October 8, 1996
Fruehauf Trailer Corporation
Bank One Center/Tower
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxx Xxxxx
Re: Payoff of Indebtedness of Fruehauf Trailer
Corporation to K-H Corporation
Dear Xxx:
Reference is made to (i) that certain Working
Capital Term Note dated April 19, 1996 from Fruehauf
Trailer Corporation ("Debtor") to K-H Corporation ("K-H")
as assignee of Congress Financial Corporation (Central)
("Congress") and the Term Loan Financing Agreements
referred to therein; (ii) that certain Supplemental
Working Capital Term Note dated June 21, 1996 from Debtor
to K-H as assignee of Congress and the Term Loan Financing
Agreements referred to therein and (iii) that certain
Subordinated Revolving Note dated June 21, 1996 from
Debtor to K-H and the Revolving Loan Documents referred to
therein (collectively the"Loan Documents"). Capitalized
terms used herein and not otherwise defined herein shall
have the meanings set forth in the Loan Documents.
The Debtor has requested that the Loan Documents
be terminated and intends to pay all Term Loan Obligations
and Loan Obligations referred to in the Loan Documents
(collectively "Obligations") from the proceeds of a new
debtor-in-possession working capital facility provided by
Xxxxxxxxx, L.L.C. (the "DIP Lender"). This letter
agreement is intended to set forth the terms and
conditions regarding the payment of the Obligations.
If received by 1:00 p.m. (New York time) on
October 9, 1996, the amount necessary to pay all
Obligations outstanding as of such date is $6,737,118.10
(as it may be increased pursuant to the immediately
following sentence, the "Payoff Amount"), comprised of
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(i) $6,500,000 in respect of principal of such Working
Capital Term Note and Supplemental Working Capital Term
Note; (ii) $125,000 in respect of principal of such
Subordinated Revolving Note; (iii)$70,326.39 in respect of
accrued and unpaid interest on such Working Capital Term
Note and Supplemental Working Capital Term Note from
September 1, 1996 through October 9, 1996 (it being
understood that this amount is net of the amounts payable
by K-H to Congress pursuant to Section 11 of each of that
certain Note Purchase and Assignment Agreement dated April
19, 1996 and that certain Supplemental Note Purchase and
Assignment Agreement dated June 21, 1996 between Congress
and K-H which shall be paid directly by Debtor to Congress
on behalf of and at the direction of K-H); (iv) $1,791.67
in respect of accrued and unpaid interest on such
Subordinated Revolving Note from August 22, 1996 through
October 9, 1996; and (v) $40,000 in respect of estimated
attorneys fees and expenses included in the Obligations.
If the Payoff Amount is received by K-H in accordance with
the provisions hereof after 1:00 p.m. (New York time) on
October 9, 1996 (it being understood that any payment
received after 1:00 p.m. (New York time) on any particular
day shall be deemed received on the immediately following
Business Day), then the Payoff Amount shall be increased
by the per diem amount of $ 1,888.02.
This letter agreement will also confirm that
at the time (i) K-H has received duly executed
counterparts of this letter agreement by each of the
Debtor and each subsidiary of the Debtor listed on the
signature pages hereto that has guaranteed the Obligations
(the "Guarantors"), (ii) the Bankruptcy Court has entered
an order (in form and substance satisfactory to K-H, it
being understood that the proposed form of order initially
filed with the Bankruptcy Court is satisfactory to K-H)
approving this letter agreement, including the releases
contained herein, as to which no stay is in effect
and no appeal has been filed and is pending and (iii) K-H
has received payment by a federal funds wire transfer of
the Payoff Amount in the following account:
Comerica Bank
Detroit, Michigan
ABA Routing # 000000000
K-H Corporation General Account
Account #1076-139045
then (i) all liabilities, obligations and indebtedness by
Debtor to K-H under the Loan Documents shall have been
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satisfied in full, (ii) all of the Loan Documents shall
hereby terminate, (iii) the right and commitment to
borrow any additional funds thereunder shall be hereby
terminated and (iv) the liens and security interests of
K-H in any and all of the Collateral shall be hereby
released and terminated; provided, however, that all of
the respective indemnification and reimbursement
obligations of the Debtor and the Guarantors under the
Loan Documents (including, without limitation, their
respective obligations, jointly and severally, to
indemnify and reimburse K-H for (i) any reasonable unpaid
attorneys' fees and expenses or other costs chargeable
under the Loan Documents and (ii) any previously paid
principal, interest, attorneys' fees and expenses or other
costs chargeable under the Loan Documents as to which
payment therefor is subsequently invalidated, set aside or
otherwise required to be disgorged for any reason by
K-H to any person or entity) (i) shall survive such
payment and (ii) shall constitute an expense of
administration in the respective bankruptcy cases of the
Debtor and each applicable Guarantor junior to the claims
of the DIP Lender.
Promptly following the Effective Date, K-H
will also deliver to the DIP Lender or, at the request of
the DIP Lender, the Debtor executed release and
termination documents covering K-H's liens and security
interests in all of the Collateral. K-H shall have no
responsibility for the filing of such documents, and the
full cost of making such filings shall be borne by the
Debtor. Thereafter, K-H will from time to time
upon the reasonable request of the DIP Lender or the
Debtor (and payment in advance of any expected associated
expenses) further execute and deliver to the DIP Lender or
the Debtor such other termination statements, releases and
other agreements reasonably requested and provided by the
DIP Lender or the Debtor which are reasonably necessary to
evidence K-H's release and termination of its liens and
security interests in the Collateral.
Although the Debtor and the Guarantors do not
believe they have any claims against K-H, in order to
facilitate the discharge in full of all Obligations, each
of the Debtor and the Guarantors (in the case of the
Debtor and the debtor Guarantors, as debtors and
debtors-in-possession) on behalf of themselves, their
estates and their successors (including any trustee or
estate representative in any bankruptcy case of
which the Debtor or any Guarantor is the subject or in any
subsequent case or proceeding under the Bankruptcy Code)
hereby releases and discharges K-H and its affiliates and
their respective successors and assigns and the officers,
directors, employees, counsel, agents and other
representatives of each of the foregoing (each, a
4
"Releasee") from any and all actions, causes of action,
suits, suits of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages,
judgments, extents, executions, losses, liabilities,
costs, expenses, debts, dues, demands, obligations, or
other claims of any kind whatsoever, in law, admiralty or
equity, which the Debtor or any Guarantor ever had, now
has or hereafter can, shall or may have against any
Releasee for, upon or by reason of any matter, cause or
theory whatsoever from the beginning of the world to and
including the Effective Date arising out of or relating to
the Loan Documents.
This letter agreement relates only to the
Obligations and shall not affect any other amounts now or
hereafter owed to K-H by Debtor and the Guarantors.
This letter agreement shall terminate and be
null and void if the Effective Date has not occurred on or
before 1:00 p.m. (New York time) October 11, 1996.
This letter agreement may be executed in one
or more counterparts, each of which shall be deemed an
original but all of which shall constitute one and the
same agreement to this letter. Please acknowledge your
agreement to this letter by signing your name where
indicated below, and fax a signed copy of this letter to
our attention at 000-000-0000.
Very truly yours,
K-H CORPORATION
By:/s/ Xxxx X. Xxxxxxx
--------------------
Its: Treasurer
ACKNOWLEDGED AND AGREED:
FRUEHAUF TRAILER CORPORATION
By:/s/ Xxxxxxx X. Xxxxx
-----------------------
Its: Vice President - Treasurer
FGR, INC.
By:/s/ Xxxxxxx X. Xxxxx
-----------------------
Its: Vice President - Treasurer
FRUEHAUF CORPORATION
By:/s/ Xxxxxxx X. Xxxxx
-----------------------
Its: Vice President - Treasurer
MARYLAND SHIPBUILDING & DRYDOCK COMPANY
By:/s/ Xxxx X. Xxxxxx
-----------------------
Its: President
THE XXXXXX CO.
By:/s/ Xxxxxxx X. Xxxxx
-----------------------
Its: Vice President - Treasurer
FRUEHAUF INTERNATIONAL LIMITED
By:/s/ Xxxxxxx X. Xxxxx
-----------------------
Its: Vice President - Treasurer
DEUTSCHE-FRUEHAUF HOLDING CORPORATION
By:/s/ Xxxxxxx X. Xxxxx
-----------------------
Its: Vice President - Treasurer
JACKSONVILLE SHIPYARDS, INC.
By:/s/ Xxxx X. Xxxxxx
-----------------------
Its: President
X.X. HOLDINGS, INC.
By:/s/ Xxxxxxx X. Xxxxx
-----------------------
Its: Vice President - Treasurer
