THIS AGREEMENT IS NOT AN OFFER WITH RESPECT TO ANY SECURITIES OR
SOLICITATION OF ACCEPTANCES OF A CHAPTER 11 PLAN. SUCH OFFER OR
SOLICITATION WILL BE MADE IN COMPLIANCE WITH ALL APPLICABLE SECURITIES
LAWS AND/OR PROVISIONS OF THE BANKRUPTCY CODE.
RESTRUCTURING AGREEMENT
Restructuring Agreement (the "Agreement"), dated as of
August 31, 1999, by and among TRISM, Inc., a Delaware corporation
("Trism"), the undersigned wholly-owned subsidiaries of Trism (the
"Guarantors" and together with Trism, collectively, the "Trism
Entities"), and the undersigned members of the informal senior
subordinated note committee.
RECITALS
A. Pursuant to an Indenture dated as of December 15, 1993
(as amended, the "Old Senior Subordinated Note Indenture"), between
Trism and U.S. Bank Trust, National Association (as successor to First
Trust National Association as indenture trustee) (the "Trustee"),
Trism issued $100 million of 10.75% senior subordinated notes due
December 15, 2000 (the "Old Senior Subordinated Notes").
B. Trism failed to pay the scheduled semi-annual interest
payment due on the Old Senior Subordinated Notes on June 15, 1999.
Prior to Trism's failure to make the June 15, 1999 interest payment,
an informal committee currently consisting of the undersigned holders
of Old Senior Subordinated Notes (the "Committee") was established.
The Committee currently holds in the aggregate the principal amount of
the Old Senior Subordinated Notes as set forth on Schedule 1 hereof.
The Committee has retained Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
as its counsel.
C. The Trism Entities and the Committee have been engaged
in negotiations concerning, and have reached an agreement on the
principal terms of, a proposed reorganization (the "Financial
Restructuring") of the outstanding indebtedness and liabilities of,
and equity interests in, the Trism Entities, together with
arrangements related thereto, including, without limitation, certain
proposed management agreements and an equity incentive plan, on the
terms and conditions set forth in this Agreement.
D. It is contemplated that the reorganization plan
described in this Agreement, which shall contain the principal terms
and conditions set forth on Exhibit "A" attached hereto and made a
part hereof (the "Plan"), will be implemented through confirmation of
a "pre-arranged" or "pre-negotiated" reorganization for the Trism
Entities in a case to be filed (the "Chapter 11 Case") under chapter
11 of title 11 of the United States Code, 11 U.S.C. 101 et seq.
(the "Bankruptcy Code"), which Plan has the support of the Committee,
each of the respective members thereof, and the Trism Entities.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Forbearance. For a period (the "Forbearance Period")
commencing on the Effective Date (as defined in Section 7 hereof)
until the occurrence of a "Termination Event" (as defined in Section 3
hereof), each of the members of the Committee hereby agrees to forbear
from the exercise of any rights or remedies it may have (including,
without limitation, by instructing the Trustee to refrain from taking
actions on its behalf) under the Old Senior Subordinated Note
Indenture, the Old Senior Subordinated Notes, any agreement related
thereto (collectively, the "Agreements"), applicable law or otherwise
with respect to any default existing as of the date hereof arising out
of the Agreements.
2. Covenants of the Parties. The Trism Entities, the
Committee and each of the respective members thereof, hereby covenant
to one another to use their reasonable best efforts, as expeditiously
as possible, unless a Termination Event has occurred, and otherwise
subject to the terms of this Agreement, to carry out the following:
(a)(i) the Trism Entities shall prepare the Plan and,
except as set forth below in Section 2(a)(ii), all documentation
related thereto, a disclosure statement pursuant to Section 1125 of
the Bankruptcy Code describing the Plan and containing information
which is materially consistent with the information heretofore
provided to the Committee (the "Disclosure Statement"), and the New
Employment Agreements (as defined in, and in the form attached to,
Exhibit "A" hereto);
(ii) the Committee shall prepare the indenture and
guarantees, if any, regarding the New Senior Subordinated Notes (as
defined on Exhibit "A" attached hereto);
(b) as promptly as reasonably practicable, but in any event
not later than the periods set forth in Section 3 hereof, the Trism
Entities shall (i) file voluntary petitions for reorganization under
Chapter 11 of the Bankruptcy Code and, as promptly as reasonably
practicable thereafter or contemporaneously therewith, file the Plan,
an application for entry of an interim and final order to approve of
debtor-in-possession financing, which financing shall be on terms
reasonably acceptable to the Committee (the "DIP Order"), the
Disclosure Statement and such other documents as may be necessary and
appropriate in order to effectuate the Plan, (ii) proceed in good
faith to obtain confirmation and consummation of the Plan consistent
with at least the timetable set forth in Section 3 hereof, and (iii)
support the Plan in good faith; provided, however, that the
obligations of the Trism Entities hereunder shall not be interpreted
so as to require them to act in a manner which is not consistent with
their fiduciary duties under the Bankruptcy Code and applicable law;
provided, further, however, that if the Trism Entities, pursuant to
the preceeding proviso or otherwise, act in a manner materially
inconsistent with this Agreement or the provisions contained in
Exhibit A hereto, this Agreement may be terminated pursuant to Section
3 hereof; and
(c) each of the respective members of the Committee shall
(and, where applicable, shall cause the Committee to) (i) timely vote
its claims against the Trism Entities represented by the Old Senior
Subordinated Notes it holds to accept the Plan, provided, that the
Disclosure Statement shall have been approved by the Bankruptcy Court,
(ii) support confirmation of the Plan (including, without limitation,
by including a statement in the Disclosure Statement that the
Committee and each of its members supports confirmation of the Plan),
(iii) not vote against, object to or support an objection to the Plan,
(iv) not vote for, consent to, support or participate in any material
modification of the Plan, (v) not vote for, consent to, support or
participate in the formulation of, and shall vote against, any other
plan of reorganization for any or all of the Trism Entities, (vi) not
support any motion (A) seeking to file any other plan of
reorganization for any or all of the Trism Entities or (B) to shorten
or terminate the initial 120-day exclusive period to file a plan of
reorganization provided to the Trism Entities under Section 1121 of
the Bankruptcy Code, without the express written consent of the Trism
Entities (which consent may or may not be given by the Trism Entities
in their sole and absolute discretion), and (vii) not file, consent
to, join or otherwise support any motion to (A) convert the Chapter 11
case of any or all of the Trism Entities to Chapter 7 liquidations,
(B) dismiss any or all of the Trism Entities' Chapter 11 cases, (C)
appoint a Chapter 11 trustee or examiner in any or all of the Trism
Entities' Chapter 11 cases, or (D) vacate the automatic stay imposed
pursuant to Section 362 of the Bankruptcy Code to foreclose on any
collateral or to otherwise take action inconsistent with the terms and
provisions of this Agreement; provided, however, that the obligations
of the Committee, and each of the respective members thereof, under
this Section 2(c) are subject to the condition that the Trism Entities
and their senior management are acting in accordance with their
fiduciary duties under the Bankruptcy Code, and provided, further,
that the obligations of the Committee, and each of the respective
members thereof, under this Agreement shall not be interpreted so as
to require such parties to act in a manner which is not consistent
with any of their fiduciary duties under applicable law. The
Committee, and each of the respective members thereof, each hereby
agrees that the distributions under the Plan in respect of such
person's claims against, or interests in, the Trism Entities is fair
and equitable under Section 1129(b) of the Bankruptcy Code.
3. Termination. This Agreement shall terminate and all
of the obligations of the Trism Entities, the Committee, and each of
the members thereof, shall be of no further force or effect in the
event that any of the following occurs (each, a "Termination Event"):
(a) immediately and automatically upon the giving of written
notice of termination by the Committee to the Trism Entities if:
(i) The Chapter 11 Case to implement the Financial
Restructuring through confirmation of the Plan shall not
have been commenced (including, without limitation, by the
filing of the Plan and Disclosure Statement in form
reasonably satisfactory to the Committee) by September 17,
1999;
(ii) The Disclosure Statement or a version thereof that is
not materially inconsistent with the terms set forth on
Exhibit A hereto shall not have been approved by the
Bankruptcy Court within sixty (60) days after the
commencement of the Chapter 11 Case;
(iii) the Plan is not confirmed within one hundred (100)
days after the commencement of the Chapter 11 Case (or an
order is entered which has the practical effect of
preventing confirmation of the Plan within one hundred (100)
days after the commencement of the Chapter 11 Case);
(iv) the Plan shall not have become effective within one
hundred twenty (120) days after the commencement of the
Chapter 11 Case;
(v) there shall be any material modification to, or
severance of any provision of, the Plan which is materially
inconsistent with the terms and conditions set forth in
Exhibit A hereto;
(vi) the aggregate amount of indebtedness of the Trism
Entities secured by a lien, security interest or mortgage on
property of the Trism Entities (including under any debtor-
in-possession financing facility) exceeds $118 million;
(b) five (5) business days after the giving of written notice of
termination by any of the parties hereto to each of the other
parties if any such other party hereto fails to perform, in any
material respect, any of their obligations hereunder or to
support the terms set forth in Exhibit A hereto, and such failure
remains uncured at the conclusion of such period, in which case
this Agreement shall thereupon terminate.
4. Representations and Warranties.
(a) Each party represents and warrants to the other parties
that (i) it is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its formation, (ii) its
execution, delivery and performance of this Agreement are within the
power and authority of such party and have been duly authorized by
such party and that no other approval or authorization is required,
(iii) this Agreement has been duly executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable in
accordance with the terms hereof, and (iv) none of the execution and
delivery of this Agreement or compliance with the terms and provisions
hereof will violate, conflict with or result in a breach of, its
certificate of incorporation or bylaws or other constitutive document,
any applicable law or regulation, any order, writ, injunction or
decree of any court or governmental authority or agency, or any
agreement or instrument to which it is a party or by which it is bound
or to which it is subject.
(b) Each member of the Committee further represents and
warrants, as applicable, to the Trism Entities, that (i) its
respective holding in principal amount of Old Senior Subordinated
Notes being separately provided to the Trism Entities as of the date
hereof is true and correct, (ii) except as contemplated herein or in
the Plan, it has not transferred, assigned or otherwise disposed of,
or entered into any agreement (whether written or oral) to transfer,
assign or otherwise dispose of, its right, title and interest in and
to the Old Senior Subordinated Notes which it holds, and (iii) except
with respect to the Plan described in this Agreement, it has not
consented to and is not currently supporting or participating in the
formulation of, and has not entered into any agreement(whether written
or oral) with respect to, (x) any other plan of reorganization for the
Trism Entities or (y) the sale of all or substantially all of the
assets of the Trism Entities or all or substantially all of the stock
or notes to be issued pursuant to the Plan.
(c) Each of the Trism Entities represents and warrants to
the Committee, and each of the members thereof, that there are no
actions, suits, claims, proceedings or, to their knowledge,
investigations pending or, to their knowledge, threatened against the
Trism Entities or any of their current or former directors or officers
that would give rise to a material claim for indemnification against
the Trism Entities by any of such directors or officers under
applicable law or the certificate of incorporation and/or by-laws of
any of the Trism Entities.
5. Confidentiality. Each member of the Committee and the
Trism Entities hereby agree that the reference to August 15, 1999, in
the first full paragraph on the third page of the Confidentiality
Agreements between the Trism Entities and the members of the Committee
shall be deleted and replaced with the following: "(a) the
termination of the Restructuring Agreement dated August 31, 1999,
pursuant to Section 3 thereof (the "Termination Date") or (b) ...".
6. Disclosure of Individual Holdings. Unless required by
applicable law or regulation or by order of a court of competent
jurisdiction, the Trism Entities shall not disclose the principal
amount of Old Senior Subordinated Notes held by any member of the
Committee without the prior written consent of such member, provided,
however, that the Trism Entities may disclose such information to
their respective directors, officers, employees, attorneys,
accountants, financial advisors and other agents and representatives.
If the disclosure of such information is so required by applicable law
or regulation, the Trism Entities shall afford the affected Committee
member a reasonable opportunity to review and comment upon any such
disclosure. If the Trism Entities are requested in any proceeding to
disclose any such information, the Trism Entities shall give
reasonable notice to such Committee member of such request so that it
may seek an appropriate protective order. The foregoing shall not
prohibit the Trism Entities from disclosing the aggregate principal
amount of Old Senior Subordinated Notes held by the Committee as a
group.
7. Effective Date. This Agreement shall become effective
immediately upon the date of execution and delivery by all signatories
hereto (the "Effective Date"). The Trism Entities shall give written
notice of the Effective Date to the members of the Committee within
five (5) days after the Effective Date.
8. Documentation Satisfactory. All documents and papers
relating to this Agreement, the Plan, the New Senior Subordinated
Notes to be issued to holders of Old Senior Subordinated Notes under
the Plan, and the DIP Order shall be reasonably satisfactory to each
party hereto. The Committee shall receive advance copies of the Plan
and all other documents and papers relating to the Plan and this
Agreement as they may reasonably request.
9. Specific Performance. Subject to any fiduciary duties
of any of the parties to this Agreement, it is understood and agreed
by each of the parties hereto that money damages would not be a
sufficient remedy for any material breach of this Agreement by any
party (other than a breach by Trism of Section 11 hereof) and each non-
breaching party shall be entitled to specific performance and
injunctive relief or other equitable relief as a remedy for any such
breach.
10. Reservation of Rights. This Agreement and the Plan are
part of a proposed settlement of disputes among the parties hereto.
Except as expressly provided in this Agreement, nothing herein is
intended to, or does, in any manner, waive, limit, impair or restrict
the ability of any of the parties hereto to protect and preserve its
rights, remedies and interests, including, without limitation, the
claims of each of the members of the Committee against the Trism
Entities or such members' full participation in the Chapter 11 Case.
If the transactions contemplated herein or in the Plan are not
consummated, or if this Agreement is terminated for any reason, the
parties hereto fully reserve any and all of their rights. Pursuant to
Federal Rule of Evidence 408 and any applicable state rules of
evidence, this Agreement shall not be admitted into evidence in any
proceeding other than in a proceeding to enforce its terms.
11. Fees and Expenses. The Trism Entities shall pay the
reasonable expenses of the members of the Committee as well as the
reasonable fees and expenses of the Committee's legal advisors in
accordance with Trism's agreement with such firm.
12. Amendments. This Agreement may not be amended except
by an instrument in writing signed by all parties hereto.
13. Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and assigns.
Without in any manner limiting the scope, extent or effect of the
foregoing, the respective members of the Committee shall not transfer,
assign or otherwise dispose of their right, title and interest in and
to, as applicable, the Old Senior Subordinated Notes (and any and all
rights, claims and obligations associated therewith), and any such
transfer shall be void and of no force and effect unless and until
such transferee or assignee agrees in writing at the time of such
transfer or assignment to be bound by this Agreement in its entirety
without revision. In the event of any such transfer or assignment,
the transferor or assignor, as the case may be, shall, within one
business day following such transfer or assignment, provide written
notice of such transfer or assignment to the Trism Entities together
with a copy of the written agreement of the transferee or assignee to
be bound by this Agreement in its entirety without revision. In the
event that another holder of Old Senior Subordinated Notes is added to
the Committee subsequent to the Effective Date, such holder shall
agree in writing at the time it joins the Committee to be bound by
this Agreement in its entirety without revision, and also shall
provide the Trism Entities with the principal amount of the Old Senior
Subordinated Notes it holds for inclusion in Schedule 1 hereto
(subject to the disclosure limitations set forth in Section 6 hereof).
Trism shall promptly circulate a revised copy of Schedule 1 including
a revised amount for the aggregate principal amount of the Old Senior
Subordinated Notes held by the members of the Committee as a group,
and such revised Schedule 1 shall be deemed to amend and restate
Schedule 1 as attached hereto.
14. Notices. In addition to any notice requirement set
forth in any indenture or other agreement, any notice required or
desired to be served, given or delivered under this Agreement shall be
in writing, and shall be deemed to have been validly served, given or
delivered if provided by personal delivery, or upon receipt of fax
delivery, as follows:
(a) if to the Trism Entities, to:
Trism, Inc.
0000 Xxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Fax: 000-000-0000
with a copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Fax: 000-000-0000
(b) if to the Committee, to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Fax: 000-000-0000.
15. Headings. The headings of this Agreement are for
reference only and shall not limit or otherwise affect the meaning
hereof.
16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York,
without regard to internal conflicts of law principles.
17. Counterparts. This Agreement may be executed in
counterparts in one or more counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute
one and the same instrument.
[END OF TEXT]
IN WITNESS WHEREOF, the parties have duly executed and
delivered this Agreement as of the date first written above.
TRISM, INC.
By:
Name:
Title:
TRISM SECURED TRANSPORTATION, INC.
By:
Name:
Title:
TRISM HEAVY HAUL, INC.
By:
Name:
Title:
TRISM MAINTENANCE SERVICES, INC.
By:
Name:
Title:
MCGILL SPECIAL SERVICES, INC.
By:
Name:
Title:
TRI-STATE MOTOR TRANSIT CO.
By:
Name:
Title:
TRISM SPECIALIZED CARRIERS, INC.
By:
Name:
Title:
AERO BODY AND TRUCK EQUIPMENT, INC.
By:
Name:
Title:
TRI-STATE TRANSPORTATION SERVICES, INC.
By:
Name:
Title:
TRISM SPECIAL SERVICES, INC.
By:
Name:
Title:
DIABLO SYSTEMS, INC.
By:
Name:
Title:
TRISM EASTERN, INC.
By:
Name:
Title:
TRISM TRANSPORT, INC.
By:
Name:
Title:
TRISM TRANSPORT SERVICES, INC.
By:
Name:
Title:
TRANSPORTATION RECOVERY SYSTEMS, INC.
By:
Name:
Title:
TRISM LOGISTICS, INC.
By:
Name:
Title:
TRISM EQUIPMENT, INC.
By:
Name:
Title:
CORPORATE HIGH YIELD FUND, INC.
By:
Name:
Title:
CORPORATE HIGH YIELD FUND II, INC.
By:
Name:
Title:
CORPORATE HIGH YIELD FUND III, INC.
By:
Name:
Title:
XXXXXXX XXXXX PHOENIX FUND, INC.
By:
Name:
Title:
XXXX X. XXXXXXXX XXX ROLLOVER
By:
Name:
Title:
20/20 (AGF U.S. SHORT-TERM HIGH
YIELD FUND)
By:
Name:
Title:
ROCKWELL FUND, INC.
By:
Name:
Title:
PROSPECT STREET HIGH INCOME
PORTFOLIO INC.
By:
Name:
Title:
WORLDLINX CBO, LTD
By: _______________________________
Name: B. Xxxxx Xxxxxx
Title: Director
RHYNO CBO 1997-1 LIMITED
By:
Name:
Title:
SCHEDULE 1
MEMBERS OF THE INFORMAL
SENIOR SUBORDINATED NOTE COMMITTEE
NAME
Xxxxxxx Xxxxx Asset Management
Prospect Street Investment Management Co., Inc.
Bear Xxxxxxx Asset Management
Xxxxxxx Partners, Inc.
Harch Capital Management, Inc.
Aggregate Principal Amount of
Old Senior Subordinated Notes
Held By Such Entities as a Group $37,659,000
EXHIBIT "A"
PLAN TERM SHEET
The following presents the material terms of the Plan
described in the Restructuring Agreement dated as August 31, 1999
among Trism, Inc., certain of its wholly-owned subsidiaries, and the
Informal Committee of Senior Subordinated Notes party thereto (the
"Restructuring Agreement"). The following terms are subject in their
entirety to the terms and conditions of the Restructuring Agreement.
Capitalized terms used herein without definition shall have the
meanings given to them in the Restructuring Agreement.
Old Senior Subordinated
Notes: Holders of Old Senior Subordinated Notes
shall receive (a) their pro rata share
of New Senior Subordinated Notes (the
"New Senior Subordinated Notes") having
the following terms -
Issuer: Trism, Inc. (the "Company")
Principal Amount: $30 million
Term: 5 years from the effective date
of the Plan Interest: 12% per annum
payable semi-annually in cash on March
15 and September 15 of each year during
the term beginning on March 15, 2000
(accrual starting as of September 15,
1999)
Amortization: None
Collateral: Unsecured
and (b) their pro rata share of 95% of
New Common Stock of the Company ("New
Common Stock") (subject to dilution
under a management stock incentive
program), which the Company shall use
its reasonable best efforts to cause to
be listed on the NASDAQ National Market
or other National Securities Exchange
within the meaning of the Securities
Exchange Act of 1934, as amended
Old Common Stock: All currently issued and
outstanding shares of common stock, par
value $.01 per share, of the Company
("Old Common Stock") shall be canceled
and extinguished and the holders of
shares of Old Common Stock shall receive
their pro rata share of 5% of New Common
Stock (subject to dilution under a
management stock incentive program).
All outstanding warrants, options and
other rights to acquire Old Common Stock
shall also be canceled and extinguished.
Management: Existing senior executive
officers of the Company shall continue
in their respective current positions
after the effective date of the Plan and
as of the effective date of the Plan:
shall enter into employment agreements
substantially in the form attached
hereto as Annex 1 ("New Employment
Agreements") with the base salaries as
set forth on Annex 2 hereto, shall
participate in a management incentive
stock option plan in the form attached
hereto as Annex 3 under which 10% of the
New Common Stock shall be issuable on a
fully-diluted basis (5% vested on the
effective date at Reorganization Value,
2.5% vested on the first and second
anniversaries of the effective date at
110% and 120% of Reorganization Value,
respectively), and shall participate in
a management cash incentive plan on the
terms set forth on Annex 4 hereto.
Secured Claims: Unimpaired. Reinstated and
all defaults, if any, cured, or paid in
full as they are incurred in the
ordinary course of business or on the
effective date of the Plan, with any
interest payable under applicable law,
provided that the aggregate amount of
Secured Claims, including the Trism
Entities' indebtedness under any DIP
financing facility, shall not exceed
$118 million on the effective date of
the Plan.
General Unsecured Claims: Unimpaired. Either paid in full as they
are incurred in the ordinary course of
business or on the effective date of the
Plan, in a manner and pursuant to a
mechanism acceptable to the Committee
and the Trism Entities, subject to
Bankruptcy Court approval, provided that
General Unsecured Claims shall not
exceed $15 million on the effective date
of the Plan (excluding insurance claims,
which also shall be paid in a manner and
pursuant to a mechanism acceptable to
the Committee and the Trism Entities,
subject to Bankruptcy Court approval).
Board Representation: Reorganized Trism (as defined in
the Plan) shall initially have a Board
of Directors comprised of 5 members as
follows: four independent directors
acceptable to the Committee (and the
Committee shall reasonably consult with
the Company regarding the selection of
such directors) and Xxxxxx X. XxXxxxxxx,
who shall serve as chairman.
Indemnity, Injunction
and Release: The Plan shall provide
that all parties hereto and their
directors, officers, attorneys, agents
and representatives shall receive the
benefit of releases, injunctions and
indemnities.
ANNEX 1
Form of Employment Agreement
ANNEX 2
Base Salaries
ANNEX 3
Form of Management Incentive Stock Option Plan
ANNEX 4
Term Sheet for Management Cash Incentive Plan
