Exhibit 99.2
AMENDMENT dated March 25, 1999 to the Amended and Restated Agreement
and Plan of Merger dated as of February 3, 1999, ("Agreement and Plan of
Merger") by and among PETROLEUM HEAT AND POWER CO., INC., a Minnesota
corporation ("Petro"), STAR GAS PARTNERS, L.P., a Delaware limited partnership
("Star Partners"), STAR GAS PROPANE, L.P., a Delaware limited partnership ("Star
Propane"), and PETRO/MERGCO, INC., a Minnesota corporation ("Mergco") and an
indirect, wholly owned subsidiary of Star Partners.
W I T N E S S E T H :
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WHEREAS, the parties hereto have entered into the Amended and Restated
Agreement and Plan of Merger; and
WHEREAS, Section 9.2 of the Amended and Restated Agreement and Plan of
Merger provides that it may be amended by an agreement in writing between the
parties approved by their respective Boards of Directors (and in the case of
Star Partners, by the Special Committee); and
WHEREAS, the Board of Directors of each of the parties to the
Agreement and Plan of Merger and the Special Committee has approved the
amendments to the Amended and Restated Agreement and Plan of Merger as set forth
below.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein and intending to be
legally bound hereby the parties agree as follows:
1. Article I entitled "Certain Definitions" is hereby amended as follows:
(a) The definition of "Restructuring Transactions" is hereby deleted
in its entirety and the following inserted in lieu thereof:
"Restructuring Transactions" shall mean the following, collectively:
1. the sale of certain assets (the "Transferred Assets") by Petro or
Subsidiaries of Petro to Star Propane in exchange for a note (the
"Bridge Note"), as contemplated by the Petro Conveyance Agreement;
2. the sale by the General Partner to Petro of its general partner
interests in Star Partners and Star Propane and its 2,396,078 Old
Subordinated Units and its 60,727 Common Units in exchange for a note
in principal amount of equivalent value;
3. the assignment by Petro to Star Partners of all of its general partner
interest in Star Propane (other than a portion of such interest with a
value of $1,000), all of its general partner interest in Star Partners
(other than a portion of such interest with a value of $1,000) and its
2,396,078 Old Subordinated Units in exchange for 102,848 newly issued
Common Units, 1,706,246 newly issued Senior Subordinated Units and a
promissory note in an amount equal to the excess of the value of the
Old Subordinated Units and general partner interests assigned to Star
Partners over the value of the Common Units and Senior Subordinated
Units issued in exchange therefor;
4. the contribution by certain Petro Insiders of 2,274,961 shares of
Class A and Class C Common Stock (the "Insider Stock") to a newly
formed Delaware limited liability company ("Star Gas LLC") in exchange
for all the member
interests in Star Gas LLC as contemplated in the Exchange Agreement,
the formation certificate and operating agreement to be subject in
form and substance to the approval of the Special Committee;
5. the contribution by Star Gas LLC of 11,370 shares of Class A and Class
C Common Stock to Star Propane in exchange for a .01% general partner
interest in Star Propane as contemplated by the Star LLC Conveyance
Agreement;
6. the contribution by Star Gas LLC of 2,263,591 shares of Class A and
Class C Common Stock to Star Partners, in exchange for a 1.99% general
partner interest, in Star Partners (represented by 324,101 General
Partner Units, subject to adjustment as provided below) as
contemplated by the Star LLC Conveyance Agreement;
7. the contribution by certain Petro Insiders to Star Partners of
3,035,152 shares of Class A and Class C Common Stock in exchange for
434,573 Junior Subordinated Units and 6,630,793 shares of Class A and
Class C Common Stock in exchange for 779,645 Senior Subordinated
Units, as contemplated in the Exchange Agreement;
8. the contribution by Star Partners of the Petro Common Stock owned by
it to Star Propane;
9. the contribution by Star Propane to Parentco of the Transferred
Assets, the stock of Petro and the stock of Stellar Propane Corp. in
exchange for all the capital stock of Parentco and the assumption by
Parentco of $85 million of Star Propane's 8.04% First Mortgage Notes
and $11 million of Star Propane's 7.17% First Mortgage Notes;
10. the contribution by Parentco of the Petro Common Stock and the
Transferred Assets owned by it to Newco free of any liability with
respect to the outstanding First Mortgage Notes of Star Partners; and
11. the contribution by Newco of the Petro Common Stock owned by it to
Mergeco.
The number of General Partner Units and the number of Junior
Subordinated Units and the number of shares of Petro Common Stock to
be transferred for each shall be changed, if necessary, so that the
number of General Partners Units (including the .01% general partner
interest in Star Propane) to be outstanding following the Merger and
the Equity Offering will be equal to 2% of the total partnership units
outstanding and the total number of General Partner Units and Junior
Subordinated Units will equal 760,302.
(b) "Petro Insiders" is hereby deleted in its entirety and the
following is inserted in lieu thereof:
"Petro Insiders" shall mean Xxxx X. Xxxxx, Xxxxxx X. Xxxxx, Xxxxxxx
Ean Xxxxx, Xxxxxx X. Xxxxxxx, Xxxxxxx X'Xxxxxxx, Brentwood Corp.,
Gabes S.A., Minneford Corp., Xxxxxxxx Xxxxxxx, X.X. Xxxxxxx & Co.,
Hanseatic Corp., Hanseatic Americas LDC, Barcel Corp., Xxxxxxxx
Xxxxxx, Tortosa GmbH and United Capital Corp.
(c) "Working Capital" is hereby amended by adding the following
sentence at the end:
"Notwithstanding the foregoing, Petro's Working Capital as of February
28, 1999 shall be deemed to be increased by $1,932,981 in excess of
the amount of its actual Working Capital on such date as calculated
pursuant to the preceding sentence."
2. Article III entitled "Merger Consideration; Exchange Provisions"
is hereby amended by adding the following subparagraph as subparagraph 3.1 (g):
"(g) Each share of Private Preferred Stock, outstanding
immediately prior to the Effective Time, shall be unchanged and shall
remain outstanding with the same relative rights, preferences and
privileges which it had immediately prior to the Effective Time and
will be redeemed at Closing pursuant to the 1989 Preferred Stock
Conditions."
3. Article VI entitled "Covenants" is hereby amended by adding the
following Section as Section 6.17:
"6.17 Contingent Issuance of Additional Senior Subordinated units.
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(a) Star Gas agrees in connection with the satisfaction of the Public
Debt Conditions, the Private Debt Conditions and any agreement by the
Public Preferred Stock to receive less than the amount provided in
Section 3.1(e) hereof in the Merger, in the event that the over-
allotment option in the Equity Offering shall not exceed 1,090,002
Common Units, then under the circumstances listed below it will agree
to issue to such holders of Public Preferred Stock and holders of the
debt described in the Public Debt Conditions and the private Debt
Conditions as Petro shall designate as an inducement for a reduction
in the redemption (or conversion) price of such securities, the right
to receive up to the additional number of Senior Subordinated Units
set forth below, but only if the condition set forth in Section
6.17(b) is satisfied and the Closing is consummated:
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Maximum Number of
Public Offering Price Contingent Senior
Per Common Unit Subordinated Units
--------------- ------------------
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More than $16 1/2 0
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$16 1/2 4,000
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$16 7/16 22,000
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$16 3/8 40,000
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$16 5/16 59,000
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$16 1/4 77,000
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$16 3/16 95,000
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$16 1/8 114,000
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$16 1/16 132,000
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$16 151,000
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$15 15/16 169,000
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$15 7/8 or less 175,000
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(b) The contingent Senior Subordinated Units described in
Section 6.17(a) shall be issued to the persons entitled thereto only in the
event that Star Partners shall have Adjusted Operating Surplus (as defined in
the Partnership Agreement) of $2.40 or more per outstanding unit for at least
one consecutive four calendar quarter period during the period beginning on
January 1, 2000 and ending December 31, 2002.
(c) If contingent Senior Subordinated Units are issued, Star
Partners will enter into a registration rights agreement with the holders
containing customary terms agreeing to file a registration statement and keep it
generally effective until the holders are free to sell under Rule 144.
4. Article IX, Sections 9.2, 9.3, 9.4, 9.7 and 9.9 of the Plan and
Agreement of Merger are incorporated herein by reference.
5. Except as expressly set forth herein, this Agreement is not
intended to amend or modify the Agreement and Plan of Merger in any respect.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed in counterparts by their duly authorized officers, all as of the day
and year first above written.
PETROLEUM HEAT AND POWER CO., INC.
By:______________________________
Name: Xxxxxxx X. Xxxxxx, Xx.
Title: President
STAR GAS PARTNERS, L.P.
By: Star Gas Corporation
By:______________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: President
STAR GAS PROPANE, LP
By: Star Gas Corporation
By:______________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: President
PETRO/MERGCO, INC.
By:______________________________
Name: Xxxxxxx X. Xxxxxx, Xx.
Title: President
