SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 1999
Commission File Number 333-45093
HUNTWAY REFINING COMPANY
(Exact Name of Registrant as Specified in its Charter)
Delaware 95-4680045
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
25129 The Old Road, Suite 322
Newhall, California
(Address of Principal Executive Offices)
91381
(Zip Code)
Registrants Telephone Number Including Area Code: (661) 286-1582
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No.
The number of shares of the registrants Common Stock, $.01 par value,
outstanding as of November 9, 1999, was 15,002,771.
QUARTERLY REPORT ON FORM 10-Q
HUNTWAY REFINING COMPANY
For the Quarter Ended September 30, 1999
INDEX
Part I. Financial Information Page
Condensed Consolidated Balance Sheets as
of September 30, 1999 and December 31, 1998 3
Condensed Consolidated Statements of
Operations for the Three and Nine Months
Ended September 30, 1999 and 1998 4
Condensed Consolidated Statements of Cash
Flows for the Nine Months Ended
September 30, 1999 and 1998 5
Condensed Consolidated Statement of
Capital for the Nine Months
Ended September 30, 1999 6
Notes to Condensed Consolidated
Financial Statements 7
Managements Discussion and Analysis
of Results of Operations and
Financial Condition 9
Quantitative and Qualitative Disclosures
About Market Risk 15
Part II. Other Information 16
<TABLE>
HUNTWAY REFINING COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
September 30, December 31,
1999 1998
(unaudited) (audited)
<S> <C> <C>
CURRENT ASSETS:
Cash $11,364,000 $10,910,000
Accounts Receivable 11,921,000 3,983,000
Inventories 5,118,000 3,551,000
Prepaid Expenses 1,669,000 449,000
Total Current Assets 30,072,000 18,893,000
PROPERTY - Net 64,106,000 59,827,000
OTHER ASSETS - Net 1,999,000 1,280,000
GOODWILL - Net 1,601,000 1,644,000
TOTAL ASSETS $97,778,000 $81,644,000
CURRENT LIABILITIES:
Accounts Payable $14,584,000 $3,515,000
Current Portion of Long-Term
Obligations 1,510,000 757,000
Accrued Interest 1,041,000 593,000
Other Accrued Liabilities 2,466,000 2,089,000
Total Current Liabilities 19,601,000 6,954,000
Long-Term Debt 35,292,000 36,110,000
Deferred Income Taxes and
Other Long-Term Obligations 2,240,000 990,000
CAPITAL:
Preferred Stock (1,000,000 shares
authorized, none issued) - -
Common Stock (75,000,000 shares
authorized, 15,000,771 outstanding) 150,000 149,000
Additional Paid-In Capital 34,631,000 34,334,000
Retained Earnings 5,864,000 3,107,000
Total Capital 40,645,000 37,590,000
TOTAL LIABILITIES AND CAPITAL $97,778,000 $81,644,000
</TABLE>
<TABLE>
HUNTWAY REFINING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS
ENDED ENDED ENDED ENDED
SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30,
1999 1998 1999 1998
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Sales $41,527,000 $25,592,000 $76,781,000 $58,422,000
Costs & Expenses:
Material &
Processing Costs 34,518,000 19,040,000 63,123,000 45,814,000
Selling and
Administration
Expenses 1,901,000 2,041,000 4,429,000 4,413,000
Interest Expense 879,000 865,000 2,576,000 2,568,000
Depreciation and
Amortization 721,000 706,000 1,980,000 2,015,000
Total Costs and
Expenses 38,019,000 22,652,000 72,108,000 54,810,000
Income before
Income Taxes 3,508,000 2,940,000 4,673,000 3,612,000
Provision for
Income Taxes 1,438,000 1,176,000 1,916,000 1,430,000
Net Income $2,070,000 $1,764,000 $2,757,000 $2,182,000
Net Income per Basic
Share $0.14 $0.12 $0.18 $0.15
Net Income per Diluted
Share $0.08 $0.07 $0.12 $0.11
Weighted Average Basic
Common Shares
Outstanding 14,995,000 14,881,000 14,960,000 14,781,000
Weighted Average
Diluted Common
Shares Outstanding 31,419,000 30,664,000 31,399,000 31,048,000
Pro Forma
Net Income before Taxes $3,612,000
Pro Forma Provision for Income Taxes 1,444,000
Pro Forma Net Income $2,168,000
Pro Forma Basic Income per Share $0.15
Pro Forma Diluted Income per Share $0.10
</TABLE>
<TABLE>
HUNTWAY REFINING COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1999 1998
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $2,757,000 $2,182,000
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating
Activities:
Interest Expense Paid by the Issuance
of Notes 278,000 248,000
Depreciation and Amortization 1,980,000 2,015,000
Deferred Income Taxes 1,250,000 790,000
Changes in Operating Assets and Liabilities:
Increase in Accounts Receivable (7,938,000) (3,889,000)
Increase in Inventories (1,552,000) (680,000)
Decrease (Increase) in Prepaid Expenses (1,214,000) 1,000
Increase (Decrease) in Accounts Payable 11,068,000 (22,000)
Increase in Accrued Liabilities 825,000 1,632,000
NET CASH PROVIDED BY OPERATING ACTIVITIES 7,454,000 2,277,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to Property (5,894,000) (2,297,000)
Other Assets (880,000) (291,000)
NET CASH USED BY INVESTING ACTIVITIES (6,774,000) (2,588,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of Common Stock 116,000 246,000
Proceeds of Notes Payable 13,390,000
Repayment of Long-term Obligations (13,732,000) (1,054,000)
NET CASH USED BY FINANCING ACTIVITIES (226,000) (808,000)
NET INCREASE (DECREASE) IN CASH 454,000 (1,119,000)
CASH BALANCE - BEGINNING OF PERIOD 10,910,000 9,406,000
CASH BALANCE - END OF PERIOD $11,364,000 $8,287,000
Supplemental Disclosures:
Interest Paid in Cash During the Period $ 1,850,000 $ 1,812,000
Income Taxes Paid in Cash During the Period $165,000 $650,000
</TABLE>
<TABLE>
HUNTWAY REFINING COMPANY
CONDENSED CONSOLIDATED STATEMENT OF CAPITAL
<CAPTION>
Common Additional Treasury
Shares Common Paid In Retained Stock Total
Outstanding Stock Capital Earnings (at cost) Capital
<S> <C> <C> <C> <C> <C> <C>
Balance at
January 1,
1999 14,881,000 $157,000 $34,335,000$3,107,000$(9,000) $37,590,000
Earned Portion
of Option Awards 182,000 182,000
Exercise of
Stock Options 119,500 1,000 115,000 116,000
Net Income for
the Nine Months
Ended September
30, 1999 2,757,000 2,757,000
Balance at
September 30,
1999 15,000,500 $158,000 $34,632,000$5,864,000$(9,000) $40,645,000
</TABLE>
HUNTWAY REFINING COMPANY AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying condensed consolidated financial statements of Huntway
Refining Company and subsidiary as of September 30, 1999 and 1998 and for the
three and nine month periods then ended are unaudited, but in the opinion of
management, reflect all adjustments (consisting only of normal recurring
adjustments) necessary for fair presentation of such financial statements in
accordance with generally accepted accounting principles. The results of
operations for an interim period are not necessarily indicative of results for
a full year. The condensed consolidated financial statements should be read
in conjunction with the consolidated financial statements and notes thereto
contained in the Companys annual report for the year ended December 31, 1998.
Huntway Refining Company (the Company) was formed for the purpose of
effecting the conversion of Huntway Partners, L.P. (the Partnership) from a
publicly traded limited partnership to a publicly traded corporation on June
1, 1998 through the merger of the Partnership into the Company (the
Conversion). As a result of the merger, the Company succeeded to the
Partnerships assets, liabilities and operations. The financial statements
through the date of the Conversion reflect the operations of the Partnership.
Pro forma information for the nine month period ended September 30, 1999 is
presented to assist in comparing the results of operations as if the
Conversion had occurred at the beginning of that period. The pro forma
provision for income taxes has been calculated at an estimated combined
Federal and State rate of 40%.
Crude oil and finished product inventories are stated at cost determined
by the last-in, first-out method, which is not in excess of market. For the
first nine months of 1999 and 1998, the effect of LIFO was to decrease net
income by approximately $1,847,000 and to increase net income by approximately
$1,028,000, respectively. For the quarter ended September 30, 1999 the effect
of LIFO was to decrease net income by approximately $985,000. LIFO did not
have an effect on net income for the comparable quarter of 1998.
<TABLE>
Inventories at September 30, 1999 and December 31, 1998 were as follows:
<CAPTION>
1999 1998
<S> <C> <C>
Finished Products $3,498,000 $2,180,000
Crude Oil and Supplies 4,750,000 1,371,000
8,248,000 3,551,000
Less LIFO Reserve (3,130,000) -
Total $5,118,000 $3,551,000
</TABLE>
2. CONTINGENCIES
The Companys business is the refining of crude oil into liquid asphalt
and other light-end products, which is subject to various environmental laws
and regulations. Adherence to these environmental laws and regulations creates
the opportunity for unknown costs and loss contingencies to arise in the
future. Unknown costs and loss contingencies could also occur due to the
nature of the Companys business. The Company is not aware of any costs or
loss contingencies relating to environmental laws and regulations that have
not been recorded in its financial statements. However, future environmental
costs cannot be reasonably estimated due to unknown factors. Although
environmental costs may have a significant impact on results of operations for
any single period, the Company believes that such costs will not have a
material adverse effect on the consolidated financial position, results of
operations or cash flows of the Company.
The Company is party to a number of lawsuits and other proceedings
arising in the ordinary course of its business. While the results of such
lawsuits and proceedings cannot be predicted with certainty, management does
not expect that the ultimate liability, if any, will have a material adverse
effect on the consolidated financial position, results of operations or cash
flows of the Company.
3. SUBSEQUENT EVENT
On October 29, 1999 the Company terminated its then existing $17,500,000
letter of credit facility and entered into a new $20,000,000 revolving credit
facility with Bank of America, N.A. (The Bank). The new facility is
collateralized by the Companys current assets and is subject to a borrowing
base limitation. Up to $10,000,000 of the facility may be borrowed for working
capital purposes but it will primarily be used for the issuance of standby
letters of credit for the purchase of crude oil. Borrowings under the
facility generally bear interest at the Banks reference rate, 8.75% at
September 30, 1999, while letter of credit fees are 1.5% (versus 2.0% under
the prior facility) on the face amount. There is also a .25% fee (versus .50%
under the old facility) on the unused portion of the facility. Up to
$2,000,000 may be used for the issuance of standby letters of credit
supporting crude oil hedging arrangements. The facility expires on June 1,
2001.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
In the following discussion, Huntway or the Company refers to Huntway
Partners, L.P. prior to June 1, 1998 and to Huntway Refining Company
thereafter. The following discussion should be read in conjunction with the
financial statements included elsewhere in this report and the financial
statements and Managements Discussion and Analysis of Results of Operations
and Financial Condition included in Huntways annual report for 1998 on Form
10-K. All per share amounts are diluted.
This Form 10-Q contains forward-looking statements, as defined in the
Private Securities Litigation Reform Act of 1995, that involve a number of
risks and uncertainties. Important factors that could cause actual results
to differ materially from those indicated by such forward-looking
statements are set forth in Managements Discussion and Analysis of Results
of Operations and Financial Condition in Huntways annual report on Form 10K
for the year ended December 31, 1998. These risks and uncertainties
include the price of crude oil, demand for liquid asphalt and government
and private funding for road construction and repair. The Companys actual
results may differ materially from these forward-looking statements.
Results of Operations
Huntway is principally engaged in the processing and sale of liquid
asphalt products, as well as the production of other refined petroleum
products such as gas oil, naphtha, kerosene distillate, diesel fuel, jet
fuel and bunker fuel.
Huntways ability to generate income depends principally upon the
margins between the prices for its refined petroleum products and the cost
of crude oil, as well as upon demand for liquid asphalt, which affects both
price and sales volume.
Historically, refined petroleum product prices (including prices for
liquid asphalt, although to a lesser degree than Huntways other refined
petroleum products) generally fluctuate with crude oil price levels. There
has not been a relationship between total revenues and income due to the
volatile commodity character of crude oil prices.
Management believes earnings before interest, depreciation and
amortization and income taxes provides the most meaningful basis for
comparing historical results of operations discussed below. Earnings
before interest, depreciation and amortization and income taxes is not a
measuring criteria under generally accepted accounting principles and
should not be viewed as superior to or in isolation from net income. The
following discussion should be read in conjunction with the financial
statements included elsewhere in this report.
Three Months Ended September 30, 1999 Compared with the Three Months
Ended September 30, 1998
Third quarter 1999 net income was $2,070,000, or $.08 per share,
versus 1998 third quarter net income of $1,764,000, or $.07 per share.
<TABLE>
The following table sets forth the effects of changes in price and
volume on sales and material and processing costs on the quarter ended
September 30, 1999 as compared to the quarter ended September 30, 1998:
<CAPTION>
Material & Barrels
Sales Processing Net Sold
<S> <C> <C> <C> <C>
Three Months Ended
September 30, 1998 $25,592,000 $19,040,000 $6,552,000 1,423,000
Effect of changes
in price 10,378,000 11,344,000 (966,000)
Effect of changes
in volume 5,557,000 4,134,000 1,423,000 309,000
Three Months Ended
September 30, 1999 $41,527,000 $34,518,000 $7,009,000 1,732,000
</TABLE>
The increase in unit volume of 22%, to 1,732,000 barrels in the third
quarter of 1999 versus the third quarter of 1998, contributed $1,423,000 in
net margin. This increase resulted from a combination of increased
production at the Benicia refinery, due to the modernization and expansion
project completed in the second quarter, and the timing of intermediate
refinery feedstock sales. Overall sales increased 62% due to overall
higher product prices and increased volumes. Asphalt prices rose between
quarters by 11%, primarily due to the impact of higher crude oil prices.
Intermediate refinery feedstock prices rose 79% in response to increasing
crude oil prices as well as a series of refinery outages in Huntways market
area. However, these increases did not recover the increased cost of
material and processing and net margins were adversely impacted by
$966,000.
Overall, material and processing costs increased by 81%, or
$15,478,000, for the third quarter as compared to the comparable quarter of
1998. On a per barrel basis, material and processing costs rose 49% from
$13.38 to $19.93. This increase was primarily the result of higher crude
oil prices, as the major producing countries have reduced production in a
successful effort to raise prices.
Overall net margins rose by 7% or $457,000 between quarters entirely
attributable to the increase in unit volume which accounted for $1,423,000
offset by a decline in net margin of $966,000.
Selling, general and administrative costs decreased by $140,000 as
compared to the third quarter of 1998, primarily as a result of decreased
compensation accruals.
Net interest expense increased in the quarter by a nominal $14,000
due to higher debt levels.
Nine Months Ended September 30, 1999 Compared with the Nine Months Ended
September 30, 1998
Net income for the first nine months of 1999 was $2,757,000, or $.12
per share, versus $2,182,000 or $.11 per share for the first nine months of
1998.
During the second quarter of 1999, the Benicia refinery was shut down
for a period of 40 days during late April and May in order to install a
number of process plant and tankage improvements intended to expand and
modernize its production, storage and shipment capabilities. The
improvements increased the refinerys production capacity by approximately
25% and have improved the quality of the plants asphalt and light-end
products through increased fractionation. The project also added 74,000
barrels of additional product storage. The improvements are also
beneficial to the environment, as air emissions have been reduced by more
than 15 percent despite the increased production levels. Overall, the
Company invested approximately $5,800,000 in this project, which was
substantially completed and placed in service in June, 1999.
Despite the aforementioned production shutdown, sales and production
volume increased by 10% and 7% respectively for the first nine months of
1999 as compared to the comparable period of 1998.
<TABLE>
The following table sets forth the effects of changes in price and
volume on sales and material and processing costs on the nine month period
ended September 30, 1999 as compared to the nine month period ended
September 30, 1998:
<CAPTION>
Material & Barrels
Sales Processing Net Sold
<S> <C> <C> <C> <C>
Nine Months Ended
September 30, 1998 $58,422,000 $45,814,000$12,608,000 3,309,000
Effect of changes
in price 12,745,000 12,906,000 (161,000)
Effect of changes
in volume 5,614,000 4,403,000 1,211,000 318,000
Nine Months Ended
September 30, 1999 $76,781,000 $63,123,000 $13,658,000 3,627,000
</TABLE>
As reflected in the table, overall unit sales rose 10% between
periods, increasing to 3,627,000 barrels in the first nine months of 1999
versus 3,309,000 barrels in the first nine months of 1998. Asphalt volumes
increased 11% between periods as the paving season experienced an
exceptionally strong start due to increased funding for road construction
and repair. On the other hand, intermediate refinery feedstock volumes
rose by 8% due to increased production at the Benicia refinery resulting
from the modernization and expansion project completed in the second
quarter and due to the timing of intermediate refinery feedstock sales.
Sales increased 31% between periods to $76,781,000 from $58,422,000 as
asphalt prices increased 9% primarily due to product mix as sales of
modified asphalt far exceeded the prior year as a result of increasing
demand for these products by state highway departments. Light
intermediate feedstock prices rose between periods by 35% as a result
of significantly higher third quarter crude oil costs.
Material and processing costs rose 38%, or $17,309,000, for the first
nine months of 1999 as compared to the first nine months of 1998. Of this
amount, approximately 25% was the result of the increase in volume while
approximately 75% resulted from higher materials costs. Crude oil costs
rose 37% as compared to 1998 due to higher third quarter crude oil prices.
Higher volumes of specialty modified asphalt sales, which require
additional modifiers, also contributed to higher material costs.
Processing costs also rose due to the impact of the production shutdown in
April and May to accommodate the expansion and modernization of the Benicia
refinery and increased tankage-related repair and maintenance activities.
Overall net margins rose by 8% or $1,050,000, entirely due to
increased volume between periods as product prices, particularly asphalt,
failed to keep pace with increased materials costs.
Selling, general and administrative costs were flat, increasing by a
nominal $16,000 as compared to the first nine months of 1998 primarily as a
result of increased legal and professional fees, investor relations
expenditures, and franchise taxes, all of which increased between periods
as a result of doing business as a corporation as opposed to a partnership.
Offsetting these increases was a reduction in compensation accruals.
Net interest expense increased in the first nine months of 1999 by a
nominal $8,000 due to higher debt levels, partially offset by the
capitalization of interest on the Benicia expansion and modernization
project.
On January 21, 1999 the Company obtained a new seven year,
$13,390,000 senior debt facility. The facility bears interest at a fixed
rate of 9.234%. Proceeds from the borrowings were used to retire all
$12,699,000 of the Companys then existing senior debt, to pay transaction
costs and to provide the Company with a small amount of working capital.
The blended interest rate on the $12,699,000 of senior debt paid off
on January 21, 1999 was approximately 8.2%. The Company anticipates that
net interest expense in 1999 will only slightly exceed net interest expense
in 1998 despite higher debt levels due to increased interest income.
Because of the foregoing, as well as other factors affecting the
Companys operating results, past financial performance should not be
considered to be a reliable indicator of future performance and investors
should not use historical trends to anticipate results or trends in future
periods.
Year 2000 Issue
The year 2000 issue is the result of computer programs being written
using two digits rather than four to define the applicable year. Any
computer programs that have time-sensitive software may recognize a date
using 00 as the year 1900 rather than the year 2000. This could result in
a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process
transactions, send invoices, or engage in similar normal business
activities.
Management has determined that the year 2000 issue will not pose
significant operational problems for either its computer systems (IT
systems) or its process controls (Non-IT systems), and believes any
remediation costs are not material. Such remediation costs are charged to
operations as incurred. The Companys process controls are not computerized
and do not rely upon time/date sensitive control equipment. The Company
believes that its accounting and billing systems, which are computerized,
are year 2000 compliant based upon manufacturer and vendor certifications
and internal testing. In the event that these applications prove not to be
compliant, the Company believes that it has sufficient manual backup
systems that could be used to prevent any material disruption of its
operations.
The Company has entered into formal communications with its
significant suppliers and customers to determine the extent to which the
Companys interface systems are vulnerable to those third parties failure to
remediate their own Year 2000 Issue. However, the Company does not utilize
any electronic data interchange directly with its customers and believes
its exposure is limited to systems associated with the Federal Wire system,
common carrier pipelines and utilities. While there can be no guarantee
that the systems of other companies on which the Company relies will be
timely converted and would not have an adverse effect on its operations,
management does not currently anticipate significant problems with these
systems. However, should the Company be denied access to crude supplies,
natural gas or other vital materials and services due to the failure of its
suppliers delivery systems resulting from year 2000 compliance problems, it
could be forced to either curtail operations or shut down until such
materials can again be delivered. Additionally, should its customers be
unable to make payments for their purchases, the Company could be faced
with a liquidity shortfall.
Capital Resources And Liquidity
The primary factors that affect the Companys cash requirements and
liquidity position are fluctuations in the selling prices for its refined
products caused by local market supply and demand factors including public
and private demand for road construction and improvement. Demand for
diesel fuel and gasoline, as well as fluctuations in the cost of crude oil,
which is impacted by a myriad of market factors, both foreign and domestic,
influence the Companys cash requirements and liquidity position. In
addition, capital expenditure requirements, including costs to maintain
compliance with environmental regulations as well as debt service
requirements, impact the Companys cash needs.
In the first nine months of 1999, operating activities provided
$7,454,000 in cash. The periods net income of $2,757,000 along with
depreciation and amortization of $1,980,000, the payment of interest by the
issuance of notes of $278,000 and a provision for deferred income taxes of
$1,250,000 provided $6,265,000 in cash. Additionally, an increase in
accounts payable, due to significantly higher crude oil prices, provided
$11,068,000 in cash while increased accrued liabilities provided $825,000
in cash. Offsetting these sources of cash were seasonal increases in
accounts receivable and inventories of $7,938,000 and $1,552,000
respectively. Additionally, prepaid expenses consumed $1,214,000 in cash,
primarily for turnaround costs associated with the Benicia and Wilmington
refineries as well as the renewal of insurance coverage.
In comparison, in the first nine months of 1998, operating activities
provided $2,277,000 in cash. The periods net income of $2,182,000 along
with depreciation and amortization of $2,015,000, the payment of interest
by the issuance of notes of $248,000 and the provision for deferred income
taxes of $790,000 provided $5,235,000 in cash. Seasonal increases in
inventories and accounts receivable of $4,569,000 were financed with cash.
Accrued liabilities provided cash of $1,632,000 because of incentive
accruals and interest accrued under convertible debt agreements payable
June 30 and December 31. Accounts payable and prepaid expenses were
virtually unchanged and consumed $21,000 in cash as lower crude prices
and higher purchased volumes in September of 1998 offset higher crude
prices and lower purchased volumes in December of 1997.
During the first nine months of 1999, investing activities consumed
$6,774,000 in cash. Additions to property, primarily for the expansion
and modernization of the Benicia refinery, required cash of $5,894,000,
while additions to other assets, primarily loan costs associated with
the new term debt and letter of credit facilities, used $880,000 in cash.
Investing activities consumed $2,588,000 in cash during the first nine
months of 1998 primarily relating to the construction of a new wastewater
treatment facility in the Wilmington refinery and various storage related
improvements in the Benicia refinery.
Financing activities consumed $226,000 in the first nine months of
1999 as a result of monthly principal payments on long-term debt offset by
the exercise of employee stock options, which provided $116,000 during the
period. In contrast, financing activities consumed $808,000 in the first
nine months of 1998 for repayment of long-term debt partially offset by
proceeds from the sale of common stock.
On October 29, 1999 the Company terminated its then existing
$17,500,000 letter of credit facility and entered into a new $20,000,000
revolving credit facility with Bank of America, N.A. (The Bank). The new
facility is collateralized by the Companys current assets and is subject to
a borrowing base limitation. Up to $10,000,000 of the facility may be
borrowed for working capital purposes but it will primarily be used for the
issuance of standby letters of credit for the purchase of crude oil.
Borrowings under the facility generally bear interest at the Banks
reference rate, 8.75% at September 30, 1999, while letter of credit fees
are 1.5% (versus 2.0% under the prior facility) on the face amount. There
is also a .25% fee (versus .50% under the old facility) on the unused
portion of the facility. Up to $2,000,000 may be used for the issuance of
standby letters of credit supporting crude oil hedging arrangements. The
facility expires on June 1, 2001.
The Company believes that its new credit facility is sufficient to
guarantee requirements for crude oil purchases, collateralization of other
obligations and for hedging activities at current crude price levels.
However, due to the volatility in the price of crude oil there can be no
assurance that this facility will be adequate in the future. If crude oil
prices increased beyond the level of the Companys ability to extend letters
of credit, it may be required to prepay for crude oil or reduce its crude
oil purchases, either of which would adversely impact profitability.
At September 30, 1999 the cash position of the Company was
$11,364,000, an increase of $3,077,000 from the balance at September 30,
1998 of $8,287,000. In the opinion of management, cash on hand, together
with anticipated future cash flows, will be sufficient to meet Huntways
liquidity obligations for the next 12 months.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As previously noted, the Companys profitability depends largely on
the spread between market prices for its refined products and its crude oil
costs. A substantial and prolonged decrease in this overall spread would
have a significant negative effect on the Companys earnings, financial
position and cash flows. Approximately half of Huntways production
consists of light products and half of asphalt. The prices of Huntways
light products have historically followed changes in crude oil prices over
12- to 18-month time periods despite high short-term volatility.
Management believes that approximately 15% of Huntways asphalt unit sales
volume will be covered by contractual escalation and de-escalation clauses
with various state highway agencies, which are based upon various crude oil
cost indexes. In an effort to mitigate the remaining risk, the Company
enters into contracts intended to partially hedge its exposure to crude oil
price fluctuations. Historically, such contracts are zero cost collars
under which the Company receives or makes a monthly payment if crude oil
prices for the month rise above, or fall below, the contracts ceiling or
floor levels, respectively. The Company does not enter into such
arrangements for trading or other speculative purposes.
To a lesser extent, the Company is also exposed to risks associated
with interest rate fluctuations. However, because the Company invests only
in short-term investment grade securities and has only fixed rate debt,
such risks to its cash flows are not material.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is party to a number of lawsuits and other proceedings
arising in the ordinary course of its business. While the results of such
lawsuits and proceedings cannot be predicted with certainty, management does
not expect that the ultimate liability, if any, will have a material adverse
effect on the consolidated financial position, results of operations or the
cash flows of the Company.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
On September 10, 1999 the Company announced that it fails to meet
all of the newly effective New York Stock Exchange (NYSE) continued listing
criteria. These criteria include, among other things, a $50,000,000 floor on
market capitalization and shareholders equity. While the Company currently
does not meet these two criteria it has submitted to the Listings and
Compliance Committee of the NYSE a plan for becoming compliant by February,
2001. On October 11, 1999 the Company was notified that its plan had been
accepted subject to quarterly monitoring of the plans goals and initiatives.
While the Company cannot guarantee that it will meet the new
continued listing requirements of the NYSE it does believe that adequate
alternative venues are available to provide a liquid market for the sale and
purchase of its publicly traded securities.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4.1 Business Loan Agreement (Receivables and Inventory) dated as
of October 29, 1999 between Bank of America, N.A. and Huntway
Refining Company
4.2 Second Refinancing and Amendatory Agreement dated as of
October 29, 1999 among Huntway Refining Company, a Delaware
corporation (the Company), Sunbelt Refining Company, L.P.
(Sunbelt), Bankers Trust Company (BT), Boeing Capital
Corporation (Boeing Capital), Lighthouse Investors, L.L.C., a
Delaware limited liability company (Lighthouse), B III Capital
Partners, L.P., a Delaware limited partnership (B III),
Contrarian Capital Fund, I, L.P., a Delaware limited
partnership (Contrarian I), Contrarian Capital Fund II, L.P.,
a Delaware limited partnership (Contrarian II), Mellon Bank,
N.A., as trustee for First Plaza Group Trust (Mellon),
Contrarian Capital Advisors, L.L.C., as agent for the entities
listed under its signature hereon (Contrarian), and The IBM
Retirement Plan Trust (IBM; Lighthouse, B III, Contrarian I,
Contrarian II, Mellon, Contrarian and IBM being sometimes
referred to as the Senior Subordinated Lenders), Madison
Dearborn Partners III and First Chicago Equity Corporation
(the Junior Lenders), United States Trust Company of New York,
as Collateral Agent under the Existing Intercreditor Agreement
referred to below (the Collateral Agent), State Street Bank
and Trust Company, as trustee under the Senior Subordinated
Indenture referred to below (the Senior Subordinated Trustee),
and Bank of America, N.A. (B of A).
20.1 Press Release re: Huntway Refining Company Announces
Retirement of Chief Executive Officer
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on November 15, 1999.
HUNTWAY REFINING COMPANY
(Registrant)
By:
Warren J. Nelson
Executive Vice President
and Chief Financial Officer
(Principal Accounting Officer)
Business Loan Agreement
(Receivables and Inventory)
This Agreement dated as of October 29, 1999, is between Bank of America, N.A.
(the Bank) and Huntway Refining Company (the Borrower).
1. DEFINITIONS
In addition to the terms which are defined elsewhere in this Agreement, the
following terms have the meanings indicated for the purposes of this
Agreement:
1.1 Borrowing Base means the sum of:
(a) 80% of the balance due on Acceptable Receivables;
(b) The lesser of Ten Million Dollars ($10,000,000) or 60% of the
value of Acceptable Inventory measured on a first-in, first-out
(FIFO) basis; and
(c) the sum of the following:
(i) 100% of the amount of time deposits maintained at the
Bank, as agent for the Collateral Agent, and pledged to the
Collateral Agent; plus
(ii) 90% of commercial paper rated A1/P1 maintained at the
Bank, as agent for the Collateral Agent, and pledged to the
Collateral Agent; plus
(iii) 85% of commercial paper rated A2/P2 maintained at the
Bank, as agent for the Collateral Agent, and pledged to the
Collateral Agent; plus
(iv) 90% of the current market value of U.S. government
obligations maintained at the Bank, as agent for the Collateral
Agent, and pledged to the Collateral Agent.
If at any time the total amount of principal outstanding under the line of
credit
(including outstanding letters of credit issued hereunder) exceeds this limit,
the Borrower will immediately either increase the loan value of marketable
securities or other acceptable collateral pledged to the Collateral Agent, or
reduce the total amount outstanding in order to comply with this limit. If
any
of the pledged assets are margin stock, the Borrower will provide the Bank a
Form
U-1 Purpose Statement, and the Bank and the Borrower will comply with the
restrictions imposed by Regulation U of the Federal Reserve, which may require
a reduction in the loan value of the margin stock pledged to the Collateral
Agent.
For regulatory reasons, the Bank will not accept as collateral Ineligible
Securities while they are being underwritten by Banc of America Securities
LLC,
or for thirty days thereafter. Banc of America Securities LLC is a wholly-
owned
subsidiary of Bank of America Corporation, and is a registered broker-dealer
which is permitted to underwrite and deal in certain Ineligible Securities.
Ineligible Securities means securities which may not be underwritten or dealt
in
by member banks of the Federal Reserve System under Section 16 of the Banking
Act
of 1933 (12 U.S.C. 24, Seventh), as amended. The restrictions of this
paragraph
shall also cover Ineligible Securities underwritten by any other present or
future subsidiary of Bank of America Corporation which underwrites Ineligible
Securities.
In determining the value of Acceptable Inventory to be included in the
Borrowing
Base, the Bank will use the lowest of (i) the Borrowers cost, (ii) the
Borrowers estimated market value, or (iii) the Banks independent determination
of the resale value of such inventory in such quantities and on such terms as
the
Bank reasonably deems appropriate. Unless the Bank makes its own independent
determination and advises the Borrower of the result thereof, the value of
Acceptable Inventory to be included in the Borrowing Base will be the value
calculated by the Borrower.
1.2 Acceptable Receivable means an account receivable which satisfies each
of
the following requirements (a)-(m) or which satisfies the following
requirement
(n):
(a) The account has resulted from the sale of goods by the
Borrower in the ordinary course of the Borrowers business and
without any further obligation on the part of the Borrower to
service, repair, or maintain any such goods sold.
(b) There are no conditions which must be satisfied before the
Borrower is entitled to receive payment of the account. Accounts
arising from COD sales, consignments or guaranteed sales are not
acceptable.
(c) The debtor upon the account does not claim any defense to
payment of the account, whether well founded or otherwise.
(d) The account is not the obligation of an account debtor who has
asserted or may reasonably assert any counterclaims or offsets
against the Borrower (including offsets for any contra accounts owed
by the Borrower to the account debtor for goods purchased by the
Borrower or for services performed for the Borrower).
(e) The account represents a genuine obligation of the debtor for
goods sold to and accepted by the debtor. To the extent any credit
balances exist in favor of the debtor, such credit balances shall be
deducted from the account balance.
(f) The Borrower has sent an invoice to the debtor in the amount
of the account.
(g) The Borrower is not prohibited by the laws of the state where
the account debtor is located from bringing an action in the courts
of that state to enforce the debtors obligation to pay the account.
The Borrower has taken all appropriate actions to ensure access to
the courts of the state where the account debtor is located,
including, where necessary, the filing of a Notice of Business
Activities Report or other similar filing with the applicable state
agency or the qualification by the Borrower as a foreign corporation
authorized to transact business in such state.
(h) The account is owned by the Borrower free of any title defects
or any liens or interests of others except the security interest in
favor of the Collateral Agent or other Permitted Liens.
(i) The debtor upon the account is not any of the following:
(i) an employee, affiliate, parent or subsidiary of the
Borrower, or an entity which has common officers or directors with
the Borrower.
(ii) the U. S. government or any agency or department of the
U. S. government unless the Bank agrees in writing to accept the
obligation, the Borrower complies with the procedures in the Federal
Assignment of Claims Act of 1940 (41 U.S.C. 15) with respect to the
obligation, and the underlying contract expressly provides that
neither the U.S. government nor any agency or department thereof
shall have the right of set-off against the Borrower.
(iii) any state, county, city, town or municipality; except
that states, counties, cities, towns and municipalities may be
debtors upon accounts that in the aggregate do not exceed Two
Hundred Fifty Thousand Dollars ($250,000).
(iv) any person or entity located in a foreign country;
except that such persons and entities may be debtors upon accounts
that in the aggregate are less than Five Hundred Thousand Dollars
($500,000) and are acceptable to the Bank in its sole discretion and
meet all other conditions of eligibility; or upon accounts that in
the aggregate are more than Five Hundred Thousand Dollars ($500,000)
if (A) supported by an irrevocable letter of credit issued by a
bank acceptable to the Bank, and, if requested by the Bank, the
original of such letter of credit and/or any usance drafts drawn
under such letter of credit and accepted by the issuing or
confirming bank have been delivered to the Collateral Agent, or
(B) covered by foreign credit insurance acceptable to the Bank and
the accounts are otherwise an Acceptable Receivable.
(j) The account is not in default. An account will be considered
in default if any of the following occur:
(i) The account is not paid within three term cycles from
its invoice date. For example, an account with Net 10 terms is not
paid within 30 days; an account with Net 30 terms is not paid within
90 days, etc. However, an account with Net 3 terms is in default if
not paid within 20 days. For any account with extended terms, it is
ineligible if not paid within 90 days of its invoice date;
(ii) The debtor obligated upon the account suspends business,
makes a general assignment for the benefit of creditors, or fails to
pay its debts generally as they come due; or
(iii) Any petition against the debtor is filed by or against
the debtor obligated upon the account under any bankruptcy law or
any other law or laws for the relief of debtors.
(k) The account is not the obligation of a debtor who is in
default (as defined above) on 25% or more of the accounts upon which
such debtor is obligated to Borrower.
(l) The account does not arise from the sale of goods which remain
in the Borrowers possession or under the Borrowers control.
(m) The account is not evidenced by a promissory note or chattel
paper, nor is the account debtor obligated to the Borrower under any
other obligation which is evidenced by a promissory note.
(n) The account is otherwise reasonably acceptable to the Bank.
In addition to the foregoing limitations, the dollar amount of accounts
included
as Acceptable Receivables which are the obligations of a single debtor shall
not
exceed the concentration limit established for that debtor. To the extent the
total of such accounts exceeds a debtors concentration limit, the amount of
any
such excess shall be excluded. The concentration limit for each debtor shall
be
equal to 10% of the total amount of the Borrowers Acceptable Receivables at
that
time. It is provided, however, at the Banks sole discretion, if the debtor
obligated upon an account possesses and maintains an investment debt rating of
BBB or better, the concentration limit applicable to such debtor may be
increased
to 30%.
1.3 Acceptable Inventory means inventory which satisfies each of the
following
requirements (a)-(g) or which satisfies the following requirement (h):
(a) The inventory is owned by the Borrower free of any title
defects or any liens or interests of others except the security
interest in favor of the Collateral Agent or other Permitted Liens.
(b) The inventory is located (i) at the Borrowers Wilmington,
California or Benecia, California refinery, (ii) at petroleum
product terminals (tank farms) located within the State of
California at locations disclosed to the Bank, in an aggregate
amount not exceeding $500,000 and provided the owner(s) of such tank
farms have executed a bailment agreement in form and substance
acceptable to Bank, and (iii) at other locations which the Borrower
has disclosed to the Bank and which are acceptable to the Bank. If
the inventory is covered by a negotiable document of title (such as
a warehouse receipt) that document must be delivered to the
Collateral Agent.
(c) Notwithstanding (b) above, inventory which is in transit to or
from the Borrowers locations and customer locations or terminals
used by customer is acceptable provided it is in an amount not
exceeding One Million Dollars ($1,000,000) and provided that the
Borrower maintains insurance satisfactory to the Bank on such
inventory and the Borrower retains title to such inventory.
(d) The inventory is held for sale or use in the ordinary course
of the Borrowers business and is of good and merchantable quality.
Display items, samples, and packing and shipping materials are not
acceptable. Inventory which is obsolete, unsalable, damaged,
defective, discontinued or slow-moving, is not acceptable.
(e) The inventory is not subject to any licensing agreements which
would prohibit or restrict in any way the ability of the Collateral
Agent to sell the inventory to third parties.
(f) The inventory has been produced in compliance with the
requirements of the U. S. Fair Labor Standards Act (29 U.S.C. 201
et seq.).
(g) The inventory is not placed on consignment.
(h) The inventory is otherwise reasonably acceptable to the Bank.
1.4 Collateral Accounts Security Agreement has the meaning given such term
in
the Intercreditor Agreement.
1.5 Collateral Agent has the meaning given such term in the Intercreditor
Agreement.
1.6 Credit Limit means the amount of Twenty Million and 00/100 Dollars
($20,000,000.00).
1.7 GAAP means generally accepted accounting principles as in effect from
time
to time in the United States, consistently applied.
1.8 Indebtedness means: (a) all obligations of Borrower for borrowed money,
(b) all obligations of Borrower evidenced by bonds, debentures, notes, or
other
similar instruments and all reimbursement or other obligations of Borrower in
respect of letters of credit, bankers acceptances, the net obligations of
Borrower under interest rate swaps and hedge agreements, or other financial
products, (c) all obligations of Borrower under capital leases, (d) all
obligations or liabilities of others secured by a Lien on any property or
asset
of Borrower, irrespective of whether such obligation or liability is assumed,
and
(e) any obligation of Borrower guaranteeing or intended to guarantee (whether
guaranteed, endorsed, co-made, discounted, or sold with recourse to Borrower)
any
indebtedness, lease, dividend, letter of credit, or other obligation of any
other
Person.
1.9 Intercreditor Agreement means that certain Second Amended and Restated
Intercreditor and Collateral Trust Agreement dated as of October 29, 1999
among
the Bank, Boeing Capital Corporation, the holders of the Convertible Notes
listed
on the signature pages thereof, State Street Bank and Trust Company, as
trustee
under the Senior Subordinated Indenture, and United States Trust Company of
New
York, as Collateral Agent, as it may from time to time be amended, renewed,
supplemented, restated or otherwise modified.
1.10 Lien means any interest in property, tangible or intangible, securing an
obligation owed to, or a claim by, any Person other than the owner of such
property, whether such interest shall be based on the common law, statute, or
contract, whether such interest shall be recorded or perfected, and whether
such
interest shall be contingent upon the occurrence of some future event or
events
or the existence of some future circumstance or circumstances, including any
lien
or security interest arising from a mortgage, deed of trust, encumbrance,
pledge,
hypothecation, assignment, deposit arrangement, security agreement, adverse
claim
or charge, conditional sale or trust receipt, or from a lease, consignment, or
bailment for security purposes and also including reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases, and other title exceptions and encumbrances affecting real property or
interests therein.
1.11 Permitted Lien means (a) Liens held by Collateral Agent, (b) Liens for
unpaid taxes, assessments, governmental charges or claims that either (i) are
not
yet due and payable or (ii) are the subject of Permitted Protests, (c) Liens
set
forth on Schedule 1, (d) the interests of lessors under operating leases, and
purchase money Liens, on property other than inventory, of lessors, vendors
or
lenders under capital leases or other Indebtedness to the extent that the
acquisition or lease of the underlying asset is permitted under Section 9.8
and
does not exceed $2,000,000 in the aggregate, and so long as the Lien only
attaches to the asset purchased or acquired and only secures the purchase
price
of the asset, (e) Liens arising by operation of law in favor of warehousemen,
landlords, carriers, mechanics, materialmen, repairmen, laborers, or
suppliers,
incurred in the ordinary course of business of Borrower and not in connection
with the borrowing of money, and which Liens either (i) are for sums not yet
due
and payable, or (ii) are the subject of Permitted Protests, (f) Liens arising
from or deposits made in connection with obtaining workers compensation,
unemployment insurance and other types of social security, (g) Liens or
deposits
to secure performance of bids, tenders, leases, statutory obligations or
government contracts, incurred in the ordinary course of business of Borrower
and
not in connection with the borrowing of money, (h) Liens arising by reason of
security for surety, performance or appeal bonds in the ordinary course of
business of Borrower, (i) Liens of or resulting from any judgment or award as
to
which the time for the appeal or petition for rehearing of which has not yet
expired, or in respect of which Borrower is in good faith prosecuting an
appeal
or proceeding for a review, and in respect of which a stay of execution
pending
such appeal or proceeding for review has been secured, (j) Liens with respect
to
the real property or interests therein that are exceptions to the commitments
for
title insurance issued in favor of Collateral Agent, (k) with respect to any
real
property or interests therein, easements, rights of way, zoning and similar
covenants and restrictions, and similar encumbrances that customarily exist on
properties of Persons engaged in similar activities and similarly situated and
that in any event do not materially interfere with or materially impair the
use
or operation of the Borrowers assets by Borrower or materially interfere with
the ordinary conduct of the business of Borrower, (l) with respect to
Indebtedness permitted under Section 9.6, Liens for fees and costs related
thereto payable to trustees under indentures related thereto, (m) Liens
securing
reimbursement obligations with respect to letters of credit which encumber
only
documents and other property relating to such letters of credit and the
products
and proceeds thereof, (n) Liens arising out of consignment or similar
arrangement
of the sale of goods entered into by Borrower in the ordinary course of
business,
(o) leases or subleases granted to others not interfering in any material
respect
with the business of Borrower, (p) Liens in favor of custom and revenue
authorities arising as a matter of law to secure payment of custom duties in
connection with the importation of goods, and (q) Liens arising from
Indebtedness
incurred by Borrower in connection with any crude oil hedging agreements,
interest rate swap agreements with Bank, performance bonds, letter of credit
obligations owing to Bank and bank overdrafts incurred in the ordinary course
of
business. Notwithstanding anything to the contrary contained herein, in no
event
shall any Lien be allowed on Personal Property Collateral if (i) the priority
Lien of the Collateral Agent on the Personal Property Collateral is affected,
or
(ii) the aggregate amount of all Permitted Liens on Personal Property
Collateral
that are junior to the Lien of the Collateral Agent thereon exceeds $250,000.
1.12 Permitted Protest means the right of Borrower to protest any Lien other
than any such Lien that secures the Borrowers obligations to Bank hereunder,
tax
(other than payroll taxes or taxes that are the subject of a United States
federal tax lien), or rental payment, provided that (a) to the extent required
by GAAP, a reserve with respect to such obligation is established on the books
of Borrower in an amount that is reasonably satisfactory to Bank, (b) any such
protest is instituted and diligently prosecuted by Borrower in good faith, and
(c) Bank is reasonably satisfied that, while any such protest is pending,
there
will be no impairment of the enforceability, validity, or priority of any of
the
Liens of Collateral Agent in and to the Personal Property Collateral.
1.13 Person means and includes governments and agencies and political
subdivisions thereof, natural persons, corporations, limited liability
companies,
limited partnerships, general partnerships, limited liability partnerships,
joint
ventures, trusts, land trusts, business trusts, or other organizations,
irrespective of whether they are legal entities.
1.14 Personal Property Collateral means the Boeing Capital Second Priority
Collateral, as defined in the Intercreditor Agreement.
1.15 Second Refinancing and Amendatory Agreement means that certain Second
Refinancing and Amendatory Agreement, dated the date hereof, among Borrower,
Bank, Collateral Agent, and certain other parties.
1.16 Sunbelt means Sunbelt Refining Company, L.P., a Delaware limited
partnership, the sole general partner of which is Borrower.
2. LINE OF CREDIT AMOUNT AND TERMS
2.1 Line of Credit Amount.
(a) During the availability period described below, the Bank will
provide a line of credit to the Borrower. The amount of the line of
credit (the Commitment) is equal to the lesser of (i) the Credit
Limit or (ii) the Borrowing Base.
(b) This is a revolving line of credit providing for cash advances
and letters of credit. During the availability period, the Borrower
may repay principal amounts, without penalty or premium except as
provided in Section 3.2(e) hereof, and reborrow them.
(c) The aggregate principal balance of cash advances outstanding
at any one time may not exceed Ten Million and 00/100 Dollars
($10,000,000.00).
(d) The Borrower agrees not to permit the outstanding principal
balance of advances under the line of credit plus the outstanding
amounts of any letters of credit, including amounts drawn on letters
of credit and not yet reimbursed, to exceed the Commitment. If the
Borrower exceeds this limit, the Borrower will immediately pay the
excess to the Bank upon the Banks demand. The Bank may apply
payments received from the Borrower under this Paragraph to the
obligations of the Borrower to the Bank in the order and the manner
as the Bank, in its discretion, may determine.
(e) In determining the net amount available to the Borrower under
the line of credit, the Bank will reserve under the Borrowing Base
an amount equal to the lesser of the face amount of any outstanding
standby letter of credit or the actual amount of the underlying
account payable to the beneficiary of the letter of credit.
(f) At its option and upon three (3) days prior written notice to
Bank, the Borrower may terminate the Commitment or permanently
reduce the Commitment by an aggregate minimum amount of $1,000,000
or any multiple thereof, provided that no such reduction or
termination shall be permitted if, after giving effect thereto and
to any prepayment of the advances outstanding on the effective date
thereof, the remaining outstanding advances plus the outstanding
amount of any letters of credit would exceed the maximum amount of
the Commitment then in effect.
2.2 Availability Period. The line of credit is available between the date
of
this Agreement and June 1, 2001 (the Expiration Date) unless an event of
default
has occurred and is continuing.
2.3 Conditions to Availability of Credit. In addition to the items required
to be delivered to the Bank under the paragraph entitled Financial Information
in the Covenants section of this Agreement, the Borrower will promptly deliver
the following to the Bank at such times as may be requested by the Bank:
(a) a borrowing certificate, in form and detail satisfactory to
the Bank, setting forth the Acceptable Receivables and the
Acceptable Inventory on which the requested extension of credit is
to be based.
(b) copies of the invoices or the record of invoices from the
Borrowers sales journal for such Acceptable Receivables and a
listing of the names and addresses of the debtors obligated
thereunder.
(c) copies of the delivery receipts, purchase orders, shipping
instructions, bills of lading and other documentation pertaining to
such Acceptable Receivables.
(d) copies of the cash receipts journal pertaining to the
borrowing certificate.
2.4 Interest Rate.
(a) Unless the Borrower elects the optional interest rate as
described below, the interest rate is the Banks Reference Rate.
(b) The Reference Rate is the rate of interest publicly announced
from time to time by the Bank in San Francisco, California, as its
Reference Rate. The Reference Rate is set by the Bank based on
various factors, including the Banks costs and desired return,
general economic conditions and other factors, and is used as a
reference point for pricing some loans. The Bank may price loans to
its customers at, above, or below the Reference Rate. Any change in
the Reference Rate shall take effect at the opening of business on
the day specified in the public announcement of a change in the
Reference Rate.
2.5 Repayment Terms.
(a) The Borrower will pay interest on November 10, 1999, and then
monthly thereafter on the tenth day of each month until payment in
full of any principal outstanding under this line of credit.
(b) The Borrower will repay in full all principal and any unpaid
interest or other charges outstanding under this line of credit no
later than the Expiration Date. Any amount bearing interest at the
optional interest rate (as described below) may be repaid at the end
of the applicable interest period, which shall be no later than
ninety-two (92) days after the Expiration Date.
2.6 Optional Interest Rate. Instead of the interest rate based on the
Reference Rate, the Borrower may elect the optional interest rate listed below
during interest periods agreed to by the Bank and the Borrower. The optional
interest rate shall be subject to the terms and conditions described later in
this Agreement. Any principal amount bearing interest at the optional rate
under
this Agreement is referred to as a Portion. The following optional interest
rate
is available:
(a) the IBOR Rate plus 1.75 percentage points.
2.7 Letters of Credit.
(a) This line of credit may be used for financing:
(i) commercial letters of credit with a maximum maturity of
6 months but not to extend more than 6 months beyond the Expiration
Date. Each commercial letter of credit will require drafts payable
at sight.
(ii) standby letters of credit, for the purchase of or the
hedging of the price of crude oil, with a maximum maturity of one
year but not to extend more than 6 months beyond the Expiration
Date. The amount of standby letters of credit outstanding at any
one time (including amounts drawn on letters of credit and not yet
reimbursed) used for the purpose of hedging crude oil purchases may
not exceed Two Million and 00/100 Dollars ($2,000,000.00) and may
not have a maturity beyond November 1, 2001.
(b) The Borrower agrees:
(i) any sum drawn under a letter of credit may, at the
option of the Bank, be added to the principal amount outstanding
under this Agreement. The amount will bear interest and be due as
described elsewhere in this Agreement.
(ii) if there is an event of default under this Agreement,
to immediately cash collateralize with the Collateral Agent any
outstanding letters of credit.
(iii) the issuance of any letter of credit and any amendment
to a letter of credit is subject to the Banks written approval and
must be in form and content satisfactory to the Bank and in favor of
a beneficiary acceptable to the Bank.
(iv) to sign the Banks form Application and Agreement for
Commercial Letter of Credit or Application and Agreement for Standby
Letter of Credit (which, notwithstanding the terms thereof, shall be
subject to the terms of this Agreement, the Collateral Accounts
Security Agreement and the Intercreditor Agreement).
(v) to pay any standard issuance and/or other standard fees
that the Bank notifies the Borrower will be charged for issuing and
processing letters of credit for the Borrower.
(vi) to allow the Bank to automatically charge its checking
account for applicable fees, discounts, and other charges.
(vii) to pay the Bank a non-refundable fee equal to 1.5% per
annum of the outstanding undrawn amount of each standby letter of
credit, payable monthly in arrears, calculated on the average,
actual standby letters of credit outstanding for the month.
3. OPTIONAL INTEREST RATE
3.1 Optional Rate. The optional interest rate is a rate per year. Interest
will be paid on the last day of each interest period, and on the last day of
each
calendar month during the interest period. At the end of any interest period,
the interest rate will revert to the rate based on the Reference Rate, unless
the
Borrower has designated the optional interest rate for the Portion. No
Portion
will be converted to a different interest rate during the applicable interest
period. Upon the occurrence of an event of default under this Agreement, the
Bank may terminate the availability of the optional interest rate for interest
periods commencing after the event of default occurs.
3.2 IBOR Rate. The election of the IBOR Rate shall be subject to the
following
terms and requirements:
(a) The interest period during which the IBOR Rate will be in
effect will be no shorter than 30 days and no longer than 92 days.
The last day of the interest period will be determined by the Bank
using the practices of the offshore dollar inter-bank market.
(b) Each IBOR Rate Portion will be for an amount not less than
Five Hundred Thousand Dollars ($500,000).
(c) The Borrower may not elect an IBOR Rate with respect to any
principal amount which is scheduled to be repaid before the last day
of the applicable interest period.
(d) The IBOR Rate means the interest rate determined by the
following formula, rounded upward to the nearest 1/100 of one
percent. (All amounts in the calculation will be determined by the
Bank as of the first day of the interest period.)
IBOR Rate = IBOR Base Rate
(1.00 - Reserve Percentage)
Where,
(i) IBOR Base Rate means the interest rate at which the
Banks Grand Cayman Branch, Grand Cayman, British West Indies, would
offer U.S. dollar deposits for the applicable interest period to
other major banks in the offshore dollar inter-bank market.
(ii) Reserve Percentage means the total of the maximum
reserve percentages for determining the reserves to be maintained by
member banks of the Federal Reserve System for Eurocurrency
Liabilities, as defined in Federal Reserve Board Regulation D,
rounded upward to the nearest 1/100 of one percent. The percentage
will be expressed as a decimal, and will include, but not be limited
to, marginal, emergency, supplemental, special, and other reserve
percentages.
(e) Each prepayment of an IBOR Rate Portion, whether voluntary, by
reason of acceleration or otherwise, will be accompanied by the
amount of accrued interest on the amount prepaid, and a prepayment
fee as described below. A prepayment is a payment of an amount on
a date earlier than the scheduled payment date for such amount as
required by this Agreement. The prepayment fee shall be equal to
the amount (if any) by which:
(i) the additional interest which would have been payable
during the interest period on the amount prepaid had it not been
prepaid, exceeds
(ii) the interest which would have been recoverable by the
Bank by placing the amount prepaid on deposit in the domestic
certificate of deposit market, the Eurodollar deposit market, or
other appropriate money market selected by the Bank for a period
starting on the date on which it was prepaid and ending on the last
day of the interest period for such Portion (or the scheduled
payment date for the amount prepaid, if earlier).
(f) The Bank will have no obligation to accept an election for an
IBOR Rate Portion if any of the following described events has
occurred and is continuing:
(i) Dollar deposits in the principal amount, and for periods
equal to the interest period, of an IBOR Rate Portion are not
available in the offshore dollar inter-bank market; or
(ii) the IBOR Rate does not accurately reflect the cost of an
IBOR Rate Portion.
4. FEES AND EXPENSES
4.1 Fees.
(a) Unused commitment fee. The Borrower agrees to pay a fee on
any difference between the Commitment and the amount of credit it
actually uses, determined by the weighted average credit outstanding
during the specified period. The fee will be calculated at 0.25%
per year. The calculation of credit outstanding shall include the
undrawn amount of letters of credit. This fee is due on November
10, 1999, and on the tenth day of each following quarter until the
expiration of the availability period.
(b) Waiver Fee. If the Bank, at its discretion, agrees to waive
or amend any terms of this Agreement, the Borrower will, at the
Banks option, pay the Bank a fee for each waiver or amendment in an
amount advised by the Bank at the time the Borrower requests the
waiver or amendment. Nothing in this paragraph shall imply that the
Bank is obligated to agree to any waiver or amendment requested by
the Borrower. The Bank may impose additional requirements as a
condition to any waiver or amendment.
4.2 Expenses. The Borrower agrees to immediately repay the Bank for
expenses
arising in connection with this Agreement that include, but are not limited
to,
search fees, appraisal fees and documentation fees.
4.3 Reimbursement Costs.
(a) The Borrower agrees to reimburse the Bank for any expenses it
incurs in the preparation of this Agreement and any agreement or
instrument required by this Agreement. Expenses include, but are
not limited to, reasonable attorneys fees, including any allocated
costs of the Banks in-house counsel.
(b) The Borrower agrees to reimburse the Bank for the cost of any
and all appraisals of the Personal Property Collateral securing this
Agreement, at such intervals as the Bank may reasonably require.
The appraisals may be performed by employees of the Bank or by
independent appraisers.
5. COLLATERAL
5.1 Confirmation of Grant of Lien and Security Interest. The Borrower
hereby
acknowledges and confirms that it has granted to United States Trust Company
of
New York, as Collateral Agent, for the benefit of Bank and others, a
continuing
lien upon and security interest in certain property (but not real property) of
the Borrower which secures prompt repayment of certain indebtedness of the
Borrower all as provided in the Intercreditor Agreement, the Collateral
Documents
(as defined in the Intercreditor Agreement) and the Second Refinancing and
Amendatory Agreement.
5.2 Personal Property Collateral. The Borrower agrees that all obligations
of
the Borrower to the Bank under this Agreement shall be secured by and entitled
to the benefits of all Personal Property Collateral pledged to the Collateral
Agent pursuant to the Collateral Documents, as defined in the Intercreditor
Agreement.
6. DISBURSEMENTS, PAYMENTS AND COSTS
6.1 Requests for Credit. Each request for an extension of credit will be
made
in writing in a manner acceptable to the Bank, or by another means acceptable
to
the Bank.
6.2 Disbursements and Payments. Each disbursement by the Bank and each
payment
by the Borrower will be:
(a) made at the Banks branch (or other location) selected by the
Bank from time to time;
(b) made for the account of the Banks branch selected by the Bank
from time to time;
(c) made in immediately available funds;
(d) evidenced by records kept by the Bank. In addition, the Bank
may, at its discretion, require the Borrower to sign one or more
promissory notes.
6.3 Telephone and Telefax Authorization.
(a) The Bank may honor telephone or telefax instructions for
advances or repayments or for the designation of the optional
interest rate and telefax requests for the issuance of letters of
credit given by any one of the individuals authorized to sign loan
agreements on behalf of the Borrower, or any other individual
designated to Bank in writing by any one of such authorized signers.
(b) Advances will be deposited in and repayments will be withdrawn
from the Borrowers account number 14654-01807, or such other of the
Borrowers accounts with the Bank as designated in writing by the
Borrower.
(c) The Borrower indemnifies and excuses the Bank (including its
officers, employees, and agents) from all liability, loss, and costs
in connection with any act resulting from telephone or telefax
instructions the Bank reasonably believes are made by any individual
authorized by the Borrower to give such instructions. This
indemnity and excuse will survive this Agreements termination.
6.4 Direct Debit (Pre-Billing).
(a) The Borrower agrees that the Bank will debit the Borrowers
deposit account number 14654-01807, or such other of the Borrowers
accounts with the Bank as designated in writing by the Borrower (the
Designated Account) on the date each payment of interest and any
fees from the Borrower becomes due (the Due Date). If the Due Date
is not a banking day, the Designated Account will be debited on the
next banking day.
(b) Approximately 10 days prior to each Due Date, the Bank will
mail to the Borrower a statement of the amounts that will be due on
that Due Date (the Billed Amount). The calculation will be made on
the assumption that no new extensions of credit or payments will be
made between the date of the billing statement and the Due Date, and
that there will be no changes in the applicable interest rate.
(c) The Bank will debit the Designated Account for the Billed
Amount, regardless of the actual amount due on that date (the
Accrued Amount). If the Billed Amount debited to the Designated
Account differs from the Accrued Amount, the discrepancy will be
treated as follows:
(i) If the Billed Amount is less than the Accrued Amount,
the Billed Amount for the following Due Date will be increased by
the amount of the discrepancy. The Borrower will not be in default
by reason of any such discrepancy.
(ii) If the Billed Amount is more than the Accrued Amount,
the Billed Amount for the following Due Date will be decreased by
the amount of the discrepancy.
Regardless of any such discrepancy, interest will continue to accrue
based on the actual amount of principal outstanding without
compounding. The Bank will not pay the Borrower interest on any
overpayment.
(d) The Borrower will maintain sufficient funds in the Designated
Account to cover each debit. If there are insufficient funds in the
Designated Account on the date the Bank enters any debit authorized
by this Agreement, the debit will be reversed.
6.5 Banking Days. Unless otherwise provided in this Agreement, a banking
day
is a day other than a Saturday or a Sunday on which the Bank is open for
business
in California. For amounts bearing interest at an offshore rate (if any), a
banking day is a day other than a Saturday or a Sunday on which the Bank is
open
for business in California and dealing in offshore dollars. All payments and
disbursements which would be due on a day which is not a banking day will be
due
on the next banking day. All payments received on a day which is not a
banking
day will be applied to the credit on the next banking day.
6.6 Taxes. If any payments to the Bank under this Agreement are made from
outside the United States, the Borrower will not deduct any foreign taxes from
any payments it makes to the Bank. If any such taxes are imposed on any
payments
made by the Borrower (including payments under this paragraph), the Borrower
will
pay the taxes and will also pay to the Bank, at the time interest is paid, any
additional amount which the Bank specifies as necessary to preserve the after-
tax
yield the Bank would have received if such taxes had not been imposed. The
Borrower will confirm that it has paid the taxes by giving the Bank official
tax
receipts (or notarized copies) within 30 days after the due date.
6.7 Additional Costs. The Borrower will pay the Bank, on demand, for the
Banks costs or losses arising from any statute or regulation, or any request
or
requirement of a regulatory agency, which is applicable to all national banks
or
a class of all national banks and which is introduced or changed after the
parties sign this Agreement (in the event of costs or losses resulting from a
change, only to the extent attributable to such change). The costs and losses
will be allocated to the loan in a manner determined by the Bank, using any
reasonable method. The costs include the following:
(a) any reserve or deposit requirements; and
(b) any capital requirements relating to the Banks assets and
commitments for credit.
Notwithstanding the foregoing, the costs do not include any reserve or deposit
requirements to the extent recovered by the Bank through inclusion in the
computation of Reserve Percentage.
6.8 Interest Calculation. Except as otherwise stated in this Agreement, all
interest and fees, if any, will be computed on the basis of a 360-day year and
the actual number of days elapsed. This results in more interest or a higher
fee
than if a 365-day year is used. Installments of principal which are not paid
when due under this Agreement shall continue to bear interest until paid.
6.9 Default Rate. Upon the occurrence and during the continuation of any
event
of default under this Agreement, principal amounts outstanding under this
Agreement will at the option of the Bank bear interest at a rate which is 2
percentage point(s) higher than the rate of interest otherwise provided under
this Agreement. This will not constitute a waiver of any default.
6.10 Interest Compounding. At the Banks sole option in each instance, to the
extent permitted by law, any interest, fees or costs which are not paid when
due
under this Agreement shall bear interest from the due date at the Reference
Rate
plus 2 percentage points. This may result in compounding of interest.
6.11 Overdrafts. At the Banks sole option in each instance, the Bank may do
one of the following:
(a) The Bank may make advances under this Agreement to prevent or
cover an overdraft on any account of the Borrower with the Bank.
Each such advance will accrue interest from the date of the advance
or the date on which the account is overdrawn, whichever occurs
first, at the interest rate described in this Agreement.
(b) The Bank may reduce the amount of credit otherwise available
under this Agreement by the amount of any overdraft on any account
of the Borrower with the Bank.
This paragraph shall not be deemed to authorize the Borrower to create
overdrafts
on any of the Borrowers accounts with the Bank.
6.12 Payments in Kind. If the Bank receives delivery in kind of the proceeds
of collection of the Borrowers accounts receivable, such proceeds shall be
credited to interest, principal, and other sums owed to the Bank under this
Agreement in the order and proportion determined by the Bank in its sole
discretion. All such credits will be conditioned upon collection and any
returned items may, at the Banks option, be charged to the Borrower.
7. CONDITIONS
The Bank must receive the following items, in form and content acceptable to
the
Bank, before it is required to extend any credit to the Borrower under this
Agreement:
7.1 Authorizations. Evidence that the execution, delivery and performance
by
the Borrower of this Agreement and any instrument or agreement required under
this Agreement have been duly authorized.
7.2 Governing Documents. A copy of the Borrowers certificate of
incorporation.
7.3 Evidence of Priority. Evidence that security interests in and liens on
the
Personal Property Collateral in favor of the Collateral Agent are valid,
enforceable, and prior to all others recorded or filed rights and interests.
7.4 Insurance. Evidence of insurance coverage, as required in the Covenants
section of this Agreement.
7.5 Other Agreements. Signed original Second Refinancing and Amendatory
Agreement and Collateral Accounts Security Agreement duly executed by the
Borrower, the Bank and the other parties thereto.
7.6 Other Items. Any other items that the Bank reasonably requires.
8. REPRESENTATIONS AND WARRANTIES
When the Borrower signs this Agreement, and until the Bank is repaid in full,
the
Borrower makes the following representations and warranties. Each request for
an extension of credit constitutes a renewed representation:
8.1 Organization of Borrower. The Borrower is a corporation duly formed and
existing under the laws of the state where organized.
8.2 Authorization. This Agreement, and any instrument or agreement required
hereunder, are within the Borrowers powers, have been duly authorized, and do
not conflict with any of its organizational papers.
8.3 Enforceable Agreement. This Agreement is a legal, valid and binding
agreement of the Borrower, enforceable against the Borrower in accordance with
its terms, and any instrument or agreement required hereunder, when executed
and
delivered, will be similarly legal, valid, binding and enforceable.
8.4 Good Standing. In each state in which the Borrower does business, it is
properly licensed, in good standing, and, where required, in compliance with
fictitious name statutes, except where the failure to be so qualified will not
have a material adverse effect on the Borrower or in any way affect the
ability
of the Collateral Agent to exercise its rights and remedies with respect to
the
Personal Property Collateral.
8.5 No Conflicts. This Agreement does not conflict with any law, agreement,
or obligation by which the Borrower is bound.
8.6 Financial Information. All financial and other information that has
been
or will be supplied to the Bank is:
(a) sufficiently complete to give the Bank accurate knowledge of
the Borrowers (and any guarantors) financial condition, including
all material contingent liabilities.
(b) in compliance with all government regulations that apply to
the Borrower.
8.7 Lawsuits. There is no lawsuit, tax claim or other dispute pending or
threatened against the Borrower which, if lost, would impair the Borrowers
financial condition or ability to repay the loan, except as have been
disclosed
in writing to the Bank (in case of each making of this representation
subsequent
to the signing of this Agreement, prior to such subsequent making of this
representation).
8.8 Collateral. All Personal Property Collateral is owned by the grantor of
the security interest therein or the grantor has rights in such collateral,
free
of any title defects or any liens or interests of others, except Permitted
Liens.
8.9 Permits, Franchises. The Borrower possesses all permits, memberships,
franchises, contracts and licenses required and all trademark rights, trade
name
rights, patent rights and fictitious name rights necessary to enable it to
conduct the business in which it is now engaged except where the failure to
possess the aforesaid will not have a material adverse effect on the Borrower
or
in any way affect the ability of the Collateral Agent to exercise its rights
and
remedies with respect to the Personal Property Collateral.
8.10 Other Obligations. The Borrower is not in default on any obligation for
borrowed money, any purchase money obligation or any other material lease,
commitment, contract, instrument or obligation, except as have been disclosed
in
writing to the Bank (in case of each making of this representation subsequent
to
the signing of this Agreement, prior to such subsequent making of this
representation).
8.11 Income Tax Matters. The Borrower has no knowledge of any pending
assessments or adjustments of its income tax for any year, except as have been
disclosed in writing to the Bank (in case of each making of this
representation
subsequent to the signing of this Agreement, prior to such subsequent making
of
this representation).
8.12 No Event of Default. There is no event which is, or with notice or
lapse
of time or both would be, an event of default under this Agreement.
8.13 Insurance. The Borrower has obtained, and maintained in effect, the
insurance coverage required in the Covenants section of this Agreement.
8.14 Merchantable Inventory; Compliance with FLSA. All inventory which is
included in the Borrowing Base is of good and merchantable quality and free
from
defects, and has been produced in compliance with the requirements of the U.S.
Fair Labor Standards Act (29 U.S.C. 201 et seq.).
8.15 Location of Borrower. The Borrowers place of business (or, if the
Borrower has more than one place of business, its chief executive office) is
located at the address listed under the Borrowers signature on this Agreement.
8.16 Year 2000 Compliance. The Borrower has conducted a comprehensive review
and assessment of the Borrowers systems and equipment applications and made
inquiry of the Borrowers key suppliers, vendors and customers with respect to
the year 2000 problem (that is, the inability of computers, as well as
embedded
microchips in non-computing devices, to properly perform date-sensitive
functions
with respect to certain dates prior to and after December 31, 1999). Based on
that review and inquiry, the Borrower does not believe the year 2000 problem,
including costs of remediation, will result in a material adverse change in
the
Borrowers business condition (financial or otherwise), operations, properties
or prospects, or ability to repay the credit. The Borrowers computer systems
will be year 2000 compliant before the Bank is obligated to extend any credit
under this Agreement. The Borrower has developed adequate contingency plans
to
ensure uninterrupted and unimpaired business operation in the event of a
failure
of its own or a third partys systems or equipment due to the year 2000
problem,
including those of vendors, customers, and suppliers, as well as a general
failure of or interruption in its communications and delivery infrastructure.
9. COVENANTS
The Borrower agrees, so long as credit is available under this Agreement and
until the Bank is repaid in full:
9.1 Use of Proceeds. To use the proceeds of the credit only for working
capital and the issuance of letters of credit.
9.2 Use of Proceeds - Ineligible Securities. Not to use any portion of the
proceeds of the credit to purchase during the underwriting period, or for
thirty
days thereafter, Ineligible Securities underwritten by Banc of America
Securities
LLC. Banc of America Securities LLC is a wholly-owned subsidiary of Bank of
America Corporation, and is a registered broker-dealer which is permitted to
underwrite and deal in certain Ineligible Securities. Ineligible Securities
means securities which may not be underwritten or dealt in by member banks of
the
Federal Reserve System under Section 16 of the Banking Act of 1933 (12 U.S.C.
27, Seventh), as amended. The restrictions of this paragraph shall also
cover
Ineligible Securities underwritten by any other present or future subsidiary
of
Bank of America Corporation which underwrites Ineligible Securities.
9.3 Financial Information. To provide the following financial information
and
statements in form and content acceptable to the Bank, and such additional
information as reasonably requested by the Bank from time to time:
(a) Within 90 days of the Borrowers fiscal year end, the
Borrowers annual financial statements. These financial statements
must be audited by Deloitte & Touche, LLC, or other Certified Public
Accountant acceptable to the Bank.
(b) Within 45 days of the periods end, the Borrowers monthly
financial statements. These financial statements may be Borrower
prepared.
(c) The Borrowers annual income statement forecast by December
31st of each year.
(d) A borrowing certificate setting forth the amount of Acceptable
Receivables and Acceptable Inventory as of (I) the 10th day of each
month, (ii) the 20th day of each month and (iii) as of the last day
of each month, within 7 days after each period and, upon the Banks
request, copies of the invoices or the record of invoices from the
Borrowers sales journal for such Acceptable Receivables, copies of
the delivery receipts, purchase orders, shipping instructions, bills
of lading and other documentation pertaining to such Acceptable
Receivables, and copies of the cash receipts journal pertaining to
the borrowing certificate. In the borrowing certificate Borrower
shall represent and warrant that all Acceptable Receivables are net
of any credits due as a result of price adjustments or de-escalation
as it relates to indexing programs. The borrowing certificate
shall include the total amount of outstanding standby letters of
credit and the total amount of accounts payable due to the
beneficiaries of the outstanding standby letters of credit. It is
provided, however, that if the outstanding principal balance of
advances under the line of credit plus the outstanding amounts of
any letters of credit, including amounts drawn on letters of credit
and not yet reimbursed, is less than 50% of the total Borrowing
Base, then the borrowing certificate is required only at the end of
the month.
(e) A detailed aging by invoice and a summary aging by account
debtor of the Borrowers receivables within 15 days after the end of
each month.
(f) A listing by vendor of open accounts payable within 15 days
after the end of each month.
(g) Copies of reports of accounts receivable collections delivered
to the Collateral Agent pursuant to the Collateral Accounts Security
Agreement.
(h) An inventory listing within 15 days after the end of each
month from the Borrower and from the owner of any tank farm where
inventory of the Borrower is located, the listing must include a
description of the inventory, its location and cost, and such other
information as the Bank may require.
(i) A listing of the names and addresses of all debtors obligated
upon the Borrowers accounts receivable within 15 days after the end
of each semi-annual period.
(j) Copies of all letters of credit issued in support of the
Borrowers accounts receivable.
(k) Promptly upon the Banks request, such other books, records,
statements, lists of property and accounts, budgets, forecasts or
reports as to the Borrower and as to each guarantor of the
Borrowers obligations to the Bank as the Bank may request and the
providing of which by the Borrower would not violate any law.
9.4 Fixed Charge Coverage Ratio. To maintain a fixed charge coverage ratio
of
at least 1.5:1. Fixed charge coverage ratio is defined as the sum of earnings
before interest, taxes, depreciation and amortization divided by the sum of
cash
interest expense and the current portion of long-term liabilities. This ratio
will be calculated at the end of each fiscal quarter, using the results of
that
quarter and each of the 3 immediately preceding quarters. The current portion
of long term liabilities will be measured as of the last day of the
calculation
period.
9.5 Profitability. To maintain a positive net income before taxes and
extraordinary items, excluding non-cash write-offs of fixed assets, for each
annual accounting period.
9.6 Other Debts. Not to create, incur, assume, or guarantee, directly or
indirectly, any Indebtedness, except:
(a) Indebtedness evidenced by or arising under this Agreement;
(b) Indebtedness set forth on Schedule 2 attached hereto;
(c) Indebtedness secured by Permitted Liens;
(d) Refinancings, renewals, extensions or amendments of
Indebtedness permitted under clauses (b) and (c) of this Section
(and continuance or renewal of any Permitted Liens associated
therewith) so long as: (i) the terms and conditions of such
refinancings, renewals, extensions or amendments do not materially
reduce the prospects of repayments of the obligations under this
Agreement by the Borrower, (ii) the net cash proceeds of such
refinancings, renewals, extensions or amendments do not result in an
increase in the aggregate principal amount of the Indebtedness so
refinanced, renewed, extended or amended, (iii) such refinancings,
renewals, refundings, extensions or amendments do not result in a
shortening of the average weighted maturity of the Indebtedness so
refinanced, renewed, extended or amended, and (iv) to the extent
that Indebtedness that is refinanced was subordinated in right of
payment to the obligations of Borrower to the Bank hereunder, then
the subordination terms and conditions of the refinancing
Indebtedness must be at least as favorable to Bank as those
applicable to the refinanced Indebtedness;
(e) Indebtedness incurred by Borrower in connection with any crude
oil hedging agreements, interest rate swap agreements with Bank,
performance bonds, and letter of credit obligations owing to Bank;
(f) Indebtedness incurred by Borrower arising from agreements
providing for indemnification, adjustment of purchase price or
similar obligations (including guarantees of performance bonds and
letters of credit) incurred in connection with the disposition of
assets ( other than inventory, except as related to contracts with
state highway or local transportation agencies where the purchase
price adjustment is based on a billing error, and as otherwise
permitted hereunder) but other than the guarantee of any
indebtedness of any purchaser of such assets, in a principal amount
not to exceed 25% of the gross proceeds actually received by
Borrower in connection with such disposition.
9.7 Other Liens. Not to create, incur, assume or permit to exist, directly
or
indirectly, any Lien on or with respect to any of its assets or property, of
any
kind, whether now owned or hereafter acquired, or any income or profits
therefrom, except for:
(a) Permitted Liens (including Liens that are replacements of
Permitted Liens to the extent that the original Indebtedness is
refinanced under Section 9.6 (d) and so long as the replacement
Liens only encumber those assets or property that secured the
original Indebtedness);
(b) Liens arising in connection with the defeasance of any
existing Indebtedness the payment of which is not prohibited by this
Agreement; and
(c) Liens on the assets of a Person acquired by Borrower and
incurred prior to and not in contemplation of such acquisition.
9.8 Capital Expenditures. Capital expenditures to acquire fixed assets
shall
not exceed Eight Million Five Hundred Thousand Dollars ($8,500,000) in fiscal
year 1999, Four Million Dollars ($4,000,000) plus any unused part of the 1999
amount in fiscal year 2000 and Three Million Dollars ($3,000,000) in fiscal
year
2001, in each case exclusive of insurance proceeds.
9.9 Dividends. Not to declare or pay any dividends on any of its shares
except
dividends payable in capital stock of the Borrower, and not to purchase,
redeem
or otherwise acquire for value any of its shares, or create any sinking fund
in
relation thereto.
9.10 Loans and Investments. Not to make, acquire, or incur, either directly
or
indirectly, any liabilities (including contingent obligations) for or in
connection with (a) the acquisition of the securities (whether debt or equity)
of, or other interests in, a Person, (b) loans, advances, capital
contributions,
or transfers of property to a Person, except for loans and advances to and
investments in Sunbelt (while Borrower is the sole general partner of Sunbelt)
incurred in the ordinary course of business in connection with franchise fees,
taxes, maintenance, utilities and like obligations of Sunbelt not to exceed
$400,000 in any fiscal year, or (c) the acquisition of all or substantially
all
of the properties or assets of a Person, except for (i) cash, cash equivalents
and accounts receivable arising from Borrowers normal course of business,
(ii)
the acquisition for value of options from employees or former employees of the
Borrower to purchase up to 400,000 shares of common stock of Borrower in the
aggregate (as adjusted for splits, combinations and dividends paid in stock
after
the date of this Agreement) pursuant to arrangements approved by the Board of
Directors of Borrower so long as no Event of Default exists immediately prior
to
or would be caused by any such acquisition, and subject to the existence of at
least $2,000,000 in excess Borrowing Base availability after giving effect to
such acquisition in calculating the availability for a period of at least 30
consecutive days prior to such acquisition as evidenced by the most recent
Borrowing Base Certificates, (iii) any such investment received as
consideration
for the disposition of assets otherwise permitted hereunder; (iv)
consideration
received in the good faith settlement of any bankruptcy claim, (v)
Indebtedness
incurred by or to Borrower in connection with any crude oil hedging
agreements,
interest rate swap agreements with Bank, performance bonds, and letter of
credit
obligations owing to Bank, (vi) prepaid expenses and loans or advances to
employees not exceeding $50,000 in the aggregate and similar items in the
ordinary course of business (vii) endorsements of negotiable instruments and
other similar negotiable documents, and (viii) Indebtedness owing by Borrower
or
any subsidiary in connection with the provision of any managerial or
administrative services rendered in the ordinary course of business.
For the purposes of this Section 9.10, cash equivalents means, as at any
date of determination, (i) marketable securities issued or directly and
unconditionally guaranteed by the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States,
in
each case maturing within 270 days from such date; (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 270 days from such date and, at the time of acquisition thereof, having
the highest rating obtainable from either Standard & Poors Corporation or
Moodys Investors Service, Inc.; (iii) commercial paper maturing no more than
270
days from such date and, at the time of acquisition thereof, having either of
the
two (2) highest ratings obtainable from either Standard & Poors Corporation or
Moodys Investors Service, Inc.; and (iv) certificates of deposit (whether or
not
Eurodollar in nature), bankers acceptances, repurchase agreements, reverse
repurchase agreements, Eurodollar time deposits maturing within one year or
similar investments maturing within 12 months from the date of acquisition
thereof issued by the Bank prior to the occurrence of a Sharing Event (as
defined
in the Intercreditor Agreement) and issued by the Collateral Agent after the
occurrence of a Sharing Event.
9.11 Notices to Bank. To promptly notify the Bank in writing of:
(a) any lawsuit over Two Hundred Fifty Thousand Dollars ($250,000)
against the Borrower (or any guarantor).
(b) any substantial dispute between the Borrower (or any
guarantor) and any government authority.
(c) any failure to comply with this Agreement.
(d) any material adverse change in the Borrowers (or any
guarantors) business condition (financial or otherwise),
operations, properties or prospects, or ability to repay the credit.
(e) any change in the Borrowers name, legal structure, place of
business, or chief executive office if the Borrower has more than
one place of business.
9.12 Books and Records. To maintain adequate books and records.
9.13 Audits. To allow the Bank and its agents to inspect the Borrowers
properties (including taking and removing samples for environmental testing)
and
examine, audit, and make copies of the Borrowers books and records at any
reasonable time. If any of the Borrowers properties, books or records are in
the possession of a third party, the Borrower authorizes that third party to
permit the Bank or its agents to have access to perform inspections or audits
and
to respond to the Banks requests for information concerning such properties,
books and records; provided that nothing in this sentence authorizes any third
party to permit the Bank or its agents to have access to, or respond to the
Banks requests for information concerning, any of the Borrowers properties,
books or records if such access or response would constitute a waiver of any
attorney-client privilege of the Borrower. The Bank has no duty to inspect
the
Borrowers properties or to examine, audit, or copy books and records and the
Bank shall not incur any obligation or liability to the Borrower by reason of
not
making any such inspection or inquiry. In the event that the Bank inspects
the
Borrowers properties or examines, audits, or copies books and records, the
Bank
will be acting solely for the purposes of protecting the Collateral Agents
security that benefits the Bank and preserving the Banks rights under this
Agreement. Neither the Borrower nor any other party is entitled to rely on
any
inspection or other inquiry by the Bank. The Bank owes no duty of care to
protect the Borrower or any other party against, or to inform the Borrower or
any
other party of, any adverse condition that may be observed as affecting the
Borrowers properties or premises, or the Borrowers business. In the event
that
the Bank has a duty or obligation under applicable laws, regulations or legal
requirements to disclose any report or findings made as a result of, or in
connection with, any site visit, observation or testing by the Bank, the Bank
may
make such a disclosure to the Borrower or any other party.
9.14 Compliance with Laws. To comply in all material respects with the laws
(including any fictitious name statute), regulations, and orders of any
government body with authority over the Borrowers business.
9.15 Preservation of Rights. To maintain and preserve all material rights,
privileges, and franchises the Borrower now has.
9.16 Maintenance of Properties. To make any repairs, renewals, or
replacements
to keep the Borrowers properties in good working condition without material
exception.
9.17 Cooperation. To take any action reasonably requested by the Bank to
carry
out the intent of this Agreement.
9.18 Insurance.
(a) Insurance Covering Collateral. To maintain all risk property damage
insurance policies covering the tangible property comprising the collateral.
Each insurance policy must be in an amount acceptable to the Bank. The
insurance
must be issued by an insurance company acceptable to the Bank and must include
a lenders loss payable endorsement in favor of the Collateral Agent.
(b) General Business Insurance. To maintain insurance satisfactory to the
Bank
as to amount, nature and carrier covering property damage (including loss of
use
and occupancy) to any of the Borrowers properties, public liability insurance
including coverage for contractual liability, product liability and workers
compensation, and any other insurance which is usual for the Borrowers
business.
(c) Evidence of Insurance. Upon the request of the Bank, to deliver to the
Bank a copy of each insurance policy, or, if permitted by the Bank, a
certificate
of insurance listing all insurance in force.
9.19 Additional Negative Covenants. Not to, without the Banks written
consent:
(a) engage in any business activities substantially different from
the Borrowers present business.
(b) liquidate or dissolve the Borrowers business.
(c) enter into any consolidation, merger, or other combination, or
become a partner in a partnership other than Sunbelt, a member of a
joint venture, or a member of a limited liability company.
(d) sell, assign, lease, transfer or otherwise dispose of any
Personal Property Collateral for less than fair market value, or
enter into any agreement to do so, other than in the ordinary course
of Borrowers business. For the purpose of this Paragraph, fair
market value shall be deemed to mean (i) with respect to accounts
receivable, the balance outstanding thereunder; and (ii) with
respect to inventory, the Borrowers cost thereof.
(e) sell, assign, lease, transfer or otherwise dispose of all or
any substantial part of the Borrowers business or the Borrowers
assets except inventory sold in the ordinary course of the
Borrowers business.
(f) acquire or purchase a business or its assets, except for
inventory purchased from suppliers in the Borrowers normal course
of business, and fixed assets otherwise permitted under this
Agreement.
(g) voluntarily suspend its business for more than 7 consecutive
days in any 30 day period.
9.20 Bank as Principal Depository. To maintain the Bank as its principal
depository bank, including for the maintenance of business, cash management,
operating and administrative deposit accounts. Also to maintain the accounts
contemplated by the Intercreditor Agreement and the Collateral Accounts
Security
Agreement.
9.21 Sunbelt Status. Not to, without the Banks written consent, change the
nature of the operations of Sunbelt (while Borrower is the sole general
partner
of Sunbelt).
10. HAZARDOUS WASTE INDEMNIFICATION
The Borrower will indemnify and hold harmless the Bank from any loss or
liability
directly or indirectly arising out of the use, generation, manufacture,
production, storage, release, threatened release, discharge, disposal or
presence
of a hazardous substance at any facility of the Borrower. This indemnity will
apply whether the hazardous substance is on, under or about the Borrowers
property or operations or property leased to the Borrower. The indemnity
includes but is not limited to attorneys fees (including the reasonable
estimate
of the allocated cost of in-house counsel and staff). The indemnity extends
to
the Bank, its parent, subsidiaries and all of their directors, officers,
employees, agents, successors, attorneys and assigns. Hazardous substances
means
any substance, material or waste that is or becomes designated or regulated as
toxic, hazardous, pollutant, or contaminant or a similar designation or
regulation under any federal, state or local law (whether under common law,
statute, regulation or otherwise) or judicial or administrative interpretation
of such, including without limitation petroleum or natural gas. This
indemnity
will survive repayment of the Borrowers obligations to the Bank.
11. DEFAULT
If any of the following events (each an event of default) occurs, the Bank may
do one or more of the following: declare the Borrower in default, stop making
any
additional credit available to the Borrower, and require the Borrower to repay
its entire debt immediately and without prior notice. If an event of default
occurs under the paragraph entitled Bankruptcy, below, with respect to the
Borrower, then the entire debt outstanding under this Agreement will
automatically be due immediately.
11.1 Failure to Pay. The Borrower fails to make a payment of principal or
interest when due under this Agreement (provided, that the failure to make a
payment on the due date resulting from the Banks failure to debit Borrowers
account pursuant to Section 6.4, subject to the Borrowers compliance with
Section 6.4(d), shall not be a default hereunder if cured within 5 days) or
fails
to pay any fees or other charges under this Agreement within 5 days of the
date
when due.
11.2 Lien Priority. The Collateral Agent fails to have an enforceable first
lien on or security interest in any property given as security for this
Agreement
(or any guaranty).
11.3 False Information. The Borrower (or any guarantor) has given the Bank
materially false or misleading information or representations.
11.4 Bankruptcy. The Borrower (or any guarantor) files against itself a
bankruptcy petition, a bankruptcy petition is filed against the Borrower (or
any
guarantor) or the Borrower (or any guarantor) makes a general assignment for
the
benefit of creditors. The default will be deemed cured if any bankruptcy
petition filed against the Borrower (or any guarantor) is dismissed within a
period of 60 days after the filing; provided, however, that the Bank will not
be
obligated to extend any additional credit to the Borrower during that period.
11.5 Receivers. A receiver or similar official is appointed for the
Borrowers
(or any guarantors) business, or the business is terminated.
11.6 Judgments. Any judgments or arbitration awards are entered against the
Borrower (or any guarantor), or the Borrower (or any guarantor) enters into
any
settlement agreements with respect to any litigation or arbitration, in an
aggregate amount of One Million Dollars ($1,000,000) or more in excess of any
insurance coverage, which remains unpaid when due or unvacated, undischarged
or
unstayed pending appeal for more than thirty (30) days after the entry
thereof.
11.7 Government Action. Any government authority takes action that
materially
adversely affects the Borrowers (or any guarantors) financial condition or
ability to repay.
11.8 Material Adverse Change. A material adverse change occurs in the
Borrowers (or any guarantors) business condition (financial or otherwise),
operations, properties, or ability to repay the credit.
11.9 Cross-default. Any default occurs under any agreement in connection
with
any credit the Borrower (or any guarantor) or any of the Borrowers related
entities or affiliates has obtained from anyone else or which the Borrower (or
any guarantor) or any of the Borrowers related entities or affiliates has
guaranteed, which default permits the acceleration of the maturity of
indebtedness exceeding $2,000,000.
11.10 Default under Related Documents. Any guaranty, subordination agreement,
security agreement, deed of trust, or other document required by this
Agreement
is violated in any material respect or no longer in effect.
11.11 Other Bank Agreements. The Borrower (or any guarantor) in any material
respect fails to meet the conditions of, or to perform any obligation under,
any
other agreement the Borrower (or any guarantor) has with the Bank or any
affiliate of the Bank.
11.12 Other Breach Under Agreement. The Borrower in any material respect
fails
to perform any obligation under any term of this Agreement not specifically
referred to in this Article. This includes any failure by the Borrower to
comply
with any financial covenants set forth in this Agreement, whether such failure
is evidenced by financial statements delivered to the Bank or is otherwise
known
to the Borrower or the Bank. If, in the Banks reasonable judgment, the
breach
is capable of being remedied, the breach will not be considered an event of
default under this Agreement for a period of thirty (30) days after the date
the
Bank gives written notice of the breach to the Borrower; provided, however,
the
Bank will not be obligated to extend any additional credit to the Borrower
during
that period.
12. ENFORCING THIS AGREEMENT; MISCELLANEOUS
12.1 GAAP. Except as otherwise stated in this Agreement, all financial
information provided to the Bank and all financial covenants will be made
under
GAAP.
12.2 California Law. This Agreement is governed by California law.
12.3 Successors and Assigns. This Agreement is binding on the Borrowers and
the Banks successors and assignees. The Borrower agrees that it may not
assign
this Agreement without the Banks prior consent. The Bank agrees that it will
not knowingly transfer to a competitor of the Borrower this Agreement or any
note
that may be issued pursuant to Section 6.2(d) hereof or any interest in either
of them. The Bank acknowledges that this Agreement has not been, and that
neither this Agreement nor any such note has been or will be, registered under
the Securities Act of 1933, as amended, or any state securities law; and the
Bank
further agrees not to assign this Agreement, any such note, or any interest in
either of them except in a transaction exempt from such registration.
12.4 Arbitration.
(a) This paragraph concerns the resolution of any controversies or
claims between the Borrower and the Bank, including but not limited
to those that arise from:
(i) This Agreement (including any renewals, extensions or
modifications of this Agreement);
(ii) Any document, agreement or procedure related to or
delivered in connection with this Agreement;
(iii) Any violation of this Agreement; or
(iv) Any claims for damages resulting from any business
conducted between the Borrower and the Bank, including claims for
injury to persons, property or business interests (torts).
(b) At the request of the Borrower or the Bank, any such
controversies or claims will be settled by arbitration in accordance
with the United States Arbitration Act. The United States
Arbitration Act will apply even though this Agreement provides that
it is governed by California law.
(c) Arbitration proceedings will be administered by the American
Arbitration Association and will be subject to its commercial rules
of arbitration.
(d) For purposes of the application of the statute of limitations,
the filing of an arbitration pursuant to this paragraph is the
equivalent of the filing of a lawsuit, and any claim or controversy
which may be arbitrated under this paragraph is subject to any
applicable statute of limitations. The arbitrators will have the
authority to decide whether any such claim or controversy is barred
by the statute of limitations and, if so, to dismiss the arbitration
on that basis.
(e) If there is a dispute as to whether an issue is arbitrable,
the arbitrators will have the authority to resolve any such dispute.
(f) The decision that results from an arbitration proceeding may
be submitted to any authorized court of law to be confirmed and
enforced.
(g) This provision does not limit any right of the Borrower or the
Collateral Agent to:
(i) exercise self-help remedies such as setoff;
(ii) foreclose against or sell any real or personal property
collateral; or
(iii) act in a court of law, before, during or after the
arbitration proceeding to obtain:
(A) an interim remedy; and/or
(B) additional or supplementary remedies.
(h) The pursuit of or a successful action for interim, additional
or supplementary remedies, or the filing of a court action, does not
constitute a waiver of the right of the Borrower or the Bank,
including the suing party, to submit the controversy or claim to
arbitration if the other party contests the lawsuit.
12.5 Severability; Waivers. If any part of this Agreement is not
enforceable,
the rest of the Agreement may be enforced. The Bank retains all rights, even
if
it makes a loan after default. If the Bank waives a default, it may enforce a
later default. Any consent or waiver under this Agreement must be in writing.
12.6 Administration Costs. The Borrower shall pay the Bank for all
reasonable
costs incurred by the Bank in connection with administering this Agreement.
12.7 Attorneys Fees. The Borrower shall reimburse the Bank for any
reasonable
costs and attorneys fees incurred by the Bank in connection with the
enforcement
or preservation of any rights or remedies under this Agreement and any other
documents executed in connection with this Agreement, and in connection with
any
amendment, waiver, workout or restructuring under this Agreement. In the
event
of a lawsuit or arbitration proceeding, the prevailing party is entitled to
recover costs and reasonable attorneys fees incurred in connection with the
lawsuit or arbitration proceeding, as determined by the court or arbitrator.
In
the event that any case is commenced against the Borrower (including by
itself)
under the Bankruptcy Code (Title 11, United States Code) or any similar or
successor statute, the Bank is entitled to recover costs and reasonable
attorneys fees incurred by the Bank related to the preservation, protection,
or
enforcement of any rights of the Bank in such a case. As used in this
paragraph,
attorneys fees includes the allocated costs of the Banks in-house counsel.
12.8 One Agreement. This Agreement and any related security or other
agreements
required by this Agreement, collectively:
(a) represent the sum of the understandings and agreements between
the Bank and the Borrower concerning this credit;
(b) replace any prior oral or written agreements between the Bank
and the Borrower concerning this credit; and
(c) are intended by the Bank and the Borrower as the final,
complete and exclusive statement of the terms agreed to by them.
In the event of any conflict between this Agreement and any other agreements
required by this Agreement, this Agreement will prevail to the extent not
inconsistent with the Intercreditor Agreement and the Collateral Accounts
Security Agreement.
12.9 Disposition of Schedules, Reports, Etc. Delivered by Borrower. The Bank
will not be obligated to return any schedules, invoices, statements, budgets,
forecasts, reports or other papers delivered by the Borrower. The Bank will
destroy or otherwise dispose of such materials at such time as the Bank, in
its
discretion, deems appropriate.
12.10 Returned Merchandise. Until the Collateral Agent exercises its rights
to
collect the accounts receivable as provided under any security agreement
required
under this Agreement, the Borrower may continue its present policies for
returned
merchandise and adjustments. Credit adjustments with respect to returned
merchandise shall be made immediately upon receipt of the merchandise by the
Borrower or upon such other disposition of the merchandise by the debtor in
accordance with the Borrowers instructions. If a credit adjustment is made
with
respect to any Acceptable Receivable, the amount of such adjustment shall no
longer be included in the amount of such Acceptable Receivable in computing
the
Borrowing Base.
12.11 Verification of Receivables. The Bank may at any time, in writing,
request
confirmation from any debtor of the current amount and status of the accounts
receivable upon which such debtor is obligated.
12.12 Waiver of Confidentiality. The Borrower authorizes the Bank to discuss
the
Borrowers financial affairs and business operations with any accountants,
auditors, business consultants, or other professional advisors employed by the
Borrower, and authorizes such parties to disclose to the Bank such financial
and
business information or reports (including management letters) concerning the
Borrower as the Bank may request; provided that nothing in this paragraph
authorizes the Bank to engage in any discussion with any counsel to the
Borrower,
or authorizes any counsel to the Borrower to engage in any discussion with the
Bank, if such discussion would constitute a waiver of any attorney-client
privilege of the Borrower.
12.13 Confidentiality. Bank agrees to take normal and reasonable precautions
and
exercise due care to maintain the confidentiality of all non-public
information
provided to it by the Borrower in connection with this Agreement and the Bank
shall not use any such information for any purpose or in any manner other than
pursuant to the terms contemplated by this Agreement, except to the extent
such
information (i) was or becomes generally available to the public other than as
a result of a disclosure by the Bank, or (ii) was or becomes available on a
non-
confidential basis from a source other than the Borrower; provided, however,
that
the Bank may disclose such information (A) at the request of any bank
regulatory
authority or in connection with an examination of the Bank by any such
authority;
(B) pursuant to subpoena or other court process: (C) when required to do so in
accordance with the provisions of any applicable law; (D) at the express
direction of any other agency of any State of the United States of America or
of
any other jurisdiction in which the Bank conducts its business; and (E) to the
Banks independent auditors and other professional advisors.
12.14 Indemnification. The Borrower will indemnify and hold the Bank harmless
from any loss, liability (other than for income taxes or the like), damages,
judgments, and costs of any kind relating to or arising directly or indirectly
out of (a) this Agreement or any document required hereunder, (b) any credit
extended or committed by the Bank to the Borrower hereunder, (c) any claim,
whether well-founded or otherwise, that there has been a failure to comply
with
any law regulating the Borrowers sales or leases to or performance of services
for debtors obligated upon the Borrowers accounts receivable and disclosures
in
connection therewith, and (d) subject to Section 12.7 hereof, any litigation
or
proceeding related to or arising out of this Agreement, any such document, any
such credit, or any such claim; provided that the Borrower shall have no
obligation hereunder for any loss, liability, damage, judgment or costs
arising
from the gross negligence or willful misconduct of, or any violation of law
by,
any indemnified person. This indemnity includes but is not limited to
attorneys
fees (including the allocated cost of in-house counsel). This indemnity
extends
to the Bank, its parent, subsidiaries and all of their directors, officers,
employees, agents, successors, attorneys, and assigns. This indemnity will
survive repayment of the Borrowers obligations to the Bank. All sums due to
the
Bank hereunder shall be obligations of the Borrower, due and payable
immediately
without demand.
12.15 Notices. All notices required under this Agreement shall be personally
delivered or sent by first class mail, postage prepaid, to the addresses on
the
signature page of this Agreement, or to such other addresses as the Bank and
the
Borrower may specify from time to time in writing.
12.16 Headings. Article and paragraph headings are for reference only and
shall
not affect the interpretation or meaning of any provisions of this Agreement.
12.16 Counterparts. This Agreement may be executed in as many counterparts as
necessary or convenient, and by the different parties on separate counterparts
each of which, when so executed, shall be deemed an original but all such
counterparts shall constitute but one and the same agreement.
This Agreement is executed as of the date stated at the top of the first page.
BANK OF AMERICA, N.A.
X_________________________________
By: Con ONeil, Vice President
Address where notices to the Bank are to be sent:
Los Angeles Regional Commercial
Banking Office
#01459
525 South Flower Street
Los Angeles, CA 90071
Huntway Refining Company
X_________________________________
By: Warren Nelson, Chief Financial Officer
Address for Notices:
25129 The Old Road
Newhall, CA 91381
SECOND REFINANCING AND AMENDATORY AGREEMENT
Second Refinancing and Amendatory Agreement dated as of October 29, 1999
among Huntway Refining Company, a Delaware corporation (the Company), Sunbelt
Refining Company, L.P. (Sunbelt), Bankers Trust Company (BT), Boeing Capital
Corporation (Boeing Capital), Lighthouse Investors, L.L.C., a Delaware limited
liability company (Lighthouse), B III Capital Partners, L.P., a Delaware
limited partnership (B III), Contrarian Capital Fund, I, L.P., a Delaware
limited partnership (Contrarian I), Contrarian Capital Fund II, L.P., a
Delaware limited partnership (Contrarian II), Mellon Bank, N.A., as trustee
for First Plaza Group Trust (Mellon), Contrarian Capital Advisors, L.L.C., as
agent for the entities listed under its signature hereon (Contrarian), and The
IBM Retirement Plan Trust (IBM; Lighthouse, B III, Contrarian I, Contrarian
II, Mellon, Contrarian and IBM being sometimes referred to as the Senior
Subordinated Lenders), Madison Dearborn Partners III and First Chicago Equity
Corporation (the Junior Lenders), United States Trust Company of New York, as
Collateral Agent under the Existing Intercreditor Agreement referred to below
(the Collateral Agent), State Street Bank and Trust Company, as trustee under
the Senior Subordinated Indenture referred to below (the Senior Subordinated
Trustee), and Bank of America, N.A. (B of A).
RECITALS
The Company is about to enter into a Business Loan Agreement
(Receivables and Inventory) of even date herewith with B of A (the B of A
Credit Agreement), which will supersede the Amended and Restated Letter of
Credit and Reimbursement Agreement dated as of January 20, 1999 among the
Company, Sunbelt and BT, as amended (the BT LOC Agreement).
Letters of credit available under the B of A Credit Agreement are to be
used for, among other purposes, the backup of letters of credit outstanding
under the BT LOC Agreement.
In connection with the entering into of the B of A Credit Agreement, the
parties hereto desire (1) to amend and restate the Amended and Restated
Intercreditor and Collateral Trust Agreement dated as of December 12, 1996, as
amended (the Existing Intercreditor Agreement), among BT, as issuer of letters
of credit under the BT LOC Agreement, Boeing Capital, the Senior Subordinated
Lenders, the Senior Subordinated Trustee and the Collateral Agent, as
acknowledged by the Company and Sunbelt, (2) to amend and restate the Amended
and Restated Collateral Accounts Security Agreement dated as of December 12,
1996, as amended (the Existing Collateral Accounts Agreement), among the
Company, Sunbelt, the Collateral Agent and BT, as an agent of the Collateral
Agent, (3) to amend and/or consent to deviations from the terms of certain
other documents and agreements and (4) to take certain other actions
(including without limitation entering into certain other agreements).
NOW THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
1. Refinancing-Related Actions. The parties hereto covenant
and agree that the following actions are occurring substantially
simultaneously immediately following the execution and delivery of this
Agreement, regardless of the timing of the execution and delivery of the
documents and instruments related thereto:
(a) The execution and delivery of the B of A Credit Agreement.
(b) The issuance by B of A, pursuant to the B of A Credit
Agreement, of a letter of credit in the amount of $_____________
in favor of BT to back up letters of credit outstanding pursuant
to the BT LOC Agreement and certain obligations of the Company and
Sunbelt to BT, the receipt of which is hereby acknowledged by BT.
(c) The execution and delivery of the Termination Agreement set
forth on Exhibit A hereto (the Termination Agreement), to which
Termination Agreement the Company, Sunbelt and BT, as all the
parties to the BT LOC Agreement, hereby agree, and with respect to
which BT hereby confirms that the date hereof is the Effective
Date (as such term is defined in the Termination Agreement).
(d) The execution and delivery of the Second Amended and
Restated Intercreditor and Collateral Trust Agreement set forth on
Exhibit B hereto (the Second Amended and Restated Intercreditor
Agreement) among B of A, Boeing Capital, the Senior Subordinated
Lenders, the Senior Subordinated Trustee and the Collateral Agent
and acknowledged by the Company and Sunbelt, and the related
consents set forth on Exhibit B hereto, to which Second Amended
and Restated Intercreditor Agreement and consents each of BT, as
issuer of letters of credit under the BT LOC Agreement, Boeing
Capital, the Senior Subordinated Lenders, the Senior Subordinated
Trustee and the Collateral Agent, as all of the parties to the
Existing Intercreditor Agreement immediately prior to the Second
Amended and Restated Intercreditor Agreement and such consents,
the Company and Sunbelt, as acknowledgers of the Existing
Intercreditor Agreement, and B of A, as a new party to the
Existing Intercreditor Agreement (as amended and restated by the
Second Amended and Restated Intercreditor Agreement) by virtue of
the Second Amended and Restated Intercreditor Agreement and such
related consents, hereby agree.
(e) The execution and delivery of the Second Amended and
Restated Collateral Accounts Security Agreement set forth on
Exhibit C hereto (the Second Amended and Restated Collateral
Accounts Agreement), among the Company, Sunbelt, the Collateral
Agent and B of A, as an agent of the Collateral Agent, to which
Second Amended and Restated Collateral Accounts Agreement each of
the Company, Sunbelt, the Collateral Agent and BT, as all of the
parties to the Existing Collateral Accounts Agreement immediately
prior to the Second Amended and Restated Collateral Accounts
Agreement, and B of A, as a new party to the Existing Collateral
Accounts Agreement (as amended and restated by the Second Amended
and Restated Collateral Accounts Agreement) by virtue of the
Second Amended and Restated Collateral Accounts Agreement, hereby
agree.
(f) The forwarding by the Company to Wells Fargo Bank, N.A.
(Wells Fargo) of notice that, effective upon receipt of such
notice by Wells Fargo, the wire transfers made on each business
day of each month from the demand deposit account at Wells Fargo
maintained pursuant to the existing Lockbox Agreement among the
Company, Regulus West LLC and Wells Fargo are to be made to the
Companys Receiving Account described in Schedule I to Exhibit C
hereto rather than to an account at BT.
(g) The transfer by BT, from the Receiving Accounts and
Disbursing Accounts maintained at BT pursuant to the Existing
Collateral Accounts Agreement (the Existing Agent Accounts) to the
Receiving Accounts and/or Disbursing Accounts maintained at B of A
pursuant to the Second Amended and Restated Collateral Accounts
Agreement, of all funds and investments held in the Existing Agent
Accounts other than funds in an amount identified to BT by the
Company as being the aggregate amount of all checks drawn on the
Existing Agent Accounts that currently remain outstanding, the
receipt of which is hereby acknowledged by B of A.
(h) The consents, confirmation and amendments set forth on
Exhibit D hereto to the Loan Agreement dated as of January 20,
1999 between Boeing Capital and the Company, as amended (the
Boeing Capital Loan Agreement), to which consents, confirmation
and amendments Boeing Capital and the Company, as all of the
parties to the Boeing Capital Loan Agreement, hereby agree.
(i) The consents and amendments set forth on Exhibit E hereto to
the Indenture dated as of October 15, 1997, as supplemented (the
Senior Subordinated Indenture), between the Company and the Senior
Subordinated Trustee, to which consents and amendments the Company
and the Senior Subordinated Lenders, as all of the Securityholders
under the Senior Subordinated Indenture, hereby agree.
(j) The amendments set forth on Exhibit F hereto to the
Exchange and Purchase Agreement dated as of October 31, 1997 among
the Company and the Senior Subordinated Lenders, as amended (the
Exchange and Purchase Agreement), to which amendments the Senior
Subordinated Lenders, as Three-Fourths in Interest of the
Purchasers under the Exchange and Purchase Agreement and each of
such Purchasers who owns at least $3.5 million principal amount of
the Notes issued to it thereunder, hereby agree.
(k) The consents and amendments set forth on Exhibit G hereto to
the Amended and Restated Junior Subordinated Debenture Indenture
dated as of December 12, 1996, as supplemented (the Junior
Indenture), between the Company and IBJ Whitehall Bank & Trust
Company (f/k/a IBJ Schroder Bank & Trust Company), as trustee (the
Junior Trustee), to which consents and amendments the Company and
the Junior Lenders, as all of the Holders under the Junior
Indenture, hereby agree.
(l) The payment by the Company to BT of all amounts described in
Section 2 of the Termination Agreement, the receipt of which is
hereby acknowledged by BT.
(m) The reimbursement by the Company to BT of all costs and
expenses incurred by BT and its counsel accrued through the date
hereof in connection with the negotiation and execution of this
Agreement and the transactions contemplated hereby, the receipt of
which is hereby acknowledged by BT.
2. Further Assurances.
(a) The Company shall not hereafter modify the substance of the
notice described in paragraph 1(f) above without the prior written
consent of the Collateral Agent and B of A.
(b) The parties hereto shall (at the Companys expense),
from time to time, execute and deliver to the Company or to such
party or parties as the Company may designate, any and all further
instruments as may be necessary or advisable to give full force
and effect to the provisions of this Agreement and the intent and
purposes hereof. Without limiting the generality of the
foregoing, each of the parties hereto acknowledges and agrees that
(i) the signatures of the Senior Subordinated Lenders to this
Agreement shall constitute a written consent of such parties
pursuant to Section 9.02 of the Senior Subordinated Indenture to
amend, modify and/or supplement the Senior Subordinated Indenture
as specified in Exhibit E hereto; (ii) the signatures of the
Junior Lenders to this Agreement shall constitute a consent, by
Act of such parties pursuant to Section 104 of the Junior
Indenture, to amend, modify and/or supplement the Junior Indenture
as specified in Exhibit G hereto; and (iii) each of the parties
referred to in clauses (i) and (ii) above will (at the Companys
expense) execute and deliver instruments or documents evidencing
such consents reasonably required in connection with the Company
and the Senior Subordinated Trustee and the Junior Trustee,
respectively, entering into supplemental indentures effecting such
amendments, modifications and/or supplements.
3. Representations and Warranties; Directing Parties Request,
Order or Instruction.
(a) Each of the parties hereto hereby represents and warrants to
the other parties hereto that the execution, delivery and
performance by it of this Agreement are within its corporate,
partnership or limited liability company power, as applicable, and
have been duly authorized by all necessary corporate, partnership
or limited liability company action, as applicable, on the part of
such party, and that this Agreement is the legal, valid and
binding obligation of such party, enforceable against it in
accordance with its terms.
(b) BT (i) hereby requests the Collateral Agent to execute and
deliver this Agreement and the Second Amended and Restated
Intercreditor Agreement; and (ii) certifies to the Collateral
Agent that it holds and represents not less than 51% of the LOC
Obligations (as defined in the Existing Intercreditor Agreement)
and, assuming the correctness of the certification of Boeing
Capitals representation of Boeing Capital Notes in paragraph 3(c)
below, that it and Boeing Capital constitute Directing Parties (as
defined in the Existing Intercreditor Agreement) immediately prior
to the Second Amended and Restated Intercreditor Agreement and the
consents referred to in paragraph 1(d) above for the purposes of
such request and are entitled to give such direction under the
Existing Intercreditor Agreement.
(c) Boeing Capital (i) hereby requests the Collateral Agent to
execute and deliver this Agreement and the Second Amended and
Restated Intercreditor Agreement; and (ii) certifies to the
Collateral Agent that it holds and represents not less than 51% of
the outstanding principal amount of the Boeing Capital Notes (as
defined in the Existing Intercreditor Agreement) and, assuming the
correctness of the certification of BTs representation of LOC
Obligations in paragraph 3(b) above, that it and BT constitute
Directing Parties (as defined in the Existing Intercreditor
Agreement) immediately prior to the Second Amended and Restated
Intercreditor Agreement and the consents referred to in paragraph
1(d) above for the purposes of such request and are entitled to
give such direction under the Existing Intercreditor Agreement.
(d) Each of the Senior Subordinated Lenders certifies to the
Collateral Agent that it holds the amount of outstanding
Convertible Notes (as defined in the Existing Intercreditor
Agreement) set forth opposite its name below:
Senior Amount
of
Subordinated Convertible
Holder Notes
Lighthouse
$11,000,000
BIII (through Goldman Sachs & Co.) 8,000,000
Contrarian I
900,000
Contrarian II
900,000
Mellon
425,000
Contrarian
475,000
IBM (through Chase
50,000
Manhattan Bank, $21,750,000
through Kane & Co.)
(e) B of A certifies to the other parties hereto that all of the
funds heretofore held in the Companys Account #14659-01710 at Bank
of America have been released to or at the direction of the
Company, and that such account has been closed.
4. Effect on Documents. Except as specifically amended or
modified herein and in the Exhibits hereto, the Existing Intercreditor
Agreement, Existing Collateral Accounts Agreement, Boeing Capital Loan
Agreement, Senior Subordinated Indenture, Exchange and Purchase Agreement,
Junior Indenture and other Collateral Documents (as defined in the Existing
Intercreditor Agreement) shall remain in full force and effect. Without
limiting the foregoing, each of the Company and Sunbelt acknowledges and
confirms that all obligations of the Company and/or Sunbelt under or in
respect of the B of A Credit Agreement, the Boeing Capital Loan Agreement and
the Senior Subordinated Indenture constitute Obligations or Secured
Obligations as defined in the Collateral Documents and constitute Indebtedness
as defined in one or more of the Guaranties (as Guaranties is defined in the
Existing Intercreditor Agreement); and the Company and Sunbelt hereby ratify
and affirm the Collateral Documents to which they are a party. It is
expressly understood and agreed that upon the execution and delivery of the
Second Amended and Restated Intercreditor Agreement and the Second Amended and
Restated Collateral Accounts Agreement BT shall cease to be a party to the
Existing Intercreditor Agreement and the Existing Collateral Accounts
Agreement.
5. Miscellaneous.
(a) Entire Agreement. This Agreement, including the Exhibits
hereto, constitutes the entire agreement of the parties with
respect to the subject matter hereof and supersedes all other
understandings, oral or written, with respect to the subject
matter hereof.
(b) Counterparts. This Agreement may be executed in any number
of counterparts, each of which when so executed shall be deemed an
original, but all such counterparts shall constitute one and the
same instrument.
(c) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws (as opposed to
conflicts of law provisions) of the State of New York.
(d) Headings. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute
a part of this Agreement for any other purpose.
(e) Successors and Assigns. This Agreement shall be binding
upon each of the parties hereto and its successors and assigns.
IN WITNESS WHEREOF, this Agreement has been duly executed as of
the 29th day of October, 1999.
HUNTWAY REFINING COMPANY
By:
Name:
Title:
SUNBELT REFINING COMPANY, L.P.
By: HUNTWAY REFINING COMPANY,
its sole General Partner
By:
Name:
Title:
BANKERS TRUST COMPANY
By:
Name:
Title:
BOEING CAPITAL CORPORATION
By:
Name:
Title:
LIGHTHOUSE INVESTORS, L.L.C.
By: Lighthouse Capital, LLC, its Manager
By:
Name:
Title:
GOLDMAN SACHS & COMPANY
FFC BIII Capital Partners, L.P.
By:
Name:
Title:
B III CAPITAL PARTNERS, L.P.
By: DDJ Capital III, LLC, its General
Partner
By: DDJ Capital Management, LLC, Manager
By:
Name:
Title:
CONTRARIAN CAPITAL FUND I, L.P.
By: Contrarian Capital Management, LLC,
its general partner
By:
Name:
Title:
CONTRARIAN CAPITAL FUND II, L.P.
By: Contrarian Capital Management, LLC,
its
general partner
By:
Name:
Title:
MELLON BANK, N.A., solely in its
capacity as Trustee for First Plaza Group
Trust (as directed by
Contrarian Capital Advisors, L.L.C.) and
not in its
individual capacity.
By:
Name:
Title:
CONTRARIAN CAPITAL ADVISORS, L.L.C.,
as agent for the entities listed below.
By:
Name:
Title:
Oppenheimer Horizon Partners, L.P.
Oppenheimer Institutional Horizon
Partners, L.P.
Oppenheimer International Horizon Fund II
Ltd.
Oppenheimer & Co., Inc.
The & Trust
KANE & CO.
As nominee for The Chase Manhattan Bank
By:
Name:
Title:
THE CHASE MANHATTAN BANK
As Directed Trustee For The IBM Retirement
Plan Trust
By:
Name:
Title:
MADISON DEARBORN PARTNERS III
By:
Name:
Title:
FIRST CHICAGO EQUITY CORPORATION
By:
Name:
Title:
UNITED STATES TRUST COMPANY OF
NEW YORK, as
Collateral Agent (acting at the direction
of parties that constitute Directing
Parties, as defined in the Existing
Intercreditor Agreement, immediately prior
to the execution and delivery of this
Agreement, which direction such Directing
Parties by their execution and delivery
hereof hereby confirm)
By:
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, as trustee under the Senior
Subordinated Indenture
By:
Name:
Title:
BANK OF AMERICA, N.A.
By:
Name:
Title:
EXHIBIT A
TERMINATION AGREEMENT
This TERMINATION AGREEMENT is dated as of October 29, 1999 and
entered into by and among HUNTWAY REFINING COMPANY, a Delaware corporation
(Huntway), SUNBELT REFINING COMPANY, L.P., a Delaware limited partnership
(Sunbelt), and BANKERS TRUST COMPANY (BTCo).
PRELIMINARY STATEMENTS
A. Huntway, Sunbelt, and BTCo are parties to that certain
Amended and Restated Letter of Credit and Reimbursement Agreement dated as of
January 20, 1999 (the Existing LOC Agreement; capitalized terms used herein
without definition have the meanings assigned thereto in the Existing LOC
Agreement). Pursuant to the Existing LOC Agreement, BTCo has from time to
time issued commercial and standby Letters of Credit for the account of
Huntway. The Letters of Credit that were issued under the Existing LOC
Agreement that have not expired or been terminated as of the date hereof are
referred to herein as the Existing Letters of Credit.
B. The obligations of Huntway and Sunbelt under the Existing
LOC Agreement are secured by substantially all of their real and personal
property pursuant to the Security Documents. The rights of BTCo with respect
to the Security Documents and the Collateral are governed by the
Intercreditor Agreement.
C. Huntway, and Bank of America, N.A. (Bank of America), have
entered into that certain Business Loan Agreement (Receivables and Inventory)
dated as of October 29, 1999 (the New LOC Agreement), pursuant to which Bank
of America has agreed to issue letters of credit from time to time for the
account of Huntway.
D. Simultaneously herewith, Huntway, Sunbelt, BTCo, Bank of
America, Boeing Capital Corporation, the holders of the Convertible Notes
listed on the signature pages thereof, the holders of the Junior Subordinated
Debentures, the trustee under the Senior Subordinated Indenture and
Collateral Agent have entered into that certain Second Refinancing and
Amendatory Agreement dated as of October 29, 1999 pursuant to which, among
other things, (i) the obligations of Huntway under the New LOC Agreement
shall become secured by the Security Documents, subject to the terms of the
Intercreditor Agreement, (ii) Bank of America shall become a party to the
Intercreditor Agreement, and (iii) the obligations of Huntway and Sunbelt
under the Existing LOC Agreement shall cease to be secured by the Security
Documents.
E. On the Effective Date of this Agreement, Bank of America
shall issue to BTCo an irrevocable standby letter of credit in the form of
Exhibit A hereto (the Backstop Letter of Credit), duly completed, under the
New LOC Agreement. The initial face amount of the Backstop Letter of Credit
will be 101% of the sum of (i) the aggregate stated amount of all Existing
Letters of Credit in existence on the date hereof, plus (ii) the maximum
amount of fees that can accrue after the date hereof under the Existing
Letters of Credit. BTCo shall be entitled to draw on the Backstop Letter of
Credit to reimburse any and all draws honored under any Existing Letter of
Credit and to satisfy any other obligation owed to BTCo under this Agreement
and any obligation owed to BTCo under the Existing LOC Agreement that
survives the termination thereof as set forth herein. The Backstop Letter of
Credit shall expire 14 days after the final scheduled expiration date of any
of the Existing Letters of Credit. Multiple drawings under the Backstop
Letter of Credit will be permitted.
F. On the Effective Date, following receipt by BTCo of the
Backstop Letter of Credit, the Existing LOC Agreement shall terminate, except
for certain provisions thereof which shall survive such termination as set
forth herein.
NOW, THEREFORE, in consideration of the foregoing, and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Agreement.
A. Issuance of Backstop Letter of Credit. On
the Effective Date (as defined below) Huntway shall cause
Bank of America to issue to BTCo a letter of credit in the
form of Exhibit A hereto, duly completed. The initial face
amount of the Backstop Letter of Credit shall be equal to
101% of the sum of (i) the aggregate stated amount of all
Existing Letters of Credit in existence on the date hereof,
plus (ii) the maximum amount of fees that can accrue after
the date hereof under the Existing Letters of Credit.
B. Drawings Under Backstop Letter of Credit.
BTCo shall be entitled to draw on the Backstop Letter of
Credit solely to reimburse itself for the amount of any
draws honored by it under any of the Existing Letters of
Credit (including the amount of any unreimbursed draws made
before the Effective Date), and to satisfy any other
obligation owed hereunder or owed to BTCo under the
provisions of the Existing LOC Agreement that survive its
termination pursuant to Section 1D below.
C. Obligations Unconditional. The right of
BTCo to draw on the Backstop Letter of Credit to reimburse
amounts paid by it under the Existing Letters of Credit or
to pay other amounts owed by Huntway or Sunbelt hereunder or
under the provisions of the Existing LOC Agreement that
survive its termination pursuant to Section 1D below shall
be absolute, unconditional and irrevocable under all
circumstances whatsoever, including, without limitation, any
of the circumstances described in Section 2.06 of the
Existing LOC Agreement, which are incorporated herein by
this reference.
D. Termination of Existing LOC Agreement. On
the Effective Date, following receipt of the Backstop Letter
of Credit, the Existing LOC Agreement shall terminate;
provided, however, that Sections 2.02, 2.03(a), 2.03(b),
2.04, 2.08, 7.05, 7.06 and 7.07 shall survive the
termination of the Existing LOC Agreement; provided further
that all monetary obligations contained in such provisions
shall be satisfied to the extent that they are paid by draws
on the Backstop Letter of Credit; and provided still further
that, notwithstanding the survival of Section 7.06, no
commitment fees shall accrue under Section 2.03(c) after
the Effective Date.
E. Amendments of Backstop Letter of Credit.
Following the termination or expiration after the Effective
Date of any Existing Letter of Credit (other than as a
result of a draw thereunder), upon the request of Huntway,
BTCo shall consent to a reduction in the face amount of the
Backstop Letter of Credit to an amount not less than 101% of
the sum of (i) the aggregate stated amount of all Existing
Letters of Credit in existence on the date of the proposed
reduction, plus (ii) the maximum amount of fees that can
accrue after the date of the proposed reduction under the
Existing Letters of Credit plus (iii) the aggregate amount
of all unpaid fees, expenses, reimbursement obligations, and
other amounts owed as of the date of the proposed reduction
hereunder or under the Existing Letter of Credit Agreement.
F. Payments and Computations. The
provisions of Section 2.05 of the Existing LOC Agreement,
including the defined terms used therein, are incorporated
herein by this reference.
G. Existing Letters of Credit. After the
Effective Date, the expiration date of Existing Letters of
Credit shall not be extended and the face amount of the
Existing Letters of Credit shall not be increased.
H. Termination of Security. On the
Effective Date, the obligations of Huntway and Sunbelt under
the Existing LOC Agreement shall cease to be secured by the
Security Documents.
SECTION 2. Conditions to Effectiveness.
This Agreement shall become effective upon satisfaction or waiver
in writing by BTCo of the following conditions precedent (the date of
satisfaction of such conditions being the Effective Date):
1. BTCo shall have received an irrevocable standby letter of
credit substantially in the form of Exhibit A hereto issued by Bank of
America, N.A., duly completed and in the face amount of $__________; and
2. Huntway shall have paid to BTCo an amount equal to the sum
of (i) the aggregate amount, if any, of all drawings that have been made
under Existing Letters of Credit that remain unreimbursed as of the date
hereof plus (ii) the aggregate amount, if any, of all accrued and unpaid
fees and expenses owed under the Existing Letters of Credit and the
Existing LOC Agreement that remain unreimbursed as of the date hereof.
SECTION 3. Huntways And Sunbelts Representations And Warranties
In order to induce BT Co. to enter into this Agreement, Huntway and Sunbelt
(each, a Loan Party) each represents and warrants to BTCo that the following
statements are true, correct and complete:
A. Power and Authority. Each Loan Party has all requisite corporate or
limited partnership power and authority to enter into this Agreement and to
carry out the transactions contemplated by, and perform its obligations under,
this Agreement.
B. Authorization of Agreements. The execution and delivery of this
Agreement have been duly authorized by all necessary corporate or limited
partnership action on the part of each Loan Party. The performance of this
Agreement has been duly authorized by all necessary corporate or limited
partnership action on the part of each Loan Party.
C. No Conflict. The execution and delivery by each Loan Party of this
Agreement , and the performance by each Loan Party of this Agreement do not
and will not (i) violate any provision of any law or any governmental rule or
regulation applicable to such Loan Party, the Certificate of Incorporation or
Bylaws or agreement of limited partnership of such Loan Party or any order,
judgment or decree of any court or other agency of government binding on such
Loan Party, (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any contractual obligation of
such Loan Party, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of such Loan Party (other than Liens
under the Security Documents in favor of Bank of America) or (iv) require any
approval of stockholders or limited partners or any approval or consent of any
Person under any contractual obligation of such Loan Party.
D. Governmental Consents. The execution and delivery by each Loan Party of
this Agreement , and the performance by each Loan Party of this Agreement do
not and will not require any registration with, consent or approval of, or
notice to, or action by, any federal, state or other governmental authority or
regulatory body.
E. Binding Obligation. This Agreement has been duly executed and delivered
by each Loan Party and is the legally valid and binding obligation of each
Loan Party, enforceable against each Loan Party in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors rights generally or by
equitable principles relating to enforceability.
F. Existing Letters of Credit. On the date hereof, the aggregate stated
amount of all Existing Letters of Credit is $___________________.
SECTION 4. Miscellaneous
A. Headings. Section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive
effect.
B. Applicable Law. THIS AGREEMENT 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.
C. Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
AGREES TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE RELATED
DOCUMENTS, OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF ANY
EXISTING LETTER OF CREDIT, THE BACKSTOP LETTER OF CREDIT AND THIS AGREEMENT
AND THE RELATIONSHIP THAT IS 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 and that relate to the subject matter of this transaction, 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
Agreement, 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 THE WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, THE
RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO ANY
EXISTING LETTER OF CREDIT OR THE BACKSTOP LETTER OF CREDIT. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
D. Counterparts. This Agreement 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.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
HUNTWAY REFINING COMPANY
By: ______________________________
Title: ____________________________
SUNBELT REFINING COMPANY, L.P.
by HUNTWAY REFINING COMPANY, its Sole
General Partner
By: ______________________________
Title: ____________________________
BANKERS TRUST COMPANY
By: ______________________________
Title: ____________________________
EXHIBIT A
TO TERMINATION AGREEMENT
FORM OF BACKSTOP LETTER OF CREDIT
[see attached]
Irrevocable Letter of October 29, 1999
Credit Number __________
Beneficiary:
Bankers Trust Company
One Bankers Trust Plaza
New York, NY 10006 MS 2143
Attention: Ms. Joyce Shiu
Commercial Loan Division
Standby Letter of Credit Unit
Gentlemen:
We hereby issue in your favor our irrevocable Letter of Credit for the
account of Huntway Refining Company, in an amount not to exceed in the
aggregate U.S. Dollars ___________________________________
**US$______________________**, as such amount may be reduced from time to time
as provided herein (the Stated Amount). This Letter of Credit is issued to
support those Existing Letters of Credit, listed on Schedule 1, attached
hereto (the Supported Letters of Credit) issued pursuant to that certain
Amended and Restated Letter of Credit and Reimbursement Agreement, dated as of
January 20, 1999 between Huntway Refining Company, Sunbelt Refining Company
and Bankers Trust Company (as amended, the Existing LOC Agreement). In
addition to the Supported Letters of Credit, this Letter of Credit also
supports the payment of Letter of Credit fees and other charges due you
pursuant to the terms of the Existing LOC Agreement and the Termination
Agreement, dated as of October 29, 1999, between Huntway Refining Company,
Sunbelt Refining Company and Bankers Trust Company (the Termination
Agreement).
Of the Stated Amount, an amount not exceeding US$ ________________ may be
drawn with respect to the total of the Supported Letter of Credit amounts
shown on Schedule 1, attached hereto, and an amount not exceeding
US$__________________ may be drawn with respect to Letter of Credit interest,
fees and charges and other amounts due you under the Existing LOC Agreement
and the Termination Agreement.
The Stated Amount is available to you hereunder against presentation to us
of your appropriately completed Drawing Certificate(s), in the form of Exhibit
A and/or Exhibit B, attached hereto.
Drawing Certificate(s) may be presented to us hereunder, at your option, by
hand delivery, by mail, by courier or by facsimile transmission (fax number
_____________). Partial and multiple drawings are permitted.
continued
Letter of Credit No. _______________ Page 2
If a Drawing Certificate is received by us prior to 9:00 A.M. (Los Angeles
time), on a Business Day, and provided that the Drawing Certificate conforms
to the terms and conditions of this Letter of Credit, payment of the amount
drawn shall be made to the Beneficiary in immediately available funds on the
same Business Day. If a Drawing Certificate is received by us after 9:00 A.M.
(Los Angeles time), on a Business Day, and provided that the Drawing
Certificate conforms to the terms and conditions of this Letter of Credit,
payment of the amount drawn shall be made to the Beneficiary, in immediately
available funds, on the next succeeding Business Day.
As used herein the term Business Day shall mean any day except Saturday,
Sunday and any other day on which banking institutions located in the State of
___________ are required or authorized to close.
The Stated Amount shall be reduced as follows:
a) by the amount of each conforming drawing honored by us.
b) upon our receipt of an appropriately completed Reduction Certificate in
the form of Exhibit C, attached hereto.
This Letter of Credit expires at our office located at
____________________________________________
____________________________ with our close of business on
_________________, (the Expiry Date).
This Letter of Credit is transferable in its entirety (but not in part) to
any Transferee who has succeeded you as a Successor Beneficiary. Transfer of
your rights under this Letter of Credit to such a Transferee shall be effected
upon presentation to us of the original of this Letter of Credit and
amendments, if any, accompanied by a Transfer Instruction in the form of
Exhibit D, attached hereto, and executed by the Beneficiary. We will
acknowledge and effect any transfer hereunder by endorsing the original of
this Letter of Credit and forwarding it, along with our standard transfer
notification, to the Transferee. In the event this Letter of Credit is
transferred, the Drawing Certificates required hereunder must be executed by
the Transferee.
Notwithstanding any reference in this Letter of Credit to other documents,
instruments or agreements or references in such other documents, instruments
or agreements to this Letter of Credit this Letter of Credit sets forth in
full the terms of our undertaking and any such documents, instruments or
agreements shall not be deemed incorporated herein by such reference.
We hereby engage with you that Drawing Certificates drawn under and in
compliance with the terms of this Letter of Credit will be duly honored by us
on due presentation to us.
continued
Letter of Credit No. _______________ Page 3
Except as otherwise expressly stated herein, this Letter of Credit is
issued subject to the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication Number 500,
(the UCP). If this Letter of Credit expires during an interruption of our
business as described in Article 17 of the UCP, we hereby agree to effect
payment if this Letter of Credit is drawn against within thirty (30) days
after the resumption of our business.
Communications to us regarding this Letter of Credit must be in writing and
must be addressed to us at
____________________________________________________________________,
specifically referring therein to this Letter of Credit by number.
Very truly yours,
By ___________________
Name: ________________
Title: ________________
Tel: ________________
Exhibit A to Letter of Credit Number ________
Drawing Certificate
TO: [ Name of Issuing Bank ]
[Complete Address of
Issuing Bank ]
Attention:
Re: Your Letter of Credit No. ___________
The undersigned, a duly authorized officer of [ insert name of Beneficiary
], the Beneficiary of the captioned Letter of Credit (the Credit), hereby
certifies to [Name of Issuing Bank ] (the Bank), with respect to the Credit
that:
(1) demand is hereby made on the Bank under the Credit for payment of
US$_____________, which amount does not exceed the Stated Amount under the
Credit.
(2) the above amount is to reimburse the Beneficiary for a drawing
presented in compliance with the terms of Supported Letter of Credit number(s)
[ insert Letter of Credit number(s) from Schedule 1, attached to the Credit ],
which has been or will be honored by the Beneficiary.
Payment of this demand is required to be made in immediately available
funds, by wire transfer, to the Beneficiary in accordance with the following
payment instructions:
[insert payment instructions]
In witness whereof the Beneficiary has executed and delivered this Drawing
Certificate as of the ________________ day of __________, _____.
[ Insert Name of Beneficiary ]
By:_______________________________
Name & Title:______________________
Exhibit B to Letter of Credit Number ________
Drawing Certificate
TO: [ Name of Issuing Bank ]
[ Complete Address of
Issuing Bank ]
Attention:
Re: Your Letter of Credit No. ___________
The undersigned, a duly authorized officer of [ insert name of Beneficiary
], the Beneficiary of the captioned Letter of Credit (the Credit), hereby
certifies to [Name of Issuing Bank ] (the Bank), with respect to the Credit
that:
(1) demand is hereby made on the Bank under the Credit for payment of US$
_____________, which amount does not exceed the Stated Amount under the
Credit.
(2) the above amount is being demanded in payment of letter of credit fees
or other amounts due us under the Existing LOC Agreement and/or the
Termination Agreement.
Payment of this demand is required to be made in immediately available
funds, by wire transfer, to the Beneficiary in accordance with the following
payment instructions:
[insert payment instructions]
In witness whereof the Beneficiary has executed and delivered this Drawing
Certificate as of the ________________ day of __________, _____.
[ Insert Name of Beneficiary ]
By:_______________________________
Name & Title:______________________
Exhibit C to Letter of Credit Number ________
Reduction Certificate
TO: [ Name of Issuing Bank ]
[ Complete Address of
Issuing Bank ]
Attention:
Re: Your Letter of Credit No. ___________
The undersigned, a duly authorized officer of [ insert name of Beneficiary
], the Beneficiary of the captioned Letter of Credit (the Credit), hereby
certifies to [Name of Issuing Bank ] (the Bank), with respect to the Credit
that:
(1) Beneficiarys Supported Letter of Credit number [ insert appropriate
Letter of Credit number(s) from Schedule 1, attached to the Credit ] has
been terminated and/or reduced.
(2) In light of such termination/reduction, the Beneficiary hereby
authorizes the Bank to reduce the Stated Amount of the Credit by the amount of
US$ ____________ to a new Stated Amount of US$ ___________.
In witness whereof the Beneficiary has executed and delivered this
Reduction Certificate as of the ________________ day of __________, _____.
[ Insert Name of Beneficiary ]
By:_______________________________
Name & Title:______________________
Exhibit D to Letter of Credit Number _____________________
Transfer
Instruction
Date: ___________
To: [ Name & Address of Issuing Bank ]
Attention: ___________________
Re: Your Letter of Credit Number ______________
Ladies and Gentlemen:
For value received, the undersigned Beneficiary of the captioned Letter of
Credit hereby irrevocably instructs you to transfer, in its entirety, to:
[ Name of
Transferee ]
[ Address of Transferee ]
all rights of the undersigned Beneficiary under the above referenced Letter
of Credit (the Credit). The Transferee has succeeded the undersigned as
Beneficiary under the Credit.
By this transfer, all rights of the undersigned Beneficiary in the Credit
are transferred, subject to the terms thereof, to the Transferee and the
Transferee shall have the sole rights as Beneficiary thereof, including sole
rights relating to any amendments, whether increases or decreases or
extensions or other amendments. Amendments are to be advised direct to the
Transferee, without necessity of any consent of or notice to the undersigned
Beneficiary.
Continued
Exhibit D to Letter of Credit No. ____________ Page 2
The Credit is returned herewith, and we ask you to endorse the transfer on
the reverse thereof and forward it direct to the Transferee with your
customary notice of Transfer or in exchange for the Credit to issue a
replacement Letter of Credit in favor of the Transferee containing the same
terms and conditions as the Credit and to forward the replacement Letter of
Credit direct to the Transferee with your customary notice of transfer.
[ Insert name of Beneficiary ]
By: ____________________
Name: __________________
Title: ___________________
Signature Authenticated
_____________________
(Bank)
______________________
(Authorized Signature)
IA Schedule 1 to Letter of Credit Number _______________
Bankers Trust Letter
of Credit Number Amount Expiry Date
Total Supported Letters
of Credit _____________________
EXHIBIT B
AMENDMENTS/CONSENTS TO EXISTING INTERCREDITOR AGREEMENT
1. Amendment and Restatement of the Existing Intercreditor Agreement.
The Existing Intercreditor Agreement is amended and restated to read as set
forth in the attached Second Amended and Restated Intercreditor and Collateral
Trust Agreement.
2. Consents under Existing Intercreditor Agreement. The following
transactions are consented to, and shall be permitted notwithstanding any
prohibition or other provision to the contrary contained in the Existing
Intercreditor Agreement:
The actions described in paragraph 1 of the Second Refinancing
and Amendatory Agreement to which this Exhibit B is attached.
SECOND AMENDED AND RESTATED
INTERCREDITOR AND COLLATERAL TRUST AGREEMENT
DATED AS OF OCTOBER 29, 1999
AMONG
BANK OF AMERICA, N.A.
AND
BOEING CAPITAL CORPORATION
AND
THE HOLDERS OF THE CONVERTIBLE NOTES LISTED
ON THE SIGNATURE PAGES HEREOF
AND
STATE STREET BANK AND TRUST COMPANY,
AS TRUSTEE UNDER THE SENIOR SUBORDINATED INDENTURE
AND
UNITED STATES TRUST COMPANY OF NEW YORK,
AS COLLATERAL AGENT
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS 2
1.1 Certain Defined Terms 2
1.2 Other Definitional Provisions; Interpretation 12
SECTION 2 AGREEMENTS AMONG THE SECURED PARTIES 13
2.1 Agreements as to Secured Obligations and Future Payments
and Distributions 13
A. Payments and Distributions from Ordinary Course
Receipts Prior to Sharing Event 13
B. Payment and Distributions From Extraordinary
Proceeds and Guaranty Proceeds; Payments and
Distributions from all sources Subsequent to
Sharing Event 13
1. Distribution Priorities 13
2. Lien Priorities 15
3. Basis for Distributions 15
C. Certainty of Payments 15
1. Distribution Priorities Prevail 15
2. Disclaimer of Inconsistent Benefits Under Law 15
3. Reallocations and Adjustment 16
4. Collateral Agent Entitled to Rely on Court
Order 16
2.2 Amendments to Letter of Credit Agreement or Boeing
Capital Loan Agreement 16
2.3 Replacement Letter of Credit Agreement 16
2.4 Release of Collateral 17
2.5 Notices of Events of Default 18
2.6 Instructions to Senior Subordinated Indenture Trustee 19
2.7 B of A to act as Agent of Collateral Agent pursuant to
the Collateral Accounts Agreement 19
2.8 Actions with respect to the Huntway or Sunbelt Assets 19
2.9 Indemnification with respect to an Asserted 726 Act 19
SECTION 3 CONCERNING THE COLLATERAL AGENT 20
3.1 Appointment of the Collateral Agent 20
3.2 The Distribution Account 20
A. Establishing the Distribution Account 20
B. Control of Distribution Account 21
C. Investment of Funds Deposited in Distribution
Account 21
3.3 Administration and Exercise of Remedies by the Collateral
Agent. 22
3.4 Sharing Event Notice 22
3.5 Actions Requested by Directing Parties 23
3.6 Limited Rights of Non-Directing Parties 23
3.7 Collateral Agent Requests for Directions 24
3.8 Enforcement through the Collateral Agent; Rights of
Secured Parties 24
3.9 Payments to Secured Parties 24
3.10 Collateral Agents Calculations 24
3.11 Further Assurances 25
3.12 Collateral Agent Duties and Responsibilities; Other
Matters 25
3.13 Reliance by the Collateral Agent 27
3.14 Indemnification 27
3.15 Treatment of Payees by the Collateral Agent 28
3.16 Limited Duties with respect to Collateral Documents and
Collateral 28
3.17 Compensation 28
3.18 Collateral Agents Disclaimer 29
3.19 Resignation and Removal of the Collateral Agent;
Successor Collateral Agent 29
3.20 Funds Held By Huntway and its Affiliates 30
3.21 Co-Collateral Agent 30
SECTION 4: MISCELLANEOUS 31
4.1 Notices 31
4.2 Amendments and Waivers 31
4.3 Conflicts among Agreements 32
4.4 Successors and Assigns 32
4.5 No Waivers 32
4.6 Counterparts 32
4.7 Effectiveness of Agreement 32
4.8 Applicable Law 32
4.9 Headings 32
4.10 Benefits of Agreement and Collateral Documents 32
4.11 Severability 32
4.12 Consent to Jurisdiction and Service of Process 33
4.13 Waiver of Jury Trial 33
4.14 Termination 34
4.15 Binding Obligation 34
4.16 Amendment and Restatement 34
SCHEDULES
Schedule A Amended and Restated Collateral Documents
Schedule B Amended and Restated Guaranties
EXHIBITS
Exhibit I Form of Acknowledgment
SECOND AMENDED AND RESTATED
INTERCREDITOR AND COLLATERAL TRUST AGREEMENT
This SECOND AMENDED AND RESTATED INTERCREDITOR AND COLLATERAL
TRUST AGREEMENT (as amended, amended and restated, supplemented or
otherwise modified from time to time in accordance with the terms hereof,
this Agreement) is dated as of October 29, 1999, and entered into among
BANK OF AMERICA, N.A., BOEING CAPITAL CORPORATION, the holders of the
Convertible Notes listed on the signature pages hereof, STATE STREET BANK
AND TRUST COMPANY, as Trustee under the Senior Subordinated Indenture (as
defined below), and UNITED STATES TRUST COMPANY OF NEW YORK as the
Collateral Agent hereunder (the Collateral Agent), and any Replacement LOC
Bank that may become a party hereto in accordance with the terms hereof.
Unless otherwise defined herein, capitalized terms used herein without
definition shall have the meanings set forth in Section 1 hereof.
RECITALS
WHEREAS, the parties hereto (other than B of A) and Bankers, as
issuer of certain letters of credit on behalf of Huntway, are parties to an
Amended and Restated Intercreditor and Collateral Trust Agreement dated as
of December 12, 1996, as amended (the Existing Intercreditor Agreement);
WHEREAS, pursuant to a Second Refinancing and Amendatory
Agreement of even date herewith to which the parties hereto and others are
parties, Huntway and B of A are entering into the B of A Credit Agreement,
Bankers is ceasing to provide any further letters of credit on behalf of
Huntway, B of A is issuing a letter of credit to Bankers to back up
outstanding letters of credit issued by Bankers on behalf of Huntway and
certain obligations of Huntway to Bankers, and Bankers is ceasing to have
the benefit of any liens or security interests on assets of Huntway or
Sunbelt with respect to such outstanding letters of credit and
obligations;
WHEREAS, the parties to the Existing Intercreditor Agreement
desire to reflect the foregoing and such parties and B of A desire to add B
of A as a party to the Existing Intercreditor Agreement (but without any
interest in the Boeing Capital First Priority Collateral);
WHEREAS, in connection therewith, and in view of the numerous
amendments included in and to be made to the Existing Intercreditor
Agreement, the parties hereto desire to amend and restate the Existing
Intercreditor Agreement;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto
hereby amend and restate the Existing Intercreditor Agreement as follows:
DECLARATION OF TRUST
NOW, THEREFORE, in order to continue to secure the payment of
the Secured Obligations as provided herein and in the Collateral Documents
and in consideration of the premises and the mutual agreements set forth
herein, the Collateral Agent does hereby declare that it has held, holds
and will hold as trustee in trust for the benefit of the holders of the
Secured Obligations under this Agreement all of its right, title and
interest in, to and under all the following, whether now existing or
hereafter arising (and the Secured Parties do hereby consent thereto):
(A) each of the existing Collateral Documents, and the rights
thereunder and the ability to exercise such rights and remedies, and
the Collateral granted to the Collateral Agent thereunder;
(B) each other Collateral Document, if any, and the rights
thereunder and the ability to exercise such rights and remedies,
entered into pursuant hereto and the Collateral granted to the
Collateral Agent thereunder; and
(C) the Distribution Account.
TO HAVE AND TO HOLD the foregoing Collateral Documents and the
entire Collateral (the right, title and interest of the Collateral Agent in
the Collateral Documents and the Collateral being hereinafter referred to
as the Trust Estate) unto the Collateral Agent and its successors in trust
under this Agreement and its assigns forever;
IN TRUST, NEVERTHELESS, under and subject to the conditions
herein set forth and for the benefit of the Secured Parties, and for the
enforcement of the payment of all Secured Obligations, and as security for
the performance of and compliance with the covenants and conditions of this
Agreement, the Financing Agreements and each of the Collateral Documents;
AND IT IS HEREBY COVENANTED, DECLARED AND AGREED by and among
the Secured Parties that all the Secured Obligations are to be secured and
that all the Trust Estate is to be held, subject to the further covenants,
conditions, uses and trusts herein set forth.
SECTION 1 DEFINITIONS
1.1 Certain Defined Terms. The following terms used in this
Agreement shall have the following meanings:
Affiliate means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For the purposes of this definition, control
(including, with correlative meanings, the terms controlling, controlled by
and under common control with), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through
the ownership of voting securities or by contract or otherwise.
Amended and Restated Collateral Documents means each of the
agreements, instruments and other documents identified on Schedule A
hereto.
Amended and Restated Guaranties means each of the guaranties
and agreements identified on Schedule B hereto.
Bankers means Bankers Trust Company.
Bankruptcy Code means chapter 11 of the United States
Bankruptcy Code, 11 U.S.C. 101 et. seq., as amended from time to time.
Boeing Capital means Boeing Capital Corporation, in its
capacity as a holder of the Boeing Capital Obligations.
Boeing Capital Loan Agreement means that certain Loan
Agreement dated as of January 20, 1999 by and between Huntway and Boeing
Capital, as such agreement may be amended, amended and restated,
supplemented or modified from time to time.
Boeing Capital Loan Obligations means the principal, interest,
fee and other obligations owed to Boeing Capital arising under the Boeing
Capital Loan Agreement.
Boeing Capital Notes means any note or notes issued by Huntway
pursuant to the Boeing Capital Loan Agreement and any note or notes issued
in replacement or substitution therefor.
Boeing Capital First Priority Collateral means entire right,
title and interest that Huntway or Sunbelt, as the case may be, now has or
may hereafter acquire in the following Collateral:
(i) that certain real property described in Appendix A to
Exhibit A to the Refinancing and Amendatory Agreement under the
heading Legal Description of Benicia Property (the Benicia Property);
(ii) that certain real property described in Appendix B to
Exhibit A to the Refinancing and Amendatory Agreement under the
heading Legal Description of Wilmington Property (the Wilmington
Property);
(iii) that certain real property described in Appendix C to
Exhibit A to the Refinancing and Amendatory Agreement under the
heading Legal Description (the Pinal Property);
(iv) all buildings, structures, improvements, fixtures,
equipment and appurtenances now and hereafter owned, constructed,
located, erected, installed or affixed by or on behalf of Huntway or
Sunbelt, as the case may be, upon or appurtenant to the Benicia
Property, the Wilmington Property or the Pinal Property and all
replacements and substitutions therefor (the Facilities);
(v) all appurtenances, improvements, easements, pipes,
transmission lines or wires and other rights used in connection with
the Benicia Property, the Wilmington Property or the Pinal Property
or as a means of access thereto, whether now or hereafter owned or
constructed or placed upon or in any such Property or any Facilities
(the Appurtenances);
(vi) all machinery and equipment of Huntway or Sunbelt, as
the case may be, if the same is now or hereafter located at or used
in connection with the Facilities, and all replacements and
substitutions therefor (the Equipment); and
(vii) all proceeds of any and all of the foregoing, to the
extent not otherwise included, all payments under insurance or any
indemnity, warranty or guaranty, payable by reason of loss or damage
to or otherwise with respect to any of the foregoing. The term
proceeds includes whatever is receivable or received when components
of the Wilmington Property, Benicia Property, Pinal Property,
Facilities, Appurtenances, Equipment or proceeds are sold,
collected, exchanged or otherwise disposed of, whether such
disposition is voluntary or involuntary, and includes, without
limitation, all rights to payment, including returned premiums, with
respect to any insurance relating thereto.
Boeing Capital First Priority Collateral Proceeds means any
funds or property received from the collection of, sale or other
disposition of, set off against or foreclosure upon any of the Boeing
Capital First Priority Collateral.
Boeing Capital Second Priority Collateral means all Collateral
other than Boeing Capital First Priority Collateral, and includes, without
limitation, all Collateral as defined in the Amended and Restated Current
Assets Pledge and Security Agreement and the Collateral Accounts Security
Agreement included in the Collateral Documents.
Boeing Capital Second Priority Collateral Proceeds means any
funds or property received from the collection of, sale or other
disposition of, set off against or foreclosure upon any of the Boeing
Capital Second Priority Collateral.
B of A means Bank of America, N.A.
B of A Credit Agreement means the Business Loan Agreement
(Receivables and Inventory) dated as of October 29, 1999, between B of A
and Huntway, as such agreement may be amended, amended and restated,
supplemented or modified from time to time.
Business Day means any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of the State of New York or is
a day on which banking institutions located in such state or the state in
which Boeing Capital or the LOC Bank is located are authorized or required
by law or other governmental action to close.
Code means the Uniform Commercial Code as the same may from
time to time be in effect in the State of New York.
Collateral means the collateral of every nature assigned to the
Collateral Agent or granted by Huntway or any of its Affiliates in favor of
the Collateral Agent to secure the Secured Obligations pursuant to the
Collateral Documents.
Collateral Accounts Security Agreement means that certain
Second Amended and Restated Collateral Accounts Security Agreement among
Huntway, Sunbelt, the Collateral Agent and B of A, as agent for the
Collateral Agent, dated as of October 29, 1999, as it may be amended,
amended and restated, supplemented or modified from time to time.
Collateral Agent means United States Trust Company of New York,
in its capacity as a collateral trustee and collateral agent hereunder, any
successor collateral trustee or collateral agent appointed pursuant to
Section 3 hereof and any co-collateral trustee or collateral agent
appointed pursuant to Section 3 hereof.
Collateral Documents means the Amended and Restated Collateral
Documents, the Amended and Restated Guaranties, and any other documents,
instruments, and agreements executed by Huntway or any of its Affiliates in
favor of the Collateral Agent in order to grant to the Collateral Agent a
Lien on any real, personal or mixed property as security for the Secured
Obligations and shall also include any guarantees delivered by any of
Huntways Affiliates in connection therewith, and any and all financing
statements and amendments and continuation statements filed in connection
therewith and any and all filings and recordings thereof and any other
amendments thereto.
Convertible Note Holders means the holders from time to time of
the Convertible Notes.
Convertible Note Obligations means all obligations of Huntway
arising under the Senior Subordinated Indenture.
Convertible Notes means the 9.75% Senior Subordinated Secured
Convertible Notes due 2007 issued by the Company under the Senior
Subordinated Indenture.
Directing Parties means the following:
(x) for purposes of directing the Collateral Agent with
respect to any actions to be taken with respect to the Boeing Capital
First Priority Collateral and the Collateral Documents encumbering
such Collateral, Secured Parties who hold not less than 51% of the
outstanding principal amount of the Boeing Capital Notes; provided,
that upon payment in full of the Boeing Capital Notes, Directing
Parties for the purposes described in this clause (x) means Secured
Parties holding not less than 66_% of the outstanding principal
amount of the Convertible Notes (it being expressly acknowledged and
agreed by the LOC Bank, for the benefit of the other Secured Parties,
Huntway and Sunbelt, that the LOC Bank has no interest in or right,
contingent or otherwise, to direct the Collateral Agent with respect
to any actions to be taken with respect to the Boeing Capital First
Priority Collateral or the Collateral Documents encumbering such
Collateral);
(y) for purposes of directing the Collateral Agent with
respect to the Boeing Capital Second Priority Collateral and all
Collateral Documents encumbering such Collateral and all Guaranties,
Secured Parties who hold not less than 51% of the LOC Obligations;
provided, that upon payment in full of the LOC Obligations (without
replacement of the B of A Credit Agreement by the Replacement Letter
of Credit Agreement) and termination of the commitments to extend
credit thereunder, Directing Parties for the purposes described in
this clause (y) means Secured Parties holding not less than 51% of
the outstanding principal amount of the Boeing Capital Notes;
provided further, that upon payment in full of the Boeing Capital
Notes and the LOC Obligations (without replacement of the B of A
Credit Agreement by the Replacement Letter of Credit Agreement) and
termination of the commitments to extend credit thereunder, Directing
Parties for the purposes described in this clause (y) means Secured
Parties holding not less than 66_% of the outstanding principal
amount of the Convertible Notes; and
(z) for any other purpose, Secured Parties who hold not less
than 51% of the outstanding principal amount of the Boeing Capital
Notes and not less than 51% of the LOC Obligations; provided, that
upon payment in full of the Boeing Capital Notes and the LOC
Obligations (without replacement of the B of A Credit Agreement by
the Replacement Letter of Credit Agreement) and termination of the
commitments to extend credit thereunder, Directing Parties for the
purposes described in this clause (z) means Secured Parties holding
not less than 66_% of the outstanding principal amount of the
Convertible Notes.
Directing Parties Request, Order or Instruction means any
request, order or instruction delivered to a Responsible Officer of the
Collateral Agent signed by Secured Parties constituting not less than
Directing Parties and certifying that the parties giving such direction
represent one or more of (i) not less than 51% of the LOC Obligations,
(ii) not less than 51% of the outstanding principal amount of the Boeing
Capital Notes, or (iii) not less than 66_% of the outstanding principal
amount of the Convertible Notes, and that such parties constitute Directing
Parties for purposes of such request, order or instruction and are entitled
to give such direction hereunder.
Distribution Account has the meaning ascribed to that term in
subsection 3.2.
Divestiture means the sale, lease, assignment or other transfer
for value by Huntway or any of its Affiliates to any Person of Collateral
consisting of (i) any of the stock of any Subsidiary of Huntway to a Person
other than Huntway or one of its Subsidiaries, (ii) all or substantially
all of the assets of any division or line of business of Huntway and its
Subsidiaries, or (iii) any other assets or rights, or related group of
assets or rights, of Huntway or any of its Subsidiaries having a sales
price in excess of $150,000 (it being understood that if the sales price
thereof exceeds $150,000, the entire value and not just the portion thereof
in excess of $150,000 shall be subject to subsection 2.1) other than the
sale of inventory in the ordinary course of business of Huntway or any of
its Subsidiaries; provided that the term Divestiture shall not include
Divestitures of assets that Huntway replaces within 60 days of the sale
thereof; provided that the aggregate amount of such replaced assets shall
not exceed $500,000 in any fiscal year of Huntway.
Divestiture Proceeds means cash proceeds (including any cash
received by way of deferred payment pursuant to, or monetization of, a note
receivable or otherwise, but only as and when so received) received from
any Divestiture net of the direct costs relating to such Divestiture
(including, without limitation, (i) amounts provided as a reserve in
accordance with generally accepted accounting principles against any
liabilities associated with such Divestiture and retained after such
Divestiture including, without limitation, pension and other post-
employment benefit liabilities, liabilities related to environmental laws
and liabilities under any indemnification obligations associated with such
Divestiture; provided, however, that to the extent any such amount set
aside as a reserve is subsequently decreased or discontinued as a reserve,
other than by reason of the payment of the liability represented thereby,
such amounts shall constitute Divestiture Proceeds and (ii) legal,
accounting and investment banking fees and sales commissions), taxes paid
or payable (including, without limitation, income taxes reasonably
estimated to be actually payable as a result of such Divestiture within two
years of the date of the Divestiture), amounts required to be applied to
the repayment of Indebtedness (other than the Secured Obligations) secured
by a Lien on the asset or assets which are the subject of such Divestiture
and any reserve for adjustment in respect of the sale price of such asset
or assets; provided, however, that to the extent any such amount set aside
as a reserve is subsequently decreased or discontinued as a reserve, other
than by reason of the payment of the liability represented thereby, such
amount shall constitute Divestiture Proceeds.
Environmental Claim means any written accusation, allegation,
notice of violation, claim, demand, abatement order or other order or
direction (conditional or otherwise) by any governmental authority or any
Person for any damage, including without limitation, personal injury
(including sickness, disease or death), tangible or intangible property
damage, contribution, indemnity, indirect or consequential damages, damage
to the environment, nuisance, pollution, contamination or other adverse
effects on the environment, or for fines, penalties or restrictions, in
each case relating to, resulting from or in connection with Hazardous
Materials and relating to Huntway, any of its Subsidiaries, any of their
respective Affiliates or any facility.
Event of Default shall mean (a) in the case of the LOC Bank, an
event of default as defined in the Letter of Credit Agreement as a result
of a failure to pay any portion of the principal of or interest accrued on
the LOC Obligations (whether by acceleration or otherwise); or (b) in the
case of the Boeing Capital Loan Obligations, an Event of Default as defined
in the Boeing Capital Loan Agreement as a result of a failure to pay any
portion of the principal of or interest accrued on the Boeing Capital Loan
Obligations (whether by acceleration or otherwise); or (c) in the case of
the Convertible Note Obligations, an Event of Default as defined in the
Senior Subordinated Indenture as a result of a failure to pay any portion
of the principal of or interest accrued on the Convertible Note Obligations
(whether by acceleration or otherwise).
Existing Intercreditor Agreement has the meaning assigned
thereto in the Recitals hereto.
Extraordinary Proceeds means (i) Divestiture Proceeds, (ii) any
funds or property received from the sale or other disposition of, set off
against or foreclosure upon any of the Collateral, and (iii) any cash,
securities or other property received by any Secured Party or any Person
representing a Secured Party or represented by a Secured Party in or under
any bankruptcy, reorganization, liquidation or adjustment of indebtedness
of Huntway or its Subsidiaries and any portion of the Collateral which is
distributed in kind, in each case net of the expenses of retaking, holding
and preparing for sale such Collateral, including, without limitation,
reasonable attorneys fees and legal expenses.
Financing Agreements means the Letter of Credit Agreement, any
notes issued pursuant thereto, the Boeing Capital Loan Agreement, the
Boeing Capital Notes, the Senior Subordinated Indenture, the Convertible
Notes, each Collateral Document and any other instruments, documents or
agreements entered into in connection with any Secured Obligation or
Financing Agreement.
Guaranties means the Amended and Restated Guaranties.
Guaranty Proceeds means any and all proceeds actually received
by the Collateral Agent in connection with the enforcement of any Guaranty.
Hazardous Materials means any dangerous, toxic or hazardous
pollutants, contaminants, chemicals, wastes, materials or substances as
defined in or governed by any federal, state or local law, statute, code,
ordinance, regulation, rule or other requirement relating to such
substances or otherwise relating to the environment or human health or
safety, including without limitation any wastes, materials, substances,
pollutants or contaminants that might cause any injury to human health or
safety or to the environment or might subject Huntway or Sunbelt to any
imposition of costs or liability under any federal, state, local or foreign
law, rule, regulation, code, ordinance, order, decree, directive, permit,
license, judgment or other provision having the force of law, or common
law, relating to pollution, contamination or protection of the environment
or to public health and safety.
Huntway means Huntway Refining Company, a Delaware corporation
that is the successor by merger to Huntway Partners, L.P., a Delaware
limited partnership.
Huntway Holdings means Huntway Holdings, L.P., a Delaware
limited partnership that was formerly a general partner of Huntway
Partners, L.P.
Huntway Managing General Partner means Huntway Managing
Partner, L.P., a Delaware limited partnership that was formerly a general
partner of Huntway Partners, L.P.
Junior Subordinated Debenture Indenture means the Amended and
Restated Junior Subordinated Debenture Indenture dated as of December 12,
1996 between Huntway and the trustee named therein, pursuant to which the
Junior Subordinated Debentures are issued, as such indenture may be
amended, supplemented or modified from time to time.
Letter of Credit Agreement means (i) before Huntway enters into
a Replacement Letter of Credit Agreement in accordance with the provisions
of Section 2.3 hereof, the B of A Credit Agreement and (ii) thereafter, the
Replacement Letter of Credit Agreement.
Lien means any lien, mortgage, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other
title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest).
LOC Bank means (i) before Huntway enters into a Replacement
Letter of Credit Agreement in accordance with the provisions of Section 2.3
hereof, B of A, and (ii) thereafter, the Replacement LOC Bank.
LOC Obligations means the principal, interest, reimbursement,
fee and other obligations owed to the LOC Bank arising under the Letter of
Credit Agreement.
Mortgage means any deed of trust, mortgage or similar security
document, and all amendments thereto, which in each case encumbers a fee or
leasehold interest of Huntway or any of its Subsidiaries in real property
executed, acknowledged and delivered from time to time to the Collateral
Agent to secure payment and performance of the Secured Obligations as any
such Mortgage may be amended, amended and restated, supplemented or
otherwise modified from time to time.
Non-Directing Party means, with respect to any particular
instruction given by Directing Parties to the Collateral Agent, each
Secured Party that has not given or agreed with such instruction given to
the Collateral Agent.
Ordinary Course Receipts means monies received by Huntway or
any of its Subsidiaries in connection with the conduct of the ordinary
course of their businesses, including from the sale of inventory but
excluding Extraordinary Proceeds.
Permitted Investments shall mean (a) marketable securities
issued or directly and fully guaranteed or insured by the United State of
America or any agency or instrumentality thereof having maturities of not
more than six months from the date of acquisition, (b) time deposits and
certificates of deposit of any domestic commercial bank of recognized
standing having capital and surplus in excess of U.S. $100,000,000 and a
Keefe Bank Watch Rating of C or better, with maturities of not more than
six months from the date of acquisition, (c) commercial paper rated at
least A-1 or the equivalent thereof by Standard & Poors Corporation or at
least P-1 on the equivalent thereof by Moodys Investors Service, Inc. and
in each case maturing within six months after the date of acquisition,
(d) repurchase obligations with a term of not more than thirty days for
underlying securities of the types described in clauses (a), (b) and (c)
entered into with any bank meeting the qualifications specified in clause
(b) above or with a securities dealer acceptable to the Collateral Agent;
provided that possession or control of the underlying securities has been
delivered to the Collateral Agent and (e) deposit or other accounts,
including money market or similar accounts, with the Collateral Agent;
provided that in order to provide the Collateral Agent, for the benefit of
the Secured Parties, with a perfected security interest therein, each
Permitted Investment described in clauses (a), (b), or (d) above shall be
either:
(i) evidenced by negotiable certificates or instruments, or
if non-negotiable then issued in the name of the Collateral Agent,
its nominee name or its custodian or its custodians nominee name,
which (together with any appropriate instruments of transfer) are
delivered to, and held by, the Collateral Agent (or its nominee, its
custodian or its custodians nominee) or any agent thereof (which
shall not be Huntway or any of its Affiliates) in the State of New
York; or
(ii) in book-entry form and issued by the United States and
subject to pledge under applicable state law and Treasury regulations
and as to which appropriate measures shall have been taken for
perfection of such security interests.
Person shall mean an individual, a partnership, a corporation,
a business trust, a joint stock company, a trust, an unincorporated
association, a joint venture, a governmental entity or another entity of
whatever nature.
Refinancing and Amendatory Agreement means the Refinancing and
Amendatory Agreement dated as of January 20, 1999 among Huntway, Sunbelt,
the Secured Parties (other than B of A) and others.
Replacement Letter of Credit Agreement has the meaning assigned
thereto in Section 2.3.
Replacement LOC Bank means the financial institution issuing
letters of credit under any Replacement Letter of Credit Agreement.
Responsible Officer means the officer or assistant officer of
the Collateral Agent identified to receive notices pursuant to Section 4.1
hereof and any other officer or assistant officer of the Collateral Agent
assigned to the Corporate Trustee Administration Division, or any successor
to such department or, in the case of a successor trustee, an officer
assigned to the department, division or group performing the corporate
trust work of such successor and also means with respect to any particular
corporate trust matter any other officer of the Collateral Agent to whom
such matter is referred because of his knowledge of and familiarity with
the particular subject.
Section 726 has the meaning assigned to that term in Section
2.8.
Section 726 Action has the meaning assigned to that term in
Section 2.8.
Secured Obligations means all LOC Obligations, all Boeing
Capital Loan Obligations, all Convertible Note Obligations and all other
amounts payable by Huntway and the Secured Parties (other than the
Collateral Agent) under subsections 3.14 and 3.17 of this Agreement and
under the Financing Agreements and the Collateral Documents (including,
without limitation, the fees, expenses, liabilities and indemnification of
the Collateral Agent as provided herein and therein) and all amounts
payable to the Collateral Agent hereunder.
Secured Parties means the Collateral Agent, the Senior
Subordinated Indenture Trustee, Boeing Capital, the Convertible Note
Holders and the LOC Bank; provided that Secured Parties does not include
the LOC Bank insofar as this Agreement relates to the Boeing Capital First
Priority Collateral.
Senior Subordinated Indenture means the Indenture dated as of
October 15, 1997 between the Company and State Street Bank and Trust
Company, as trustee, pursuant to which the Convertible Notes are issued, as
such agreement may be amended, amended and restated, supplemented or
modified from time to time.
Senior Subordinated Indenture Trustee means State Street Bank
and Trust Company, as trustee under the Senior Subordinated Indenture,
together with its successors and assigns.
Sharing Event means the occurrence of one or more of the
following events (a) Huntway shall have an order for relief entered with
respect to it or commenced a voluntary case under the Bankruptcy Code or
any applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or shall consent to the entry of an order for relief in a
involuntary case, or to the conversion to a voluntary case, under any such
law or a petition for relief against Huntway in an involuntary case or
proceeding under the Bankruptcy Code or any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect is filed and
either (i) Huntway fails to timely controvert such petition or (ii) such
petition is not stayed or dismissed within 90 days or (b) the acceleration
of the payment of the entire outstanding principal amount of the LOC
Obligations (or the cash collateralization thereof), the Boeing Capital
Loan Obligations or the Convertible Note Obligations, as the case may be,
under and as provided in the Letter of Credit Agreement, the Boeing Capital
Loan Agreement or the Senior Subordinated Indenture, as the case may be.
Sharing Event Notice has the meaning assigned to that term in
Section 3.4.
Subsidiary means any corporation, association or other business
entity of which more than 50% of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by any Person or one or more
of the other Subsidiaries of that Person or a combination thereof.
Sunbelt means Sunbelt Refining Company, L.P., a Delaware
limited partnership.
Trust Estate has the meaning given to such term in the
Declaration of Trust preceding Section 1 hereof.
1.2 Other Definitional Provisions; Interpretation. References to
Sections, subsections, Exhibits and Schedules shall be to Sections,
subsection, Exhibits and Schedules, respectively, of this Agreement unless
otherwise specifically provided. Any of the terms defined in
subsection 1.1 may, unless the context otherwise requires, be used in the
singular or the plural depending on the reference. In this Agreement,
hereof, herein, hereto, hereunder and the like mean and refer to this
Agreement as a whole and not merely to the specific section, paragraph or
clause in which the respective word appears; words importing any gender
include the other gender; references to writing include printing, typing,
lithography and other means of reproducing words in a tangible visible
form; the words including, includes, and include shall be deemed to be
followed by the words without limitation; references to Persons include
their respective permitted successors and assigns or, in the case of
governmental Persons, Persons succeeding to the relevant functions of such
Persons; and all references to statutes and related regulations shall
include any amendments of same and any successor statutes and regulations.
SECTION 2 AGREEMENTS AMONG THE SECURED PARTIES
2.1 Agreements as to Secured Obligations and Future Payments and
Distributions.
A. Payments and Distributions Prior to Sharing Event. So
long as no Sharing Event has occurred and is continuing Huntway shall be
entitled to repay the Secured Obligations or to pay its other obligations
with Ordinary Course Receipts, Extraordinary Proceeds and Guaranty
Proceeds.
B. Payments and Distributions Subsequent to Sharing Event.
1. Distribution Priorities. In the event a Sharing Event
occurs and for so long as such Sharing Event continues, and subject to
Section 2.1(B)(3) hereof: (i) any and all Ordinary Course Receipts received
by any Secured Party (and, if such Sharing Event is a Sharing Event
described in clause (a) of the definition thereof, any amounts owing by
Huntway upon a drawing of any amount available under any letter of credit
issued pursuant to the Letter of Credit Agreement, when received by the LOC
Bank) shall be delivered to the Collateral Agent for deposit into the
Distribution Account and applied by the Collateral Agent in accordance with
the order of priority set forth in FIRST through THIRD below; and (ii) any
and all Extraordinary Proceeds and Guaranty Proceeds actually received by
the Collateral Agent, whether in connection with the enforcement of the
Collateral Documents, a Divestiture, a distribution in bankruptcy or
otherwise, under this Agreement shall be distributed as promptly as
practicable by the Collateral Agent as follows (irrespective of when such
Extraordinary Proceeds, Guaranty Proceeds or other amounts come into the
possession of the Collateral Agent):
FIRST: To the payment of the reasonable costs and expenses of
such sale, collection or other realization, including reasonable
compensation to the Collateral Agent and its agents and counsel, and
to the payment of any and all reasonable expenses and costs and all
other liabilities and indemnification made, incurred or suffered by
the Collateral Agent and its agents and counsel, including (but not
limited to) amounts required to be provided to the Collateral Agent
pursuant to subsection 3.14, in connection therewith or in connection
with this Agreement or the Collateral Documents (which costs and
expenses, expenses and costs and other liabilities and
indemnification shall be charged against the sub-accounts of the
Distribution Account as provided in Section 3.2C);
SECOND: After payment in full of the outstanding obligations
described in subsection 2.1(B)(1) FIRST, then:
(x) all Boeing Capital First Priority Collateral
Proceeds shall be applied as follows: first, to the ratable
payment of all Boeing Capital Loan Obligations, provided that
there shall have occurred a Sharing Event described in
clause (a) of the definition thereof or described in clause (b)
of such definition relating to the Boeing Capital Loan
Obligations; and second, after giving effect to the provisions
of clause first, to the ratable payment of the Convertible Note
Obligations, provided that there shall have occurred a Sharing
Event described in clause (a) of the definition thereof or
described in clause (b) of such definition relating to the
Convertible Note Obligations (it being expressly acknowledged
and agreed by the LOC Bank, for the benefit of the other
Secured Parties, Huntway and Sunbelt, that none of the Boeing
Capital First Priority Collateral is for the benefit of the LOC
Obligations); and
(y) all Boeing Capital Second Priority Collateral
Proceeds and Guaranty Proceeds shall be applied as follows:
first, to the ratable payment or cash collateralization, as
applicable, of all LOC Obligations, provided that there shall
have occurred a Sharing Event described in clause (a) of the
definition thereof or described in clause (b) of such
definition relating to the LOC Obligations; second, after
giving effect to the provisions of clause first, to the ratable
payment of all Boeing Capital Loan Obligations, provided that
there shall have occurred a Sharing Event described in
clause (a) of the definition thereof or described in clause (b)
of such definition relating to the Boeing Capital Loan
Obligations; and third, after giving effect to the provisions
of clauses first and second, to the ratable payment of the
Convertible Note Obligations, provided that there shall have
occurred a Sharing Event described in clause (a) of the
definition thereof or described in clause (b) of such
definition relating to the Convertible Note Obligations; and
THIRD: After giving effect to the provisions of FIRST and
SECOND above, to the payment or upon the order of Huntway, or to
whomsoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct, of any surplus then remaining
from such Ordinary Course Receipts, Extraordinary Proceeds, Guaranty
Proceeds and other amounts.
The foregoing distributions set forth in FIRST through THIRD to
the contrary notwithstanding, should Huntway or Sunbelt assert that
any Secured Party other than the Collateral Agent or the LOC Bank has
committed a 726 Action (as defined in Section 2.8 hereof): (i) any
distributions that would otherwise be made hereunder to such Secured
Party shall be suspended unless such Secured Party has debt
offerings rated BBB+ or better by Moodys Investor Service, Inc. or an
equivalent rating by another recognized rating agency (any such
Secured Party being Investment Grade) and shall be held by the
Collateral Agent in a separate investment account and invested in
Cash Equivalents as directed by such Secured Party until there is a
Final Judgment (as defined in Section 2.9 hereof); (ii) the Secured
Party alleged to have committed the 726 Action (unless it is
Investment Grade) shall receive no distributions until either the
affected Secured Party or Parties have received payment in full of
the Secured Obligations owed to them or there has been a Final
Judgment holding that such Secured Party did not commit a 726 Action
or such 726 Action did not damage the other Secured Parties; and
(iii) should there be a Final Judgment holding that any such Secured
Party committed a 726 Action that adversely affected the
distributions hereunder to any other Secured Party or Parties,
payments otherwise payable to the Secured Party committing the 726
Action shall be paid within fifteen (15) days of the entry of such
Final Judgment to the adversely affected Secured Party or Parties
until such Secured Party or Parties have been paid in full for the
damages suffered by them as a result of such 726 Action.
2. Lien Priorities. Notwithstanding the date, manner
or order of perfection of the Liens granted to the Collateral Agent for the
benefit of the Secured Parties or any provisions of the Code, the
Bankruptcy Code or other applicable law or decision or any other Financing
Agreement or whether any Secured Party holds possession of all or any part
of the Collateral, as between the Secured Parties, the relative priority of
distributions to, and the Liens for the Benefit of, the Secured Parties in
the Collateral shall be as set forth in subsection 2.1B(1) above.
3. Basis for Distributions. All distributions
required to be applied in accordance with this subsection 2.1B shall be
based on the amount of the applicable type of Secured Obligations
outstanding as of the date on which payments required to be applied in
accordance with this subsection 2.1B are distributed by the Collateral
Agent. In determining the amount of the Secured Obligations outstanding as
of any date the Collateral Agent shall be conclusively entitled to rely
upon written certifications of the Secured Parties, Directing Parties
Orders and Instructions and court orders and to make calculations as
provided in Section 3.10.
C. Certainty of Payments.
1. Distribution Priorities Prevail. Each of the
Secured Parties agrees that the provisions of this Agreement with respect
to allocations and distributions of Extraordinary Proceeds, Guaranty
Proceeds and Ordinary Course Receipts to the Secured Parties, including,
without limitation, subsection 2.1B, shall prevail notwithstanding any
event or circumstance, including, without limitation, in the event that,
through the operation of any bankruptcy, reorganization, insolvency or
other laws or otherwise, the Collateral Agents security interest in the
Collateral is avoided in whole or in part or is enforced with respect to
some, but not all, of the Secured Obligations then outstanding.
2. Disclaimer of Inconsistent Benefits Under Law. In
furtherance of the foregoing, each of the Secured Parties agrees that none
of them shall be entitled to benefit from any avoidance action affecting or
otherwise relating to any distribution or allocation made in accordance
with the provisions of subsection 2.1B or any other provisions of this
Agreement, whether by preference or otherwise, it being understood and
agreed that the benefit of any such avoidance action otherwise allocable to
them shall instead be allocated and turned over to the Person required to
return monies or property to Huntway or any of its Affiliates in connection
with such avoidance action.
3. Reallocations and Adjustment. Notwithstanding
anything in this Agreement to the contrary, if adjustments under this
subsection 2.1C are required, the Collateral Agent shall reallocate and
adjust any distributions that would otherwise be required to be made in
accordance with subsections 2.1B(1) SECOND or THIRD, as the case may be, in
order to give effect to this subsection 2.1C.
4. Collateral Agent Entitled to Rely on Court Order.
Notwith-standing any other provision of this Agreement, the Collateral
Agent shall be entitled to act in accordance with any order issued by a
court of competent jurisdiction specifically directing the Collateral Agent
to make distributions to the other Secured Parties and it shall be the
responsibility of the other Secured Parties to seek the vacation or
modification of such order if it is inconsistent with the agreements of
such other Secured Parties set forth in this Agreement.
2.2 Amendments to Letter of Credit Agreement or Boeing Capital Loan
Agreement.
(1) The LOC Bank hereby agrees that it shall enter into no
amendment, modification or waiver of any provision of the Letter of Credit
Agreement having the effect of (i) decreasing the maximum amount of letters
of credit available thereunder (subject to the terms and conditions
thereof) below $20,000,000, (ii) decreasing the maximum aggregate amount of
credit available thereunder (subject to the terms and conditions thereof)
to below $20,000,000, (iii) increasing the aggregate amount of credit
available thereunder to above $30,000,000, or (iv) shortening the maturity
of the LOC Banks commitment to make loans or issue letters of credit
thereunder, without the concurrence of the Directing Parties; provided,
however, that the LOC Bank may enter into any amendment, modification or
waiver affecting the terms and provisions of Borrowing Base as defined in
the Letter of Credit Agreement; and provided, further, that the LOC Bank
may terminate the B of A Credit Agreement if, concurrently with such
termination, Huntway enters into a Replacement Letter of Credit Agreement.
(2) Boeing Capital agrees that it shall enter into no
amendment, modification or waiver of any provision of the Boeing Capital
Loan Agreement or the Boeing Capital Notes having the effect of (i)
increasing the aggregate principal amount of notes permitted to be
outstanding thereunder to above $20,000,000 or (ii) shortening the maturity
of the Boeing Capital Notes, without the concurrence of the Directing
Parties.
2.3 Replacement Letter of Credit Agreement.
If and only if
(i0 the LOC Bank certifies to the Collateral Agent that (w) all
commitments to extend credit, including all commitments to issue, renew or
extend letters of credit, under the B of A Credit Agreement have been
canceled or expired, (x) all letters of credit issued under the B of A
Credit Agreement have been canceled or terminated or have been backed up
by letters of credit issued under a Replacement Letter of Credit Agreement,
(y) all principal, interest and amounts owed under or in respect of all
letters of credit issued under the B of A Credit Agreement have been paid
in full and (z) the LOC Bank has ceased to be a Secured Party and has
ceased to have any interest in the Boeing Capital Second Priority
Collateral;
(ii0 Huntway enters into a Replacement Letter of Credit Agreement;
and
(iii0 the Replacement LOC Bank executes and delivers to the
Collateral Agent an Acknowledgment substantially in the form of Schedule I
hereto, pursuant to which such Replacement LOC Bank shall agree to be bound
by the provisions of this Agreement;
then such Replacement Letter of Credit Agreement shall be the Letter of
Credit Agreement hereunder, such Replacement LOC Bank shall be the LOC Bank
hereunder, the principal, interest, reimbursement, fee and other
obligations owed to the Replacement LOC Bank arising under such Replacement
Letter of Credit Agreement shall be the LOC Obligations hereunder, and the
Replacement LOC Obligations under such Replacement Letter of Credit
Agreement shall be secured by the Collateral. As used herein, a
Replacement Letter of Credit Agreement means any agreement to issue letters
of credit for the account of Huntway (which may, but need not, also provide
for revolving credit borrowings for working capital purposes) containing
the following terms and conditions: (i) the letters of credit issued
thereunder shall be used solely to support (x) purchases of crude oil and
inventory, (y) obligations under hedging agreements relating to the price
of crude oil and (z) on a backup basis, letters of credit outstanding under
the B of A Credit Agreement during the transition period following the
replacement thereof by such agreement; (ii) the maximum aggregate amount of
letters of credit available thereunder (subject to the terms and conditions
thereof, including the terms and conditions relating to the borrowing base)
shall not be less than $20,000,000; (iii) the aggregate amount of credit
thereunder shall not exceed $30,000,000; (iv) the term of such agreement
shall not be less than 12 months; and (v) the obligations of Huntway
thereunder shall not be secured by any assets of Huntway or its affiliates
other than the Collateral; as such agreement may be amended, amended and
restated, supplemented or modified from time to time.
2.4 Release of Collateral. Notwithstanding anything herein or any
Collateral Document to the contrary, the Directing Parties shall be
entitled to instruct the Collateral Agent in writing to release all or any
portion of the Collateral from the security interests granted to the
Collateral Agent for the benefit of the Secured Parties only as follows:
(ai The security interests granted for the benefit of the
Secured Parties in particular Collateral may be released at any time in
connection with the sale or other disposition of such Collateral; provided
that, in the event Responsible Officers of the Collateral Agent shall have
received written notice of a Divestiture, the Collateral Agent shall not
take action to release such Collateral unless arrangements satisfactory to
the Collateral Agent have been made for the delivery to the Collateral
Agent of the Divestiture Proceeds required to be delivered to the
Collateral Agent at the closing of such disposition; and
(bi The security interests granted for the benefit of the
Secured Parties in particular Collateral may be released at any time upon
receipt by the Collateral Agent of both (x) a Directing Parties Request,
Order or Instruction issued by Secured Parties who are at such time
Directing Parties with respect to actions to be taken with respect to such
Collateral and (y) a certificate from those other Secured Parties. if any,
who, under the definition of Directing Parties, could become Directing
Parties with respect to actions to be taken with respect to such Collateral
pursuant to the proviso(s) in such definition, which certificate directs
the Collateral Agent to release such Collateral and certifies that such
Secured Parties could become Directing Parties under the circumstances
described in this clause (y) and are entitled to give such certificate
hereunder; provided that (i) no more than $500,000 may be released pursuant
to this clause (b) during any fiscal year of Huntway and upon receipt by a
Responsible Officer of the Collateral Agent of a written notice that a
Sharing Event has occurred and is continuing, the Collateral Agent shall
not be required to release any Collateral under this clause (b). The
Collateral Agent shall have no duty to determine the value of any such
Collateral or the pendency of a Sharing Event and shall be entitled to rely
upon statements of value and absence of Sharing Event set forth in the
Directing Parties Request, Order or Instruction. Any release of Collateral
effected in accordance with such Directing Parties Request, Order or
Instruction shall be deemed not to impair the security interest in any
remaining portion of the Collateral.
The Collateral Agent may also release the Collateral from the security
interests granted to the Collateral Agent for the benefit of the Secured
Parties upon receipt of written certification from all of the Secured
Parties that the Secured Obligations have been indefeasibly paid in full as
provided in the Collateral Documents. All releases of Collateral from the
security interests granted to the Collateral Agent for the benefit of the
Secured Parties described in this subsection 2.4 shall be made with respect
to all Secured Obligations secured by such Collateral.
2.5 Notices of Events of Default.
(a) The LOC Bank agrees to promptly notify each of the other
Secured Parties of the occurrence of an event of default under the Letter
of Credit Agreement or an acceleration of the payment of the LOC
Obligations (or cash collateralization thereof) thereunder; provided,
however, that no delay in giving or failure to give such notification shall
in any way restrict the LOC Banks ability to exercise its rights and
remedies under the LOC Agreement or this Agreement.
(b) Boeing Capital agrees to promptly notify each of the
other Secured Parties of the occurrence of an Event of Default under the
Boeing Capital Loan Agreement or an acceleration of the payment of the
Boeing Capital Loan Obligations thereunder.
2.6 Instructions to Senior Subordinated Indenture Trustee.
The holders of the Convertible Note Obligations party to this
Agreement agree to give written instructions to the Senior Subordinated
Indenture Trustee to take actions (with sufficient particularity of
instruction) consistent with the agreements of such holders under this
Agreement.
2.7 B of A to act as Agent of Collateral Agent pursuant to the
Collateral Accounts Agreement.
Each of the Secured Parties hereby authorizes B of A to serve
as agent for the Collateral Agent, prior to the occurrence of a Sharing
Event, pursuant to the Collateral Accounts Agreement and the actions
contemplated thereby and the Collateral Agent hereby appoints B of A to so
act as its agent.
2.8 Actions with respect to the Huntway or Sunbelt Assets.
Secured Parties agree and acknowledge that the Boeing Capital
First Priority Collateral includes real property located within the States
of Arizona and California. Secured Parties other than the Collateral Agent
and the LOC Bank further agree and acknowledge that they are familiar with
the provisions of California Code of Civil Procedure Section 726
(Section 726), and while they do not believe that it applies to the
relationships between Huntway, Sunbelt and Secured Parties, each agrees to
act in a manner as if Section 726 applied. Thus, each Secured Party other
than the Collateral Agent and the LOC Bank agrees that notwithstanding
anything in Section 3.8 hereof to the contrary, it shall not commit an
action within the meaning of Section 726 to recover any Secured Obligation
or enforce any right secured by any deed of trust or mortgage included in
the Collateral Documents (726 Action), which such actions include, among
other actions, exercising rights of set-off against any of the Huntway or
Sunbelt assets, regardless of whether such assets are pledged to Collateral
Agent for the benefit of Secured Parties but shall exclude actions taken in
accordance with the Code on Collateral in which it has a security interest.
2.9 Indemnification with respect to an Asserted 726 Action.
Each Secured Party other than the Collateral Agent, the Senior
Subordinated Indenture Trustee in its individual capacity and the LOC Bank
(each, an Indemnifying Party) shall pay, indemnify, defend, and hold every
other Secured Party other than the LOC Bank (each, an Indemnified Person),
harmless (to the fullest extent permitted by law) from and against any and
all suits, actions, and damages, and all reasonable attorneys fees,
including those incurred in proceedings brought pursuant to the Bankruptcy
Code and disbursements and other costs and expenses actually incurred in
connection therewith (as and when they are incurred), at any time incurred
by such Indemnified Person as a result of a breach or violation by such
Indemnifying Party of its obligations under Section 2.8 hereof, as
determined in a final judgment (Final Judgement) by a court of competent
jurisdiction in either a proceeding brought among Secured Parties or a
proceeding brought by Huntway or Sunbelt against the Collateral Agent or
other Secured Parties seeking to prevent a foreclosure under one or more of
the Collateral Documents encumbering the real property. Any sums not paid
by or on behalf of a Secured Party other than the Collateral Agent
(including, without limitation, payments made pursuant to the final
paragraph of Section 2.1B(1) hereof from distributions withheld from such
Secured Party) within 15 days of the date of entry of a Final Judgment
holding that such Secured Party breached or violated its obligations under
Section 2.8 hereof shall bear interest, compounded monthly, at the rate of
ten percent (10%) per annum from the date of entry at such Final Judgment.
SECTION 3 CONCERNING THE COLLATERAL AGENT
3.1 Appointment of the Collateral Agent.
The Secured Parties hereby confirm the appointment of United
States Trust Company of New York to serve as the collateral trustee for,
the collateral agent for and the representative of each such Secured Party
(in such capacity, the Collateral Agent) and authorize the Collateral Agent
to act as agent for the Secured Parties for the purposes of executing and
delivering the Collateral Documents on their behalf and, subject to the
provisions of this Agreement, holding the Liens created by this Agreement
and the Collateral Documents and enforcing the Secured Parties rights in
respect of the Collateral and the obligations of Huntway and its Affiliates
under the Collateral Documents. The Secured Parties hereby direct the
Collateral Agent to enter into this Agreement.
3.2 The Distribution Account.
A. Establishing the Distribution Account.
1. The Collateral Agent shall continue to maintain at
its office at 114 West 47th Street, New York, New York 10036, the account
established pursuant to Section 3.2A of the Existing Intercreditor
Agreement, which shall be entitled the Huntway Distribution Account (the
Distribution Account). All moneys which are required by this Agreement or
the Collateral Documents to be delivered to the Collateral Agent or which
are received by the Collateral Agent or any agent or nominee of the
Collateral Agent in respect of the Collateral, whether in connection with
the exercise of the remedies provided in this Agreement or the Collateral
Documents or otherwise, shall be deposited in the Distribution Account and
thereafter shall be held by the Collateral Agent as part of the Collateral
and applied in accordance with the terms of this Agreement. All moneys
paid to the Collateral Agent shall be deemed to be paid at its office
identified above.
2. The Secured Parties agree that any Extraordinary
Proceeds and any Guaranty Proceeds received by any Secured Party shall be
promptly turned over to the Collateral Agent, and upon receipt of any
Extraordinary Proceeds or Guaranty Proceeds, the Collateral Agent shall, in
the event Section 2.1B of this Agreement is applicable, make a distribution
in accordance with the priorities set forth in such Section; provided that
this subsection 3.2A(2) shall not apply to any distributions made by the
Collateral Agent to any such Person in accordance with this Agreement or
any distributions received by such Person directly from Huntway which such
Person is entitled to retain as provided under this Agreement, including
under subsection 2.1A.
3. The Collateral Agent shall segregate in separate
sub-accounts in the Distribution Account the moneys that are the proceeds
of the Boeing Capital First Priority Collateral and the moneys that are the
proceeds of the Boeing Capital Second Priority Collateral and the Guaranty
Proceeds.
B. Control of Distribution Account. All right, title and
interest in and to the Distribution Account shall vest in the Collateral
Agent, and funds on deposit in the Distribution Account shall constitute
part of the Collateral. The Distribution Account shall be subject to the
exclusive dominion and control of the Collateral Agent.
C. Investment of Funds Deposited in Distribution Account.
The Collateral Agent shall invest and reinvest moneys on deposit in the
Distribution Account at any time in Permitted Investments as set forth in a
Directing Parties Request, Order or Instruction. All such investments of
moneys segregated in a particular sub-account of the Distribution Account,
and the interest and income received thereon and the net proceeds realized
on the sale thereof, shall be held in the Distribution Account as part of
the Collateral and segregated in such sub-account. The Collateral Agent
shall have no responsibility or liability for any loss resulting from a
fluctuation in interest rates or the sale or other disposition of any
Permitted Investment prior to its maturity date or otherwise or for any
loss whatsoever, including a loss of principal or interest resulting from
an investment made in accordance with such Directing Parties Request, Order
or Instruction. The Collateral Agent shall as promptly as practicable
reinvest the moneys on deposit in the Distribution Account. In addition to
the payment of expenses pursuant to any other Section of this Agreement,
the Collateral Agent may deduct from the funds on deposit in the
Distribution Account all the actual and reasonable costs and expenses that
the Collateral Agent and its agents and counsel may incur in connection
with (a) the custody or preservation of, or the sale of, collection from,
or other realization of the Collateral or (b) the exercise or enforcement
of any of the rights of the Collateral Agent hereunder or under the
Collateral Documents. Such costs and expenses shall be charged against the
particular sub-account to which such costs and expenses relate or, if such
costs and expenses relate to both sub-accounts, pro rata in proportion to
the then outstanding amount of the LOC Obligations and the Boeing Capital
Loan Obligations. In the event that the charges against either sub-account
exceed the amount in such sub-account (the underfunded sub-account) at such
time, the Collateral Agent may charge the other sub-account for the amount
of such excess, provided that the Collateral Agent shall restore amounts
charged to such sub-account from deposits, if any, that are thereafter made
to the underfunded sub-account prior to making any other distributions from
the underfunded sub-account.
3.3 Administration and Exercise of Remedies by the Collateral
Agent. The Collateral Agent agrees to administer the Collateral Documents
and the Collateral and to make such demands and give such notices under the
Collateral Documents as the Directing Parties may request in writing, and
to take such action to enforce the Collateral Documents and to foreclose
upon, collect and dispose of the Collateral or any portion thereof as may
be directed in writing by the Directing Parties provided, however, that
prior to taking any action the Collateral Agent shall receive an amount
satisfactory to it to cover its costs and expenses of such action, together
with indemnity satisfactory to it to cover any and all further costs and
expenses, from the Secured Parties (other than the Collateral Agent) and,
if requested, confirmation of the indemnity provided in Section 3.14.
Subject to taking instruction from the Directing Parties as provided herein
and in the Collateral Documents, the Collateral Agent agrees (i) that upon
receipt of a Directing Parties Request, Order or Instruction to exercise
such of the rights and powers vested in it hereunder and under the
Collateral Documents, including in connection with the foreclosure upon any
Collateral, and (ii) upon receipt by a Responsible Officer of the
Collateral Agent of a Sharing Event Notice, to use the same degree of care
and skill in carrying out the directions of the Directing Parties as a
prudent person would exercise or use under the circumstances in the conduct
of his own affairs. The Collateral Agent shall execute and deliver after
the date hereof additional Collateral Documents upon receipt of Directing
Parties Request, Order or Instruction pursuant to which Huntway or its
Affiliates grant to the Collateral Agent for the benefit of the Secured
Parties security interests in additional Collateral, and shall take action
under or with respect to this Agreement and the Collateral Documents and
the Collateral at the instruction of the Directing Parties; provided that
the Directing Parties shall not be required to deliver any such instruction
or instructions or cause Huntway or any of its Affiliates to enter into any
such Collateral Documents. The Collateral Agent shall not be required to
take any action that is in its opinion contrary to law or to the terms of
this Agreement or the Collateral Documents, or that would in its opinion
subject it or any of its officers, employees, agents or directors to
liability, including, without limitation, any action that may subject it or
any such persons to liability under any state or federal environmental law,
and the Collateral Agent shall not be required to take any action under
this Agreement or the Collateral Documents unless and until the Collateral
Agent shall be indemnified to its satisfaction by one or more of the
Secured Parties against any and all loss, cost, expense or liability in
connection therewith. The Collateral Agent shall have no responsibility to
request opinions of counsel relating to the perfection of liens in the
Collateral except to the extent specifically requested to do so by a
Directing Parties Request, Order or Instruction.
3.4 Sharing Event Notice.
(ai Any one or more of the LOC Bank or any other holder of a
Secured Obligation shall be entitled to deliver to the Collateral Agent a
notice of the occurrence of a Sharing Event (a Sharing Event Notice) at any
time if a Sharing Event has occurred and is continuing under the Letter of
Credit Agreement, the Boeing Capital Loan Agreement or the Senior
Subordinated Indenture. Upon receipt by the Collateral Agent of a Sharing
Event Notice, the Collateral Agent shall promptly forward a copy of such
notice to each of the other Secured Parties (other than the Person
delivering such Sharing Event Notice). Upon the occurrence of a Sharing
Event described in clause (a) of the definition thereof, any Secured Party
may give notice to the Collateral Agent of the occurrence of such Sharing
Event (which may be a joint notice from one or more Secured Parties).
Until and unless the Collateral Agent shall have received a Sharing Event
Notice the Collateral Agent shall be entitled to assume that no Sharing
Event has occurred and is continuing.
(bi A Sharing Event Notice shall become effective upon
receipt thereof by the Collateral Agent and shall remain in effect unless
it is canceled as provided in subsection 3.4(c).
(ci The Person giving a Sharing Event Notice shall be
entitled to cancel it by delivering a written notice of cancellation to the
Collateral Agent. The Collateral Agent shall promptly forward a copy of
such cancellation to each of the other Secured Parties (other than the
Person delivering such cancellation). Such notice of cancellation shall
not affect any Sharing Event Notice given by any other Person.
3.5 Actions Requested by Directing Parties. Each Secured Party
agrees that the Collateral Agent shall act as the Directing Parties may
request in writing (regardless of whether any individual Secured Party
agrees, disagrees or abstains with respect to such request and including,
without limitation, any decision to release all or any portion of the
Collateral, provided such request does not conflict with the express terms
of this Agreement or the Collateral Documents), that the Collateral Agent
shall have no liability for acting in accordance with such request and that
no Directing Parties or Non-Directing Party shall have any liability to any
Non-Directing Party or Directing Parties for any such request. The
Collateral Agent shall give as promptly as practicable to each other
Secured Party copies of written materials sent by the Collateral Agent to
third parties, and notice of any other action taken, pursuant to the
instructions of the Directing Parties to enforce any Collateral Document;
provided, however, that the failure to give any copies of such materials or
any such notice shall not impair the right of the Collateral Agent to take
any such action or the validity or enforceability under this Agreement of
the action so taken.
3.6 Limited Rights of Non-Directing Parties. Each Secured Party
agrees that the only right of a Non-Directing Party under this Agreement
relating to the Collateral and the Collateral Documents is for Secured
Obligations held by such Non-Directing Party to be secured by the
Collateral for the period and to the extent provided therein and in this
Agreement (and subject to release of such collateral as directed by the
Directing Parties), to receive a share of the proceeds of the Collateral,
if any, to the extent and at the time provided in the applicable Collateral
Document and in this Agreement and to have such other rights as are
expressly set forth herein and therein, including under subsection 3.8.
Non-Directing Parties shall nevertheless be bound by the terms of any
Directing Parties Request, Order or Instruction and Non-Directing Parties
must pay their proportionate share of the costs and expenses in connection
with actions or inactions taken or omitted in accordance with such
Directing Parties Request, Order or Instruction including any indemnity
payments and advances; provided that the LOC Bank need not pay any share of
costs and expenses in connection with any such actions or inactions related
solely to the Boeing Capital First Priority Collateral or the Collateral
Documents encumbering such Collateral.
3.7 Collateral Agent Requests for Directions. The Collateral Agent
may, but shall not be obligated to, at any time request directions from the
other Secured Parties as provided in this Agreement as to any course of
action or other matter relating hereto or to any Collateral Document. Each
of the Secured Parties (other than the Collateral Agent) agrees to respond
to any such request as promptly as practicable and the Collateral Agent may
refrain from taking any action until it receives such direction. Except as
otherwise provided in this Agreement and the Collateral Documents, written
directions given by the Directing Parties to the Collateral Agent hereunder
shall be binding on all Secured Parties, including all Non-Directing
Parties, for all purposes.
3.8 Enforcement through the Collateral Agent; Rights of Secured
Parties. Each of the Secured Parties (other than the Collateral Agent)
agrees not to take any action whatsoever to enforce any term or provision
of the Collateral Documents or to enforce any of its rights in respect of
the Collateral except through the Collateral Agent in accordance with this
Agreement. This subsection 3.8 shall preclude any Secured Party from
proceeding against any Collateral in any action or proceeding or remedy
available to such Secured Party under applicable law except through the
Collateral Agent in accordance with this Agreement and the Collateral
Documents; however, the other rights of the Secured Parties available under
applicable law shall not be affected or limited by this subsection 3.8 or
the other provisions of this Agreement except to the extent provided
herein. In furtherance and not in limitation of the foregoing, but subject
to Section 2.8 hereof, each Secured Party shall retain the right to sue and
obtain judgment on any obligation owing to such Secured Party, to enforce
its rights under this Agreement and the Collateral Documents in accordance
with their terms and to file to commence a proceeding against Huntway or
any other Person under the Bankruptcy Code and to file claims or otherwise
participate in any such voluntary or involuntary bankruptcy proceedings,
including the right to participate in any hearing or proceeding considering
whether such Secured Party has received or will receive adequate protection
as applicable under the Bankruptcy Code; provided that the Directing
Parties shall at all times retain the right to instruct the Collateral
Agent to administer and proceed against the Collateral as provided herein.
3.9 Payments to Secured Parties. (a) Payments by the Collateral
Agent in respect of the LOC Obligations shall be made to the LOC Bank; (b)
payments by the Collateral Agent with respect to the Boeing Capital Loan
Obligations shall be made to Boeing Capital and (c) payments by the
Collateral Agent with respect to the Convertible Note Obligations shall be
made to the Senior Subordinated Indenture Trustee or its designee for
distribution to the holders of the Convertible Notes in accordance with the
terms of the Senior Subordinated Indenture.
3.10 Collateral Agents Calculations. In making the determinations
and allocations required by subsection 2.1B and the other provisions of
this Agreement, the Collateral Agent may rely upon written certification
supplied by the LOC Bank with respect to any amounts payable with respect
to the LOC Obligations, by Boeing Capital as to any amounts payable with
respect to the Boeing Capital Loan Obligations and by the Senior
Subordinated Indenture Trustee as to any amounts payable with respect to
the Convertible Note Obligations; provided, however, that if a dispute
exists as to any determination or allocation, including with respect to the
amount of any LOC Obligations, Boeing Capital Loan Obligations or
Convertible Note Obligations, the Collateral Agent shall be entitled to
conclusively rely upon a Directing Parties Request, Order or Instruction as
to such matter or, if no such Directing Parties Request, Order or
Instruction is provided within 10 business days after request therefor by
the Collateral Agent to the other Secured Parties, as a court of competent
jurisdiction may so direct. The Collateral Agent shall have no liability
to Huntway, Sunbelt or any of the other Secured Parties for actions taken
in reliance on such written certification, Directing Parties Request, Order
or Instruction or court order. All distributions made by the Collateral
Agent pursuant to subsection 2.1B and the other provisions of this
Agreement shall be (subject to any decree of any court of competent
jurisdiction) final, and the Collateral Agent shall have no duty to inquire
as to the application by the LOC Bank, Boeing Capital or the Senior
Subordinated Indenture Trustee of any amounts distributed to them.
Notwithstanding anything else in this Agreement to the contrary, upon a
determination by a court of competent jurisdiction of any distribution
payable to any Secured Party, including any court having jurisdiction in
any proceeding of Huntway under the Bankruptcy Code, any subsequent
distribution shall be made in accordance therewith. If, at any time, the
Collateral Agent reasonably determines in its sole discretion that an
allocation or distribution previously made pursuant to subsection 2.1B or
any other provision of this Agreement was based on a mistake of fact, the
Collateral Agent may in its discretion, but shall not be obligated to,
adjust subsequent allocations and distributions thereunder so that, on a
cumulative basis, the Secured Parties receive the distributions to which
they would have been entitled if such mistake of fact had not been made.
3.11 Further Assurances. Each Secured Party agrees from time to
time to execute further instruments and documents and take all further
action, including the delivery of information with respect to the Secured
Obligations owing to such Secured Party and other matters, that may be
necessary or reasonably requested in writing by the Collateral Agent in
order to carry out or give effect to the provisions of this Agreement. The
Collateral Agent shall be entitled to conclusively rely on any such
instruments, documents or information.
3.12 Collateral Agent Duties and Responsibilities; Other Matters.
(a) The Collateral Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
Collateral Documents and no others and no implied covenants or obligations
shall be read into this Agreement against the Collateral Agent. The
Collateral Agent shall not by reason of this Agreement or the Collateral
Documents or the Trust Estate created hereunder have any fiduciary
obligation to any Secured Party (including any obligation under the Trust
Indenture Act of 1939, as amended). The Collateral Agent shall not be
responsible to any other Secured Party for and may rely on any recitals,
statements, representations or warranties contained in any Financing
Agreement or in any certificate or other document referred to or provided
for in, or received by any of them under, any Financing Agreement, or for
the value, validity, effectiveness, genuineness, enforceability or
sufficiency of any Financing Agreement or any other document referred to or
provided for therein or any Lien under any of the Collateral Documents or
the perfection or priority of any such Lien or for any failure by Huntway,
Sunbelt, any other Secured Party or any other Person (other than, provided
the Collateral Agent has received a copy of the Financing Agreement under
which such obligations arise, the Collateral Agent) to perform any of its
respective obligations under any Financing Agreement. Without limiting the
foregoing, the Collateral Agent shall not be required to take any action
under any Collateral Document or to execute any additional Collateral
Document, including any Mortgage, including, without limitation, any action
to perfect any security interests granted in the Collateral pursuant to the
Collateral Documents or to administer any Collateral, other than the filing
of Mortgages and Uniform Commercial Code financing statements with respect
to the Collateral as and where instructed by the Directing Parties. The
Collateral Agent may employ agents and attorneys-in-fact and shall not be
responsible, except as to money or securities received by it or its
authorized agents, for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Neither the
Collateral Agent nor any of its directors, officers, employees or agents
shall be liable or responsible for any action taken or omitted to be taken
by it or them hereunder or in connection herewith, except for its or their
own gross negligence or willful misconduct. The Collateral Agent shall not
be liable for (i) any error of judgment made in good faith unless it is
proved that the Collateral Agent was grossly negligent in ascertaining the
pertinent facts, (ii) any action it takes or omits to take in good faith in
accordance with a direction or instruction received by it pursuant to this
Agreement or (iii) in reliance on or pursuant to an opinion of counsel. To
the extent that the Collateral Agent becomes liable for the payment of
taxes, including withholding taxes, in respect of income derived from the
investment of funds held hereunder or any payment made hereunder, the
Collateral Agent may pay such taxes. The Collateral Agent may withhold
from any payment of monies held by it hereunder such amount as the
Collateral Agent estimates to be sufficient to provide for the payment of
such taxes not yet paid, and may use the sum withheld for that purpose.
The Collateral Agent shall be indemnified and held harmless against any
liability for taxes and for any penalties or interest in respect of taxes
on such investment income or payments in the manner provided in subsection
3.14.
(b) No provision of this Agreement shall require the
Collateral Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or in
the exercise of any of its rights or powers if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liabilities is not reasonably assured to it.
(c) The duties and obligations of the Collateral Agent
hereunder and under the Collateral Documents shall in no way impair or
affect any of the rights and powers of, or impose any duties or obligations
upon, the Collateral Agent in its individual capacity. With respect to its
status as a holder of Secured Obligations, the Collateral Agent shall have
the same rights and powers hereunder as any other Secured Party and may
exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the terms LOC Bank, Secured Obligations,
Boeing Capital Loan Obligations and Convertible Note Obligations or holders
of Boeing Capital Notes or any similar term shall, unless the context
clearly otherwise indicates, include United States Trust Company of New
York in its individual capacity. The Collateral Agent and each of its
Affiliates may accept deposits from, and generally engage in any kind of
banking, trust, financial advisory or other business with Huntway or any
Affiliate or Subsidiary of Huntway or any other Person as if it were not
performing the duties specified herein, and may accept fees or other
consideration from Huntway or any Affiliate or Subsidiary of Huntway or any
other Person for services in connection with this Agreement and otherwise
without having to account for the same to any other Secured Party or
Person.
3.13 Reliance by the Collateral Agent. The Collateral Agent shall
be entitled to conclusively rely upon any Directing Parties Request, Order
or Instruction, written certification provided by any Secured Party,
certificate of an executive officer of Huntway, document, certification,
notice or other communication (including any thereof by telex, telecopy,
telegram or cable) believed by it to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel (including counsel to Huntway,
any Secured Party or any Affiliate of Huntway or any Secured Party),
independent accountants and other experts selected by the Collateral Agent.
The Collateral Agent need not investigate any fact or matter stated in any
such document, certification, notice or other communication. As to any
matters not expressly provided for by this Agreement, the Collateral Agent
shall in all cases be fully protected in acting, or in refraining from
acting, hereunder in accordance with instructions signed by the Directing
Parties, and such instructions of the Directing Parties, and any action
taken or failure to act pursuant thereto, shall be binding on all Secured
Parties, the Directing Parties and the Non-Directing Parties.
3.14 Indemnification.
(a) Each of the Secured Parties (other than the Collateral
Agent and the Senior Subordinated Indenture Trustee in its individual
capacity) agrees to jointly and severally indemnify and hold harmless the
Collateral Agent, its officers, directors, employees and its agents and
counsel, ratably in accordance with the amount of the obligations held by
such Secured Parties secured by the Collateral Documents to the extent
neither reimbursed by Huntway under the Collateral Documents nor reimbursed
out of any Extraordinary Proceeds or other amounts pursuant to clause FIRST
of subsection 2.1B(1) hereof, as the case may be, for any and all claims,
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
that may be imposed on (including but not limited to reasonable attorneys
fees and expenses, and any and all Environmental Claims, and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever in
connection therewith), incurred by or asserted against the Collateral
Agent, its officers, directors, employees and its agents and counsel in any
way relating to or arising out of (i) the administration of its rights and
duties hereunder, under the Existing Intercreditor Agreement, and under the
Collateral Documents or any Financing Agreement and (ii) any of the
Financing Agreements or any other document contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or the
enforcement of any of the terms of this Agreement, the Existing
Intercreditor Agreement or any Collateral Document; provided, however, that
no such Secured Party shall be liable for any of the foregoing to the
extent they arise from the gross negligence or willful misconduct of the
Collateral Agent or from any action or inaction taken or omitted to be
taken by any Person prior to the date that such Secured Party became a
Secured Party; and provided further that the LOC Bank shall not be liable
for any of the foregoing to the extent they relate solely to the Boeing
Capital First Priority Collateral or the Collateral Documents encumbering
such Collateral.
(b) Except for action expressly required of the Collateral
Agent hereunder, the Collateral Agent shall, notwithstanding anything to
the contrary in this subsection 3.14, in all cases be fully justified in
failing or refusing to act hereunder unless it shall be further indemnified
to its satisfaction by the Secured Parties against any and all liability
and expense that may be incurred by it by reason of taking or continuing to
take any such action.
(c) This Section 3.14 shall survive any termination,
satisfaction or discharge of this Agreement, including any termination
under any bankruptcy law and the full and complete payment of the Secured
Obligations.
3.15 Treatment of Payees by the Collateral Agent. The Collateral
Agent may deem and treat the payee of any promissory note or other evidence
of indebtedness or obligations relating to any Secured Obligation as the
owner thereof for all purposes hereof unless and until a written notice of
the assignment or transfer thereof, signed by such payee and in form
satisfactory to the Collateral Agent, shall have been filed with the
Collateral Agent. Any request, authority or consent of any Person who at
the time of making such request or giving such authority or consent is the
holder of any such note or other evidence of indebtedness or obligations
shall be conclusive and binding on any subsequent holder, transferee or
assignee of such note or other evidence of indebtedness or obligations and
of any note or notes or other evidences of indebtedness or obligations
issued in exchange therefor.
3.16 Limited Duties with respect to Collateral Documents and
Collateral. Except as expressly provided herein and in the Collateral
Documents, the Collateral Agent shall have no duty to take any affirmative
steps with respect to the administration or enforcement of, or collection
of amounts payable in respect of, the Collateral Documents or the
Collateral. The Collateral Agent shall incur no liability (absent gross
negligence or willful misconduct) as a result of any sale of any
Collateral, whether at any public or private sale.
3.17 Compensation. By execution of the Collateral Accounts
Agreement, Huntway has acknowledged its agreement to pay to the Collateral
Agent from time to time compensation for its services (which compensation
shall not be limited by any provision of law regarding the compensation of
a trustee of an express trust) in amounts and at the times agreed upon by
Huntway and the Collateral Agent, and Huntway has acknowledged its
agreement to reimburse the Collateral Agent upon request for all reasonable
out-of-pocket disbursements, expenses and advances (including reasonable
fees and expenses of counsel) incurred or made by it in connection with
entering into this Agreement, its duties hereunder or under any of the
Collateral Documents or Financing Agreements in addition to compensation
for its services. Such expenses shall include the reasonable compensation,
out-of-pocket disbursements and expenses of the Collateral Agents agents
and counsel. To secure all of the payment obligations of Huntway and the
Secured Parties (other than the Collateral Agent) under this Agreement,
including but not limited to Sections 3.14 and 3.17, the Collateral Agent
shall have a senior lien, to which the Secured Obligations are hereby made
subject, in the Collateral. This lien shall survive any termination,
satisfaction or discharge of this Agreement, including any termination
under any bankruptcy law and shall survive the payment in full of the
Secured Obligations. To the extent that the Collateral Agent renders any
services hereunder following commencement of a voluntary or involuntary
bankruptcy of Huntway, the parties hereto agree that those services are
intended to constitute expenses of administration in any such bankruptcy
proceeding.
3.18 Collateral Agents Disclaimer. The Collateral Agent shall not
be responsible for and makes no representation as to the validity or
adequacy of this Agreement, the Secured Obligations or the Financing
Agreements or the Collateral covered thereby, or any of the insurance
thereon.
3.19 Resignation and Removal of the Collateral Agent; Successor
Collateral Agent.
(a) The Collateral Agent may resign at any time by giving at
least 30 days notice thereof to the other Secured Parties (such resignation
to take effect as hereinafter provided) and the Collateral Agent may be
removed as the Collateral Agent at any time by the Directing Parties. In
the event of any such resignation or removal of the Collateral Agent, the
Directing Parties shall thereupon have the right to appoint a successor
Collateral Agent. The successor Collateral Agent shall deliver a written
acceptance of its appointment to the retiring Collateral Agent. If no
successor Collateral Agent shall have been so appointed by the Directing
Parties and shall have accepted such appointment within 30 days after the
notice of the intent of the Collateral Agent to resign, then the retiring
Collateral Agent may, on behalf of the other Secured Parties, appoint a
successor Collateral Agent. Any successor Collateral Agent appointed
pursuant to this clause shall be a commercial bank or other financial
institution organized under the laws of the United States of America or any
state thereof having a combined capital and surplus of at least
$250,000,000.
(b) Upon the acceptance of any appointment as the Collateral
Agent hereunder by a successor Collateral Agent, such successor Collateral
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring or removed Collateral Agent,
and the retiring or removed Collateral Agent shall thereupon be discharged
from its duties and obligations hereunder. Such successor Collateral Agent
shall mail notice of its succession to each of the other Secured Parties.
After any retiring or removed Collateral Agents resignation or removal
hereunder as Collateral Agent, the provisions of this Section 3 shall
continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Collateral Agent.
3.20 Funds Held By Huntway and its Affiliates. In no event shall
the Collateral Agent or any Secured Party be liable or responsible for any
funds or investments of funds held by Huntway or any of its Affiliates.
3.21 Co-Collateral Agent.
(a) If at any time or times it shall be necessary or prudent
in order to conform to any law of any jurisdiction in which any of the
Collateral shall be located, or the Collateral Agent shall be advised by
counsel, satisfactory to it, that it is necessary or prudent in the
interest of the Secured Parties, or the Collateral Agent shall in its
reasonable discretion deem it desirable for its own protection in the
performance of its duties hereunder, the Collateral Agent shall execute and
deliver all instruments and agreements necessary or proper to constitute
another bank or trust company, or one or more Persons approved by the
Collateral Agent and the Secured Parties, either to act as co-agent or co-
agents (each a co-agent) of all or any of the Collateral, jointly with the
Collateral Agent, or to act as separate agent or agents of any such
property. If the Directing Parties shall not have joined in the execution
of such instruments and agreements within 10 days after they receive a
written reasonable request from the Collateral Agent to do so, or if a
Sharing Event Notice is in effect, the Collateral Agent may act under the
foregoing provisions of this Section without the concurrence of the
Directing Parties or any other Secured Party. The Secured Parties hereby
appoint the Collateral Agent as its agent and attorney to act for it under
the foregoing provisions of this Section in either of such contingencies.
(b) Every separate agent and every co-agent other than any
successor agent appointed pursuant to subsection 3.19, shall, to the
extent permitted by law, be appointed and act and be such, subject to the
following provisions and conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Collateral Agent hereunder shall
be conferred or imposed upon and exercised or performed by the
Collateral Agent and such separate agent or co-agent, jointly,
as shall be provided in the instrument appointing such separate
agent or co-agent, except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be
performed by the Collateral Agent or such agent or co-agent,
the Collateral Agent shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers,
duties and obligations shall be exercised and performed by such
separate agent or other separate agents or co-agent or co-
agents;
(ii) no agent hereunder shall be personally liable by
reason of any act or omission of any other agent or co-agent
hereunder; and
(iii) the Directing Parties and the Collateral
Agent, at any time by an instrument in writing executed by them
jointly, may accept the resignation of or remove any such
separate agent or co-agent and, in that case by an instrument
in writing executed by them jointly, may appoint a successor to
such separate agent or co-agent, as the case may be, anything
contained herein to the contrary notwithstanding. If the
Directing Parties shall not have joined in the execution of any
such instrument within 10 days after they receive a written
reasonable request from the Collateral Agent to do so, or if a
Sharing Event Notice is in effect, the Collateral Agent shall
have the power to accept the resignation of or remove any such
separate agent or co-agent and to appoint a successor without
the concurrence of the Directing Parties or any other Secured
Party. The Secured Parties hereby appoint the Collateral Agent
their agent and attorney to act for them in such connection in
such contingency. If the Collateral Agent shall have appointed
a separate agent or separate agents or co-agent or co-agents as
above provided, the Collateral Agent may at any time, by an
instrument in writing, accept the resignation of or remove any
such separate agent or co-agent and the successor to any such
separate agent or co-agent shall be appointed by the Directing
Parties and the Collateral Agent, or by the Collateral Agent
alone pursuant to this Section.
SECTION 4: MISCELLANEOUS
4.1 Notices. All notices and other communications provided for
herein shall be in writing and may be personally served, telecopied
confirmed by telephone, telexed, sent by guaranteed overnight courier or
sent by United States mail and shall be deemed to have been given when
delivered in person, upon receipt of telecopy or telex, or four Business
Days after deposit in the United States mail, registered or certified, with
postage prepaid and properly addressed; provided that any notice or other
communication to the Collateral Agent shall not be effective until actually
received by a Responsible Officer of the Collateral Agent. For the
purposes hereof, the addresses of the parties hereto (until notice of a
change thereof is delivered as provided in this subsection 4.1) shall be as
set forth under each partys name on the signature pages (including
acknowledgments) hereof.
4.2 Amendments and Waivers.
(a) Subject to Section 4.10, this Agreement may be amended,
amended and restated, supplemented or otherwise modified by an instrument
or instruments in writing signed by the Collateral Agent (subject to
Sections 3.12 and 3.14), Secured Parties holding not less than 51% of the
LOC Obligations (if any such Obligations are outstanding or the LOC Bank
has any remaining commitment under the Letter of Credit Agreement), Secured
Parties holding not less than 51% of the Boeing Capital Loan Obligations
(if any such Obligations are outstanding), and Secured Parties holding not
less than 66-2/3% of the outstanding Convertible Note Obligations (if any
such Obligations are outstanding). Any Collateral Document may be amended,
amended and restated, supplemented or otherwise modified only by an
instrument in writing signed by the Collateral Agent, the other party or
parties to such Collateral Documents and the Directing Parties for purposes
of directing the Collateral Agent with respect to any actions to be taken
with respect to such Collateral Document. Any amendment, modification,
supplement or waiver entered into in accordance with this subsection 4.2
shall be binding upon each Secured Party and its successors and assigns.
(b) Notwithstanding anything to the contrary herein, the
Collateral Agent shall not be required to sign any amendment, amendment and
restatement, supplement or other modification of this Agreement that it
reasonably believes adversely affects its rights, duties or immunities
hereunder.
4.3 Conflicts among Agreements. In the event and to the extent
that any term or provision of any Financing Agreement between or among any
of the Secured Parties or Huntway or Sunbelt is inconsistent with the
terms or provisions of this Agreement, the terms and provisions of this
Agreement shall govern.
4.4 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Collateral Agent, each Secured Party and
their respective successors and assigns.
4.5 No Waivers. No failure on the part of the Collateral Agent or
any Secured Party to exercise, no course of dealing with respect to, and no
delay in exercising, any right, power or privilege under this Agreement or
the Collateral Documents shall operate as a waiver thereof nor shall any
single or partial exercise of any such right, power or privilege preclude
any other or further exercise thereof or the exercise of any other right,
power or privilege.
4.6 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
4.7 Effectiveness of Agreement. This Agreement shall become
effective upon the execution of a counterpart hereof by each of the parties
hereto and delivery to the Collateral Agent of the counterparts of each of
the other parties hereto.
4.8 Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. THE PARTIES TO THIS
AGREEMENT ACKNOWLEDGE THAT SUCH STATE HAS SUBSTANTIAL CONTACTS WITH BOTH
THEM AND THIS AGREEMENT.
4.9 Headings. Headings of sections of this Agreement have been
included herein for convenience only and should not be considered in
interpreting this Agreement.
4.10 Benefits of Agreement and Collateral Documents. Nothing in
this Agreement or the Collateral Documents, expressed or implied, is
intended or shall be construed to confer upon or give to any Person, other
than the Secured Parties, any right, remedy or claim under or by reason of
any such agreement or any covenant, condition or stipulation herein or
therein contained; except that the acknowledgments and agreements of the
LOC Bank for the benefit of Huntway and Sunbelt in the definition of
Directing Parties herein and in subsection 2.1(B)(1) SECOND hereof shall
benefit Huntway and Sunbelt and may not be amended or otherwise modified
without their written consent.
4.11 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
4.12 Consent to Jurisdiction and Service of Process. Each Secured
Party agrees that all judicial proceedings brought against any Secured
Party with respect to this Agreement or the Collateral Documents may be
brought in any state or federal court of competent jurisdiction in the
State of New York (without regard to such courts competence as to personal
jurisdiction over the parties to the matter), and by execution and delivery
of this Agreement, each Secured Party accepts for itself and in connection
with its properties, generally and unconditionally, the nonexclusive
jurisdiction of the aforesaid courts, and irrevocably agrees to be bound by
any judgment rendered thereby in connection with this Agreement or the
Security Documents. Each Secured Party designates and appoints the
Secretary of State of the State of New York, and such other Person as may
hereafter be selected by that Secured Party irrevocably agreeing in writing
to so serve, as its agent to receive on its behalf service of all process
in any such proceeding in any such court, such service being hereby
acknowledged by such Secured Party to be effective and binding service in
every respect. A copy of any such process so served shall be mailed by
registered mail to such Secured Party at its address for purposes of
notices pursuant to Section 4.1, except that unless otherwise provided by
applicable law, any failure to mail such copies shall not affect the
validity of service of process. If any agent appointed by any Secured
Party refuses to accept service, such Secured Party hereby agrees that
service upon it by mail shall constitute sufficient notice.
4.13 Waiver of Jury Trial. EACH SECURED PARTY 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 AGREEMENT 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 Secured Party 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 Agreement and that each will
continue to rely on the waiver in its related future dealings. Each
Secured Party further warrants and represents that it has reviewed this
waiver with its legal counsel, and that it 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
AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO EXTENSIONS OF
CREDIT PURSUANT TO THE FINANCING DOCUMENTS. In the event of litigation,
this Agreement may be filed as a written consent to a trial by the court.
4.14 Termination. This Agreement shall terminate on the final
disposition of all the monies, liens, security interests and other property
subject to this Agreement or the Collateral Documents and upon receipt of
written certification from all of the Secured Parties of the indefeasible
payment in full of all of the Secured Obligations; provided that (i) the
liens and security interests created under the Collateral Documents shall
have been released in accordance with the terms hereof and of the
Collateral Documents and (ii) the rights of the Collateral Agent and the
obligations of the Secured Parties under Section 2 shall survive the
termination hereof.
4.15 Binding Obligation. Each Secured Party severally represents to
each other Secured Party that this Agreement constitutes its legal, valid
and binding obligation.
4.16 Amendment and Restatement. This Agreement amends, restates and
supersedes in its entirety the Existing Intercreditor Agreement; provided,
however, that the rights of the Collateral Agent under Section 3.14(a) of
the Existing Intercreditor Agreement shall survive the amendment and
restatement of the Existing Intercreditor Agreement and are incorporated in
Section 3.14(a) hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
BANK OF AMERICA, N.A.
By: ________________________________
Title:
Notice Address: Los Angeles Regional
Commercial
Banking Office
525 S. Flower St.
Los Angeles, CA
90071
Attn: Con ONeil
Telecopy Number: (213) 345-6981
BOEING CAPITAL CORPORATION
By:_________________________________
Title:
Notice Address: 4060 Lakewood
Boulevard
6th Floor
Long Beach, CA 90808-
1700
Attn: Vice
President - Taxes
and Associate
General
Counsel
Telecopy Number: (562) 627-3002
LIGHTHOUSE INVESTORS, L.L.C.
By: Lighthouse Capital, LLC, its
Manager
By:____________________________________
_
Title:
Notice Address: c/o Westcliff Capital
Management, L.L.C.
200 Seventh Avenue
Suite 105
Santa Cruz, CA 95062
Attn: Richard S.
Spencer III
Telecopy Number: (831) 479-3642
GOLDMAN SACHS & COMPANY
FFC BIII Capital Partners, L.P.
By:____________________________________
_
Title:
Notice Address: 48th Floor
One New York Plaza
New York, NY 10004
Attn: Demietrick
Dawkins
Telecopy Number: (212) 357-0413
B III CAPITAL PARTNERS, L.P.
By: DDJ Capital III, LLC, its General
Partner
By: DDJ Capital Management, LLC,
Manager
By:____________________________________
__
Title:
Notice Address: c/o DDJ Capital
Management, LLC
141 Linden Street,
Suite S-4
Wellesley, MA 02482
Attn: Wendy Schnipper
Clayton
Telecopy Number: (781) 283-8541
CONTRARIAN CAPITAL FUND I, L.P.
By: Contrarian Capital Management,
LLC, its general partner
By:____________________________________
_
Title:
Notice Address: c/o Contrarian
Capital
Management
411 West Putnam,
Suite 225
Greenwich, CT 06830
Attn: Michael Restifo
Telecopy Number: (203) 622-2345
CONTRARIAN CAPITAL FUND II, L.P.
By: Contrarian Capital Management,
LLC, its
general partner
By:____________________________________
__
Title:
Notice Address: c/o Contrarian
Capital
Management
411 West Putnam,
Suite 225
Greenwich, CT 06830
Attn: Michael Restifo
Telecopy Number: (203) 622-2345
MELLON BANK, N.A., solely in its
capacity as Trustee for First Plaza
Group Trust (as directed by
Contrarian Capital Management, L.L.C.)
and not in
its individual capacity.
By:____________________________________
_
Title:
Notice Address: c/o Contrarian
Capital
Management
411 West Putnam,
Suite 225
Greenwich, CT
06830
Attn: Michael
Restifo
Telecopy Number: (203) 622-2345
CONTRARIAN CAPITAL ADVISORS, L.L.C.,
as agent for the entities listed below.
By:____________________________________
__
Title:
Notice Address: c/o Contrarian
Capital
Management
411 West Putnam,
Suite 225
Greenwich, CT
06830
Attn: Michael
Restifo
Telecopy Number: (203) 622-2345
Oppenheimer Horizon Partners, L.P.
Oppenheimer Institutional Horizon
Partners, L.P.
Oppenheimer International Horizon
Fund II Ltd.
Oppenheimer & Co., Inc.
The & Trust
KANE & CO.
As nominee for The Chase Manhattan
Bank
By:____________________________________
_
Title:
Notice Address: c/o Contrarian
Capital
Management
411 West Putnam,
Suite 225
Greenwich, CT
06830
Attn: Michael
Restifo
Telecopy Number: (203) 622-2345
THE CHASE MANHATTAN BANK
As Directed Trustee For The IBM
Retirement
Plan Trust
By:____________________________________
_
Title:
Notice Address: c/o Contrarian
Capital
Management
411 West Putnam,
Suite 225
Greenwich, CT
06830
Attn: Michael
Restifo
Telecopy Number: (203) 622-2345
STATE STREET BANK AND TRUST
COMPANY, as Trustee under the Senior
Subordinated Indenture
By:___________________________________
Title
Notice Address: Corporate Trust
Department
2 Avenue de Lafayette
Boston, MA 02111-1724
Attn: Susan Freedman
Telecopy Number: (617) 662-1464
UNITED STATES TRUST COMPANY OF
NEW YORK, in its capacity as
Collateral Agent
By:________________________________
Title:
Notice Address: 114 West 47th Street
New York, New York
10036
Attention:
Corporate Trust
Department
Telecopy Number: (212) 852-1626
ACKNOWLEDGMENT:
THE UNDERSIGNED HEREBY
ACKNOWLEDGE THE TERMS
OF THE ABOVE SECOND AMENDED AND
RESTATED INTERCREDITOR AND
COLLATERAL TRUST AGREEMENT
HUNTWAY REFINING COMPANY
By:_____________________________________
Title:
SUNBELT REFINING COMPANY, L.P.
By: HUNTWAY REFINING COMPANY,
its sole general partner
By:______________________________________
Title:
SCHEDULE A
AMENDED AND RESTATED COLLATERAL DOCUMENTS
1. That certain Second Amendment to Deed of Trust with Assignment of
Rents dated as of December 12, 1996 between Sunbelt and Collateral
Agent
2. That certain Amended and Restated Current Assets Pledge and Security
Agreement dated as of December 12, 1996 by and among Huntway
Partners, L.P., and Collateral Agent
3. That certain Amended and Restated Huntway Pledge and Security
Agreement dated as of December 12, 1996 by and among Huntway
Partners, L.P., and Collateral Agent
4. That certain Amended and Restated Sunbelt Pledge and Security
Agreement dated as of December 12, 1996 by and among Sunbelt and
Collateral Agent
5. That certain Amended and Restated Huntway Managing Partner Pledge and
Security Agreement dated as of December 12, 1996 by and among Huntway
Managing Partner and Collateral Agent
6. That certain Amended and Restated Huntway Special General Partner
Pledge and Security Agreement dated as of December 12, 1996 by and
among Huntway Holdings, Bankers and Collateral Agent
7. That certain Amended, Restated and Consolidated Deed of Trust and
Security Agreement With Fixture Filing and other Security Documents
dated as of December 12, 1996, between Huntway Partners, L.P. and
Collateral Agent
8. That certain Amended, Restated and Consolidated Deed of Trust and
Security Agreement With Fixture Filing and other Security Documents
dated as of December 12, 1996, between Huntway Partners, L.P. and
Collateral Agent
9. That certain Second Amended and Restated Collateral Accounts Security
Agreement dated as of October 29, 1999, between Huntway, Sunbelt, the
Collateral Agent and B of A, as an agent for the Collateral Agent
10. That certain Assignment and Assumption dated as of May 29, 1998
between Huntway Partners, L.P. and Huntway
11. That certain Affirmation of Amended and Restated Sunbelt Pledge and
Security Agreement dated as of May 29, 1998 by Sunbelt for the
benefit of the Collateral Agent for and representative of the Secured
Parties
12. That certain Affirmation of Amended and Restated Assets Pledge and
Security Agreement With Respect to Huntway Special General Partner
Pledge and Security Agreement dated as of May 29, 1998 by Huntway
Holdings for the benefit of the Collateral Agent, as collateral agent
for and representative of the Secured Parties
13. That certain Affirmation of Amended and Restated Current Pledge and
Security Agreement dated as of May 29, 1998 by Huntway, for the
benefit of the Collateral Agent, as collateral agent for and
representative of the Secured Parties
14. That certain Affirmation of Amended and Restated Huntway Pledge and
Security Agreement dated as of May 29, 1998 by Huntway, for the
benefit of the Collateral Agent, as collateral agent for and
representative of the Secured Parties
15. That certain Affirmation of Amended and Restated Pledge and Security
Agreement With Respect to Huntway Managing Partner Pledge and
Security Agreement dated as of May 29, 1998 by Huntway Managing
Partner for the benefit of the Collateral Agent, as collateral agent
for and representative of the Secured Parties
SCHEDULE B
AMENDED AND RESTATED GUARANTIES
1. That certain Amended and Restated Huntway Guaranty dated as of
December 12, 1996, by Huntway Partners, L.P., and accepted by
Collateral Agent
2. That certain Affirmation of Amended and Restated Huntway Guaranty
Agreement dated as of May 29, 1998 by Huntway for the benefit of the
Secured Parties
3. That certain Amended and Restated Special General Partner Guaranty
dated as of December 12, 1996, by Huntway Holdings and accepted by
Collateral Agent
4. That certain Affirmation of Amended and Restated Huntway Special
General Partner Guaranty Agreement dated as of May 29, 1998 by
Huntway Holdings for the benefit of the Secured Parties
5. That certain Amended and Restated Huntway Managing General Partner
Guaranty dated as of December 12, 1996, by Huntway Managing Partner,
and accepted by Collateral Agent
6. That certain Affirmation of Amended and Restated Huntway Managing
Partner Guaranty Agreement dated as of May 29, 1998 by Huntway
Managing Partner in favor of the Secured Parties
7. That certain Amended and Restated Sunbelt Guaranty dated as of
December 12, 1996, by Sunbelt Refining Company, L.P.
8. That certain Affirmation of Amended and Restated Sunbelt Guaranty
Agreement dated as of May 29, 1998 by Sunbelt for the benefit of the
Secured Parties
SCHEDULE I
[FORM OF ACKNOWLEDGMENT]
Reference is hereby made to the Second Amended and Restated
Intercreditor Agreement dated as of October 29, 1999 (as amended to the
date hereof, the Intercreditor Agreement), by and among Bank of America,
N.A., Boeing Capital Corporation, the Convertible Note Holders listed on
the signature pages thereof, State Street Bank and Trust Company, as
Trustee under the Senior Subordinated Indenture, and United States Trust
Company of New York as the Collateral Agent thereunder, in which this
Acknowledgment is incorporated. The undersigned has entered into a
Replacement Letter of Credit Agreement with Huntway Refining Company, a
Delaware corporation, and requests that the obligations thereunder be
secured by the Collateral (as defined in the Intercreditor Agreement). The
undersigned hereby acknowledges the terms of the Intercreditor Agreement
and agrees to be bound by the terms thereof.
[NAME OF REPLACEMENT LOC BANK]
By___________________________
Title________________________
Date___________________
Notice Address:
_____________________________
_____________________________
_____________________________
EXHIBIT C
SECOND AMENDED AND RESTATED
COLLATERAL ACCOUNTS SECURITY AGREEMENT
This SECOND AMENDED AND RESTATED COLLATERAL ACCOUNTS SECURITY
AGREEMENT (this Agreement) is dated as of October 29, 1999 and entered into
by and between HUNTWAY REFINING COMPANY, a Delaware corporation (Huntway),
SUNBELT REFINING COMPANY, L.P., a Delaware limited partnership (Sunbelt;
Huntway and Sunbelt together are referred to herein as Pledgors), UNITED
STATES TRUST COMPANY OF NEW YORK, as collateral agent for and
representative of (in such capacity herein called Collateral Agent) the
Secured Parties named in the Intercreditor Agreement (as defined below) and
BANK OF AMERICA, N.A. as an agent of the Collateral Agent maintaining
certain accounts for Pledgors (in such capacity herein called B of A).
PRELIMINARY STATEMENTS
A. The parties hereto (other than B of A) and Bankers Trust
Company are parties to an Amended and Restated Collateral Accounts Security
Agreement dated as of December 12, 1996, as amended (the Existing
Collateral Accounts Agreement).
B. Pursuant to a Second Refinancing and Amendatory Agreement of
even date herewith to which Pledgors, the Collateral Agent, Bank of
America, N.A. and others are parties, Bankers Trust Company is ceasing to
act under the Existing Collateral Accounts Agreement as agent of the
Collateral Agent and Bank of America, N.A. is commencing to act as such
agent.
C. The parties to the Existing Collateral Accounts Agreement
desire to reflect the foregoing and such parties desire to add B of A as a
party to the Existing Collateral Accounts Agreement.
D. In connection therewith, and in view of the numerous amendments
included in and to be made to the Existing Collateral Accounts Agreement,
the parties hereto desire to amend and restate the Existing Collateral
Accounts Agreement.
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Pledgors, B of A and Collateral Agent hereby amend and
restate the Existing Collateral Account Agreement as follows:
1. Definitions. The following terms used in this Agreement shall
have the following meanings:
Boeing Capital means Boeing Capital Corporation, a Delaware
corporation.
Boeing Capital Loan Agreement means the Loan Agreement dated as of
January 20, 1999 between Boeing Capital and Huntway, as the same has been
amended and may hereafter be amended, supplemented, restated or otherwise
modified from time to time.
Boeing Capital Notes means any note or notes issued by Huntway
pursuant to the Boeing Capital Loan Agreement and any note or notes issued
in replacement or substitution therefor.
B of A shall have the meaning assigned to that term in the
Preliminary Statements to this Agreement.
Cash Equivalents means, as at any date of determination, (i)
marketable securities issued or directly and unconditionally guaranteed by
the United States Government or issued by any agency thereof and backed by
the full faith and credit of the United States, in each case maturing
within two hundred seventy (270) days from such date; (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 two hundred seventy (270) days from such date and,
at the time of acquisition thereof, having the highest rating obtainable
from either Standard & Poors Corporation or Moodys Investors Service, Inc.;
(iii) commercial paper maturing no more than two hundred seventy (270) days
from such date and, at the time of acquisition thereof, having either of
the two highest ratings obtainable from either Standard & Poors Corporation
or Moodys Investors Service, Inc.; and (iv) certificates of deposit
(whether or not Eurodollar in nature), bankers acceptances, repurchase
agreements, reverse repurchase agreements, Eurodollar time deposits
maturing within one year or similar investments maturing within 12 months
from the date of acquisition thereof issued by B of A prior to the
occurrence of a Sharing Event and issued by the Collateral Agent after the
occurrence of a Sharing Event; provided that in order to provide Collateral
Agent, for the benefit of itself and the other Secured Parties, with a
perfected security interest therein, each Cash Equivalent described in
clauses (i), (ii), or (iv) above shall be either:
(a) evidenced by negotiable certificates or instruments, or
if non-negotiable then issued in the name of Collateral Agent, its nominee,
its custodian or the nominee of its custodian, which (together with any
appropriate instruments of transfer) are delivered to, and held by,
Collateral Agent (or its nominee, its custodian or its custodians nominee)
or any agent thereof (which shall not be Huntway or any of its Affiliates)
in the State of New York or California; or
(b) in book-entry form and issued by the United States and
subject to pledge under applicable state law and Treasury regulations and
as to which (in the opinion of counsel to B of A prior to the occurrence of
a Sharing Event or counsel to the Collateral Agent after the occurrence of
a Sharing Event) appropriate measures shall have been taken for perfection
of such security interests.
Collateral means (i) the Collateral Accounts and all amounts from
time to time on deposit therein, (ii) all Investments, including all
certificates and instruments from time to time representing or evidencing
such Investments and any account or accounts in which such Investments may
be held by, or in the name of, or for, Collateral Agent or B of A for or on
behalf of a Pledgor, (iii) all notes, certificates of deposit, checks and
other instruments and all deposits and uncertificated securities from time
to time hereafter transferred to or otherwise possessed by, or held in the
name of, Collateral Agent (or any agent of the Collateral Agent) for or on
behalf of a Pledgor in substitution for or in addition to any or all of the
Collateral, (iv) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Collateral, and (v) to the
extent not covered by clauses (i) through (iv) above, all proceeds of any
or all of the foregoing Collateral.
Collateral Accounts means each of the Disbursing Accounts, the
Receiving Accounts, the Lock Box Accounts and the Distribution Account.
Collateral Agent means United States Trust Company of New York, in
its capacity as collateral trustee for, collateral agent for, and
representative of, the other Secured Parties as so appointed in the
Intercreditor Agreement.
Collateral Documents shall have the meaning assigned to that term in
the Intercreditor Agreement.
Convertible Notes means the 9-1/4% Senior Subordinated Secured
Convertible Notes due 2007 issued by the Company under the Senior
Subordinated Indenture.
Deposit Account means a demand, time, savings, passbook, NOW, money
market or like account with a bank, savings and loan association, credit
union or like organization other than an account evidenced by a negotiable
certificate of deposit.
Depository Bank shall have the meaning assigned to that term in
Section 2 of this Agreement.
Disbursing Accounts shall have the meaning assigned to that term in
Section 2(a) of this Agreement.
Distribution Account shall have the meaning assigned to that term in
Section 6(a) of this Agreement.
Event of Default shall have the meaning assigned to such term in each
of the Boeing Capital Loan Agreement and the Senior Subordinated Indenture
and the meaning assigned to the term event of default in the Letter of
Credit Agreement.
Extraordinary Proceeds shall have the meaning assigned to that term
in the Intercreditor Agreement.
Huntway shall have the meaning assigned to that term in the
Preliminary Statements to this Agreement.
Intercreditor Agreement means the Second Amended and Restated
Intercreditor and Collateral Trust Agreement dated as of October 29, 1999
among Bank of America, N.A., Boeing Capital Corporation, the holders of the
Convertible Notes listed on the signature pages thereof, State Street Bank
and Trust Company, as trustee under the Senior Subordinated Indenture, and
Collateral Agent, as the same may be amended, supplemented, restated or
otherwise modified from time to time.
Investments means those investments, if any, made by Collateral Agent
or any agent thereof pursuant to Section 10.
Letters of Credit means the letters of credit issued under the Letter
of Credit Agreement or the Replacement Letter of Credit Agreement.
Letter of Credit Agreement shall have the meaning assigned to such
term in the Intercreditor Agreement.
LOC Bank shall have the meaning assigned to such term in the
Intercreditor Agreement.
Lock Box Accounts shall have the meaning assigned to that term in
Section 2 of this Agreement.
Permitted Encumbrances means encumbrances that are not prohibited by
Paragraph 9.7 of the Letter of Credit Agreement, Section 8.2 of the Boeing
Capital Loan Agreement or Section 4.11 of the Senior Subordinated
Indenture.
Potential Event of Default shall have the meaning assigned to the
term Default in each of the Boeing Capital Loan Agreement and the Senior
Subordinated Indenture and shall also mean any event which is, or with
notice or lapse of time or both would be, an event of default under the
Letter of Credit Agreement.
Receiving Account and Lock Box Agreement shall mean any of (i) the
existing Lockbox Agreement among the Company, Regulus West LLC and Wells
Fargo Bank, N.A., (ii) an agreement, substantially in the form of Exhibit A
attached hereto among Huntway and/or Sunbelt, a Depository Bank, B of A and
the Collateral Agent, or (iii) an agreement contemplated in Section 2(c) of
this Agreement.
Receiving Accounts shall have the meaning assigned to that term in
Section 2(a) of this Agreement.
Replacement Letter of Credit Agreement shall have the meaning
assigned to such term in the Intercreditor Agreement.
Secured Obligations means all obligations and liabilities of every
nature of Pledgors owing to Secured Parties now or hereafter existing under
or arising out of or in connection with the Letter of Credit Agreement, the
Replacement Letter of Credit Agreement, the Boeing Capital Loan Agreement,
the Boeing Capital Notes, the Senior Subordinated Indenture, the
Convertible Notes, the Intercreditor Agreement and each of the Collateral
Documents and all extensions or renewals thereof, whether for principal,
interest (including, without limitation, interest that, but for the filing
of a petition in bankruptcy with respect to Pledgors, would accrue on such
obligations), reimbursement of amounts drawn under Letters of Credit, fees,
commissions, expenses, indemnities or otherwise, whether voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not
from time to time decreased or extinguished and later increased, created or
incurred, and all or any portion of such obligations or liabilities that
are paid, to the extent all or any part of such payment is avoided or
recovered directly or indirectly from Collateral Agent as a preference,
fraudulent transfer or otherwise, and all obligations of every nature of
Pledgors now or hereafter existing under this Agreement.
Secured Parties means the Collateral Agent and the holders from time
to time of the Secured Obligations.
Senior Subordinated Indenture means the Indenture dated as of October
15, 1997 between the Company and State Street Bank & Trust Company, as
trustee, as the same has been supplemented and may hereafter be amended,
supplemented, restated or otherwise modified from time to time.
Sharing Event shall have the meaning set forth in the Intercreditor
Agreement.
SECTION 2. Disbursing, Receiving and Lock Box Accounts.
(a) Each Pledgor has established one or more disbursing accounts
with B of A, as agent for the Collateral Agent, each of which is described
on Schedule I attached hereto (the Disbursing Accounts). Pledgors have
also established certain receiving accounts with B of A, each of which is
described on Schedule I attached hereto (the Receiving Accounts) and
certain lock box accounts with certain commercial banks (each of which such
banks is referred to herein as a Depository Bank), each of which is
described on Schedule I attached hereto (the Lock Box Accounts).
(b) In order to establish the applicable Pledgors, Collateral
Agents, B of As and Depository Banks rights and obligations with respect to
each Lock Box Account, the applicable Pledgor has entered into or is
concurrently herewith entering into a Receiving Account and Lock Box
Agreement with the applicable Depository Bank.
(c) It is expressly understood that at any time while B of A
remains an agent of the Collateral Agent hereunder, B of A may cause the
lock box accounts referred to in (a) above to be established with it rather
than with the banks referred to in (a) above (in which event B of A shall
be referred to herein as a Depository Bank and such lock box accounts
established at B of A shall be referred to herein as the Lock Box
Accounts); provided that prior to taking such action, the applicable
Pledgor(s), the Collateral Agent and B of A shall enter into a mutually
acceptable agreement establishing their rights and obligations with respect
to each such Lock Box Account (which agreement shall be referred to herein
as a Receiving Account and Lock Box Agreement).
(d) Each Pledgor shall notify all of its customers and account
debtors in writing to make any and all payments owing to such Pledgor by
direct deposit to one of its Lock Box Accounts; provided that in lieu of
having such payments made into a Lock Box Account, each Pledgor may in good
faith collect, to maximize and expedite cash receipts, payment directly
from an account debtor and immediately transfer the amount collected to the
Receiving Account. Notwithstanding the foregoing, in the event that
Pledgors or any Depository Bank shall otherwise receive any amounts due or
other proceeds with respect to any accounts of Pledgors, Pledgors or such
Depository Bank shall hold such amounts in trust for Collateral Agent and
immediately transfer such amounts to the applicable Receiving Account.
(e) Except as otherwise provided herein, B of A shall transfer from
such Receiving Account to the applicable Disbursing Account all amounts
received from a Depository Bank pursuant to any Receiving Account and Lock
Box Agreement.
(f) Upon the occurrence of a Sharing Event, B of A shall promptly
transfer the balances in the Receiving Accounts and Disbursing Accounts to
Collateral Agent for deposit into the Distribution Account by wire transfer
in accordance with the instructions set forth herein.
SECTION 3. [intentionally omitted]
SECTION 4. [intentionally omitted]
SECTION 5. [intentionally omitted]
SECTION 6. Distribution Account.
(a) Pursuant to Section 3.2 of the Intercreditor Agreement,
Collateral Agent has established and will maintain a Huntway Distribution
Account which is described on Schedule I attached hereto (the Distribution
Account).
(b) Upon the receipt by Collateral Agent of any amount delivered to
it pursuant to Section 2.1B of the Intercreditor Agreement, Collateral
Agent shall deposit all such amounts in the Distribution Account.
(c) Collateral Agent shall administer and distribute all amounts
held in the Distribution Account in accordance with Section 3.2 of the
Intercreditor Agreement.
SECTION 7. No Other Accounts. Except for the Collateral Accounts,
Pledgors shall not establish or maintain any Deposit Account other than the
demand deposit account at Wells Fargo Bank, N.A. related to the document
identified in clause (ii) of the definition of Receiving Account and
Lockbox Agreement.
SECTION 8. Pledge of Security for Secured Obligations. Pledgors
hereby pledge to Collateral Agent, and hereby grant to Collateral Agent a
security interest in, all of their respective right, title and interest in
and to the Collateral as collateral security for the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
362(a)), of all Secured Obligations. The rights of the Secured Parties
arising from or relating to the pledge and security interest hereby granted
by Pledgors in the Collateral are subject to the terms and provisions of
the Intercreditor Agreement.
This Section shall constitute notice from the Collateral Agent to B
of A, pursuant to California Commercial Code Section 9302(1)(g)(ii), of the
security interest of the Collateral Agent in and to any and all deposit and
other accounts maintained with B of A by the Company that are Collateral
Accounts, and acknowledgment by B of A to the Collateral Agent of receipt
of such notice.
SECTION 9. Delivery of Pledged Collateral. All certificates or
instruments, if any, representing or evidencing the Collateral shall be
delivered to and held by or on behalf of B of A as agent for the Collateral
Agent or Collateral Agent pursuant hereto and shall be in suitable form for
transfer by delivery or, as applicable, shall be accompanied by the
applicable Pledgors endorsement, where necessary, or duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to B of A or Collateral Agent. In the event any Collateral is
not evidenced by a certificate, a notation reflecting title in the name of
Collateral Agent or the security interest of Collateral Agent shall be made
in the records of the issuer of such Collateral or in such other
appropriate records as Collateral Agent may require, all in form and
substance satisfactory to Collateral Agent. Collateral Agent and B of A
shall have the right, at any time in its discretion and without notice to
Pledgors, to transfer to or to register in the name of Collateral Agent or
any of its nominees any or all of the Collateral. In addition, Collateral
Agent and B of A shall have the right at any time to exchange certificates
or instruments representing or evidencing Collateral for certificates or
instruments of smaller or larger denominations.
SECTION 10. Investment of Amounts in the Collateral Account. Cash
held by B of A or Collateral Agent in any Collateral Account shall not be
invested or reinvested except as provided in this Section 10.
(a) Except as otherwise provided in Section 18, any funds on
deposit in any Collateral Account shall be invested by B of A or Collateral
Agent prior to the occurrence of a Sharing Event (i) in a savings or time
deposit account of B of A maturing within seven (7) days or (ii) so long as
no Event of Default or Potential Event of Default shall have occurred and
be continuing, and upon receipt from time to time by B of A or Collateral
Agent from Huntway or Sunbelt, as the case may be, of appropriate written
or tested telex instructions (or oral instructions from employees
authorized in writing from time to time by Huntway or Sunbelt, as the case
may be), in Cash Equivalents. Following the occurrence of a Sharing Event,
the Collateral Agent shall invest funds on deposit in the Disbursing
Account pursuant to the terms of the Intercreditor Agreement.
(b) B of A or Collateral Agent is hereby authorized to sell, and
shall sell, all or any designated part of the securities constituting part
of the Collateral (i) so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing, upon receipt of appropriate
written or tested telex instructions from Huntway or Sunbelt, as the case
may be, or (ii) in any event if such sale is necessary to permit B of A or
Collateral Agent to perform its respective duties hereunder. Neither B of
A nor Collateral Agent shall have any responsibility for any loss resulting
from a fluctuation in interest rates, penalty for liquidating investments
prior to maturity or otherwise. Any interest received in respect of
securities constituting part of the Collateral and the net proceeds of the
sale or payment of any such securities shall be held in the Collateral
Account from which such interest and proceeds are derived by B of A or
Collateral Agent pending investment thereof pursuant to Section 10(a).
(c) Each Collateral Account shall be subject to such applicable
laws, and such applicable regulations of the Board of Governors of the
Federal Reserve System and of any other appropriate banking or governmental
authority, as may now or hereafter be in effect.
SECTION 11. Representations and Warranties. Each Pledgor severally
represents and warrants as follows:
(a) Ownership of Collateral. Each Pledgor is (or at the time of
transfer to B of A or Collateral Agent thereof will be) the legal and
beneficial owner of the Collateral applicable to it from time to time
transferred by such Pledgor to Collateral Agent or B of A, free and clear
of any Lien except for the security interest created by this Agreement and
the Collateral Documents and Permitted Encumbrances.
(b) Governmental Authorizations. No authorization, approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for either (i) the grant by
Pledgors of the security interest granted hereby or for the execution,
delivery or performance of this Agreement by Pledgors or (ii) the
perfection of or the exercise by B of A or Collateral Agent of its
respective rights and remedies hereunder (except as may have been taken by
or at the direction of Pledgors).
(c) Perfection. The pledge and assignment of the Collateral
pursuant to this Agreement continues a valid and perfected first priority
security interest in the Collateral, securing the payment of the Secured
Obligations.
(d) Deposit Accounts. No Deposit Accounts are maintained by either
Pledgor, other than the Collateral Accounts and the demand deposit account
at Wells Fargo Bank, N.A. related to the document identified in clause (ii)
of the definition of Receiving Account and Lock Box Agreement.
(e) Other Information. All information heretofore, herein or
hereafter supplied to B of A or Collateral Agent by or on behalf of each
Pledgor with respect to the Collateral is accurate and complete in all
respects.
SECTION 12. Further Assurances. Each Pledgor agrees that from time
to time, at the expense of such Pledgor, it will promptly execute and
deliver all further instruments and documents, and take all further action,
that may be necessary or desirable, or that B of A or Collateral Agent upon
advice of counsel may request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable B of A or
Collateral Agent to exercise and enforce its rights and remedies hereunder
with respect to any Collateral. Without limiting the generality of the
foregoing, each Pledgor will: (i) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments
or notices, as may be necessary or desirable, or as Collateral Agent upon
advice of counsel may request, in order to perfect and preserve the
security interests granted or purported to be granted hereby and (ii) at
Collateral Agents request upon advice of counsel, appear in and defend any
action or proceeding that may affect such Pledgors title to or Collateral
Agents security interest in all or any part of the Collateral.
SECTION 13. Transfers and Other Liens. Each Pledgor agrees that it
will not (a) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral or (b) create or suffer to exist any Lien
upon or with respect to any of the Collateral, except for the security
interest under this Agreement or the Collateral Documents and Permitted
Encumbrances.
SECTION 14. Collateral Agent Appointed Attorney-in-Fact. Each
Pledgor hereby irrevocably appoints Collateral Agent and, for purposes of
clause (b) below, B of A as its attorney-in-fact, with full authority in
the place and stead of such Pledgor and in the name of such Pledgor,
Collateral Agent or otherwise, from time to time as directed pursuant to
the Intercreditor Agreement to take any action and to execute any
instrument that Collateral Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including without limitation
(a) to file one or more financing or continuation statements, or amendments
thereto, relative to all or any part of the Collateral without the
signature of such Pledgor and (b) to receive, endorse and collect any
instruments made payable to such Pledgor representing any dividend,
principal or interest payment or other distribution in respect of the
Collateral or any part thereof and to give full discharge for the same.
SECTION 15. Collateral Agent May Perform. If either Pledgor fails
to perform any agreement contained herein, Collateral Agent may itself
perform, or cause performance of, such agreement, and the expenses of
Collateral Agent incurred in connection therewith shall be payable by
Pledgors under Section 19.
SECTION 16. Standard of Care. The powers conferred on B of A and
Collateral Agent hereunder are solely to protect its respective interest in
the Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually
received by it hereunder, neither B of A nor Collateral Agent shall have
any duty as to any Collateral, it being understood that neither B of A nor
Collateral Agent shall have any responsibility for (a) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relating to any Collateral, whether or not
Collateral Agent or B of A has or is deemed to have knowledge of such
matters, (b) taking any necessary steps (other than steps taken in
accordance with the standard of care set forth above to maintain possession
of the Collateral) to preserve rights against any parties with respect to
any Collateral, (c) taking any necessary steps to collect or realize upon
the Secured Obligations or any guarantee therefor, or any part thereof, or
any of the Collateral, (d) initiating any action to protect the Collateral
against the possibility of a decline in market value, (e) any loss
resulting from Investments made pursuant to Section 10, except for a loss
resulting from B of As or Collateral Agents gross negligence or willful
misconduct in complying with Section 10, or (f) determining (i) the
correctness of any statement or calculation made by either Pledgor in any
written certification, facsimile transmission (confirmed by telephone with
the original sent by guaranteed overnight courier) or telex (tested or
otherwise) instructions or (ii) whether any deposit in the Collateral
Account is proper. B of A and Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in
its possession if such Collateral is accorded treatment substantially equal
to that which B of A and Collateral Agent, respectively, accords its own
property consisting of negotiable securities.
SECTION 17. Remedies.
(a) Subject to the provisions of the Intercreditor Agreement, if
any Event of Default shall have occurred and be continuing, Collateral
Agent may exercise in respect of the Collateral, in addition to all other
rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under the Uniform
Commercial Code as in effect in any relevant jurisdiction (the Code)
(whether or not the Code applies to the affected Collateral), and
Collateral Agent may also in its sole discretion, without notice except as
specified below, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any exchange or brokers board or at
any of Collateral Agents offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon
such other terms as Collateral Agent may deem commercially reasonable,
irrespective of the impact of any such sales on the market price of the
Collateral. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of either Pledgor, and
each Pledgor hereby waives (to the extent permitted by applicable law) all
rights of redemption, stay and/or appraisal which it now has or may at any
time in the future have under any rule of law or statute now existing or
hereafter enacted. Each Pledgor agrees that, to the extent notice of sale
shall be required by law, at least ten days notice to such Pledgor of the
time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification. Collateral Agent
shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. Collateral Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. If the proceeds of any sale or
other disposition of the Collateral are insufficient to pay all the Secured
Obligations, each Pledgor shall be liable for the deficiency and the fees
of any attorneys employed by Collateral Agent to collect such deficiency.
(b) Prior to the occurrence of a Sharing Event, anything contained
herein to the contrary notwithstanding, any of the Collateral consisting of
investments in a savings or time deposit of B of A maturing within seven
(7) days shall be subject to B of As rights of set-off under the Letter of
Credit Agreement except as otherwise provided in the Intercreditor
Agreement.
SECTION 18. Application of Proceeds. If any Event of Default shall
have occurred and be continuing, all cash held by Collateral Agent as
Collateral and all proceeds received by Collateral Agent in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral will be held by Collateral Agent as Collateral for, and/or then,
or at any other time thereafter, applied in full or in part by Collateral
Agent against, the Secured Obligations in the following order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Collateral Agent and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by Collateral Agent in connection
therewith, and all amounts for which Collateral Agent or B of A is entitled
to indemnification hereunder and all advances made by Collateral Agent
hereunder for the account of a Pledgor, and to the payment of all costs and
expenses paid or incurred by Collateral Agent in connection with the
exercise of any right or remedy hereunder, all in accordance with Section
19;
SECOND: To the payment of all other Secured Obligations to the
extent and in the order provided in Section 2.1 of the Intercreditor
Agreement; and
THIRD: To the payment to or upon the order of the applicable
Pledgor, or to whosoever may be lawfully entitled to receive the same or as
a court of competent jurisdiction may direct, of any surplus then remaining
from such proceeds.
SECTION 19. Indemnity and Expenses.
(a) Each Pledgor agrees to indemnify Collateral Agent and B of A
solely in its capacity as agent for the Collateral Agent, their respective
agents and counsel from and against any and all claims, losses and
liabilities in any way relating to, growing out of or resulting from this
Agreement and the transactions contemplated hereby (including, without
limitation, enforcement of this Agreement, including but not limited to any
and all Environmental Claims (as such term is defined in the Intercreditor
Agreement) and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever in connection therewith), except to the extent such
claims, losses or liabilities result solely from B of As (solely in its
capacity as agent for the Collateral Agent) or Collateral Agents respective
gross negligence or willful misconduct as finally determined by a court of
competent jurisdiction.
(b) Each Pledgor agrees to pay to B of A solely in its capacity as
agent for the Collateral Agent and Collateral Agent upon demand the amount
of any and all costs and expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that B of A solely
in its capacity as agent for the Collateral Agent or Collateral Agent may
incur in connection with (i) the administration of this Agreement
(including, without limitation, enforcement of this Agreement, including
but not limited to any and all Environmental Claims (as such term is
defined in the Intercreditor Agreement) and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever in connection therewith),
(ii) the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any of the rights of B of A solely in
its capacity as agent for the Collateral Agent or Collateral Agent
hereunder, or (iv) the failure by such Pledgor to perform or observe any of
the provisions hereof. The indemnity obligations under this Section 19
shall survive any termination, satisfaction or discharge of this Agreement,
including the payment in full of the Secured Obligations. To the extent
that the Collateral Agent renders any services hereunder following
commencement of a voluntary or involuntary bankruptcy of any of the
Pledgors, the parties hereto agree that these services are intended to
constitute expenses of administration in any such bankruptcy proceeding.
(c) By its execution of this Agreement, Huntway acknowledges and
agrees to pay compensation to the Collateral Agent as set forth in Section
3.17 of the Intercreditor Agreement.
SECTION 20. Continuing Security Interest; Transfer of Obligations.
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until written
confirmation from the Secured Parties of the indefeasible payment in full
of the Secured Obligations (other than any indemnification obligations for
which any Secured Party has not made a claim; provided, however that the
termination of such security interest will not release the Pledgors from
their indemnification obligations, which shall survive such termination),
the cancellation or termination of the Commitment (as defined in the Letter
of Credit Agreement) or the commitment pursuant to the Replacement Letter
of Credit Agreement and the cancellation or expiration of all outstanding
Letters of Credit, (b) be binding upon each Pledgor, its successors and
assigns, and (c) inure, together with the rights and remedies of B of A and
Collateral Agent hereunder, to the benefit of B of A and Collateral Agent
and its successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Secured Party may assign or
otherwise transfer any Secured Obligations owing to it to any other Person,
and such other Person shall thereupon become vested with all the benefits
in respect thereof granted to Collateral Agent herein or otherwise. Upon
the indefeasible payment in full of all Secured Obligations, the
cancellation or termination of the Commitment or the commitment pursuant to
the Replacement Letter of Credit Agreement and the cancellation or
expiration of all outstanding Letters of Credit, the security interest
granted hereby shall terminate and all rights to the Collateral shall
revert to the applicable Pledgor. Upon any such termination B of A and
Collateral Agent will, at the applicable Pledgors expense, execute and
deliver to such Pledgor such documents as such Pledgor shall reasonably
request to evidence such termination and such Pledgor shall be entitled to
the return, upon its request and at its expense, against receipt and
without recourse to B of A or Collateral Agent, of such of the Collateral
as shall not have been sold or otherwise applied pursuant to the terms
hereof.
SECTION 21. Collateral Agent as Agent of Secured Parties; B of A as
Agent of Collateral Agent.
(a) Collateral Agent has been appointed to act as Collateral Agent
hereunder by Secured Parties under Section 3.1 of the Intercreditor
Agreement. Collateral Agent shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action
(including, without limitation, the release or substitution of Collateral),
solely in accordance with this Agreement and the Intercreditor Agreement.
(b) Collateral Agent shall at all times be the same Person that is
Collateral Agent under the Intercreditor Agreement. Written notice of
resignation by Collateral Agent pursuant to Section 3.19 of the
Intercreditor Agreement shall also constitute notice of resignation as
Collateral Agent under this Agreement; removal of Collateral Agent pursuant
to Section 3.19 of the Intercreditor Agreement shall also constitute
removal as Collateral Agent under this Agreement; and appointment of a
successor Collateral Agent pursuant to Section 3.19 of the Intercreditor
Agreement shall also constitute appointment of a successor Collateral Agent
under this Agreement. Upon the acceptance of any appointment as Collateral
Agent under Section 3.19 of the Intercreditor Agreement by a successor
Collateral Agent, that successor Collateral Agent shall thereupon succeed
to and become vested with all the rights, powers, privileges and duties of
the retiring or removed Collateral Agent under this Agreement, and the
retiring or removed Collateral Agent under this Agreement shall promptly
(i) transfer to such successor Collateral Agent all sums, securities and
other items of Collateral held hereunder (which shall be deposited in a new
Collateral Account established and maintained by such successor Collateral
Agent), together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the
successor Collateral Agent under this Agreement, and (ii) execute and
deliver to such successor Collateral Agent such amendments to financing
statements, and take such other actions, as may be necessary or appropriate
in connection with the assignment to such successor Collateral Agent of the
security interests created hereunder, whereupon such retiring or removed
Collateral Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring or removed Collateral Agents
resignation or removal hereunder as Collateral Agent, the provisions of
this Agreement shall inure to its benefit as to any actions taken or
omitted to be taken by it under this Agreement while it was Collateral
Agent hereunder.
(c) B of A has been authorized by the Secured Parties to act as the
agent of the Collateral Agent pursuant to Section 2.7 of the Intercreditor
Agreement. B of A shall take or refrain from taking any action solely in
accordance with this Agreement. B of A shall provide the Collateral Agent
from time to time with such information regarding its actions as agent of
the Collateral Agent as the Collateral Agent shall request.
SECTION 22. Amendments; Etc. No amendment or waiver of any
provision of this Agreement, or consent to any departure by Pledgors
herefrom, shall in any event be effective unless the same shall be in
writing and signed by B of A and Collateral Agent, and then such waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which it was given.
SECTION 23. Notices. Any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telecopied, telexed or sent by United States mail or courier
service and shall be deemed to have been given when delivered in person or
by courier service, upon receipt of telecopy or telex, or four Business
Days after depositing it in the United States mail, registered or
certified, with postage prepaid and properly addressed. For the purposes
hereof, the address of each party hereto shall be as set forth under such
partys name on the signature pages hereof or, as to either party, such
other address as shall be designated by such party in a written notice
delivered to the other party hereto.
SECTION 24. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Collateral Agent or B of A in the
exercise of any power, right or privilege hereunder shall impair such
power, right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude any other or further exercise thereof or
of any other power, right or privilege. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
SECTION 25. Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 26. Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given
any substantive effect.
SECTION 27. Governing Law; Terms. THIS AGREEMENT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE VALIDITY
OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined
herein, terms used in Article 9 of the Uniform Commercial Code in the State
of New York are used herein as therein defined.
SECTION 28. Consent to Jurisdiction. ALL JUDICIAL PROCEEDINGS
BROUGHT AGAINST EITHER PLEDGOR ARISING OUT OF OR RELATING TO THIS AGREEMENT
MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN
THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT EACH
PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY
AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS
AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of Collateral Agent to bring
proceedings against such Pledgor in the courts of any other jurisdiction.
SECTION 29. Waiver of Jury Trial. EACH PLEDGOR, B OF A AND
COLLATERAL AGENT HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. The scope of this waiver is intended to be all-encompassing of
any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. Each Pledgor, B of A and Collateral Agent each
acknowledge that this waiver is a material inducement for such Pledgor, B
of A and Collateral Agent to enter into a business relationship, that such
Pledgor, B of A and Collateral Agent have already relied on this waiver in
entering into this Agreement and that each will continue to rely on this
waiver in their related future dealings. Each Pledgor, B of A and
Collateral Agent further warrant and represent 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, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In
the event of litigation, this Agreement may be filed as a written consent
to a trial by the court.
SECTION 30. Counterparts. This Agreement may be executed in one or
more 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.
IN WITNESS WHEREOF, each Pledgor, B of A and Collateral Agent have
caused this Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first written above.
PLEDGORS:
HUNTWAY REFINING COMPANY
By: _______________________________
Title:
Notice Address: 25129 The Old Road
Suite 322
Newhall, California 91381
Attn: Mr. Warren Nelson
SUNBELT REFINING COMPANY, L.P.
By: HUNTWAY REFINING COMPANY, its sole
General Partner
By: ________________________________
Title:
Notice Address: 25129 The Old Road
Suite 322
Newhall, California 91381
Attn: Mr. Warren Nelson
COLLATERAL AGENT:
UNITED STATES TRUST COMPANY
OF NEW YORK
By: _______________________________
Title:
Notice Address: 114 West 47th Street
New York, New York 10036
Attention: Corporate
Trust Department
B OF A:
BANK OF AMERICA, N.A.
By: ________________________________
Title:
Notice Address: Los Angeles Regional
Commercial Banking
Office
525 S. Flower St.
Los Angeles, CA 90071
Attenton: Con ONeil
SCHEDULE I TO AMENDED AND RESTATED
COLLATERAL ACCOUNTS SECURITY AGREEMENT
Disbursing Accounts
Huntway 7765601121
Sunbelt 14650-01861
Receiving Accounts
Huntway 14654-01807
Sunbelt 14650-01861
Lock Box Accounts
Wells Fargo Bank, N.A.
Account No. 4159325075
Distribution Account
United States Trust Company of New York
094-51100
Huntway Distribution Account
Attention Cynthia Chaney
EXHIBIT A TO SECOND AMENDED AND RESTATED
COLLATERAL ACCOUNTS SECURITY AGREEMENT
RECEIVING ACCOUNT AND LOCK BOX AGREEMENT, dated as of [date], among
[NAME OF DEPOSITORY BANK] (Depository Bank), BANK OF AMERICA, N.A. (B of
A), UNITED STATES TRUST COMPANY OF NEW YORK, as collateral agent for and
representative of (in such capacity herein called Collateral Agent) the
holders of the Secured Obligations described in the Collateral Accounts
Agreement (as defined below) and [HUNTWAY REFINING COMPANY, a Delaware
corporation] [SUNBELT REFINING COMPANY, L.P., a Delaware limited
partnership] (Pledgor).
W I T N E S S E T H :
WHEREAS, Pledgor presently maintains at the Depository Bank the
account(s) described on Schedule I hereto (individually, a Lock Box Account
and, collectively, the Lock Box Accounts); and
WHEREAS, Pledgor, [Huntway Refining Company, a Delaware corporation]
[Sunbelt Refining Company, L.P., a Delaware limited partnership], B of A
and United States Trust Company of New York, as Collateral Agent have
entered into that certain Second Amended and Restated Collateral Accounts
Security Agreement dated as of October 29, 1999 (said agreement, as it may
hereafter be amended, restated, supplemented or otherwise modified from
time to time, being the Collateral Accounts Agreement; unless otherwise
noted, capitalized terms used herein and not defined herein are used herein
as defined in the Collateral Accounts Agreement), pursuant to which Pledgor
has granted to Collateral Agent a security interest in all of Pledgors
right, title and interest in and to the Lock Box Accounts and all amounts
from time to time on deposit therein; and
WHEREAS, it is a requirement of the Collateral Accounts Agreement
that the parties hereto execute and deliver this Receiving Account and Lock
Box Agreement;
NOW, THEREFORE , the parties hereto hereby agree as follows:
1. Pledgor agrees that all payments, whether in cash, by check or
other instrument, or otherwise, received by Pledgor from its customers
shall be deposited by Pledgor in its Lock Box Accounts; provided, however,
that payments made by wire transfer shall be made directly to the relevant
Receiving Account at B of A. Pledgor shall furnish to B of A each Business
Day a collection report setting forth, in such reasonable detail as B of A
may request, the deposits made during such day in its Lock Box Accounts,
together with a copy of each deposit slip issued in connection with such
deposits.
2. Prior to notification of the occurrence of a Sharing Event,
each of Pledgor and Depository Bank irrevocably authorizes and directs B of
A to initiate wire transfer instructions with respect to transferring the
available balance (as determined by Depository Bank) in Pledgors Lock Box
Accounts on each Business Day to Pledgors Receiving Account at B of A. The
parties agree that Pledgor shall not have any authority to withdraw any
amount from, to draw upon, or to otherwise exercise any powers as a
depositor or owner with respect to the Lock Box Accounts and the funds
deposited therein. Following receipt of notification of the occurrence of
a Sharing Event, all monies shall be wire transferred to the Collateral
Agent as set forth in paragraph 9 hereof.
3. The parties agree that all funds deposited in the Lock Box
Accounts from time to time shall, as between Pledgor and Collateral Agent,
be subject to the security interests in favor of Collateral Agent, be held
by Depository Bank subject to the security interest of Collateral Agent and
may be withdrawn at any time or from time to time at the direction of
Collateral Agent by check, draft, wire transfer or otherwise as Collateral
Agent shall determine. Prior to notification of the occurrence of a
Sharing Event, Depository Bank hereby agrees that, upon receipt of wire
transfer instructions from B of A as described in paragraph 1 above, it
shall forward daily all of the prior days available funds (as determined by
Depository Bank) deposited in the Lock Box Accounts by wire transfer to the
Receiving Account at B of A. Depository Bank hereby agrees that it will
provide Collateral Agent and B of A with written notice on or before the
date on which it terminates any of the Lock Box Accounts. Following
receipt of notification and the occurrence of a Sharing Event, all monies
shall be wire transferred to the Collateral Agent as set forth in paragraph
9 hereof
4. Depository Banks charges for the services to be performed
pursuant to this Agreement shall be as separately agreed to between
Depository Bank and Pledgor from time to time. To the extent that
Depository Banks charges are not paid when due, Collateral Agent, B of A
and Pledgor agree that Depository Bank shall have a lien and right of
offset against the funds in the applicable Lock Box Account.
5. Depository Bank agrees that at the request of Collateral Agent
or B of A it shall furnish to Collateral Agent or B of A a copy of the
original of all bank statements with respect to and all daily debit advices
of, the Lock Box Accounts, and promptly upon the issuance or receipt
thereof, copies of all notices and other communications with respect to the
Lock Box Accounts issued or received by Depository Bank.
6. This Agreement, and the covenants, agreements, authorizations
and directions contained herein, are irrevocable and cannot be changed or
modified without the prior written consent of Collateral Agent and B of A.
7. All checks, money orders and other evidences of payment
received by Depository Bank and all proceeds thereof are at all times to be
considered subject to the security interests granted by the Collateral
Documents and this Agreement and are further subject to the requirement
that, in accordance with the terms hereof, such amounts shall be duly
transferred to Collateral Agent or B of A, and neither Pledgor nor
Depository Bank shall have any rights or claims to, or interest in, such
property or any funds in the Lock Box Accounts, including any right to
offset except as provided in Section 4 hereof. Except as otherwise
required by law, any notice of legal process of any kind relating to
Pledgor which Depository Bank may receive shall have no effect whatsoever
on such property or the Lock Box Accounts or on Depository Banks
responsibility under this Agreement unless and until Depository Bank
receives written instructions from Collateral Agent to the contrary; upon
receipt of any legal process relating to Pledgor, Depository Bank shall
promptly give notice thereof to Pledgor, B of A and Collateral Agent.
8. Notwithstanding anything in this Agreement to the contrary,
Collateral Agent and B of A shall exercise, or shall refrain from
exercising, their powers and obligations hereunder or otherwise herewith in
accordance with instructions of Directing Parties (as defined in the
Intercreditor Agreement), and to the extent of matters affecting Collateral
under any Collateral Documents, in accordance with the instructions of
Directing Parties, and Secured Parties shall be bound by such instructions;
and the sole rights of Secured Parties under this Agreement shall be to be
secured by the Collateral and to receive the payments provided for with
respect thereto under the applicable Collateral Document and the
Intercreditor Agreement.
9. All notices, requests or other communications given to Pledgor,
B of A, Collateral Agent or the Depository Bank shall be given in writing
(including facsimile transmission or similar writing) at the address or
telecopy number specified below:
Collateral Agent: United States Trust Company
of New York
114 West 47th Street
New York, New York 10036
Attention: Corporate Trust Department
Telecopy: (212) 852-1626
B of A: Bank of America, N.A.
Los Angeles Regional
Commercial Banking Office
525 S. Flower St.
Los Angeles, CA 90071
Attention: Con ONeil
Telecopy: (213) 345-6981
Depository Bank: [address]
[contact person]
[fax]
Pledgor: [Huntway Refining Company]
[Sunbelt Refining Company, L.P.]
25129 The Old Road
Suite 322
Newhall, California 91381
Attention: Mr. Warren Nelson
Telecopy: (661) 286-1588
Any party may change its address or telecopy number for notices
hereunder by notice to each other party hereunder. Each notice, request or
other communication shall be effective (a) if given by mail, 48 hours after
such communication is deposited in the mails with registered first class
postage prepaid, addressed as aforesaid, or (b) if given by any other
means, when delivered at the address specified in this Section 9.
10. In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality or enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
11. This Agreement 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 taken together shall constitute but one and the same
instrument. This Agreement shall become effective as of the date first set
forth above upon the execution of a counterpart hereof by Pledgor, B of A,
the Depository Bank and Collateral Agent and receipt by Collateral Agent of
written or telephonic notification of such execution and authorization of
delivery thereof.
12. Pledgor and the Depository Bank shall execute and deliver to B
of A and Collateral Agent, all statements, documents, agreements and
reports it may from time to time reasonably request in order to implement
this Agreement or assure the proper deposit of funds to, and transfer of
funds from, the Lock Box Accounts.
13. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OBLIGATION HEREUNDER MAY BE BROUGHT IN
ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW
YORK AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, PLEDGOR ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT,
OR SUCH OBLIGATION. PLEDGOR DESIGNATES AND APPOINTS CT CORPORATION SYSTEM
WITH AN OFFICE AT 1633 BROADWAY, NEW YORK, NEW YORK 10019, AND SUCH OTHER
PERSONS AS MAY HEREAFTER BE SELECTED BY PLEDGOR IRREVOCABLY AGREEING IN
WRITING TO SO SERVE, AS ITS AGENT TO RECEIVE ON ITS BEHALF SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING
HEREBY ACKNOWLEDGED BY PLEDGOR TO BE EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT. A COPY OF ANY SUCH PROCESS SO SERVED SHALL BE MAILED BY
REGISTERED MAIL TO PLEDGOR AT ITS ADDRESS PROVIDED IN THIS AGREEMENT,
EXCEPT THAT UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO
MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY
AGENT APPOINTED BY PLEDGOR REFUSES TO ACCEPT SERVICE, PLEDGOR HEREBY AGREES
THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING
HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF COLLATERAL AGENT, DEPOSITORY
BANK OR ANY SECURED PARTY TO BRING PROCEEDINGS AGAINST PLEDGOR IN THE
COURTS OF ANY OTHER JURISDICTION.
14. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
15. EXCEPT TO THE EXTENT THAT THE LAWS OF THE STATE IN WHICH THE
DEPOSITORY BANK IS LOCATED GOVERN THE LOCK BOX ACCOUNTS, THIS AGREEMENT
SHALL BE GOVERNED BY, AND, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW, CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and delivered by its duly authorized officer on
the date first set forth above.
[DEPOSITORY BANK]
By _______________________
Title:
UNITED STATES TRUST COMPANY
OF NEW YORK,
as Collateral Agent
By _______________________
Title:
[HUNTWAY REFINING COMPANY
By ____________________________]
Title:
[SUNBELT REFINING COMPANY, L.P.
By HUNTWAY REFINING COMPANY, its
sole General Partner
By ____________________________]
Title:
BANK OF AMERICA, N.A.
By ________________________________
Title ___________________________
SCHEDULE I
TO
RECEIVING ACCOUNT AND LOCK BOX AGREEMENT
[List Lock Box Account(s)]
EXHIBI
T D
AMENDMENTS/CONSENTS/CONFIRMATION
TO BOEING CAPITAL LOAN AGREEMENT
1. Certain Definitions. Capitalized terms used in this Exhibit D
but not otherwise defined herein shall have the meanings given such terms
in the Second Refinancing and Amendatory Agreement to which this Exhibit D
is attached.
2. Amendments to the Boeing Capital Loan Agreement. The Boeing
Capital Loan Agreement is amended as follows:
(a) Definitions.
The following definition contained in the Boeing
Capital Loan Agreement is amended and restated as
follows:
Intercreditor Agreement means that certain Second
Amended and Restated Intercreditor and Collateral Trust
Agreement dated as of October 29, 1999 among Bank of
America, N.A., Lender, the Convertible Note Holders
listed on the signature pages thereof, State Street Bank
and Trust Company, as Trustee under the Senior
Subordinated Indenture, and United States Trust Company
of New York, as Collateral Agent, as it may from time to
time be amended, renewed, supplemented, restated or
otherwise modified.
(b) Financial Covenants. Section 7.18(b) of the Boeing
Capital Loan Agreement is amended by substituting for the
words $4,000,000 during Borrowers 2000 fiscal year the
words $4,000,000 (plus any portion of the allowance for
Borrowers 1999 fiscal year not expended during such
fiscal year) during Borrowers 2000 fiscal year.
(c) Indebtedness. Section 8.1(d) of the Boeing Capital Loan
Agreement is amended by substituting for clause (ii)
thereof the following: (ii) the net cash proceeds of such
refinancings, renewals, extensions or amendments do not
result in an increase in the aggregate principal amount
of the Indebtedness so refinanced, renewed, extended or
amended (other than any such increase with respect to the
Letter of Credit Agreement as contemplated under and
defined in the Intercreditor Agreement).
(d) Investments. Section 8.13 of the Boeing Capital Loan
Agreement is amended by adding the following at the end
thereof: For purposes of clause (i) above, the term cash-
equivalents means, as at any date of determination, (i)
marketable securities issued or directly and
unconditionally guaranteed by the United States
Government or issued by any agency thereof and backed by
the full faith and credit of the United States, in each
case maturing within two hundred seventy (270) days from
such date; (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 two hundred
seventy (270) days from such date and, at the time of
acquisition thereof, having the highest rating obtainable
from either Standard & Poors Corporation or Moodys
Investors Service, Inc.; (iii) commercial paper maturing
no more than two hundred seventy (270) days from such
date and, at the time of acquisition thereof, having
either of the two highest ratings obtainable from either
Standard & Poors Corporation or Moodys Investors Service,
Inc.; and (iv) certificates of deposit (whether or not
Eurodollar in nature), bankers acceptances, repurchase
agreements, reverse repurchase agreements, Eurodollar
time deposits maturing within one year or similar
investments maturing within 12 months from the date of
acquisition thereof issued by B of A prior to the
occurrence of a Sharing Event and issued by the
Collateral Agent after the occurrence of a Sharing Event.
3. Consents under Boeing Capital Loan Agreement. The following
transactions are consented to, and shall be permitted notwithstanding any
prohibition or other provision to the contrary contained in the Boeing
Capital Loan Agreement:
(a) The actions described in paragraph 1 of the Second
Refinancing and Amendatory Agreement to which this
Exhibit D is attached.
(b) The opening of the Receiving Accounts and Disbursing
Accounts described on Schedule I to the Second Amended
and Restated Collateral Accounts Agreement and any Lock
Box Account(s) established pursuant to Section 2(c) of
such Agreement.
4. Confirmation under Boeing Capital Loan Agreement. Boeing
Capital hereby confirms that the B of A Credit Agreement is satisfactory to
Boeing Capital for purposes of Section 7.9 of the Boeing Capital Loan
Agreement.
EXHIBI
T E
AMENDMENTS/CONSENTS TO SENIOR SUBORDINATED INDENTURE
1. Certain Definitions. Capitalized terms used in this
Exhibit F but not otherwise defined herein shall have the meanings given
such terms in the Second Refinancing and Amendatory Agreement to which this
Exhibit E is attached.
2. Amendments to the Senior Subordinated Indenture. The
Senior Subordinated Indenture is amended as follows:
Definitions.
The following definitions contained in the Senior
Subordinated Indenture are amended and restated as
follows:
Boeing Capital Notes means any note or notes issued by
the Issuer pursuant to the Boeing Capital Loan Agreement
and any note or notes issued in replacement or
substitution therefor.
B of A means Bank of America, N.A.
Intercreditor Agreement means the Second Amended and
Restated Intercreditor and Collateral Trust Agreement
dated as of October 29, 1999 among B of A, Boeing
Capital, the Convertible Note Holders listed on the
signature pages thereof, State Street Bank and Trust
Company, as Trustee under the Senior Subordinated
Indenture, and United States Trust Company of New York,
as Collateral Agent, as such Agreement may from time to
time be amended, renewed, supplemented, restated or
otherwise modified.
Letter of Credit Agreement means the Business Loan
Agreement (Receivables and Inventory) dated as of October
29, 1999,between B of A and the Issuer, as such Agreement
may from time to time be amended, renewed, supplemented,
restated or otherwise modified, and any Replacement
Letter of Credit Agreement (as such term is defined in
the Intercreditor Agreement).
Letter of Credit Agreement Obligations means the
Issuers obligations arising under the Letter of Credit
Agreement.
3. Consents under the Senior Subordinated Indenture. The
following transactions are consented to, and shall be permitted
notwithstanding any prohibition or other provision to the contrary
contained in the Senior Subordinated Indenture:
The actions described in paragraph 1 of the Second
Refinancing and Amendatory Agreement to which this
Exhibit E is attached.
EXHIBIT F
AMENDMENTS TO EXCHANGE AND PURCHASE AGREEMENT
1. Amendments to the Exchange and Purchase Agreement. The
Exchange and Purchase Agreement is amended as follows:
a. Section 3.5 is amended by substituting for the words (as
amended pursuant to the Sequencing and Amendatory Agreement and
pursuant to the Refinancing and Amendatory Agreement dated as of
January 20, 1999 among the Purchasers, the Company and the other
parties thereto, the Amended Intercreditor Agreement) the words (as
amended and restated pursuant to the Second Amended and Restated
Intercreditor and Collateral Trust Agreement dated as of October 29,
1999 among Bank of America, N.A., Boeing Capital, the Convertible
Note Holders listed on the signature pages thereof, State Street Bank
and Trust Company, as Trustee under the Senior Subordinated
Indenture, and United States Trust Company of New York, as Collateral
Agent, the Amended Intercreditor Agreement).
b. Section 6.11 is amended by inserting immediately prior to
the words and $4,000,000 in any subsequent calendar year the words ,
$4,000,000 (plus any portion of the allowance for 1999 not made in
1999) in 2000.
c. Section 6.15 is deleted.
d. In Section 12.1, the definition of Boeing Capital Notes
is restated in its entirety to read as follows:
Boeing Capital Notes means any note or notes issued by the
Company pursuant to the Boeing Capital Loan Agreement and any
note or notes issued in replacement or substitution therefor.
e. In Section 12.1, the definition of Letter of Credit
Agreement is restated in its entirety to read as follows:
Letter of Credit Agreement means the Business Loan Agreement
(Receivables and Inventory) dated as of October 29, 1999
between Bank of America, N.A., and the Company, as such
agreement may be amended, supplemented or modified from time to
time.
EXHIBIT G
AMENDMENTS/CONSENTS TO JUNIOR INDENTURE
1. Certain Definitions. Capitalized terms used in this
Exhibit G but not otherwise defined herein shall have the meanings given
such terms in the Second Refinancing and Amendatory Agreement to which this
Exhibit G is attached.
2. Amendments to the Junior Indenture. The Junior Indenture
is amended as follows:
(a) Definitions.
(i) The following definitions contained in the Junior
Indenture are amended as follows:
The definition of Consolidated Current Liabilities is
amended by (A) substituting for the words Senior Securities the
words Boeing Capital Notes and (B) inserting the following
words immediately prior to the period of the end of such
definition: and the current portion of Indebtedness pursuant
to the Letter of Credit Facility.
The definition of Senior Indebtedness is amended by
substituting for clause (i) the words (i) all unreimbursed
drawings with respect to letters of credit issued or amended
(or deemed issued or amended) under the Letter of Credit
Facility, the principal of any advance made pursuant to the
Letter of Credit Facility (whether or not evidenced by any
note), interest accrued or accruing on any of the foregoing
both before and after the date of filing a petition in
bankruptcy, insolvency, arrangement, reorganization or
receivership proceedings, whether or not allowed as a claim in
such case or proceeding (in accordance with and at the contract
rate), any commitment, commission, facility and other fees
payable under the Letter of Credit Facility and any other
amounts due under the Letter of Credit Facility, whether direct
or indirect, absolute or contingent, secured or unsecured, due
or to become due, now existing or hereafter arising (including,
without limitation, amounts for which the issuer of letters of
credit pursuant to, or any holder of any note issued pursuant
to, the Letter of Credit Facility is entitled to reimbursement
pursuant to the Letter of Credit Facility in respect of letters
of credit or otherwise);.
(ii) The following definitions contained in Section 101
of the Junior Indenture are restated to read as follows:
B of A means Bank of America, N.A.
Boeing Capital Notes means any note or notes issued by the
Company pursuant to the Boeing Capital Loan Agreement and any
note or notes issued in replacement or substitution therefor.
Intercreditor Agreement means the Second Amended and
Restated Intercreditor and Collateral Trust Agreement dated as
of October 29, 1999 among B of A, Boeing Capital, the
Convertible Note Holders listed on the signature pages thereof,
State Street Bank and Trust Company, as Trustee under the
Senior Subordinated Indenture, and United States Trust Company
of New York, as Collateral Agent, as such Agreement may from
time to time be amended, renewed, supplemented, restated or
otherwise modified.
Letter of Credit Facility means the Business Loan Agreement
(Receivables and Inventory) dated as of October 29, 1999
between B of A and the Company, as such Agreement may from time
to time be amended, renewed, supplemented, restated or
otherwise modified, and any successor, substitute or
replacement letter of credit facility including, without
limitation, any Replacement Letter of Credit Agreement.
LOC Bank means the provider of credit under the Letter of
Credit Facility.
Representative means with respect to the Letter of Credit
Facility, the LOC Bank, and with respect to any Senior
Indebtedness arising under the Boeing Capital Loan Agreement
and the Senior Subordinated Indenture, Boeing Capital and the
trustee named in such Indenture, respectively.
(b) Payment of Interest. Sections 307(a) - (c) and (f) of
the Junior Indenture are amended by substituting for the words on the
Boeing Capital Notes each time they appear the words on the Boeing Capital
Notes and its obligations pursuant to the Letter of Credit Facility.
(c) Limitation on Indebtedness. Section 406 of the Junior
Indenture is amended by substituting for the words on the Boeing Capital
Notes the words on the Boeing Capital Notes and its obligations pursuant to
the Letter of Credit Facility.
(d) Limitation on Restricted Junior Payments. Section 407 of
the Junior Indenture is amended by substituting for the words on the Boeing
Capital Notes the words on the Boeing Capital Notes and its obligations
pursuant to the Letter of Credit Facility.
(e) Limitation on Restrictions Affecting Subsidiaries.
Section 408 of the Junior Indenture is amended by substituting for the
words on the Boeing Capital Notes the words on the Boeing Capital Notes and
its obligations pursuant to the Letter of Credit Facility.
(f) Limitation on Liens. Section 410 of the Junior Indenture
is amended by (i) substituting for the words on the Boeing Capital Notes
the words on the Boeing Capital Notes and its obligations pursuant to the
Letter of Credit Facility and (ii) substituting for the words Boeing
Capital Loan Agreement and the Senior Subordinated Indenture the words
Boeing Capital Loan Agreement, the Senior Subordinated Indenture and the
Letter of Credit Facility.
(g) Transactions with Partners and Affiliates. Section 414
of the Junior Indenture is amended by substituting for the words on the
Boeing Capital Notes the words on the Boeing Capital Notes and its
obligations pursuant to the Letter of Credit Facility.
(h) Financial Covenants. Section 415 of the Junior Indenture
is amended by substituting for the words the Boeing Capital Notes the words
on the Boeing Capital Notes and its obligations pursuant to the Letter of
Credit Facility.
(i) Limitation on Investments, Loans and Advances. Section
417 of the Junior Indenture is amended by substituting for the words on the
Boeing Capital Notes the words on the Boeing Capital Notes and its
obligations pursuant to the Letter of Credit Facility.
(j) Limitation on Consolidated Capital Expenditures. Section
418 of the Junior Indenture is amended by substituting for the first
sentence thereof the following: After the Company has paid in full the
principal of and all accrued interest on the Boeing Capital Notes and the
Convertible Notes and its obligations pursuant to the Letter of Credit
Facility, the Company will not and will not permit any of its Subsidiaries
to make, in the aggregate, Consolidated Capital Expenditures in an amount
in excess of $4,000,000 during any calendar year (or, in the case of 1999,
if this covenant becomes applicable during 1999, $8,500,000; or, in the
case of 2000, if this covenant becomes applicable prior to or during 2000,
$4,000,000 plus any excess of $8,500,000 over the amount of Consolidated
Capital Expenditures during 1999)..
(k) Fundamental Changes Only on Certain Terms. Section 419
of the Junior Indenture is amended by substituting for the words on the
Boeing Capital Notes the words on the Boeing Capital Notes and its
obligations pursuant to the Letter of Credit Facility.
(l) Contingent Obligations. Section 420 of the Junior
Indenture is amended by substituting for the words on the Boeing Capital
Notes the words on the Boeing Capital Notes and its obligations pursuant to
the Letter of Credit Facility.
(m) Grant of Lien to Secure Obligations. Section 422(a) of
the Junior Indenture is amended by substituting for the words on the Boeing
Capital Notes the words on the Boeing Capital Notes and its obligations
pursuant to the Letter of Credit Facility.
(n) Right of Redemption. Section 901 of the Junior Indenture
is amended by substituting for the words on the Boeing Capital Notes the
words on the Boeing Capital Notes and its obligations pursuant to the
Letter of Credit Facility.
3. Consents under Junior Indenture. The following
transactions are consented to, and shall be permitted notwithstanding any
prohibition or other provision to the contrary contained in the Junior
Indenture:
The actions described in paragraph 1 of the Second
Refinancing and Amendatory Agreement to which this Exhibit G is
attached.
Exhibit 20.1 Huntway Refining Company Announces Retirement
of Chief Executive Officer
Newhall, Calif. (November 12, 1999) (NYSE:HWY) - Huntway
Refining Company reported today that Mr. Juan Y. Forster has
announced that he will retire as President and Chief Executive
Officer effective March 1, 2000. The Board of Directors has accepted
his resignation effective at that time. Mr. Forster will remain
Chairman of the Board of Directors. A committee of the Board of
Directors has been formed to search for his successor.
Commenting on the announcement Mr. Forster said, I have served as
Huntways President and Chief Executive Officer since its inception
in 1979, through the IPO process in 1988 and through the protracted
period of restructuring that occurred in the 1990s. The companys
current financial position is strong and I look forward to working
with the new Chief Executive Officer and our Board of Directors
to increase shareholder value in the years ahead.
Huntway Refining Company operates two refineries at Wilmington
and Benicia, California, which primarily process California crude
oil to produce liquid asphalt for use in road construction and
repair, as well as smaller amounts of gas oil, naphtha, kerosene
distillate and bunker fuels.
The companys common shares are traded on the New York Stock Exchange
under the symbol HWY.
End
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