FORBEARANCE AGREEMENT
THIS FORBEARANCE AGREEMENT ("Agreement") is made as of the 23rd day of
August, 1999, (the "Effective Date") among METROTRANS CORPORATION, a Georgia
corporation, ("Borrower"), BUS PRO, INC., a Georgia corporation,
("Guarantor") and BANK OF AMERICA, N.A., successor to NationsBank, N.A.
("Bank").
R E C I T A L S:
A. Borrower is indebted to Bank (the "Loan") as evidenced by that
certain Amended and Restated Note (the "Note"), dated as of April 12, 1999,
in the original principal amount of $23,000,000.00 and made payable to Bank
and that certain Loan Agreement Between Metrotrans Corporation and
NationsBank, N.A. (the "Loan Agreement"), dated as of September 5, 1997, as
amended.
B. The Note is secured by, among other things, three Deeds to Secure
Debt and one Mortgage and Security Agreement executed by Borrower, related to
certain real property more particularly described therein (the "Property"),
recorded as follows:
(i) on April 14, 1999 in Book 3848, Page 013, public records of
Clayton County, Georgia ("Clayton Co. Deed to Secure Debt");
(ii) on April 16, 1999 in Book 1645, Page 259, public records of
Spalding County, Georgia ("Spalding Co. Deed to Secure Debt");
(iii) on April 15, 1999 in Book 3266, Page 322, public records of
Henry County, Georgia ("Henry Co. Deed to Secure Debt");
(iv) on April 15, 1999 in Book 5728, Page 3282, public records of
Orange County, Florida ("Orange Co. Mortgage")
(collectively, the "Mortgages").
C. The Note is further secured by those certain Security Agreements
dated April 12, 1999, executed by Borrower and Guarantor, covering certain
property more particularly described therein ("Security Agreements").
D. The Note is further secured by that certain Stock Pledge
Agreement ("Stock Pledge") executed by Borrower pledging to Bank certain
shares ("Pledged Securities") of capital stock described more fully therein.
1
E. The Note is further secured by those certain UCC-1 Financing
Statements executed by Borrower and recorded as follows:
(i) In the Superior Court, Spalding County, Georgia, on April 13,
1999, file no. 126-1999-778;
(ii) Secretary of State for the State of Illinois on April 13,
1999, file no. 4019583;
(iii) Secretary of State on April 13, 1999, file no. APO133614;
(iv) Hamilton County, Ohio on May 3, 1999, file no. 99-88091;
(v) Texas Secretary of State on April 13, 1999, file no. 99-
073700;
(vi) Secretary of State for California on April 13, 1999 file no.
9911160423;
(vii) Secretary of State for Colorado on April 13, 1999 file no.
19992020867;
(viii) Tennessee Secretary of State on April 13, 1999, file no. 991-
001553;
(ix) Department of Treasury, State of New Jersey on April 20, 1999,
file no. 1900718;
(x) State of Maryland Dept. of Assessments and Taxation on April
13, 1999, file no. 1000007852000000;
(xi) Florida Secretary of State on April 13, 1999, file no.
990000080981;
F. The Note is further secured by those certain UCC-1 Financing
Statements executed by Guarantor and recorded as follows:
(i) In the Superior Court, Spalding County, Georgia, on April 13,
1999, file no. 126-1999-779;
(ii) Secretary of State for the State of Illinois on April 13, 1999,
file no. 4019582;
(iii) Ohio Secretary of State on April 13, 1999, file no. APO133613;
(iv) Hamilton County, Ohio on May 3, 1999, file no. 99-88092;
(v) Texas Secretary of State on April 13, 1999, file no. 99-
073701;
(vi) Secretary of State for California on April 13, 1999 file no.
9911160426;
(vii) Secretary of State for Colorado on April 13, 1999 file no.
19992020868;
2
(viii) Tennessee Secretary of State on April 13, 1999, file no. 991-
001554;
(ix) Department of Treasury, State of New Jersey on April 20, 1999,
file no. 1900720;
(x) State of Maryland Dept. of Assessments and Taxation on April
13, 1999, file no. 1000007851000000;
(xi) Florida Secretary of State on April 13, 1999, file no.
990000080982;
G. The Loan is guaranteed by Guarantor pursuant to that certain
Guaranty dated as of April 12, 1999 ("Guaranty").
H. The Note, the Loan Agreement, the Mortgages, the Security Agreements
and all other written documents executed in connection therewith, together
with any written renewals, modifications or extensions thereof are
collectively referred to as the "Loan Documents."
I. Borrower is in default under the Loan Documents. Borrower and
Guarantor have requested that Bank forebear from exercising its rights and
remedies under the Loan Documents for a period of time as specified herein in
reliance upon the covenants, representations, and warranties of Borrower and
Guarantor herein and for other consideration.
A G R E E M E N T:
For and in consideration of the mutual covenants herein, Ten Dollars
($10.00), and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower and Bank agree as
follows:
1. Recitals. The foregoing recitals are confirmed by the parties as true
and correct and are incorporated herein by reference. The recitals are a
substantive, contractual part of this Agreement.
2. No Waiver. The execution, delivery and performance of this Agreement
by Bank and the acceptance by Bank of performance of Borrower and Guarantor
hereunder (a) shall not constitute a waiver or release by Bank of any default
that may now or hereafter exist under the Loan Documents, (b) shall not
constitute a novation of the Loan Documents as it is the intent of the
parties to modify the Loan Documents as expressly set out herein and (c)
except as expressly provided in this Agreement, shall be without prejudice
to, and is not a waiver or release of, Bank's rights at any time in the
future to exercise any and all rights conferred upon Bank by the Loan
Documents or otherwise at law or in equity, including but not limited to the
right to institute foreclosure proceedings against the Property and/or
institute collection or arbitration proceedings against Borrower and/or
Guarantor and/or to exercise any right against any other person or entity not
a party to this Agreement.
3
3. Forbearance. So long as this Agreement is not terminated earlier as
provided herein, Bank agrees not to foreclose or attempt to foreclose any
collateral securing the Note, institute suit or arbitration proceedings for
collection of the Note against Borrower, or exercise any other remedies
available to it under the Loan Documents or under applicable law from the
Effective Date ntil September 30, 1999 (the "Termination Date"). The period
of time from the Effective Date through the Termination Date shall be
referred to as the Forbearance Period. If all defaults under the Note and
Loan Documents are not cured on or before the Termination Period or the
earlier termination of this Agreement, then Bank may seek to foreclose upon
any collateral for the Note and to exercise any other remedies to which Bank
may be entitled under the Loan Documents or applicable law to collect amounts
due under the Note or other Loan Documents. Borrower and Guarantor agree
that neither Borrower nor Guarantor will, during the Forbearance Period,
initiate any action of any kind against Bank with respect to the Note,
exercise any remedy available under the Loan Documents
or otherwise, or make any type of demand upon Bank with respect to the
indebtedness evidenced by the Note.
4. Contemporaneously with the execution of the Agreement, Borrower agrees
to pay to Bank $3500.00 of Banks' attorneys' fees and expenses incurred
related to the Agreement and the Loan Documents, plus $12,950.00 of the costs
incurred to date related to conducting appraisals of the Property and other
collateral. Borrower further agrees to pay to Bank on or before September
15, 1999 an additional $12,950.00 of the costs incurred to date related to
conducting appraisals of the Property and other collateral. Further Borrower
covenants and agrees to make payments as provided under the Note and Loan
Documents subsequent to the date hereof.
5. Acknowledgment of Default, Amounts Due and Maturity Date. Bank and
Borrower acknowledge that as of the Effective Date the outstanding unpaid
principal balance of the Note is $22,088,242.70 and the accrued, unpaid
interest under the Note as of the Effective Date is $83,319.47. Borrower and
Guarantor also acknowledge that costs and expenses, including without
limitation attorneys' fees and appraisal fees, are owed under the Note in
addition to principal and accrued interest. The maturity date for the Note is
May 31, 2000. Borrower and Guarantor waive any and all rights to other
notice of payment default or any other default, protest and notice of
protest, dishonor, diligence in collecting and the bringing of suit or
arbitration proceedings against any party, notice of
intention to accelerate, notice of acceleration, demand for payment and any
other notices whatsoever regarding the Note or the other Loan Documents, and
further waive any claims that any notices previously given are insufficient
for any reason.
6. Limitation on Interest. No provision of this Agreement, the Note, any
of the other Loan Documents, or any instrument evidencing or securing the
Note, or otherwise relating to the indebtedness evidenced by the Note, shall
require the payment or permit the collection, application or receipt of
interest in excess of the maximum rate permitted by applicable state or
federal law. If any excess of interest in such respect is herein or in any
such other instrument provided for, or shall be adjudicated to be so provided
for herein or in any such instrument, the provisions of this paragraph shall
govern, and neither Borrower nor any endorsers of the Note nor their respective
heirs, personal representatives, successors or assigns shall be
obligated to pay the amount of such interest to the extent it is in excess of
the amount permitted by applicable law. It is expressly stipulated and
agreed to be the intent of Borrower and Bank at all
times to comply with the usury and other laws relating to the Note
4
and the other
Loan Documents and any subsequent revisions, repeals or judicial
nterpretations thereof, to the extent applicable to the Note or the other
Loan Documents. In the event Bank ever receives, collects or applies as
interest any such excess, such amount which would be excessive interest shall
be applied to the reduction of the unpaid principal balance of the Note, and,
if upon such application the principal balance of the Note is paid in full,
any remaining excess shall be paid forthwith to Borrower and the provisions
of the Note, the other Loan Documents and any demand or other charging
document shall immediately be deemed reformed
and the amounts thereafter collectible thereunder reduced, without the
necessity of execution of any new document, so as to comply with the then
applicable law, but so as otherwise to permit the recovery of the fullest
amount called for thereunder. In determining whether or not the interest
paid or payable under any specific contingency exceeds the maximum rate of
interest allowed to be charged by applicable law, Borrower and Bank shall, to
the maximum extent permitted under applicable law, amortize, prorate,
allocate and spread the total amount of
interest throughout the entire term of the respective Note so that the amount
or rate of interest charged for any and all periods of time during the term
of the Note is to the greatest extent possible less than the maximum amount
or rate of interest allowed to be charged by law during the relevant period
of time. Notwithstanding any of the foregoing, if at any time applicable
laws shall be changed so as to permit a higher rate or amount of interest to
be charged than that permitted prior to such change, then unless prohibited
by law, references in the Note to "applicable law" for purposes of determining
the maximum interest or rate of interest that can be charged
shall be deemed to refer to such applicable law as so amended to allow the
greater amount or rate of interest.
7. Representations and Warranties. In order to induce Bank to execute,
deliver, and perform this Agreement, Borrower and Guarantor warrant and
represent to Bank that:
(a) this Agreement is not being made or entered into with the
actual intent to hinder, delay, or defraud any entity or person, and the
Borrower and Guarantor are each solvent and not bankrupt;
(b) this Agreement is not intended by the parties to be a
novation of the Loan Documents and, except as expressly modified herein, all
terms, conditions, rights and obligations as set out in the Loan Documents
are hereby reaffirmed and shall otherwise remain in full force and effect as
originally written and agreed;
(c) other than as those previously disclosed to Bank by
Borrower, no action or proceeding, including, without limitation, a voluntary
or involuntary petition for bankruptcy under any chapter of the Federal
Bankruptcy Code, has been instituted or threatened by or against Borrower or
any Guarantor;
(d) the execution of this Agreement by Borrower and Guarantor
and the performance by Borrower and Guarantor of their obligations hereunder
will not violate or result in a breach or constitute a default under any
agreements to which any of them is a party;
(e) all information provided by Borrower and Guarantor to Bank
prior to the date hereof, including, without limitation, all financial
statements, balance sheets, and cash flow statements, was, at the date of
delivery, and is, as of the date hereof, true and correct in all
5
material respects. Borrower and
Guarantor recognize and acknowledge that Bank is entering into this Agreement
based in part on the financial information provided to Bank by each of them
and that the truth and correctness of that financial information is a
material inducement to Bank in entering into this Agreement. During the term
of this Agreement, Borrower and Guarantor agree to advise Bank promptly in
writing of any and all new information, facts, or occurrences which would in
any way materially supplement, contradict, or affect any financial
statements, balance sheets, cash
flow statements, or similar items furnished to Bank; and
(f) This Agreement and the Loan Documents constitute the entire
agreement among Bank, Guarantor and Borrower with respect to this matter.
8. Termination of this Agreement. This Agreement will terminate upon the
expiration of the Forbearance Period unless terminated earlier by Bank, at
Bank's sole option, upon written notice to Borrower and Guarantor of the
occurrence of any of the following:
(a) Borrower or Guarantor files a petition for bankruptcy under
any chapter of the Federal Bankruptcy Code or takes advantage of any other
debtor relief law, or an involuntary petition for bankruptcy under any
chapter of the Federal Bankruptcy Code is filed against Borrower and/or any
Guarantor, or any other judicial action is taken with respect to Borrower or
Guarantor by any creditor;
(b) Bank discovers that any representation or warranty made
herein by Borrower or Guarantor was or is untrue, incorrect or misleading in
any material respect;
(c) An Event of Default occurs under the Loan Documents, other
than any Event of Default known to exist as of the date hereof (and the Bank
hereby acknowledges that it knows of the following:
(i) Events of Default presently existing under the following
Sections of the Loan Agreement: 7.9 (a) (regarding Tangible Net Worth), 7.9
(c) (regarding Net Income), 5.8 (regarding payment of all debts as they come
due), and
(ii) Any Event of Default which may arise under Section 8.1 (I)
of the Loan Agreement in connection with certain litigation or financial
circumstances which the Borrower has made the Bank aware of prior to the date
hereof:
6
(d) Borrower or Guarantor breaches or defaults in performance of
any covenant or agreement contained in this Agreement.
9. Waiver of Claims. Borrower and Guarantor warrant and represent to
Bank that the Note is not subject to any credits, charges, claims, or rights
of offset or deduction of any kind or character whatsoever; and Borrower and
Guarantor release and discharge Bank from any and all claims and causes of
action, whether known or unknown and whether now existing or hereafter
arising, including without limitation, any usury claims, that have at any
time been owned, or that are hereafter owned, in tort or in contract by
Borrower or Guarantor and that arise out of any one or more circumstances or
events that occurred prior to the date of this Agreement. Moreover, Borrower
and Guarantor, jointly and severally, waive any and all claims now or
hereafter arising from or related to any delay by Bank
in exercising any rights or remedies under the Loan Documents, including,
without limitation, any delay in foreclosing any collateral securing the
Note.
10. ARBITRATION. THE LOAN DOCUMENTS ARE HEREBY AMENDED TO INCLUDE AND
THIS AGREEMENT SHALL BE SUBJECT TO THE FOLLOWING PROVISION:
ARBITRATION. EXCEPT AS SET OUT BELOW, ANY CONTROVERSY OR CLAIM BETWEEN OR
AMONG THE PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR
RELATING TO THIS DOCUMENT OR ANY RELATED DOCUMENTS, INCLUDING ANY CLAIM BASED
ON OR ARISING FROM AN ALLEGED TORT (COLLECTIVELY, "CLAIM"), SHALL BE
DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION
ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE
AND PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF
J.A.M.S./ENDISPUTE OR ANY SUCCESSOR THEREOF ("J.A.M.S."), AND THE "SPECIAL
RULES" SET FORTH BELOW. IN THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES
SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY
COURT HAVING JURISDICTION. ANY PARTY TO THIS DOCUMENT MAY BRING AN ACTION,
INCLUDING A SUMMARY OR EXPEDITED PROCEEDING,
TO COMPEL ARBITRATION OF ANY CLAIM IN ANY COURT HAVING JURISDICTION OVER SUCH
ACTION. THE INSTITUTION AND MAINTENANCE OF AN ACTION FOR ANY JUDICIAL RELIEF
SHALL NOT CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE
PLAINTIFF, TO SUBMIT THE CLAIM TO ARBITRATION IF ANY OTHER PARTY CONTESTS
SUCH ACTION FOR JUDICIAL RELIEF.
a. SPECIAL RULES. ANY ARBITRATION SHALL BE CONDUCTED IN THE COUNTY
OF ANY BORROWER'S DOMICILE AT THE TIME OF THE EXECUTION OF THIS DOCUMENT, OR
IF THERE IS REAL OR PERSONAL PROPERTY COLLATERAL, IN THE COUNTY WHERE SUCH
REAL OR PERSONAL PROPERTY IS LOCATED, AND ADMINISTERED BY J.A.M.S. WHO WILL
APPOINT AN ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM
ADMINISTERING THE ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL
SERVE. ALL
7
ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR
ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE
PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL
60 DAYS. ANY DISPUTE CONCERNING THIS ARBITRATION PROVISION OR WHETHER A
CLAIM IS ARBITRABLE SHALL BE DETERMINED BY THE ARBITRATOR. THE ARBITRATOR
SHALL HAVE THE POWER TO AWARD LEGAL FEES PURSUANT TO THE TERMS OF THIS
DOCUMENT.
b. RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION PROVISION
SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE
STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS DOCUMENT;
OR (II) BE A WAIVER BY BANK OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. SEC.
91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT
OF ANY PARTY HERETO (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT
LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST OR SELL ANY REAL OR PERSONAL
PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY
REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION
OR THE APPOINTMENT OF A RECEIVER. ANY PARTY MAY EXERCISE SUCH SELF HELP
RIGHTS, FORECLOSE OR SELL COLLATERAL OR OBTAIN
SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY
OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS DOCUMENT. NONE OF
THESE ACTIONS SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING
THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE CLAIM
OCCASIONING RESORT TO SUCH REMEDIES OR PROCEDURES.
c. WAIVER OF CERTAIN DAMAGES. THE PARTIES HERETO WAIVE ANY RIGHT OR
REMEDY EITHER MAY HAVE AGAINST THE OTHER TO RECOVER PUNITIVE OR EXEMPLARY
DAMAGES ARISING OUT OF ANY CLAIM WHETHER THE CLAIM IS RESOLVED BY ARBITRATION
OR BY JUDICIAL ACTION.
11. Miscellaneous.
(a) This Agreement may be executed in a number of identical
counterparts which, taken together, shall constitute collectively one (1)
agreement; but in making proof of this Agreement, it shall not be necessary
to produce or account for more than one such counterpart executed by the
party to be charged.
(b) Any future waiver, alteration, amendment or modification of any
of the provisions of the Loan Documents or this Agreement shall not be valid
or enforceable unless in writing and signed by all parties, it being
expressly agreed that neither the Loan Documents, or this Agreement can be
modified orally, by course of dealing or by implied agreement. Moreover, any
delay by Bank in enforcing its rights after an event of default shall not be
a
8
release or waiver of the event of default and shall not be relied upon by the
Borrower or Guarantor as a release or waiver of the default.
(c) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto, their heirs, executors, administrators,
successors, legal representatives, and assigns.
(d) The headings of paragraphs in this Agreement are for convenience
of reference only and shall not in any way affect the interpretation or
construction of this Agreement.
(e) THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
GEORGIA AND FEDERAL LAW, AS APPLICABLE.
(f) The warranties and representations of the parties in this
Agreement shall survive the termination of this Agreement.
(g) The terms and conditions set forth in this Agreement are the
product of joint draftsmanship by all parties, each being represented by
counsel, and any ambiguities in this Agreement or any documentation prepared
pursuant to or in connection with this Agreement shall not be construed against
any of the parties because of draftsmanship.
12. FINAL AGREEMENT. THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT AMONG
THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR ORAL OR WRITTEN, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS AMONG THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES.
(SIGNATURES ON NEXT PAGE)
9
EXECUTED under seal as of the Effective Date.
BORROWER ATTEST: (SEAL)
METROTRANS CORPORATION ________________________
BY: /s/ John G. Wallace (SEAL) NAME: David E. Brewer
NAME: John G. Wallace TITLE: Chief Financial Officer
TITLE: President/Chief Executive Offier
DATE: August 23, 1999
[CORPORATE SEAL]
GUARANTOR ATTEST: (SEAL)
BUS PRO, INC. ________________________
BY: _____________________________(SEAL) NAME: __________________
NAME:__________________________________ TITLE:__________________
TITLE:_________________________________
DATE: _________________________________
[CORPORATE SEAL]
BANK ATTEST: (SEAL)
BANK OF AMERICA, N.A. /s/ Linda J. Frixson
BY: /s/ Kimberly D. Stamey (SEAL) NAME: Linda J. Frixson
NAME: Kimberly D. Stamey TITLE: Assistant Secretary
TITLE: Senior Vice President
DATE:
August 23, 1999
[CORPORATE SEAL]
10