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, 1996
Commission File Number 1-10091
HUNTWAY PARTNERS, L.P.
(Exact Name of Registrant as Specified in its Charter)
Delaware
36-3601653
(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)
Registrant's Telephone Number Including Area Code: (805) 286-
1582
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(b) 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 .
QUARTERLY REPORT ON FORM 10-Q
HUNTWAY PARTNERS, L.P.
For the Quarter Ended September 30, 1996
INDEX
Part I. Financial Information
Page
Condensed Consolidated Balance Sheets as
of September 30, 1996 and December 31, 1995 3
Condensed Consolidated Statements of
Operations for the Three and Nine Months
Ended September 30, 1996 and 1995 4
Condensed Consolidated Statement of
Partners' Capital (Deficiency) for the Nine Months
Ended September 30, 1996 4
Condensed Consolidated Statements of Cash
Flows for the Nine Months Ended
September 30, 1996 and 1995 5
Notes to Condensed Consolidated
Financial Statements 6
Management's Discussion and Analysis
of Results of Operations and
Financial Condition 8
Part II. Other Information 14
<TABLE>
HUNTWAY PARTNERS, L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<CAPTION>
September 30, December 31,
1996 1995
(Unaudited) (Audited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 4,381 $ 4,304
Accounts Receivable 8,398 4,820
Inventories 4,224 3,320
Prepaid Expenses 782 676
Total Current Assets 17,785 13,120
PROPERTY - Net 59,513 58,677
OTHER ASSETS 1,381 780
GOODWILL 1,773 1,816
TOTAL ASSETS $ 80,452 $ 74,393
CURRENT LIABILITIES:
Accounts Payable $ 8,814 $ 6,582
Current Portion of Long-Term
Obligations 94,345 94,445
Accrued Interest 4,712 1,417
Other Accrued Liabilities 2,274 2,113
Total Current Liabilities 110,145 104,557
LONG-TERM OBLIGATIONS 350 350
PARTNERS' CAPITAL:
General Partners (300) (305)
Limited Partners (29,743) (30,209)
Total Partners' Capital (Deficiency) (30,043) (30,514)
TOTAL LIABILITIES AND
PARTNERS' CAPITAL $ 80,452 $ 74,393
</TABLE>
<TABLE>
HUNTWAY PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1996 1995 1996 1995
Unaudited Unaudited Unaudited Unaudited
<S> <C> <C> <C> <C>
SALES $ 30,829 $ 27,345 $ 74,137 $ 60,684
COSTS AND EXPENSES:
Material and
Processing Costs 26,636 24,301 65,471 57,667
Selling and
Administration
Expenses 906 895 2,696 2,818
Interest Expense 1,310 1,328 3,833 3,884
Depreciation and
Amortization 620 661 1,666 1,829
Total Costs and
Expenses 29,472 27,185 73,666 66,198
NET INCOME (LOSS) $ 1,357 $ 160 $ 471 $ (5,514)
NET INCOME (LOSS)
PER UNIT $ 0.12 $ 0.01 $ 0.04 $ (0.47)
LIMITED PARTNER EQUIVALENT
UNITS OUTSTANDING 11,673 11,673 11,673 11,673
</TABLE>
<TABLE>
HUNTWAY PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
(DEFICIENCY)
(in thousands)
<CAPTION>
General Limited
Partners Partners Totals
<S> <C> <C> <C>
Balance at January 1, 1996 $ (305) $ (30,209) $ (30,514)
Net Income for the Nine Months
Ended September 30, 1996 5 466 471
Balance at September 30, 1996 $ (300) $ (29,743) $ (30,043)
</TABLE>
<TABLE>
HUNTWAY PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
<CAPTION>
Nine Nine
Months Ended Months Ended
September 30, September 30,
1996 1995
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income/(Loss) $ 471 $ (5,514)
Adjustments to Reconcile Net Loss
to Net Cash Provided by Operating Activities:
Interest Expense Paid by the Issuance of Notes 0 1,692
Depreciation and Amortization 1,666 1,829
Changes in Operating Assets and Liabilities:
Increase in Accounts Receivable (3,578) (5,830)
Decrease/(Increase) in Inventories (924) 428
Decrease/(Increase) in Prepaid Expenses (110) 94
Increase in Accounts Payable 2,232 2,546
Increase in Accrued Liabilities 3,456 1,151
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 3,213 (3,604)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to Property (2,293) (186)
Additions to Other Assets (743) (108)
NET CASH USED BY INVESTING ACTIVITIES (3,036) (294)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of Long-term Obligations (100) (365)
NET CASH USED BY FINANCING ACTIVITIES (100) (365)
NET INCREASE/(DECREASE) IN CASH 77 (4,263)
CASH BALANCE - BEGINNING OF PERIOD 4,304 5,984
CASH BALANCE - END OF PERIOD $ 4,381 $ 1,721
INTEREST PAID IN CASH DURING THE PERIOD $ 275 $ 1,114
</TABLE>
HUNTWAY PARTNERS, L.P. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying condensed consolidated financial statements
of Huntway Partners, L.P. and subsidiary as of September 30, 1996
and for the three and nine month periods ended September 30, 1996
and 1995 are unaudited, but in the opinion of management, reflect
all adjustments (consisting only of normal recurring adjustments)
necessary for a 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 Partnership's annual report for the year ended
December 31, 1995.
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 1996 and 1995,
the effect of LIFO was to increase the net loss by $590,000 and
$1,020,000, respectively. For the third quarter of 1996 and
1995, the effect of LIFO was to decrease net income by $100,000
and to increase net income by $616,000, respectively.
Inventories at September 30, 1996 and December 31, 1995 were
as follows:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Finished Products $1,846,000 $2,295,000
Crude Oil and Supplies 4,138,000 2,195,000
5,984,000 4,490,000
Less LIFO Reserve (1,760,000) (1,170,000)
Total $4,224,000 $3,320,000
</TABLE>
2. FINANCIAL ARRANGEMENTS
On December 4, 1995, the Partnership announced that it did
not make its scheduled $1,000,000 debt payment due November 30,
1995 and was, therefore, in default under its indenture. At that
time, the Partnership was verbally informed by substantially all
of its senior lenders that they did not intend to pursue their
remedies under the current indenture due to nonpayment while
discussions regarding the potential restructuring of the
Partnership's indebtedness was continuing. The Partnership also
stated that it would not be making any further payments under the
current indenture which provided for payment of $5,000,000 in
1996 paid quarterly under a defined formula. As a result, at
December 31, 1995 and September 30, 1996, substantially all of
the Partnership's outstanding indebtedness was classified as
current. The amount of contractual interest not paid at
September 30, 1996 was $3,296,000.
On April 15, 1996, the Partnership announced that it had
reached agreement with four of its five senior lenders,
representing 86% of its senior debt, to restructure its
indebtedness over a ten-year period. These discussions
culminated in the April 15, 1996 announcement described below
regarding the restructuring of the Partnership's debt.
The agreement specifies, among other things, that total debt
will be reduced from $95,500,000 to $25,570,000 effective January
1, 1996. The new debt will carry an interest rate of 12%.
Had this restructuring agreement been in effect during the
three and nine month periods ended September 30, 1996, interest
expense would have been reduced by $430,000 and $1,272,000,
respectively.
The agreement also specifies that no cash interest will be
paid in 1996 unless cash at December 31, 1996 exceeds $6,000,000.
Cash in excess of $6,000,000 at December 31, 1996, net of funding
capital expenditures (not to exceed $4,150,000), will be paid to
the lenders on January 15, 1997. Such payment will replace,
dollar for dollar, required debt amortization in year three of
the agreement. In 1997, the Partnership is obligated to pay cash
interest and debt amortization based on 50% of excess cash flow
as defined.
Although a majority of the Partnership's senior lenders and
all of the Partnership's junior lenders have agreed to enter into
an out-of-court consensual restructuring on the terms set forth
above, consummation of the Consensual Restructuring Agreement
requires that all of the Partnership's senior lenders affected
thereby agree to its terms and the Partnership has been unable to
obtain the consent of one of the Partnership's senior lenders
(representing 14% of its outstanding senior indebtedness) to the
Consensual Restructuring Agreement. Accordingly, the Partnership
has determined that reorganization under the federal bankruptcy
laws pursuant to a Prepackaged Plan is the only available
alternative to achieve the beneficial effects of the
Restructuring Agreement.
To that end, the Partnership prepared a Consent Solicitation
Disclosure Statement and related consent materials for
distribution to its unitholders and other affected parties. On
October 11, 1996, the Partnership announced that the Consent
Solicitation Disclosure Statement and related consent materials
had been declared effective by the Securities and Exchange
Commission and that it had begun seeking Unitholder and lender
approval of the restructuring on such terms. On November 12,
1996, the Partnership announced that, having obtained the
requisite approval of its lenders, warrant and equity holders, it
had filed the prepackaged plan in U.S. Bankruptcy Court in
Wilmington, Delaware. During the solicitation period, which
expired on November 7, 1996, ballots representing approximately
86 percent of senior debt, 100 percent of junior debt, 100
percent of warrant holders and 98.6 percent of the unitholders
who cast votes, voted in favor of the plan. Slightly over 84
percent of total units outstanding cast votes on the plan.
The court, acting on the Partnership's first-day motions,
has granted authority to pay prepetition obligations to
employees, suppliers and other trade creditors in the ordinary
course of business and to maintain all employee salaries, wages
and benefit programs as they existed prior to the filing. In
addition, an interim order was issued that grants the company
immediate access to its cash collateral. The company was
authorized to obtain on an interim basis up to $17.5 million in
letters of credit under a new letter of credit facility.
Accordingly, this prepackaged filing does not impact the
Company's trade creditors, suppliers or employees as it provides
for the continuing and timely payment in full of all of Huntway's
obligations to suppliers, other trade creditors and employees
under normal terms.
Hearings have been scheduled on December 12, 1996 to
consider approval of Huntway's disclosure statement and
solicitation procedures and to consider confirmation of the
prepackaged plan.
At September 30, 1996, the cash position of the Partnership
was $4,381,000. In the opinion of management, assuming
completion of the debt restructuring (which provides for no
principal and interest payments on indebtedness during 1996),
cash on hand, together with anticipated future cash flows, will
be sufficient to meet Huntway's liquidity obligations for the
next 12 to 24 months.
3. CONTINGENCIES
The Partnership is party to a number of lawsuits and other
proceedings arising out of 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 Partnership.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following discussion should be read in conjunction
with the financial statements included elsewhere in this
report.
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.
Huntway's 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
Huntway's other refined petroleum products) generally
fluctuate with crude oil price levels. Accordingly, there has
not been a relationship between total revenues and income due
to the volatile commodity character of crude oil prices.
Accordingly, income before interest, depreciation and
amortization provides the most meaningful basis for comparing
historical results of operations discussed below.
A number of uncertainties exist that may affect Huntway's
future operations including the possibility of further
increases in crude costs that may not be able to be passed on
to customers in the form of higher prices. Additionally,
crude costs could rise to such an extent that Huntway may not
have sufficient letter of credit availability to purchase all
the crude it needs to sustain operations to capacity,
especially during the summer season. If this occurred,
Huntway would be forced to reduce crude purchases which could
adversely impact results of operations. The Partnership's
primary product is liquid asphalt. Most of Huntway's
competitors produce liquid asphalt as a by-product and are of
much greater size and have much larger financial resources
than the Partnership. Accordingly, the Partnership has in the
past, and may have in the future, difficulty raising prices in
the face of increasing crude costs.
Three Months Ended September 30, 1996 Compared with the Three
Months Ended September 30, 1995
Third quarter 1996 net income was $1,357,000, or $.12 per
unit, versus 1995 third quarter net income of $160,000, or
$.01 cents per unit.
The improvement in results between quarters of $1,197,000
is principally attributable to significantly higher light-
product margins offset to a small extent by lower asphalt
margins. Prices for Huntway's light-end products rose in the
third quarter commensurate with increases in wholesale
gasoline and diesel prices in California. These increases
were partially the result of production disruptions at a
number of large California refineries and inventory shortages
of California Phase II fuels. Sales of paving and other
asphalt products increased by 57,000 barrels, or 7%, to
841,000 barrels in the third quarter of 1996 from 784,000
barrels in the third quarter of 1995. This increase is the
result of project timing in Northern California as several
projects were shifted from the second quarter of 1996 to the
third quarter.
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, 1996 as compared to the
quarter ended September 30, 1995:
<TABLE>
<CAPTION>
Material & Barrels
Sales Processing Net Sold
(In Thousands)
<S> <C> <C> <C> <C>
Quarter ended September 30, 1995 $ 27,345 $ 24,301 $ 3,044 1,384
Effect of changes in price 3,030 1,931 1,098
Effect of changes in volume 454 404 51 23
Quarter ended September 30, 1996 $ 30,829 $ 26,636 $ 4,193 1,407
</TABLE>
As reflected in the table, the net margin between sales and
material and processing costs improved from $2.20 per barrel
for the third quarter of 1995 to $2.98 per barrel for the
third quarter of 1996. This improvement in net margin of
$1,149,000 is primarily attributable to the Partnership's
significantly improved margin on light products in the third
quarter as wholesale gasoline and diesel prices rose primarily
due to refinery outages in California and shortages of
California Phase II fuels. Asphalt margins declined by 11%
due to intense competitive pressures, particularly in the
Southern California market. Over all, sales prices averaged
$21.91 per barrel for the third quarter of 1996 as compared to
$19.76 per barrel for the comparable quarter of 1995, an
increase of $2.15, or 11%. This increase in pricing was
partially offset by increased material and processing costs
which averaged $18.93 and $17.56 for the quarters ended
September 30, 1996 and 1995, respectively, an increase of
$1.37, or 8%.
Selling, general and administrative costs were comparable
to the second quarter of 1995 increasing by $11,000.
Depreciation and amortization fell to $620,000 in the
second quarter of 1996 from $661,000 in the comparable quarter
of 1995 reflecting reduced depreciation of the Sunbelt
refinery subsequent to its write down in 1995. Interest
expense was generally consistent with the prior year.
Interest expense in the third quarter does not reflect the
impact of the reduced debt level contemplated in the proposed
financial restructuring described in Note 2, "Financial
Arrangements". Had the restructuring been completed at the
beginning of 1996, third quarter interest expense would have
been approximately $880,000 versus $1,310,000 incurred in the
third quarter of 1996, a difference of $430,000, or $.03 per
unit.
Because of the foregoing, as well as other factors
affecting the Partnership's 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.
Nine Months Ended September 30, 1996 Compared with the Nine
Months Ended September 30, 1995
The 1996 nine month net income was $471,000, or $.04 per
unit, versus a 1995 nine month net loss of $5,514,000, or $.47
per unit.
The improvement in results between periods of $5,985,000
is principally attributable to improved light-product margins
in the second and third quarter and, to a lesser extent, lower
levels of rainfall in the first half of 1996 versus the first
half of 1995. Refinery outages in California and resultant
disruptions to the supply of CARB Phase II fuels as well as
well as speculative pressures on clean fuels generally caused
light product prices and refinery margins to be significantly
improved in the second and third quarters as compared to 1995.
The first half of 1995 was characterized by unseasonably high
rainfall which severely curtailed paving asphalt sales and
forced the sale of significant amounts of low-margin fuel oil
in order to maintain cash flow. Fuel oil sales fell in the
current nine month period by 209,000 barrels to 58,000 barrels
from 267,000 barrels in the comparable period of 1995. Sales
of other asphalt-based products increased by 201,000 barrels,
or 13%, as compared to the comparable period of 1995,
primarily due to better weather.
The following table sets forth the effects of changes in
price and volume on sales and material and processing costs on
the nine months ended September 30, 1996 as compared to the
nine months ended September 30, 1995:
<TABLE>
Material & Barrels
Sales Processing Net Sold
(In Thousands)
<S> <C> <C> <C> <C>
Nine months ended September 30, 1995 $ 60,684 $ 57,667 $ 3,017 3,271
Effect of changes in price 10,114 4,631 5,483
Effect of changes in volume 3,339 3,173 166 180
Nine months ended September 30, 1996 $ 74,137 $ 65,471 $ 8,666 3,451
</TABLE>
As reflected in the table, the net margin between sales and
material and processing costs improved from a negative $.92
per barrel for the first nine months of 1995 to $2.51 per
barrel for the first nine months of 1996. As discussed above,
this improvement in net margin of $5,649,000 is primarily
attributable to improvement in light-product margins and
increased sales of higher margin asphalt products due to
improved weather conditions in the first half of 1996 as
compared to the first half of 1995. Sales prices averaged
$21.48 per barrel for the first nine months of 1996 as
compared to $18.55 per barrel for the comparable quarter of
1995, an increase of $2.93, or 16%. This increase in average
sales price was partially offset by increased material and
processing costs which averaged $18.97 and $17.63 for the nine
months ended September 30, 1996 and 1995, respectively, an
increase of $1.34, or 8%.
Selling, general and administrative costs decreased
$122,000 compared to the first half of 1995 primarily as a
result of the recovery of a previously written-off accounts
receivable.
Depreciation and amortization fell to $1,666,000 in the
first half of 1996 versus $1,829,000 in the comparable period
of 1995 primarily as a result of reduced depreciation of the
Sunbelt refinery subsequent to its write down in 1995.
Interest expense was generally consistent with the prior year.
Interest expense for the period does not reflect the impact of
the reduced debt level contemplated in the proposed financial
restructuring described in Note 2, "Financial Arrangements".
Had the restructuring been completed at the beginning of 1996,
nine months interest expense would have been approximately
$2,561,000 versus $3,833,000 incurred in the first nine months
of 1996, a difference of $1,272,000, or $.11 per unit.
Because of the foregoing, as well as other factors
affecting the Partnership's 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.
Capital Resources And Liquidity
The primary factors that affect the Partnership's cash
requirements and liquidity position are fluctuations in the
selling prices of refined products caused by local market
supply and demand factors, including public and private demand
for road construction and improvement as well as 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. In addition, capital expenditure
requirements, including costs to maintain compliance with
environmental regulations as well as debt service
requirements, also impact the Partnership's cash needs.
In the first nine months of 1996, operating activities
provided $3,213,000 in cash. The period's net income of
$471,000 plus depreciation and amortization of $1,666,000
provided $2,137,000 in cash. Seasonal increases in accounts
receivable and inventory of $4,502,000 were partially financed
by a similar seasonal increase in accounts payable of
$2,232,000. Accrued liabilities increased by $3,456,000 as
interest continues to accrue under the existing debt agreement
until the proposed debt restructuring is completed as
described below. Prepaid expenses consumed $110,000 primarily
due to turnaround costs. In comparison, during the first nine
months of 1995, operating activities consumed $3,604,000 in
cash primarily resulting from the period's net loss of
$5,514,000 offset by non-cash items of $3,521,000. Seasonal
increases in accounts receivable and inventories of $5,402,000
were financed by similar seasonal increases in accounts
payable and accrued liabilities which increased by $3,697,000.
Changes in prepaid expenses provided an additional $94,000.
Investing activities consumed $3,036,000 during the first
nine months of 1996 primarily for refinery equipment including
new modified asphalt facilities and tankage for our Benicia
refinery. During the first nine months of 1995, investing
activities consumed $294,000 primarily for refinery equipment
and deposits.
Financing activities consumed $100,000 in the first nine
months of 1996 pursuant to a 1993 settlement with the State of
Arizona. In the first nine months of 1995, financing
activities consumed $365,000 primarily for reduction in the
capital lease obligation.
As described below, the Partnership has reached an
agreement in principle with four of its five senior lenders,
representing 86% of its senior debt, to restructure its
indebtedness over a ten-year period. The Partnership has also
reached agreement with the holders of its junior subordinated
debt on the restructuring plan described below.
On April 15, 1996, the Partnership announced that it had
reached an agreement in principle to restructure its
indebtedness with its current lenders. The agreement, which
is subject to final documentation and unitholder approval,
will reduce total indebtedness from $95,500,000 at December
31, 1995 to $25,570,000 effective January 1, 1996. Under the
agreement, the new debt will carry an interest rate of 12%.
The new debt will mature ten years from date of closing, or
December 31, 2005, and will amortize ratably over years three
through ten of the agreement. No cash interest will be paid
in 1996 unless cash at December 31, 1996 exceeds $6,000,000.
Cash in excess of $6,000,000 at December 31, 1996 net of
funding capital expenditures (not to exceed $4,150,000) will
be paid to the lenders on January 15, 1997. Such payment will
replace, dollar for dollar, required debt amortization in year
three of the agreement. In 1997, the Partnership is obligated
to pay cash interest and debt amortization based on 50% of
excess cash flow as defined.
The Partnership will issue 12,671,327 new units to its
lenders, including 1,115,077 to its junior note holders, as
part of this agreement. The Partnership currently has
11,556,250 units outstanding. Accordingly, after the
restructuring is completed, 25,342,654 units will be
outstanding. In addition, as part of the agreement, the
Company will issue options to acquire 3,415,850 common units
and will retire options to acquire 1,022,000 common units and
will retire warrants for the purchase of 3,340,757 units.
Options to acquire 546,059 common units will remain
outstanding. Accordingly, on a fully-diluted basis, total
common units and unit equivalents outstanding will increase
from 16,465,066 to 29,304,563.
Although a majority of the Partnership's senior lenders
and all of the Partnership's junior lenders have agreed to
enter into an out-of-court consensual restructuring on the
terms set forth above, consummation of the Consensual
Restructuring Agreement requires that all of the Partnership's
senior lenders affected thereby agree to its terms. The
Partnership has been unable to obtain the consent of one of
the Partnership's senior lenders (representing 14% of its
outstanding senior indebtedness) to the Consensual
Restructuring Agreement. Accordingly, the Partnership has
determined that reorganization under the federal bankruptcy
laws pursuant to a Prepackaged Plan is the only available
alternative to achieve the beneficial effects of the
Restructuring Agreement and permit the Company to continue to
operate as a going concern and to preserve the Unitholders'
investment in the Partnership.
To that end, the Partnership prepared a Consent
Solicitation Disclosure Statement and related consent
materials for distribution to its unitholders and other
affected parties. On October 11, 1996, the Partnership
announced that the Consent Solicitation Disclosure Statement
and related consent materials had been declared effective by
the Securities and Exchange Commission and that it had begun
seeking Unitholder and lender approval of the restructuring on
such terms. On November 12, 1996, the Partnership announced
that, having obtained the requisite approval of its lenders,
warrant and equity holders, it had filed the prepackaged plan
in U.S. Bankruptcy Court in Wilmington, Delaware. During the
solicitation period, which expired on November 7, 1996,
ballots representing approximately 86 percent of senior debt,
100 percent of junior debt, 100 percent of warrant holders and
98.6 percent of the unitholders who cast votes, voted in favor
of the plan. Slightly over 84 percent of total units
outstanding cast votes on the plan.
The court, acting on the Partnership's first-day motions,
has granted authority to pay prepetition obligations to
employees, suppliers and other trade creditors in the ordinary
course of business and to maintain all employee salaries,
wages and benefit programs as they existed prior to the
filing. In addition, an interim order was issued that grants
the company immediate access to its cash collateral. The
company was authorized to obtain on an interim basis up to
$17.5 million in letters of credit under a new letter of
credit facility. Accordingly, this prepackaged filing does
not impact the Company's trade creditors, suppliers or
employees as it provides for the continuing and timely payment
in full of all of Huntway's obligations to suppliers, other
trade creditors and employees under normal terms.
Hearings have been scheduled on December 12, 1996 to
consider approval of Huntway's disclosure statement and
solicitation procedures and to consider confirmation of the
prepackaged plan.
Under applicable bankruptcy law, a plan of reorganization
must be approved by the affirmative vote of 2/3 in dollar
amount and 1/2 in number of each class of security holder which
is impaired under the plan. Senior debt holders, junior
subordinated debt holders, equity interests of holders of
common units, equity interests of warrant holders, equity
interests of holders of existing unit options and general
partner interests will be impaired under the prepackaged plan.
As described above, senior lenders, representing 86% in dollar
and 80% in number, have voted for the plan. The common unit
holders have also approved the prepackaged plan.
The Partnership's current debt agreement provides for a
$17,500,000 letter of credit facility (LC). The facility
provides for crude purchases, hedging and other activities.
Fees for this facility are 2% on the face amount of any letter
of credit issued up to an aggregate of $14,500,000 and 3% on
the face amount of any letter of credit issued above that
amount. Under the terms of the proposed future restructuring
agreement, a new letter of credit facility will be made
available to the Partnership (under similar terms as the
existing facility) for one year following the closing of the
current proposed restructuring. A similar letter of credit
agreement is in place for the pendancy of the proceedings in
U.S. Bankruptcy Court.
The Partnership believes its current level of letter of
credit facilities are 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 these facilities are adequate.
If crude oil prices were to increase, the Partnership may be
required to reduce its crude oil purchases which would
adversely impact profitability.
At September 30, 1996, the cash position of the
Partnership was $4,381,000. In the opinion of management,
assuming completion of the debt restructuring (which provides
for no principal and interest payments on indebtedness during
1996), cash on hand, together with anticipated future cash
flows, will be sufficient to meet Huntway's liquidity
obligations for the next 12 to 24 months.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Partnership is party to a number of additional
lawsuits and other proceedings arising out of 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 or results of operations of the Partnership other
than as previously reported.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
The Partnership is in default of certain of its
indebtedness. See Note 2 to the financial statements included
in this report.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.58 Debtor in Possession Letter of Credit and Reimbursement Agreement
(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 14, 1996.
HUNTWAY PARTNERS, L.P.
(Registrant)
By:/s/ Warren J. Nelson
Warren J. Nelson
Executive Vice President
and Chief Financial Officer
(Principal Accounting Officer)
DEBTOR-IN-POSSESSION
LETTER OF CREDIT
AND
REIMBURSEMENT AGREEMENT
This DEBTOR-IN-POSSESSION LETTER OF CREDIT AND
REIMBURSEMENT AGREEMENT is dated as of November 12, 1996 and
is entered into by and between HUNTWAY PARTNERS, L.P., a
Delaware limited partnership ("Huntway"), as debtor and debtor
in possession, and BANKERS TRUST COMPANY ("Bankers").
WHEREAS, on November 12, 1996 (the "Petition Date"),
Huntway commenced chapter 11 Case No. 96-_________ (the
"Chapter 11 Case"), by filing a voluntary petition for relief
under the chapter 11 of title 11 of the United States Code
(the "Bankruptcy Code") with the United States Bankruptcy
Court for the District of Delaware (the "Court");
WHEREAS, Huntway continues to operate its business
and manage its properties as debtor in possession pursuant to
Sections 1107 and 1108 of the Bankruptcy Code;
WHEREAS, Huntway, Sunbelt Refining Company, L.P., a
Delaware limited Partnership ("Sunbelt") and Bankers are party
to that certain Letter of Credit and Reimbursement Agreement
dated as of June 22, 1993 (the "Prepetition Letter of Credit
Agreement");
WHEREAS, as of the Petition Date approximately
$17,095,000 in aggregate stated amount of letters of credit
(exclusive of the IDB Letter of Credit) were outstanding under
the Prepetition Letter of Credit Agreement;
WHEREAS, Huntway is a party to that certain
Collateralized Note Indenture (the "Collateralized Note
Indenture") dated as of June 22, 1993, with Fleet National
Bank of Massachusetts (formerly known as Shawmut Bank, N.A.),
as Indenture Trustee, and that certain Subordinated Note
Indenture (the "Subordinated Note Indenture") dated as of
June 22, 1993, with Fleet National Bank of Massachusetts
(formerly known as Shawmut Bank Connecticut N.A.), as
Indenture Trustee;
WHEREAS, as of the Petition Date, the Debtor was
indebted to the certain lenders (the "Secured Lenders") under
the Collateralized Note Indenture and the Subordinated Note
Indenture and the notes issued pursuant thereto in the
principal amount of approximately $86,765,297 plus accrued and
unpaid interest (such amounts, together with all other fees,
charges, costs and expenses due to the Secured Lenders under
the Collateralized Note Indenture, the Subordinated Note
Indenture, the notes issued pursuant thereto and the
Prepetition Letter of Credit Agreement being the "Prepetition
Secured Obligations");
WHEREAS, Huntway's obligations to the Secured Lenders
are secured by liens against substantially all of Huntway's
real and personal property and the security interests in favor
of the Secured Lenders were duly and validly preferred more
than one year before the Petition Date;
WHEREAS, Huntway has an immediate need for the
ability to have letters of credit issued for its account (or
to have the expiration date of Existing Letters of Credit
extended) in order to obtain crude oil inventory, to secure
its obligations under crude oil hedging agreements and to
finance other activities necessary for the continuance of its
business during the pendency of the Chapter 11 Case;
WHEREAS, it would be futile for Huntway to seek to
obtain sufficient unsecured credit or to incur sufficient
unsecured debt, including debt with respect to which a claim
for any amount remaining unpaid by Huntway would be allowable
as an administrative expense pursuant to sections 364(a) and
(b) and section 503(b) of the Bankruptcy Code, from any other
source sufficient to continue its business operations;
WHEREAS, Huntway has requested Bankers to extend
postpetition credit to Huntway consisting letters of credit in
an aggregate stated amount not to exceed $17,500,000 at any
time (including the aggregate stated amount of the Existing
Letters of Credit, other than the IDB Letter of Credit), and
Bankers has agreed to do so, pursuant to the terms and
conditions set forth herein and in the Orders; and
WHEREAS, Huntway has agreed to secure the Obligations
(as hereinafter defined) with liens and security interests on
all of its real and personal property assets in accordance
with sections 364(c)(2) and (3) and section 364(d) of the
Bankruptcy Code, and Huntway acknowledges and agrees that the
Obligations shall constitute allowed administrative expense
claims having priority over any and all administrative
expenses of the kind specified in sections 503(b) and 507(b)
of the Bankruptcy Code, except for certain fees owing to
court-approved professionals and the U.S. Trustee as more
fully described in Section 2.09;
NOW, THEREFORE, in consideration of the premises and
in order to induce Bankers to maintain and issue Letters of
Credit and extend the maturity date of the Existing Letters of
Credit, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Unless otherwise
indicated in this Agreement, the capitalized terms used herein
shall have the following meanings:
"Affiliate," as applied to any Person, means any
other Person directly or indirectly controlling,
controlled by, or under common control with, that Person.
For purposes of this definition, "control" (including
with correlative meaning, 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 memberships
or by contract or otherwise.
"Agreement" means this Debtor-in-Possession Letter of
Credit and Reimbursement Agreement as it may be amended,
supplemented or otherwise modified from time to time.
"Bankers" has the meaning set forth in the intro-
ductory paragraph of this Agreement.
"Bankruptcy Code" has the meaning assigned to it in
the recital paragraphs hereof.
"Base Rate" means, for any day, the rate of interest
per annum equal to the greater of (a) the rate announced
by Bankers from time to time as its prime lending rate
for domestic commercial loans (such rate not necessarily
being the lowest rate which Bankers charges to a borrower
or group of borrowers) in effect on such day and
(b) (i) the rate on overnight Federal funds transactions
with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day (or, if
such day is not a Business Day, the next succeeding
Business Day) by the Federal Reserve Bank of New York, or
(ii) if such rate is not so published for any day which
is a Business Day, the average of the quotations for such
day on such transactions received by Bankers from three
Federal funds brokers of recognized standing selected by
it plus in each case specified in (i) and (ii) .50% per
annum, each change in the Base Rate to be effective as of
the opening of business on the day such change occurs.
If for any reason Bankers shall have determined that it
is unable to ascertain the rate on overnight Federal
funds transactions, including, without limitation, the
inability or failure of Bankers to obtain sufficient bids
or publications in accordance with the terms hereof, the
Base Rate shall be the prime lending rate of Bankers
until the circumstances giving rise to such inability no
longer exist.
"Business Day" means a day which is not (i) a
Saturday, Sunday or legal holiday under the laws of the
State of New York or (ii) any other day on which banking
institutions in the State of New York or in any
jurisdiction in which the office of Bankers at which
drawings under any Letter of Credit must be presented are
authorized or required to be closed.
"Capital Lease," as applied to any Person, means any
lease of any property (whether real, personal or mixed)
by that Person as lessee that, in conformity with GAAP,
is accounted for as a capital lease on the balance sheet
of that Person.
"Cash Collateral Order" means (i) the Interim Agreed
Order Authorizing Use of Cash Collateral by Debtor in
Possession and Granting Replacement Liens and Other
Adequate Protection in the form attached as Exhibit D
with any modifications approved by Bankers entered in the
Chapter 11 Case after an interim hearing under Bankruptcy
Rule 4001(b)(2) and (ii) the Final Agreed Order
Authorizing Use of Cash Collateral by Debtor in
Possession and Granting Replacement Liens and Other
Adequate Protection entered in the Chapter 11 Case after
a final hearing.
"Chapter 11 Case" has the meaning assigned to it in
the recital clauses hereof.
"Collateral" means all the real and personal property
of Huntway on which a Lien exists to secure the
Obligations pursuant to the Orders.
"Collateralized Note Indenture" has the meaning
assigned to it in the recital clauses hereof.
"Commitment" means the Letter of Credit Commitment
and the IDB Letter of Credit Commitment.
"Commitment Termination Date" means the earliest of
(i) the ninetieth day after the Petition Date; (ii) the
date that Bankers elects pursuant to Section 6.02 to
terminate Huntway's right to have Letters of Credit
issued for its account; (iii) the date that is 30 days
after the Petition Date, if neither the Interim Order nor
the Final Order has been entered by the Court by such
date; (iv) in the event the Interim Order is entered in
accordance with the foregoing clause (iii), the date that
is 60 days after the Petition Date if the Final Order has
not been entered by the Court by such date; and (v) the
date the Reorganization Plan becomes effective.
"Contingent Obligation," as applied to any Person,
means any direct or indirect liability, contingent or
otherwise, of that Person (i) with respect to any
Indebtedness, lease, dividend or other obligation of
another if the primary purpose or intent thereof by the
Person incurring the Contingent Obligation is to provide
assurance to the obligee of such obligation of another
that such obligation of another will be paid or
discharged, or that any agreements relating thereto will
be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in
respect thereof, (ii) with respect to any letter of
credit issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement
of drawings, or (iii) under any interest rate swap
agreement, interest rate cap agreement, interest rate
collar or similar agreement or any foreign exchange
agreement or forward purchase contract or similar
agreement. Contingent Obligations shall include, without
limitation, (a) the direct or indirect guaranty,
endorsement (otherwise than for collection or deposit in
the ordinary course of business), co-making, discounting
with recourse or sale with recourse by such Person of the
obligation of another, (b) the obligation to make take-
or-pay or similar payments if required regardless of non-
performance by any other party or parties to an agreement
and (c) any liability of such Person for the obligation
of another through any agreement (contingent or
otherwise) (x) to purchase, repurchase or otherwise
acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (y) to
maintain the solvency or any balance sheet item, level of
income or financial condition of another if, in the case
of any agreement described under subclauses (x) or (y) of
this sentence, the primary purpose or intent thereof is
as described in the preceding sentence. The amount of
any Contingent Obligation shall be equal to the amount of
the obligation so guaranteed or otherwise supported or,
if less, the amount to which such Contingent Obligation
is specifically limited.
"Court" shall have the meaning assigned to it in the
recital clauses hereof.
"Crude Supply Subfacility" has the meaning set forth
in Section 2.01D.
"Designated Officer" means, with respect to Huntway
and Sunbelt, the president, chief financial officer or
controller of Huntway.
"Effective Date" means the date on which the
conditions to the effectiveness of this Agreement set
forth in Section 3.01 are satisfied.
"Employee Benefit Plan" means any employee benefit
plan within the meaning of Section 3(3) of ERISA that is
maintained for employees of Huntway or any ERISA
Affiliate of Huntway.
"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.
"Environmental Laws" means all statutes, ordinances,
orders, rules, regulations or decrees and similar
provisions having the force and effect of law relating to
(i) environmental matters, including, without limitation,
those relating to fines, injunctions, penalties, damages,
contribution, cost recovery compensation, losses or
injuries resulting from the Release or threatened Release
of Hazardous Materials, (ii) the generation, use,
storage, transportation or disposal of Hazardous
Materials, or (iii) occupational safety and health,
industrial hygiene, land use or the protection of human,
plant or animal health or safety, in any manner
applicable to Company or any of its Subsidiaries or any
or their respective properties, including, without
limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. 9601 et
seq.), the Hazardous Materials Transportation Act (49
U.S.C. 1801 et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. 6901 et seq.), the Federal
Water Pollution Control Act ( 33 U.S.C. 1251 et seq.),
the Clean Air Act (42 U.S.C. 7401 et seq.), the Toxic
Substances Control Act (15 U.S.C. 2601 et seq.), the
Federal Insecticide, Fungicide and Rodenticide Act (7
U.S.C. 136 et seq.), the Occupational Safety and Health
Act (29 U.S.C. 651 et seq.) and the Emergency Planning
and Community Right-to-Know Act (42 U.S.C. 11001 et
seq.), each as amended or supplemented, and any analogous
future or present local, state and federal statutes and
regulations promulgated pursuant thereto, each as in
effect as of the date of determination.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended and any successor statute.
"ERISA Affiliate," as applied to any Person, means
(i) any corporation that is a member of a controlled
group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that
person is, or was at any time, a member, (ii) any trade
or business (whether or not incorporated) that is a
member of a group of trades or businesses under common
control within the meaning of Section 414(c) of the
Internal Revenue Code of which that Person is a member
and (iii) any member of an affiliated service group
within the meaning of Section 414(m) or (o) of the
Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or
business described in clause (ii) above is a member.
"ERISA Event" means (i) a "reportable event"
described in Section 4043 of ERISA and the regulations
issued thereunder with respect to any Pension Plan
(excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation);
(ii) the failure to meet the minimum funding standard of
Section 412 of the Internal Revenue Code with respect to
any Pension Plan (whether or not waived in accordance
with Section 412(d) of the Internal Revenue Code) or the
failure to make by its due date a required installment
under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan or the failure to make any
required contribution to a Multi-employer Plan; (iii) the
provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of
intent to terminate such plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the
withdrawal by Huntway or any of its ERISA Affiliates from
any Pension Plan with two or more contributing sponsors
or the termination of any such Pension Plan resulting in
liability pursuant to Sections 4063 or 4064 of ERISA;
(v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any
event or condition which could constitute grounds under
ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan; (vi) the
imposition of liability on Huntway or any of its ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA
or by reason of the application of Section 4212(c) of
ERISA; (vii) the withdrawal by Huntway or any of its
ERISA Affiliates in a complete or partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA)
from any Multiemployer Plan if there is any potential
liability therefor, or the receipt by Huntway or any
ERISA Affiliate of notice from any Multiemployer Plan
that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A or 4042
of ERISA; (viii) the occurrence of an act or omission
which could give rise to the imposition on Huntway or any
of its ERISA Affiliates of fines, penalties, taxes or
related charges under Chapter 43 of the Internal Revenue
Code or under Section 409 or 502(c), (i) or (l) or 4071
of ERISA in respect of any Employee Benefit Plan;
(ix) the assertion of a material claim (other than
routine claims for benefits) against any Employee Benefit
Plan (other than any Multiemployer Plan) or the assets
thereof, or against Huntway or any of its ERISA
Affiliates in connection with any such plan; (x) receipt
from the Internal Revenue Service of notice of the
failure of any Pension Plan (or any other Employee
Benefit Plan intended to be qualified under
Section 401(a) of the Internal Revenue Code) to qualify
under Section 401(a) of the Internal Revenue Code, or the
failure of any trust forming part of any Pension Plan to
fail to qualify for exemption from taxation under Section
501(a) of the Internal Revenue Code; or (xi) the
imposition of a Lien pursuant to Section 401(a)(29) or
412(n) of the Internal Revenue Code or pursuant to ERISA
with respect to any Pension Plan.
"Event of Default" has the meaning set forth in
Section 6.01.
"Existing Collateral Documents" means each of the
agreements, instruments and other documents identified on
Schedule VIII hereto.
"Existing Letter of Credit" means each Letter of
Credit (as such term is defined in the Prepetition Letter
of Credit Agreement) that has not expired or been
cancelled as of the Effective Date and listed on
Schedule I hereto.
"Exxon Letters of Credit" has the meaning specified
in the definition "Letters of Credit."
"Facilities" means any and all real property
(including, without limitation, all buildings, fixtures
or other improvements located thereon) now, hereafter or
heretofore owned, leased, operated or used by Huntway or
any of its Subsidiaries or any of their respective
predecessors or Affiliates.
"Final Order" means an order of the Court entered in
the Chapter 11 Case authorizing this Agreement and the
transactions contemplated hereby after a final hearing
under Bankruptcy Rule 4001(c)(2) in the form attached as
Exhibit C with any modifications approved by Bankers.
"GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entity as
may be approved by a significant segment of the
accounting profession, which are applicable to the
circumstances as of the date of determination.
"Governmental Acts" has the meaning set forth in
Section 7.05.
"Governmental Authorization" means any permit,
license, authorization, plan, directive, consent order or
consent decree of or from any federal, state or local
governmental authority, agency or court.
"Guaranty," as applied to any Person, means all loan
commitments of that Person and all obligations of that
Person guaranteeing in any manner, whether directly or
indirectly, any obligation of any other Person for the
payment of principal or interest with respect to borrowed
money.
"Hazardous Materials" means (i) any chemical,
material or substance at any time defined as or included
in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous
waste," "restricted hazardous waste," "infectious waste,"
"toxic substances" or any other formulations intended to
define, list or classify substances by reason of
deleterious properties such as ignitability, corrosivity,
reactivity, carcinogenicity, toxicity, reproductive
toxicity, "TCLP toxicity" or "EP toxicity" or words of
similar import under any applicable Environmental Laws;
(ii) any oil, petroleum, petroleum fraction or petroleum
derived substance; (iii) any drilling fluids, produced
waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or
geothermal resources; (iv) any flammable substances or
explosives; (v) any radioactive materials; (vi) asbestos
in any form; (vii) urea formaldehyde foam insulation;
(viii) electrical equipment which contains any oil or
dielectric fluid containing levels of polychlorinated
biphenyls in excess of fifty parts per million;
(ix) pesticides; and (x) any other chemical, material or
substance, exposure to which is prohibited, limited or
regulated by any governmental authority or which may or
could pose a hazard to the health and safety of the
owners, occupants or any Persons in the vicinity of the
Facilities.
"Hedging Subfacility" has the meaning set forth in
Section 2.01D.
"Huntway Documentary Letters of Credit" means any
dollar-denominated documentary letter of credit issued or
renewed by Bankers for the account of Huntway pursuant to
the Prepetition Letter of Credit Agreement for the
purpose of supporting the purchases and exchanges of
crude and crude products by Huntway in the normal course
of business or for other purposes which have previously
been approved by Bankers.
"Huntway Letters of Credit" means the Huntway
Documentary Letters of Credit and the Huntway Standby
Letters of Credit.
"Huntway Managing General Partner" means Huntway
Managing Partner, L.P., a Delaware limited partnership,
whose sole General Partner is Reprise.
"Huntway Special General Partner" means Huntway
Holdings, L.P., a Delaware limited partnership, whose
sole General Partner is Reprise.
"Huntway Standby Letters of Credit" means any dollar-
denominated standby letter of credit issued or renewed by
Bankers for the account of Huntway pursuant to the
Prepetition Letter of Credit Agreement for the purpose of
supporting the purchases and exchanges of crude and crude
products by Huntway in the normal course of business or
for other purposes which have previously been approved by
Bankers.
"IDB Bonds" means the $8,600,000 aggregate principal
amount of The Industrial Development Authority of the
County of Pinal's Variable/Fixed Rate Demand Industrial
Development Revenue Bonds Series 1988 (Sunbelt Refining
Company, L.P. Project) issued pursuant to the IDB
Indenture to finance the acquisition, construction and
equipping by Sunbelt of an asphalt refinery in the County
of Pinal, Arizona.
"IDB Commitment" has the meaning set forth in Section
2.01B hereof.
"IDB Indenture" means that certain Indenture of Trust
dated as of August 1, 1988 between The Industrial
Development Authority of the County of Pinal and the Dai-
Ichi Kangyo Bank of California, as trustee, pursuant to
which the IDB Bonds were issued.
"IDB Letter of Credit" means that certain Irrevocable
Letter of Credit No. S04377 dated October 5, 1988 in the
original stated amount of $9,510,411.00 issued by Bankers
to the Trustee under the IDB Indenture to support payment
of the IDB Bonds, as amended to date and as the same may
be further amended from time to time.
"IDB Principal Obligations" has the meaning set forth
in Section 2.01B hereof.
"Incremental Subfacility" has the meaning set forth
in Section 2.01D.
"Indebtedness," as applied to any Person, means
without duplication, (a) any liability of any Person
(i) for borrowed money, or under any reimbursement
obligation relating to a letter of credit or a bankers'
acceptance, or (ii) evidenced by a bond, note, debenture
or similar instrument (including a purchase money
obligation given in connection with the acquisition of
any businesses, properties or assets of any kind, other
than a trade payable or a current liability arising in
the ordinary course of business), or (iii) for the
payment of money with respect to a Capital Lease, or
(iv) in respect of an interest rate, currency, commodity
or other hedge or protection arrangement; (b) any
guarantee with respect to Indebtedness (of the kind
otherwise described in this definition) of another
Person; and (c) any amendment, supplement, modification,
deferral, renewal, extension or refunding of any
liability of the types referred to in clauses (a) and (b)
above.
"Indemnitee" has the meaning set forth in Section
8.06.
"Intercreditor Agreement" means the Intercreditor
Agreement dated as of June 22, 1993 among Bankers (in its
capacity as issuer of letters of credit under the
Prepetition Letter of Credit Agreement), Bankers Trust
Company (as holder of Priority Notes, Senior Notes and
Subordinated Notes), Massachusetts Mutual Life Insurance
Company, Phoenix Home Life Insurance Company, Crown Life
Insurance Company, Century Life of America, Century Life
Insurance Company and Collateral Agent, as it may be
amended, supplemented or modified from time to time.
"Interest Drawing" means any drawing under the IDB
Letter of Credit for the purpose of paying interest
coming due on the IDB Bonds. If any drawing under the
IDB Letter of Credit is applied to the payment of both
interest on the IDB Bonds and principal, premium and
other amounts other than interest, it shall be deemed a
Principal Drawing to the extent that such drawing is
applied to the payment of principal, premium and amounts
other than interest and an Interest Drawing to the extent
proceeds of such drawing are applied to pay interest on
the IDB Bonds.
"Interim Order" means an order of the Court
authorizing this Agreement and the transactions
contemplated hereby entered in the Chapter 11 Case after
an interim hearing under Bankruptcy Rule 4001(b)(2) or
(c)(2) in the form attached as Exhibit B with any
modifications approved by Bankers.
"Internal Revenue Code" means the Internal Revenue
Code of 1986, as amended.
"Letters of Credit" means the irrevocable, standby
letters of credit (other than the IDB Letter of Credit)
issued and deemed to have been issued by Bankers pursuant
to Section 2.01 (including, without limitation, the
Existing Letters of Credit) and any successor standby
letters of credit as provided in such standby letters of
credit provided that such term shall include one or more
documentary letters of credit (the "Exxon Letters of
Credit") up to an aggregate amount of $2,000,000 issued
for the account of Huntway for the benefit of Exxon
Company U.S.A. or one of its Affiliates.
"Letter of Credit Commitment" has the meaning set
forth in Section 2.01B.
"Letter of Credit Commitment Amount" has the meaning
set forth in Section 2.01B.
"Letter of Credit Usage" means, as at any date of
determination, the sum of (i) the maximum aggregate
amount which is or at any time thereafter may become
available for drawing under all Letters of Credit
(including, without limitation, the Existing Letters of
Credit) then outstanding plus (ii) the aggregate amount
of all drawings under all Letters of Credit honored by
Bankers and not theretofore reimbursed by Huntway.
"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 lien or security interest).
"Material Adverse Effect" means (i) a material
adverse effect upon the business, operations, properties,
assets, condition (financial or otherwise) or prospects
of Huntway and its Subsidiaries, taken as a whole, or
(ii) the impairment of the ability of Huntway to perform,
or of Bankers to enforce, the Obligations.
"Multiemployer Plan" means a "multiemployer plan"
within the meaning of Section 3(37) of ERISA to which
Huntway or any of its ERISA Affiliates is contributing or
to which Huntway or any of its ERISA Affiliates has an
obligation to contribute.
"Notice of Issuance of Letter of Credit" has the
meaning set forth in Section 2.01C.
"Obligations" means all obligations of Huntway to
Bankers of every kind and description (whether or not
evidenced by a note or other instrument and whether or
not for the payment of money) direct or indirect,
absolute or contingent, due or to become due, now
existing or hereafter arising pursuant to the terms of
this Agreement or any Letter of Credit or the IDB Letter
of Credit or any other document or instrument issued
pursuant hereto or thereto.
"Orders" means the Interim Order and the Final Order.
"Participant" has the meaning set forth in Section
2.07.
"PBGC" means the Pension Benefit Guaranty Corporation
(or any successor thereto).
"Pension Plan" means any Employee Benefit Plan that
is subject to the provisions of Section 412 of the
Internal Revenue Code and that is maintained for
employees of Huntway or any ERISA Affiliate of Huntway,
other than a Multiemployer Plan.
"Permitted Liens" means the following types of Liens:
(i) Liens (other than any Lien imposed by
ERISA) for taxes (including Liens for real property
taxes), assessments or governmental charges or
governmental claims the payment of which is not at
the time required by Section 405;
(ii) Statutory Liens of landlords and Liens
of carriers, warehousemen, mechanics, materialmen and
other liens imposed by law incurred in the ordinary
course of business for sums not yet delinquent or
being contested in good faith, if such reserve or
other appropriate provision, if any, as shall be
required by GAAP shall have been made therefor;
(iii) Liens (other than any Lien
imposed by ERISA) incurred or deposits made in the
ordinary course of business in connection with
workers' compensation, unemployment insurance and
other types of social security, or to secure the
performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the
payment of borrowed money);
(iv) Any attachment or judgment Lien not in
excess of $100,000 (exclusive of any amount
adequately covered by insurance as to which the
insurance company has acknowledged coverage) and any
other attachment or judgment lien unless the judgment
it secures shall, within 45 days after the entry
thereof, not have been discharged or execution
thereof stayed pending appeal, or shall not have been
discharged within 45 days after the expiration of any
such stay;
(v) Leases or subleases granted to others
not interfering in any material respect with the
business of Huntway or any of its Subsidiaries;
(vi) Easements, rights-of-way,
restrictions, minor defects or irregularities in
title and other similar charges or encumbrances not
interfering in any material respect with the ordinary
conduct of the business of Huntway or any of its
Subsidiaries;
(vii) Liens arising from UCC financing
statements regarding leases permitted by this
Agreement;
(viii) Liens in favor of customs and
revenue authorities arising as a matter of law to
secure payment of customs duties in connection with
the importation of goods; and
(ix) Liens securing obligations not in
excess of $50,000 in aggregate outstanding amount
arising from automobile and personal property leases;
"Person" means an individual, a corporation, a
partnership, an association, a trust or any other entity
or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Petition Date" has the meaning assigned to it in the
recital clauses hereof.
"Plan of Reorganization" means a plan of
reorganization in the Chapter 11 Case.
"Prepetition Letter of Credit Agreement" has the
meaning assigned to it in the recital clauses hereof.
"Principal Drawing" means any drawing under the IDB
Letter of Credit for the purpose of paying the principal,
premium, if any or other amounts coming due and payable
on the IDB Bonds, other than interest. If any drawing
under the IDB Letter of Credit is applied to the payment
of both interest on the IDB Bonds and principal, premium
and other amounts other than interest, it shall be deemed
a Principal Drawing to the extent that such drawing is
applied to the payment of principal, premium and amounts
other than interest and an Interest Drawing to the extent
proceeds of such drawing are applied to pay interest on
the IDB Bonds.
"Potential Event of Default" means a condition or
event which, after notice or lapse of time or both, would
constitute an Event of Default if that condition or event
were not cured or removed within any applicable grace or
cure period.
"Priority Notes" means those certain 8% Priority
Secured Notes due 1994 issued by Huntway pursuant to the
Collateralized Note Indenture.
"Principal Office" means the principal office of
Bankers at 1 BT Plaza, 130 Liberty Street, New York, New
York.
"Related Documents" means each Letter of Credit, each
Notice of Issuance of Letter of Credit, the Orders and
any instrument, document or agreement relating thereto.
"Release" means any release, spill, emission,
leaking, pumping, pouring, injection, escaping, deposit,
disposal, discharge, dispersal, dumping, leaching or
migration of Hazardous Materials into the indoor or
outdoor environment (including, without limitation, the
abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous
Materials), or into or out of any Facility, including the
movement of any Hazardous Material through the air, soil,
surface water, groundwater or property.
"Reprise" means Reprise Holdings, Inc., a Texas
corporation.
"Restricted Junior Payment" means any distribution,
direct or indirect, whether in cash or other property on
account of (i) the units of ownership in Huntway or any
other partnership interest in Huntway or dividend,
distribution or similar payment, redemption, purchase,
retirement or other acquisition for value, direct or
indirect, of any units of ownership in Huntway or any
other partnership interest in Huntway, (ii) the Junior
Subordinated Debentures for the payment or prepayment of
principal or interest or the redemption, purchase,
retirement, defeasance, sinking fund or similar payment
with respect to such securities, and (iii) warrants,
options or other rights to acquire units of ownership in
Huntway in order to retire, or to obtain the surrender
of, such securities.
"Secondary Securities" shall have the meaning set
forth in the Subordinated Note Indenture.
"Secured Lenders" has the meaning assigned to it in
the recital clauses hereof.
"Senior Notes" means those certain 8% Senior Secured
Notes due 2000 issued by Huntway pursuant to the
Collateralized Note Indenture.
"Stated Termination Date" means with respect to any
Letter of Credit or the IDB Letter of Credit, the date on
which Bankers' obligations under such Letter of Credit or
the IDB Letter of Credit, as the case may be, expire or
terminate.
"Subfacility" has the meaning set forth in Section
2.01D.
"Subfacility Commitments" has the meaning set forth
in Section 2.01D.
"Subfacility Enhancement" means an increase in any
Subfacility (and corresponding decrease in another
Subfacility) pursuant to the proviso in Section 2.01D.
"Subordinated Note Indenture" has the meaning
assigned to it in the recital clauses hereof.
"Subordinated Notes" means those certain Increasing
Rate Subordinated Secured Notes due 2008 (including the
Subordinated Note (Sunbelt IDB) and the Subordinated
Notes (Other) and any Secondary Securities issued in
respect thereof) issued by Huntway pursuant to the
Subordinated Note Indenture.
"Subordinated Notes (Other)" means those certain
Increasing Rate Subordinated Secured Notes due 2008
issued by Huntway under the Subordinated Note Indenture
and any Secondary Securities issued in respect thereof.
"Subordinated Note (Sunbelt IDB)" means that certain
Increasing Rate Subordinated Secured Note due 2008 issued
by Huntway to Bankers and any Secondary Securities issued
in respect thereof, representing Huntway's assumption of
the reimbursement, fee and other obligations (including
Huntway's guaranty of Sunbelt's obligations) owed to
Bankers arising in connection with the IDB Letter of
Credit pursuant to the Huntway Assumption Agreement.
"Subsidiary" means any corporation, association,
partnership or other business entity of which more than
50% of the total voting power of shares of stock or
memberships entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or
Persons (whether directors, managers, trustees or other
Persons performing similar functions) having the power to
direct or cause the direction of the management and
policies 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, and references herein to Subsidiaries of
Huntway, Huntway and its Subsidiaries or other similar
references shall include Sunbelt unless otherwise
excluded.
"Tax" or "Taxes" means any present or future tax,
levy, impost, duty, charge, fee, deduction or withholding
of any nature and whatever called, by whomsoever, on
whomsoever and wherever imposed, levied, collected,
withheld or assessed. "Tax on overall net income" of a
Person shall be construed as a reference to tax imposed
by the jurisdiction in which its principal office
(and/or, in the case of Bankers, its lending office) is
located on all or part of the net income, profits or
gains of that Person (whether worldwide, or only insofar
as such income, profits or gains are considered to arise
in or to relate to a particular jurisdiction, or
otherwise).
"Total Letters of Credit" means the Letters of Credit
and the IDB Letter of Credit.
SECTION 1.02. Accounting Terms; Utilization of GAAP
for Purposes of Calculations Under Agreement. For purposes of
this Agreement, all accounting terms not otherwise defined
herein shall have the meanings assigned to them in conformity
with GAAP. Calculations in connection with the definitions,
covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those
used to prepare the audited financial statements of Huntway
and its Subsidiaries for the year ended December 31, 1995.
SECTION 1.03. Other Definitional Provisions.
References to "Sections" and "subsections" shall be to
Sections and subsections, 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.
SECTION 1.04. Interim and Final Orders to Govern.
In the event of any inconsistency between this Agreement and
the Interim Order or Final Order, the terms of the Interim
Order or Final Order, as applicable, shall govern.
ARTICLE II
AMOUNT AND TERMS OF LETTERS OF CREDIT
SECTION 2.01. The Letters of Credit and the IDB
Letter of Credit.
A. Request for Issuance or Amendment. Huntway may
request that, in accordance with the provisions of this
Section 2.01, on and after the Effective Date to and excluding
the Commitment Termination Date, Bankers (A) issue dollar-
denominated Letters of Credit for the account of Huntway or
(B) amend any Letter of Credit previously issued or deemed to
have been issued under this Agreement; provided that (i) in no
event shall Bankers issue any Letter of Credit or amend any
Letter of Credit in a manner that would result in any Letter
of Credit having a Stated Termination Date more than 9 months
after its date of issuance; and (ii) Huntway shall not request
that Bankers issue or amend any Letter of Credit if, after
giving effect to such issuance or amendment, either (x) the
Letter of Credit Usage would exceed the Letter of Credit
Commitment Amount or (y) the aggregate amount of Letters of
Credit under any Subfacility would exceed its respective
Subfacility Commitment and (iii) no Huntway Documentary Letter
of Credit (other than an Exxon Letter of Credit) may be
amended or otherwise extended or renewed under this Agreement.
The issuance or amendment of any Letter of Credit in
accordance with the provisions of this Section 2.01 shall
require the satisfaction of each condition set forth in
Section 3.02.
Huntway and Bankers agree that all Existing Letters
of Credit and the IDB Letter of Credit shall for all purposes
of this Agreement be deemed to have been issued under and
pursuant to the terms of this Agreement. All obligations of
Huntway under the Prepetition Letter of Credit Agreement shall
be continued under this Agreement except to the extent that
other provision is specifically made therefor hereunder. The
principal amount and beneficiary of each Existing Letter of
Credit outstanding as of the Effective Date and the IDB Letter
of Credit is set forth on Schedule I annexed hereto.
Each Letter of Credit may provide that Bankers may
(but shall not be required to) pay the beneficiary thereof
upon the occurrence of an Event of Default and the
acceleration of the Obligations as provided in Section 6.02
or, if payment is not then due to the beneficiary, provide for
the deposit of funds in an account to secure payment to the
beneficiary and that any funds so deposited shall be paid to
the beneficiary of such Letter of Credit if conditions to such
payment are satisfied or returned to Bankers (or, if all
Obligations shall have been indefeasibly paid in full, to
Huntway if no payment to the beneficiary has been made and the
final date available for drawings under such Letter of Credit
has passed. Each payment or deposit of funds by Bankers as
provided in this paragraph shall be treated for all purposes
of this Agreement as a drawing duly honored by Bankers under
the related Letter of Credit.
B. Letter of Credit Commitment.
(i) Bankers' commitment to issue and amend Letters
of Credit pursuant to this Section 2.01 from the
Effective Date to and excluding the Commitment
Termination Date is herein referred to as its "Letter of
Credit Commitment". The maximum aggregate amount of the
Letter of Credit Commitment of Bankers at any time is
$17,500,000 (the amount available pursuant to Section
2.01D(i) at any date of determination being the "Letter
of Credit Commitment Amount") and the Letter of Credit
Commitment shall expire on the Commitment Termination
Date. The Letter of Credit Usage shall not at any time
exceed the Letter of Credit Commitment Amount.
(ii) Bankers agrees to extend the Stated Termination
Date of the IDB Letter of Credit from time to time from
the Effective Date to and excluding the Commitment
Termination Date in accordance with the terms thereof and
hereof (the "IDB Letter of Credit Commitment"); provided
that in no event shall Bankers amend the IDB Letter of
Credit in a manner that would result in the IDB Letter of
Credit having a Stated Termination Date more than 9
months after the date of its most recent amendment. The
IDB Letter of Credit shall not be included within the
defined term "Letter of Credit" and the amount available
for drawing thereunder shall not be included in
determining usage or availability of the Letter of Credit
Amount. Huntway's obligation to reimburse Bankers for
any Principal Drawing under the IDB Letter of Credit (the
"IDB Principal Obligation") has been assumed by Huntway
pursuant to the Huntway Assumption Agreement and is and
shall continue to be evidenced by the Subordinated Note
(Sunbelt IDB). No commission shall be payable hereunder
with respect to the IDB Letter of Credit.
C. Notice of Issuance or Amendment of Letters of
Credit. Whenever Huntway desires the issuance of a Letter of
Credit or the amendment of an Existing Letter of Credit or the
IDB Letter of Credit, a Designated Officer of Huntway shall
deliver to Bankers a Notice of Issuance of Letter of Credit in
the form of Exhibit A annexed hereto (a "Notice of Issuance")
no later than 3:00 P.M. (New York time) at least five Business
Days, or such shorter period as may be agreed to by Bankers in
any particular instance, in advance of the proposed date of
issuance. The Notice of Issuance of Letter of Credit shall
specify (i) the proposed date of issuance or amendment (which
shall be a Business Day); (ii) the face amount of such Letter
of Credit or the IDB Letter of Credit, as the case may be;
(iii) the expiration date of such Letter of Credit or the IDB
Letter of Credit, as the case may be; (iv) the name and
address of the beneficiary; (v) the purpose (which shall be
limited to the purposes identified in Section 2.01D) for which
such Letter of Credit or the IDB Letter of Credit, as the case
may be is being issued or amended; (vi) the Subfacility
pursuant to which such Letter of Credit is being issued or
amended and, if it is being issued or amended pursuant to a
Subfacility Enhancement, the Subfacility being reduced to
effect such enhancement; and (vii) specify a precise
description of the documents and the verbatim text of any
certificate to be presented by the beneficiary which, if
presented by the beneficiary prior to the expiration date of
such Letter of Credit or the IDB Letter of Credit, as the case
may be, would require Bankers to make payment under such
Letter of Credit or the IDB Letter of Credit, as the case may
be; provided that Bankers, in its sole judgment, may require
changes in any such documents and certificates; and provided
further that no Letter of Credit or IDB Letter of Credit shall
require payment against a conforming draft to be made
hereunder on the same Business Day that such draft is
presented if such presentation is made after 11:00 A.M. (New
York time) on such Business Day. In determining whether to
pay under any Letter of Credit or the IDB Letter of Credit,
Bankers shall be responsible only to determine that the
documents and certificates required to be delivered under that
Letter of Credit or the IDB Letter of Credit, as the case may
be, have been delivered and that they comply on their face
with the requirements of that Letter of Credit or the IDB
Letter of Credit, as the case may be.
D. Purposes of Letters of Credit.
(i) The Letters of Credit may be requested by
Huntway for the following purposes (the availability of
Letters of Credit for each such purpose being a "Subfacility")
and in the following face amounts (as such amounts are reduced
or increased as a result of a Subfacility Enhancement, the
"Subfacility Commitments"):
(a) Letters of Credit in an aggregate face amount of
up to $1,500,000 at any one time outstanding may be
requested to support nonspeculative hedging agreements
relating to the price of crude oil entered into by
Huntway (the "Hedging Subfacility");
(b) Letters of Credit in an aggregate face amount of
up to $14,500,000 at any one time outstanding may be
requested to support the purchase and exchange of crude
and crude products by Huntway and Sunbelt (the "Crude
Supply Subfacility"); and
(c) Letters of Credit in an aggregate face amount of
up to $1,500,000 at any one time outstanding may be
requested to support existing lease obligations of
Huntway or its Subsidiaries, other obligations of Huntway
or its Subsidiaries for which Bankers has previously
issued Letters of Credit not specified in clauses (a) or
(b) above, capital leases entered into by Huntway after
the date hereof to the extent permitted hereunder,
modifier purchases, performance bonds and surety bonds
(the "Incremental Subfacility");
provided that (A) upon the request by Huntway and the consent
by Bankers, all or a portion of the Hedging Subfacility and
the Incremental Subfacility will be made available for the
purposes identified in clause (b) above; and (B) in no event
shall the aggregate Letter of Credit Usage exceed the Letter
of Credit Commitment Amount.
(ii) Huntway may request amendments to extend the IDB
Letter of Credit in an aggregate face amount of up to
$9,099,726 at any one time outstanding to secure the payment
of principal, interest and premium, if any, payable as a
result of a Determination of Taxability (as defined in the IDB
Indenture) on the IDB Bonds and for the repurchase of tendered
IDB Bonds as set forth in the IDB Indenture;
SECTION 2.02. Reimbursement.
(a) Huntway hereby agrees to pay to Bankers (x) on
the date that any amount drawn is honored under any
Letter of Credit or on the date that any Interest Drawing
in honored under the IDB Letter of Credit, a sum equal to
such amount, (y) on demand, any other amounts expressly
payable by Huntway to Bankers under this Agreement, and
(z) on demand, interest on any amounts unpaid by Huntway
when due under this Agreement, whether at maturity, by
acceleration, on the date demanded or otherwise,
including post-petition interest in any proceeding under
the United States Bankruptcy Code or other applicable
bankruptcy laws, from and including the date such amounts
become due until payment in full, whether before or after
judgment, at a fluctuating interest rate per annum equal
to the Base Rate plus 5%. Payment or acceptance of
interest provided for herein is not a permitted
alternative to timely payment and shall not constitute a
waiver of any Event of Default or otherwise prejudice or
limit any rights or remedies of Bankers.
(b) Promptly after any Principal Drawing under the
IDB Letter of Credit, Bankers shall surrender the
Subordinated Note (Sunbelt IDB) for exchange under the
Subordinated Note Indenture for a Subordinated Note
(Other) dated the date of such drawing in a principal
amount equal to the amount of such drawing. Bankers
shall also surrender a proportional amount of Secondary
Securities Subordinated Note (Sunbelt IDB) for Secondary
Securities Subordinated Note (Other). If the Plan of
Reorganization that is confirmed is substantially in the
form of the plan filed by Huntway with the Court on the
Petition Date, then on the effective date of the Plan of
Reorganization Bankers shall exchange New Senior Notes
(Sunbelt IDB) received by Bankers on the effective date
of the Plan of Reorganization in an aggregate amount
equal to the amount of such Principal Drawing for New
Senior Notes (Other) in accordance with Section 310 of
the New Collateralized Note Indenture (as each such term
is defined in the Plan of Reorganization).
(c) Huntway's obligation to reimburse any Interest
Drawing shall constitute an Obligation under this
Agreement and Bankers shall not exchange or convert any
Subordinated Note (Sunbelt IDB) in the event of an
Interest Drawing but shall instead be reimbursed by
Huntway in accordance with Section 2.02(a).
SECTION 2.03. Fees.
(a) Huntway hereby agrees to pay to Bankers, a
commission equal to 2.00% per annum on the face amount of
Letters of Credit outstanding; provided that Huntway shall pay
a commission of 3.00% per annum on the face amount of any
Letter of Credit issued under the Crude Supply Subfacility
when the aggregate face amount of Letters of Credit
outstanding under such subfacility exceeds $14,500,000.
Notwithstanding the grant of any participation pursuant to
Section 2.07, Bankers shall at all times retain a portion of
such commission equal to .25% per annum on the face amount of
Letters of Credit Outstanding in payment for administrative
services in connection therewith. All such commissions shall
be payable on the thirtieth day of each calendar month during
each year commencing on the thirtieth day of the month in
which the Effective Date occurs and on the Commitment
Termination Date and shall be calculated on the basis of a
360-day year for the actual number of days elapsed.
(b) Huntway hereby agrees to pay to Bankers with
respect to the issuance, amendment or transfer of each Letter
of Credit and the IDB Letter of Credit and each drawing made
thereunder, documentary and processing charges in accordance
with Bankers' standard schedule for such charges in effect at
the time of such issuance, amendment, transfer or drawing, as
the case may be, or as otherwise agreed to by Bankers.
(c) Huntway agrees to pay to Bankers a commitment
fee for the period from and including the Effective Date to
and excluding the Commitment Termination Date equal to the
average of the daily unused portion of the Letter of Credit
Commitment multiplied by 1/2 of 1% per annum, such commitment
fees to be calculated on the basis of a 360-day year and the
actual number of days elapsed and to be payable monthly in
arrears on the thirtieth day of each month, commencing on the
thirtieth day of the month in which the Effective Date occurs.
SECTION 2.04. Increased Costs.
If Bankers determines (which determination shall, in
the absence of demonstrable error, be final and conclusive and
binding on all parties) that any law, treaty or governmental
rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof
(including the introduction of any new law, treaty,
governmental rule, regulation or order) or any determination
of any governmental authority, court, central bank or
comparable agency, or compliance by Bankers with any
guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or quasi-
governmental authority (whether or not having the force of
law) shall:
(A) subject Bankers to any additional Tax with
respect to any Letter of Credit or the IDB Letter of
Credit, or shall change the amounts due under this
Agreement or any of the Related Documents or its
obligation to make any payment under the Letters of
Credit or the IDB Letter of Credit (except for changes in
the rate of Tax on the overall net income of Bankers
imposed by the jurisdiction in which Bankers' Principal
Office is located); or
(B) impose, modify or deem applicable any reserve
(including, without limitation, any marginal, emergency,
supplemental, special or other reserve), capital
adequacy, special deposit, insurance or similar
requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the
Federal Reserve System) against letters of credit issued
by or assets held by, deposits with or for the account
of, or credit extended by, Bankers; or
(C) impose on Bankers any condition with respect to
this Agreement, the Letters of Credit or the IDB Letter
of Credit or any of the Related Documents;
and the result of any of the foregoing is to increase the cost
to Bankers of the issuance or maintenance of the Letters of
Credit or the IDB Letter of Credit, or to reduce the amount of
any sum received or receivable by Bankers under this Agreement
or under any of the Related Documents with respect thereto, by
an amount deemed by Bankers to be material, or to reduce the
rate of return on Bankers' capital as a consequence of its
obligations hereunder to a level below which Bankers could
have achieved, but for such compliance, taking into account
Bankers' policies with respect to capital adequacy, then,
within ten days after demand by Bankers, Huntway shall pay for
Bankers' account such additional amount or amounts as will
compensate Bankers for such increased cost or reduction
together with interest on each such amount at a rate equal to
the Base Rate plus 2% from the date of such demand by Bankers
until payment in full thereof. Bankers will promptly notify
Huntway and Sunbelt of any event occurring after the date
hereof of which Bankers has knowledge which will entitle
Bankers to compensation pursuant to this Section 2.04. A
certificate of Bankers claiming compensation under this
Section 2.04 and setting forth in reasonable detail the
calculation of the additional amount or amounts to be paid to
it hereunder and the basis therefor shall be conclusive and
binding in the absence of demonstrable error. In determining
such amount, Bankers may use any reasonable averaging and
attribution methods. The provisions of this Section shall
apply equally to any Person acting as a Participant in the
Total Letters of Credit, as if such Person were Bankers
hereunder.
SECTION 2.05. Payments and Computations. All
payments by Huntway to Bankers hereunder shall be made in
lawful currency of the United States and in immediately
available funds at the Principal Office of Bankers or at such
other address as Bankers may designate in writing to Huntway.
Whenever any payment under this Agreement shall be due on a
day which is not a Business Day, the date for payment thereof
shall be extended to the next succeeding Business Day. If the
date for any payment of principal is extended by operation of
law or otherwise, interest thereon shall be payable for such
extended time. Computations of interest hereunder shall be
made by Bankers on the basis of a year of 360 days for the
actual number of days elapsed (including the first day but
excluding the last day) and shall be conclusive with respect
to the amount of interest owed by Huntway absent manifest
error.
SECTION 2.06. Obligations Absolute. The payment
Obligations of Huntway under this Agreement shall be absolute,
unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement under all
circumstances whatsoever, including, without limitation, the
following circumstances:
(i) any lack of validity or enforceability of any
Letter of Credit or the IDB Letter of Credit, this
Agreement or any other Related Document;
(ii) any amendment or waiver of or any consent to
departure from this Agreement or all or any of the
Related Documents except to the extent such amendment,
waiver or consent relates to the specific payment
Obligations in question;
(iii) the existence of any claim, set-off,
defense or other rights which Huntway, or any other
Person may have at any time against any beneficiary or
any transferee of any Letter of Credit or the IDB Letter
of Credit (or any Persons for whom any such beneficiary
or any such transferee may be acting), Bankers or any
other Person, whether in connection with this Agreement,
the transactions contemplated herein or in the Related
Documents or any unrelated transaction;
(iv) any statement or any other document presented
under any Letter of Credit or the IDB Letter of Credit
proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;
(v) payment by Bankers under any Letter of Credit or
the IDB Letter of Credit against presentation of a draft
or certificate which does not comply with the terms of
such Letter of Credit or the IDB Letter of Credit, as the
case may be; provided that such payment does not
constitute gross negligence or willful misconduct of
Bankers; or
(vi) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
SECTION 2.07. Participations. Bankers shall have
the right to grant participation rights in this Agreement and
Bankers' obligations under the Total Letters of Credit at any
time and from time to time to one or more financial
institutions (each a "Participant"); provided, however, that,
except as provided to the contrary in this Agreement, such
participation rights shall be obligations only of Bankers and
shall not create any direct obligation of Huntway to any such
Participant under this Agreement or create any direct
liability of any such Participant under any Letter of Credit
or the IDB Letter of Credit. The grant of participation
rights shall not affect or diminish the rights of Bankers to
reimbursement or other payments under Article II of this
Agreement, such reimbursement or payments to be calculated as
if Bankers had not granted any such participation rights.
SECTION 2.08. Taxes. All sums payable by Huntway
under this Agreement and the Related Documents shall be paid
(i) free of any restriction or condition, (ii) free and clear
of and (except to the extent required by law) without any
deduction or withholding on account of any Tax imposed,
levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in or of
the United States of America or any other jurisdiction from or
to which a payment is made by or on behalf of Huntway or by
any federation or organization of which the United States of
America or any such jurisdiction is a member at the time of
payment and (iii) without deduction or withholding (except to
the extent required by law) on account of any other amount,
whether by way of set-off or otherwise.
If Huntway or any other Person making a payment to
Bankers is required by law to make any deduction or
withholding on account of any such Tax or other amount as is
referred to in the immediately preceding paragraph from any
sum paid or payable by Huntway to Bankers under this Agreement
or the Related Documents:
(i) Huntway shall notify Bankers of any such
requirement or any change in any such requirement as soon
as Huntway becomes aware of it;
(ii) Huntway shall pay any such tax or other amount
before the date on which penalties attach thereto, such
payment to be made (if the liability to pay is imposed on
Huntway) for its own account or (if that liability is
imposed on Bankers) on behalf of and in the name of
Bankers;
(iii) the sum payable by Huntway or Sunbelt in
respect of which the relevant deduction, withholding or
payment is required shall be increased to the extent
necessary to ensure that, after the making of that
deduction, withholding or payment, Bankers or any other
party receives on the due date and retains (free from any
liability in respect of any such deduction, withholding
or payment) a net sum equal to what it would have
received and so retained had no such deduction,
withholding or payment been required or made; and
(iv) within 30 days after paying any sum from which
it is required by law to make any deduction or
withholding, and within 30 days after the due date of
payment of any Tax or other amount which it is required
by clause (ii) above to pay, Huntway shall deliver to
Bankers evidence satisfactory to Bankers of such
deduction, withholding or payment and of the remittance
thereof to the relevant taxing or other authority.
SECTION 2.09. Superpriority Nature of Obligations.
All Obligations shall constitute allowed administrative
expense claims against Huntway in the Chapter 11 Case with
priority under Section 364(c)(1) of the Bankruptcy Code over
any and all other administrative expenses of the kind
specified or ordered pursuant to any provision of the
Bankruptcy Code, including, but not limited to, Sections 105,
326, 328, 503(b), 506(c), 507(a), 507(b) and 726 of the
Bankruptcy Code; provided that such Section 364(c)(1) claims
shall be subject to: (i) unpaid professional fees and
expenses allowed in the Chapter 11 Case in an aggregate amount
(determined without regard to fees and expenses incurred
before the delivery to Huntway by Bankers of a notice imposing
the limitations in this paragraph) not to exceed $350,000
(exclusive of any fees payable to counsel to the Bankers
pursuant to Section 7.07 hereof) and (ii) fees payable to the
United States Trustee pursuant to 28 U.S.C. 1930(a)(6).
SECTION 2.10. Collateral. Huntway hereby grants
Bankers a security interest in and Lien on all of its right,
title and interest to the Collateral to secure the
Obligations. The Lien securing the Obligations shall be a
first priority Lien on the Collateral to the extent provided
in the Orders.
ARTICLE III
CONDITIONS OF EFFECTIVENESS AND ISSUANCE
SECTION 3.01. Condition Precedent to Effectiveness
of this Agreement. This Agreement shall become effective, and
the Existing Letters of Credit and the IDB Letter of Credit
shall be deemed to have been issued hereunder upon
satisfaction of the following conditions:
(a) Huntway Documents. On or before the Effective Date,
Huntway shall deliver to Bankers the following each, unless
otherwise noted, dated the Effective Date:
1. Certified copies of its Amended and
Restated Agreement of Limited Partnership and all
amendments thereto, together with a good standing
certificate from the Secretary of State of the State of
Delaware, dated a recent date prior to the Effective
Date;
2. Resolutions of the Board of Directors of
Reprise Holdings, Inc. the general partner the General
Partner of Huntway, approving and authorizing the
commencement of the Chapter 11 Case and the execution,
delivery, and performance of this Agreement and the
Related Documents, certified as of the Effective Date by
its corporate secretary or an assistant secretary as
being in full force and effect without modification or
amendment;
3. Signature and incumbency certificates of
its officers executing this Agreement and the Related
Documents; and
4. Executed copies of this Agreement.
(b) Fees. Bankers shall have received payment by Huntway
of all fees referred to in Section 5.01(b) and any other
amounts which are due and payable to Bankers upon
effectiveness of this Agreement.
(c) Orders. Bankers shall have received a certified copy
of the Interim Order or, if there is no Interim Order, the
Final Order; and the Interim Order or Final Order, as the case
may be, shall have been entered by the Court and be in full
force and effect, and shall not have been stayed, reversed,
vacated, modified, amended or rescinded.
(d) No Other Orders. Except for the Orders and the Cash
Collateral Order, no order of the Court shall have been
entered (i) authorizing Huntway to borrow money pursuant to
Section 364 of the Bankruptcy Code from any other entity or to
obtain any other credit from any other entity secured by a
lien or security interest on any of their respective assets
pursuant to section 364(c) or (d) of the Bankruptcy Code or
(ii) affording any creditor adequate protection under sections
361-364 of the Bankruptcy Code by granting a lien or security
interest in any Collateral (unless the lien or security
interest is junior to all of the liens and security interests
granted under this Agreement, the Cash Collateral Order and
the prepetition liens and security interests of the Secured
Lenders and provided that all such junior liens do not secure
indebtedness in excess of $100,000 in the aggregate).
(f) Cash Collateral Order. Bankers shall have received a
certified copy of the Cash Collateral Order and the Cash
Collateral Order shall have been entered by the Court and be
in full force and effect, and shall not have been stayed,
reversed, vacated, modified, amended or rescinded.
(g) Consents to Plan of Reorganization. Huntway shall
have received ballots sufficient for acceptance of its
proposed Plan of Reorganization, which Plan of Reorganization
shall be in form and substance satisfactory to Bankers, to
permit the Court to confirm such Plan of Reorganization.
SECTION 3.02. Conditions Precedent to Issuance or
Amendment of each Letter of Credit and the IDB Letter of
Credit. The obligation of Bankers to issue or amend each
Letter of Credit and the IDB Letter of Credit shall be subject
to the following further conditions precedent:
(a) On or before the date of issuance or amendment
of each Letter of Credit or the IDB Letter of Credit,
Bankers shall have received, in accordance with the
provisions of Section 2.01C, an originally executed
Notice of Issuance of Letter of Credit signed by a
Designated Officer requesting such issuance or amendment,
all other information specified in Section 2.01C and such
other documents as Bankers may reasonably require in
connection with the issuance or amendment of such Letter
of Credit or the IDB Letter of Credit;
(b) As of the date of issuance or amendment of such
Letter of Credit or the IDB Letter of Credit, as the case
may be:
1. The representations and warranties
contained herein and in the Related Documents shall
be true, correct and complete in all material
respects on and as of that date of issuance or
amendment to the same extent as though made on and as
of that date;
2. No event shall have occurred and be
continuing or would result from the issuance or
amendment of such Letter of Credit or the IDB Letter
of Credit which would constitute an Event of Default
or a Potential Event of Default;
3. Huntway shall have performed in all
material respects all agreements and satisfied all
conditions which this Agreement provides shall be
performed and satisfied by them on or before such
issuance or amendment of such Letter of Credit or the
IDB Letter of Credit;
4. No order, judgment or decree of any court,
arbitrator or governmental authority shall purport to
enjoin or restrain Bankers from issuing or amending
such Letter of Credit or the IDB Letter of Credit;
and
5. There shall not be pending or, to the
knowledge of Huntway, threatened, any action, suit,
proceeding, governmental investigation or arbitration
against or affecting Huntway or Sunbelt or any
property of Huntway or Sunbelt that has not been
disclosed by Huntway or Sunbelt in writing as
required pursuant to Section 5.01(t) prior to the
issuance or renewal of the last preceding Letter of
Credit or the IDB Letter of Credit (or, in the case
of the initial Letter of Credit, prior to the
execution of this Agreement), and there shall have
occurred no development not disclosed in any such
action, suit, proceeding, governmental investigation
or arbitration so disclosed that, in either event, in
the opinion of Bankers, would be expected to have a
Material Adverse Effect.
6. The Interim Order or Final Order, as the
case may be, shall not have been modified by the
Bankruptcy Court without the consent of Bankers. No
order of the Court prohibited in Section 3.01(e)
shall have been entered on or prior to such date of
issuance or amendment.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties.
Huntway represents and warrants as follows:
(a) Huntway is a limited partnership duly formed and
validly existing under the laws of the State of Delaware;
Huntway has the requisite partnership power and authority
to own its properties and to carry on its businesses as
now conducted and as proposed to be conducted; Huntway
has the requisite partnership power and authority to
enter into and perform this Agreement and each Related
Document to which it is a party; Huntway is in good
standing in the State of Delaware and wherever necessary
to carry on its present business and operations, except
in jurisdictions in which the failure to be in good
standing has and will have no material adverse effect on
the conduct of the business of Huntway;
(b) The execution, delivery and performance of this
Agreement and the Related Documents to which it is a
party have been duly authorized by all necessary
partnership action by Huntway.
(c) Upon entry of the Interim Order (or if there is
no Interim Order, the Final Order), this Agreement and
each Related Document to which Huntway is a party will be
the legal, valid and binding obligations of Huntway
enforceable against it in accordance with their
respective terms.
(d) Upon entry of the Interim Order (or if there is
no Interim Order, the Final Order), the execution and
delivery of this Agreement and the Related Documents, the
consummation of the transactions herein and therein
contemplated and the fulfillment of or compliance with
the terms and conditions hereof and thereof will not in
any material respect conflict with or constitute a
violation or breach of or default (with due notice or the
passage of time or both) under the certificate of limited
partnership or agreement of limited partnership of
Huntway or any applicable law or administrative rule or
regulation, or any applicable court or administrative
decree or order, or any trust agreement, mortgage, deed
of trust, loan agreement, material lease, material
contract or other material agreement or instrument to
which Huntway or Sunbelt is a party or by which either of
them or their respective properties are otherwise subject
or bound (in each case, with respect to which the
performance has not been excused by the Bankruptcy Code),
or result in the creation or imposition of any Lien of
any nature whatsoever, other than a Permitted Lien, upon
any of the property or assets of Huntway. Huntway is not
a party to, or otherwise subject to, any provision
contained in any instrument evidencing Indebtedness of
Huntway, any agreement relating thereto or any other
contract or agreement, including its certificate of
limited partnership or agreement of limited partnership
(in each case, with respect to which the performance has
not been excused by the Bankruptcy Code) which limits the
amount of, or otherwise imposes restrictions on the
incurring of the Obligations.
(e) Upon entry of the Interim Order (or if there is
no Interim Order, the Final Order), no consent or
approval of any trustee, holder of any indebtedness of
Huntway or any other Person, and no consent, permission,
authorization, order or license of, or filing or
registration with, any governmental authority is
necessary in connection with the execution and delivery
of this Agreement or the Related Documents, the
consummation of any transaction herein or therein
contemplated, or the fulfillment of or compliance with
the terms and conditions hereof or thereof, except as
have been obtained or made and as are in full force and
effect.
(f) Except as set forth on Schedule II attached
hereto, there is no action, suit, proceeding, inquiry or
investigation before or by any court or federal, state,
municipal or other governmental authority or arbitrator
or other Person, pending or, to the knowledge of Huntway
after reasonable inquiry and investigation, threatened
against or affecting Huntway or any of its Subsidiaries
or the assets, properties or operations of Huntway or any
of its Subsidiaries which, if determined adversely to
Huntway or any of its Subsidiaries or their respective
interests, would be reasonably likely to have a Material
Adverse Effect upon the consummation of the transactions
contemplated by or the fulfillment or compliance with the
terms and conditions, or the legality, validity or
enforceability, of this Agreement or the Related
Documents, or upon the financial condition, assets,
properties or operations of Huntway and its Subsidiaries,
taken as a whole, and neither Huntway nor any of its
Subsidiaries is in default (and no event has occurred and
is continuing which with the giving of notice or the
passage of time or both could constitute a default) with
respect to any order or decree of any court or any order,
regulation or demand of any federal, state, municipal or
other governmental authority or arbitrator or other
Person, which default would be reasonably likely to have
consequences that would materially and adversely affect
the consummation of the transactions contemplated by this
Agreement or the Related Documents, or the financial
condition, assets, properties, prospects or operations of
Huntway and its Subsidiaries, taken as a whole, or their
respective properties.
(g) Except as set forth on Schedule III attached
hereto, all tax returns (federal, state and local)
required to be filed by or on behalf of Huntway and its
Subsidiaries have been filed, and all taxes shown thereon
to be due, including interest and penalties, except such,
if any, as are being actively contested by Huntway or any
of its Subsidiaries in good faith, have been paid or
adequate reserves have been made for the payment thereof,
which reserves, if any, are reflected in the financial
statements described in subsection (h) of this Section.
(h) The audited consolidated balance sheet of
Huntway as at December 31, 1995, and the related
statements of income and changes in partners' equity were
prepared in conformity with GAAP and present fairly the
financial position of Huntway and its Subsidiaries as at
such date, and since December 31, 1995, there has been no
material adverse change in the financial condition,
assets, liabilities, properties, prospects or results of
operations of Huntway and its Subsidiaries, taken as a
whole. Neither Huntway nor any of its Subsidiaries has
any material Guaranty or Indebtedness, contingent
obligation, contingent liability or liability for taxes,
long term lease or unusual forward or long-term
commitment that is not reflected in the foregoing
financial statements or the notes thereto and that in any
case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or
prospects of Huntway and its Subsidiaries, taken as a
whole.
(i) Huntway and its Subsidiaries have good and
marketable title to all their respective properties and
assets reflected in the most recent consolidated balance
sheet referred to in Section 4.01(h), except for assets
acquired or disposed of in the ordinary course of
business since the date of such consolidated balance
sheet or financial statements or as otherwise permitted
hereunder, and all such properties and assets are free
from any adverse Lien of any kind whatsoever, excepting
only Permitted Liens.
(j) (i) Except as set forth on Schedule VI hereto
or disclosed in writing to Bankers prior to the date
hereof, Huntway and each of its ERISA Affiliates are each
in compliance in all material respects with all
applicable provisions of ERISA and the regulations and
published interpretations thereunder with respect to each
Employee Benefit Plan, and have performed all their
obligations under each Employee Benefit Plan.
(ii) Except as set forth on Schedule VI hereto,
no ERISA Event has occurred or is reasonably expected
to occur with respect to any Employee Benefit Plan.
(iii) Except to the extent required under
Section 4980B of the Internal Revenue Code or
applicable state continuation coverage laws, no
Employee Benefit Plan provides health or welfare
benefits (through the purchase of insurance or
otherwise) for any retired or former employees of
Huntway or any of its ERISA Affiliates.
(iv) As of the most recent valuation date for
any Pension Plan, the amount of unfunded benefit
liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all
Pension Plans (excluding for purposes of such
computation any Pension Plans with respect to which
assets exceed benefit liabilities), does not exceed
$250,000.
(k) Except as set forth on Schedule IV attached
hereto, Huntway and each of its Subsidiaries has complied
with all statutes, regulations and other laws of all
governmental authorities, including environmental laws
and regulations, applicable to Huntway and its
Subsidiaries except those statutes, regulations and other
laws that if violated or breached by Huntway or any of
its Subsidiaries would not be reasonably expected to have
a Material Adverse Effect.
(l) Neither Huntway nor any of its Subsidiaries is
subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, the Investment Company Act of
1940 or any other federal or state statute or regulation
that may limit Huntway's ability to incur Indebtedness or
that may otherwise render all or any portion of the
Obligations unenforceable. Neither Huntway nor any of
its Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit
for the purchase of stock or other securities.
(m) No information furnished by (or on behalf of)
Huntway to Bankers in connection with this Agreement or
the Related Documents includes any untrue statement of a
material fact or omits to state a material fact necessary
in order to make the statements made in such information,
in the light of the circumstances in which they were
made, not misleading in any material respect.
(n) As of the date hereof, Huntway and its
Subsidiaries possesses all necessary trade names and
licenses to conduct its business as now operated without
any known conflict with the valid trademarks, tradenames,
copyrights, patents, patent rights and licenses or other
intangible property rights of others.
(o) Huntway does not have a Subsidiary other than
Sunbelt.
(p) Except as set forth in Schedule V annexed
hereto:
(i) the operations of Huntway and each of its
Subsidiaries (including, without limitation, all
operations and conditions at or in the Facilities)
comply in all material respects with all
Environmental Laws;
(ii) Huntway and each of its Subsidiaries have
obtained all Governmental Authorizations under
Environmental Laws necessary to their respective
operations, and all such Governmental Authorizations
are in good standing, and Huntway and each of its
Subsidiaries are in compliance with all material
terms and conditions of such Governmental
Authorizations;
(iii) neither Huntway nor any of its
Subsidiaries has received (a) any notice or claim to
the effect that it is or may be liable to any Person
as a result of or in connection with any Hazardous
Materials or (b) any letter or request for
information under Section 104 of the Comprehensive
Environmental Response, Compensation, and Liability
Act (42 U.S.C. 9604) or comparable state laws, and,
to the best of Huntway's knowledge, none of the
operations of Huntway or any of its Subsidiaries is
the subject of any federal or state investigation
relating to or in connection with any Hazardous
Materials at any Facility or at any other location;
(iv) none of the operations of Huntway or any of
its Subsidiaries is subject to any judicial or
administrative proceeding alleging the violation of
or liability under any Environmental Laws which if
adversely determined is reasonably likely to have a
Material Adverse Effect;
(v) neither Huntway nor any of its Subsidiaries
nor any of their respective Facilities or operations
are subject to any outstanding written order or
agreement with any governmental authority or private
party relating to (a) any Environmental Laws or
(b) any Environmental Claims;
(vi) neither Huntway nor any of its Subsidiaries
has any contingent liability in connection with any
Release of any Hazardous Materials by Huntway or any
of its Subsidiaries;
(vii) neither Huntway nor any of its
Subsidiaries nor, to the best knowledge of Huntway,
any predecessor of Huntway or any of its Subsidiaries
has filed any notice under any Environmental Law
indicating past or present treatment or Release of
Hazardous Materials at any Facility, and none of
Huntway's or any of its Subsidiaries' operations
involves the generation, transportation, treatment,
storage or disposal of hazardous waste, as defined
under 40 C.F.R. Parts 260-270 or any state equivalent
except to the extent any such activity is conducted
in compliance with all applicable laws;
(viii) no Hazardous Materials exist on, under
or about any Facility in a manner that has a
reasonably possibility of giving rise to an
Environmental Claim having a Material Adverse Effect,
and neither Huntway nor any of its Subsidiaries has
filed any notice or report of a Release of any
Hazardous Materials that has a reasonable possibility
of giving rise to an Environmental Claim having a
Material Adverse Effect;
(ix) neither Huntway nor any of its Subsidiaries
nor, to the best knowledge of Huntway, any of their
respective predecessors has disposed of any Hazardous
Materials in a manner that has a reasonable
possibility of giving rise to an Environmental Claim
having a Material Adverse Effect;
(x) no underground storage tanks or surface
impoundments are on or at any Facility; and
(xi) no Lien in favor of any Person relating to
or in connection with any Environmental Claim has
been filed or has been attached to any Facility.
The representations and warranties made by Huntway in
the Related Documents are hereby incorporated by reference
herein.
ARTICLE V
COVENANTS OF HUNTWAY
SECTION 5.01. Covenants. Huntway covenants and
agrees that, so long as the Commitment hereunder shall be in
effect and until termination or expiration of the Total
Letters of Credit and reimbursement of all amounts owing in
respect thereof, unless Bankers shall otherwise give prior
written consent, Huntway shall perform all covenants in this
Section 5.01.
(a) Cash Collateral Order. Huntway hereby agrees,
unless Bankers shall otherwise give prior written consent, to
perform all covenants set forth in the Cash Collateral Order
and said covenants are hereby incorporated herein by this
reference with the same effect as though set forth in their
entirety herein.
(b) Payment of Fees Under Prepetition Letter of
Credit Agreement. Huntway shall pay to Bankers all fees and
commissions due under the Prepetition Letter of Credit
Agreement with respect to the Existing Letters of Credit and
the IDB Letter of Credit accrued and unpaid on the Effective
Date. The obligation of Huntway to pay such amount shall be a
payment obligation hereunder, included within the term
"Obligations".
(c) Financial Reports. Huntway will deliver to
Bankers the following reports and information:
(i) Not later than the second Business Bay
following the end of each week, Huntway will deliver to
Bankers statements of cash receipts and disbursements
(including the beginning and ending ledger cash balance
for that week).
(ii) Not later than the third Business Day
following the end of each week, Huntway will deliver to
Bankers a flash report for Huntway's gross margin for
such week in reasonable detail.
(iii) Not later than the 10th day after the end
of each calendar month, Huntway will deliver to Bankers
flash projections of Huntway's gross profit for such
month in reasonable detail.
(iv) Not later than the 15th day after each
calendar month, Huntway will provide to Bankers
comparative statements of operations-consolidated in a
manner consistent with such reports previously delivered
pursuant to the Collateralized Note Indenture.
(v) Not later than the 30th day following the
end of each calendar month, Huntway will deliver to
Bankers statements of actual versus budgeted revenues and
expenditures for such month.
(vi) Not later than the 30th day following the
end of each calendar month, Huntway will deliver to
Bankers statements financial statements prepared in a
manner consistent with those delivered pursuant to the
Collateralized Note Indenture.
(vii) Not later than the 10th Business Day
following the end of each calendar month, Huntway will
deliver to Bankers statements of its accounts receivable
and accounts payable aging for such month.
(viii) Not later than the fifth Business Day
following the end of each calendar month, Huntway will
deliver to Bankers a statement setting forth the type of
the obligations supported by each Letter of Credit
outstanding during such month.
(ix) As soon as practicable after any reasonable
request therefor, Huntway shall furnish any additional
financial reports and information reasonably requested by
Bankers.
(d) Maintenance of Existence; Compliance with Laws.
Huntway will do or cause to be done all things necessary to
preserve and keep in full force and effect its partnership
existence and the corporate or partnership existence, as the
case may be, of each Subsidiary and all rights, privileges,
franchises, permits, licenses, patents, patent rights and
other authority which if not so preserved or kept in full
force and effect would have a Material Adverse Effect on the
business of Huntway and its Subsidiaries taken as a whole.
Huntway and its Subsidiaries will at all times conduct their
business in an orderly manner without voluntary interruption
and shall exercise all reasonable diligence in order to comply
with the requirements of all material applicable laws, rules,
regulations, licenses, permits and orders of any governmental
authority, noncompliance with which could materially and
adversely affect the business, properties, assets, operations
or condition (financial or otherwise) of Huntway and its
Subsidiaries taken as a whole.
(e) Payment of Taxes and Other Claims.
(i) Except as excused by the Bankruptcy Code or
by an applicable order of the Court, Huntway will, and
will cause each of its Subsidiaries to, pay all taxes,
assessments and other governmental charges imposed upon
it or any of its properties or assets or in respect of
any of its franchises, business, income or property
before any penalty or interest accrues thereon, and all
claims (including, without limitation, claims for labor,
services, material and supplies) of sums which have
become due and payable and which by law have or may
become a Lien upon any of its properties or assets, prior
to the time when any penalty or fine shall be incurred
with respect thereof; provided that no such charge or
claim need be paid if being contested in good faith by
appropriate proceedings promptly instituted and
diligently conducted and if such reserve or other
appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor.
(ii) Huntway will not, nor will it permit any of
its Subsidiaries to, file or consent to the filing of any
consolidated income tax return with any Person (other
than its Subsidiaries and Reprise).
(f) Limitation on Indebtedness.
Huntway will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create, incur,
assume, guarantee, or otherwise become or remain directly or
indirectly liable with respect to, any Indebtedness, except:
(i) Huntway may become and remain liable with
respect to the Obligations;
(ii) Huntway may remain liable with respect to
Indebtedness existing on the Petition Date without giving
effect to any supplemental borrowings or incremental
incurrences thereof;
(iii) Huntway and its Subsidiaries may
become and remain liable with respect to hedging
agreements relating to the price of crude oil in an
amount (including hedging agreements in existence as of
the Petition Date) not to exceed $1,500,000;
(iv) Sunbelt may remain liable with respect to
the IDB Bonds so long as it continues to own the property
described in Exhibit A hereto as the Pinal Property; and
(v) Huntway may become and remain liable with
respect to the Contingent Obligations permitted by
Section 5.01(r).
(g) Limitation on Restricted Junior Payments;
Payments On Pre-Petition Indebtedness.
(i) Huntway and its Subsidiaries will not,
directly or indirectly, declare, order, pay, make or set
apart any sum for any Restricted Junior Payment;
(ii) Huntway and its Subsidiaries will not,
directly or indirectly, declare order, pay, make or set
apart any sum for any payment or prepayment of any
Prepetition Indebtedness or any other claim or obligation
existing on the Petition Date other than payments Huntway
has sought Court approval to make pursuant to a motion
filed on the Petition Date.
(h) Limitation on Restrictions Affecting
Subsidiaries. Huntway will not, and will not permit any
Subsidiary to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of
any kind on the ability of any Subsidiary to (a) pay dividends
or make any other distribution on any of such Subsidiary's
capital stock or partnership interests owned by Huntway or any
Subsidiary of Huntway, (b) pay any Indebtedness owed to
Huntway or any other Subsidiary of Huntway, (c) make loans or
advances to Huntway or any other Subsidiary of Huntway or
(d) transfer any of its property or assets to Huntway or any
other Subsidiary of Huntway.
(i) Limitation on Liens. Huntway will not, and will
not permit any of its Subsidiaries to, directly or indirectly,
create, incur, assume or permit to exist any Lien on or with
respect to any of its properties or assets or the properties
or assets of any of its Subsidiaries, respectively, whether
now owned or hereafter acquired, or any income or profits
therefrom, except:
(i) Permitted Liens;
(ii) Liens existing on the Petition Date, which
(other than Permitted Liens) are listed on
Schedule VII;
(iii) Liens created pursuant to the terms of
the Cash Collateral Order; and
(iv) Liens securing the Obligations.
provided that none of the Liens described in clauses (ii) or
(iii) shall be pari passu with or senior to the Liens or in
the Collateral securing the Obligations.
(j) Restrictions on Acquisitions of Subsidiaries.
Huntway will not, nor will it permit any Subsidiary to,
acquire or form any Subsidiaries.
(k) Inspection. Huntway will permit authorized
representatives of Bankers, at the expense of Bankers, to
visit and inspect properties of Huntway or any of its
Subsidiaries, including its and their financial and accounting
records, and to make copies and take extracts therefrom, and
to discuss its and their affairs, finances and accounts with
its and their officers and independent public accountants, all
upon reasonable notice to Huntway and at such reasonable times
during normal business hours and as often as may be reasonably
requested. Bankers shall agree to hold nonpublic information
received from Huntway pursuant to this clause (k) in
confidence pursuant to a confidentiality agreement in form and
substance reasonably satisfactory to Bankers and Huntway.
(l) Maintenance of Properties and Insurance.
Huntway will cause all material properties owned by or leased
to it or any Subsidiary and used or useful in the conduct of
its business or the business of such Subsidiary to be
maintained and kept in normal condition, repair and working
order and supplied with all necessary equipment and will cause
to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment
of Huntway may be necessary, so that the business carried on
in connection therewith may be properly and advantageously
conducted at all times. Huntway will provide or cause to be
provided, for itself and the Subsidiaries, insurance against
loss or damage of the kinds customarily insured against by
entities similarly situated and owning like properties,
including, but not limited to, products liability insurance
and public liability insurance, with reputable insurers or
with the government of the United States of America as an
agency or instrumentality thereof, in such amounts with such
deductibles and by such methods as shall be customary for
entities similarly situated in the industry.
(m) Transactions with Partners and Affiliates.
Huntway will not, and will not permit any of its Subsidiaries
to, directly or indirectly, enter into or permit to exist any
transaction (including, without limitation, the purchase,
sale, lease or exchange of any property or the rendering of
any service) with any holder of 5% or more of the total
partnership interests in Huntway, or with an Affiliate of
Huntway or of any such holder, on terms that are less
favorable to Huntway or that Subsidiary, as the case may be,
than those which might be obtained at the time from Persons
who are not such a holder or Affiliate; provided that the
foregoing restriction shall not apply to transactions with a
partner or its Affiliate pursuant to or permitted by the
relevant agreement of limited partnership.
(n) Cumulative Cash Flow. Huntway will not permit
Cumulative Operating Cash flow at any time after the Petition
Date to be less than $1.00. As used herein, "Cumulative
Operating Cash Flow" means, for any period, Huntway's gross
sales during such period minus cost of goods sold during such
period minus the following types of processing costs paid in
cash during such period: heating, chemicals, supplies,
salaries and wages, health/disability/workers' compensation
insurance, retirement plan and bonus, facilities rent,
electricity, repairs and maintenance, turnaround costs,
insurance, taxes and licenses, waste disposal/treatment, other
environmental costs, training and other, and reserve
provision.
(o) Sale of Assets. Huntway will not, and will not
permit any of its Subsidiaries to, sell, lease, transfer, or
otherwise dispose of (or apply to the Court for authority to
do so) any of its property or assets (other than cash or cash
equivalents) except (i) sales of inventory in the ordinary
course of business; sales of obsolete or damaged equipment.
(p) Fundamental changes. Huntway will not, and will
not permit any of its Subsidiaries to (i) sell, lease,
transfer or otherwise dispose of (or apply to the Court for
authority to do so) all or substantially all, of its property
and assets to any other person or entity or consolidate with
or merge into, directly or indirectly any other partnership or
corporation or permit any corporation or partnership to merge
into Huntway or any of its Subsidiaries, (ii) modify its
agreement of limited partnership or make any change in its
capital structure.
(q) Compliance with Collateral Documents. Huntway
will comply with all of the terms, covenants and provisions
set forth in the Existing Collateral Documents.
(r) Waiver of Stay, Extension or Usury Laws.
Huntway covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of,
any stay or extension law or any usury law or other law, which
would prohibit or forgive Huntway from paying all or any
portion of the Obligations, wherever enacted, now or any time
hereafter in force, or which may affect the covenants or the
performance of this Agreement; and (to the extent that it may
lawfully do so) Huntway hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein
granted to Bankers, but will suffer and permit the execution
of every such power as though no such law had been enacted.
(s) Limitation on Investments, Loans and Advances.
Huntway will not, nor will it permit any Subsidiary to, make
any advance, loan, extension of credit or capital contribution
to, or purchase any stock, bonds, notes, debentures or other
securities of, or make any other investment in, any Person,
except (a) extensions of trade credit in the ordinary course
of business and investments in Cash Equivalents; (b) advances
to employees in the ordinary course of business which shall
not exceed $5,000 to any single employee and $36,000 in the
aggregate to all employees at any time outstanding; and
(c) hedging transactions relating to crude oil purchases
otherwise permitted hereunder.
(t) Limitation on Expenditures. Huntway will not
permit its expenditures in the period covered by the Budget
attached hereto as Exhibit E for any item to exceed by ten
percent (10%) or more the amount for such item set forth in
the Budget attached hereto as Exhibit E. Not less than ten
days before the end of each period covered by the Budget
attached hereto as Exhibit E (as revised from time to time in
accordance with the terms hereof), Huntway shall deliver to
Bankers a revised budget in the same form as the budget
attached hereto as Exhibit E for the 4 week period immediately
following the period covered by the budget then in effect. If
Bankers approves such revised budget, than such revised budget
shall replace the budget then in effect on the last day of the
period covered thereby, and Huntway shall thereafter comply
with such revised budget. If Bankers does not approve such
revised Budget, Banker's commitment to issue or renew Letters
of Credit shall expire on the last day of the budget then in
effect.
(u) Contingent Obligations. Huntway will not, and
will not permit any of its Subsidiaries to, directly or
indirectly, create or become or be liable with respect to any
Contingent Obligation, except:
(i) Contingent Obligations in respect of the
Obligations;
(ii) guarantees resulting from endorsement of
negotiable instruments for collection in the ordinary
course of business;
(iii) Huntway and its Subsidiaries may
become and remain liable with respect to hedging
agreements relating to the price of crude oil in an
amount (including hedging agreements in existence on the
Petition Date) not to exceed $1,500,000; and
(iv) Contingent Obligations existing prior to
the Petition Date.
(v) Conduct of Business. Huntway will not, and will
not permit any of its Subsidiaries to, engage in any business
other than the business engaged in by Huntway and its
Subsidiaries on the Effective Date and substantially similar
or related businesses and any other businesses which in the
aggregate are not material to Huntway and its Subsidiaries
taken as a whole.
(w) Environmental Covenants.
(i) Huntway shall, and shall cause each of its
Subsidiaries to, exercise all due diligence in order to
comply and cause (a) all tenants under any leases or
occupancy agreements affecting any portion of the
Facilities and (b) all other Persons on or occupying such
property, to comply with all Environmental Laws in all
material respects.
(ii) Huntway agrees that Bankers may, from time
to time and in its sole and absolute discretion, upon
obtaining knowledge of a Release of Hazardous Materials
or any violation of any Environmental Laws which has a
reasonable possibility of creating a liability to Huntway
or adversely impacting the value of any real property
owned, operated or used by Huntway, retain, at Huntway's
expense, an independent professional consultant to review
any report relating to Hazardous Materials prepared by or
for Huntway and to conduct its own investigation of any
Facility currently owned, leased, operated or used by
Huntway or any of its Subsidiaries, and Huntway agrees to
use its best efforts to obtain permission for such
professional consultant to conduct its own investigation
of any Facility previously owned, leased, operated or
used by Huntway or any of its Subsidiaries. Huntway
hereby grants to Bankers and its agents, employees,
consultants and contractors, the right to enter into or
on the Facilities currently owned, leased, operated or
used by Huntway or any of its Subsidiaries to perform
such tests on such property as are reasonably necessary
to conduct such a review and/or investigation. Any such
investigation of any Facility shall be conducted, unless
otherwise agreed to by Huntway and Bankers, during normal
business hours and, to the extent reasonably practicable,
shall be conducted so as not to interfere with the
ongoing operations at any such Facility or to cause any
damage or loss to any property at such Facility. Any
report of any investigation conducted at the request of
Bankers pursuant to this Section 5.01(t) will be obtained
and shall be used by such Bankers for Bankers' internal
business purposes, to monitor compliance with this
Agreement and to protect Bankers' security interests
created by this Agreement. A copy of any such report
shall be delivered to Huntway with the understanding that
Huntway acknowledges and agrees that (a) it will
indemnify and hold harmless Bankers from any costs,
losses or liabilities relating to Huntway's use of or
reliance on such report, and (b) by delivering such
report to Huntway, Bankers is not requiring or
recommending the implementation of any suggestions or
recommendations contained in such report.
(iii) Huntway shall promptly advise Bankers
in writing and in reasonable detail of (a) any Release of
any Hazardous Materials required to be reported to any
federal, state or local governmental or regulatory agency
under any applicable Environmental Laws, (b) any and all
written communications with respect to any Environmental
Claims that have a reasonable probability of giving rise
to a Material Adverse Effect or with respect to any
Release of Hazardous Materials required to be reported to
any federal, state or local governmental or regulatory
agency, (c) any remedial action taken by Huntway or any
other Person in response to (x) any Hazardous Materials
on, under or about any Facility, the existence of which
has a reasonable probability of resulting in an
Environmental Claim having a Material Adverse Effect, or
(y) any Environmental Claim that could have a Material
Adverse Effect, (d) Huntway's discovery of any occurrence
or condition on any real property adjoining or in the
vicinity of any Facility that could cause such Facility
or any part thereof to be subject to any restrictions on
the ownership, occupancy, transferability or use thereof
under any Environmental Laws, and (e) any written request
for information from any governmental agency relating to
Huntway's or any of its Subsidiaries' potential
responsibility for a Release of Hazardous Materials.
(iv) Huntway shall promptly notify Bankers of
(a) any proposed acquisition of stock, assets, or
property by Huntway or any of its Subsidiaries that could
reasonably be expected to expose Huntway or any of its
Subsidiaries to, or result in, Environmental Claims that
could have a Material Adverse Effect or that could
reasonably be expected to have a material adverse effect
on any Governmental Authorization then held by Huntway or
any of its Subsidiaries and (b) any proposed action to be
taken by Huntway or any of its Subsidiaries to commence
new and substantially different manufacturing, industrial
or other operations that could reasonably be expected to
subject Huntway or any of its Subsidiaries to additional
laws, rules or regulations, including, without
limitation, laws, rules and regulations requiring
additional environmental permits or licenses.
(v) Huntway shall, at its own expense, provide
copies of such documents or information as Bankers may
reasonably request in relation to any matters disclosed
pursuant to this Section 5.01(w).
(vi) Huntway shall promptly take, and shall
cause each of its Subsidiaries promptly to take, any and
all necessary remedial action in connection with the
presence, storage, use, disposal, transportation or
Release of any Hazardous Materials on, under or about any
Facility in order to comply with all applicable
Environmental Laws and Governmental Authorizations in all
material respects. In the event Huntway or any of its
Subsidiaries undertakes any remedial action with respect
to any Hazardous Materials on, under or about any
Facility, Huntway or such Subsidiary shall conduct and
complete such remedial action in compliance with all
applicable Environmental Laws, and in accordance with the
policies, orders and directives of all federal, state and
local governmental authorities, in each case in all
material respects, except when, and only to the extent
that, Huntway's or such Subsidiary's liability for such
presence, storage, use, disposal, transportation or
discharge of any Hazardous Materials is being contested
in good faith by Huntway or such Subsidiary.
(x) Chapter 11 Claims. Without limiting the
provisions of subsection 5.01(i) hereof, Huntway shall not
incur, create, assume, suffer or permit any claim against it,
as debtor in possession, or any of the property of the estate
in the Chapter 11 Case (other than the claims described in the
proviso contained in Section 2.09 but only to the extent
therein described) to be pari passu with or senior to the
claims of Bankers against Huntway in respect of the
Obligations, or apply to the Court for authority to do so.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default.
The occurrence of any of the following events shall
be an "Event of Default:"
(i) Huntway shall fail to pay any amount payable
hereunder when due and continuance of such default for a
period of three days; or
(ii) Huntway shall use any Letter of Credit for a
purpose other than that specified in the Notice of
Issuance of Letter of Credit delivered with respect
thereto or for any purpose not permitted by Section
2.01D; or
(iii) The Letter of Credit Usage shall exceed
$17,500,000 at any time; or
(iv) Any representation or warranty made by Huntway
herein, or by Huntway (or any of its officers) in
connection with this Agreement or any Related Document
shall prove to have been incorrect when made; or
(v) Huntway shall fail to perform or observe any
other term, covenant or agreement contained in this
Agreement (including those incorporated herein by
reference) and any such failure shall remain unremedied
for 15 days after written notice thereof shall have been
given to Huntway by Bankers; provided that an Event of
Default shall occur without regard to the giving of
notice or lapse of time if Huntway shall fail to perform
or observe the covenants set forth in the Cash Collateral
Order, which are incorporated herein by reference; or
(vi) Any material provision of this Agreement shall
at any time for any reason cease to be in full force and
effect or shall be declared to be null and void, or the
validity or enforceability thereof shall be contested by
Huntway or any governmental agency or authority, or
Huntway shall deny that it has any or further liability
or obligation under this Agreement; or
(vii) The entry of an order in the Chapter 11
Case authorizing Huntway to obtain either additional
financing under Section 364(c) or (d) of the Bankruptcy
Code or any financial accommodation outside the ordinary
course of business, or authorizing any Person to recover
from any portions of the Collateral any costs or expenses
of preserving or disposing of such collateral under
Section 506(c) of the Bankruptcy Code, or authorizing
under Section 363(c) of the Bankruptcy Code the use of
cash collateral in which Bankers has an interest without
the prior written consent of Bankers; or
(viii) the appointment of an interim or permanent
trustee in the Chapter 11 Case or the appointment of an
examiner in the Chapter 11 Case with expanded powers to
operate or manage the financial affairs, the business, or
reorganization of Huntway; or
(ix) the dismissal of the Chapter 11 Case, or the
conversion of the Chapter 11 Case to a case under Chapter
7 of the Bankruptcy Code;
(x) the entry of an order granting relief from or
modifying the automatic stay of Section 362 of the
Bankruptcy Code to allow (a) any creditor to execute upon
or enforce a Lien on or on any other property or assets
of Huntway or (b) the granting of any Lien on any
property or assets of the Huntway for the benefit of any
state or local environmental or regulatory agency or
authority; or
(xi) the entry of an order without the prior written
consent of Bankers amending, supplementing, staying,
vacating or otherwise modifying any of the Orders or this
Agreement or any Related Document or any of Bankers'
rights, benefits, privileges or remedies under the
Orders, this Agreement or any other Related Document, or
staying any of the Orders, or consolidating Huntway with
any Person; or
(xii) Huntway shall file an application for the
approval of, or there shall arise, any other
administrative expense claim (other than those
specifically referred to in Section 2.09) having any
priority over, or being pari passu with, the administra-
tive expense priority of the Obligations arising under
this Agreement and the Related Documents; or
(xiii) Huntway shall fail to perform or observe
any other term, covenant or condition on its part to be
performed under the Cash Collateral Order; or
(xiv) the Final Order shall not have been entered
by the Court on or before December 15, 1996; or
(xv) the Cash Collateral Order shall terminate or
otherwise cease to be in full force and effect; or
(xvi) (A) a court having jurisdiction in the
premises shall enter a decree which has not been stayed
or order for relief in respect of Sunbelt or partners of
Huntway holding in excess of 51% of the units of
ownership of Huntway (the "Units") (or partners of
Huntway holding a lesser percentage of Units which
together with the Units of other partners of Huntway
which are subject to an order or have taken action
described in Section 6.01(xvi) exceeds 51% of the total
Units) in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or
hereafter in effect, which decree or order is not stayed
or any other similar relief shall be granted under any
applicable federal or state law; or (B) an involuntary
case is instituted against Sunbelt or partners of Huntway
holding in excess of 51% of the Units (or partners of
Huntway holding a lesser percentage of Units which
together with the Units of other partners of Huntway
which are subject to an order or have taken action
described in Section 6.01(xvi) exceeds 51% of the total
Units) under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or a decree
or order of a court having jurisdiction in the premises
for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having
similar powers over Sunbelt or partners of Huntway
holding in excess of 51% of the Units (or partners of
Huntway holding a lesser percentage of Units which
together with the Units of other partners of Huntway
which are subject to an order or have taken action
described in Section 6.01(xvi) exceeds 51% of the total
Units); or over all or a substantial part of its
property, shall have been entered; or the involuntary
appointment of an interim receiver, trustee or other
custodian of Sunbelt or partners of Huntway holding in
excess of 51% of the Units (or partners of Huntway
holding a lesser percentage of Units which together with
the Units of other partners of Huntway which are subject
to an order or have taken action described in Section
601(xvi) exceeds 51% of the total Units) for all or a
substantial part of its property; or the issuance of a
warrant of attachment, execution or similar process
against any substantial part of the property of Sunbelt
or partners of Huntway holding in excess of 51% of the
Units (or partners of Huntway holding a lesser percentage
of Units which together with the Units of other partners
of Huntway which are subject to an order or have taken
action described in Section 6.01(xvi) exceeds 51% of the
total Units) and the continuance of any such events in
clause (B) for 30 days unless dismissed, bonded or
discharged; or
(xvii) Sunbelt or partners of Huntway holding in
excess of 51% of the Units (or partners of Huntway
holding a lesser percentage of Units which together with
the Units of other partners of Huntway which are subject
to an order or have taken action described in this
Section exceeds 51% of the total Units) shall have an
order for relief entered with respect to it or commence a
voluntary case under 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 an involuntary case, or to the conversion to an
involuntary case, under any such law, or shall consent to
the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part
of its property; the making by Sunbelt or partners of
Huntway holding in excess of 51% of the Units (or
partners of Huntway holding a lesser percentage of Units
which together with the Units of other partners of
Huntway which are subject to an order or have taken
action described in this Section exceeds 51% of the total
Units) of any assignment for the benefit of creditors; or
the inability or failure of Huntway, Sunbelt or any of
their respective Subsidiaries or partners of Huntway
holding in excess of 51% of the Units (or partners of
Huntway holding a lesser percentage of Units which
together with the Units of other partners of Huntway
which are subject to an order or have taken action
described in this Section exceeds 51% of the total Units)
or the admission by Sunbelt or partners of Huntway
holding in excess of 51% of the Units (or partners of
Huntway holding a lesser percentage of Units which
together with the Units of other partners of Huntway
which are subject to an order or have taken action
described in this Section exceeds 51% of the total Units)
in writing of its inability to pay its debts as such
debts become due; or the governing body of Sunbelt or
partners of Huntway holding in excess of 51% of the Units
(or partners of Huntway holding a lesser percentage of
Units which together with the Units of other partners of
Huntway holding a lesser percentage of Units which are
subject to an order or have taken action described in
this Section exceeds 51% of the total Units) adopts any
resolution or otherwise authorizes action to approve any
of the foregoing; or
(xviii) except as otherwise agreed to by Bankers,
any money judgment, writ or warrant of attachment, or
similar process involving in any case an amount in excess
of $100,000 not adequately covered by insurance shall be
entered or filed against Huntway or any of its
Subsidiaries or any of their respective assets and shall
remain undischarged, unvacated, unbonded or unstayed for
a period of 30 days or in any event later than five days
prior to the date of any proposed sale thereunder; or
(xix) any order, judgment or decree shall be entered
against Sunbelt, decreeing the dissolution or split up of
Sunbelt and such order shall remain undischarged or
unstayed for a period in excess of 30 days; or
(xx) any Pension Plan maintained by Huntway or any of
its respective ERISA Affiliates shall be terminated
within the meaning of Title IV of ERISA or a trustee
shall be appointed by an appropriate United States
district court to administer any Pension Plan, or the
Pension Benefit Guaranty Corporation (or any successor
thereto) shall institute Proceedings to terminate any
Pension Plan or to appoint a trustee to administer any
Pension Plan if as of the date thereof Huntway's
liability or any such ERISA Affiliate's liability (after
giving effect to the tax consequences thereof) to the
Pension Benefit Guaranty Corporation (or any successor
thereto) for unfunded guaranteed vested benefits under
the Pension Plans exceeds the then current fair market
value of assets accumulated in such Pension Plan by more
than $250,000, in the aggregate (or in the case of a
termination involving Huntway or any of its ERISA
Affiliates as a "substantial employer" (as defined in
Section 4001(a)(2) of ERISA) the withdrawing employer's
proportionate share of such excess shall exceed such
amount); or
(xxi) Huntway or any of its ERISA Affiliates as
employer under a Multiemployer Plan shall have made a
complete or partial withdrawal from such Multiemployer
Plan and the plan sponsor of such Multiemployer Plan
shall have notified such withdrawing employer that such
employer has incurred a withdrawal liability in an annual
amount exceeding $100,000; or
(xxii) or the protection or security afforded
Bankers in any portion of the Collateral is thereby in
any material respect impaired for any reason; or for any
reason Bankers shall fail to have a valid, perfected and
enforceable, first priority security interest in
Huntway's right, title and interest in the Collateral to
the extent provided in the Orders or Huntway shall
contest in any manner that this Agreement constitutes its
valid and enforceable agreement or Huntway shall assert
in any manner that it has no further obligation or
liability under such documents; or
(xxiii) the General Partner and the Special General
Partner shall cease to be the sole general partners of
Huntway or Huntway shall cease to be the managing general
partner of Sunbelt.
SECTION 6.02. Upon an Event of Default.
(a) if any Event of Default shall have occurred and
be continuing, Bankers may, in its sole discretion, but
shall not be obligated to:
(i) by notice to Huntway, declare the Commitment
of Bankers to issue or amend any Letters of Credit or
the IDB Letter of Credit to be terminated, whereupon
the same shall forthwith terminate;
(ii) declare any and all Obligations and the IDB
Principal Obligation (x) then owing and (y) that
would become owing (including, without limitation,
the exchange of the Subordinated Note (Sunbelt IDB)
and any Secondary Securities issued with respect
thereto for a Subordinated Note (Other) and
Subordinated Note (Other) Secondary Securities in
like amounts) upon a drawing of any amount available
under any Letter of Credit or the IDB Letter of
Credit to be immediately due and payable;
(iii) without notice to Huntway except as
required by law and at any time or from time to time,
exercise its rights of set-off set forth in Section
7.04;
(iv) exercise in respect of the Collateral, in
addition to other rights and remedies provided for
herein or otherwise available to Bankers, all the
rights and remedies of a secured party upon default
under the UCC and all of the rights of a mortgagee of
real property or beneficiary of a deed of trust of
real property, (including, but not limited to, all
rights of a real property mortgagee under the
statutory mortgage of each state in which real
property included in the Collateral may be located)
and Bankers may also, 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, broker's board or at any of
Bankers' offices or elsewhere, for cash, on credit or
for future delivery, and upon such other terms as
Bankers may deem commercially reasonable. Huntway
agrees that, to the extent notice of sale shall be
required by law, at least 20 days' notice to Huntway
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. Bankers shall
not be obligated to make any sale of Collateral
regardless of notice of sale having been given.
Bankers 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. Any cash held by Bankers as Collateral
and all cash proceeds received by Bankers in respect
of any sale of, collection from, or other realization
upon all or any part of the Collateral may, in the
discretion of Bankers be held as Collateral for,
and/or then or at any time thereafter be applied
(after payment of any fees, expenses, costs, charges,
reimbursements and similar amounts payable to Bankers
pursuant to this Agreement or the Related Documents)
in whole or in part by Bankers for benefit against,
all or any part of the Obligations in such order as
Bankers shall elect. Any surplus of such cash or
cash proceeds held by Bankers and remaining after the
indefeasible cash payment in full of all the
Obligations shall be delivered to the collateral
agent for the Secured Lenders as additional
collateral for any Prepetition Secured Obligations
then outstanding;
(v) revoke Huntway's right to use cash
collateral in which Bankers has an interest; or
(vi) exercise any other remedy available to it
at law, in equity or otherwise.
(b) Huntway hereby agrees that the exercise of any
of the foregoing rights and remedies shall not in any way
be delayed, limited, affected or impaired by the
provisions of Sections 362 or 105 of the Bankruptcy Code,
or any order of the Court issued thereunder or under any
other provision of the Bankruptcy Code. Bankers shall
have no obligation of any kind to make a motion or
application to the Court to exercise the foregoing rights
and remedies. Huntway waives any right to seek relief
under Bankruptcy Code Section 105 or any other provision
of the Bankruptcy Code to the extent that such relief
would in any way restrict or impair the foregoing rights
and remedies of Bankers. The enumeration of the forego-
ing rights and remedies is not intended to be exhaustive
and the exercise of any right or remedy shall not
preclude the exercise of any other rights or remedies,
all of which shall be cumulative and not alternative.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendments, Etc. No amendment or
waiver of any provision of this Agreement, nor consent to any
departure by Huntway therefrom, shall in any event be
effective unless the same shall be in writing and signed by
Bankers and Huntway and then such waiver or consent shall be
effective only in the specific instance and for the specific
purpose for which given.
SECTION 7.02. Notice, Etc. All notices, demands and
other communications provided for hereunder shall, unless
otherwise stated herein, be in writing (including telex or
facsimile notice with telephonic confirmation) and mailed,
sent or delivered, if to Huntway at 25129 The Old Road, Suite
322, Newhall, CA 91381, to the attention of the Chief
Financial Officer, and in the case of telecopy to telecopy
no.: (805) 286-1588; if to Bankers, in the case of deliveries
or mailings, at its address at Special Loan Group, One BT
Plaza, 130 Liberty Street, New York, New York 10006, and in
the case of telecopy, to telecopy no.: (212) 454-3996, in
each case Attention: Carl O. Roark, Managing Director, or, as
to each party, to such other Person and/or at such other
address or number as shall be designated by such party in a
written notice to each other party. All such notices and
communications shall be effective when mailed or sent,
addressed as aforesaid, except that notices to Bankers
pursuant to the provisions of Article II shall not be
effective until received by Bankers. Notices of any Potential
Event of Default shall be sent by Huntway to Bankers by telex
or telecopy (with immediate telephonic confirmation).
SECTION 7.03. No Waiver; Remedies. No failure on
the part of Bankers to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 7.04. Set-off by Bankers; Security Interest
in Deposit Accounts. Notwithstanding the provisions of
Section 362 of the Bankruptcy Code and without application or
motion to, or receipt of an order from, the Court, upon the
occurrence and during the continuance of any Event of Default,
Bankers is hereby authorized at any time and from time to
time, without notice to Huntway (any such notice being
expressly waived by Huntway to the fullest extent permitted by
law), to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by Bankers to or
for the credit or the account of Huntway against any and all
of the Obligations now or hereafter existing under this
Agreement, irrespective of whether or not Bankers shall have
made any demand hereunder and although such obligations may be
contingent or unmatured. Bankers agrees promptly to notify
Huntway after any such setoff and application; provided that
the failure to give such notice shall not affect the validity
of such setoff and application. Subject to the limitations
set forth above, the rights of Bankers under this Section are
in addition to other rights and remedies (including, without
limitation, other rights of set-off) which Bankers may have.
Huntway hereby grants to Bankers a security interest in all
deposits and accounts maintained with Bankers as security for
the Obligations.
SECTION 7.05. Indemnification. Huntway hereby
indemnifies and holds Bankers and the officers, directors,
employees, agents and Affiliates of Bank (the "Indemnitees")
harmless from and against any and all claims, damages, losses,
liabilities, costs or expenses (including reasonable
attorneys' fees and expenses) which the Indemnitees may incur
or which may be claimed against the Indemnitees by any Person:
(a) by reason of or in connection with the
execution, delivery or performance of this Agreement, or
any Related Document or any transaction contemplated
herein (including the issuance or amendment of any Letter
of Credit or the IDB Letter of Credit); provided,
however, that Huntway shall not be liable under this
Section to indemnify the Indemnitees for any claims,
damages, losses, liabilities, costs or expenses resulting
solely from Bankers' gross negligence or willful
misconduct or from other contracts, agreements or
instruments to which Bankers is a party, not related to
this Agreement; or
(b) by reason of or in connection with the execution
and delivery or transfer of, or payment or failure to
make lawful payment under, any Letter of Credit or the
IDB Letter of Credit; provided, however, that Huntway
shall not be required to indemnify the Indemnitees
pursuant to this Section for any claims, damages, losses,
liabilities, costs or expenses to the extent, but only to
the extent, caused by (i) the willful misconduct or gross
negligence of Bankers in determining whether a draft or
certificate presented under any Letter of Credit or the
IDB Letter of Credit complied with such terms of such
Letter of Credit or the IDB Letter of Credit or
(ii) Bankers' willful failure to make lawful payment
under any Letter of Credit or the IDB Letter of Credit
after the presentation to it by the beneficiary thereof
of a draft and certificate strictly complying with the
terms and conditions of such Letter of Credit or the IDB
Letter of Credit; or
(c) the failure of Bankers to honor a drawing under
any Letter of Credit or the IDB Letter of Credit as a
result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or
omissions herein called "Governmental Acts").
Nothing in this Section is intended to limit the other
Obligations of Huntway hereunder. Without prejudice to the
survival of any other Obligation hereunder, the obligations
contained in this Section shall survive the payment in full of
all amounts payable pursuant to Article II and the termination
of each Letter of Credit, the IDB Letter of Credit and this
Agreement.
SECTION 7.06. Liability of Parties.
Except as otherwise expressly set forth in this
Agreement, Huntway assumes all risks of the acts or omissions
of any beneficiary or transferee of any Letter of Credit or
the IDB Letter of Credit with respect to its use of such
Letter of Credit or the IDB Letter of Credit. Neither Bankers
nor any of its officers or directors shall be liable or
responsible (absent gross negligence or willful misconduct (as
determined by a court of competent jurisdiction)) for:
(a) the use or misuse which may be made of any
Letter of Credit or the IDB Letter of Credit or any acts
or omissions of any beneficiary or transferee in
connection therewith;
(b) the validity, accuracy, sufficiency or
genuineness of documents, or of any endorsement thereon,
even if such documents shall prove to be in any or all
respects invalid, inaccurate, insufficient, fraudulent or
forged;
(c) payment by Bankers against presentation of
documents which do not comply with the terms of any
Letter of Credit or the IDB Letter of Credit, including
failure of any documents to bear any reference or
adequate reference to such Letter of Credit or the IDB
Letter of Credit; or
(d) failure of the beneficiary of any Letter of
Credit or the IDB Letter of Credit to comply fully with
conditions required in order to draw upon such Letter of
Credit or the IDB Letter of Credit; or
(e) omissions, interruptions or delays in trans-
mission or delivery of any messages, by mail, cable
telegraph, telex or otherwise, whether or not they be in
cipher; or
(f) errors in interpretation of technical terms; or
(g) any loss or delay in the transmission or
otherwise of any document required in order to make a
drawing under any Letter of Credit or the IDB Letter of
Credit or of the proceeds thereof; or
(h) the misapplication by the beneficiary of any
Letter of Credit or the IDB Letter of Credit of the
proceeds of any drawing thereunder; or
(i) any consequences arising from causes beyond the
control of Bankers, including, without limitation, any
Governmental Acts; or
(j) any other circumstances whatsoever in making or
failing to make payment under any Letter of Credit or the
IDB Letter of Credit.
In furtherance and not in limitation of the foregoing, Bankers
may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless
of any notice or information to the contrary.
SECTION 7.07. Costs, Expenses and Taxes. Huntway
agrees to pay on demand all reasonable costs and expenses
incurred in connection with the preparation, execution,
delivery, filing, recording and administration of this
Agreement and the Related Documents, including, without
limitation, the reasonable fees and expenses of counsel for
Bankers with respect to advising Bankers as to its rights and
responsibilities under this Agreement whether or not any
Letter of Credit or the IDB Letter of Credit is issued or
amended. Huntway also agrees to pay all reasonable costs and
expenses (including reasonable counsel fees and expenses)
incurred in connection with (i) the enforcement or amendment
of this Agreement or any Related Document in the Chapter 11
Case, thereafter and in or any subsequent insolvency or
bankruptcy proceeding, (ii) any action or proceeding relating
to a court order, injunction or other process or decree re-
straining or seeking to restrain Bankers from paying any
amount under any Letter of Credit or the IDB Letter of Credit
or (iii) the Plan of Reorganization or the Chapter 11 Case,
whether or not in connection with this Agreement. In
addition, Huntway shall pay any and all stamp and other taxes
and fees payable or determined to be payable in connection
with the execution, delivery, filing and recording of this
Agreement and the Related Documents (except as otherwise
provided herein), and agrees to save Bankers harmless from and
against any and all liabilities with respect to or resulting
from any delay in paying or omitting to pay such taxes and
fees, except to the extent that such liability results from
the gross negligence or willful misconduct of Bankers.
SECTION 7.08. Binding Effect. This Agreement shall
become effective when it shall have been executed by Huntway
and Bankers and the conditions precedent set forth in Section
3.01 are satisfied and thereafter shall be binding upon
Huntway, Huntway's estate, and any trustee appointed in the
Chapter 11 Case or any chapter 7 case or any other successor
in interest to Huntway notwithstanding the discharge of
Huntway pursuant to section 1141 of the Bankruptcy Code, the
conversion of either of the Chapter 11 Case to a case under
chapter 7 of the Bankruptcy Code or the dismissal of the
Chapter 11 Case. This Agreement shall not be subject to
Section 365 of the Bankruptcy Code. Bankers may assign to any
Participant all or any part of, or any interest (undivided or
divided) in, Bankers' rights and benefits under this Agreement
in accordance with Section 2.07.
SECTION 7.09. Independence of Covenants. All
covenants hereunder (including those incorporated herein by
reference) shall be given independent effect so that if a
particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another
covenant should not avoid the occurrence of a Potential Event
of Default or Event of Default if such action is taken or
condition exists.
SECTION 7.10. Governing Law and Jurisdiction. This
Agreement shall be deemed to be a contract made under the laws
of the State of New York and for all purposes shall be
construed in accordance with the laws of said state, without
regard to the principles of conflicts of laws. Any action or
proceeding arising out of or relating to this Agreement or any
Letter of Credit or the IDB Letter of Credit shall be heard
and determined in (a) the United States Bankruptcy Court for
the District of Delaware if such action or proceeding is
commenced during the Chapter 11 Case and (b) otherwise an
appropriate state or federal court in the State of New York.
SECTION 7.11. 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 LETTER OF CREDIT, THE IDB LETTER OF
CREDIT AND THIS AGREEMENT AND THE LENDER/BORROWER 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 transactions, 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 LETTER OF
CREDIT OR THE IDB LETTER OF CREDIT. In the event of
litigation, this Agreement may be filed as a written consent
to a trial by the court.
SECTION 7.12. 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.
SECTION 7.13. Counterparts. This Agreement may be
executed in any number of counterparts and by different
parties hereto on separate counterparts, each of which
counterpart, when so executed and delivered, shall be deemed
to be an original and all of which counterparts, taken
together, shall constitute but one and the same agreement.
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 PARTNERS, L.P., as debtor and
debtor in possession
by HUNTWAY MANAGING PARTNER, L.P.,
its Managing General Partner
by The Huntway Division of
Reprise Holdings, Inc., its
Sole General Partner
By:
______________________________
Title:
____________________________
BANKERS TRUST COMPANY
By: ______________________________
Title: ____________________________
EXHIBIT A
TO REIMBURSEMENT AGREEMENT
FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
Pursuant to that certain Debtor-in-Possession Letter
of Credit and Reimbursement Agreement dated as of November 12,
1996 (as such agreement may be amended, restated, supplemented
or otherwise modified from time to time, the "L/C Agreement")
entered into by and between Huntway Partners, L.P. as debtor
and debtor in possession ("Huntway") and Bankers Trust Company
("Bankers"), this represents Huntway's request to have Bankers
[issue] [amend] [a Letter of Credit] [the IDB Letter of
Credit] on in the stated amount of $ with an expiration
date of for the benefit of . The purpose of such Letter
of Credit is and given such purpose, it is being [issued]
[amended] under the Subfacility [,which is the result of an
enhancement of such Subfacility by a reduction of the
Subfacility]. The contemplated terms of such Letter of Credit
are . Capitalized terms used herein without definition
shall have the meanings set forth in the L/C Agreement.
The undersigned officer on behalf of Huntway
certifies that (i) the representations and warranties
contained in the L/C Agreement and the Related Documents are
true in all material respects on and as of the date hereof to
the same extent as though made on and as of the date hereof;
(ii) no event has occurred and is continuing under the L/C
Agreement or will result from the proposed issuance of a
Letter of Credit which would constitute an Event of Default or
Potential Event of Default; (iii) Huntway has performed all
agreements in all material respects and satisfied all
conditions which the L/C Agreement and the other Related
Documents provide shall be performed or satisfied on or before
the date of issuance of the Letter of Credit requested
pursuant to this Notice of Issuance of Letter of Credit;
(iv) there is not pending or, to the knowledge of Huntway,
threatened, any action, suit, proceeding governmental
investigation or arbitration against or affecting Huntway or
any of its Subsidiaries or any property of Huntway or any of
its Subsidiaries which has not been disclosed by Huntway
pursuant to Section 5.01(c) of the L/C Agreement prior to the
issuance of the last preceding Letter of Credit or IDB Letter
of Credit, as the case may be (or, in the case of the initial
Letter of Credit, prior to the execution of this Agreement)
and there has occurred no development not so disclosed in any
such action, suit, proceeding, governmental investigation or
arbitration so disclosed, which, in either event, in the
opinion of Bankers would be expected to (i) have a material
adverse effect upon the business, operations, properties,
assets, condition (financial or otherwise) or prospects of
Huntway or (ii) impair the ability of Huntway to perform or of
Bankers to enforce, the Obligations and no injunction or other
restraining order has been issued and no hearing to cause an
injunction or other restraining order to be issued is pending
or noticed with respect to any action, suit or proceeding
seeking to enjoin or otherwise prevent the consummation of, or
to recover any damages or obtain relief as a result of, the
transactions contemplated by the L/C Agreement or the issuing
or amending of a Letter of Credit thereunder; (v) the Letter
of Credit Usage, after giving effect to the proposed issuance
of the Letter of Credit requested hereby, does not exceed
$17,500,000 and (vi) the Letter of Credit will be used only
for the purpose identified in the prior paragraph.
Date:
HUNTWAY PARTNERS, L.P.
by HUNTWAY MANAGING PARTNER, L.P.,
its Managing General Partner
By The Huntway Division of
Reprise Holdings, Inc., its
Sole General Partner
By:
______________________________
Title:
____________________________
SCHEDULE I TO
LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
EXISTING LETTERS OF CREDIT
Huntway Letters of Credit
IDB Letter of Credit
LC# Beneficiary Extenstion Period
(04377) Dai-Ichi Kangyo Bank 11/1/96-2/3/97
of California
Original Date Amount
10/05/88 $9,099,726.06
SCHEDULE II TO
LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
ENVIRONMENTAL MATTERS
SCHEDULE III TO
LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
SCHEDULE IV TO
LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
SCHEDULE V TO
LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
SCHEDULE VI TO
LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
SCHEDULE VII TO
LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
SCHEDULE VIII TO
LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
SCHEDULE VIII
EXISTING COLLATERAL DOCUMENTS
1. That certain Deed of Trust and Assignment of Rents dated
as of October 5, 1988, executed by Sunbelt, as trustor,
to First American Title Insurance Agency of Pinal, as
trustee, and naming Bankers as beneficiary, and recorded
as Instrument No. 923540 in Docket 1558, Page 863, of the
Official Records of Pinal County, Arizona, as amended by
that certain Modification of Deed of Trust dated as of
June 8, 1989, and as further amended by that certain
Second Modification of Deed of Trust dated as of
November 20, 1990, as assigned by Bankers Trust Company
to USNBO pursuant to that certain Assignment of Notes and
Deeds of Trust dated as of June 22, 1993, and as further
amended by that certain Amendment to Deed of Trust with
Assignment of Rents and Other Security Documents dated as
of June 22, 1993, between Sunbelt and Collateral Agent,
creating a first lien on the subject premises and all
buildings, fixtures and improvements now or hereafter
owned or acquired by Sunbelt and situated thereon, and
all rights and easements appurtenant thereto, (as so
amended, the "Sunbelt Deed of Trust").
2. That certain Current Assets Pledge and Security Agreement
dated as of May 31, 1989, as amended by that certain
Modification of Huntway Current Assets Pledge and
Security Agreement dated as of June 22, 1993 by and among
Huntway, Bankers and Collateral Agent, pursuant to which
Huntway granted to Bankers a security interest in the
current assets of Huntway (as so amended, the "Huntway
Current Assets Pledge and Security Agreement").
3. That certain Huntway Pledge and Security Agreement dated
as of May 31, 1989, as amended by that certain
Modification of Huntway Pledge and Security Agreement
dated as of June 22, 1993 by and among Huntway, Bankers
and Collateral Agent, pursuant to which Huntway granted
to Collateral Agent a security interest in the general
partnership interests of Sunbelt owned by Huntway (as so
amended, the "Huntway Pledge Agreement").
4. That certain Sunbelt Pledge and Security Agreement dated
as of May 31, 1989, as amended by that certain
Modification of Sunbelt Pledge and Security Agreement
dated as of June 22, 1993 by and among Sunbelt, Bankers
and Collateral Agent, pursuant to which Sunbelt granted
to Collateral Agent a security interest in the current
assets of Sunbelt (as so amended, the "Sunbelt Current
Assets Pledge Agreement").
5. That certain Huntway Managing General Partner Pledge and
Security Agreement dated as of May 31, 1989, as amended
by that certain Modification of Huntway Managing General
Partner Pledge and Security Agreement dated as of June
22, 1993 by and among Huntway Managing General Partner,
Bankers and Collateral Agent, pursuant to which the
Huntway Managing General Partner granted to Collateral
Agent a security interest in the general partnership
interests of Huntway owned by the Huntway Managing
General Partner (as so amended, the "Huntway Managing
General Partner Pledge Agreement").
6. That certain Huntway Special General Partner Pledge and
Security Agreement dated as of May 31, 1989, as amended
by that certain Modification of Huntway Special General
Partner Pledge and Security Agreement dated as of June
22, 1993 by and among Huntway Holdings, Bankers and
Collateral Agent, pursuant to which the Huntway Special
General Partner granted to Collateral Agent a security
interest in the general partnership interests of Huntway
owned by Huntway Holdings (as so amended, the "Huntway
Special General Partner Pledge Agreement").
7. Those certain Collateral Accounts Agreements dated as of
November 16, 1990 by and between Bankers and Huntway and
by and between Bankers and Sunbelt.
8. Those certain Affirmations of Pledge and Security
Agreements dated as of May 18, 1990 and entered into by
Huntway, Sunbelt, the Huntway Managing General Partner
and Huntway Holdings affirming the effectiveness of each
of the agreements and instruments described in items 2
through 6 above.
9. That certain Deed of Trust and Security Agreement
(Wilmington Mortgage) dated as of December 1, 1987 from
Huntway to Chicago Title Insurance Company, as deed
trustee, and Bank of America NT&SA (as successor by
merger to Security Pacific National Bank), as assigned by
Bank of America NT&SA to USNBO pursuant to that certain
Assignment of Notes and Deeds of Trust dated as of June
22, 1993, and as amended by that certain Amendment to
Deed of Trust and Security Agreement and other Security
Documents dated as of June 22, 1993 (the "First
Wilmington Mortgage").
10. That certain Deed of Trust and Security Agreement
(Benicia Mortgage) dated as of December 1, 1987 from
Huntway to Chicago Title Insurance Company, as deed
trustee, and Bank of America NT&SA (as successor by
merger to Security Pacific National Bank), as amended by
the certain First Supplement to Deed of Trust and
Security Agreement dated as of November 1, 1988, as
assigned by Bank of America NT&SA to Collateral Agent
pursuant to that certain Assignment of Notes and Deeds of
Trust dated as of June 22, 1993, and as further amended
by that certain Amendment to Deed of Trust and Security
Agreement and other Security Documents dated as of June
22, 1993, (the "First Benicia Mortgage").
11. The Collateral Assignment of Southern Pacific Leases and
Agreement and all the Collateral Assignments of Operating
Agreements in the forms attached to the Note Purchase
Agreements dated as of December 1, 1987 between Old
Huntway and each of the Noteholders named therein,
respectively, as assigned by Bank of America NT&SA to
Collateral Agent pursuant to that certain Assignment of
Notes and Deeds of Trust dated as of June 22, 1993 (the
"Wilmington Lease Assignment").
12. Short Form Deed of Trust and Assignment of Rents
(Wilmington) dated as of June 22, 1993 (the "Second
Wilmington Mortgage").
13. Short Form Deed of Trust and Assignment of Rents
(Benicia) dated as of June 22, 1993 (the "Second Benicia
Mortgage").
14. That certain Collateral Accounts Security Agreement dated
as of June 22, 1993 between Huntway and Bankers Trust
Company (the "Collateral Accounts Security Agreement").
DEBTOR-IN-POSSESSION
LETTER OF CREDIT
AND
REIMBURSEMENT AGREEMENT
dated as of November 12, 1996
between
HUNTWAY PARTNERS, L.P.,
as debtor and debtor in possession
and
BANKERS TRUST COMPANY
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS 3
1.01. Definitions 3
1.02. Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement 17
1.03. Other Definitional Provisions 17
ARTICLE II
AMOUNT AND TERMS OF LETTERS OF CREDIT 18
2.01. The Letters of Credit and the IDB Letter of Credit 18
2.02. Reimbursement 21
2.03. Fees 22
2.04. Increased Costs 22
2.05. Payments and Computations 23
2.06. Obligations Absolute 24
2.07. Participations 24
2.08. Taxes 25
2.09. Superpriority Nature of Obligations 26
2.10. Collateral 26
ARTICLE III
CONDITIONS OF EFFECTIVENESS AND ISSUANCE 26
3.01. Condition Precedent to Effectiveness of this
Agreement 26
3.02. Conditions Precedent to Issuance or Amendment of each
Letter of Credit and the IDB Letter of Credit 28
ARTICLE IV
REPRESENTATIONS AND WARRANTIES 29
4.01. Representations and Warranties 29
ARTICLE V
COVENANTS OF HUNTWAY 34
5.01. Covenants 34
ARTICLE VI
EVENTS OF DEFAULT 42
6.01. Events of Default 42
6.02. Upon an Event of Default 47
ARTICLE VII
MISCELLANEOUS 49
7.01. Amendments, Etc. 49
7.02. Notice, Etc. 50
7.03. No Waiver; Remedies 50
7.04. Set-off by Bankers; Security Interest in Deposit
Accounts 50
7.05. Indemnification 51
7.06. Liability of Parties 52
7.07. Costs, Expenses and Taxes 53
7.08. Binding Effect 53
7.09. Independence of Covenants 53
7.10. Governing Law and Jurisdiction 54
7.11. Waiver of Jury Trial 54
7.12. Headings 54
7.13. Counterparts 54
Exhibit A - Form of Notice of Issuance of Letter of Credit
Exhibit B - Form of Interim Order
Exhibit C - Form of Final Order
Exhibit D - Form of Cash Collateral Order
Exhibit E - Form of Budget
Schedule I - Existing Letters of Credit
Schedule II - Proceedings
Schedule III - Tax Returns
Schedule IV - Compliance with Law
Schedule V - Environmental Matters
Schedule VI - ERISA Matters
Schedule VII - Existing Liens
Schedule VIII - Existing Collateral Documents
Insert proposed date of issuance of the Letter of Credit.
Insert stated amount of the Letter of Credit in numbers.
Insert expiration date for the Letter of Credit.
Insert name and address of the beneficiary of the Letter of Credit.
Insert purpose of the Standby Letter of Credit.
Insert name of Subfacility pursuant to which it is being issued.
Insert name of Subfacility being reduced.
Insert a summary of the salient contemplated terms of the Standby
Letter of Credit.
- - 11 -
11
S-1
A-2
I-1
II-1
III-1
IV-1
V-1
VI-1
VII-1
VIII-3
VIII-7
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 4381
<SECURITIES> 0
<RECEIVABLES> 8398
<ALLOWANCES> 0
<INVENTORY> 4224
<CURRENT-ASSETS> 17785
<PP&E> 74757
<DEPRECIATION> 15244
<TOTAL-ASSETS> 80452
<CURRENT-LIABILITIES> 110145
<BONDS> 350
0
0
<COMMON> 29743
<OTHER-SE> 300
<TOTAL-LIABILITY-AND-EQUITY> 80452
<SALES> 74137
<TOTAL-REVENUES> 74137
<CGS> 67137
<TOTAL-COSTS> 67137
<OTHER-EXPENSES> 2696
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3833
<INCOME-PRETAX> 471
<INCOME-TAX> 0
<INCOME-CONTINUING> 471
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