Exhibit 10(g)
July 25, 2000
OTR Express, Inc.
804 N. Meadowbrook Drive
Olathe, KS 66062
Attn: Mr. Bill Ward, President
Re: Extension of Payments Under Commercial Loan Agreements
This letter is in response to OTR Express, Inc's ("OTR Express") request to
Navistar Financial Corporation ("Lender") to extend ninety days of loan
payments due Lender and move such payments to the last payment due under the
agreements. OTR Express has represented to NFC that they will not be able to
meet their scheduled loan payments when they became due in July, August, and
September of 2000 or the equivalent of a ninety-day extension.
Reference is made to those certain Commercial Loan Agreements of various dates
by and between Navistar Financial Corporation ("Lender") and OTR Express. All
of the foregoing Commercial Loan Agreements are collectively hereinafter
referred to as the "Loan Agreements". Each Loan Agreement provides that each
monthly payment is due by the date specified in each loan agreement and on the
same day of each month thereafter with past due interest accrued from the due
date of each payment if payment is not received by NFC within ten (10) days
from each due date.
As of the date of this letter, Lender has not received a payment on any of the
Loan Agreements since July 14th, 2000. The representation that Borrower is
unable to meet its debt obligations and the failure to timely pay Lender in
accordance with the terms of the Loan Agreements constitute a default under
the Loan Agreements. The existence of such defaults gives Lender various
rights, including, but not limited to, the right to declare the unpaid
principal amount, accrued interest, and late charges due and owing Lender
under the Loan Agreements immediately due and payable, and to exercise all
other rights and remedies set forth in the Loan Agreements and under
applicable law.
Each Loan Agreement provides that the Vehicles securing each individual Loan
Agreement also secures all other indebtedness and amounts due and owing Lender
by Borrower. Lender will maintain its security interest in all the Vehicles
for all indebtedness due and owing it by Borrower.
Lender, in the exercise of its discretion, without waiving the aforementioned
defaults, or waiving any remedies available to it, will be willing to forebear
in exercising or enforcing rights and remedies under the Loan Agreements and
applicable law, subject to:
1) Borrower agreeing to the following payment schedule with respect to the
Loan Agreements:
a) Lender will defer to the end of each respective Loan Agreement, the
scheduled July, August, and September, 2000, or a three (3) month
equivalent payment under each Loan Agreement all as described in
more specific detail on Schedule A attached to and forming a part
of this Agreement. The scheduled amount due under each Loan
Agreement for July, August, and September 2000, or a three (3)
month equivalent will be extended to the end of each Loan
Agreement.
b) Borrower will pay the full scheduled amounts to Lender due under
the Loan Agreements for the months of October, 2000 or the
equivalent and each month thereafter. Such payments will be due
and owing to Lender on the date as presently exists on each Loan
Agreements.
c) In consideration of Lender agreeing to extend such payments,
Borrower will pay to Lender no later that August 1st, 2000
$105,057.44 and August 15th, 2000 another $105,057.44, and September
15th, 2000 $105,057.46
2) Lender will expect all amounts due and owing to be made on a timely
basis and in good and collected funds. A failure to pay Lender the
amounts described in Section 1.c above described herein, will give
Lender the option to immediately and without notice, terminate its
forbearance.
3) Since all the collateral pledged to the Lender secures all the
indebtedness due and owing Lender, Lender will not release its interest
in any of the collateral.
4) This agreement and the Schedule A attached will constitute the
documentation which will amend each Loan Agreement.
Lenders forbearance and agreement to extend the July, August, and September
2000 or the three (3) month equivalent payments due Lender is subject to
immediate modification and revision if Borrower grants any other lender (for
which Borrower is negotiating payment relief) more favorable terms, provisions
or conditions relative to its restructuring of its indebtedness than it has
done with Lender.
Please note that Lender's forbearance does not constitute an election of
remedy or a waiver by Lender of any of its rights and remedies under the Loan
Agreements or applicable law. Lender reserves the rights to exercise any or
all of its rights and remedies existing if further defaults occur under any
one of the Loan Agreements, or if Borrower does not comply with the terms of
this Agreement.
The terms of Lenders forbearance as contained herein will be effective until
Tuesday August 2nd, 2000. If Lender does not receive Borrower's acceptance
and acknowledgement of the terms and conditions contained in this Agreement by
the close of business on Tuesday August 2nd, 2000 such forbearance will be
voidable by Lender.
We anticipate your acceptance of the terms contained herein.
Sincerely,
/s/ Richard Curtiss
Rick Curtiss
District Operations Manager
Dw
Enc
Cc: Justin Scheuchenzuber
Chuck McGrath
Gary Webb
Gary M Zimmerman, Esq.
Accepted and Agreed:
OTR Express, Inc.
By:/s/ William P. Ward
President