AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT
AND AMENDMENT NO. 2 TO SUPPLEMENT A TO
LOAN AND SECURITY AGREEMENT
September 28, 1995
Empire Gas Corporation
1700 South Jefferson Street
Lebanon, Missouri 65536
Attn: Valeria Schall
Ladies and Gentlemen:
Reference is made to the Loan and Security Agreement
(as amended and supplemented, the "Loan Agreement"), dated as of
June 29, 1994 among Empire Gas Corporation ("Borrower"), the
Lenders party thereto (the "Lenders") and Bank of America
Illinois, f/k/a Continental Bank, f/k/a Continental Bank N.A., as
a Lender and as Agent for the Lenders ("BAI"). Unless otherwise
defined herein, capitalized terms used herein shall have the
meanings ascribed to such terms in the Loan Agreement.
Borrower has requested that Lenders agree to
retroactively (i) amend Section 5.18(a) of the Loan Agreement to
permit advances to certain employees, which advances will be
reduced to be in compliance with Section 5.18, as amended hereby,
prior to October 31, 1995, (ii) increase the amount of capital
expenditures permitted to be made by Borrower during the 1995
Fiscal Year pursuant to Section 6.2 of Supplement A to the Loan
Agreement ("Supplement A"), and (iii) amend the Interest Coverage
Ratio contained in Section 6.3 of Supplement A. Lenders have
agreed to the foregoing on the terms, and pursuant to the
conditions, contained herein, including, without limitation, the
condition that Borrower agrees to amend the Loan Agreement to
require Borrower to obtain the prior written consent of requisite
Lenders before consummating any Acquisition.
Therefore, the parties hereto agree as follows:
A. Amendment to Loan Agreement. The Loan Agreement is
hereby amended, retroactively effective as of June 30, 1995, as
follows:
(i) Section 5.12. Section 5.12 of the Loan Agreement
is hereby amended to add a new subsection (d) thereto, which
shall be inserted immediately following subsection (c)
therein and immediately prior to the semicolon therein, and
shall read as follows:
"or (d) purchase or otherwise acquire, or agree to
purchase or otherwise acquire, any of the stock, assets
or business of any Person (including, without
limitation, by means of an Acquisition)"
(ii) Section 5.15. Subsection (h) of Section 5.15 of
the Loan Agreement is hereby amended and restated in its
entirety to read as follows:
"(h) 'Acquisition Indebtedness' as that term is defined
in the Senior Loan Documents in the aggregate principal
amount outstanding as of September 28, 1995."
(iii) Section 5.18. Subsection (a) of Section 5.18 of
the Loan Agreement is amended and restated in its entirety
to read as follows:
"(a) advances not exceeding $72,000 to each of Jerry
Mulligan, Daniel Binning and Kenneth DePrinzio which do
not remain outstanding in an amount which exceeds the
limits set forth below after October 31, 1995 (the
"Agreed Loans") and advances to other employees of
Borrower or employees of any of the Subsidiaries for
travel or other ordinary business expenses, provided
that, the aggregate amount of such advances (other than
the Agreed Loans prior to October 31, 1995) outstanding
at any one time shall not exceed $25,000 for any single
employee and $75,000 in the aggregate for all
employees;"
B. Amendment to Supplement A. Supplement A is hereby
amended, retroactively effective as of June 30, 1995, as follows:
(i) Section 6.2. Section 6.2 of Supplement A is
hereby amended and restated in its entirety as follows:
"6.2 Capital Expenditures. Borrower will not purchase
or otherwise acquire (including, without limitation,
acquisition by way of Capitalized Lease), or commit to
purchase or otherwise acquire or commit to purchase or
otherwise acquire or permit its Subsidiaries to
purchase or otherwise acquire, any fixed asset if,
after giving effect to such purchase or other
acquisition, the aggregate cost of all fixed assets
purchased or otherwise acquired by Borrower or its
Subsidiaries in any Fiscal Year period set forth below,
other than in connection with a startup or an
Acquisition permitted under the Agreement, would exceed
the following amounts during the corresponding periods:
Period Capital Expenditures
1995 Fiscal Year $4,200,000
1996 Fiscal Year 3,000,000
1997 Fiscal Year 3,000,000"
(ii) Section 6.3. The first paragraph of Section 6.3
of Supplement A to the Loan and Security Agreement is hereby
amended and restated in its entirety, as follows:
"6.3 Interest Coverage Ratio. Borrower will not permit
the ratio ("Interest Coverage Ratio") of (a) net
earnings before interest expense, income tax expense,
depreciation and amortization to (b) cash interest
expense in respect of Indebtedness under the Agreement,
in respect of the Senior Notes, in respect of
Subordinated Debt and in respect of Acquisition
Indebtedness, in each case measured on the last day of
any calendar month in any period set forth below,
calculated for the 12 months ending on such date, and
determined for Borrower and its Subsidiaries on a
consolidated basis, and in accordance with GAAP, to be
less than the ratio set forth below opposite such
period:
Interest Coverage
Period Ratio
June 1, 1995 through and 0.8:1.0
including September 30, 1995
October 1, 1995 through and 1.0:1.0
including December 31, 1995
January 1, 1996 through and 1.1:1.0
including February 29, 1996
March 1, 1996 through and
including May 31, 1996 1.2:1.0
June 1, 1996 and thereafter 1.4:1.0
C. Scope. This Amendment No. 1 to Loan and Security
Agreement and Amendment No. 2 to Supplement A to Loan and
Security Agreement ("Amendment") shall have the effect of
amending the Loan Agreement, Supplement A and the Related
Agreements as appropriate to express the agreements contained
herein. In all other respects, the Loan Agreement, Supplement A
and the Related Agreements shall remain in full force and effect
in accordance with their respective terms.
D. Condition to Effectiveness. This Amendment shall
be effective immediately upon (i) receipt by BAI of an amendment
fee of $10,000, which fee is fully earned and payable as of the
date hereof and (ii) the execution of this Amendment by BAI, on
behalf of the Lenders, acceptance hereof by Borrower and each
other Obligor, and delivery hereof to BAI at 231 South LaSalle
Street, Chicago, Illinois 60690, Attention: Mark Cordes, on or
prior to September 28, 1995.
Very truly yours,
BANK OF AMERICA ILLINOIS,
f/k/a CONTINENTAL BANK,
f/k/a CONTINENTAL BANK, N.A.,
ON BEHALF OF THE LENDERS
By /s/ John P. Hesselmann
_________________________
Its Sr. Vice President
Acknowledged and agreed to this
28th day of September, 1995.
EMPIRE GAS CORPORATION
By /s/ Paul S. Lindsey, Jr.
___________________________
Its President
Acknowledgment and Acceptance of Guarantors
Each of the undersigned is a party to the Master
Corporate Guaranty dated June 29, 1994 in favor of BAI, as Agent
for itself and Lenders (the "Guaranty"), pursuant to which each
of the undersigned has guaranteed the Obligations of Borrower
under the Loan Agreement. Each of the undersigned hereby
acknowledges receipt of the foregoing Amendment No. 1 to Loan and
Security Agreement and Amendment No. 2 to Supplement A to Loan
and Security Agreement ("Amendment"), accepts and agrees to be
bound by the terms thereof, ratifies and confirms all of its
obligations under the Guaranty, and agrees that the Guaranty
shall continue in full force and effect as to it, notwithstanding
such Amendment.
Acknowledged and Agreed to this 28th day of
September, 1995.
EACH OF THE SUBSIDIARIES OF EMPIRE GAS
CORPORATION LISTED ON EXHIBIT A ATTACHED
HERETO
By /s/ Valeria Schall
__________________________________
Vice President of each Subsidiary