EXHIBIT 10.5
EXECUTION COPY
AMENDMENT NO. 1 TO
LETTER OF CREDIT AGREEMENT
This AMENDMENT NO. 1 TO LETTER OF CREDIT AGREEMENT (this "AMENDMENT"),
dated as of September 29, 2003, by and among (1) EOTT ENERGY OPERATING LIMITED
PARTNERSHIP, ("EOTT OLP"), EOTT ENERGY CANADA LIMITED PARTNERSHIP ("EOTT
CANADA"), EOTT ENERGY LIQUIDS, L.P. ("EOTT LIQUIDS"), EOTT ENERGY PIPELINE
LIMITED PARTNERSHIP, ("EOTT PIPELINE", and together with EOTT Canada, EOTT
Liquids, and EOTT OLP, the "BORROWERS"), EOTT ENERGY LLC ("EOTT LLC"), EOTT
ENERGY GENERAL PARTNER, L.L.C. ("EOTT GP", and together with EOTT LLC, each a
"GUARANTOR", and together with the Borrowers, each a "CREDIT PARTY" and
collectively, the "CREDIT PARTIES"), STANDARD CHARTERED BANK, as administrative
agent for the LC Participants (in such capacity, the "LC AGENT" and in its
individual capacity, "STANDARD CHARTERED") and as LC Participant, LC Issuer and
Collateral Agent under the Letter of Credit Agreement (as defined below), (2)
XXXXXX BROTHERS INC., as agent for the Term Lenders under the Xxxxxx Credit
Agreement (as defined in the Letter of Credit Agreement) (the "TERM LENDER
AGENT"), and (3) STANDARD CHARTERED TRADE SERVICES CORPORATION ("SCTSC").
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed thereto in the Letter of Credit Agreement (as defined below).
WHEREAS, the Borrowers, each Guarantor and Standard Chartered entered
into the Letter of Credit Agreement, dated as of February 11, 2003 (as amended,
supplemented or otherwise modified prior to the effective date hereof, the
"LETTER OF CREDIT AGREEMENT");
WHEREAS, EOTT OLP and SCTSC have entered into (a) the Second Amended
and Restated Commodities Repurchase Agreement, dated as of February 11, 2003 (as
amended by Amendment No. 1 to Second Amended and Restated Commodities Repurchase
Agreement, dated as of August 29, 2003, and as further amended, supplemented or
otherwise modified from time to time, the "CRUDE OIL PURCHASE AGREEMENT"), and
(b) the Second Amended and Restated Receivables Purchase Agreement, dated as of
February 11, 2003 (as amended by Amendment No. 1 to Second Amended and Restated
Receivables Purchase Agreement, dated as of August 29, 2003, and as further
amended, supplemented or otherwise modified from time to time, the "RECEIVABLES
PURCHASE AGREEMENT");
WHEREAS, the Borrowers, each Guarantor, the LC Agent, the Term Lender
Agent and SCTSC have entered into the Intercreditor and Security Agreement,
dated as of March 1, 2003 (as amended, supplemented or otherwise modified from
time to time, the "INTERCREDITOR AGREEMENT");
WHEREAS, EOTT OLP and EOTT Pipeline propose to dispose of certain
assets in Texas, Louisiana and Arkansas, as particularly described in the
consent letter regarding Consent to Proposed Sale of Designated Property in East
Texas, North Louisiana and
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Arkansas, dated September 23, 2003, from EOTT OLP and EOTT Pipeline to the LC
Agent, the LC Participant, the Term Lender Agent and the Term Lenders (the
"ARKLATEX CONSENT") (such disposition, the "ARKLATEX DISPOSITION"), which
disposition the LC Agent, the LC Participant, the Term Lender Agent and the Term
Lenders have consented to upon the term and conditions set forth in the ArkLaTex
Consent;
WHEREAS, EOTT OLP proposes to dispose of the West Coast Assets as
particularly described in the Consent to Proposed Sale of Designated Property in
Xxxxxx, Xxxx County, California, dated September 26, 2003, from EOTT OLP to the
LC Agent, the LC Participant, and the Term Lender Agent and the Term Lenders
(the "WEST COAST CONSENT") (such disposition, the "WEST COAST DISPOSITION," and
together with the ArkLaTex Disposition, each a "SPECIFIED DISPOSITION"), which
disposition the LC Agent, the LC Participant, the Term Lender Agent and the Term
Lenders have consented to upon the terms and conditions set forth in the West
Coast Consent; and
WHEREAS, it is a condition to the effectiveness of both the ArkLaTex
Consent and the West Coast Consent that the Letter of Credit Agreement be
amended in connection with the Specified Dispositions.
NOW, THEREFORE, in consideration of the foregoing and other
consideration the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. AMENDMENTS TO THE LETTER OF CREDIT AGREEMENT.
(a) The definition of "BORROWING BASE" is hereby amended by adding
a new clause (v) and a new clause (vi), each reading in its entirety as follows:
"(v) minus, on and after the closing date of the disposition of the
West Coast Assets (as determined pursuant to the West Coast Asset
Purchase Agreement), an amount equal to the greater of (A) the West
Coast Net Proceeds and (B) $9,050,000;
(vi) minus, on and after the closing date of the ArkLaTex Disposition
(as determined pursuant to the ArkLaTex Asset Purchase Agreement), an
amount equal to the sum of (A) twenty-two and one half percent (22.5%)
of the ArkLaTex Inventory Amount, (B) $14,000,000, less the amount (if
any) by which the aggregate value of Eligible Receivables arising in
connection with the ArkLaTex assets prior to such closing date (valued
in accordance with the method for determining the value of Eligible
Receivables prior to such closing date), multiplied by the Advance
Rates applicable to such Eligible Receivables, exceeds the face amount
of Letters of Credit issued to support accounts payable incurred in
connection with the ArkLaTex assets, and (C) such other amount as the
LC Agent may determine, in its sole discretion, may be necessary to
ensure that no material increase or decrease in the Borrowing Base
results directly from the
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ArkLaTex Disposition and the repayment of Indebtedness and other
transactions contemplated in connection therewith."
(b) The defined terms "Amendment No. 1", "ArkLaTex Asset Purchase
Agreement", "ArkLaTex Disposition", "ArkLaTex Inventory Amount", "West Coast
Asset Purchase Agreement" and "West Coast Net Proceeds", are hereby inserted in
Section 1 of the Letter of Credit Agreement in appropriate alphabetical order,
each reading in its entirety as follows:
"AMENDMENT NO. 1" means the Amendment No. 1 to Letter of Credit
Agreement, dated as of September 26, 2003, among the Borrowers, the
Guarantors, the LC Agent, the LC Issuer, the LC Participant, the
Collateral Agent, the Term Lender Agent, the Term Lenders and SCTSC.
"ARKLATEX ASSET PURCHASE AGREEMENT" means the asset purchase agreement
governing the ArkLaTex Disposition, as described in Amendment No. 1.
"ARKLATEX DISPOSITION" has the meaning set forth in Amendment No. 1.
"ARKLATEX INVENTORY AMOUNT" means the amount certified by the Borrower
Representative to the LC Agent and the Term Lender Agent as the value
of inventory sold pursuant to the ArkLaTex Disposition, which amount is
included in the calculation of the Borrowing Base immediately prior to
the date of the ArkLaTex Disposition.
"WEST COAST ASSET PURCHASE AGREEMENT" means the asset purchase
agreement governing the disposition of the West Coast Assets, as
described in Amendment No. 1.
"WEST COAST NET PROCEEDS" has the meaning set forth in Amendment No. 1.
2. APPLICATION OF SPECIFIED DISPOSITION NET PROCEEDS.
Notwithstanding anything to the contrary in the Intercreditor Agreement or any
other Credit Document, all the net proceeds from the ArkLaTex Disposition
("ARKLATEX NET PROCEEDS") and the West Coast Disposition ("WEST COAST NET
PROCEEDS"), shall be applied to repay amounts outstanding under the Crude Oil
Purchase Agreement, in the manner specified in Section 3.3(a) of the
Intercreditor Agreement, and the Maximum Commitment (as defined in the Crude Oil
Purchase Agreement) shall be permanently reduced by the amount of such net
proceeds, in accordance with Section 3(b) of the Crude Oil Purchase Agreement
(as if all Specified Dispositions constituted dispositions of Designated
Assets). On the closing date of each Specified Disposition (determined as set
forth in the amendment to the term "Borrowing Base" in Section 1(a) of this
Amendment), the amount of net proceeds for such Specified Disposition shall be
the amount set forth in the certificate delivered by EOTT OLP (and EOTT
Pipeline, as applicable) to the LC Agent and to the Term Lender Agent, which
certificate shall set forth a calculation of such net proceeds in reasonable
detail (including, without limitation, the ArkLaTex Inventory Amount with
respect to the
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ArkLaTex Disposition), all in compliance with the terms of the ArkLaTex Consent
or the West Coast Consent, as the case may be.
3. ADVANCE RATES. The Credit Parties hereby acknowledge receipt
of notice from the LC Agent prior to the date hereof (in compliance with the
proviso to the definition of "Borrowing Base" in the Letter of Credit
Agreement), to the effect that, as of the date four months after the Closing
Date, the Advance Rates have been reduced by (a) 2.5% in each case other than
other under clauses (i)(A) and (i)(F) of such definition, and (b) 5% under
clause (i)(F) of such definition.
4. REPRESENTATION AND WARRANTIES. Each Credit Party represents
and warrants to the LC Agent, the LC Issuer and the LC Participant as follows:
(a) The representations and warranties of such Credit
Party contained in the Letter of Credit Agreement (i) were true and
correct when made and (ii) shall be true and correct on and as of the
Effective Date (as defined below) with the same effect as if made at
and as of that time (except to the extent that such representations and
warranties relate expressly to an earlier date).
(b) The execution and delivery by such Credit Party of
this Amendment and the performance by such Credit Party of its
agreements and obligations under this Amendment are within its
authority, and have been duly authorized by all necessary action. Such
execution, delivery, and performance by such Credit Party, do not and
will not (a) contravene any provision of such Credit Party's
organizational documents or (b) conflict with any provision of (i) any
Law, (ii) the Organizational Documents of such Credit Party, or (iii)
the terms of or result in a breach or default under any material
contract, indenture, lease, license or other agreement to which such
Credit Party is party.
(c) This Amendment and the Letter of Credit Agreement, as
amended hereby, constitutes the legal, valid and binding obligations of
such Credit Party, enforceable in accordance with their respective
terms, except as enforcement may be limited by principles of equity,
bankruptcy, insolvency, or other laws affecting the enforcement of
creditors' rights generally.
(d) After giving effect to this Amendment, no Default or
Event of Default has occurred and is continuing.
5. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective as of the date hereof, on the date (the "Effective Date") that this
Amendment shall have been duly authorized, executed and delivered to the LC
Agent by the LC Agent, the LC Issuer, the LC Participant, each Credit Party,
SCTSC and the Term Lender Agent.
6. COVENANT. The Credit Parties hereby agree to deliver to the
Collateral Agent, on or before November 30, 2003, a title insurance policy for
the MTBE Assets in form and substance satisfactory to the Collateral Agent.
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7. MISCELLANEOUS. Except as expressly provided herein, this
Amendment shall not by implication or otherwise, alter, modify, amend or in any
way affect any of the obligations or covenants contained in the Letter of Credit
Agreement, all of which are ratified and confirmed in all respects and shall
continue in full force and effect.
8. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. Delivery of an executed counterpart of a signature page by
facsimile transmission shall be effective as delivery of a manually executed
counterpart of this Amendment. In making proof of this Amendment, it shall not
be necessary to produce or account for more than one such counterpart.
9. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REFERENCE TO CONFLICT OF LAWS).
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the undersigned have duly executed this Amendment
as of the date first set forth above.
EOTT ENERGY OPERATING LIMITED
PARTNERSHIP
By: EOTT ENERGY GENERAL
PARTNER, L.L.C., its General
Partner
/s/ Xxxxx Xxxxxx
------------------------------------
Xxxxx Xxxxxx
Vice President and Treasurer
EOTT ENERGY CANADA LIMITED
PARTNERSHIP, as a Borrower
By: EOTT ENERGY GENERAL
PARTNER, L.L.C., its General
Partner
/s/ Xxxxx Xxxxxx
------------------------------------
Xxxxx Xxxxxx
Vice President and Treasurer
EOTT ENERGY LIQUIDS, L.P.,
as a Borrower
By: EOTT ENERGY GENERAL
PARTNER, L.L.C., its General
Partner
/s/ Xxxxx Xxxxxx
------------------------------------
Xxxxx Xxxxxx
Vice President and Treasurer
EOTT ENERGY PIPELINE
LIMITED PARTNERSHIP, as a Borrower
By: EOTT ENERGY GENERAL
PARTNER, L.L.C., its General Partner
/s/ Xxxxx Xxxxxx
------------------------------------
Xxxxx Xxxxxx
Vice President and Treasurer
EOTT ENERGY LLC,
as a Guarantor
/s/ Xxxxx Xxxxxx
------------------------------------
Xxxxx Xxxxxx
Vice President and Treasurer
EOTT ENERGY GENERAL PARTNER,
L.L.C.,
as a Guarantor
/s/ Xxxxx Xxxxxx
------------------------------------
Xxxxx Xxxxxx
Vice President and Treasurer
STANDARD CHARTERED BANK,
as LC Agent, LC Issuer, an LC Participant
and as Collateral Agent
By: /s/ Xxxx XxXxxxxx
---------------------------------
Name: Xxxx XxXxxxxx
Title: Senior Vice President
ACKNOWLEDGED AND AGREED BY:
STANDARD CHARTERED TRADE
SERVICES CORPORATION
By: /s/ Xxxxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Director
By: /s/ Xxxxx Xxxxx
---------------------------------
Name: Xxxxx Xxxxx
Title: E.V.P.
XXXXXX BROTHERS INC.,
as Term Lender Agent
By: /s/ J. Xxxxxx Xxxxxxxx
---------------------------------
Name: J. Xxxxxx Xxxxxxxx
Title: Managing Director
