Swingline Facility.
(a) The first sentence of the preamble of the Agreement is hereby amended by
deleting the word "and" at the end of clause (a) thereof and adding at
the end thereof the following:
"and (c) Swingline Loans at any time and from time to time on or after
the Amendment Effective Date and prior to the Working Capital Maturity
Date, in an aggregate principal amount at any time outstanding not
exceeding $5,000,000."
(b) The third sentence of the preamble of the Agreement is hereby amended by
adding the phrase, "and Swingline Loans" after the phrase, "Working
Capital Loans."
(c) Section 1.01 of the Agreement is hereby amended by:
(i) Adding the following new definitions in their proper alphabetical
order:
"Applicable Percentage" of any lender at any time shall mean the
percentage of the aggregate Working Capital Commitments of all
Lenders represented by such Lender's Working Capital Commitment.
In the event the Working Capital Commitments shall have expired
or been terminated, the Applicable Percentages shall be
determined on the basis of the Working Capital Commitments most
recently in effect prior to such expiration or termination,
giving effect to any assignments pursuant to Section 9.06.
"Swingline Commitment" shall mean the commitment of the Swingline
Lender to make loans pursuant to Section 2.22, as the same may be
reduced from time to time pursuant to Section 2.09.
"Swingline Exposure" shall mean at any time the aggregate
principal amount at such time of all outstanding Swingline Loans.
The Swingline Exposure of any Lender at any time shall equal its
Applicable Percentage of the aggregate Swingline Exposure at such
time.
"Swingline Lender" shall mean The Chase Manhattan Bank, in its
capacity as the Swingline lender. Unless the context clearly
indicates otherwise, the term "Lenders" shall include the
Swingline Lender.
"Swingline Loan" shall mean any loan made by the Swingline Lender
pursuant to Section 2.22.
(ii) Deleting the word "and" from the end of clause (a) of the
definition of "Interest Period" and inserting the following
provision at the end of clause (b):
"and (c) as to any borrowing of Swingline Loans, the period
commencing on the date of such borrowing and ending on the date
that is seven Business Days thereafter, or such other period as
shall be determined by The Chase Manhattan Bank and agreed to by
the Borrower"
(iii) Deleting the definition of "Required Lenders" in its entirety and
replacing it with the following definition:
"Required Lenders" shall mean, at any time, Lenders having Loans,
Swingline Exposures and unused Commitments representing at least
51% of the sum of all Loans outstanding, Swingline Exposures and
unused Commitments at such time.
(iv) Adding the phrase ", plus the aggregate amount at such time of
such Lender's Swingline Exposure" to the end of the definition of
"Working Capital Exposure."
(d) Section 2.04(a) of the Agreement is hereby amended by deleting the
word "and" at the end of clause (a) and adding to the end thereof the
following:
"and (c) in the case of a Swingline Loan, on the last day of the
Interest Period applicable to such Loan or, if earlier, on the Working
Capital Maturity Date."
(e) Section 2.09(a) of the Agreement is hereby amended by inserting the
phrase "and Swingline Commitment" immediately after the phrase "Working
Capital Commitments" in the seventh line thereof.
(f) Section 2.12 of the Agreement is hereby amended by adding the phrase
"(and Swingline Loans)" immediately after each reference to "Working
Capital Borrowings" therein.
(g) Section 2.18(a) of the Agreement is hereby amended by adding the
following parenthetical after the phrase "Each such payment" in the
fourth line thereof:
"(other than principal of and interest on Swingline Loans, which shall
be paid directly to the Swingline Lender except as otherwise provided in
Section 2.22(e))"
(h) Section 2.20(b) of the Agreement is hereby amended (i) by adding the
words "and the Swingline Lender" immediately after the words
"Administrative Agent" in the eleventh line thereof and (ii) by adding
the words "amounts owed to it in respect of its Swingline Exposure and"
immediately after the word "including" in the parenthetical in clause
(ii) of the proviso.
(i) The following shall be inserted in the Agreement as a new Section 2.22:
SECTION 2.22. Swingline Loans.
(a) Swingline Commitment. Subject to the terms and conditions and relying
upon the representations and warranties herein set forth, the Swingline Lender
agrees to make loans to the Borrower at any time and from time to time on and
following the Amendment Effective Date and until the earlier of the Working
Capital Maturity Date and the termination of the Working Capital Commitments in
accordance with the terms hereof, in an aggregate principal amount at any time
outstanding that will not result in (i) the aggregate outstanding principal
amount of all Swingline Loans exceeding $5,000,000 or (ii) the Working Capital
Exposure of any Lender exceeding its Working Capital Commitment. Each Swingline
Loan shall be in a principal amount that is an integral multiple of $500,000 and
not less than $1,000,000. The Swingline Commitment may be terminated or reduced
from time to time as provided herein. Within the foregoing limits, the Borrower
may borrow, pay or prepay and reborrow Swingline Loans hereunder, subject to the
terms, conditions and limitations set forth herein.
(b) Swingline Loans. The Borrower shall notify the Administrative Agent in
writing or by telecopy (or by telephone promptly confirmed in writing or by
telecopy), not later than 11:00 a.m., New York City time, on the day of a
proposed Swingline Loan. Such notice shall be delivered on a Business Day, shall
irrevocable and shall refer to this Agreement and shall specify the requested
date (which shall be a Business Day) and amount of such Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any notice
received from the Borrower pursuant to this paragraph (b). The Swingline Lender
shall make each Swingline Loan available to the Borrower by means of a credit to
the general deposit account of such Borrower with the Swingline Lender by 3:00
p.m. on the date such Swingline loan is so requested.
(c) Prepayment. The Borrower shall have the right at any time and from time
to time to prepay any Swingline loan, in whole or in part, upon giving written
or telecopy notice (or telephonic notice promptly confirmed by written or
telecopy notice) to the Swingline Lender and to the Administrative Agent before
12:00 (noon), New York City time, on the date of prepayment, provided that all
or any portion of a Swingline Loan borrowed and prepaid on the same date shall
be deemed to have been outstanding for one day.
(d) Interest. Subject to the provisions of Section 2.07, each Swingline
Loan shall bear interest at the Alternate Base Rate or such lower rate as shall
be determined by The Chase Manhattan Bank from time to time.
(e) Participations. If the Borrower does not fully repay a Swingline Loan
on or prior to the last day of the Interest Period with respect thereto, the
Swingline Lender may by written notice given to the Administrative Agent not
later than 10:00 a.m., New York City time, on any Business Day require the
Lenders to acquire participations on such Business Day in all or a portion of
the Swingline Loans outstanding. Such notice shall specify the aggregate amount
of Swingline Loans in which the Lenders will participate. The Administrative
Agent will, promptly upon receipt of such notice, give notice to each Lender,
specifying in such notice such Lender's Applicable Percentage of such Swingline
Loan or Loans. In furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees, upon receipt of notice as provided above, to pay to
the Administrative Agent, for the account of the Swingline Lender, such Lender's
Applicable percentage of such Swingline Loan or Loans. Each such payment shall,
for all purposes hereof, be deemed to be an ABR Working Capital Loan to which
interest at the rate provided for in Section 2.07 will apply. Each Lender
acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or an Event of Default, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever. Each Lender shall comply with its obligations under this paragraph
by wire transfer of immediately available funds, in the same manner as provided
in Section 2.02(c) with respect to Loans made by such Lender (and Section
2.02(c) shall apply, mutatis mutandis, to the payment obligations of the
Lenders) and the Administrative Agent shall promptly pay to the Swingline Lender
the amounts so received by it from the Lenders. The Administrative Agent shall
notify the Borrower of any participations in any Swingline Loan acquired
pursuant to this paragraph and thereafter payments in respect of such Swingline
Loan shall be made to the Administrative Agent and not to the Swingline Lender.
Any amounts received by the Swingline Lender from the Borrower (or other party
on behalf of the Borrower) in respect of a Swingline Loan following receipt by
the Swingline Lender of the proceeds of a sale of participations therein shall
be promptly remitted to the Administrative Agent; any such amounts received by
the Administrative agent shall be promptly remitted by the Administrative Agent
to the Lenders that shall have made their payments pursuant to this paragraph
and to the Swingline Lender, as their interests may appear. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower (or other party liable for obligations of the Borrower) of any
default in the payment thereof.
(j) The preamble to Article IV is hereby amended by adding the phrase, "and
of the Swingline Lender to make Swingline Loans" immediately after the phrase,
"obligations of the Lenders to make Loans."
(k) Section 4.01(a) of the Agreement is hereby amended by:
(i) adding the phrase, "and each borrowing of Swingline Loans"
immediately after the parenthetical in the first sentence
thereof.
(ii) adding the words "or borrowing of Swingline Loans" immediately
after the word "Borrowing" in clauses (i), (ii) and (iii)
thereof.
(iii) adding the words "or Section 2.22(b), as applicable" at the
end of clause (i) thereof.
(l) Section 9.04 of the Agreement is hereby amended by adding immediately
after the word "Loans" in clause (a)(ii) thereof the words "(and Swingline
Loans)."
SECTION 3. Representations and Warranties.
The Borrower represents and warrants to each of the Lenders, the Administrative
Agent and the Co-Agent that:
(a) Before and after giving effect to this Amendment, the representations
and warranties set forth in Article III of the Agreement are true and correct in
all material respects with the same effect as if made on the date hereof, except
to the extent such representations and warranties expressly relate to an earlier
date.
(b) Before and after giving effect to this Amendment, no Event of Default
or Default has occurred and is continuing.
SECTION 4. Conditions to Effectiveness.
This Amendment shall become effective on the date that the Administrative Agent
shall have received duly executed counterparts of this Amendment that, when
taken together, bear the signatures of the Borrower and the Required Lenders.
SECTION 5. Agreement.
Except as specifically stated herein, the provisions of the Agreement are and
shall remain in full force and effect. As used therein, the terms "Agreement,"
"herein," "hereunder," "hereinafter, "hereto," "hereof" and words of similar
import shall, unless the context otherwise requires, refer to the Agreement as
amended hereby.
SECTION 6. Applicable Law.
THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.
SECTION 7. Counterparts.
This Amendment may be executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together shall constitute but
one contract.
SECTION 8. Expenses.
The Borrower agrees to reimburse the Administrative Agent for its reasonable
out-of-pocket expenses in connection with this Amendment, including the
reasonable fees, charges and disbursements of Cravath, Swaine & Xxxxx, counsel
for the Administrative Agent.
SECTION 9. The Borrower hereby acknowledges that as of the Amendment Effective
Date Credit Lyonnais Cayman Island Branch hereby assigns its interest under the
Agreement and the other Loan Documents to Credit Lyonnais New York Branch.
Accordingly, each of the Loan Documents is hereby amended by deleting each
reference to "Credit Lyonnais Cayman Island Branch" and substituting, in lieu
thereof and where appropriate, "Credit Lyonnais New York Branch."
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their respective authorized officers as of the day and year first
written above.
SUBURBAN PROPANE, L.P.
By:/s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
THE CHASE MANHATTAN BANK,
individually and as Administrative
Agent and Swingline Lender,
By:/s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title: Vice President
