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Forbearance Agreement

 

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Title:

Forbearance Agreement

Entities:

Chase Manhattan Bank; Salomon Smith Barney Inc.; Trism, Inc.

Date:

2001

Size:

Preview shows 6KB of 42KB total

Price:

$42

ID:

#912028

 

 

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FORBEARANCE AGREEMENT

        THIS AGREEMENT (this "Agreement" or this "Forbearance Agreement") is made and entered into as of November , 2000 (the "Effective Date"), by and among TRISM, INC., a Delaware corporation ("Trism"), TRISM SECURED TRANSPORTATION, INC., a Delaware corporation ("Trism Secured"), TRI-STATE MOTOR TRANSIT CO., a Delaware corporation ("TSMT"), DIABLO SYSTEMS INCORPORATED D/B/A DIABLO TRANSPORTATION, INC., a California corporation ("Diablo"), TRISM EASTERN, INC. D/B/A C.I. WHITTEN TRANSFER, a Delaware corporation ("CI Whitten"), TRISM HEAVY HAUL, INC., a Delaware corporation ("Heavy Haul"), TRISM SPECIALIZED CARRIERS, INC., a Georgia corporation ("Specialized"), TRISM SPECIAL SERVICES, INC., a Georgia corporation ("Special Services"), TRISM LOGISTICS, INC., a Delaware corporation ("Logistics"), TRISM EQUIPMENT, INC., a Delaware corporation ("TEI") (each of Trism, Trism Secured, TSMT, Diablo, CI Whitten, Heavy Haul, Specialized, Special Services, Logistics and TEI is herein referred to individually as a "Borrower" and collectively as the "Borrowers"), AERO BODY AND TRUCK EQUIPMENT, INC., a Delaware corporation ("Aero Body"), E.L. POWELL & SONS TRUCKING CO., INC., an Oklahoma corporation ("EL Powell"), TRISM TRANSPORT, INC., a Delaware corporation ("Transport"), and TRISM TRANSPORT SERVICES, INC., a Utah corporation ("Transport Services") (each of Aero Body, EL Powell, Transport and Transport Services is individually referred to herein as a "Guarantor" and collectively as the "Guarantors") and each of the financial institutions party to the Loan Agreement (each is herein referred to individually as a "Lender" and are collectively referred to herein as the "Lenders") and THE CIT GROUP/BUSINESS CREDIT, INC., a New York corporation, as Agent of the Lenders under the Loan Agreement (the "Agent").

RECITALS

        On February 9, 2000, Borrowers, Guarantors, Agent and Lenders entered into various documents evidencing financial arrangements between them, including but not limited to, a Post-Confirmation Loan and Security Agreement (as amended, the "Loan Agreement"; capitalized terms used herein and not otherwise defined shall have the respective meanings ascribed thereto in the Loan Agreement), pursuant to which Lenders agreed to extend to Borrowers a senior secured revolving credit facility (the "Credit Facility") in the aggregate amount and on the terms and conditions set forth therein.

        On or about October 19, 2000, a Change in Management occurred at each of the Borrowers. Such Change in Management was in violation of Section 12.1(o) of the Loan Agreement (the "Change in Management Default"). In addition, on or about October 27, 2000, Agent notified Borrowers that due to, among other things, (i) Borrowers' current and projected future negative earnings and cash flow, (ii) the Change in Management Default, (iii) the increasing fuel costs of Borrowers and (iv) the anticipated material increase in the insurance costs of Borrowers beginning November 1, 2000, a Materially Adverse Effect had occurred in violation of Section 12.1(m) of the Loan Agreement (the "Materially Adverse Effect Default") (each of the Change in Management Default and the Materially Adverse Effect Default is individually referred to herein as an "Existing Default" and collectively as the "Existing Defaults").

        By reason of the Existing Defaults, Agent, on behalf of the Lenders, is authorized to exercise all remedies available to it under the Loan Documents, including, but not limited to, the right to repossess and foreclose upon the Collateral. Despite the Existing Defaults, Borrowers desire that Agent and Lenders (a) forbear from exercising remedies of suit, repossession and foreclosure otherwise available to Agent, on behalf of the Lenders, under the Loan Documents in order to afford Borrowers an opportunity to prepare and implement a proposed restructuring plan, and (b) continue to make available the Credit Facility to Borrowers and make other concessions, as set forth herein.

        Agent and Lenders are willing to continue to conditionally forbear from pursuing certain remedies in connection with the Existing Defaults, continue to make available to Borrowers the Credit Facility, as modified herein, and make other concessions to the Borrowers (collectively the "Borrower Benefits"), on the terms and conditions contained herein, each of which, individually and in the aggregate, and including the performance thereof by Borrowers, constitute the consideration to the Agent and Lenders for entering into this Forbearance Agreement, and in the absence of any of which Agent would not have entered into this Forbearance Agreement or otherwise extended to Borrowers the Borrower Benefits.

        Borrowers and Guarantors each acknowledge and agree that the Borrower Benefits hereunder are of immediate and material benefit, financial and otherwise, to such Borrowers and Guarantors, and that neither Agent nor Lenders was or is under any obligation to extend to Borrowers or Guarantors the Borrower Benefits provided hereunder.


 

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