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UNITED STATES BANKRUPTCY COURT
WESTERN DISTRICT OF OKLAHOMA
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In re:
Freymiller Trucking, Inc., Bky. No. 95-12095-BH
Debtor.
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STIPULATION FOR SECURED BORROWING AND USE OF CASH COLLATERAL
Freymiller Trucking, Inc., an Indiana corporation (the
"Debtor"), and Norwest Business Credit, Inc., a Minnesota corporation (the
"Secured Party"), hereby stipulate and agree, subject to approval of this
Stipulation by the Court as hereinafter set forth, as follows:
1. Nature and Amount of Secured Party's Claim. The
Debtor hereby stipulates and agrees that:
(a) The Secured Party is the holder of a claim as of
April 20, 1995 (the "Secured Party's Claim") against the Debtor in the
sum of $7,696,653.44 consisting of total borrowings ($5,671,653.44)
and obligations in respect of presently undrawn letters of credit
($2,025,000.00), plus all costs and expenses of administration,
collection and enforcement in accordance with the loan documentation
incurred by Secured Party prior to commencement of the Debtor's
bankruptcy case (the "Case"), plus, to the extent permitted under
Section 506(b) of the United States Bankruptcy Code (the "Code"),
interest accrued after commencement of the Case and the reasonable
fees, costs and charges referred to in Section 506(b).
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(b) The Secured Party's Claim is evidenced by the
Debtor's Revolving Note dated as of February 11, 1993 (as amended to
date, the "Note") and the Revolving Credit Agreement dated as of
February 11, 1993 (as amended to date, the "Credit Agreement"), and is
secured, among other things, pursuant to the following documents each
dated as of February 11, 1993 unless otherwise noted (collectively,
the "Security Documents"): (1) the Security Agreement, as amended to
date (the "Security Agreement"), (2) the Collateral Account Agreement
by the Debtor and Norwest Bank Iowa, National Association ("Norwest
Iowa"), (3) four Occupancy Agreements, one of which is dated May 5,
1994, (4) the Assignment of Life Insurance Policy as Collateral (the
"Life Insurance Assignment"), (5) the Special Deposit Agreement dated
as of February 9, 1993 by the Debtor and Community First Bank, (6) the
Agreement as to Lockbox Service (the "Lockbox Agreement") by the
Debtor and Norwest Iowa, (7) the collateral account letter agreement
dated March 20, 1995 by the Debtor and Bank IV Oklahoma, N.A., and (8)
the Special Deposit Agreement by Harris Trust and Savings Bank and the
Debtor dated March 31, 1993.
(c) Payment of the Secured Party's Claim is absolutely
and unconditionally due and payable, without defense, offset or
counterclaim, and the Debtor waives and releases any right to object
to the allowance of the Secured Party's Claim, provided, however, the
portion of the Secured Party's Claim with respect to letters of credit
which expire undrawn shall not be allowed, and, provided further, the
Debtor reserves its right to challenge the amount of expenses charged
by the Secured Party.
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(d) The Secured Party's Claim is secured by a security
interest in (A) all collateral security granted to the Secured Party
pursuant to the Security Documents and all other documents given by
the Debtor in favor of the Secured Party (including, without
limitation, all inventory, accounts, chattel paper, instruments,
equipment and general intangibles, and vehicles, as those terms are
defined in the Uniform Commercial Code, in existence on or before the
commencement of the Debtor's Case and the life insurance policy
assigned pursuant to the Life Insurance Assignment); and (B) all
proceeds and products of such collateral security acquired by the
estate created by the Debtor's Case (the "Estate") after the
commencement of the Case, except only allowances to the Estate for
improvements made by the Estate after the commencement of the Case, as
determined pursuant to Section 552(b) of the Code.
(e) Except as the Secured Party may otherwise agree, in
writing, the Debtor will look solely to its rights under paragraph 3
below to recover any costs and expenses of preserving said collateral
security and such proceeds and products (which collateral security,
proceeds and products are herein called the "Prepetition Collateral")
and for any allowances or reimbursement for any improvements made by
the Estate after commencement of the Case.
(f) Secured Party acknowledges that its security interest
in and to the Debtor's tractors and trailers, except for the Show
Truck and the Motor Coach as defined in paragraph 5(e) below, was not
perfected at the date of commencement of the case. Otherwise, unless
the Debtor files a written objection or complaint with the Court
properly objecting to the perfection of any security interest in favor
of Secured Party
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on or before the final hearing on the approval of this Stipulation,
which shall be held within 30 days of the issuance of the interim
order approving this Stipulation, the due and proper perfection of
such security interest shall be deemed admitted and approved, and the
Debtor shall be deemed to have waived and released any right to object
thereto.
2. Use of Collateral; Adequate Protection.
(a) The Debtor stipulates and agrees that, other than as
permitted herein, prior to the termination of this Stipulation, it:
(1) will not without prior written consent of the Secured Party engage
in, or seek authority for, (A) any use of cash collateral of the
Secured Party except as permitted herein, or (B) any use, sale or
lease of Prepetition Collateral other than in the ordinary course of
business, provided, however, that the Debtor (i) may trade in
GE-financed 1993 tractors and Mercedes Benz-financed 1993 tractors on
reasonable business terms for new tractors without the prior written
consent of the Secured Party, and (ii) may sell of or lease tractors
and trailers without the prior written consent of Secured Party as
long as the same are on usual business terms and any surplus proceeds
from the sale or lease of such tractors and trailers after payment of
prior liens are paid to Secured Party as set forth herein and,
provided further, that nothing herein shall prohibit the Debtor from
seeking to consummate any transaction necessary or appropriate in
connection with its confirmed plan of reorganization; (2) will keep
insured and properly care for all tangible Prepetition Collateral as
provided in the Credit Agreement, Security Documents and the documents
related thereto; (3) will segregate and account for all cash
collateral of
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the Secured Party; and (4) will pay to the Secured Party on the first
day of each month all interest accruing on the Secured Party's Claim
in the prior month, provided that from and after April 20, 1995, such
interest shall accrue at an annual rate equal to two percent (2%) over
the Base Rate, as such term is defined in paragraph 5(a) below.
(b) Any cash collateral of the Secured Party used by the
Debtor since the commencement of the Debtor's Case, but before the
execution of this Stipulation, shall be treated as a New Loan under
paragraph 5 hereof.
(c) Effective upon the earlier of December 31, 1995 or
the date on which an order is entered in the Case confirming a plan
("the Termination Date"), the Secured Party's consent to the use of
cash collateral shall expire, and the Debtor and the Secured Party
shall have with respect to the use and disposition of property of the
Estate the rights and duties imposed by the Code and any order of the
Court, provided that such expiration shall not affect any rights or
liens in the property of the Estate granted to the Secured Party
during the period this Stipulation is in effect nor the agreement of
Debtor in paragraph 3 hereof.
3. Allowance for Improvements made by the Estate. In
consideration of the Debtor's right to use collateral in accordance with
paragraph 2 and in view of the effect of such use, no allowance shall be made
to the Estate for any insurance, preservation, repair or improvement with
respect to any of the Prepetition Collateral, except as otherwise agreed
hereafter in writing by the Secured Party.
4. Segregation and Payment of the Secured Party's Cash
Collateral. The Debtor shall pay over to the Secured Party for application to
the Secured Party's Claim all
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cash proceeds of Prepetition Collateral now held by Debtor. The Lockbox
Agreement shall remain in full force and effect and the Debtor shall continue
to notify all account debtors to direct payments to the lock box. On a daily
basis, unless otherwise agreed by the Secured Party in writing, the Debtor
shall account to the Secured Party for any sums received directly by the
Debtor, and shall pay over to the Secured Party for application on the Secured
Party's Claim as provided herein, all cash proceeds of the Prepetition
Collateral (except to the extent such proceeds are necessary to satisfy
perfected, prepetition liens on the item of prepetition collateral sold)
received by the Debtor during that day. All cash proceeds of Prepetition
Collateral shall be deposited in a collateral account (the "Collateral
Account") under the exclusive control of the Secured Party, established at a
bank selected by the Debtor and reasonably satisfactory to the Secured Party.
After allowing for the collection of uncollected items, the Secured Party is
authorized to and shall apply the amounts so deposited to the reduction of the
Secured Party's Claim as provided herein.
Subject to paragraph 1(f) above, any application of sums by
the Secured Party to the reduction of the Secured Party's Claim prior to the
termination of this Stipulation shall be final. Subject to paragraph 1(f)
above, neither such application nor the validity of the Secured Party's
pre-petition security interest in the Prepetition Collateral as security for
the Secured Party's Claim shall be subject to challenge by the Debtor, and
nothing shall impair the validity of such application or security interest.
5. Terms of Any New Loans to the Debtor. The Secured
Party will make loans (the "New Loans") and issue guaranties of letters of
credit (the "New L/C Guaranties")
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to or for the benefit of the Debtor from time to time before the Termination
Date on the following terms and conditions:
(a) The New Loans shall bear interest at an annual rate
which shall at all times be equal to two percent (2%) over the rate of
interest publicly announced from time to time by Norwest Bank
Minnesota, National Association as its "base rate" or, if such bank
ceases to announce a rate so designated, any similar successor rate
designated by the Secured Party, with interest computed on the basis
of actual days elapsed in a 360-day year (the "Base Rate").
(b) All New Loans, with such interest thereon, and all
New L/C Guaranties, with all fees associated therewith, and all
collection costs and enforcement expenses related to each shall be:
(1) allowable under Section 503(b)(1) of the Code
as an administrative expense with priority pursuant to the
provisions of Section 364(c)(1) of the Code over all other
administrative expenses of the kind specified in Section
503(b) or Section 507(b) of the Code and all other expenses
and claims, provided that nothing herein shall prohibit the
Debtor from paying such other administrative expenses from the
proceeds of New Loans in the ordinary course of the Debtor's
Case; and
(2) secured by (and the Secured Party is hereby
granted) a lien on and security interest in all present and
future property of the Estate, including both real and
personal property, whether now held or hereafter acquired by
the Estate, and including specifically and without limitation
(A) all of the Estate's now owned or hereafter acquired
inventory, equipment, accounts, instruments,
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documents, chattel paper and general intangibles, as those
terms are defined in the Uniform Commercial Code, (B) any
recovery that the Estate may obtain pursuant to Sections 544,
545, 547, 548, 549 or 553 of the Code, (C) the Prepetition
Collateral, (D) any real estate, and (E) all proceeds,
products, rents, issues and profits of all of the foregoing
(all herein referred to as the "Secured Party's Collateral"),
which lien and security interest shall have priority over all
other liens, claims and expenses, including administrative
expenses, in the Debtor's Case, except as otherwise set forth
in subparagraph 5(c) below and except all other contractual
security interests in equipment or real estate of the Debtor
which were duly perfected on the date of commencement of the
Debtor's Case and are not subject to avoidance therein. The
liens granted above to secure payment of the New Loans and the
New L/C Guaranties shall be valid and enforceable regardless
of whether the Court determines, in response to an objection
or complaint filed in accordance with paragraph 1 above, that
some or all of the liens held by the Secured Party in the
Prepetition Collateral are unenforceable for any reason.
(c) Notwithstanding the provisions of subparagraph 5(b)
above, the liens and security interest herein granted to the Secured
Party shall be subordinate to the security interest in the Prepetition
Collateral held by the Secured Party in the inventory, accounts,
equipment, general intangibles and other assets of the Debtor which
was duly perfected on the date of commencement of the Debtor's Case.
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(d) The Debtor's obligation to repay the New Loans and to
reimburse the Secured Party in connection with all New L/C Guaranties
shall be evidenced by this Stipulation and by the Secured Party's
books and records. Such obligation shall be due and payable on the
termination of this Stipulation, with prepayments as herein provided.
The liens securing the New Loans and New L/C Guaranties shall be
evidenced by this Stipulation.
(e) The Debtor will not request, and the Secured Party
shall not make, any New Loan or New L/C Guaranty unless the aggregate
balance of the New Loans and New L/C Guaranties which would be
outstanding hereunder if such New Loan or New L/C Guaranty were made,
which when added to the amount of the Secured Party's Claim then
outstanding, does not exceed the amount of a "Borrowing Base" computed
as follows:
The lesser of $10,000,000 or
(i) 90% of Eligible Billed Freight
Accounts Receivable, plus
(ii) 70% of Eligible Unbilled Freight
Accounts Receivable; provided, however, that in no
event shall the sum of (A) New L/C Guaranties plus
(B) Letter of Credit Guaranties under the Credit
Agreement exceed $3,000,000, plus
(iii) $600,000, minus
(iv) 100% of the net proceeds received by
the Debtor from the sale, refinance or other
disposition of the Debtor's Prevost motor home,
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vehicle identification number 2P9M33404L1001641 (the
"Motor Coach"),minus
(v) 100% of the net proceeds received by
the Debtor from the sale, refinance or other
disposition of the Debtor's 1991 Freightliner show
tractor, vehicle identification number
1F7DOY92MP506405 (the "Show Truck"),minus
(vi) 50% of the net cash proceeds
received by the Debtor from the sale, refinancing or
other disposition of each of the Debtor's tractors,
whether such sale, refinancing or other disposition
is in units or in bulk, and whenever consummated,
minus
(vii) 100% of the net cash proceeds received
by the Debtor from the sale, refinance or other
disposition of each item of the Debtor's other
machinery and equipment.
For these purposes, "Letter of Credit Guaranties," "Eligible Billed
Freight Accounts Receivable" and "Eligible Unbilled Freight Accounts
Receivable" shall have the meanings given to such terms in the Credit
Agreement. Notwithstanding the foregoing, the Secured Party may from
time to time, at its sole discretion, make temporary New Loans to the
Debtor and issue New L/C Guaranties which, when added to the aggregate
balance of the New Loans, the New L/C Guaranties and the Secured
Party's Claim then outstanding, would exceed the Borrowing Base.
(f) The Secured Party may terminate its obligation to
make New Loans and issue New L/C Guaranties if an Event of Default has
occurred under Section 6 below.
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(g) The Secured Party will make New Loans and issue New
L/C Guaranties only after the Secured Party and its legal counsel are
satisfied that: (1) the liens securing the New Loans have been duly
perfected by entry of an order approving this Stipulation; (2) there
are no prior liens in the Secured Party's Collateral except the
Secured Party's security interest in the Prepetition Collateral and
other valid pre-petition security interests held by others and
disclosed to the Secured Party; (3) there is appropriate and adequate
insurance coverage for the Secured Party's Collateral as provided in
the Credit Agreement, Security Documents, and documents related
thereto; and (4) Don H. Freymiller has duly consented to this
Stipulation, and the Bankruptcy Court has found that the Secured
Party, by agreeing to this Stipulation, has not impaired in any way
the enforceability of the Guaranty dated February 11, 1993, as
amended, of Don H. Freymiller, in favor of the Secured Party (the
"Guaranty") as to the Secured Party's Claim and the New Loans; and (5)
the Court has approved this Stipulation and the Debtor's execution and
delivery of it, and this Stipulation has been duly executed and
delivered by the Debtor.
(h) The Debtor will immediately deposit in the Collateral
Account, in the form received, all cash proceeds of any property of
the Estate. The Lockbox Agreement shall remain in full force and
effect and the Debtor shall continue to notify all account debtors to
direct payments to the lock box. After allowing for the collection of
uncollected items, the Secured Party is authorized to apply the
amounts deposited in the Collateral Account first to the Secured
Party's Claim and then to the payment of the New Loans. Any
application of sums by the Secured Party to the
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reduction of the Secured Party's Claim or the New Loans after the date
of this Stipulation shall be final. Neither such application nor the
lien and the security interest herein granted to the Secured Party
shall be subject to challenge by the Debtor, and nothing shall impair
the validity of such application and of such lien and security
interest.
(i) The Secured Party is authorized to make the New Loans
and to issue New L/C Guaranties upon telephonic or other oral or
written request of Richard Kuehn and such other persons as set forth
in the Credit Agreement and to disburse proceeds of the New Loans as
instructed by such person(s).
(j) Each of the Debtor and the Secured Party agrees to
comply with and abide by all applicable provisions of the Credit
Agreement and Security Documents except as modified herein, including
without limitation (i) the obligation of the Debtor to pay the
Facility Fee, the Letter of Credit Fee, and all other fees payable to
the Secured Party as provided in the Credit Agreement and Security
Documents, and (ii) the procedures with respect to requesting New
Loans, the issuance of New L/C Guaranties, and the repayment of same.
The Secured Party shall have all of the rights thereby conferred both
with respect to the Prepetition Collateral and the liens securing the
New Loans, including the right to conduct periodic audits of the
Debtor's business during reasonable business hours, with the right to
have an auditor of the Secured Party on the Debtor's premises.
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(k) The proceeds of all New Loans shall be used in the
ordinary course of business.
(l) The Debtor shall at all times maintain an inventory
of parts at a level exceeding $100,000.
(m) The Debtor shall pay, when due, the administrative
expenses in the Debtor's case.
(n) The Debtor shall use its best efforts to prepare,
propose and file a plan of reorganization in the Debtor's case as
quickly as possible and in no event later than October 31, 1995 and to
confirm such plan of reorganization no later than December 31, 1995.
6. Events of Default. "Event of Default", wherever used
herein, means any one of the following events, unless waived in writing by the
Secured Party:
(a) Any of the Secured Party's Collateral is converted by
the Debtor, lost or stolen in any material amount, or not accounted
for by the Debtor; or
(b) The Debtor fails to pay any cash proceeds of
collateral to the Secured Party as herein provided or otherwise fail
to make any payment required hereunder; or
(c) The Order entered by the Court approving the terms of
this Stipulation, or any subsection or portion thereof, shall be
vacated, reversed, or modified; or
(d) The Debtor fails to comply with any of its
obligations under the Code or other applicable law, if such
noncompliance has a material adverse impact on the Debtor's business
or the Debtor's estate or to the Secured Party; or
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(e) The Debtor fails to allow the Secured Party to
conduct its customary audits of the Secured Party's Collateral during
regular business hours; or
(f) The Debtor fails to timely deliver to Secured Party
the reports required under paragraph 8 hereof, provided, however, that
the Debtor may have until ten days after written notice from the
Secured Party to deliver the reports required by paragraphs 8(b), (c)
and (e) hereof; or
(g) The Debtor shall at any time discontinue or shall be
ordered to discontinue the conduct of its business; or
(h) The automatic stay is terminated with respect to any
other party permitting that party to proceed against any assets of the
Debtor, or the Debtor assumes or rejects any executory contract, which
has a material adverse impact on the Debtor's business or the Debtor's
estate or the Secured Party; or
(i) The Debtor's Case shall be dismissed or converted to
a Chapter 7 case ; or
(j) The Debtor fails to attain at least 60% of the
cumulative, projected cash flows as set forth in the Budget attached
hereto as Exhibit A; or
(k) Appointment of a trustee or examiner with expanded
powers under 11 U.S.C. Section 1104; or
(l) The Debtor fails to comply with any representation,
warranty, covenant contained in the Credit Agreement, Security
Documents (except for the covenants related to the filing of a
bankruptcy petition, solvency or financial covenants) or
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herein, and the continuance of such failure following ten days written
notice to the Debtor from the Secured Party.
As of the date of this Stipulation, the Secured Party is not aware of any
failure or act which would constitute an Event of Default hereunder. The
Secured Party acknowledges that a plan of reorganization may contain terms
inconsistent with such representations, warranties and covenants but the
Secured Party reserves all of its rights to object to such inconsistent terms.
These Events of Default are exclusive and supersede those Events of Default
stated in the Security Documents or Credit Agreement.
7. Secured Party's Remedies. In addition to the Secured
Party's right to refuse to make New Loans and New L/C Guaranties as provided in
paragraph 5(f),
(a) upon the occurrence of an Event of Default, all
indebtedness of the Debtor to the Secured Party shall, at the Secured
Party's option, become immediately due and payable, without notice or
demand, and the Secured Party may immediately, without notice, demand
or any period of grace, temporarily suspend or permanently cease
making New Loans and issuing New L/C Guaranties pursuant to paragraph
5 hereof, and may withdraw its consent to the Debtor's use of cash
collateral; and
(b) upon the occurrence of any Event of Default at the
Secured Party's option and upon five business days notice to the
Debtor, the Secured Party shall be entitled to an order from the
Bankruptcy Court terminating the automatic stay of 11 U.S.C. Section
362 as to the Secured Party, which order the Debtor agrees may be
entered.
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8. Reporting. The Debtor will make available to the
Secured Party all information required by the Credit Agreement and Security
Documents, or as otherwise required by the Secured Party, including without
limitation, the following items:
(a) as soon as available, a copy of each weekly cash flow
statement;
(b) within 20 days after the end of each month, an
operating statement for that month and asset and liability statement
as at the end of that month;
(c) each day, (1) collection reports of accounts
receivable and cash sales; and (2) a listing of new accounts
receivable, along with, at the request of the Secured Party, each
receivable's invoice documentation;
(d) on the first business day of each week, (1) a
certificate setting forth the amount of New Loans and New L/C
Guaranties outstanding hereunder, the amount of Prepetition
Collateral, the Secured Party's Collateral and the Borrowing Base
referred to in subparagraph 5(e), in each case as of the end of the
previous week; and (2) reports on the aging of accounts receivable and
accounts payable;
(e) immediately upon the sale, refinancing or other
disposition of the Motor Coach, the Show Truck, any tractor, or any
other item of machinery or equipment with a sales price in excess of
$1,500, a certificate setting forth the amount of the net proceeds
received from such sale, refinancing or other disposition.
9. Reservation of Rights. Except as otherwise expressly
set forth herein, the Secured Party reserves and retains all rights it may have
as to the Secured Party's Claim and the Prepetition Collateral and all rights
against any and all other collateral security held by the Secured Party.
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10. Modification of Prior Documents. Except as expressly
modified, changed or amended by this Stipulation, all provisions of the Credit
Agreement, Security Documents, and documents in favor of the Secured Party,
remain in full force and effect.
11. Complete Agreement. This Stipulation sets forth the
complete agreement of the parties. It may not be modified, waived or changed,
except by a writing signed by the party to be bound thereto.
12. Binding Effect. This Stipulation is binding upon the
parties and their respective successors and assigns, including but not limited
to any successor entity under any plan of reorganization of the Debtor. Any
trustee in this Chapter 11 case or any converted Chapter 7 case shall be bound
by this Stipulation without prejudice, however, to such trustee's rights to
challenge paragraph 1 hereof.
13. Expenses. The Debtor agrees to reimburse the Secured
Party for all reasonable attorney's fees and legal expenses incurred by the
Secured Party in connection with the negotiation, execution and delivery of
this Stipulation or the making of any New Loan, or the collection, enforcement
or protection of this Stipulation, the indebtedness evidenced hereby, or the
security therefor.
14. Termination. Any termination of the Secured Party's
consent to the use of cash collateral or of the Secured Party's obligation to
extend New Loans or New L/C Guaranties shall not affect any rights or the
validity, priority or effect of liens in the property of the Estate granted to
the Secured Party during the period this Stipulation is in effect or the
Debtor's agreement in paragraphs 3 and 7 hereof.
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15. Stipulation Subject to Entry of Court Order. This
Stipulation is subject to, and shall be effective only upon, entry of an order
of the Court authorizing the Debtor to enter into and perform this Stipulation,
including (without limitation) the provisions of paragraphs 3, 4 and 5 hereof,
for which order the Debtor hereby applies to the Court. During the pendency of
this case and prior to confirmation of a plan of reorganization, the United
States Bankruptcy Court for the Western District of Oklahoma shall be the sole
forum for resolving disputes between the Debtor and the Secured Party under the
Stipulation.
16. Exit Financing. The Debtor has requested that the
Secured Party provide financing to the Debtor after the confirmation of a plan
of reorganization in the Debtor's Case (the "Exit Financing"). The Secured
Party is willing to provide the Exit Financing on the following terms and
conditions:
(a) The Debtor's plan of reorganization and the order
confirming the plan shall provide for the continuing validity,
enforceability and effectiveness of the Credit Agreement, Security
Documents and documents related thereto on the same terms and
conditions as existed before the commencement of the Debtor's Case,
except as specifically set forth below. Without limitation of the
foregoing, the Debtor's plan of reorganization and the order
confirming the plan must provide for (i) the payment in full through
the Exit Financing or otherwise of all amounts due to the Secured
Party, whether incurred before, during or after the Debtor's Case,
(ii) the continuation of all liens, claims and encumbrances in favor
of the Secured Party on assets of the Estate and the reorganized
Debtor, and (iii) the maintenance of the loan structure which existed
before the commencement of the Debtor's Case.
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(b) The Exit Financing shall expire and be repaid in full
no later than the earlier of (i) one year after the date on which an
order is entered in the case confirming a plan of Reorganization, or
(ii) December 31, 1996.
(c) The Exit Financing will not be made available to the
Debtor if an Event of Default has occurred under this Stipulation or
if the Termination Date has occurred prior to the confirmation of the
Debtor's plan.
(d) The Debtor must have delivered to the Secured Party,
before the date of confirmation of the Debtor's plan, projections for
operations of the Debtor through December 31, 1996 showing positive
cash flow and positive net income, which projections shall be the
basis for resetting the financial covenants in the Credit Agreement
with respect to the Exit Financing.
(e) Interest shall accrue at an annual rate equal to two
and one-half percent (2 1/2%) over the Base Rate. After default,
interest shall accrue at four and one-half percent (4 1/2%) in excess
of the Base Rate. All other fees, charges and other expenses shall be
payable by the Debtor to the Secured Party as set forth in the Credit
Agreement, Security Documents, and documents related thereto.
(f) The "Borrowing Base" shall return to the definition
of such term in the Credit Agreement immediately prior to the
commencement of the Debtor's Case.
(g) The Exit Financing shall be secured by a perfected
security interest in all assets of the Debtor, and Don H. Freymiller
shall acknowledge that the terms of the Exit Financing do not impair
in any way the enforceability of the Guaranty as to the Exit
Financing.
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(h) The Debtor shall execute such documents as the
Secured Party may deem appropriate or reasonable to evidence the terms
set forth above and the continuing validity, enforceability and
effectiveness of the Credit Agreement, Loan Documents and documents
related thereto.
The Debtor is agreeable to all of the foregoing terms and conditions, and
agrees that it will not propose a plan of reorganization which fails to include
each of the foregoing terms.
Dated: May 23, 1995
Debtor's Counsel: Debtor:
FREYMILLER TRUCKING, INC.
/s/ Judy Hamilton Morse
Judy Hamilton Morse
Roger A. Stong By /s/ Richard E. Kuehn
Crowe & Dunlevy Its Chief Financial Officer
20 North Broadway, Suite 1800
Oklahoma City, Oklahoma 73102
Telephone (405) 720-6555
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Secured Party's Counsel: Secured Party:
/s/ G. Blaine Schwabe, III NORWEST BUSINESS CREDIT, INC.
G. Blaine Schwabe, III
Mock, Schwabe, Waldo, Elder,
Rooves & Bryant By /s/ Perry T. Larson
211 North Robinson Its Vice President
Oklahoma City, OK 73102
and
Michael R. Stewart
Kathleen H. Sanberg
Faegre & Benson, Professional Limited
Liability Partnership
2200 Norwest Center
90 South Seventh Street
Minneapolis, MN 55402-3901
Telephone (612) 336-3000
The undersigned hereby agrees that the terms of the foregoing
Stipulation do not impair in any way the enforceability of the undersigned's
Guaranty dated February 11, 1993, as amended, in favor of the Secured Party as
to the Secured Party's Claim and the New Loans.
/s/ Don H. Freymiller
Don H. Freymiller
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