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Exhibit 10.5
EXECUTION COPY
THIRD AMENDMENT TO
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
This THIRD AMENDMENT TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
(this "Amendment") is dated as of November 30, 1997, and entered into by and
among HUNTWAYPARTNERS,L.P., a Delaware limited partnership ("HUNTWAY"), SUNBELT
REFINING COMPANY, L.P.,A Delaware limited partnership ("SUNBELT"),AND BANKERS
TRUST COMPANY ("BANKERS"), and is made with reference to that certain Letter
of Credit and Reimbursement Agreement dated as of June 22,1993, as amended by
the First Amendment to Letter of Credit and Reimbursement Agreement dated as
of December 12,1996 by and among Huntway, Sunbelt and Bankers, and the
Sequencing and Amendatory Agreement defined below (as so amended, the "LETTER
OF CREDIT AGREEMENT"). Capitalized terms used herein without definition shall
have the same meanings herein as set forth in the Letter of Credit Agreement.
PRELIMINARY STATEMENTS
A. Huntway and Sunbelt have heretofore entered into that certain
Sequencing and Amendatory Agreement dated as of October 31,1997 (the
"Sequencing and Amendatory Agreement") with Lighthouse Investors, L.L.C.,a
Delaware limited liability company, B III Capital Partners, L.P.,a Delaware
limited partnership, Contrarian Capital Fund I, L.P.,a Delaware limited
partnership, Contrarian Capital Fund II, L.P.,a Delaware limited partnership,
Bankers, Massachusetts Mutual Life Insurance Company, Mellon Bank, N.A., as
trustee for First Plaza Group Trust, Oppenheimer & Company., Inc., as agent
for itself and certain affiliated entities and for itself and as Agent for
certain affiliates as listed under the signature of Contrarian Capital
Advisors, L.L.C. on the signature page thereof, The IBM Retirement Plan Trust,
Lindner Growth Fund, Madison Dearborn Partners III and First Chicago Equity
Corporation, United States Trust Company of New York, as Collateral Agent,
State Street Bank & Trust Company, as trustee under the Senior Subordinated
Indenture referred to therein, and Fleet National Bank, as trustee under the
Collateralized Note Indenture. Pursuant to the Sequencing and Amendatory
Agreement, the parties hereto amended the Letter of Credit Agreement and
agreed to enter into certain other amendments to the Letter of Credit
Agreement, as described in Part II of Exhibit F to the Sequencing and
Amendatory Agreement.
B. The parties hereto desire to amend the Letter of Credit Agreement for
the purpose of (i) providing that all draws on the IDB Letter of Credit will
be reimbursed by Huntway on the date such draws are honored, (ii) providing
that any unreimbursed draw on the IDB Letter of Credit will result in a
portion of the Senior Note (Sunbelt IDB) in the principal amount of such
unreimbursed draw becoming payable on demand, (iii) providing that the Company
shall permanently reduce the outstanding principal amount of the IDB Bonds and
the stated amount of the IDB Letter of Credit at
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the times and in the amounts set forth herein, (iv) revising the commission
payable in respect of the IDB Letter of Credit. (v) revising certain
definitions, covenants and events of default in the Letter of Credit Agreement
and (vi) making other revisions as set forth herein.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as
follows:
Section 1. AMENDMENTS TO THE LETTER OF CREDIT AGREEMENT
1.1 AMENDMENTS TO ARTICLE I: DEFINITIONS
A. Section 1.01 of the Letter of Credit Agreement is hereby amended by
deleting the definitions of "Commitment Termination Date" and "Senior Notes
(Sunbelt IDB)" therefrom in their entirety and substituting the following
therefor:
"COMMITMENT TERMINATION DATE" means (i) with respect to the IDB
Letter of Credit, requests to extend or renew the IDB Letter of Credit and
fees payable with respect thereto, December 31, 2005 and (ii) with respect to
Letters of Credit, requests to issue, extend or renew Letters of Credit and
fees payable with respect thereto, December 31, 1998.
"SENIOR NOTES (SUNBELT IDB)" means those certain Variable Rate Senior
Secured Notes (Sunbelt IDB) due 2005 issued by Huntway pursuant to the
Collateralized Note Indenture, as amended by the First Supplemental Indenture
thereto dated as of October 31, 1997 and Second Supplemental Indenture
thereto dated as of November 30, 1997 in the original aggregate principal
amount of $9,100,000, and any notes issued in lieu thereof, or in exchange
therefor, as such notes may be amended, restated or otherwise modified from
time to time.
B. Section 1.01 of the Letter of Credit Agreement is hereby further
amended by adding the following definition thereto, which shall be inserted
in proper alphabetical order:
"EXCESS CASH FLOW" means, for any period, the sum of (i) Consolidated
NET INCOME for such period, plus (ii) to the extent such Consolidated Net
Income has been reduced thereby, amortization expense, depreciation expense,
interest not paid in cash, and other non-cash expenses for such period, minus
the sum of (a) the aggregate amount of principal paid in cash during such
period (b) Consolidated Capital Expenditures made during such period that
were permitted under the Collateralized Note Indenture. As used in this
definition, the terms "Consolidated Net Income" and "Consolidated Capital
Expenditures" have the
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meanings assigned to thereto in the Collateralized Note Indenture' as in
effect on November 1, 1997."
1.2 AMENDMENTS TO ARTICLE II: AMOUNT AND TERMS OF LETTERS OF CREDIT
A. Section 2.01B(ii) of the Letter of Credit Agreement is hereby amended
by deleting it in its entirety and substituting the following therefor
"(ii) Bankers agrees to extend the Stated Termination Date of the IDB
Letter of Credit from time to time from the Effective Date to and excluding
the Commitment Termination Date in accordance with the terms thereof and
hereof (the 'IDB Commitment'); provided that in no event shall Bankers amend
the IDB Letter of Credit in a manner that would result in the IDB Letter of
Credit having (x) a Stated Termination Date later than the Commitment
Termination Date or (y) a Stated Termination Date more than 9 months after
the date of its most recent amendment. The IDB Letter of Credit shall not be
included within the deemed term 'Letter of Credit' and the amount available
for drawing thereunder shall not be included in determining usage or
availability of the Letter of Credit Amount. Sunbelt's obligation to
reimburse Bankers for any drawing under the IDB Letter of Credit has been
assumed by Huntway pursuant to the Huntway Assumption Agreement and is
evidenced in part by the Senior Note (Sunbelt IDB) and in part hereby and
constitutes part of the Obligations hereunder. Bankers agrees to surrender
the Senior Note (Sunbelt IDB) for cancellation in accordance with the
provisions of the Collateralized Note Indenture upon the expiration of the
IDB Letter of Credit and reimbursement of all drawings made thereunder and
payment of all interest thereon and other amounts owed with respect thereto."
B. Section 2.02(ii) of the Letter of Credit Agreement is hereby amended
by deleting it in its entirety and substituting the following therefor:
"(ii) Huntway hereby agrees to pay to Bankers on the date that any
drawing (including any Principal Drawings and any Interest Drawings) is
honored under the IDB Letter of Credit, a sum equal to the amount of such
drawing. If Huntway shall fail to reimburse Bankers in full on the day that
any drawing on the IDB Letter of Credit is honored in accordance with the
immediately preceding sentence, then, without limiting Bankers' rights under
Section 6 hereof, in accordance with the Collateralized Note Indenture, an
aggregate principal amount of the Senior Notes (Sunbelt IDB) in an amount
equal to the amount of such drawing shall immediately and without further
action become payable on demand by the respective holders of such Senior Note
(Sunbelt IDB). The amount of all obligations under the Senior Notes (Sunbelt
IDB) that shall become payable on demand pursuant to this subsection and the
Collateralized Note Indenture shall be
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allocated among the Senior Notes (Sunbelt IDB) in accordance with the
provisions of the Collateralized Note Indenture."
C. Section 2.03 of the Letter of Credit Agreement is hereby amended by
adding thereto a new clause (d) as follows:
(d) Huntway hereby agrees to pay to Bankers with respect to the IDB
Letter of Credit a commission equal to the undrawn face amount of the IDB
Letter of Credit multiplied by (i) 2.33% per annum during the period from
November 1, 1997 to December 31, 1997, (ii) 2.50% per annum during the period
from January 1, 1998 to June 30, 1998, (iii) 3.00% per annum from July 1,
1998 to December 31, 1998, and (iv) 2.33% per annum thereafter. Such
commissions shall be calculated on the basis of a 360-day year for the actual
number of days elapsed and shall be payable monthly in arrears on the
thirtieth day of each month commencing on February 28, 1998, and at
maturity."
1.4 AMENDMENTS TO ARTICLE V: COVENANTS
A. Section 5.01(d) of the Letter of Credit Agreement is hereby amended by
deleting it in its entirety and substituting the following therefor:
"(d) Promptly after each payment by Huntway in respect of the principal
amount of Senior Notes (Sunbelt IDB) pursuant to Section 3.07(d) of the
Collateralized Note Indenture, Sunbelt will direct the trustee under the IDB
Indenture to redeem IDB Bonds in an aggregate principal amount equal to the
amount of such payment. Any redemptions of the IDB Bonds pursuant to this
Section 5.01(d) shall be applied to reduce the scheduled redemptions of IDB
Bonds set forth in Section 5.01(f) in inverse order of maturity. Huntway
shall cause each redemption of the IDB Bonds made pursuant to this Section
5.01(d) to result in a permanent reduction in the stated amount of the IDB
Letter of Credit in the amount of the aggregate principal amount of the IDB
Bonds so redeemed. Any principal payments received by Bankers pursuant to
Section 3.07(d) of the Collateralized Note Indenture shall be applied against
Huntway's obligations arising under Section 2.02(ii) hereof as a result of
such redemption of IDB Bonds."
B. Section 5.01 of the Letter of Credit Agreement is hereby amended by
adding thereto new clauses (f) and (g) as follows:
"(f) Scheduled Redemptions of IDB Bonds. Huntway shall cause IDB
Bonds to be permanently redeemed in installments on the dates and in the
amounts set forth below:
Date Scheduled Redemption of Bonds
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September 30, 2001 $400,000
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December 31, 2001 $ 600,000
September 30, 2002 $ 400,000
December 31, 2002 $ 600,000
September 30, 2003 $ 400,000
December 31, 2003 $ 600,000
September 30, 2004 $ 400,000
December 31, 2004 $ 600,000
September 30, 2005 $ 400,000
December 31, 2005 $4,200,000
; provided that the scheduled redemptions of the IDB Bonds set forth above
shall be reduced in connection with any mandatory redemptions of the IDB
Bonds in accordance with Section 5.01(d) or 5.01(g); provided further that
all outstanding IDB Bonds shall be redeemed and all interest and other
obligations with respect thereto paid not later than December 31, 200s,and
the final installment payable by Huntway in respect of the IDB Bonds on such
date shall be in an amount, if different from that specified above,
sufficient to repay all amounts owing with respect to the IDB Bonds. Huntway
shall cause each redemption of the IDB Bonds made pursuant to this Section
5.01(f) to result in a permanent reduction in the stated amount of the IDB
Letter of Credit in the amount of the aggregate principal amount of the IDB
Bonds so redeemed.
(g) Mandatory Redemptions from Excess Cash Flow. Not later than 90 days
after the end of each of 1999 and 2000, Huntway shall cause IDB Bonds to be
permanently redeemed in an aggregate principal amount equal to the lesser of
(x) 66.67% of Excess Cash Flow for such calendar year and (y) $1,000,000. Any
redemptions of the IDB Bonds pursuant to this Section 5.01(g) shall be
applied to reduce the scheduled redemptions of IDB Bonds set forth in Section
5.01(fl in inverse order of maturity. Huntway shall cause each redemption of
the IDB Bonds made pursuant to this Section 5.01(g) to result in a permanent
reduction in the stated amount of the IDB Letter of Credit in the amount of
the aggregate principal amount of the IDB Bonds so redeemed."
1.5 AMENDMENTS TO ARTICLE VI: EVENTS OF DEFAULT.
A. Section 6.02 of the Letter of Credit Agreement is hereby amended by
deleting it in its entirety and substituting the following therefor:
"SECTION 6.02. UPON AN EVENT OF DEFAULT.
(a) If an Event of Default described under Section 6.01(viii) or 6.01(ix)
occurs, any and all Obligations (i) then owing or (ii) which would become
owing upon a drawing of any amount available under any Letter of Credit or
the IDB Letter of Credit shall automatically become due and payable, all
obligations under the Senior Notes (Sunbelt IDB) shall automatically become
due and payable, and
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the Commitment shall automatically terminate Any amounts described in clause
(ii) above when received by Bankers shall be delivered to the Collateral
Agent pursuant to the Collateral Account Agreement as cash collateral for the
Obligations and for the Senior Notes and Convertible Notes, as required by
the Intercreditor Agreement.
(b) If any Event of Default shall have occurred and be continuing
(including under Section 6.01(viii) or 6.01(ix) with respect to clause (iii)
below), Bankers may, in its sole discretion, but shall not be obligated to,
(i) by notice to Huntway and Sunbelt, declare the Commitment to be
terminated, whereupon the same shall forthwith terminate, (ii) declare any
and all Obligations (x) then owing and (y) which would become owing upon a
drawing of any amount available under any Letter of Credit or the IDB Letter
of Credit to be immediately due and payable, whereupon all obligations
described in the preceding clauses (x) and (y) shall automatically become due
and payable and all obligations under the Senior Notes (Sunbelt IDB) shall
automatically become due and payable, or (iii) exercise any other remedy
available to it at law, in equity or otherwise. Any amounts described in
clause (y) above when received by Bankers shall be delivered to the
Collateral Agent pursuant to the Collateral Account Agreement as cash
collateral for the Obligations and for the Senior Notes and Convertible
Notes, as required by the Intercreditor Agreement."
SECTION 2. CONDITIONS TO EFFECTIVENESS
Section 1 of this Amendment shall become effective only upon the
satisfaction of the following condition precedent (the date of satisfaction of
such condition(s) being referred to herein as the "THIRD AMENDMENT EFFECTIVE
DATE"):
A. On or before the Third Amendment Effective Date, the Second
Supplemental Indenture dated as of November 30, 1997, by and between Huntway
and Fleet National Bank, as Indenture Trustee shall have been executed and
delivered and the New Senior Notes (Sunbelt IDB), as deemed therein, shall
have been authenticated, executed and delivered, and all unpaid interest on
the Existing Senior Notes (Sunbelt IDB) (as defined therein) shall have been
paid, and all other obligations set forth in Section 18 of such Second
Supplemental Indenture shall have been performed.
SECTION 3. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE LETTER OF CREDIT AGREEMENT AND MODIFIED
DOCUMENTS.
(i) On and after the Third Amendment Effective Date, each reference in
the Letter of Credit Agreement to "this Agreement", "hereunder", "hereof",
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"herein" or words of like import referring to the Letter of Credit
Agreement, and each reference in the Restructured Documents (as defined on
the Intercreditor Agreement) to the "Letter of Credit Agreement"
"thereunder", "thereof" or words of like import referring to the Letter of
Credit Agreement shall mean and be a reference to the Letter of Credit
Agreement as amended by this Amendment (the "Amended Agreement")
(ii) Except as specifically amended by this Amendment, the Letter of
Credit Agreement shall remain in full force and effect and is hereby ratified
and confirmed.
B. HEADINGS. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive
effect.
C. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK) WITHOUT REGARD TO CONFLICTS -OF LAWS PRINCIPLES.
D. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OR ACTION BASED
UPON OR ARISING OUT OF THIS AMENDMENT OR ANY DEALINGS BETWEEN OR AMONG THEM
RELATING TO THE SUBJECT MATTER OF THE TRANSACTION CONTEMPLATED HEREBY AND THE
RELATIONSHIP BEING ESTABLISHED. The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court that
relate to the subject matter of the transactions contemplated hereby,
including, without limitation, contract claims, tort claims, breach of duty
claims and all other common law and statutory claims Each party hereto
acknowledges that this waiver is a material inducement to enter into a business
relationship, that each has already relied on the waiver in entering into this
Amendment and that each will continue to rely on the waiver in their related
future dealings Each party hereto further warrants and represents that each has
reviewed this waiver with its legal counsel, and that each knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
AMENDMENTS AND RESTATEMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AMENDMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO EXTENSIONS OF
CREDIT PURSUANT TO THIS AGREEMENT. In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.
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E. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document. This Amendment (other than the provisions of
Section 1 hereof, the effectiveness of which is governed by Section 2 hereof)
shall become effective upon the execution of a counterpart hereof by each of
the parties hereto and receipt by each of the parties hereto of written or
telephonic notification of such execution and authorization of delivery
thereof. On the Third Amendment Effective Note, the obligation of the parties
hereto to amend the Letter of Credit Agreement pursuant to the Sequencing and
Amendatory Agreement shall be terminated.
[Remainder of page intentionally left blank]
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Page S-1 to Third Amendment to Letter of Credit Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers "hereunto duly
authorized as of the date first written above.
BANKERS TRUST COMPANY
By:
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Title:
HUNTWAY PARTNERS, L.P.
By: HUNTWAY MANAGING PARTNER, L.P.,
its Managing General Partner
By: The Huntway Division of Reprise
Holdings, Inc., its sole General Partner
By:
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Title:
By: HUNTWAY HOLDINGS, L.P.,its Special
General Partner
By: The Huntway Division of Reprise
Holdings, Inc., its sole General Partner
By:
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Title:
SUNBELT REFINING COMPANY, L.P.
By: HUNTWAY PARTNERS, L.P.,its sole General
partner
By: The Huntway Division of Reprise
Holdings, Inc., its sole
General Partner
By:
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Title:
S-1