<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 23, 1996
REGISTRATION NO. 333-03283
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
TRAVIS BOATS & MOTORS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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TEXAS 5551 74-2024798
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NUMBER)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
MARK T. WALTON
13045 RESEARCH BLVD. CHAIRMAN OF THE BOARD AND PRESIDENT
AUSTIN, TEXAS 78750 13045 RESEARCH BLVD.
(512) 250-8103 AUSTIN, TEXAS 78750
FAX: (512) 250-8104 (512) 250-8103
(ADDRESS, INCLUDING ZIP CODE, AND FAX: (512) 250-8104
TELEPHONE NUMBER, INCLUDING AREA CODE, (NAME, ADDRESS, INCLUDING ZIP CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE AND TELEPHONE NUMBER, INCLUDING AREA
OFFICES) CODE, OF AGENT FOR SERVICE)
PLEASE ADDRESS COPIES OF ALL COMMUNICATIONS TO:
J. ROWLAND COOK, ESQ. CARMELO M. GORDIAN, ESQ.
MARK E. MOURITSEN, ESQ. S. MICHAEL DUNN, ESQ.
JENKENS & GILCHRIST, A PROFESSIONAL BROBECK, PHLEGER & HARRISON LLP
CORPORATION 301 CONGRESS AVENUE, SUITE 1200
600 CONGRESS AVENUE, SUITE 2200 AUSTIN, TEXAS 78701
AUSTIN, TEXAS 78701 (512) 477-5495
(512) 499-3821 FAX: (512) 477-5813
FAX: (512) 404-3520
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
possible after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL HAVE BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
TRAVIS BOATS AND MOTORS, INC.
CROSS-REFERENCE SHEET
PURSUANT TO REGULATION S-K ITEM 501
<TABLE>
<CAPTION>
ITEM NUMBER AND CAPTION OF
FORM S-1 LOCATION/CAPTION IN PROSPECTUS
-------------------------- ------------------------------
<C> <S> <C>
1. Forepart of the
Registration Statement and Cover Page of Registration Statement; Cross-
Outside Front Cover Page Reference Sheet; Outside Front Cover Page of
of Prospectus............. Prospectus
2. Inside Front and Outside
Back Cover Pages of Inside Front and Outside Back Cover Pages of
Prospectus................ Prospectus
3. Summary Information, Risk
Factors and Ratio of Prospectus Summary; Risk Factors
Earnings to Fixed
Charges...................
4. Use of Proceeds........... Prospectus Summary; Use of Proceeds
5. Determination of Offering Outside Front Cover Page of Prospectus;
Price..................... Underwriting
6. Dilution.................. Prospectus Summary; Risk Factors; Dilution
7. Selling Security Holders.. Principal and Selling Stockholders
8. Plan of Distribution...... Outside Front Cover Page of Prospectus;
Underwriting
9. Description of Securities Outside Front Cover Page of Prospectus;
to be Registered.......... Dividend Policy; Description of Capital
Stock; Shares Eligible for Future Sale
10. Interests of Named Experts Not Applicable
and Counsel...............
11. Information with Respect Outside Front Cover Page of Prospectus;
to the Registrant......... Prospectus Summary; Risk Factors; Dividend
Policy; Capitalization; Selected Consolidated
Financial Data; Management's Discussion and
Analysis of Financial Condition and Results
of Operations; Business; Management; Certain
Transactions; Principal and Selling
Stockholders; Description of Capital Stock;
Shares Eligible for Future Sale;
Underwriting; Consolidated Financial
Statements
12. Disclosure of Commission
Position on Not Applicable
Indemnification for
Securities Act
Liabilities...............
</TABLE>
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MAY 23, 1996
[LOGO]
1,750,000 SHARES
COMMON STOCK
Of the 1,750,000 shares of Common Stock offered hereby, 1,312,500 shares are
being sold by Travis Boats & Motors, Inc. (the "Company" or "Travis Boats"),
and 437,500 shares are being sold by the Selling Stockholders. See "Principal
and Selling Stockholders." The Company will not receive any of the proceeds
from the sale of the shares being sold by the Selling Stockholders. Prior to
this offering, there has been no public market for the Common Stock of the
Company. The Common Stock has been approved subject to official notification of
issuance for quotation on the Nasdaq National Market under the symbol "TRVS."
It is currently estimated that the initial public offering price will be
between $11.00 and $13.00 per share. See "Underwriting" for information
relating to the method of determining the initial public offering price.
--------
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 7.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS COMPANY(1) STOCKHOLDERS
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<S> <C> <C> <C> <C>
Per Share...................... $ $ $ $
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Total(2)....................... $ $ $ $
</TABLE>
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(1) Before deducting expenses of this offering payable by the Company,
estimated at $ .
(2) The Company has granted the Underwriters a 30-day option to purchase up to
an additional 262,500 shares of Common Stock solely to cover over-
allotments, if any. If such option is exercised in full, the total Price to
Public, Underwriting Discounts and Commissions and Proceeds to Company will
be $ , $ and $ , respectively. See "Underwriting."
--------
The Common Stock is offered by the Underwriters as stated herein, subject to
receipt and acceptance by them and subject to their right to reject any order
in whole or in part. It is expected that delivery of such shares will be made
through the offices of Robertson, Stephens & Company LLC ("Robertson, Stephens
& Company"), San Francisco, California, on or about , 1996.
ROBERTSON, STEPHENS & COMPANY PRINCIPAL FINANCIAL SECURITIES, INC.
The date of this Prospectus is , 1996.
<PAGE>
PICTURES ARE INCLUDED AS FOLLOWS:
1. Photograph of store front.
2. Five photographs of store interior.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2
<PAGE>
NO DEALER, SALES REPRESENTATIVE OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS
OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, ANY SELLING STOCKHOLDER OR ANY UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT
RELATES OR AN OFFER TO, OR SOLICITATION OF, ANY PERSON IN ANY JURISDICTION
WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
UNTIL , 1996 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE COMMON STOCK OFFERED HEREBY, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Prospectus Summary....................................................... 4
Risk Factors............................................................. 7
Use of Proceeds.......................................................... 14
Dividend Policy.......................................................... 14
Capitalization........................................................... 15
Dilution................................................................. 16
Selected Consolidated Financial Data..................................... 17
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 18
Business................................................................. 25
Management............................................................... 33
Certain Transactions..................................................... 39
Principal and Selling Stockholders....................................... 41
Description of Capital Stock............................................. 42
Shares Eligible for Future Sale.......................................... 45
Underwriting............................................................. 47
Legal Matters............................................................ 49
Experts.................................................................. 49
Additional Information................................................... 49
Index to Financial Statements............................................ F-1
</TABLE>
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The Company intends to furnish its stockholders with annual reports
containing audited consolidated financial statements and an opinion thereon
expressed by its independent auditors, and with quarterly reports for the
first three quarters of each fiscal year containing unaudited summary
financial information.
Unless the context requires otherwise, as used in this Prospectus, "Company"
and "Travis Boats" refer to Travis Boats & Motors, Inc. and its subsidiaries.
The Company's principal executive office is located at 13045 Research
Boulevard, Austin, Texas 78750, and its telephone number is (512) 250-8103.
The trademarks "Travis Boating Center(TM)" and "Travis Edition(TM)" are
owned by the Company. All rights are fully reserved. This Prospectus also
includes trademarks and trade names of companies other than Travis Boats.
3
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information, including "Risk Factors" and Consolidated Financial Statements and
Notes thereto, appearing elsewhere in this Prospectus. Effective September 30,
1995, the Company changed its fiscal year end to September 30; references to
the Company's fiscal years prior to such date refer to the Company's fiscal
years ended on December 31.
THE COMPANY
Travis Boats is a leading multi-state superstore retailer of recreational
boats, motors, trailers and related marine accessories in the southern United
States. The Company currently operates 12 superstores in Texas, Arkansas and
Louisiana under the name Travis Boating Center. Founded in 1979 in Austin,
Texas, Travis Boats differentiates itself from competitors by providing
customers a unique superstore shopping experience that showcases a broad
selection of high quality boats, motors, trailers and marine products at firm,
clearly posted low prices. Each superstore offers complete customer service and
support, including in-house financing programs and full-service repair
facilities staffed by factory-trained mechanics.
The Company sells approximately 40 different models of brand-name fishing,
water-skiing and general recreational boats, along with motors, trailers,
accessories and related equipment. Personal watercraft, off-shore fishing boats
and cabin cruisers are also offered for sale at selected store locations. Boats
sold generally range in size from 16 to 23 feet at prices ranging from $7,500
to $23,000 with an average boat purchase price of approximately $12,000. The
Company custom designs and pre-packages combinations of popular brand-name
boats, such as Aquasport, Cajun and Larson, with Johnson outboard and other
motors, trailers and numerous accessories, under its proprietary Travis Edition
product line. These signature Travis Edition packages, which account for the
vast majority of the Company's total new boat sales, are developed in
coordination with the manufacturers and often include distinguishing features
and accessories that have historically been unavailable to, or listed as
optional by, many competitors. These factors enable the Company to provide the
customer with an exceptional product that is conveniently packaged for
immediate enjoyment and competitively priced.
Travis Boats is the largest volume buyer in the United States of Johnson
outboard motors from Outboard Marine Corporation and is the largest domestic
volume buyer of boats from substantially all of the boat manufacturers it
represents. The Company's volume purchasing, design expertise and market
knowledge has allowed it to position its own Travis Edition line of brand label
recreational boats as a superior value. Unlike most recreational boat dealers,
the Company establishes firm, clearly posted prices on Travis Edition packages,
generally maintains such prices for an entire season and typically does not
engage in promotional discounts or sales. This selling philosophy eliminates
customer anxiety associated with bargaining or negotiation and results in
prices at or below those generally available from competitors. The Company
believes this pricing strategy and low-pressure sales style provide the
customer with the comfort and confidence of having received a better boat with
more features at a lower price. In the Company's view, this approach has
promoted good customer relationships and has enhanced the Company's reputation
in the industry as a leading provider of quality and value.
Travis Boating Center superstores have a distinctive and stylish trade dress
accented with deep blue awnings, nautical neon building decoration and
expansive glass storefronts. Stores range in size from 6,000 to 33,200 square
feet and average approximately 21,000 square feet. Each superstore presents
customers with a broad array of boats and over 9,000 parts and accessories in a
brightly lit, well-stocked, air-conditioned shopping environment. All boats are
typically displayed fully rigged with motor, trailer and a complete accessory
package, giving a "ready to take home" impression. A professional service and
repair staff operates service bays, providing customers with quality
maintenance and repair service. The Company also participates in offsite sales
promotions such as regional boat shows, in-the-water sales events on area lakes
and various types of
4
<PAGE>
parking lot shows in conjunction with large retailers, including Sam's Clubs.
These and other offsite shows generate significant sales, marketing exposure
and access to a larger and more diverse customer base for nominal incremental
cost.
The recreational boating industry generated approximately $7.7 billion in
retail sales of boats, motors, trailers and related accessories in 1995, of
which approximately $3.0 billion was generated in the Company's 17-state target
market. The boat retailing business is highly fragmented and is characterized
by numerous independent retailers, most of which are family owned, operate in
only a single market, have annual sales of less than $3.0 million and provide
varying degrees of merchandising, professional management and customer service.
The Company believes it has better pricing, superior merchandising, broader
selection, more sophisticated operating systems and a more consumer-oriented
environment than the other independent retailers with which it competes.
Management believes it is the first to have developed a multi-state, chain
superstore merchandising strategy in the retail sales of recreational boats.
The Company's objective is to become the dominant retailer of boats, motors,
trailers and related marine accessories in the southern United States. The
Company's business strategy is to expand its superstore concept, further
develop Travis Edition as an identifiable brand in the recreational boating
business and build customer awareness through extensive advertising and
promotions. This strategy includes expansion into new regional markets,
allowing the Company to benefit from geographic diversity and broaden its
customer base.
Travis Boats' growth strategy is to continue increasing sales at existing
stores and to expand the current store base by further developing existing
markets and entering new markets. Management's strategy for developing new
Travis Boating Center locations has three components: (i) acquire existing boat
retailers, (ii) acquire and convert compatible facilities and (iii) build new
stores. Since 1991, the Company has opened or acquired seven stores in new
markets, while increasing average sales per store from $2.7 million to $4.9
million. The Company's 20,000 square foot new store prototype costs
approximately $825,000 (excluding the cost of the land), is expected to
generate $5.0 million in annual revenues and approximately $250,000 in annual
operating contributions to the Company, resulting in a return on invested
capital of approximately 30%. New locations established through acquisition
typically involve a lower cash investment, yet generate similar sales and
operating contributions. Accordingly, acquisitions have historically produced
substantially greater returns on invested capital than with new store
construction. The Company's expansion strategy is based primarily on
acquisitions rather than new store construction, although it will build new
stores if judged to be the most efficient means of entering a market. Because
of the fragmented nature of the industry, the Company has numerous
opportunities to acquire existing facilities and businesses and believes it can
continue to make such acquisitions on favorable financial terms.
THE OFFERING
<TABLE>
<S> <C>
Common Stock Offered by the
Company.......................... 1,312,500 shares
Common Stock Offered by the
Selling Stockholders............. 437,500 shares
Common Stock Outstanding after the
Offering......................... 3,996,006 shares(1)
Use of Proceeds................... Repayment of $14.2 million of principal and
interest on certain indebtedness including
revolving lines of credit.
Proposed Nasdaq National Market
symbol........................... TRVS
</TABLE>
- --------
(1) Excludes (i) 262,500 shares of Common Stock issuable upon the exercise of
the Underwriter's over-allotment option, (ii) an aggregate of 133,867
shares of Common Stock issuable upon the exercise of outstanding non-
statutory stock options at an exercise price of $5.25 per share and (iii)
200,000 shares of Common Stock reserved for issuance under the Company's
1995 Incentive Plan (the "Incentive Stock Plan"). See "Management--Stock
Option Plans and Agreements" and "Underwriting."
5
<PAGE>
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL AND STORE DATA
(In thousands, except per share and certain store data)
<TABLE>
<CAPTION>
TWELVE
FISCAL YEAR ENDED FISCAL YEAR MONTHS SIX MONTHS
DECEMBER 31,(1) ENDED ENDED ENDED MARCH 31,
---------------------------------- SEPTEMBER 30, DECEMBER ----------------
1991 1992 1993 1994 1995(1) 31, 1995(2) 1995 1996(3)
------- ------- ------- ------- ------------- ----------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT
OF OPERATIONS DATA:
Net sales............. $13,796 $18,317 $25,757 $37,225 $41,442 $45,006 $16,627 $22,017
Gross profit.......... 3,241 4,193 5,946 8,734 10,306 11,254 3,774 5,571
Operating income...... 698 767 1,270 2,135 3,736 3,007 420 1,007
Net income............ 202 255 596 1,023 2,050 1,408 98 243
Net income per share.. $ 0.08 $ 0.10 $ 0.23 $ 0.39 $ 0.76 $ 0.53 $ 0.04 $ 0.09
Weighted avg. shares
outstanding.......... 2,612 2,612 2,612 2,648 2,684 2,684 2,684 2,684
STORE DATA:
Stores open at period
end.................. 6 7 7 8 11 12 9 12
Average sales per
store(4)............. $ 2,747 $ 3,025 $ 3,679 $ 4,653 $ 4,886 $ 4,946 $ 1,981 $ 2,046
Percentage increase in
comparable store
sales(5)............. 4.7% 7.4% 25.6% 28.4% 5.0% 16.0% 22.6% 6.4%
</TABLE>
MARCH 31, 1996
---------------------
ACTUAL AS ADJUSTED(6)
------ --------------
CONSOLIDATED BALANCE SHEET DATA:
<TABLE>
<S> <C> <C>
Working capital.............................................. $ 2,616 $15,980
Total assets................................................. 41,898 41,898
Short-term debt, including current maturities of long-term
debt........................................................ 26,216 12,852
Long-term debt, less current maturities...................... 5,397 4,561
Stockholders' equity......................................... 5,055 19,255
</TABLE>
- --------
(1) The Company's fiscal years ended on December 31 in 1991, 1992, 1993 and
1994, and on September 30 in 1995, pursuant to a change adopted in 1995,
resulting in a nine-month 1995 fiscal year. Except for Consolidated
Statement of Operations Data for the fiscal years ended December 31, 1993
and 1994 and September 30, 1995, all financial and store data is unaudited.
(2) Reflects inclusion of nine-month audited financial statements for the
fiscal year ended September 30, 1995 and three-month unaudited financial
statements for the quarter ended December 31, 1995, in order to provide a
basis for comparing 12 months of operations in 1995 to prior fiscal years.
(3) The operations of Red River Marine, Inc. acquired in September 1995 are
included for the 1996 period. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and Note 4 of Notes to
Consolidated Financial Statements.
(4) Includes only those stores open for the entire preceding 12-month period.
(5) New stores and upgraded facilities are included in the comparable store
base at the beginning of the store's thirteenth complete month of
operations.
(6) Adjusted to reflect the issuance and sale of the 1,312,500 shares of Common
Stock offered by the Company hereby at an assumed initial public offering
price of $12.00 per share and the application of the estimated net proceeds
therefrom. See "Use of Proceeds."
Except as otherwise noted, all information in this Prospectus (i) reflects a
1-for-3 stock dividend to be paid prior to the effective date of this offering
and (ii) assumes no exercise of the Underwriters' over-allotment option. See
"Capitalization," "Description of Capital Stock" and "Underwriting."
6
<PAGE>
RISK FACTORS
The discussion in this Prospectus contains forward-looking statements that
involve risks and uncertainties. The Company's actual results could differ
materially from those discussed herein. Factors that could cause or contribute
to such differences include, but are not limited to, the factors set forth
below, those discussed in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and those discussed elsewhere in this
Prospectus. These factors should be considered carefully in evaluating the
Company and its business before purchasing the shares of Common Stock offered
hereby.
IMPACT OF SEASONALITY AND WEATHER ON OPERATIONS
The Company's business, as well as the entire recreational boating industry,
is highly seasonal. Strong sales typically begin in January with the onset of
the public boat and recreation shows, and continue through July. Over the
previous five-year period, the average net sales for the quarterly periods
ended March 31 and June 30 represented in excess of 27% and 37%, respectively,
of the Company's average annual net sales. If, for any reason, the Company's
sales were to be substantially below those normally expected during these
periods, the Company's business, financial condition and results of operations
would be materially and adversely affected. The Company generally realizes
significantly lower sales in the quarterly period ending December 31,
resulting in operating losses during that quarter.
The Company's business is also significantly affected by weather patterns
which may adversely impact the Company's operating results. For example,
drought conditions or merely reduced rainfall levels, as well as excessive
rain, may force area lakes to close or render boating dangerous or
inconvenient, thereby curtailing customer demand for the Company's products.
In addition, unseasonably cool weather and prolonged winter conditions may
lead to a shorter selling season in certain locations. Although the Company's
geographic expansion has reduced, and is expected to continue to reduce, the
overall impact on the Company of adverse weather conditions in any one market
area, such conditions will continue to represent potential, material adverse
risks to the Company and its future financial performance. Due to the
foregoing factors, among others, the Company's operating results in some
future quarters may be below the expectations of stock market analysts and
investors. In such event, there could be an immediate and significant adverse
effect on the trading price of the Common Stock. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and "Business--
Seasonality."
IMPACT OF GENERAL ECONOMIC CONDITIONS AND DISCRETIONARY CONSUMER SPENDING
The Company's operations are dependent upon a number of factors relating to
or affecting consumer spending. The Company's operations may be adversely
affected by unfavorable local, regional or national economic developments or
uncertainties regarding future economic prospects that reduce consumer
spending in the markets served by the Company's stores. Consumer spending on
non-essential goods such as recreational boats can also be adversely affected
due to declines in consumer confidence levels, even if prevailing economic
conditions are positive. In an economic downturn, consumer discretionary
spending levels are also reduced, often resulting in disproportionately large
declines in the sale of high-dollar items such as recreational boats. For
example, during the Company's 1988-1990 fiscal years, the Texas economy was
severely depressed due to declines in the financial, oil and gas and real
estate markets. While the Company remained profitable during these periods,
its operating performance declined. There can be no assurance that a similar
economic downturn might not recur in Texas or any other market or that the
Company could remain profitable during any such period. Similarly, rising
interest rates could have a negative impact on consumers' ability or
willingness to obtain financing from third-party lenders, which could also
adversely affect the ability of the Company to sell its products. Changes in
federal and state tax laws including, without limitation, the imposition or
proposed adoption of luxury or similar taxes on certain consumer products,
also influence consumers' decision to purchase products offered by the Company
and could have a negative effect on the Company's sales. Local influences such
as corporate downsizing, military base closings and the Mexican peso
devaluation have adversely affected and may continue to influence the
Company's operations in certain markets. See "Business--Recreational Boating
Industry."
7
<PAGE>
DEPENDENCE UPON EXPANSION
A significant portion of the Company's growth has resulted from, and will
continue to be increasingly dependent upon, the addition of new stores and
continued sales and profitability from existing stores. Since October 1991, at
which time the Company operated five stores in Texas, the Company has opened or
acquired seven new store locations in Texas, Arkansas and Louisiana. During the
time period of fiscal 1991 through fiscal 1995, these new stores collectively
accounted for approximately 32% of the Company's aggregate net sales and
approximately 43% of aggregate pre-tax income. Comparable store sales increased
16% in calendar 1995 and 28% in fiscal 1994. Recent rates of comparable store
sales and net income growth are not necessarily indicative of the comparable
store performance that may be achieved by the Company in the foreseeable
future.
The Company intends to continue to pursue a strategy of growth into new
markets through acquiring existing boat retailers, converting compatible
facilities to Travis Boating Centers and building new store facilities.
Accomplishing these goals for expansion will depend upon a number of general
factors, including the identification of new markets in which the Company can
obtain approval to sell its existing or substantially similar product lines,
the Company's financial capabilities, the hiring, training and retention of
qualified personnel and the timely integration of new stores into existing
operations. The acquisition strategy will further depend upon the Company's
ability to locate suitable acquisition candidates at a reasonable cost and to
dispose, timely and effectively, of the acquired entity's remaining inventory,
as well as the ability of the Company to sell its Travis Edition product line
to the customer base of the previous owner. There can be no assurance that the
Company can identify suitable acquisition candidates or complete acquisitions
on terms and conditions favorable to the Company.
The strategy of growth through conversion of compatible facilities to Travis
Boating Centers or the construction of new Travis Boating Centers will further
depend upon the Company's ability (i) to locate and construct suitable
facilities at a reasonable cost in those new markets in which the Company
believes it can obtain adequate market penetration at standard operating
margins without the acquisition of an existing dealer, (ii) to obtain the
reliable data necessary to determine the size and product preferences of such
potential markets and (iii) to introduce successfully its Travis Edition line.
There can be no assurance that the Company will be able to open and operate new
stores on a timely or profitable basis. Moreover, the costs associated with
opening such stores may adversely affect the Company's profitability. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business--Growth Strategy."
MANAGEMENT OF GROWTH
The Company has undergone a period of rapid growth. Management has expended
and expects to continue to expend significant time and effort in acquiring and
opening new stores. There can be no assurance that the Company's systems,
procedures and controls will be adequate to support the Company's expanding
operations. The inability of the Company to manage its growth properly could
have a material adverse effect on the Company's business, financial condition
and results of operations.
The Company has recently deployed a new management information system to
improve its ability to monitor and manage its geographically dispersed stores.
As of the date of this Prospectus, this system is operational in nine of the
Company's 12 stores. Although the Company believes this system will be
operational in all stores in fiscal 1997, there can be no assurance that this
goal can be achieved, that the system will function as planned or that the
system can be integrated smoothly with new store openings and acquisitions.
The Company's planned growth will also impose significant added
responsibilities on members of senior management, including the need to
identify, recruit and integrate new senior level managers, and the ability to
maintain or expand Travis Edition's and Travis Boating Center's successful
appeal to consumers. There is no assurance that any additions to management can
be readily and successfully achieved or that the Company will be able to
continue to grow its business. See "Business--Business Strategy" and "--Growth
Strategy."
8
<PAGE>
RELIANCE ON MANUFACTURERS AND OTHER KEY VENDORS
The Company's success is dependent upon its relationship with, and favorable
pricing arrangements from, a limited number of major manufacturers. In the
event these arrangements were to change or terminate for any reason, including
changes in competitive, regulatory or marketing practices, the Company's
business, financial condition and results of operations could be adversely
affected.
As is typical in the industry, the Company deals with each of its
manufacturers pursuant to an annually renewable, non-exclusive, dealer
agreement that does not contain any contractual provisions concerning product
pricing or required purchasing levels. Pricing is generally established on a
model year basis, but is subject to change at the manufacturer's sole
discretion.
The Company purchased 100% of its new outboard motors in 1995 from Outboard
Marine Corporation ("OMC"), the manufacturer of Johnson outboard motors.
Unlike the Company's other dealer agreements, the Company's agreement with OMC
is multi-year in nature. This agreement, which is in the first of three years,
sets forth an established discount level from the then prevailing dealer net
price over the entire term of the agreement. This dealer agreement may be
canceled by either party if the volume of product purchased or available to be
purchased is not maintained at pre-established levels. If the Company's
contract with OMC were canceled or modified, it could have a material adverse
effect on the Company's business, financial condition and results of
operations.
Approximately 20.1% of the Company's net purchases in fiscal 1995 were from
a single boat supplier. The Company also currently purchases a high percentage
of the annual production of a limited number of boat manufacturers. To ensure
adequate inventory levels to support the Company's expansion, it may be
necessary for such manufacturers to increase production levels or allocate a
greater percentage of their production to the Company. In the event that the
operations of the Company's manufacturers were interrupted or discontinued,
the Company could experience temporary inventory shortfalls, or disruptions or
delays with respect to any unfilled purchase orders then outstanding. Although
the Company believes that adequate alternate sources would be available that
could replace a manufacturer as a product resource, there can be no assurance
that such alternate sources will be available at the time of any such
interruption or that alternative products will be available at comparable
quality and prices. The unanticipated failure of any manufacturer or supplier
to meet the Company's requirements with regard to volume or design
specifications, the Company's inability to locate acceptable alternative
manufacturers or suppliers, the Company's failure to have dealer agreements
renewed or to meet certain volume requirements with regard to purchasing, or
any substantial increase in the manufacturer's pricing to the Company, could
have a material adverse effect on the Company's business, financial condition
and results of operations. See "Business--Operations."
LIMITATIONS TO MARKET ENTRY
Under certain of its dealer agreements, the Company must obtain permission
from its manufacturers to sell products in new markets. While the Company has
received permission to sell Johnson motors and various boat lines in its
immediate expansion markets, manufacturers have not granted such permission to
the Company in its broader target markets. There can be no assurance that
these manufacturers will grant permission for the Company to sell in new
markets, or if unable to obtain such permission, that the Company can obtain
suitable alternative sources of supply.
Unlike other states the Company has targeted for expansion, the State of
Oklahoma has restrictions on the location of competing marine dealers that
limit the ability of new entrants in the retail boat industry to compete in
Oklahoma. There can be no assurance that other states will not pass similar or
other restrictions limiting new competition. See "Business--Operations."
COMPETITION
The Company operates in a highly competitive environment. In addition to
facing competition generally from businesses seeking to attract discretionary
spending dollars, the recreational boat industry itself is highly
9
<PAGE>
fragmented, resulting in intense competition for customers, access to quality
products, access to boat show space in new markets and suitable store
locations. The Company relies heavily on boat shows to generate sales. If the
Company is impeded in its ability to participate in boat shows in its existing
or targeted markets, it could have a material adverse effect on the Company's
business, financial condition and results of operations.
The Company competes primarily with single location boat dealers and, to a
lesser degree, with national specialty marine stores, catalog retailers,
sporting goods stores and mass merchants, particularly with respect to parts
and accessories. Dealer competition continues to increase based on the quality
of available products, the price and value of the products and attention to
customer service. There is significant competition both within markets
currently being served by the Company and in new markets into which the Company
plans to enter. The Company competes in each of its markets with retailers of
brands of boats and motors not sold by the Company in that market. Management
believes that a trend in the industry is for manufacturers to include more
features as standard equipment on boats and for dealers to offer packages
comparable to those offered by the Company as its Travis Edition lines. In
addition, several of the Company's competitors, especially those selling
boating accessories, are large national or regional chains that have
substantially greater financial, marketing and other resources than the
Company. There can be no assurance that the Company will be able to compete
successfully in the retail marine industry in the future. See "Business--
Competition."
INCOME FROM FINANCING, INSURANCE AND EXTENDED SERVICE CONTRACTS
A substantial portion of the Company's income results from the origination
and placement of customer financing and the sale of insurance products and
extended service contracts (collectively, "F&I Products"), the most significant
component of which is the income resulting from the Company's origination of
customer financing. The Company's lenders may choose to pursue this business
directly, rather than through intermediaries such as the Company. Moreover,
lenders may impose terms in their boat financing arrangements with the Company
that may be materially unfavorable to the Company or its customers. For these
and other reasons, the Company could experience a significant reduction in
income resulting from reduced demand for its customer financing programs. In
addition, if profit margins are reduced on sales of F&I Products, or if these
products are no longer available, it would have a material adverse effect on
the Company's business, financial condition and results of operations.
Furthermore, under optional extended service contracts with customers, the
Company may experience significant breach of warranty claims that may, in the
aggregate, be material to the Company's business. See "Business--Operations--
Customer Service and Support."
AVAILABILITY OF FINANCING
The Company currently has significant floor plan and other inventory lines of
credit from financial institutions and other lenders, which the Company
believes reflect competitive terms and conditions. While the Company believes
it will continue to obtain comparable financing from these or other lenders,
there can be no assurance that such financing will be available to the Company.
The failure to obtain sufficient financing on favorable terms and conditions
could have a material adverse effect on the business, financial condition and
results of operations of the Company. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Liquidity and Capital
Resources."
DEPENDENCE ON KEY PERSONNEL
The Company believes its success depends, in large part, upon the continued
services of key management personnel, including Mark T. Walton, Chairman of the
Board and President; Ronnie L. Spradling, Executive Vice President--New Store
Development; and Michael B. Perrine, Chief Financial Officer, Secretary and
Treasurer; and other key employees. Although the Company has employment
agreements through TBC Management, Ltd. (an affiliated partnership of the
Company) with each of Messrs. Walton, Spradling and Perrine expiring in June
1999, the loss of any of these individuals could materially and adversely
affect the Company, including its business expansion plans. The Company
maintains and is the beneficiary of key-man life insurance policies on Messrs.
Walton and Perrine in the amount of $1.0 million each, and on Mr. Spradling in
the amount of $500,000. See "Management."
10
<PAGE>
PRODUCT AND SERVICE LIABILITY RISKS
Products sold or serviced by the Company may expose it to potential liability
for personal injury or property damage claims relating to the use of those
products. Additionally, as a result of the Company's activities in custom
packaging its Travis Edition lines, the Company may be included as a defendant
in product liability claims relating to defects in manufacture or design.
Historically, the resolution of product liability claims has not materially
affected the Company's business. The Company generally requires manufacturers
from which it purchases products to supply proof of product liability
insurance. Although the Company maintains third-party product liability
insurance that it believes to be adequate, there can be no assurance that the
Company will not experience legal claims in excess of its insurance coverage,
or claims that are ultimately not covered by insurance. Furthermore, if any
significant claims are made against the Company, the Company's business,
financial condition and results of operations may be adversely affected by
related negative publicity. See "Business--Product Liability."
IMPACT OF ENVIRONMENTAL AND OTHER REGULATORY ISSUES
On October 31, 1994, the U.S. Environmental Protection Agency ("EPA")
announced proposed emissions regulations for outboard marine motors. The
proposed regulations would require a 75% average reduction in hydrocarbon
emissions for outboard motors and set standards for carbon monoxide and
nitrogen oxide emissions as well. Under the proposed regulations, manufacturers
would begin phasing in low emission models in 1998 and have nine years to
achieve full compliance. The EPA estimates that its proposed regulations, if
enacted, will result in an increase in the average price of an outboard marine
motor of $700 after full implementation of the regulations in the year 2006.
Costs of comparable new models, if materially more expensive than previous
models, or the manufacturer's inability to comply with EPA requirements, could
have a material adverse effect on the Company's business, financial condition
and results of operations.
The Company, in the ordinary course of its business, is required to dispose
of certain waste products that are regulated by state or federal agencies.
These products include waste motor oil, tires, batteries and certain paints. It
is the Company's policy to use appropriately licensed waste disposal firms to
handle this refuse. If there were improper disposal of these products, it could
result in potential liability for the Company. Although the Company does not
own or operate any underground petroleum storage tanks, it currently maintains
one above-ground tank, which is subject to registration, testing and
governmental regulation.
Additionally, certain states have required or are considering requiring a
license in order to operate a recreational boat. While such licensing
requirements are not expected to be unduly restrictive, regulations may
discourage potential first-time buyers, thereby limiting future sales, which
could have a material adverse effect on the Company's business, financial
condition and results of operations. See "Business--Environmental and Other
Regulatory Issues."
CONTROL BY OFFICERS AND DIRECTORS
Upon completion of this offering, the executive officers and directors of the
Company will own approximately 52.7% of the issued and outstanding shares of
the Company's Common Stock (49.5% if the Underwriters' over-allotment is
exercised in full). As a result of such ownership, such officers and directors
will have the power effectively to control the Company, including the election
of directors, the determination of matters requiring stockholder approval and
other matters pertaining to corporate governance. See "Principal and Selling
Stockholders."
NO PRIOR MARKET AND POSSIBLE VOLATILITY OF STOCK PRICE
There has been no public trading market for the Company's Common Stock prior
to this offering. The initial public offering price of the Common Stock will be
determined through negotiations between the Company and the Representatives of
the Underwriters. There can be no assurance that an active trading market will
develop and continue after completion of this offering or that the market price
of the Common Stock will not decline
11
<PAGE>
below the initial public offering price. It is anticipated that there will be
limited float in the market due to the relatively low number of shares to be
offered to the public and consequently, fluctuations in the market price for
the Common Stock could be significant. Recent market conditions for newly
public companies, as well as the Company's quarterly variations in operating
results due to seasonality and other factors, are likely to result in
significant fluctuations in the market price for the Common Stock. Future
announcements concerning the Company or its competitors, including government
regulations, litigation or changes in earnings estimates or descriptive
materials published by analysts, may also cause the market price of the Common
Stock to fluctuate substantially. These fluctuations, as well as general
economic, political and market conditions, such as recessions, may adversely
affect the market price of the Common Stock. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Underwriting."
IMMEDIATE AND SUBSTANTIAL DILUTION
Assuming an offering price per share of $12.00, purchasers of the Common
Stock in this offering will experience immediate and substantial dilution in
pro forma net tangible book value of the Common Stock of $7.46, or 62.2%, per
share. See "Dilution."
DIVIDEND POLICY
The Company has never declared or paid cash dividends on its Common Stock
and does not anticipate paying cash dividends in the foreseeable future.
Moreover, the Company's financing covenants under certain of the Company's
current loan agreements restrict the Company's ability to pay dividends. See
"Dividend Policy."
SHARES ELIGIBLE FOR FUTURE SALE
Sales of substantial amounts of the Company's Common Stock in the public
market after this offering, or the perception that such sales may occur, could
have a material adverse effect on the market price of the Common Stock. The
Company, its officers and directors and certain stockholders, holding, in the
aggregate, 2,683,506 shares of Common Stock prior to the offering, have agreed
that they will not, directly or indirectly, offer, sell, grant any option to
purchase or otherwise dispose of any shares of Common Stock of the Company or
any securities convertible or exchangeable therefor, for a period of 180 days
after the date of this Prospectus without the prior written consent of
Robertson, Stephens & Company. Of the 3,996,006 shares of Common Stock to be
outstanding after the offering (4,258,506 shares if the Underwriters' over-
allotment option is exercised in full), the 1,750,000 shares of Common Stock
being offered hereby (2,012,500 shares if the Underwriters' over-allotment
option is exercised in full) will be freely tradeable without restriction or
further registration under the Securities Act of 1933, as amended (the
"Securities Act"); and 2,246,006 shares will become eligible for sale pursuant
to Rule 144 ("Rule 144") under the Securities Act upon expiration of the 180-
day period. Furthermore, the Company intends, 90 days after the closing of the
offering, to register 200,000 shares of Common Stock reserved for issuance to
its employees, directors and consultants upon exercise of options available
for grant under the Incentive Stock Plan and 133,867 shares of Common Stock
that may be purchased under the Option Agreements (as hereinafter defined). No
prediction can be made as to the effect, if any, that future sales of shares,
or the availability of shares for future sale, will have on the market price
of the Common Stock prevailing from time to time. See "Management--Stock
Option Plans and Agreements," "Principal and Selling Stockholders" and "Shares
Eligible for Future Sale."
ANTI-TAKEOVER EFFECT OF ARTICLES AND BYLAW PROVISIONS
The Company's Articles of Incorporation provide that up to 1,000,000 shares
of preferred stock may be issued by the Company from time to time in one or
more series. The Board of Directors is authorized to determine the rights,
preferences, privileges and restrictions granted to and imposed upon any
unissued series of preferred stock and to fix the number of shares of any
series of preferred stock and the designation of any such series, without any
vote or action by the Company's stockholders. The Board of Directors may
authorize and issue preferred stock with voting or conversion rights that
could adversely affect the voting power or other rights
12
<PAGE>
of the holders of Common Stock. In addition, the issuance of preferred stock
could have the effect of delaying, deferring or preventing a change in control
of the Company. The Company's Articles of Incorporation also allow the Board of
Directors to fix the number of directors in the Bylaws with no minimum or
maximum number of directors required. The Company's Bylaws currently provide
that the Board of Directors shall be divided into three classes of two or three
directors each, with each class elected for three-year terms expiring in
successive years. The effect of these provisions may be to delay or prevent a
tender offer or takeover attempt that a stockholder might consider to be in the
stockholder's best interest, including attempts that might result in a premium
over the market price for the shares held by the stockholders. See "Management"
and "Description of Capital Stock--Anti-Takeover Provisions."
13
<PAGE>
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 1,312,500 shares of
Common Stock offered by the Company hereby (net of underwriting discounts and
commissions and estimated offering expenses) are estimated to be approximately
$14.2 million, assuming an initial public offering price of $12.00 per share.
The Company will not receive any proceeds from the sale of shares of Common
Stock by the Selling Stockholders.
The Company intends to use the net proceeds to repay the following
outstanding bank and other indebtedness: (i) approximately $13.2 million to
reduce floor plan and other inventory revolving lines of credit payable to
commercial banks, bearing interest at a floating rate of prime plus 0.25% to
1.0%, and maturing in July and August 1996; (ii) $211,622 to repay a mortgage
note payable to an unaffiliated individual, bearing interest at 10.5% and
maturing in September 2000; and (iii) approximately $750,000 to repay
indebtedness incurred in connection with the acquisition of Red River Marine,
Inc. and Red River Marine, Inc. #2 in Arkansas in September 1995, which
consists of two notes, bearing interest at 8.75% and maturing in November 1997
and November 2002, respectively.
The Company plans to use reborrowings under its revolving lines of credit
for general corporate purposes, including working capital, expansion into new
markets and for financing of possible acquisitions. Although the Company
constantly evaluates acquisition opportunities, there currently are no
agreements with respect to any acquisitions. See "Risk Factors--Dependence
Upon Expansion" and "Business--Growth Strategy."
DIVIDEND POLICY
The Company has never declared or paid cash dividends on its Common Stock
and presently has no plans to do so. Any change in the Company's dividend
policy will be at the sole discretion of the Board of Directors and will
depend on the Company's profitability, financial condition, capital needs,
future loan covenants, general economic conditions, future prospects and other
factors deemed relevant by the Board of Directors. The Company currently
intends to retain earnings for use in the operation and expansion of the
Company's business and does not anticipate paying cash dividends in the
foreseeable future. Certain covenants contained in the Company's loan
agreements effectively restrict the payment of any dividends without the
lender's prior consent. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources."
14
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated short-term debt and
capitalization of the Company at March 31, 1996, and as adjusted to give
effect to the sale of the 1,312,500 shares of Common Stock offered by the
Company at an assumed initial public offering price of $12.00 per share after
deducting underwriting discounts and commissions and estimated offering
expenses and the application of the estimated net proceeds therefrom. See "Use
of Proceeds." This table should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Company's Consolidated Financial Statements and Notes thereto included
elsewhere herein.
<TABLE>
<CAPTION>
MARCH 31, 1996
-------------------
ACTUAL AS ADJUSTED
------- -----------
(In thousands)
<S> <C> <C>
Short-term debt, including current maturities of long-term
debt...................................................... $26,216 $12,852
======= =======
Long-term debt, less current maturities.................... $ 5,397 $ 4,561
Stockholders' equity:
Serial preferred stock, $.01 par value, 1,000,000 shares
authorized; none issued or outstanding.................. -- --
Common stock, $.01 par value, 50,000,000 shares autho-
rized, 2,683,506 issued and outstanding; 3,996,006 is-
sued and outstanding as adjusted(1)..................... 27 40
Additional paid-in capital............................... 139 14,326
Retained earnings........................................ 4,889 4,889
------- -------
Total stockholders' equity.............................. 5,055 19,255
------- -------
Total capitalization................................... $10,452 $23,652
======= =======
</TABLE>
- --------
(1) Excludes (i) an aggregate of 133,867 shares of Common Stock issuable upon
the exercise of outstanding non-statutory stock options at an exercise
price of $5.25 per share and (ii) 200,000 shares of Common Stock reserved
for issuance under the Company's Incentive Stock Plan. See "Management--
Stock Option Plans and Agreements."
15
<PAGE>
DILUTION
At March 31, 1996, the net tangible book value of the Company was
approximately $4.0 million or $1.47 per share of Common Stock. "Net tangible
book value per share" represents the amount of the Company's total tangible
assets less total liabilities, divided by the number of shares of Common Stock
outstanding.
Dilution in net tangible book value per share represents the difference
between the amount paid by purchasers of shares of Common Stock in this
offering and the net tangible book value per share of Common Stock immediately
after completion of this offering. After giving effect to the sale by the
Company of 1,312,500 shares of Common Stock offered hereby at an assumed
initial public offering price of $12.00 per share (the midpoint of the
estimated public offering price range), and after deducting estimated
underwriting discounts and commissions and offering expenses, the net tangible
book value of the Company at March 31, 1996 would have been approximately
$18.2 million or $4.54 per share. This amount represents an immediate increase
in net tangible book value of $3.07 per share of Common Stock to existing
stockholders and an immediate dilution in net tangible book value of $7.46 per
share to purchasers of Common Stock in the offering as illustrated in the
following table:
<TABLE>
<S> <C> <C>
Assumed initial public offering price per share................ $12.00
------
Net tangible book value per share at March 31, 1996........... $1.47
Increase per share attributable to the new investors.......... 3.07
-----
Net tangible book value per share after this offering.......... 4.54
------
Dilution of net tangible book value per share to new invest-
ors........................................................... $ 7.46
======
</TABLE>
The following table sets forth since March 31, 1991, the number of shares of
Common Stock purchased from the Company, the total consideration and the
average consideration per share paid by the stockholders and to be paid by new
investors purchasing shares of Common Stock in this offering assuming an
initial public offering price of $12.00 per share:
<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
----------------- ------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ------- ----------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders(1)... 123,435 8.6% $ 145,604 0.9% $ 1.17
New investors.............. 1,312,500 91.4% 15,750,000 99.1% 12.00
--------- ----- ----------- -----
Total.................... 1,435,935 100.0% $15,895,604 100.0%
========= ===== =========== =====
</TABLE>
- --------
(1) Excludes (i) an aggregate of 133,867 shares of Common Stock issuable upon
the exercise of outstanding non-statutory stock options at an exercise
price of $5.25 per share and (ii) 200,000 shares reserved for issuance
under the Company's Incentive Stock Plan. See "Management--Stock Option
Plans and Agreements." To the extent outstanding stock options are
exercised, there will be additional dilution to new investors.
16
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data presented below as of and for the
year ended December 31, 1994 and as of and for the nine months ended September
30, 1995 comprising fiscal 1995 was derived from the Company's consolidated
financial statements, which were audited by Ernst & Young LLP, independent
auditors, whose report with respect thereto, together with such consolidated
financial statements, appear elsewhere herein. The selected consolidated
financial data presented below as of and for the year ended December 31, 1993
was derived from the Company's consolidated financial statements, which were
audited by Devona Jeffery, L.L.C., independent auditors, whose report with
respect thereto, together with such consolidated financial statements, appear
elsewhere herein. The selected consolidated financial data presented below as
of and for the years ended December 31, 1991 and 1992, and as of and for the
six-month periods ended March 31, 1995 and 1996, was derived from unaudited
consolidated financial statements (which, with respect to the 1991 and 1992
fiscal years, are not presented herein). In the opinion of management of the
Company, the unaudited consolidated financial statements include all
adjustments (consisting only of normal recurring adjustments) necessary to
present fairly the financial information included herein. The information set
forth below should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the Company's
Consolidated Financial Statements and related Notes thereto appearing
elsewhere in this Prospectus.
<TABLE>
<CAPTION>
SIX MONTHS
FISCAL YEAR TWELVE MONTHS ENDED
FISCAL YEAR ENDED DECEMBER 31,(1) ENDED ENDED MARCH 31,
-------------------------------------- SEPTEMBER 30, DECEMBER 31, ----------------
1991 1992 1993 1994 1995(1) 1995(2) 1995 1996(3)
-------- -------- -------- -------- ------------- ------------- ------- -------
(In thousands, except per share and certain store data)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT
OF OPERATIONS DATA:
Net sales.............. $ 13,796 $ 18,317 $ 25,757 $ 37,225 $41,442 $45,006 $16,627 $22,017
Gross profit........... 3,241 4,193 5,946 8,734 10,306 11,254 3,774 5,571
Selling, general and
administrative
expenses.............. 2,443 3,293 4,496 6,333 6,353 7,904 3,217 4,302
Operating income....... 698 767 1,270 2,135 3,736 3,007 420 1,007
Interest expense....... 538 462 449 629 670 946 371 669
Net income............. 202 255 596 1,023 2,050 1,408 98 243
Net income per share... $ 0.08 $ 0.10 $ 0.23 $ 0.39 $ 0.76 $ 0.53 $ 0.04 $ 0.09
Weighted avg. shares
outstanding........... 2,612 2,612 2,612 2,648 2,684 2,684 2,684 2,684
STORE DATA:
Stores open at period
end................... 6 7 7 8 11 12 9 12
Average sales per
store(4).............. $ 2,747 $ 3,025 $ 3,679 $ 4,653 $ 4,886 $ 4,946 $ 1,981 $ 2,046
Percentage increase in
comparable store
sales(5).............. 4.7% 7.4% 25.6% 28.4% 5.0% 16.0% 22.6% 6.4%
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------- SEPTEMBER 30, DECEMBER 31, MARCH 31,
1991 1992 1993 1994 1995 1995 1996
----- ----- ------ ------ ------------- ------------ ---------
(In thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE
SHEET DATA:
Cash and cash
equivalents........... $ 187 $ 104 $ 139 $ 259 $ 996 $ 673 $ 665
Working capital........ 291 874 11 1,866 2,808 1,855 2,616
Total assets........... 7,489 9,727 14,088 17,434 23,357 35,590 41,898
Short-term debt,
including current
maturities of long-
term debt............. 5,119 6,798 10,608 10,977 11,443 24,776 26,216
Long-term debt less
current maturities.... 915 1,538 1,013 2,588 4,876 5,426 5,397
Stockholders' equity... 658 814 1,485 2,562 4,812 4,097 5,055
</TABLE>
- --------
(1) The Company's fiscal years ended on December 31 in 1991, 1992, 1993 and
1994, and on September 30 in 1995, pursuant to a change adopted in 1995,
resulting in a nine-month 1995 fiscal year. Except for Consolidated
Statement of Operations Data for the fiscal years ended December 31, 1993
and 1994 and September 30, 1995, all financial and store data is
unaudited.
(2) Reflects inclusion of nine-month audited financial statements for the
fiscal year ended September 30, 1995 and three-month unaudited financial
statements for the quarter ended December 31, 1995, in order to provide a
basis for comparing 12 months of operations in 1995 to prior fiscal years.
(3) The operations of Red River Marine, Inc. acquired in September 1995 are
included for the 1996 period. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and Note 4 of Notes to
Consolidated Financial Statements.
(4) Includes only those stores open for the entire preceding 12-month period.
(5) New stores or upgraded facilities are included in the comparable store
base at the beginning of the store's thirteenth complete month of
operations.
17
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The discussion in this section of the Prospectus contains forward-looking
statements that involve risks and uncertainties. The Company's actual results
could differ materially from those discussed herein. Factors that could cause
or contribute to such differences include, but are not limited to, those
discussed in this section, those discussed in "Risk Factors" and those
discussed elsewhere in this Prospectus.
OVERVIEW
Travis Boats is a leading multi-state superstore retailer of recreational
boats, motors, trailers and related marine accessories in the southern United
States. The Company, which currently operates 12 superstores under the name
Travis Boating Center in Texas, Arkansas and Louisiana, differentiates itself
from competitors by providing customers a unique superstore shopping
experience that showcases a broad selection of high quality boats, motors,
trailers and related marine accessories at firm, clearly posted low prices.
Each superstore also offers complete customer service and support, including
in-house financing programs and full-service repair facilities staffed by
factory-trained mechanics.
The Company was founded and opened its initial store in Austin, Texas in
1979. During the 1980's, the Company expanded into San Antonio, Texas with the
construction of a new store facility. The Company subsequently made
acquisitions of boat retailers operating within the Texas markets of Midland,
Dallas and Abilene. It was during this initial period of expansion that the
Company began developing the systems necessary to manage a multi-store
operation and leveraging the economies of scale associated with volume
purchasing. The Company's success in these areas led to the Travis Edition
packaging concept and the Company's pricing philosophy. Since 1991, the
Company has opened or acquired seven stores in new markets, while increasing
average sales per store from $2.7 million to $4.9 million. New store openings,
existing store sales increases and acquisitions have increased net sales to
$41.4 million for the nine-month period comprising fiscal 1995 from $13.8
million in fiscal 1991, with net income having increased to $2.1 million from
approximately $202,000 over the same period.
The Company acquired substantially all of the assets of Red River Marine,
Inc. ("Red River Marine") on September 20, 1995. Red River Marine, a leading
boat retailer in Arkansas, operates stores in the resort communities of Hot
Springs and Heber Springs. The Company also acquired substantially all of the
assets of Clay's Boats & Motors, Inc., the operator of a single store location
in New Iberia, Louisiana, on December 1, 1995. The results of operations of
Red River Marine and Clay's Boats & Motors from their respective acquisition
dates through March 31, 1996 are included in the discussion below.
The Company's business, as well as the sales demand for various types of
boats, tends to be highly seasonal. See "--Quarterly Data and Seasonality."
Effective September 30, 1995, the Company elected to change its fiscal year
end from December 31 to September 30. This change was made to establish a
fiscal year that more closely conforms to the business cycle of the Company.
The following discussion compares fiscal year 1994 to calendar year 1995,
which reflects the inclusion of nine-month audited consolidated financial
statements for the fiscal year ended September 30, 1995 and three-month
unaudited consolidated financial statements for the quarter ended December 31,
1995 in order to provide a basis for comparing 12 months of operations. See
"--Quarterly Data and Seasonality."
The following discussion and analysis of financial condition and results of
operations of the Company should be read in conjunction with the Consolidated
Financial Statements of the Company, including the related Notes thereto,
appearing elsewhere in this Prospectus.
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RESULTS OF OPERATIONS
The following table sets forth for the periods indicated certain financial
data as a percentage of net sales:
<TABLE>
<CAPTION>
FISCAL YEARS ENDED
--------------------------- SIX MONTHS
DECEMBER ENDED
31, SEPTEMBER 30, TWELVE MONTHS MARCH 31,
------------ ------------- ENDED ------------
1993 1994 1995 DECEMBER 31, 1995 1995 1996
----- ----- ------------- ----------------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Net sales............... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Costs of goods sold..... 76.9 76.5 75.1 75.0 77.3 74.7
----- ----- ----- ----- ----- -----
Gross profit............ 23.1 23.5 24.9 25.0 22.7 25.3
Selling, general and
administrative
expenses............... 17.5 17.0 15.3 17.6 19.4 19.5
Operating income........ 4.9 5.7 9.0 6.7 2.5 4.6
Interest expense........ 1.7 1.7 1.6 2.1 2.2 3.0
Other income............ 0.3 0.2 0.3 0.0 0.7 0.1
----- ----- ----- ----- ----- -----
Income before income
taxes.................. 3.5 4.2 7.7 4.9 1.0 1.7
Income tax expense...... 1.2 1.5 2.8 1.9 0.4 0.6
----- ----- ----- ----- ----- -----
Net income.............. 2.3% 2.7% 4.9% 3.1% 0.6% 1.1%
===== ===== ===== ===== ===== =====
</TABLE>
SIX MONTHS ENDED MARCH 31, 1996 COMPARED TO SIX MONTHS ENDED MARCH 31, 1995
Net sales. Net sales increased by 32.5% to $22.0 million in the six months
ended March 31, 1996 from $16.6 million in the six months ended March 31,
1995. Of this increase, $560,000 was attributable to 6.4% growth in comparable
store sales and $4.8 million resulted from sales by store locations that were
built, upgraded or acquired subsequent to March 31, 1995 and therefore were
not yet includable in comparable store sales. Net sales benefitted from
general growth in overall store sales volume, the Company's participation in
additional season-opening boat shows and a new sales program featuring weekend
sales shows in the parking lots of local Sam's Clubs. The Sam's program was
initiated in late 1995.
Gross profit. Gross profit increased by 47.4% to $5.6 million in the six
months ended March 31, 1996 from $3.8 million in the six months ended March
31, 1995. Gross profit as a percent of sales increased to 25.3% in the six
months ended March 31, 1996 from 22.7% in the six months ended March 31, 1995.
Increased net sales attributable to F&I Products contributed $951,000, or
17.1%, of total gross profit for the six months ended March 31, 1996, as
compared to $408,000, or 10.7%, of total gross profit for the six months ended
March 31, 1995. This improvement was primarily due to higher net spreads
achieved in the placement of customer financing, as well as overall increases
in the percentage of customers buying these products (which is referred to
herein as "sell-through"). Net sales attributable to F&I Products are reported
on a net basis (with associated costs included in selling, general and
administrative expenses), and therefore all of such sales contribute directly
to the Company's gross profit.
Selling, general and administrative expenses. Selling, general and
administrative expenses increased by 34.4% to $4.3 million for the six months
ended March 31, 1996 from $3.2 million for the six months ended March 31,
1995. Selling, general and administrative expenses as a percent of net sales
increased to 19.5% for the six months ended March 31, 1996 from 19.4% for the
six months ended March 31, 1995. The increase in selling, general and
administrative expenses, both in terms of dollars and as a percent of net
sales, was primarily attributable to increased expenses associated with the
operation of a larger store network, the Company's participation in additional
season-opening boat shows and the expenses related to the implementation of
the Company's management information system in three stores acquired in the
latter part of 1995. Selling, general and administrative expenses as a percent
of net sales are typically at the highest levels during the quarters ended
December 31 and March 31 because of the Company's fixed overhead expenses and
the seasonal nature of its annual sales. See "--Quarterly Data and
Seasonality."
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Interest expense. Interest expense increased by 80.3% to $669,000 in the six
months ended March 31, 1996 from $371,000 in the six months ended March 31,
1995. This resulted in an increase in interest expense as a percent of net
sales to 3.0% in the 1996 period from 2.2% in the 1995 period. The increase
was primarily the result of the additional debt incurred in the acquisition of
Red River Marine as well as higher balances on the Company's floor plan lines
of credit necessary to support inventory requirements for additional stores
and projected increases in net sales.
Net income. Net income increased by 148% to $243,000 in the six months ended
March 31, 1996 from $98,000 in the six months ended March 31, 1995. Net income
as a percent of sales increased to 1.1% from 0.6% during the same periods. The
Company generally experiences lower net income as a percent of net sales
during the first six months of its fiscal year due to the seasonal nature of
its annual sales. See "--Quarterly Data and Seasonality."
CALENDAR YEAR 1995 COMPARED TO FISCAL 1994
Net sales. Net sales increased by 21.0% to $45.0 million in calendar year
1995 from $37.2 million in fiscal 1994. Of this increase, $4.4 million was
attributable to 16.0% growth in comparable store sales in calendar 1995 and
$3.4 million of this increase was due to the operations of stores that were
built, upgraded or acquired in 1995 and therefore were not yet includable in
comparable store sales.
The increase in comparable store sales was primarily the result of the
Company's introduction of several new Travis Edition boat lines appealing to
customer groups previously not successfully captured by the Company. These new
boat lines included the Viper line of high performance bass boats, the
Aquasport line of off-shore fishing boats and the Sea Ark line of aluminum
fishing boats. These lines collectively accounted for $2.7 million of calendar
1995 net sales.
Notwithstanding these increases, the rate of increase in comparable store
sales in 1995 reflected diminished growth from the rates of increase for
fiscal 1994 and 1993. Management attributes the substantial growth in
comparable store sales during fiscal 1994 and 1993 primarily to the small
number of stores includable in the comparable store base and the significant
increase in the number of models of Travis Edition packages made available for
sale resulting from the Company having entered into sales agreements with
additional new manufacturers and through the development of additional models
with existing manufacturers. While the Company expects comparable store sales
growth to continue due to planned enhancements in product lines, this growth
is not expected to continue at historical levels.
Gross profit. Gross profit increased by 29.9% to $11.3 million in calendar
1995 from $8.7 million in fiscal 1994. This increase was primarily due to the
increase in net sales and because gross profit as a percent of net sales
increased to 25.0% from 23.5% during the period.
Gross profit attributable to sales of F&I Products was $1.6 million, or
14.2%, of total gross profit in calendar 1995 compared to $1.1 million, or
12.6%, of total gross profit in fiscal 1994. This increase was primarily due
to increased revenues from the origination and placement of customer
financing, partially caused by selected lenders offering more beneficial
programs.
Selling, general and administrative expenses. Selling, general and
administrative expenses increased by approximately 25.4% to $7.9 million in
calendar 1995 from $6.3 million in fiscal 1994. Selling, general and
administrative expenses as a percent of net sales increased to 17.6% in
calendar 1995 from 17.0% in fiscal 1994. The increase, both in terms of
dollars and as a percent of net sales, was primarily the result of the
increased variable expenses related to the net sales increase and, to a lesser
extent, those expenses attributable to integrating the three recently acquired
stores. During calendar 1995, corporate overhead expenses and store management
salaries accounted for approximately $1.4 million of total selling, general
and administrative expenses compared to approximately $1.1 million for fiscal
1994. The majority of Travis Boats' work force is compensated by commission;
accordingly, increased sales volume leads to higher commissions and payroll
taxes. Due to the
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<PAGE>
significant increase in net sales, however, gross wages as a percent of net
sales declined to approximately 10.0% of net sales in calendar 1995 from
approximately 11.4% of net sales in fiscal 1994.
Interest expense. Interest expense increased by approximately 50.4% to
$946,000 in calendar 1995 from $629,000 in fiscal 1994. This resulted in an
increase of interest expense as a percent of net sales to 2.1% in calendar
1995 from 1.7% in fiscal 1994. The increase in interest expense was primarily
the result of higher balances outstanding on the Company's floor plan lines of
credit to support the increased sales levels and higher effective interest
rates during calendar 1995. Interest expense was also affected by the
incremental interest expense associated with the indebtedness incurred in
connection with the acquisition of the new stores in Arkansas and Louisiana.
Net income. Net income increased by 40.0% to $1.4 million in calendar 1995
from $1.0 million in fiscal 1994. This increase was due primarily to the
increased sales volume, greater sell-through of F&I Products and improved
leverage of general and administrative expenses. The Company's net income as a
percent of net sales increased to 3.1% in calendar 1995 from 2.7% in fiscal
1994.
FISCAL 1994 COMPARED TO FISCAL 1993
Net sales. Net sales increased by 44.2% to $37.2 million in fiscal 1994 from
$25.8 million in fiscal 1993. Of this increase, $5.2 million was attributable
to 28.4% growth in comparable store sales and $6.2 million was due to the
operations of the store locations that were built, upgraded or acquired during
fiscal 1994 and therefore were not yet includable in comparable store sales.
The increase in comparable store sales was primarily the result of the
substantial sales growth in boat lines that the Company first introduced as
Travis Editions in fiscal 1993. The Sprint line of fishing boats and the
Larson line of family runabouts were able to gain rapid customer acceptance
with combined net sales growth of $4.7 million during fiscal 1994.
Gross profit. Gross profit increased by 47.5% to $8.7 million in fiscal 1994
from $5.9 million in fiscal 1993. This increase was primarily due to the
increase in net sales and the origination and placement of customer financing.
Gross profit attributable to sales of F&I Products was $1.1 million, or 12.6%,
of total gross profit in 1994, compared to $717,000, or 12.2%, of total gross
profit in 1993. In fiscal 1994, the Company improved training programs and
sell-through goals for F&I Products sales personnel. Gross profit as a percent
of sales increased to 23.5% in fiscal 1994 from 23.1% in fiscal 1993.
Selling, general and administrative expenses. Selling, general and
administrative expenses increased by 40.0% to $6.3 million in fiscal 1994 from
$4.5 million in fiscal 1993. Selling, general and administrative expenses as a
percent of net sales were 17.0% in fiscal 1994 as compared to 17.5% in fiscal
1993. The decrease in selling, general and administrative expenses as a
percent of net sales from fiscal 1993 to fiscal 1994 was primarily due to the
significant increase in net sales relative to the level of fixed selling,
general and administrative expenses.
Interest expense. Interest expense increased by 40.1% to $629,000 in fiscal
1994 from $449,000 in fiscal 1993. Interest expense as a percent of net sales
was 1.7% during both periods.
Net income. Net income increased by approximately 67.8% to $1.0 million in
fiscal 1994 from $596,000 in fiscal 1993. Net income as a percent of sales
increased to 2.7% in fiscal 1994 from 2.3% in fiscal 1993. This increase was
due primarily to increased sales volume, greater sell-through of F&I Products
and better leverage of general and administrative expenses.
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QUARTERLY DATA AND SEASONALITY
The following table sets forth certain unaudited quarterly financial data
for each of the Company's last nine quarters and such data expressed as a
percentage of the Company's net sales for the respective quarters. The
information has been derived from unaudited financial statements that, in the
opinion of management, reflect all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of such quarterly
information. The operating results for any quarter are not necessarily
indicative of the results to be expected for any future period.
<TABLE>
<CAPTION>
QUARTER ENDED
-----------------------------------------------------------------------------------
FISCAL YEAR 1994 FISCAL YEAR 1995 FISCAL YEAR 1996
----------------------------------- --------------------------- -----------------
MARCH 31 JUNE 30 SEPT. 30 DEC. 31 MARCH 31 JUNE 30 SEPT. 30 DEC. 31 MARCH 31
-------- ------- -------- ------- -------- ------- -------- ------- --------
(In thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales............... $10,250 $14,908 $8,892 $3,175 $13,452 $17,048 $10,942 $3,564 $18,453
Gross profit............ 2,380 3,626 2,220 508 3,266 4,300 2,740 948 4,623
Selling, general and
administrative
expenses............... 1,560 2,020 1,580 1,173 2,044 2,347 1,962 1,551 2,751
Operating income
(loss)................. 753 1,540 574 (732) 1,152 1,883 701 (729) 1,736
Interest expense........ 144 145 166 174 196 265 209 276 393
Net income (loss)....... 404 915 268 (564) 662 1,046 342 (642) 885
<CAPTION>
AS A PERCENTAGE OF NET SALES
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales............... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Gross profit............ 23.2 24.3 25.0 16.0 24.3 25.2 25.0 26.6 25.1
Selling, general and
administrative
expenses............... 15.2 13.5 17.8 36.9 15.2 13.8 17.9 43.5 14.9
Operating income
(loss)................. 7.3 10.3 6.5 (23.1) 8.6 11.0 6.4 (20.5) 9.4
Interest expense........ 1.4 1.0 1.9 5.5 1.5 1.6 1.9 7.7 2.1
Net income (loss)....... 3.9 6.1 3.0 (17.8) 4.9 6.1 3.1 (17.9) 4.8
</TABLE>
The Company's business, as well as the sales demand for various types of
boats, tends to be highly seasonal. Strong sales typically begin in January
with the onset of the public boat and recreation shows, and continue through
July. Over the previous five-year period, the average annual net sales for the
quarterly periods ended March 31 and June 30 represented in excess of 27% and
37%, respectively, of the Company's annual net sales. With regard to net
income, the Company historically generates profits in three of its fiscal
quarters and experiences operating losses in the quarter ended December 31 due
to a broad seasonal slowdown in sales. During the quarter ended September 30,
inventory reaches its lowest levels and accumulated cash reserves reach the
highest levels. During the quarter ended December 31, the Company generally
builds inventory levels in preparation for the upcoming selling season which
begins with boat and recreation shows occurring in January and February in
certain market areas in which the Company conducts business. Travis Boats'
operating results would be materially and adversely affected if net sales were
to fall significantly below historical levels during the months of January
through June.
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The Company's business is also significantly affected by weather patterns.
Weather conditions that are unseasonable or unusual may adversely affect the
Company's results of operations. For example, drought conditions or merely
reduced rainfall levels, as well as excessive rain, may affect the Company's
sale of boating packages and related products and accessories. While
management believes that the Company's quarterly net sales will continue to be
impacted by seasonality, quarterly results may become less susceptible to
certain regional weather conditions as expansion occurs throughout the
southern United States. See "Risk Factors--Impact of Seasonality and Weather
on Operations."
Quarterly results may fluctuate as a result of the expenses associated with
new store openings or acquisitions. The Company attempts to concentrate
expansion during the seasonal slowdown generally occurring in the quarter
ending December 31. Stores opened during this time period will generate
additional operating losses, at a minimum, until the second quarter.
Accordingly, the results for any quarterly period may not be indicative of the
expected results for any other quarterly period.
LIQUIDITY AND CAPITAL RESOURCES
The Company's short-term cash needs are primarily for working capital to
support operations including inventory requirements, off-season liquidity and
store expansion. These short-term cash needs have historically been financed
with cash from operations and borrowings under the Company's credit
facilities. At March 31, 1996, the Company had working capital of $2.6
million, including $4.5 million in accounts receivable (primarily contracts in
transit from sales) and $28.7 million in inventories, offset by approximately
$736,000 of accounts payable, $24.2 million outstanding under floor plan lines
of credit, approximately $650,000 under open lines of credit and $1.3 million
in other short-term indebtedness including current maturities of long-term
debt. Contracts in transit are amounts receivable from a customer's financial
institution related to that customer's purchase of a boat. As of March 31,
1996, the aggregate maximum borrowing limits under floor plan and working
capital lines of credit were approximately $38.6 million and $850,000,
respectively.
Operating activities provided cash flows of $2.7 million for fiscal 1995 due
primarily to net income of $2.1 million and changes in working capital. For
the six months ended March 31, 1996, operating activities utilized cash flows
of $14.4 million due primarily to increases in inventories and accounts
receivable of $14.3 million and $3.4 million, respectively, offset partially
by unearned revenue of $2.8 million relating to a volume purchase from a
manufacturer (which is not expected to occur in future periods). Financing
activities provided $15.2 million of cash flows from increased borrowings.
Increases in inventories have been financed with borrowings under the
Company's floor plan and working capital lines of credit. These credit lines
are collateralized by security interests in specific inventories, accounts
receivable and contracts in transit. The floor plan and working capital lines
with commercial banks are generally annually renewable and bear interest at
floating rates ranging from .25% to 1% above the bank's prime rate. The floor
plan lines of credit maintained with finance companies generally have no
stated maturity and utilize subsidies from manufacturers to provide for
certain interest free periods each calendar year (usually August through
April). Certain lines of credit are governed by loan agreements containing
certain financial covenants concerning, among others, minimum tangible net
worth, leverage ratio, debt service coverage and maximum annual capital
expenditures. As of March 31, 1996, management believes the Company was in
compliance with the terms and conditions of its loan agreements.
Merchandise inventories were $13.5 million and $14.3 million as of December
31, 1994 and September 30, 1995, respectively, and $28.7 million as of March
31, 1996. The significant increase in merchandise inventories from September
30, 1995 to March 31, 1996 was attributable to a volume purchase from a
manufacturer that was financed through an interest-free program. Accounts
receivable increased from approximately $1.0 million at the end of fiscal 1995
to $4.5 million as of March 31, 1996. This amount represents primarily
contracts in transit generated from sales. The increase was due to the higher
level of sales in the second fiscal quarter. Costs in excess of net assets
acquired increased to $1.1 million in fiscal 1995 due to the acquisition of
Red River Marine in September 1995.
The Company had net capital expenditures of $1.1 million in fiscal 1993 and
approximately $937,000 in fiscal 1994, primarily related to the construction
of new superstore boating centers in Austin, Texas and
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Lewisville (Dallas), Texas. During fiscal 1995, the Company purchased the
facility previously leased in Baton Rouge, Louisiana for approximately
$590,000, completed construction of the superstore in Lewisville (Dallas),
Texas and acquired substantially all of the assets of Red River Marine for
approximately $2.5 million. These capital expenditures were substantially
financed with long-term debt provided by commercial banks and individuals at
fixed interest rates.
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BUSINESS
GENERAL
Background. Travis Boats is a leading multi-state superstore retailer of
recreational boats, motors, trailers and related marine accessories in the
southern United States. The Company currently operates 12 superstores in
Texas, Arkansas and Louisiana under the name Travis Boating Center. Founded in
1979 in Austin, Texas, Travis Boats differentiates itself from competitors by
providing customers a unique superstore shopping experience that showcases a
broad selection of high quality boats, motors, trailers and marine products at
firm, clearly posted low prices. Each superstore also provides in-house
financing programs and full-service repair facilities staffed by factory-
trained mechanics.
The Company sells approximately 40 different models of brand-name fishing,
water-skiing and general recreational boats, along with motors, trailers,
accessories and related equipment. Personal watercraft, off-shore fishing
boats and cabin cruisers are also offered for sale at selected store
locations. Boats sold generally range in size from 16 to 23 feet at prices
ranging from $7,500 to $23,000 with an average boat purchase price of
approximately $12,000. The Company custom designs and pre-packages
combinations of popular brand-name boats, such as Aquasport, Cajun and Larson,
with Johnson outboard and other motors, trailers and numerous accessories,
under its proprietary Travis Edition product line. These signature Travis
Edition packages, which account for the vast majority of total new boat sales,
have been designed and developed in coordination with the manufacturers and
often include distinguishing features and accessories that have historically
been unavailable to, or listed as optional by, many competitors. These factors
enable the Company to provide the customer with an exceptional product that is
conveniently packaged for immediate enjoyment and competitively priced.
Unit level economics. The Company's new store prototype costs approximately
$825,000, excluding the cost of the land, and has 20,000 square feet of
enclosed space. Initial pre-opening expenses of approximately $50,000 are
typically required for newly built, upgraded or acquired stores. Initial
inventories total approximately $2.1 million, substantially all of which are
financed by manufacturers' programs or through floor plan financing
arrangements and typically result in no net additional capital investment by
the Company. The Company's new store model is expected to generate $5.0
million in net sales and produce an operating contribution to the Company of
approximately $250,000, resulting in a return on invested capital of
approximately 30%. Existing stores operational during calendar year 1995
experienced sales ranging from $2.6 million to $7.9 million. Average existing
store sales were $4.9 million with an average operating contribution of
$286,000 in calendar 1995.
New locations established through acquisition typically involve a lower cash
investment, yet generate similar sales and store contributions. Accordingly,
acquisitions have historically produced substantially greater returns on
invested capital than new store construction. The Company's expansion strategy
is based primarily on acquisitions rather than new store construction,
although it will build new stores if judged to be the most efficient means of
entering a market. Because of the fragmented nature of the industry, the
Company has numerous opportunities to acquire existing facilities and
businesses and believes it can continue to make such acquisitions on favorable
financial terms.
RECREATIONAL BOATING INDUSTRY
The retail recreational boating industry represents a large and growing
industry in the United States as evidenced by the following data reported by
the National Marine Manufacturers Association (the "NMMA"):
.76.8 million people participated in recreational boating in 1995
.Total consumer expenditures related to recreational boating in 1995 were
approximately $17.3 billion
.Total boat and motor sales in 1995 were approximately $7.7 billion
. Estimated unit purchases of outboard, inboard/outboard and stern drive
pleasure boats increased 20.8% from 279,000 units in 1991 to 337,000
units in 1995
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Demographics continue to be a key aspect of growth. The 35-54 age group,
which is the fastest growing segment of the U.S. population, is the largest
age category purchasing boats. This age group is projected to increase at a
2.5% annual rate through the end of the century, while other age categories
are projected to remain flat. Although these individuals account for 36% of
the U.S. population over age 16, they account for over 50% of discretionary
income.
The Company's management believes that the southern United States is a
particularly strong market for its products due to mild weather conditions,
extended fishing and recreational seasons and accessibility to the Gulf of
Mexico and numerous lakes, rivers, estuaries and wetlands. Boat registrations
in these markets reflect sales of products in average price ranges similar to
those offered by the Company, including outboard powered recreational boat
packages with average retail values of approximately $12,000 and
inboard/outboard runabouts with average retail values of approximately
$21,000. As reported by the NMMA, the Company's targeted 17-state market
accounted for over 57% of coastal shoreline in the continental U.S. and 43% of
inland water in square miles. Furthermore, on average this target market is
characterized by higher rates of boat ownership, with one boat owner for every
22 individuals versus the U.S. average of one for every 31 individuals,
representing 40.6% of total recreational boats registered in the U.S.
BUSINESS STRATEGY
Management of the Company believes it is the first to have developed a
multi-state, chain superstore merchandising strategy in the recreational
boating business. The Company's objective is to become the dominant retailer
of recreational boats, motors, trailers and marine accessories in the southern
United States. Management's merchandising strategy is based on providing
customers with a comprehensive selection of quality, brand name boats and
boating products in a comfortable superstore environment. The Company intends
to continue to build brand identity by placing the Travis Edition name on
complete boating packages. Travis Boats has developed and implemented a
business strategy designed to increase its market penetration within both
existing and new market areas through a variety of advertising and promotional
events. The Company intends to emphasize the following key elements of its
business strategy:
Travis Boating Center superstore. Travis Boating Center superstores have a
distinctive and stylish trade dress accented with deep blue awnings, a
nautical neon building decoration, expansive glass storefronts and brightly
lit interiors. The stores range in size from 6,000 to 33,200 square feet and
average approximately 21,000 square feet. Each superstore presents customers
with a broad array of boats and over 9,000 parts and accessories in a clean,
well-stocked, air-conditioned shopping environment. All boats are typically
displayed fully rigged with motor, trailer and a complete accessory package,
giving a "ready to take home" impression. Professionally-trained mechanics
operate service bays, providing customers with quality and reliable
maintenance and repair service.
Travis Edition concept. The Company uses extensive market research, combined
with the design resources of its manufacturers, to develop custom Travis
Edition boating packages. The Company's significant purchasing power and
consequent ability to coordinate designs with manufacturers have enabled the
Company to obtain products directly from the factory at the lowest prices and
with favorable delivery schedules. The Company can also add certain additional
features after receipt of the product to enhance the Company's Travis Edition
packages. Each Travis Edition is a complete, full-feature package, including
the boat, motor, trailer and numerous additional accessories and design
features often not found on competitors' products, thus providing customers
with superior value. In addition, Travis Edition boats are identified by the
Company's attractive private label logo as well as the respective
manufacturer's logo.
Unlike most recreational boat dealers, the Company establishes firm prices
on its Travis Edition packages and generally maintains such prices for an
entire season. Prices are advertised and clearly posted so that the customer
receives the same price at any Travis Boating Center. The Company's selling
philosophy eliminates
26
<PAGE>
customer anxiety associated with bargaining or negotiation and results in a
price at or below prices generally available from competitors. The Company
believes this pricing strategy and low-pressure sales style provide the
customer with the comfort and confidence of having received a better boat with
more features at a lower price. In the Company's view, this approach has
promoted good customer relationships and enhanced the Company's reputation in
the industry as a leading provider of quality and value.
Advertising and promotion. Due to the Company's relative size, the Company
has a competitive advantage within its industry by being able to conduct an
organized and systematic advertising and marketing effort. The Company
promotes its signature Travis Edition boat packages through full-color
informational brochures and through professionally developed advertising used
in magazine, newspaper, television and radio campaigns, targeting customers on
a Company-wide, state-wide or local basis. In certain magazines, the Company
purchases gate-fold cover, multi-page advertising space to promote its Travis
Edition product line in a catalog format. To enhance statewide and regional
exposure, the Company also actively sponsors numerous professional fishing
guides and fishing tournaments. These advertising techniques have permitted
the Company to attain mass market exposure that management believes would not
be cost effective to a boat dealer operating a single or small store network.
Substantial financial assistance in certain forms of general advertising is
received from manufacturers.
The Company also participates in boat shows, typically held in January and
February, in each of its markets and in certain markets of close proximity.
These shows are normally held at convention centers, with all area dealers
purchasing space in which to participate. Boat shows and other offsite
promotions generate a significant amount of interest in products and often
have an immediate impact on sales at a nominal incremental cost. Although
total boat show sales are difficult to assess, management attributes a
significant portion of second quarter net sales to such shows.
The Company implements numerous in-store promotions, including open houses
and seminars featuring experts discussing topics ranging from boating safety
to the latest competitive kneeboarding techniques. The Company also
participates in offsite sales promotions such as boat shows, in-the-water
sales events on area lakes and various types of parking lot shows in
conjunction with large retailers, including Sam's Clubs. In certain markets,
the Company holds "Demo Days," events that showcase boats in the water and
allow customers actually to operate and test-drive a variety of boats before
selecting the package of their choice.
GROWTH STRATEGY
The Company believes it is the first organization in the retail recreational
boat industry to operate a multi-state retail store network in an effort to
realize economies of scale from consolidation in this fragmented industry.
Continued expansion into new states adds to the Company's geographic
diversity, lessening the impact of economic cycles or weather patterns in
individual regions. Furthermore, expansion into several contiguous markets
enables the Company to readily shift individual boats from store-to-store to
fill customer orders when necessary. Management has developed databases to
forecast market trends by studying information obtained from state and local
government agencies and manufacturers and from discussions with other
retailers and employees of the Company.
The Company's superstore concept, Travis Edition packaging and pricing
practices, combined with the Company's enhanced internal systems and
management controls, establish a framework for continued expansion in multiple
states. Since October 1991, Travis Boats has opened or acquired seven stores
in new markets, and its current expansion strategy focuses beyond its existing
presence in Texas, Arkansas and Louisiana, into most other southern states. At
this time the Company has targeted Alabama, Arizona, Florida, Georgia, Kansas,
Kentucky, Mississippi, Missouri, New Mexico, North Carolina, Oklahoma, South
Carolina, Tennessee and Virginia as potential new-entry markets. The close
proximity of current and anticipated new markets facilitates operating and
distribution efficiencies within the Company's overall business.
27
<PAGE>
To further achieve its goal of becoming the dominant retailer of
recreational boats throughout the southern United States, the Company intends
to continue establishing new Travis Boating Center locations by (i) acquiring
existing boat retailers, (ii) acquiring and converting compatible facilities
and (iii) building new stores. The factors considered by the Company in
assessing a potential acquisition are the quality of the market, the
attractiveness of the location, price and the Company's ability to retain
qualified employees. In identifying new locations for expansion, the primary
focus of the Company is a prospective market's historic and projected level of
new boat registrations. The Company prefers that the boat retailer liquidate
inventory prior to the effective date of the acquisition, allowing the Company
to control inventory quality and immediately to merchandise its Travis Edition
boating packages and institute its value pricing philosophy.
The Company generally seeks expansion in new markets where the establishment
of a facility can immediately and substantially enhance the Company's market
share as well as its name recognition. It has accomplished this through the
development of its prototype superstore boating center. In strategic market
areas, the Company has built new facilities that have set the standard for its
image and operations. The Company has also acquired existing retailers and
facilities which it has converted to Company specifications. While newly built
stores provide design and location flexibility with attractive returns, the
Company's emphasis is to expand through the acquisition of existing
facilities, which yield higher returns on capital than can be achieved through
new store construction. See "Risk Factors--Dependence Upon Expansion."
OPERATIONS
Purchasing. The Company is the largest volume buyer in the United States of
Johnson outboard motors from Outboard Marine Corporation ("OMC") and is the
largest domestic volume buyer of boats from substantially all of the boat
manufacturers it represents. As a result, the Company has significant access
to the manufacturers and substantial input into the design process for the new
boats that are introduced to the market each year by such manufacturers. In
addition, the Company has designed and developed, in coordination with its
manufacturers, signature Travis Edition boating packages which account for the
vast majority of its total new boat sales. The Company's purchasing power
allows it to purchase boats that are pre-rigged for the Company's Travis
Edition lines. Approximately 20.1% of the Company's net purchases in fiscal
1995 were from a single boat supplier.
The Company typically deals with each of its manufacturers pursuant to an
annually renewable, non-exclusive dealer agreement which does not contain any
contractual provisions concerning product pricing or purchasing levels.
Pricing is generally established on an annual basis, but may be changed at the
manufacturer's sole discretion. The Company's agreement with OMC, unlike its
other dealer agreements, is multi-year in nature. This agreement, which is in
the first of three years, sets forth an established discount level from the
then prevailing OMC dealer net price over the entire term of the agreement.
This dealer agreement may be canceled by either party if volume of product
purchased or available to be purchased is not maintained at pre-established
levels. OMC supplied products that represented approximately $11.0 million, or
34.5%, of the Company's net purchases during fiscal 1995.
Pursuant to its arrangements with certain manufacturers, the Company's right
to display some product lines in certain markets may be restricted. While the
Company has received permission to sell Johnson motors and various boats in
its immediate expansion markets, it has not received such permission in its
broader target market. The Company does not believe that these restrictions
imposed by manufacturers will materially affect the Company's expansion plans.
See "Risk Factors--Limitations to Market Entry."
Store operations and management. Each Travis Boating Center superstore is
managed by a general manager who oversees the operations, personnel and
financial performance of the individual store, subject to the direction of the
Company's corporate office. To date, the Company has been successful in
recruiting and retaining general managers, with only one general manager
resigning since 1990. To increase loyalty and service, the Company encourages
general managers to purchase stock in the Company beginning with the
completion of their first year of service. The store is also typically staffed
by approximately three sales representatives, one
28
<PAGE>
finance manager, two parts employees, eight service related and make ready
employees and an office manager. Each store maintains an individual point of
sale and inventory tracking system which can be accessed through modems by
other stores and by the Company's corporate office. The Company is currently
replacing its inventory management and financial accounting system with an
updated, fully-integrated system in each of its stores. As of the date of this
Prospectus, the new system is operating in nine stores, including the
Company's Austin headquarters, with plans for the system to be fully
operational in all stores in fiscal 1997. The sales staff of each store is
compensated on a commission basis. Store managers are salaried employees with
incentive bonuses based on their store's performance. Parts managers and
service managers are compensated primarily on a salary basis with commission
incentives. In the past, the Company has not laid off employees during the
slow winter months.
Customer service and support. The Company strives to differentiate itself
further from competitors by providing superior customer service and support
before, during and after the sale. The sales process begins with the Company's
ability to offer customers a turn-key purchasing process by offering
attractive lender financing packages, extended service agreements, credit
life, accidental and health insurance and casualty insurance. The Company
thoroughly instructs customers about the operation of their boats and,
whenever practical, accompanies the customer to an area lake for a hands-on
demonstration. Subsequent to the delivery, customers are encouraged to bring
in their boats for regular service and maintenance by the Company's factory-
trained service personnel.
Management information systems. The Company has developed and maintained
management information systems and databases to monitor market conditions and
assess product and expansion strategies. Information received from state and
regulatory agencies, manufacturers and industry contacts allows the Company to
determine market share statistics and gross volume sales numbers on its
products as well as those of competitors. This information impacts ongoing
operations by allowing the Company to remain abreast of major or subtle
changes within the market and allows management to react accordingly by
realigning product lines and by adding new product lines and models.
The Company also utilizes the information assimilated from its management
information systems to determine and monitor the appropriate inventory level
at each store location throughout the selling season. When selecting new
markets for entry, the Company also undertakes a methodical market analysis
beginning with extensive on site observation, discussions with manufacturers
currently serving the area, and often discussions with local competitive
dealers. Further market research is conducted from a review of demographic and
other historical data on the number and type of boats annually registered or
newly licensed with appropriate local and state agencies. The Company has
developed databases and programs that permit the prompt retrieval of data used
by management to evaluate the Company's expansion decisions.
Distribution and inventory management. The Company maintains a close
geographic proximity between stores that it operates and stores that it plans
to open. This allows for timely and cost-effective sharing of managerial and
sales responsibilities and the transfer of individual boats among stores to
fill customer orders. The Company strives to locate new stores within a 250
mile radius of an existing store to facilitate the prompt transfer of
inventory that otherwise might take three to four weeks to order from the
manufacturer. This reduces delays in delivery and helps the Company maximize
inventory turnover. It also assists in controlling the potential of overstock
or understock situations. The Company plans to maintain a similar geographic
radius in future expansion plans, although there may be instances in which it
will not be advantageous to do so.
Floor plan financing. The Company acquires a substantial portion of its
inventory through floor plan financing agreements. Inventory is generally
purchased under floor plan lines of credit (secured by such inventory)
maintained with third party finance companies and/or commercial banks,
depending upon the type of product purchased. The finance companies maintain
relationships with certain manufacturers that allow the Company to obtain
several months of interest-free financing, generally from August of one year
through April of the following year. Management believes that these financing
arrangements are standard within the industry. As of March 31, 1996, the
Company and its subsidiaries owed an aggregate of $24.2 million pursuant to
the floor
29
<PAGE>
plan financing agreements. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources."
Sales of used boats. The Company's primary sales focus is on the retail sale
of new boat, motor and trailer packages. To facilitate new product sales, the
Company will accept a prospective customer's used boat for sale on consignment
or as a trade-in. In evaluating trades, the Company generally offers trade
allowances at or below the published wholesale cost to allow for the immediate
sale of the used product to certain wholesalers with which it regularly
conducts business. Accordingly, used product inventory and sales are typically
insignificant in relation to those of new products.
Employees. As of March 31, 1996, the Company's staff consisted of 250
employees, 241 of whom are full time. The full-time employees include 12 in
store level management and 18 in corporate administration and management. The
Company is not a party to any collective bargaining agreements and is not
aware of any efforts to unionize its employees. The Company considers its
relations with its employees to be good.
Trademarks and service marks. The Company does not hold any registered trade
or service marks at this time, but has trademark applications pending with the
U.S. Patent and Trademark Office for the names "Travis Boating Center" and
"Travis Edition," for its corporate logo and for the overall appearance and
trade dress of its Travis Boating Centers. There can be no assurance that any
of these applications will be granted. However, based on a number of years of
use, the Company believes it has common law rights to these marks at least in
its current market areas.
SEASONALITY
The Company's business, as well as the entire recreational boating industry,
is highly seasonal. Strong sales typically begin in January with the onset of
the public boat and recreation shows, and continue through July. Over the
previous five-year period, the average annual net sales for the quarters ended
March 31 and June 30 represented in excess of 27% and 37%, respectively, of
the Company's annual net sales. The Company generally realizes significantly
lower sales in the quarterly period ending December 31, resulting in operating
losses during that quarter. The Company uses seasonality and its strong
capital position to take product delivery during the manufacturers' slow
seasons and to gain pricing advantages and better product availability during
the selling season.
The Company's business is also significantly affected by weather patterns
which may adversely affect the Company's results of operations. For example,
drought conditions or merely reduced rainfall levels, as well as excessive
rain, may force area lakes to close or render boating dangerous or
inconvenient, thereby curtailing customer demand for the Company's products.
In addition, unseasonably cool weather and prolonged winter conditions may
lead to a shorter selling season in certain locations. Although the Company's
geographic expansion has reduced, and is expected to continue to reduce, the
overall impact to the Company of adverse weather conditions in any one market
area, such conditions will continue to represent potential, material adverse
risks to the Company and its future financial performance. See "Risk Factors--
Impact of Seasonality and Weather on Operations."
ENVIRONMENTAL AND OTHER REGULATORY ISSUES
On October 31, 1994, the U.S. Environmental Protection Agency (the "EPA")
announced proposed emissions regulations for outboard marine engines. The
proposed regulations would require a 75% average reduction in hydrocarbon
emissions for outboard motors and set standards for carbon monoxide and
nitrogen oxide emissions as well. Under the proposed regulations,
manufacturers would begin phasing in low emission models in 1998 and have nine
years to achieve full compliance. Costs of these new models, if materially
different than previous comparable horsepower models, and/or the
manufacturer's inability to comply with the EPA requirements, could have a
material adverse effect on the Company's business, financial condition and
results of operations. As of the date of this Prospectus, the EPA has not yet
finalized these regulations. The Company
30
<PAGE>
believes that its outboard motor manufacturer currently meets all common
standards and has proprietary or licensed technology to meet or exceed EPA
standards with a new line of motors.
The Company, in the ordinary course of its business, is required to dispose
of certain waste products that are regulated by state or federal agencies.
These products include waste motor oil, tires, batteries and certain paints.
It is the Company's policy to use appropriately licensed waste disposal firms
to handle this refuse. If there were improper disposal of these products, it
could result in potential liability to the Company. Although the Company does
not own or operate any underground petroleum storage tanks, it currently
maintains one above-ground tank which is subject to registration, testing and
governmental regulation.
Additionally, certain states have required or are considering requiring a
license in order to operate a recreational boat. While the licensing
requirements are not expected to be unduly restrictive, such regulations may
discourage potential first-time buyers thereby limiting future sales. The
adoption of such licensing regulations could have a material adverse effect on
the Company's business. See "Risk Factors--Impact of Environmental and Other
Regulatory Issues."
PRODUCT LIABILITY
Products sold or serviced by the Company may expose it to potential
liabilities for personal injury or property damage claims relating to the use
of those products. Additionally, as a result of the Company's activities in
custom packaging its Travis Edition lines, the Company may be included as a
defendant in product liability claims relating to defects in manufacture or
design. Historically, the resolution of product liability claims has not
materially affected the Company's business. The Company generally requires
manufacturers from which it purchases products to supply proof of product
liability insurance, and the Company maintains third-party product liability
insurance, which it believes to be adequate. However, there can be no
assurance that the Company will not experience legal claims in excess of its
insurance coverage, or claims that are ultimately not covered by insurance.
Furthermore, if any significant claims are made against the Company, the
Company's business, financial condition and results of operations may be
adversely affected by related negative publicity. See "Risk Factors--Product
and Service Liability Risks."
COMPETITION
The Company operates in a highly competitive environment. In addition to
facing competition generally from businesses seeking to attract discretionary
spending dollars, the recreational boat industry itself is highly fragmented,
resulting in intense competition for customers, access to quality products,
access to boat show space in new markets and suitable store locations. The
Company believes that the principal factors influencing competition are price,
location, selection, service and the availability of customer financing. The
Company relies heavily on boat shows to generate sales. If the Company is
impeded in its ability to participate in boat shows in its existing or
targeted markets, it could have a material adverse effect on the Company's
business, financial condition and results of operations.
The Company competes primarily with single location boat dealers and, to a
lesser degree, with national specialty marine stores, catalog retailers,
sporting goods stores and mass merchants, particularly with respect to parts
and accessories. Dealer competition continues to increase based on the quality
of available products, the price and value of the products and attention to
customer service. There is significant competition both within markets
currently being served by the Company and in new markets into which the
Company plans to enter. The Company competes in each of its markets with
retailers of brands of boats and motors not sold by the Company in that
market. Management believes that a trend in the industry is for manufacturers
to include more features as standard equipment on boats and for dealers to
offer packages comparable to those now offered by the Company as its Travis
Edition lines. In addition, several of the Company's competitors, especially
those selling boating accessories, are large national or regional chains that
have substantially greater financial, marketing and other resources than the
Company. There can be no assurance that the Company will be able to compete
successfully in the retail marine industry in the future. See "Risk Factors--
Competition."
31
<PAGE>
PROPERTIES
The Company owns its corporate offices located in the Travis Boating Center
in Austin, Texas. The Company also owns and operates Travis Boating Center
locations in Abilene, Dallas, Midland and San Antonio, Texas; Baton Rouge,
Louisiana; and Hot Springs, Arkansas. The remaining facilities are leased
under short-term leases that generally contain multi-year renewal options. In
all such cases, the Company pays a fixed rent. In substantially all of the
leased locations, the Company is responsible for taxes, insurance, repairs and
maintenance.
The chart below reflects the status and approximate size of the various
Travis Boating Centers operated as of the date of this Prospectus.
<TABLE>
<CAPTION>
OWNED OR
LOCATION SQUARE FOOTAGE* ACREAGE* LEASED YEAR OF MARKET ENTRY
-------- --------------- -------- -------- --------------------
<S> <C> <C> <C> <C>
Austin, Texas(1)........ 20,000 3.5 Owned 1979
San Antonio, Texas(1)... 15,500 1.9 Owned 1982
Midland, Texas(1)....... 18,750 3.8 Owned 1982
Dallas, Texas(1)........ 20,000 4.2 Owned 1983
Abilene, Texas(2)....... 24,250 3.7 Owned 1989
Houston, Texas(2)....... 15,100 2.2 Leased 1991
Baton Rouge, Louisian-
a(2)................... 33,200 7.5 Owned 1992
Beaumont, Texas(2)...... 25,500 6.5 Leased 1994
Arlington, Texas(3)..... 6,000 1.0 Leased 1995
Heber Springs, Arkan-
sas(4)................. 26,000 9.0 Leased 1995
Hot Springs, Arkan-
sas(4)................. 20,510 3.0 Owned 1995
New Iberia, Louisian-
a(4)................... 24,000 3.3 Leased 1995
</TABLE>
- --------
* Square footage and acreage are approximate.
(1) Newly constructed store.
(2) Facility acquired and converted to superstore.
(3) To be moved to newly constructed superstore under long-term lease.
(4) Acquired facility.
LEGAL PROCEEDINGS
The Company is not a party to any material legal proceedings. The Company
is, however, involved in various legal proceedings arising out of its
operations in the ordinary course of business. The Company believes that the
outcome of all such proceedings, even if determined adversely, would not have
a material adverse effect on its business, financial condition or results of
operations.
32
<PAGE>
MANAGEMENT
DIRECTORS, DIRECTOR NOMINEES AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to each
director, each person who has agreed to serve as a director, and each
executive officer of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Mark T. Walton(1)(2).... 44 Chairman of the Board and President
Ronnie L. Spradling(1).. 52 Executive Vice President--New Store Development and Director
Michael B. Perrine...... 32 Chief Financial Officer, Treasurer and Secretary
E.D. Bohls(1)(2)........ 77 Vice Chairman of the Board
Joseph E.
Simpson(1)(2)(3)....... 62 Director
Robert C.
Siddons(1)(2)(4)....... 53 Director
Steve Gurasich(3)(4).... 47 Director Nominee
Zach McClendon,
Jr. (3)(4)............. 58 Director Nominee
</TABLE>
- --------
(1) Member of the Nominations Committee.
(2) Member of the Executive Committee.
(3) Member or nominee to the Audit Committee.
(4) Member or nominee to the Compensation Committee.
Mark T. Walton has served as President and as a director of the Company
since 1980 and as Chairman of the Board since 1995. From 1979 to 1980, Mr.
Walton served as the General Manager of the Company's Austin store. Utilizing
his 25 years of experience in the retail boat business, Mr. Walton, together
with Mr. Spradling, developed and implemented the Travis Edition and Travis
Boating Center concepts.
Ronnie L. Spradling has served as Executive Vice President of the Company
since 1989 and as the Executive Vice President of New Store Development since
1994. Mr. Spradling became a director in 1995. Mr. Spradling previously served
as the General Manager of Falcon Marine, Inc., located in Midland, Texas from
1982 to 1988. Mr. Spradling has over 28 years of experience in boat retailing
operations. Together with Mr. Walton, Mr. Spradling helped develop and
implement the Travis Boating Center and Travis Edition concepts.
Michael B. Perrine has served as Chief Financial Officer since 1991 and as
Treasurer and Secretary of the Company since 1992. From 1986 to 1991, he
served as a loan officer in the Commercial Banking Division of NationsBank,
N.A. Mr. Perrine is responsible for developing and implementing the Company's
corporate structure.
E.D. Bohls has served as the Vice Chairman of the Board of the Company since
1995 and previously served as Chairman of the Board of the Company from 1979
to 1995. He has served as Chairman of the Board of Capital Commerce Reporter,
Inc., a public records research company, since 1986. In addition, he has
served as Vice President and as a director of Americana Enterprises, a private
real estate development joint venture, since 1975.
Joseph E. Simpson has served as a director of the Company since 1979. He has
served as President and as a director of Capital Commerce Reporter, Inc., a
records research company, since 1986.
Robert C. Siddons has served as a director of the Company since 1979. He has
served as President of Frank Siddons Insurance Agency, a family-owned
insurance agency, since 1987. In addition, he has served as President of the
Texas Builders Insurance Company, a commercial lines insurance company, since
1987.
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<PAGE>
Steve Gurasich has agreed to serve as a director of the Company upon the
closing of the offering. For over the past 20 years, Mr. Gurasich has served
in various capacities, including most recently as Chairman of the Board of
GSD&M Advertising, Austin, Texas, an advertising firm, handling such accounts
as Southwest Airlines, Wal-Mart, MasterCard, Coors Light and Pearle Vision.
Zach McClendon, Jr. has agreed to serve as a director of the Company upon
the closing of the offering. Mr. McClendon is the co-founder of the
predecessor to SeaArc Marine, Inc., a manufacturer of various types of boats
and marine products, and now serves as the Chairman of the Board of its parent
company. In addition, Mr. McClendon serves as the Chairman of the Board of
Union Bank and Trust Company, a subsidiary of First Union Financial
Corporation, and as Chairman of the Board of Drew Cottonseed Oil Mill, Inc., a
manufacturer of polystyrene products.
Officers are elected annually by, and serve at the discretion of, the Board
of Directors.
The number of directors of the Board of Directors is currently fixed at
seven. The Board of Directors is divided into three classes, designated as
Class A, Class B and Class C. The members of each class of directors will
serve for staggered three-year terms. Messrs. Bohls and Simpson are currently
Class A directors and will stand for election at the 1996 annual stockholders'
meeting. Mr. Spradling is currently a Class B director and will stand for
election at the 1997 annual stockholders' meeting. Messrs. Walton and Siddons
are currently Class C directors and will stand for election at the 1998 annual
stockholders' meeting. There are currently two Class B positions on the Board
of Directors that are vacant.
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to the
compensation awarded to, earned by or paid for services rendered to the
Company in all capacities during the fiscal year ended September 30, 1995, by
the Company's President and the other most highly compensated executive
officer who received compensation in excess of $100,000 for the fiscal year
ended September 30, 1995 (collectively, the "named executive officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION(1) COMPENSATION
----------------------------- ------------
SECURITIES
OTHER ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION SALARY BONUS COMPENSATION OPTIONS
--------------------------- -------- ------- ------------ ------------
<S> <C> <C> <C> <C>
Mark T. Walton....................... $108,000 $45,000 -- 20,267
President
Ronnie L. Spradling.................. $ 69,000 $45,000 -- 46,933
Executive Vice President
</TABLE>
- --------
(1) Fiscal year 1995 is a nine-month period; dollar amounts shown have been
annualized.
34
<PAGE>
OPTIONS GRANTED IN LAST FISCAL YEAR
The following table sets forth information concerning stock options granted
by the Company to the named executive officers during the fiscal year ended
September 30, 1995.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
----------------------------------------------- VALUE AT ASSUMED
NUMBER OF ANNUAL RATES OF STOCK
SECURITIES % OF TOTAL PRICE APPRECIATION FOR
UNDERLYING OPTIONS GRANTED EXERCISE OPTION TERM(2)
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME GRANTED(1) FISCAL YEAR ($/SHARE) DATE 5% 10%
---- ---------- --------------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Mark T. Walton.......... 20,267 15.1% $5.25 May 2005 $ 66,914 $ 169,574
Ronnie L. Spradling..... 46,933 35.1% $5.25 May 2005 $ 154,960 $ 392,698
</TABLE>
- --------
(1) The stock options were granted by the Company pursuant to Nonqualified
Stock Option Agreements dated May 17, 1995. These options become
exercisable as to 20% of the shares covered thereby on May 17 of each year
with the first installment vesting on May 17, 1996.
(2) These amounts are calculated based on certain assumed rates of annual
compound stock price appreciation from the date the option was granted to
the end of the option term. Actual gains, if any, on stock option
exercises and Common Stock holdings are dependent on the future
performance of the Company and overall stock market conditions. There can
be no assurance that the amounts reflected in this table will be achieved.
These calculations assume a fair market value of $5.25 per share of Common
Stock on May 17, 1995, the date of grant of such options.
STOCK OPTION PLANS AND AGREEMENTS
The Company is currently a party to certain option agreements ("Option
Agreements") pursuant to which options to purchase shares of the Common Stock
are outstanding. Additionally, the Company currently maintains one plan, the
Incentive Stock Plan, pursuant to which options, stock appreciation rights and
restricted stock are available for future grant.
Nonqualified Stock Option Agreements. Pursuant to the Option Agreements,
each of Messrs. Walton, Spradling and Perrine (together, the "Optionees")
received nonqualified stock options to purchase 20,267, 46,933 and 66,667
shares of Common Stock, respectively, at a price of $5.25 per share
exercisable for a period of ten years. These options become exercisable as to
20% of the shares covered thereby on May 17 of each year with the first
installment vesting on May 17, 1996.
In the event the employment of an Optionee is terminated for "cause," as
defined in the Option Agreement, the Optionee shall have the right to exercise
any vested, unexercised portion of the Option. If an Optionee is terminated
without "cause," the options shall immediately become fully vested and
exercisable. Upon the occurrence of a "change in control" of Travis Boats, as
defined in the Option Agreements, the options shall immediately become fully
vested and exercisable.
Incentive Stock Plan. The Company's Incentive Stock Plan was adopted by the
Board of Directors and approved by the Company's stockholders in December
1995. A total of 200,000 shares of Common Stock have been reserved for
issuance pursuant to the Incentive Stock Plan. To date, no options have been
granted under this plan. The Incentive Stock Plan provides for the grant to
employees, including officers of the Company, of "incentive stock options"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), nonstatutory stock options, stock appreciation rights
and restricted stock (collectively, "Awards"). In addition, non-employee
directors ("Outside Directors") and consultants are eligible to receive
nonstatutory stock options.
The Incentive Stock Plan provides that Awards may be granted to employees
(including officers), consultants and directors of the Company and its
majority-owned subsidiaries. To the extent that the aggregate
35
<PAGE>
fair market value of the shares with respect to which options designated as
"incentive stock options" are exercisable for the first time by any optionee
during any calendar year (under all plans of the Company) exceeds $100,000,
such options will be reclassified in accordance with the Code. The Incentive
Stock Plan is not a qualified deferred compensation plan under Section 401(a)
of the Code and is not subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended.
The Incentive Stock Plan is currently administered by the Compensation
Committee of the Board. Subject to special provisions relating to Outside
Directors, the Board of Directors or its designated committee selects the
employees to which Awards may be granted and the type of Award to be granted
and determines, as applicable, the number of shares to be subject to each
Award, the exercise price and terms of vesting. In making such determination,
the Board of Directors or its designated committee takes into account the
employee's present and potential contributions to the success of the Company
and other relevant factors.
The exercise price of all incentive stock options granted under the
Incentive Stock Plan must be at least equal to the fair market value of the
shares of Common Stock on the date of grant. With respect to any participant
who owns stock representing more than 10% of the voting rights of the
Company's outstanding capital stock, the exercise price of any incentive stock
option granted under the Incentive Stock Plan must equal at least 110% of the
fair market value of the shares of Common Stock subject to such option on the
date of grant and the term of the option must not exceed five years.
Options granted under the Incentive Stock Plan vest pursuant to terms
determined by the Board of Directors or its designated committee.
The terms of all incentive stock options and nonstatutory stock options
granted under the Incentive Stock Plan may not exceed ten years and ten years
and 30 days, respectively. However, the terms of all incentive stock options
granted to an optionee who, at the time of grant, owns stock representing more
than 10% of the voting rights of the of the Company's outstanding capital
stock, may not exceed five years.
Options may be granted to Outside Directors under the Incentive Stock Plan
only pursuant to an automatic, nondiscretionary grant mechanism, under which
each Outside Director whose term begins after the closing of this offering
will receive an option to acquire 13,333 shares of Common Stock, exercisable
at fair market value on the date of grant and vesting in five equal annual
installments beginning on the first anniversary of the Outside Director's term
in office. The term of the option shall be ten years; provided that vested
options shall be exercisable only while the Outside Director remains a
director, or within one month after termination of his status as an Outside
Director.
Restricted Common Stock ("Restricted Stock") may be granted to employees
pursuant to terms determined by the Board of Directors or its designated
committee. Restricted Stock may not be transferred until the restrictions are
removed or have expired. Conditions to the removal of restrictions may
include, but are not required to be limited to, continuing employment or
service to the Company or achievement of certain performance objectives.
Stock appreciation rights ("SARs") may be granted to employees, either
independent of, or in connection with, options. SARs are exercisable in the
manner, and pursuant to terms, determined by the Board of Directors or its
designated committee. Terms to be determined by the Board of Directors (or its
designated committee) include the number of shares to which the SAR applies,
the vesting schedule for the exercise of such right and the expiration date of
the right. Upon exercise of an SAR, the holder shall receive payment (in cash,
stock or a combination of both at the discretion of the Board of Directors or
its designated committee) in an amount equal to the product of (i) the fair
market value of a share of Common Stock as of the date of exercise, minus the
fair market value of a share of Common Stock as of the date the SAR was
granted, multiplied by (ii) the number of shares as to which the SAR is being
exercised. The exercise of SARs granted in connection with options requires
the holder to surrender the related option (or any portion thereof, to the
extent unexercised). No SAR granted under the Incentive Stock Plan is
transferable by the employee other than by will or the laws of descent and
distribution and each SAR is exercisable during the lifetime of the employee
only by such employee.
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<PAGE>
In the event of certain changes in the Company's capitalization, including
as a result of a stock split or stock dividend, which results in a greater or
lesser number of shares of outstanding Common Stock, appropriate adjustment
shall be made in the number of shares available under the Incentive Stock
Plan, the exercise price and in the number of shares subject to options,
Restricted Stock and SARs.
Award agreements under the Incentive Stock Plan may, as determined by the
Board of Directors or its designated committee, provide that, in the event of
a "change in control" of the Company, the following will occur: the holder of
a stock option will be granted a corresponding stock appreciation right; all
outstanding stock appreciation rights and stock options will become
immediately and fully vested and exercisable in full; and the restriction
period on any Restricted Stock will be accelerated and the restrictions will
expire. In general, a "change in control" of the Company occurs in any of five
situations: (1) a person (other than (a) the Company, (b) certain affiliated
companies or benefit plans, or (c) a company, a majority of which is owned
directly or indirectly by the stockholders of the Company) becomes the
beneficial owner of 50% or more of the voting power of the Company's
outstanding voting securities; (2) a majority of the Board of Directors is not
comprised of the members of the Board of Directors at the effective date of
the Incentive Stock Plan and persons whose elections as directors were
approved by those original directors or their approved successors; (3) a
person described in clause (1) announces a tender offer for 50% or more of the
Company's outstanding voting securities and the Board of Directors approves or
does not oppose the tender offer; (4) the Company merges or consolidates with
another corporation or partnership, or the Company's stockholders approve such
a merger or consolidation, other than mergers or consolidations in which the
Company's voting securities are converted into securities having the majority
of voting power in the surviving company; or (5) the Company liquidates or
sells all or substantially all of its assets, or the Company's stockholders
approve such a liquidation or sale, except sales to corporations having
substantially the same ownership as the Company.
If a "restructuring" of the Company occurs that does not constitute a change
in control of the Company, the Board of Directors or the committee
administering the Incentive Stock Plan may (but need not) cause the Company to
take any one or more of the following actions: accelerate in whole or in part
the time of vesting and exercisability of any outstanding stock options and
stock appreciation rights to permit those stock options and stock appreciation
rights to be exercisable before, upon, or after the completion of the
restructure; grant each option holder corresponding stock appreciation rights;
accelerate in whole or in part the expiration of some or all of the
restrictions on any Restricted Stock; if the restructuring involves a
transaction in which the Company is not the surviving entity, cause the
surviving entity to assume in whole or in part any one or more of the
outstanding incentive awards upon such terms and provisions as the Board of
Directors or its designated committee deems desirable; or redeem in whole or
in part any one or more of the outstanding incentive awards (whether or not
then exercisable) in consideration of a cash payment as adjusted for
withholding obligations. A restructuring generally is any merger of the
Company or the direct or indirect transfer of all or substantially all of the
Company's assets (whether by sale, merger, consolidation, liquidation, or
otherwise) in one transaction or a series of transactions.
EMPLOYMENT AGREEMENTS
The Company is the beneficiary of employment agreements with TBC Management,
Ltd. (an affiliated partnership of the Company) and each of Mark T. Walton,
Ronnie L. Spradling and Michael B. Perrine, providing, among other things, for
three-year terms and annual base salaries of $175,000 for Mr. Walton, $150,000
for Mr. Spradling and $90,000 for Mr. Perrine, respectively. In addition,
Messrs. Walton, Spradling and Perrine have agreed to contractual
confidentiality and noncompete provisions in their respective employment
agreements, which will extend beyond termination of their employment for any
reason. In the event any of these employees are terminated without "cause," as
such term is defined in the employee agreements, such employees will be
entitled to payment of approximately three times their annual salary. The
foregoing agreements are scheduled to become effective upon the completion of
this offering.
The employment agreements also provide that, if the consolidated income of
Travis Boats before income tax expenses and non-recurring audit adjustments
(the "Pre-tax Income") reflects growth in excess of 20.0%
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<PAGE>
over the previous fiscal year, Messrs. Walton and Spradling will each receive
a bonus of 2.0% of the Pre-tax Income and Mr. Perrine will receive a bonus of
1.0% of the Pre-tax Income. If the Pre-tax Income does not reflect growth of
20.0%, the bonus for each individual will be determined by the Board of
Directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Compensation decisions during fiscal year 1994 were made by the Company's
Board of Directors, which included Mark T. Walton, President of the Company.
In 1995, the Company established a Compensation Committee to review the
performance of executive officers, establish overall employee compensation
policies and recommend major compensation programs for approval by the Board
of Directors. No member of the current Compensation Committee serves as an
executive officer of the Company, or as a director of any entity, an executive
officer of which serves on the Compensation Committee or as a director of the
Company.
COMPENSATION OF DIRECTORS
During fiscal 1995, the Company paid directors' fees of $1,500 per month to
each director, whether or not such director was an officer or employee of the
Company. Effective immediately following the closing of this offering,
directors who are not officers or employees of or consultants to the Company
will receive annual compensation of $10,000, plus $2,000 per year for each
committee on which such director serves, excluding the Nominations Committee,
for which compensation will not be received, and $3,000 per year in the case
of the Executive Committee. Directors' expenses for attending meetings are
reimbursed by the Company. Directors who are elected or appointed after or
upon the closing of this offering and who are not also officers or employees
of the Company will also receive options to purchase Common Stock under the
Incentive Stock Plan. See "--Stock Option Plans and Agreements."
401(K) PROFIT SHARING PLAN
In January 1995, the Company adopted a 401(k) Plan (the "401(k) Plan") under
which substantially all employees of the Company and its subsidiaries who have
completed at least one year of service and attain the age of 21 are eligible
to participate, subject to certain other conditions. Eligible participants may
elect to defer the receipt of up to a maximum of 15.0% of their annual
compensation (up to a maximum dollar amount established in accordance with
Section 401(k) of the Code) and have such deferred amounts contributed to the
401(k) Plan. The Company may, in its discretion, make matching contributions
which the Company, in its discretion, determines from year to year. The Board
of Directors has voted to make a matching contribution equal to 50.0% of the
first 4.0% of each eligible participant's 1995 calendar year contribution. The
amount of this contribution is not expected to exceed $100,000. Participants
are fully vested in their contributions while employer- matching contributions
vest over a five year period.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles of Incorporation provide that the Company has the
power to indemnify any person to the fullest extent permitted by law. The
Company has entered into indemnification agreements with each of its directors
and executive officers providing the broadest indemnification allowable under
the Texas Business Corporation Act. See "Description of Capital Stock--
Indemnification of Officers and Directors; Limitation of Director Liability."
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<PAGE>
CERTAIN TRANSACTIONS
Stockholders Agreement. The shares of Common Stock are subject to
restrictions on transfer pursuant to a stock restriction agreement entered
into by the Company and all of the stockholders of the Company. The stock
restriction agreement prohibits the sale of Common Stock without first
offering such stock for sale to the other stockholders and the Company. This
agreement also provides that upon certain events, a stockholder shall sell,
and the Company shall purchase, all of the stockholder's stock at a formula
price. The Company is currently prohibited from issuing stock to any
stockholder unless such stockholder first enters into the stock restriction
agreement. This agreement terminates automatically upon the consummation of
this offering.
Reinsurance Arrangements. The Company sells extended service contracts to
its customers. The obligations of the Company under these contracts are
transferred to Ideal Insurance Company, Ltd. ("Ideal") pursuant to an
agreement between the Company and Ideal dated as of January 1, 1994. Ideal
reinsures these risks with Amerisure Property & Casualty, Ltd. ("Amerisure"),
a company wholly owned by certain principal stockholders of the Company. These
contracts are administered by First Extended Service Corporation ("FESC") and
are reinsured under a stop-loss policy issued to Amerisure by FFG Insurance
Co. ("FFG"), an affiliate of FESC. In conjunction with these arrangements, the
Company pays an agreed amount for each extended service contract which is
insured and, in the event of claims under any extended service contracts,
Amerisure reimburses the repair facility for the amount of covered claims.
Amerisure and/or FFG are financially responsible for any repairs required
pursuant to the extended service contract. Upon consummation of this offering,
Amerisure will remain a separate legal entity and will maintain its current
ownership structure. However, to eliminate any potential conflict of interest,
the Company will terminate its relationship with Amerisure effective upon
consummation of the offering with respect to future extended service
contracts. The Company is evaluating whether to use traditional insurance, to
form a wholly owned subsidiary to provide the services previously provided by
FESC or to arrange an alternate method of insurance. To provide for the risks
associated with the extended service contracts sold by the Company prior to
the consummation of this offering, Amerisure intends to retain cash reserves
in an amount it believes will reasonably be adequate to cover any of
Amerisure's obligations. Moreover, Amerisure has obtained the above described
stop-loss policy from FFG. For the fiscal year ended December 31, 1994, and
for the fiscal year ended September 30, 1995, the Company received net
payments of approximately $350,000 and $448,000, respectively, through the
sale of extended service contracts. Over the same period, Amerisure received
an aggregate of approximately $700,000, all of which it has reserved against
losses with respect to extended service contracts sold to the Company's
customers. Amerisure's underwriting losses and aggregate reinsurance costs
will not be determinable until the end of each of the five-year extended
service contracts sold prior to this offering. The Company is not affiliated
with Ideal, FESC or FFG.
Employment Arrangements. Executive management, store management and
corporate administrative employees are employed by TBC Management, Ltd., a
Texas limited partnership (the "Partnership"). The Partnership, in turn, has
entered into a Management Agreement with the Company and its subsidiaries and
invoices each company monthly for management services rendered. The general
partner and 1.0% owner of the Partnership is the Company. The sole limited
partner and 99.0% owner of the Partnership is T B C Management, Inc. (the
"Delaware Company"), a Delaware company wholly owned by Travis Boats. The
operations of the Partnership are accounted for on a consolidated basis with
those of the Company. The Delaware Company's income results from distributions
of the Partnership and is accordingly taxed under Delaware law.
Certain Borrowings. On August 31, 1995, the Company borrowed $300,000 from
Amerisure. The Company executed a promissory note in favor of Amerisure for
the principal amount of $300,000, repayable at an interest rate of prime plus
0.25% per annum. The note has been paid in full.
The Company borrowed a total of $150,000 from Joseph E. and Pat Simpson.
Joseph E. Simpson is a director and principal stockholder of the Company. The
Company borrowed $100,000 on October 11, 1994 and executed an unsecured
promissory note for that amount. On January 31, 1995, the $100,000 note was
renewed and extended until January 1, 1996. On March 31, 1995, the Company
borrowed an additional $50,000 and executed a promissory note for that amount.
Both notes were renewed and extended into one $150,000 note on
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<PAGE>
August 31, 1995. The renewed and extended note provided for quarterly interest
payments at an interest rate equal to the prime rate minus 0.25%, with the
principal balance payable in full on October 1, 1996. The renewed and extended
note will be paid in full prior to the consummation of this offering.
The Company borrowed $175,000 from Capital Commerce Reporter, Inc., a
company owned by Joseph E. Simpson and E.D. Bohls, directors and principal
stockholders of the Company. The loan was evidenced by two unsecured
promissory notes, for $100,000 and $75,000. The notes were originally executed
on August 10, 1994 and were renewed and extended on December 31, 1994 and on
August 31, 1995. The renewed and extended notes provided for quarterly
payments of interest only at a rate equal to the prime rate minus 0.25%, with
the principal balance payable in full on October 1, 1996. The notes will be
paid in full prior to the consummation of this offering.
E.D. Bohls, Jesse Cox, Robert C. Siddons, Joseph E. Simpson, Ronnie L.
Spradling and Mark T. Walton, all of whom are stockholders and officers or
directors of the Company, have each executed a personal guaranty of certain
indebtedness of the Company. It is currently contemplated that such guaranties
will be released upon completion of this offering.
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<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth the beneficial ownership of the Common Stock
as of March 31, 1996, and as adjusted to reflect the sale of shares offered
hereby of (i) each person known to the Company to own beneficially 5% or more
of the Common Stock, (ii) each of the Company's directors, (iii) each of the
Company's named executive officers, (iv) each Selling Stockholder and (v) all
of the Company's executive officers and directors as a group.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED BEFORE OWNED AFTER
THE OFFERING(1)(2) NUMBER OF THE OFFERING(3)
----------------------- SHARES -----------------------
NAME OF BENEFICIAL OWNER NUMBER PERCENT OFFERED NUMBER PERCENT
- ------------------------ ------------ ---------- --------- ------------ ----------
<S> <C> <C> <C> <C> <C>
E.D. Bohls(4)........... 808,427 30.1% 97,800 710,627 17.8%
Robert C. Siddons(5).... 538,968 20.1 94,900 444,068 11.1
Mark T. Walton(6)....... 411,521 15.3 40,000 371,521 9.3
Joseph E. Simpson....... 404,224 15.1 72,700 331,524 8.3
Ronnie L. Spradling(7).. 267,030 9.9 25,000 242,030 6.0
James Bohls(8).......... 252,928 9.4 43,700 209,228 5.2
Jesse C. Cox(9)......... 202,112 7.5 43,700 158,412 4.0
Michael B. Perrine(10).. 20,800 * -- 20,800 *
Blake Bohls(11)......... 25,408 * 8,000 17,408 *
Mason Bohls(12)......... 25,408 * 8,000 17,408 *
Kelly Harber............ 8,534 * 500 8,004 *
J. Brooks Rainer........ 6,400 * 800 5,600 *
Charles Bell............ 9,878 * 800 9,078 *
William M. Breed........ 11,691 * 1,600 10,091 *
All executive officers
and directors
as a group (six
persons)(13)........... 2,450,970 90.4% 330,400 2,120,570 52.7%
</TABLE>
- -------
* Less than 1%.
(1) Except as otherwise indicated, the persons named in the table have sole
voting and investment power with respect to the shares of Common Stock
shown as beneficially owned by them. Beneficial ownership as reported in
the above table has been determined in accordance with Rule 13d-3 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
based on information furnished by the persons listed, and represents the
number of shares of Common Stock for which a person, directly or
indirectly, through any contract, management, understanding, relationship
or otherwise, has or shares voting power, including the power to vote or
direct the voting of such shares, or investment power, including the
power to dispose or to direct the disposition of such shares, and
includes shares which may be acquired upon the exercise of options within
60 days following June 24, 1996, which is the assumed effective date of
this offering. The percentages are based upon 2,683,506 shares
outstanding as of the date of this Prospectus, and 3,996,006 shares
outstanding after giving effect to this offering. Except as otherwise
noted below, the address of each holder of 5% or more of the Common Stock
is 13045 Research Boulevard, Austin, Texas 78750.
(2) Does not include options granted to Mark T. Walton, Ronnie L. Spradling
and Michael B. Perrine to purchase 16,214, 37,546 and 53,334 shares of
Common Stock, respectively, which are not exercisable until more than 60
days after June 24, 1996. See "Management--Stock Option Plans and
Agreements."
(3) Assumes no exercise of the Underwriters' over allotment option.
(4) Includes 202,112 shares owned by Mr. Bohls' son, James Bohls, to which
Mr. E.D. Bohls controls the voting rights. Mr. E.D. Bohls disclaims
beneficial ownership of such shares. Also includes 50,816 shares held by
trusts for the benefit of James Bohls' children of which James Bohls
serves as trustee, but all voting rights have been retained by Mr. E.D.
Bohls.
(5) Includes 19,202 shares held by family trusts over which Mr. Siddons
exercises sole voting and investment control.
(6) Includes 4,053 shares subject to options exercisable within 60 days of
June 24, 1996 and 4,268 shares owned and held in trust for Mr. Walton's
children, for which the voting rights reside with Mr. Walton.
(7) Includes 9,387 shares subject to options exercisable within 60 days of
June 24, 1996.
(8) Includes 50,816 shares held by trusts for the benefit of Mr. Bohls'
children as to which he serves as trustee with full dispositive power.
Mr. E.D. Bohls retains all voting rights in such shares. James Bohls'
address is 1301 South IH-35, Austin, Texas 78701.
(9) Jesse C. Cox's address is 12300 IH-10, San Antonio, Texas 78230.
(10) Includes 13,333 shares subject to options exercisable within 60 days of
June 24, 1996.
(11) Shares are held in trust for the benefit of Blake Bohls. Mr. James Bohls
serves as trustee with full dispositive power. Mr. E.D. Bohls retains all
voting rights in such shares.
(12) Shares are held in trust for the benefit of Mason Bohls. Mr. James Bohls
serves as trustee with full dispositive power. Mr. E.D. Bohls retains all
voting rights in such shares.
(13) See Notes (6), (7) and (10). Includes 26,773 shares subject to options
exercisable within 60 days of June 24, 1996.
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<PAGE>
DESCRIPTION OF CAPITAL STOCK
The following description of the capital stock of the Company does not
purport to be complete and is subject to and qualified in its entirety by the
Articles of Incorporation and Bylaws of the Company which are included as
exhibits to the registration statement of which this Prospectus is a part, and
by the provisions of applicable law.
AUTHORIZED AND OUTSTANDING CAPITAL STOCK
Effective prior to the closing of this offering, the authorized capital
stock of the Company will consist of 50,000,000 shares of Common Stock, $.01
par value, and 1,000,000 shares of Preferred Stock, $.01 par value, issuable
in series. As of the date of this Prospectus, 2,683,506 shares of Common Stock
were issued and outstanding and held by 24 persons. A total of 133,867 shares
of Common Stock are reserved for issuance upon the exercise of options granted
to Mark T. Walton, Ronnie L. Spradling and Michael B. Perrine, and 200,000
shares of Common Stock are reserved for issuances of Awards under the
Incentive Stock Plan. No shares of Preferred Stock are issued or outstanding.
COMMON STOCK
The holders of Common Stock are entitled to one vote for each share held on
all matters submitted to a vote of stockholders, voting with the holders of
Preferred Stock as a single class, except where class voting is required by
the Texas Business Corporation Act. Cumulative voting in the election of
directors is not permitted and the holders of a majority of the combined
number of outstanding shares of Common Stock and Preferred Stock entitled to
vote in any election of directors may elect all of the directors standing for
election. Upon the closing of this offering, the holders of a majority of the
outstanding shares of Common Stock will be able to elect all of the directors.
Holders of Common Stock are entitled to receive ratably such dividends, if
any, as may be declared by the Board of Directors out of funds legally
available therefor, subject to any preferential dividend rights of outstanding
Preferred Stock. Upon a liquidation, dissolution or winding up of the Company,
the holders of Common Stock are entitled to receive ratably the net assets of
the Company available after the payment of all debts and other liabilities and
subject to the prior rights of any outstanding Preferred Stock. The holders of
Common Stock have no preemptive, subscription, redemption or conversion
rights. The outstanding shares of Common Stock are, and the shares offered by
the Company in this offering, will be, when issued and paid for, fully paid
and nonassessable.
PREFERRED STOCK
The Board of Directors may issue Preferred Stock in one or more series and
may designate the dividend rate, voting rights and other rights, preferences
and restrictions of each series without further stockholder approval. It is
not possible to predict the effect of the issuance of Preferred Stock upon the
rights of holders of Common Stock unless and until the Board of Directors
determines the specific rights of the holders of a series of Preferred Stock.
However, such effects might include, among other things, restricting dividends
on Common Stock, diluting the voting power of Common Stock, impairing the
liquidation rights of Common Stock and delaying, discouraging or preventing a
change in control of the Company without further action by the stockholders.
ANTI-TAKEOVER PROVISIONS
Certain provisions of the Company's Articles of Incorporation and Bylaws,
the Company's Incentive Stock Plan and the indemnification agreements with
directors and officers of the Company may be deemed to have an anti-takeover
effect and may delay, defer or prevent a tender offer or takeover attempt that
a stockholder might consider to be in that stockholder's best interest,
including attempts that might result in a premium over the market price for
the shares held by stockholders.
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Articles of Incorporation and Bylaws. Pursuant to the Company's Articles of
Incorporation, the Company's Board of Directors may issue additional shares of
Common Stock or establish one or more series of Preferred Stock having the
number of shares, designations, relative voting rights, dividend rates,
liquidation and other rights, preferences and limitations that the Board of
Directors fixes without stockholder approval. Any additional issuance of
Common Stock or designation of rights, preferences, privileges and limitations
with respect to Preferred Stock could have the effect of impeding or
discouraging the acquisition of control of the Company by means of a merger,
tender offer, proxy contest or otherwise, and thereby protect the continuity
of the Company's management. Specifically, if, in the due exercise of its
fiduciary obligations, the Board of Directors were to determine that a
takeover proposal was not in the Company's best interest, shares could be
issued by the Board of Directors without stockholder approval in one or more
transactions that might prevent or render more difficult or costly the
completion of the takeover transactions by diluting the voting or other rights
of the proposed acquiror or insurgent stockholder group, by putting a
substantial voting lock in institutional or other hands that might undertake
to support the position of the incumbent Board of Directors, by effecting an
acquisition that might complicate or preclude the takeover, or otherwise.
The Company's Bylaws provide that the Board of Directors shall be divided
into three classes of two or three directors each, with each class elected for
three-year terms expiring in successive years. The Company's Articles of
Incorporation also allow the Board of Directors to fix the number of directors
in the Bylaws with no minimum or maximum number of directors required. The
effect of these provisions may be to delay or prevent a tender offer or
takeover attempt that a stockholder might consider to be in his best interest,
including attempts that might result in a premium over the market price for
the shares held by the stockholders. Cumulative voting in the election of
directors is specifically denied. Although the Bylaws do not give the Board
any power to approve or disapprove stockholder nominations for the election of
directors or of any other business desired by stockholders to be conducted at
an annual or any other meeting, provisions of the Bylaws (i) may have the
effect of precluding a nomination for the election of directors or precluding
the conduct of business at a particular annual meeting if the proper
procedures are not followed and (ii) may discourage or deter a third party
from conducting a solicitation of proxies to elect its own slate of directors
or otherwise attempting to obtain control of the Company, even if the conduct
of such solicitation or attempt might be beneficial to the Company and its
stockholders.
The Company's Articles of Incorporation and Bylaws provide that special
meetings of stockholders generally can be called only by the President or
Board of Directors or by holders of at least 25% of the voting stock of the
Company and provide for an advance notice procedure for the nomination, other
than by or at the direction of the Board of Directors or a committee of the
Board of Directors, of candidates for election as directors as well as for
other stockholder proposals to be considered at annual meetings of
stockholders. In general, notice of intent to nominate a director or raise
business at such meetings must be received by the Company not less than 30 nor
more than 60 days before the meeting, and must contain certain information
concerning the person to be nominated or the matters to be brought before the
meeting and concerning the stockholder submitting the proposal.
Incentive Stock Plan. Awards granted pursuant to the Company's Incentive
Stock Plan may provide that, under certain circumstances, upon a change in
control of the Company, all outstanding stock options will become immediately
vested and exercisable in full and the restriction period on any restricted
stock award will be accelerated and the restrictions shall expire. It is
anticipated that all options granted under the Incentive Stock Plan will
contain such a provision. As of the date of this Prospectus, no options have
been granted under the Incentive Stock Plan. See "Management--Stock Option
Plans and Agreements."
Indemnification of Officers and Directors; Limitation of Director
Liability. The Company has entered into indemnification agreements with all of
its directors and executive officers, which, among other things, require the
Company to indemnify directors against liability arising from stockholder
claims of a breach of duty by a director if a director votes against a
transaction that would result in a change of control of the Company. The
Company's Articles of Incorporation also provide that its directors shall not
be liable for monetary damages caused by an act or omission occurring in their
capacity as directors. This provision does not eliminate the duty of care,
and, in appropriate circumstances, equitable remedies such as injunctive or
other forms of non-monetary relief will remain available under Texas law. In
addition, each director will continue to be subject to liability for
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<PAGE>
breach of the director's duty of loyalty to the Company, for acts or omissions
not in good faith or involving intentional misconduct, for knowing violations
of law, for actions leading to improper personal benefit to a director and for
payment of dividends or acts or omissions for which a director is made
expressly liable by applicable statute. The limitations on liability provided
for in the Company's Articles of Incorporation do not affect a director's
responsibilities under any other law, such as the federal securities laws or
state or federal environmental laws. The Company believes that these
provisions will assist the Company in attracting and retaining qualified
individuals to serve as executive officers and directors.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Company's Common Stock is KeyCorp
Stockholder Services, Inc., Dallas, Texas.
44
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, the Company will have outstanding
3,996,006 shares of Common Stock (4,258,506 shares if the Underwriters' over-
allotment option is exercised in full), assuming no exercise of options
outstanding as of May 1, 1996. Of these shares, all 1,750,000 of the shares of
Common Stock offered hereby (2,012,500 shares if the Underwriters' over-
allotment option is exercised in full) will be freely tradeable in the public
market without restriction by persons other than "affiliates" of the Company,
as that term is defined in Rule 144 under the Securities Act.
The remaining 2,246,006 shares of Common Stock will be "restricted"
securities within the meaning of Rule 144 and may not be sold unless
registered under the Securities Act or an exemption therefrom is available,
such as Rule 144 or Rule 144A.
The Company, its officers and directors and certain stockholders, who
collectively own an aggregate of 2,683,506 shares of Common Stock prior to the
offering, have agreed not to offer for sale, sell or otherwise dispose of,
directly or indirectly, any shares of Common Stock (other than the shares to
be sold by the Selling Stockholders in this offering) or any securities
convertible into or exchangeable or exercisable for Common Stock, or sell or
grant options, rights or warrants with respect to any shares of Common Stock
(other than the grant of options pursuant to option plans existing on the date
hereof), without the prior consent of Robertson, Stephens & Company for a
period of 180 days following the date of this Prospectus (the "Lock-Up
Period"). Following the expiration of such 180-day period, all of such shares
will be eligible for resale in the public market subject, where applicable, to
the volume limitations and other requirements of Rule 144. The shares subject
to the lock-up agreements include all outstanding shares that would otherwise
be eligible for resale in the public market pursuant to Rule 144 beginning 90
days after the date of this Prospectus. In addition to the foregoing, as of
May 1, 1996, there were outstanding options to purchase an aggregate of
133,867 shares of Common Stock. Of the shares underlying such options, 26,773
shares will be eligible for sale upon expiration of the Lock-Up Period. The
remaining 107,094 shares underlying such options will become eligible for sale
more than 180 days after the date of this Prospectus as such options vest.
Robertson, Stephens & Company has informed the Company that it has no current
intention to release shares during the Lock-Up Period. Any request for release
would be evaluated by Robertson, Stephens & Company, and the decision whether
to permit early release of shares would be made dependent upon the facts and
circumstances existing at the time of the request.
In general, under Rule 144 as currently in effect, any person (or persons
whose shares are aggregated), including an affiliate, who has beneficially
owned "restricted" shares for at least two years (including the holding period
of any prior owner except an affiliate from whom such shares were purchased)
may sell within any three-month period commencing 90 days after the date of
this Prospectus, a number of shares that does not exceed the greater of 1.0%
of the then outstanding shares of Common Stock (approximately 39,960 shares
immediately after this offering, or approximately 42,585 shares if the
Underwriters' over-allotment option is exercised in full) or the average
weekly trading volume in Common Stock during the four calendar weeks preceding
the date on which notice of such sale is filed with the Securities and
Exchange Commission (the "Commission"). Sales under Rule 144 are also subject
to certain provisions relating to the manner and notice of sale and
availability of current public information about the Company. Affiliates may
sell shares which are not "restricted" shares in accordance with volume
limitations and other restrictions, but without regard to the two-year holding
period. A person who is not an affiliate of the Company at any time during the
90 days preceding a sale and who beneficially owns shares that were not
acquired from the Company or an affiliate of the Company within the past three
years may sell such shares under Rule 144 without regard to volume
limitations, manner of sale and notice provisions or the availability of
current public information concerning the Company.
The Company intends to file a registration statement on Form S-8 under the
Securities Act to register all 200,000 shares reserved for issuance under the
Incentive Stock Plan, as well as 133,867 shares issuable upon exercise of
outstanding options under the Option Agreements. All shares acquired in the
future under the Incentive Stock Plan or pursuant to the Option Agreements
will be available for resale by non-affiliates in the public market without
restriction, subject, however, to lock-up agreements with respect to such
shares. Shares
45
<PAGE>
acquired by affiliates under the Incentive Stock Plan or the Option Agreements
may not be resold unless they are registered under the Securities Act or
resold pursuant to an exemption from such registration, such as Rule 144.
Prior to this offering, there has been no public market for the Common
Stock, and no prediction can be made as to the effect, if any, that market
sales of shares of Common Stock or the availability of shares of Common Stock
for sale will have on the market price of the Common Stock prevailing from
time to time. Nevertheless, sales of substantial shares of Common Stock of the
Company in the public market could adversely affect prevailing market prices
and could impair the Company's future ability to raise capital through the
sale of its equity securities.
46
<PAGE>
UNDERWRITING
The Underwriters named below (the "Underwriters"), acting through their
representatives, Robertson, Stephens & Company LLC and Principal Financial
Securities, Inc. (the "Representatives"), have severally agreed with the
Company and the Selling Stockholders, subject to the terms and conditions of
the Underwriting Agreement, to purchase from the Company and the Selling
Stockholders the number of shares of Common Stock set forth opposite their
respective names below. The Underwriters are committed to purchase and pay for
all such shares if any are purchased.
<TABLE>
<CAPTION>
NUMBER
UNDERWRITER OF SHARES
----------- ---------
<S> <C>
Robertson, Stephens & Company LLC..................................
Principal Financial Securities, Inc. ..............................
---------
Total............................................................ 1,750,000
=========
</TABLE>
The Representatives have advised the Company and the Selling Stockholders
that the Underwriters propose to offer the shares of Common Stock to the
public at the initial public offering price set forth on the cover page of
this Prospectus, and to certain dealers at such price less a concession not in
excess of $ per share. The Underwriters may allow, and such dealers may re-
allow, a concession not in excess of $ per share to certain other dealers.
After the initial public offering, the public offering price, concessions and
reallowances to dealers may be reduced by the Representatives. No such
reduction shall change the amount of proceeds to be received by either the
Company or the Selling Stockholders as set forth on the cover of this
Prospectus.
The Company has granted to the Underwriters an option, exercisable not later
than 30 days from the date of this Prospectus, to purchase up to 262,500
additional shares of Common Stock at the initial public offering price less
the underwriting discounts and commissions set forth on the cover page of this
Prospectus. To the extent that the Underwriters exercise such option, each of
the Underwriters will have a firm commitment to purchase approximately the
same percentage thereof that the number of shares of Common Stock to be
purchased by it shown in the above table bears to the total shares of Common
Stock listed in such table, and the Company will be obligated, pursuant to
such option, to sell such shares to the Underwriters. The Underwriters may
exercise such option only to cover over-allotments made in connection with the
sale of Common Stock offered hereby. If purchased, the Underwriters will offer
such additional shares on the same terms as those on which the 1,750,000
shares are being sold.
The Underwriting Agreement contains covenants of indemnity among the
Underwriters, the Company and the Selling Stockholders against certain
liabilities, including liabilities under the Securities Act.
Pursuant to the terms of lock-up agreements, the officers, directors and
certain stockholders of the Company, including the Selling Stockholders, who
will hold in the aggregate approximately 2,246,006 shares of Common Stock
following this offering, have agreed that they will not directly or indirectly
offer to sell, sell, or otherwise dispose of shares of Common Stock or any
securities convertible or exchangeable therefor, for a period of 180 days
after the date of this Prospectus, without the prior written consent of
Robertson, Stephens & Company LLC. Robertson, Stephens & Company LLC may, in
its sole discretion and at any time without notice, release all or any portion
of the securities subject to lock-up agreements. See "Shares Eligible for
Future Sale." In addition,
47
<PAGE>
the Company has agreed not to offer to sell, sell or otherwise dispose of any
shares of Common Stock for a period of 180 days after the date of this
Prospectus without the prior written consent of Robertson, Stephens & Company
LLC, except for the shares of Common Stock offered hereby and except that the
Company may issue securities pursuant to the Company's Incentive Stock Plan and
upon the exercise of outstanding options.
The Representatives have advised the Company and the Selling Stockholders
that the Underwriters do not intend to confirm sales to any accounts over which
they exercise discretionary authority.
During 1995, the Company paid Principal Financial Securities, Inc. a fee in
the amount of $15,000 in connection with its due diligence investigation of the
Company relating to this offering.
Prior to this offering, there has been no public market for the Common Stock
of the Company. Consequently, the initial public offering price for the Common
Stock will be determined by negotiations among the Company and the
Representatives. The factors to be considered in such negotiations will be the
prevailing market conditions, the results of operations of the Company in
recent periods, the market capitalizations and stages of development of other
companies which the Company and the Representatives believe to be comparable to
the Company, estimates of the business potential of the Company and the present
state of the Company's development. There can be no assurance that an active or
orderly trading market will develop for the Company's Common Stock or that the
Common Stock will trade in the public market subsequent to this offering at or
above the initial public offering price.
48_
<PAGE>
LEGAL MATTERS
Certain legal matters with respect to the validity of shares of Common Stock
offered hereby are being passed upon for the Company by Jenkens & Gilchrist, a
Professional Corporation, Austin, Texas. Certain legal matters will be passed
upon for the Underwriters by Brobeck, Phleger & Harrison LLP, Austin, Texas.
EXPERTS
The consolidated financial statements of the Company at September 30, 1995
and December 31, 1994 and for the fiscal year ended September 30, 1995 and
December 31, 1994, appearing in this Prospectus and Registration Statement have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon appearing elsewhere herein and in the Registration Statement,
and are included in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.
The consolidated financial statements of the Company at December 31, 1993 and
for the year then ended appearing in this Prospectus and Registration Statement
have been audited by Devona Jeffery, L.L.C., independent auditor, as set forth
in their report thereon appearing elsewhere herein, and are included in
reliance upon such report given upon the authority of such firm as expert in
accounting and auditing.
The consolidated statements of operations, retained earnings and cash flows
of Red River Marine, Inc. ended September 30, 1994 and 1995, included in this
Prospectus and Registration Statement, have been audited by Turner, Burkett &
Ring, P.A., Searcy, Arkansas, independent auditors, as set forth in their
report thereon appearing elsewhere herein, and are included in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
ADDITIONAL INFORMATION
The Company has filed a Registration Statement on Form S-1 (the "Registration
Statement") with the Commission under the Securities Act in respect of the
Common Stock offered hereby. For purposes of this Prospectus, the term
"Registration Statement" means the initial Registration Statement and any and
all amendments thereto. This Prospectus does not contain all of the information
contained in the Registration Statement and the exhibits and schedules thereto,
as permitted by the rules and regulations of the Commission. For further
information with respect to the Company and the Common Stock offered hereby,
reference is made to the Registration Statement, including the exhibits
thereto. Statements herein concerning the contents of any contract or other
document filed as an exhibit to the Registration Statement are not necessarily
complete, and in each instance reference is made to such contract or other
document filed with the Commission as an exhibit to the Registration Statement,
or otherwise, each such statement being qualified by and subject to such
reference in all respects.
As a result of the offering, the Company will become subject to the
informational requirements of the Exchange Act, and in accordance therewith,
will file reports and other information with the Commission. Reports,
registration statements, proxy statements, and other information filed by the
Company with the Commission can be inspected and copied at the public reference
facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, and at its regional offices located at
500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and 7 World Trade
Center, Suite 1300, New York, New York 10048.
The Company intends to furnish its stockholders with annual reports
containing audited consolidated financial statements certified by its
independent public accountants and quarterly reports for the first three
quarters of each fiscal year containing unaudited financial information.
49
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Unaudited Pro Forma Condensed Consolidated Financial Statements........... F-2
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the
nine months ended
September 30, 1995....................................................... F-3
HISTORICAL FINANCIAL STATEMENTS
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
Audited Consolidated Financial Statements
Reports of Independent Auditors........................................... F-4
Consolidated Balance Sheets--December 31, 1993 and 1994, and September 30,
1995..................................................................... F-6
Consolidated Statements of Operations for the Years ended December 31,
1993 and 1994 and the nine months ended September 30, 1995............... F-7
Consolidated Statements of Stockholders' Equity for the Years ended Decem-
ber 31, 1993 and 1994 and the nine months ended September 30, 1995....... F-8
Consolidated Statements of Cash Flows for the Years ended December 31,
1993 and 1994 and the nine months ended September 30, 1995............... F-9
Notes to Consolidated Financial Statements................................ F-10
Unaudited Interim Financial Statements
Unaudited Condensed Consolidated Balance Sheet as of March 31, 1996....... F-19
Unaudited Condensed Consolidated Statements of Operations for the six
months ended March 31, 1995 and 1996..................................... F-20
Unaudited Condensed Consolidated Statements of Cash Flows for the six
months ended March 31, 1995 and 1996..................................... F-21
Notes to Unaudited Condensed Consolidated Financial Statements............ F-22
RED RIVER MARINE, INC. AND SUBSIDIARY
Audited Consolidated Financial Statements
Report of Independent Auditors............................................ F-24
Consolidated Statements of Income and Retained Earnings for the Years
ended September 30, 1994 and 1995........................................ F-25
Consolidated Statements of Cash Flows for the Years ended September 30,
1994 and 1995............................................................ F-26
Notes to Financial Statements............................................. F-27
</TABLE>
F-1
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma condensed consolidated statements of operations of
Travis Boats & Motors, Inc. (the Company) for the nine months ended September
30, 1995 reflect adjustments as if the acquisition of Red River Marine, Inc.
and the repayment of certain existing debt as contemplated by the Registration
Statement had occurred as of January 1, 1995.
The acquisition of Red River Marine, Inc. occurred on September 20, 1995 and
has been accounted for using the purchase method of accounting for business
combinations. Accordingly, the historical consolidated statements and
operations of the Company include the operations of Red River Marine, Inc.
since September 20, 1995.
The unaudited pro forma condensed consolidated financial statements should
be read in conjunction with the separate historical financial statements of
Travis Boats & Motors, Inc. and Red River Marine, Inc., related notes and
"Management's Discussions and Analysis of Financial Condition and Results of
Operations" appearing elsewhere in this Registration Statement. The pro forma
information is not necessarily indicative of the results that would have been
obtained had the acquisition of Red River Marine, Inc. actually occurred on
the date assumed herein, nor is the pro forma information indicative of the
future results of the Company and its consolidated subsidiaries.
F-2
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
TRAVIS BOATS LESS
& MOTORS RED RIVER RED RIVER
NINE MONTHS MARINE MARINE
ENDED YEAR ENDED THREE MONTHS
SEPTEMBER 30, SEPTEMBER 30, ENDED TRAVIS BOATS
1995 1995 DECEMBER 31, PRO FORMA & MOTORS
HISTORICAL HISTORICAL 1994 ADJUSTMENTS PRO FORMA
------------- ------------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Net sales............... $ 41,442,349 $ 14,085,084 $ 897,821 $ -- $ 54,629,612
Cost of goods sold...... (31,136,555) (11,316,009) (753,022) -- (41,699,542)
------------ ------------ --------- --------- ------------
Gross profit............ 10,305,794 2,769,075 144,799 -- 12,930,070
Operating expenses...... (6,569,809) (2,573,890) (484,640) 324,920 (a),(b),(c) (8,334,139)
Interest expense........ (670,020) (331,318) (51,956) 523,000 (d),(e) (426,382)
Other income............ 133,849 85,240 7,619 -- 211,470
------------ ------------ --------- --------- ------------
Income (loss) before
income taxes........... 3,199,814 (50,893) (384,178) 847,920 4,381,019
Income tax (expense).... (1,149,621) -- -- (427,546)(f) (1,577,167)
------------ ------------ --------- --------- ------------
Net income (loss)....... $ 2,050,193 $ (50,893) $(384,178) $ 420,374 $ 2,803,852
============ ============ ========= ========= ============
Net income per common
share.................. $ .76 $ .70
============ ============
Weighted average common
shares outstanding..... 2,683,506 3,996,006
</TABLE>
The following pro forma adjustments reflect the effect of the acquisition of
Red River Marine, Inc. and the transactions contemplated by the Registration
Statement as if such acquisition and such transactions had occurred on January
1, 1995. Adjustments included in the unaudited pro forma condensed
consolidated statement of operations for the nine months ended September 30,
1995 are as follows:
(a) To eliminate costs in the amount of $25,000 incurred by Red River
Marine in connection with the acquisition.
(b) To reflect nine months of amortization expense in the amount of
$52,500 on costs in excess of net assets acquired recorded in connection
with the acquisition.
(c) To eliminate excess owner's compensation and related expenses in the
amount of $352,420, all of which were directly attributable to the
acquisition.
(d) To reflect nine months of interest expense in the amount of $84,000
on notes payable issued in connection with the acquisition (average
interest rate of 8.75%).
(e) To eliminate interest expense on debt to be retired with proceeds
from the transactions contemplated by the Registration Statement as
follows:
. $523,000 related to floor plans payable and revolving lines of credit
(average interest rate of 5.3%)
. $84,000 related to notes payable issued in connection with the
acquisition (average interest rate of 8.75%)
(f) To reflect income taxes at the Company's effective tax rate of 36%.
F-3
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors
Travis Boats & Motors, Inc. and Subsidiaries
We have audited the accompanying consolidated balance sheets of Travis Boats
& Motors, Inc. and Subsidiaries as of September 30, 1995 and December 31, 1994
and the related consolidated statements of operations, stockholders' equity
and cash flows for the nine-month period ended September 30, 1995 and the year
ended December 31, 1994. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Travis Boats
& Motors, Inc. and Subsidiaries as of September 30, 1995 and December 31, 1994
and the consolidated results of their operations and their cash flows for the
nine-month period ended September 30, 1995 and the year ended December 31,
1994, in conformity with generally accepted accounting principles.
Ernst & Young LLP
November 8, 1995, except for Note 10,
as to which the date is May 3, 1996
Austin, Texas
F-4
<PAGE>
May 17, 1994
President and Board of Directors
Travis Boats & Motors, Inc.
and Subsidiary Companies
Austin, Texas
We have audited the Consolidated Accompanying Balance Sheet of Travis Boats
& Motors, Inc. and Subsidiary Companies as of December 31, 1993, and the
related Consolidated Statements of Operations, Stockholders' Equity and Cash
Flows for the year then ended, in accordance with standards established by the
American Institute of Certified Public Accountants. All information included
in these financial statements are the representation of management of Travis
Boats & Motors, Inc. and Subsidiary Companies. Our responsibility is to
express an opinion on these Financial Statements based on our independent
audit.
We conducted the audit in accordance with Generally Accepted Auditing
Standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated balance sheet of Travis Boats & Motors,
Inc. and Subsidiary Companies as of December 31, 1993 presents fairly, in all
material respects, the financial position of Travis Boats & Motors, Inc. and
Subsidiary Companies and the results of their operations and their cash flows
for the year then ended, in conformity with Generally Accepted Accounting
Principles.
Devona Jeffery, L.L.C.
Austin, Texas
F-5
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
------------------------ -------------
1993 1994 1995
----------- ----------- -------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............. $ 139,162 $ 258,752 $ 996,058
Accounts receivable................... 375,503 223,608 1,046,717
Prepaid expenses...................... 135,877 73,190 48,559
Inventories........................... 10,704,170 13,494,799 14,270,312
Deferred tax asset.................... -- -- 115,375
----------- ----------- -----------
Total current assets................ 11,354,712 14,050,349 16,477,021
Property and equipment:
Land.................................. 1,138,287 1,500,718 1,815,718
Buildings and improvements............ 1,897,149 2,246,627 4,183,718
Furniture, fixture and equipment...... 798,864 938,970 1,351,449
----------- ----------- -----------
3,834,300 4,686,315 7,350,885
Less accumulated depreciation......... (1,150,909) (1,342,728) (1,559,693)
----------- ----------- -----------
2,683,391 3,343,587 5,791,192
Deferred tax asset..................... -- -- 21,300
Costs in excess of net assets ac-
quired................................ 14,167 -- 1,050,000
Other assets........................... 35,700 40,167 17,150
----------- ----------- -----------
Total assets........................ $14,087,970 $17,434,103 $23,356,663
=========== =========== ===========
LIABILITIES
Current liabilities:
Accounts payable...................... $ 337,649 $ 196,056 $ 461,919
Accrued liabilities................... 197,568 784,165 1,188,355
Federal income taxes payable.......... 201,239 226,535 576,157
Current portion of notes payable and
other short-term obligations......... 10,607,640 10,977,126 11,442,625
----------- ----------- -----------
Total current liabilities........... 11,344,096 12,183,882 13,669,056
Notes payable, less current portion.... 1,012,644 2,587,994 4,875,745
Deferred revenue....................... 21,011 -- --
Redeemable preferred stock, Series A,
$100 par value, 10.5% noncumulative,
nonvoting, 10,000 shares authorized,
2,250, 1,000, and -0- shares issued
and outstanding at December 31, 1993
and 1994, and September 30, 1995,
respectively.......................... 225,000 100,000 --
Stockholders' equity:
Common stock, $.01 par value,
50,000,000 shares authorized,
2,564,331, 2,635,865 and 2,683,506
shares issued and outstanding at
December 31, 1993 and 1994, and at
September 30, 1995, respectively..... 25,643 26,358 26,835
Paid-in capital....................... 5,947 66,670 138,511
Retained earnings..................... 1,572,854 2,596,323 4,646,516
Notes receivable--stockholders........ (119,225) (127,124) --
----------- ----------- -----------
Total stockholders' equity.......... 1,485,219 2,562,227 4,811,862
----------- ----------- -----------
Total liabilities and stockholders'
equity............................. $14,087,970 $17,434,103 $23,356,663
=========== =========== ===========
</TABLE>
See accompanying notes.
F-6
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS
DECEMBER 31, ENDED
------------------------ SEPTEMBER 30,
1993 1994 1995
----------- ----------- -------------
<S> <C> <C> <C>
Net sales............................. $25,756,505 $37,224,643 $41,442,349
Cost of goods sold.................... 19,810,693 28,490,216 31,136,555
----------- ----------- -----------
Gross profit.......................... 5,945,812 8,734,427 10,305,794
Selling, general and administrative
expenses............................. 4,496,029 6,332,883 6,352,844
Depreciation and amortization......... 179,527 266,299 216,965
----------- ----------- -----------
4,675,556 6,599,182 6,569,809
----------- ----------- -----------
Operating income...................... 1,270,256 2,135,245 3,735,985
Interest expense...................... (449,364) (628,685) (670,020)
Other income.......................... 82,822 61,348 133,849
----------- ----------- -----------
Income before income taxes............ 903,714 1,567,908 3,199,814
Income taxes.......................... 307,262 544,439 1,149,621
----------- ----------- -----------
Net income............................ $ 596,452 $ 1,023,469 $ 2,050,193
=========== =========== ===========
Net income per common share........... $ .23 $ .39 $ .76
=========== =========== ===========
Weighted average common shares out-
standing............................. 2,611,972 2,647,739 2,683,506
</TABLE>
See accompanying notes.
F-7
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
COMMON STOCK NOTES
----------------- PAID-IN RETAINED RECEIVABLE--
SHARES AMOUNT CAPITAL EARNINGS STOCKHOLDERS TOTAL
--------- ------- -------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31,
1992................... 2,564,331 $25,643 $ 5,947 $ 976,402 $(173,066) $ 834,926
Net income............. -- -- -- 596,452 -- 596,452
Net proceeds on notes
receivable--
stockholders.......... -- -- -- -- 53,841 53,841
--------- ------- -------- ---------- --------- ----------
BALANCE AT DECEMBER 31,
1993 .................. 2,564,331 25,643 5,947 1,572,854 (119,225) 1,485,219
Issuance of common
stock................. 71,534 715 60,723 -- -- 61,438
Net income............. -- -- -- 1,023,469 -- 1,023,469
Net proceeds (issuance)
on notes receivable--
stockholders.......... -- -- -- -- (7,899) (7,899)
--------- ------- -------- ---------- --------- ----------
BALANCE AT DECEMBER 31,
1994................... 2,635,865 26,358 66,670 2,596,323 (127,124) 2,562,227
Issuance of common
stock................. 47,641 477 71,841 -- -- 72,318
Net income............. -- -- -- 2,050,193 -- 2,050,193
Net proceeds on notes
receivable--
stockholders.......... -- -- -- -- 127,124 127,124
--------- ------- -------- ---------- --------- ----------
BALANCE AT SEPTEMBER 30,
1995................... 2,683,506 $26,835 $138,511 $4,646,516 $ -- $4,811,862
========= ======= ======== ========== ========= ==========
</TABLE>
See accompanying notes.
F-8
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
------------------------ -------------
1993 1994 1995
----------- ----------- -------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income............................ $ 596,452 $ 1,023,469 $ 2,050,193
Adjustments to reconcile net income to
net cash (used in) provided by
operating activities:
Depreciation and amortization....... 179,527 266,299 216,965
Loss on disposal of assets.......... 1,000 19,381 --
Changes in operating assets and lia-
bilities:
(Increase) decrease in accounts
receivable....................... (111,298) 151,895 (823,109)
(Increase) decrease in prepaid as-
sets............................. (56,538) 62,687 24,631
(Increase) decrease in invento-
ries............................. (3,260,728) (2,790,629) 349,830
Decrease in other assets.......... 7,469 9,700 23,017
Increase in deferred tax asset.... -- -- (136,675)
Increase (decrease) in accounts
payable.......................... 320,021 (141,593) 265,863
Increase in accrued liabilities... 50,654 586,597 404,190
Increase in income taxes payable.. 21,358 25,296 349,622
Decrease in deferred charges...... (113,167) (21,011) --
----------- ----------- -----------
Net cash (used in) provided by operat-
ing activities....................... (2,365,250) (807,909) 2,724,527
INVESTING ACTIVITIES:
Purchase of business.................. -- -- (916,345)
Purchase of property and equipment.... (1,085,229) (937,004) (1,885,345)
----------- ----------- -----------
Net cash used in investing
activities........................... (1,085,229) (937,004) (2,801,690)
FINANCING ACTIVITIES:
Net increase in notes payable and
other short-term obligations......... 3,431,426 1,935,964 715,027
Issuance of common stock.............. -- 61,488 72,268
Redemption of preferred stock......... -- (125,000) (100,000)
Net proceeds (issuance) on notes
receivable--stockholders............. 53,841 (7,949) 127,174
----------- ----------- -----------
Net cash provided by financing
activities........................... 3,485,267 1,864,503 814,469
Increase in cash and cash
equivalents.......................... 34,788 119,590 737,306
Cash and cash equivalents, beginning
of year.............................. 104,374 139,162 258,752
----------- ----------- -----------
Cash and cash equivalents, end of
year................................. $ 139,162 $ 258,752 $ 996,058
=========== =========== ===========
</TABLE>
See accompanying notes.
F-9
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business and Consolidation
Travis Boats & Motors, Inc. (the "Company") is a retailer of boats, motors,
trailers and related watersport accessories. The Company operates 11 locations
in Texas, Louisiana and Arkansas. The consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiaries. All
significant intercompany accounts and transactions have been eliminated in
consolidation. In 1995, the Company changed its fiscal year end from December
31 to September 30 to coincide with the seasonal cycle of its business.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
investments with maturities of ninety days or less when purchased to be cash
equivalents.
Inventories
Inventories are carried at the lower of cost or market. Cost is determined
using the specific identification method. Inventories consist of boats,
motors, trailers and related watersport accessories.
Property and Equipment
Property and equipment are stated at cost. Provisions for depreciation are
determined using double-declining balance and straight-line methods. The
Company uses estimated useful lives of 5-20 years for buildings and
improvements and 5-10 years for furniture, fixtures and equipment. The Company
capitalized interest of approximately $80,000 during the nine months ended
September 30, 1995 in connection with the construction of a store location. No
interest was capitalized in the years ended December 31, 1993 and 1994.
Income Taxes
In accordance with Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," deferred income taxes are provided for
temporary differences between the basis of assets and liabilities for
financial reporting purposes and for income tax return purposes.
Costs in Excess of Net Assets Acquired
Amounts assigned to costs in excess of net assets acquired are amortized
over the respective estimated useful lives using the straight-line method as
follows:
<TABLE>
<CAPTION>
LIFE
--------
<S> <C>
Noncompete agreement.......................... 7 years
Goodwill...................................... 25 years
</TABLE>
Accounts Receivable
Accounts receivable potentially expose the Company to concentrations of
credit risk, as defined by the Statement of Financial Accounting Standards No.
105, "Disclosure of Information about Financial Instruments with Off-Balance
Sheet Risk and Financial Instruments with Concentrations of Credit Risk."
Accounts receivable consist primarily of amounts due from financial
institutions upon sales contract funding and amounts
F-10
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
due from vendors under rebate programs. There was no allowance for doubtful
accounts recorded at December 31, 1993 and 1994 and September 30, 1995.
Pre-opening Costs
Pre-opening costs related to new store locations are expensed as incurred.
Advertising Costs
Advertising costs are expensed as incurred and were approximately $178,000,
$334,000, and $353,000 during the years ended December 31, 1993 and 1994 and
the nine months ended September 30, 1995, respectively.
Net Income per Common Share
Net income per common share is based on the weighted average number of
common shares outstanding during the period. Common stock issued during the
nine months ended September 30, 1995 has been included in the calculation of
weighted average common shares outstanding for all periods presented. The
effect of common stock equivalents is not significant.
Recently Issued Accounting Standards
In March 1995, the FASB issued Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of,"
which requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount. Statement No. 121 also addresses the accounting for long-
lived assets that are held for disposition. The Company will adopt Statement
No. 121 in 1996 and, based on current circumstances, does not expect a
material impact to the Company's results of operations or financial position.
In October 1995, the FASB issued Statement No. 123, "Accounting for Stock-
Based Compensation," which prescribes accounting and reporting standards for
all stock-based compensation plans, including employee stock options. The
Company must adopt the provisions of Statement No. 123 during the year ended
September 30, 1996. Under such provisions, the Company may elect to expense
the fair value of stock-based compensation or provide pro forma disclosures of
what net income would have been had the Company adopted the new fair value
method for recognition purposes. The Company continues to evaluate the
provisions of Statement No. 123 and has not determined whether it will adopt
the Statement for expense recognition purposes.
Reclassifications
Certain 1993 and 1994 amounts have been reclassified in order to conform
with the 1995 presentation.
2. NOTES PAYABLE AND OTHER SHORT-TERM OBLIGATIONS
Notes payable and other short-term obligations consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31
-------------------------- SEPTEMBER 30
1993 1994 1995
------------ ------------ ------------
<S> <C> <C> <C>
Floor plan payables............. $ 8,790,002 $ 10,223,665 $ 10,302,562
Revolving lines of credit....... 540,000 570,000 667,143
Notes payable................... 2,290,282 2,771,455 5,348,665
------------ ------------ ------------
Total notes payable and other
short-term obligations....... 11,620,284 $ 13,565,120 16,318,370
Less current portion............ (10,607,640) (10,977,126) (11,442,625)
------------ ------------ ------------
Total notes payable and other
short-term obligations, less
current portion.............. $ 1,012,644 $ 2,587,994 $ 4,875,745
============ ============ ============
</TABLE>
F-11
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. NOTES PAYABLE AND OTHER SHORT-TERM OBLIGATIONS (CONTINUED)
Floor plan payables consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------- SEPTEMBER 30,
1993 1994 1995
---------- ----------- -------------
<S> <C> <C> <C>
Floor plan payable to bank under a
$7,500,000 revolving line of
credit agreement with interest
floating at prime plus .25%,
maturing July 1996............... $3,658,375 $ 4,268,901 $ 2,163,267
Floor plan payable to bank under
revolving line of credit
agreements totaling $4,050,000
with interest floating at prime
plus .50% to prime plus 1%,
maturing May 1996 and August
1996............................. 630,220 610,185 1,224,389
Floor plans payable to commercial
finance companies under revolving
line of credit agreements with
interest ranging from 0% to prime
plus 4.75% with no stated
maturity date.................... 4,501,407 5,344,579 6,914,906
---------- ----------- -----------
Total floor plans payable......... $8,790,002 $10,223,665 $10,302,562
========== =========== ===========
</TABLE>
The floor plan payables are collateralized by specific boat, motor and
trailer inventory, as well as general security filings on all inventory and
equipment. The floor plan payables to finance companies include non-interest
bearing payment terms for part of the calendar year (typically the months of
August through April). As of December 31, 1993 and 1994, and September 30,
1995, the amount of non-interest bearing floor plans payable to finance
companies was $4,389,639, $4,478,125 and $6,522,829, respectively.
Floor plan payables of certain of the Company's subsidiaries are guaranteed
by the Company. Certain floor plan payables are guaranteed in limited dollar
amounts by various stockholders of the Company. The Company is significantly
limited as to annual dividends for preferred and common stock.
Borrowings under revolving lines of credit consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------- SEPTEMBER 30,
1993 1994 1995
-------- -------- -------------
<S> <C> <C> <C>
Note payable to bank under a $500,000
revolving line of credit agreement with
interest at prime plus .25%, due July
1996................................... $500,000 $500,000 $470,000
Notes payable to bank under $250,000
revolving line of credit agreements
with interest at prime plus 1%, due
February 1996 and May 1996............. 40,000 70,000 197,143
-------- -------- --------
Borrowings under lines of credit........ $540,000 $570,000 $667,143
======== ======== ========
</TABLE>
The weighted average interest rate on floor plan payables and revolving
lines of credit outstanding as of December 31, 1993, December 31, 1994 and
September 30, 1995 is 3.9%, 5.2% and 5.3%, respectively.
F-12
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. NOTES PAYABLE AND OTHER SHORT-TERM OBLIGATIONS (CONTINUED)
Notes payable consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------- SEPTEMBER 30,
1993 1994 1995
---------- ---------- -------------
<S> <C> <C> <C>
Mortgage notes payable to various
banks, organizations and
individuals under deeds of trust
with interest ranging from 6.0% to
10.5% due in monthly principal and
interest installments ranging from
$1,225 to $30,114, maturing
beginning in April 1998........... $1,269,105 $2,134,561 $3,266,475
Notes payable to various banks, a
corporation and an individual for
equipment with interest ranging
from 6.99% to 11.0%, due in
monthly installments ranging from
$333 to $10,500, maturing
beginning in December 1995........ 130,065 85,228 580,524
Notes payable to individuals with
interest at prime plus 1% fixed
annually, due in annual principal
installments of $20,000
(aggregate) plus interest,
maturing October 1997,
collateralized by approximately
90,000 shares of the Company's
outstanding common stock owned by
certain directors and officers of
the Company....................... 80,000 60,000 60,000
Notes payable (unsecured) to
corporation(s) owned by various
stockholders of the Company and to
stockholders individually, with
interest due quarterly at various
rates at or below prime plus 1%,
maturing October 1996............. 91,667 491,666 641,666
Note payable to individual with
interest at 8.75%, due in monthly
principal and interest
installments of $12,543, maturing
November 2002..................... -- -- 800,000
Interim construction note payable
to a bank under a deed of trust
with interest at prime plus 1%,
maturing April 1994............... 705,834 -- --
Note payable to individual with
interest at 10%, due in monthly
principal and interest
installments of $1,186............ 13,611 -- --
---------- ---------- ----------
Total notes payable................ $2,290,282 $2,771,455 $5,348,665
========== ========== ==========
</TABLE>
Certain notes payable are collateralized by assets of the Company including
inventory, accounts receivable, equipment, leasehold improvements, vehicles,
company stock, land and buildings. Notes payable of certain of its subsidiaries
are guaranteed by the Company. Certain notes payable are guaranteed in limited
dollar amounts by various stockholders of the Company.
F-13
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. NOTES PAYABLE AND OTHER SHORT-TERM OBLIGATIONS (CONTINUED)
Interest paid was approximately $440,000, $641,000, and $843,000, in the
years ended December 31, 1993 and 1994 and the nine months ended September 30,
1995, respectively.
Aggregate maturities required on notes payable at September 30, 1995 are as
follows:
<TABLE>
<CAPTION>
YEAR ENDING
SEPTEMBER 30
------------
<S> <C>
1996....................................... $ 472,920
1997....................................... 1,208,899
1998....................................... 534,539
1999....................................... 360,868
2000....................................... 492,964
Thereafter................................. 2,278,475
----------
$5,348,665
==========
</TABLE>
3. LEASES
The Company leases various facilities under operating leases. Rent expense
was $246,979 in 1993, $214,421 in 1994 and $188,581 in 1995. Generally, the
leases provide for renewals for various periods at stipulated rates. Future
minimum rentals due under noncancelable leases are as follows for each of the
years ending September 30:
<TABLE>
<S> <C>
1996.......................................... $227,748
1997.......................................... 36,066
1998 and thereafter........................... --
</TABLE>
In addition, under most of the Company's leases, the Company has renewal
options at varying terms.
4. ACQUISITION
Effective September 20, 1995, the Company acquired Red River Marine, Inc.
with retail store locations in Hot Springs and Heber Springs, Arkansas. This
acquisition included land and building (Hot Springs location) and boat, motor
and trailer inventory, as well as parts and accessories inventory of each
location. The purchase price was $2,517,417 of which approximately $1,600,000
was financed by the issuance of notes payable to the seller.
The acquisition has been accounted for using the purchase method of
accounting and, accordingly, the operating results of Red River Marine, Inc.
have been included in the consolidated financial statements from the date of
acquisition. The purchase price ($2,517,417) and liabilities assumed
($437,150) have been allocated to the tangible net assets acquired
($1,904,567) based on their respective fair values at the date of acquisition.
The resulting excess purchase price ($1,050,000) was allocated to a noncompete
agreement ($300,000) and goodwill ($750,000).
F-14
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. ACQUISITION (CONTINUED)
The unaudited pro forma combined condensed results of operations of the
Company for the nine months ended September 30, 1995 and the year ended
December 31, 1994 as if the purchase had occurred on January 1, 1994 on the
basis described above are as follows:
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, 1994 SEPTEMBER 30, 1995
----------------- ------------------
<S> <C> <C>
Revenue.............................. $50,400,575 $54,629,612
=========== ===========
Net income........................... $ 1,341,310 $ 2,469,132
=========== ===========
Net income per common share.......... $ .51 $ .92
=========== ===========
</TABLE>
The pro forma information does not purport to represent what the Company's
results of operations would actually have been had the acquisition occurred at
the beginning of the period indicated, nor to project the Company's results of
operations for any future date or period.
5. INCOME TAXES
In 1992, the Financial Accounting Standards Board issued Statement No. 109,
"Accounting for Income Taxes." The Company adopted the provisions of the new
standard in its financial statements for the year ended December 31, 1994. The
cumulative effect as of January 1, 1994 of adopting the Standard was
immaterial and the prior year financial statements have not been restated to
reflect the change in accounting method.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of the Company's deferred tax liabilities and assets are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------- SEPTEMBER 30,
1993 1994 1995
------ ------ -------------
<S> <C> <C> <C>
Deferred tax assets:
Book over tax deprecia-
tion................... $ -- $ -- $ 21,300
Accrued salaries and
wages.................. -- -- 115,375
------ ------ --------
Total deferred tax as-
sets..................... -- -- 136,675
Valuation allowance for
deferred tax assets...... -- -- --
------ ------ --------
Net deferred tax assets... $ -- $ -- $136,675
====== ====== ========
</TABLE>
F-15
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. INCOME TAXES (CONTINUED)
Significant components of the provision for income taxes are as follows:
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED DECEMBER 31 ENDED
----------------------- SEPTEMBER 30
1993 1994 1995
----------- ----------- ------------
<S> <C> <C> <C>
Current expense:
Federal.................................. $ 307,262 $ 523,589 $1,243,371
State.................................... -- 20,850 42,925
----------- ----------- ----------
Total current expense.................. 307,262 544,439 1,286,296
=========== =========== ==========
Deferred expense (benefit):
Federal.................................. -- -- (130,900)
State.................................... -- -- (5,775)
----------- ----------- ----------
Total deferred expense (benefit)....... -- -- (136,675)
----------- ----------- ----------
Total provision for income taxes........... $ 307,262 $ 544,439 $1,149,621
=========== =========== ==========
</TABLE>
The differences between the effective tax rate and the U.S. federal
statutory rate of 34% are reconciled as follows:
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED DECEMBER 31 ENDED
----------------------- SEPTEMBER 30
1993 1994 1995
----------- ----------- ------------
<S> <C> <C> <C>
Income tax expense at the federal statu-
tory rate.............................. $ 307,262 $ 533,089 $1,087,937
State income taxes..................... -- 20,850 37,150
Other.................................. -- (9,500) 24,534
----------- ----------- ----------
$ 307,262 $ 544,439 $1,149,621
=========== =========== ==========
</TABLE>
Income taxes paid were approximately $162,000, $528,000 and $855,000, in the
years ended December 31, 1993 and 1994 and the nine months ended September 30,
1995, respectively.
6. REDEEMABLE PREFERRED STOCK
On August 31, 1989, the Company issued 2,250 shares of Series A redeemable
preferred stock for $225,000. The preferred stock is noncumulative and has a
par value and redemption value of $100 per share. The holders of the preferred
stock are entitled to receive dividends at the rate of 10.5% annually if
declared by the Board of Directors. No dividends were declared or paid during
the years ended December 31, 1993 and 1994 and the nine months ended September
30, 1995. The Company must redeem all preferred stock outstanding within 10
years from the date of issuance or August 31, 1999. The Company redeemed 1,250
shares in 1994 and 1,000 shares in 1995 for $125,000 and $100,000,
respectively. No preferred stock was outstanding at September 30, 1995.
7. STOCKHOLDERS' EQUITY
In March 1994, the Board of Directors of the Company approved a 199 for 1
stock dividend for stockholders of record as of March 31, 1994. See also Note
10.
The Company has granted options to purchase shares of the Company's common
stock to certain officers of the Company which vest over five years.
F-16
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
7. STOCKHOLDERS' EQUITY (CONTINUED)
Total option activity for the years ended December 31, 1993 and 1994 and the
nine months ended September 30, 1995, was as follows:
<TABLE>
<CAPTION>
NUMBER OF
SHARES PRICE $
--------- -------
<S> <C> <C>
Outstanding at December 31, 1992........................ -- --
Granted............................................... -- --
Exercised............................................. -- --
Expired............................................... -- --
-------
Outstanding at December 31, 1993........................ -- --
Granted............................................... -- --
Exercised............................................. -- --
Expired............................................... -- --
-------
Outstanding at December 31, 1994........................ -- --
Granted............................................... 133,867 $5.25
Exercised............................................. -- --
Expired............................................... -- --
-------
Outstanding at September 30, 1995....................... 133,867 $5.25
=======
Exercisable at September 30, 1995....................... -- --
=======
</TABLE>
8. RELATED PARTY TRANSACTIONS
The Company sells extended service contracts to its customers. The
obligations of the Company under these contracts are transferred to Ideal
Insurance Company, Ltd. (Ideal) pursuant to an agreement between the Company
and Ideal dated as of January 1, 1994. Ideal reinsures these risks with
Amerisure Property & Casualty, Ltd. (Amerisure), a company wholly owned by
certain principal shareholders of the Company. These contracts are
administered by First Extended Service Corporation (FESC), which contracts are
insured by FESC's affiliate, FFG Insurance Co. (FFG). In conjunction with
these agreements, the Company pays Amerisure an agreed amount for each
extended service contract which is insured and, in the event of claims under
any extended service contracts, Amerisure reimburses the repair facility for
the amount of covered claims. Amerisure is then financially responsible for
any repairs required pursuant to the extended service contract. The Company
receives a commission for each extended service contract that it sells. For
the years ended December 31, 1993 and 1994, and the nine-month period ended
September 30, 1995, extended service contract commissions totaled
approximately $-0-, $350,000 and $448,000, respectively.
9. COMMITMENTS AND CONTINGENCIES
The Company is currently involved in several matters regarding pending or
threatened litigation in the normal course of business. Management does not
expect the ultimate resolution of these matters to have a material adverse
effect on the Company's consolidated financial statements.
10. SUBSEQUENT EVENTS
Effective December 14, 1995, the Company adopted an Incentive Stock Option
Plan which provides for the granting of options to directors, officers, and
key employees to purchase shares of the Company's common stock. The Company
has reserved 200,000 shares of common stock for issuance under such plan.
F-17
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. SUBSEQUENT EVENTS (CONTINUED)
Effective December 14, 1995, the Company changed the stated par value of
each share of common stock from $.10 to $.01. The financial statements have
been restated to retroactively reflect the above change in par value.
In November 1995, the Board of Directors of the Company approved a 15 for 1
stock dividend for stockholders of record as of November 8, 1995.
In May 1996, the Board of Directors of the Company approved a 1 for 3 stock
dividend for stockholders of record as of May 3, 1996.
All share amounts presented in these financial statements have been restated
to retroactively reflect the above stock dividends.
Effective December 1, 1995, the Company acquired certain assets of Clay's
Boats & Motors, Inc. ("Clay's") in New Iberia, Louisiana. The assets acquired
included furniture, fixtures and equipment, all parts and accessories, all
leasehold improvements and certain other miscellaneous assets. The purchase
price was $328,741, of which $262,687 was paid in cash and $66,054 was
financed by the issuance of a note payable to the seller.
The acquisition has been accounted for using the purchase method of
accounting and, accordingly, the operating results of Clay's have been
included in the consolidated financial statements from the date of
acquisition. The purchase price ($328,741) has been allocated to the tangible
net assets acquired ($240,669) and the resulting excess purchase price
($88,072) was assigned to goodwill.
F-18
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1996
<TABLE>
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents........................................ $ 664,969
Accounts receivable.............................................. 4,455,289
Prepaid expenses................................................. 131,775
Inventories...................................................... 28,733,265
Deferred tax asset............................................... 76,160
-----------
Total current assets........................................... 34,061,458
Property and equipment:
Land............................................................. 1,815,718
Buildings and improvements....................................... 4,876,653
Furniture, fixture and equipment................................. 1,627,843
-----------
8,320,214
Less accumulated depreciation.................................... (1,761,154)
-----------
6,559,060
Cost in excess of net assets acquired.............................. 1,101,114
Other assets....................................................... 176,181
-----------
Total assets....................................................... $41,897,813
===========
</TABLE>
<TABLE>
<S> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable................................................. $ 735,925
Accrued liabilities.............................................. 1,237,219
Federal income taxes payable..................................... 487,000
Unearned revenue................................................. 2,769,714
Current portion of notes payable and other short-term obliga-
tions........................................................... 26,216,072
-----------
Total current liabilities...................................... 31,445,930
Notes payable, less current portion................................ 5,397,066
Stockholders' equity:
Common stock, $.01 par value, 50,000,000 shares authorized,
2,683,506 shares issued and outstanding......................... 26,835
Paid-in capital.................................................. 138,511
Retained earnings................................................ 4,889,471
-----------
Total stockholders' equity......................................... 5,054,817
-----------
Total liabilities and stockholders' equity......................... $41,897,813
===========
</TABLE>
See accompanying notes.
F-19
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MARCH 31
------------------------
1995 1996
----------- -----------
<S> <C> <C>
Net sales............................................. $16,626,734 $22,016,532
Cost of good sold..................................... 12,852,973 16,445,167
----------- -----------
Gross profit.......................................... 3,773,761 5,571,365
Selling, general and administrative expenses.......... 3,216,600 4,301,986
Depreciation and amortization......................... 136,815 262,256
----------- -----------
3,353,415 4,564,242
----------- -----------
Operating income...................................... 420,346 1,007,123
Interest expense...................................... (370,659) (668,547)
Other income.......................................... 110,034 31,379
----------- -----------
Income before income taxes............................ 159,721 369,955
Income taxes.......................................... 61,512 127,000
----------- -----------
Net income............................................ $ 98,209 $ 242,955
=========== ===========
Net income per common share........................... $ .04 $ .09
=========== ===========
Weighted average common shares outstanding............ 2,683,506 2,683,506
</TABLE>
See accompanying notes.
F-20
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED MARCH 31,
---------------------------
1995 1996
------------- -------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income....................................... $ 98,209 $ 242,955
Adjustments to reconcile net income to net cash (used in)
operating activities:
Depreciation and amortization.................. 136,815 262,256
Changes in operating assets and liabilities:
(Increase) in accounts receivable............ (1,209,236) (3,408,572)
(Increase) in prepaid assets................. (47,478) (83,216)
(Increase) in inventories.................... (8,592,777) (14,331,935)
(Increase) in other assets................... (11,601) (159,031)
Decrease in deferred tax asset............... -- 60,515
Increase in accounts payable................. 79,383 274,006
Increase in accrued liabilities.............. 247,937 48,864
(Decrease) in income taxes payable........... (500,000) (89,157)
Increase in unearned revenue................. -- 2,769,714
------------ -------------
Net cash (used in) provided by operating activi-
ties............................................ (9,798,748) (14,413,601)
INVESTING ACTIVITIES:
Purchase of business............................. -- (262,687)
Purchase of property and equipment............... (133,679) (883,515)
------------ -------------
Net cash used in investing activities............ (133,679) (1,146,202)
FINANCING ACTIVITIES:
Net increase in notes payable and other short-
term obligations................................ 9,388,893 15,228,714
Issuance of common stock......................... 10,230 --
Net proceeds (issuance) on notes receivable
stockholders.................................... 8,101 --
------------ -------------
Net cash provided by financing activities........ 9,407,224 15,228,714
Decrease in cash and cash equivalents............ (525,203) (331,089)
Cash and cash equivalents, beginning of period... 525,203 996,058
------------ -------------
Cash and cash equivalents, end of period......... $ -- $ 664,969
============ =============
Supplemental Cash Flow Information:
Interest paid.................................... $ 320,000 $ 746,000
Income taxes paid................................ $ 311,000 $ 190,000
</TABLE>
See accompanying notes.
F-21
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information. Accordingly, they do not include all of the
information and notes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the six-months ended
March 31, 1996 may not be indicative of the results for the year ended
September 30, 1996.
2. NOTES PAYABLE AND OTHER SHORT-TERM OBLIGATIONS
Notes payable and other short-term obligations as of March 31, 1996 consist
of the following:
<TABLE>
<S> <C>
Floor plans payable.......................................... $24,233,120
Revolving lines of credit.................................... 650,000
Notes payable................................................ 6,730,018
-----------
Total notes payable and other short-term obligations....... 31,613,138
Less current portion......................................... 26,216,072
-----------
Total notes payable and other short-term obligations, less
current portion........................................... $ 5,397,066
===========
</TABLE>
The weighted average interest rate on floor plans payable and revolving
lines of credit outstanding as of March 31, 1996 is 5.3%.
3. ACQUISITION
Effective September 20, 1995, the Company acquired Red River Marine, Inc.
with retail store locations in Hot Springs and Heber Springs, Arkansas. The
acquisition included land and building (Hot Springs location) and boat, motor
and trailer inventory, as well as parts and accessories inventory of each
location. The purchase price was $2,517,417 of which approximately $1,600,000
was financed by the issuance of notes payable to the seller.
The acquisition has been accounted for using the purchase method of
accounting and, accordingly, the operating results of Red River Marine, Inc.
have been included in the consolidated financial statements from the date of
acquisition. The purchase price ($2,517,417) and liabilities assumed
($437,150) have been allocated to the tangible net assets acquired
($1,904,567) based on their respective fair values at the date of acquisition.
The resulting excess purchase price ($1,050,000) was assigned to noncompete
agreement ($300,000) and goodwill ($750,000).
Effective December 1, 1995, the Company acquired certain assets of Clay's
Boats & Motors, Inc. ("Clay's") in New Iberia, Louisiana. The assets acquired
included furniture, fixtures and equipment, all parts and accessories, all
leasehold improvements and certain other miscellaneous assets. The purchase
price was $328,741, of which $262,687 was paid in cash and $66,054 was
financed by the issuance of a note payable to the seller.
The acquisition has been accounted for using the purchase method of
accounting and, accordingly, the operating results of Clay's have been
included in the consolidated financial statements from the date of
acquisition. The purchase price ($328,741) has been allocated to the tangible
net assets acquired ($240,669) and the resulting excess purchase price
($88,072) was assigned to goodwill.
F-22
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. STOCKHOLDERS' EQUITY
In November 1995, the Board of Directors of the Company approved a 15 for 1
stock dividend for stockholders of record as of November 8, 1995.
Effective December 14, 1995, the Company changed the stated par value of
each share of common stock from $.10 to $.01.
In May 1996, the Board of Directors of the Company approved a 1 for 3 stock
dividend for stockholders of record as of May 3, 1996.
The financial statements have been restated to retroactively reflect the
above stock dividend and change in par value.
5. RELATED PARTY TRANSACTIONS
The Company sells extended service contracts to its customers. The
obligations to the Company under these contracts are transferred to ideal
Insurance Company, Ltd. (Ideal) pursuant to an agreement between the Company
and Ideal dated as of January 1, 1994. Ideal reinsures these risks with
Amerisure Property & Casualty, Ltd. (Amerisure), a company wholly owned by
certain principal shareholders of the Company. These contracts are
administered by First Extended Service Corporation (FESC), which contracts are
insured by FESC's affiliate, FFG Insurance Co. (FFG). In conjunction with
these agreements, the Company pays Amerisure an agreed amount for each
extended service contract which is insured and, in the event of claims under
any extended service contracts, Amerisure reimburses the repair facility for
the amount of covered claims. Amerisure is then financially responsible for
any repairs required pursuant to the extended service contract. The Company
receives a commission for each extended service contract that it sells. For
the six-month period ended March 31, 1995 and 1996, extended service contract
commissions totaled approximately $169,000 and $106,000, respectively.
F-23
<PAGE>
REPORT OF INDEPENDENT AUDITORS
December 5, 1995
To the Shareholder
Red River Marine, Inc.
Heber Springs, AR 72543
We have audited the accompanying consolidated statements of income, retained
earnings and cash flows of Red River Marine, Inc. and its subsidiary for the
two years ended September 30, 1995. These financial statements are the
responsibility of the company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated results of operations and cash
flows of Red River Marine, Inc. and its subsidiary for the two years ended
September 30, 1995, in conformity with generally accepted accounting
principles.
Turner, Burkett & Ring, P.A.
F-24
<PAGE>
RED RIVER MARINE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30
-----------------------
1994 1995
----------- -----------
<S> <C> <C>
Sales.................................................. $13,175,932 $14,085,084
Cost of sales.......................................... 10,296,129 11,316,009
----------- -----------
Gross profit......................................... 2,879,803 2,769,075
Operating expenses:
Salaries and wages................................... 1,156,314 1,572,556
Repairs and maintenance.............................. 64,516 45,685
Auto expense......................................... 56,805 68,406
Insurance............................................ 137,456 102,597
Telephone and utilities.............................. 86,809 98,319
Advertising.......................................... 15,038 31,322
Office supplies and postage.......................... 18,641 18,097
Travel and entertainment............................. 22,411 38,594
Professional services................................ 20,237 44,631
Other................................................ 63,074 60,361
Commissions.......................................... 85,155 36,383
Payroll taxes........................................ 101,982 123,205
Depreciation......................................... 63,013 67,893
Operating supplies................................... 37,915 48,133
Contract labor....................................... 44,754 19,312
Freight.............................................. 82,051 76,418
Rent................................................. -- 24,833
Taxes and licenses................................... -- 29,216
Bad debts............................................ 53,750 37,742
Show expense......................................... 24,624 30,187
Profit sharing contribution.......................... 20,000 --
----------- -----------
Total operating expenses........................... 2,154,545 2,573,890
Income from operations............................... 725,258 195,185
</TABLE>
<TABLE>
<S> <C> <C>
Other income (expense):
Interest expense................................... $ (224,418) $ (331,318)
Interest income.................................... 29,074 32,927
Other income....................................... 26,795 52,313
----------- -----------
Total other income (expense)..................... (168,549) (246,078)
Income (loss) before provision for income taxes...... 556,709 (50,893)
Provision for income taxes........................... 148,068 --
----------- -----------
Net income (loss).................................... 408,641 (50,893)
Retained earnings, beginning of period............... 1,184,438 1,593,079
----------- -----------
Retained earnings, end of year....................... $ 1,593,079 $ 1,542,186
=========== ===========
</TABLE>
The notes to the consolidated financial statements
are an integral part of this statement.
F-25
<PAGE>
RED RIVER MARINE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30
------------------------
1994 1995
----------- -----------
<S> <C> <C>
Cash flows from operating activities
Net income (loss).................................. $ 408,641 $ (50,893)
Adjustment to reconcile net income (loss) to net
cash provided (used) by operating activities:
Depreciation..................................... 63,013 67,893
Deferred income taxes............................ (990) (11,025)
Gain on sale of assets........................... -- (10,575)
(Increase) decrease in:
Accounts receivable.............................. (386) (7,832)
Inventory........................................ (614,598) 2,698,098
Notes receivable................................. -- (801,073)
Prepaid expenses and other assets................ 18,554 (10,998)
Increase (decrease) in:
Trade accounts payable........................... 44,513 (74,919)
Notes payable--floor plan........................ 181,985 (1,821,723)
Other current liabilities........................ (402) (17,683)
Income taxes payable............................. 107,684 (117,112)
Accrued salaries and commissions................. 27,987 (43,250)
----------- -----------
Net cash provided (used) by operating activi-
ties.......................................... 236,001 (201,092)
Cash flows from investing activities:
Purchase of equipment.............................. (56,360) --
Net proceeds from sale of assets................... -- 465,377
----------- -----------
Net cash provided (used) by investing activi-
ties............................................ (56,360) 465,377
Cash flows from financing activities:
Decrease in financing reserves..................... 50,894 33,776
Reduction in notes payable......................... (57,501) (223,172)
----------- -----------
Net cash used by financing activities............ (6,607) (189,396)
Net increase in cash................................. $ 173,034 $ 74,889
Cash, beginning of year.............................. 1,032,306 1,205,340
----------- -----------
Cash, end of year.................................... $ 1,205,340 $ 1,280,229
=========== ===========
Supplemental cash flow information
Cash paid for interest............................. $ 221,219 $ 330,479
=========== ===========
Cash paid for income taxes......................... $ 41,374 $ 117,112
=========== ===========
</TABLE>
The notes to the consolidated financial statements are an integral part of this
statement.
F-26
<PAGE>
RED RIVER MARINE, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
The financial statements include the accounts of Red River Marine, Inc. and
its wholly-owned subsidiary Red River Marine, Inc. #2 (the Company). All
intercompany accounts have been eliminated in consolidation. The financial
statements reflect the marine operations through September 20, 1995, the date
of sale as discussed in Note 2.
Depreciation
Depreciation is computed using the straight-line and accelerated methods
over the estimated useful lives of the assets as summarized below:
<TABLE>
<S> <C>
Land Improvements...................... 10 Years
Building and Improvements.............. 10 to 40 Years
Vehicles............................... 3 Years
Furniture and Equipment................ 5 to 10 Years
</TABLE>
Bad Debts
Bad debts are accounted for by the direct write-off method.
NOTE 2--NOTES RECEIVABLE
In September 1995, the Company sold its inventory, certain other assets and
real estate and rights to the use of its name. Payment is to be received at
approximately $30,100 per month including interest at 8.75%.
NOTE 3--PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at September 30, 1995, consists of the
following:
<TABLE>
<S> <C>
Land............................................................ $483,662
Buildings and Leasehold Improvements............................ 364,798
Autos........................................................... 23,835
Land Improvements............................................... 83,315
--------
955,610
Less: Accumulated Depreciation.................................. (228,287)
--------
Total........................................................... $727,323
========
</TABLE>
NOTE 4--LONG-TERM DEBT
Long-term debt at September 30, 1995 is comprised as follows:
<TABLE>
<S> <C>
Heber Springs State Bank 9.5% (Secured by real estate and
guaranteed by FMHA)......................................... $449,582
--------
Total long-term debt......................................... 449,582
Less current portion......................................... (15,638)
--------
$433,944
========
</TABLE>
F-27
<PAGE>
RED RIVER MARINE, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 4--LONG-TERM DEBT (CONTINUED)
Annual maturities of long-term debt are as follows:
<TABLE>
<CAPTION>
YEAR ENDING SEPTEMBER 30,
-------------------------
<S> <C>
1996.......................................................... $ 15,638
1997.......................................................... 17,123
1998.......................................................... 18,750
1999.......................................................... 20,531
2000.......................................................... 22,482
Thereafter.................................................... 355,058
--------
$449,582
========
</TABLE>
NOTE 5--CONTINGENT LIABILITIES
The Company is contingently liable to financial institutions at September
30, 1995 as follows:
<TABLE>
<S> <C>
Heber Springs State Bank....................................... $210,356
First Commercial Bank.......................................... 743,294
--------
Total........................................................ $953,650
========
</TABLE>
These contingent liabilities are a result of financing agreements with
recourse on boat sales financed by the above financial institutions.
NOTE 6--FUTURE OPERATIONS
Red River Marine, Inc., as noted in Note 2, sold its inventory, certain
other assets and real estate and right to the use of its name to Travis
Boating Centers, Inc. The management of Red River Marine, Inc. and its
operating policies and procedures will not continue in the future. Therefore,
the degree of success that Travis Boats & Motors, Inc. will experience in the
market area of Red River Marine, Inc. will be totally dependent upon the
skills of the Travis Boats & Motors, Inc. management of the Red River Marine
stores.
F-28
<PAGE>
PICTURES ARE INCLUDED AS FOLLOWS:
1. Photographs of boats
2. Copy of companies in-store price-signage
3. Company's logo
<PAGE>
[LOGO]
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following sets forth expenses and costs (other than underwriting
discounts and commissions) expected to be incurred in connection with the
issuance and distribution of the shares offered hereby:
<TABLE>
<S> <C>
Commission registration fee......................................... $9,022
------
NASD filing fee..................................................... 3,117
------
Nasdaq Stock Market................................................. *
Accounting fees and expenses........................................ *
Legal fees and expenses............................................. *
Blue sky fees and expenses (including fees and expenses of coun-
sel)............................................................... *
Printing and engraving fees and expenses............................ *
Fees of transfer agent and registrar................................ *
Miscellaneous....................................................... *
------
Total........................................................... $ *
======
</TABLE>
- --------
* To be supplied by amendment.
All of the foregoing, except the Commission registration fee and the NASD
filing fee, are estimated.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant has authority under Articles 2.02A.(16) and 2.02-1 of the
Texas Business Corporation Act (the "TBCA") to indemnify its directors and
officers to the extent provided for in such statute. The Registrant's articles
of incorporation permit indemnification of directors and officers to the
fullest extent permitted by law.
The TBCA provides in part that a corporation may indemnify a director or
officer or other person who was, is, or is threatened to be made a named
defendant or respondent in a proceeding because the person is or was a
director, officer, employee or agent of the corporation, if it is determined
that such person (i) conducted himself in good faith; (ii) reasonably
believed, in the case of conduct in his official capacity as a director or
officer of the corporation, that his conduct was in the corporation's best
interests, and, in all other cases, that his conduct was at least not opposed
to the corporation's best interest; and (iii) in the case of any criminal
proceeding, had no reasonable cause to believe that his conduct was unlawful.
A corporation may indemnify a person under the TBCA against judgments,
penalties (including excise and similar taxes), fines, settlement, and
reasonable expenses actually incurred by the person in connection with the
proceeding. If the person is found liable to the corporation or is found
liable on the basis that personal benefit was improperly received by the
person, the indemnification is limited to reasonable expenses actually
incurred by the person in connection with the proceeding, and shall not be
made in respect of any proceeding in which the person shall have been found
liable for willful or intentional misconduct in the performance of his duty to
the corporation.
A corporation may also pay or reimburse expenses incurred by a person in
connection with his appearance as a witness or other participation in a
proceeding at a time when he is not a named defendant or respondent in the
proceeding.
Reference is also made to the articles of incorporation of the Registrant,
which limit or eliminate a director's liability for monetary damages to the
Registrant or its stockholders for acts or omissions in the director's
capacity as a director, except that the articles of incorporation do not
eliminate the liability of a director for (i) a breach of the
II-1
<PAGE>
director's duty of loyalty to the Registrant or its stockholders, (ii) an act
or omission not in good faith that constitutes a breach of duty of the
director to the Registrant or an act or omission that involves intentional
misconduct or a knowing violation of the law, (iii) a transaction from which a
director received an improper benefit, whether or not the benefit resulted
from an action taken within the scope of the director's office, or (iv) an act
or omission for which the liability of a director is expressly provided for by
an applicable statute.
Reference is made to Section 8 of the Form of Underwriting Agreement
contained as Exhibit 1.1 which provides for indemnification by the
Underwriters of the directors and officers of the Registrant signing the
Registration Statement and certain controlling persons of the Registrant
against certain liabilities, including those arising under the Securities Act
in certain instances.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
All references to numbers of shares and per share prices give effect to the
1 for 3 stock dividend to be effected prior to the closing of this offering
unless otherwise indicated.
Within the past three years, the Registrant has sold the following
securities or engaged in the following transactions which were not registered
under the Securities Act:
(1) On March 1, 1993, the Company issued 4,267 shares of Common Stock to
Michael B. Perrine, the Company's Chief Financial Officer, Secretary and
Treasurer, in lieu of a $4,000 cash bonus payable with respect to the
Company's fiscal year 1992. This transaction was exempt from the
registration requirements of the Securities Act pursuant to Section 4(2)
thereunder.
(2) On March 31, 1994, the Company issued 41,707 shares of Common Stock
to Ronnie L. Spradling in lieu of a $40,000 cash bonus payable with respect
to the Company's fiscal year 1993. This transaction was exempt from the
registration requirements of the Securities Act pursuant to Section 4(2)
thereunder.
(3) On April 30, 1994, the Company issued 11,691 shares of Common Stock
to Billy Breed in lieu of a $11,212 cash payment payable to Mr. Breed in
connection with an agreement entered into between the Company and Mr. Breed
in 1989. This transaction was exempt from the registration requirements of
the Securities Act pursuant to Section 4(2) thereunder.
(4) On September 30, 1994, the Company issued 6,400 shares of Common
Stock to J. Brooks Rainer, the Company's controller and tax manager, in
exchange for $6,834. This transaction was exempt from the registration
requirement of the Securities Act pursuant to Section 4(2) thereunder.
(5) On September 30, 1994, the Company issued 3,200 shares of Common
Stock to Michael B. Perrine, the Company's Chief Financial Officer,
Secretary and Treasurer, in exchange for $3,069. This transaction was
exempt from the registration requirements of the Securities Act pursuant to
Section 4(2) thereunder.
(6) On October 18, 1994, the Company issued 8,533 shares of Common Stock
to Kelly Harber in exchange for $8,184. This transaction was exempt from
the registration requirements of the Securities Act pursuant to Section
4(2) thereunder.
(7) As of December 31, 1994, the Company agreed to sell stock to selected
employees. Pursuant to this arrangement, the Company sold a total of 47,637
shares to six persons for a total consideration of $72,318 between March 1
and June 30, 1995. These transactions were exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) and Rule 701
thereunder.
(8) In May 1995, the Company granted nonstatutory stock options to
purchase 20,267, 46,933 and 66,667 shares of Common Stock to Mark T.
Walton, Ronnie L. Spradling and Michael B. Perrine, respectively, at an
exercise price of $5.25 per share. Such options vest over a period of five
years, at a cumulative rate of 20% per year. The initial 20% vests on May
17, 1996. This transaction was exempt from the registration requirements of
the Securities Act pursuant to Section 4(2) and Rule 701 thereunder.
II-2
<PAGE>
(9) On November 8, 1995, the Company declared a 15-for-1 stock dividend.
This transaction was exempt from the registration requirements as not
involving any "sale," "offer," or "offer to sell" within the meaning of
Section 2(3) of the Securities Act.
(10) On May 3, 1996, the Company declared a one for three stock dividend.
This transaction was exempt from the registration requirements as not
involving any "'sale," "offer," or "offer to sell" within the meaning of
Section 2(3) of the Securities Act.
The securities referred to above as having been issued in reliance on the
exemption from registration under Section 4(2) of the Securities Act were
subject to restrictions on transfer and appropriate restrictive legends were
affixed to the certificates or instruments issued in each transaction. All
recipients were furnished with, or had adequate access to, information
regarding the Registrant and all recipients represented that they were
"accredited investors" as that term is defined in Rule 501 of Regulation D
promulgated by the Securities and Exchange Commission pursuant to the
Securities Act.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits: Except as otherwise noted, all Exhibits have been previously
filed.
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement.
3.1 Restated Articles of Incorporation of the Registrant, as amended.
3.2 Restated Bylaws of the Registrant, as amended.
4.1* Specimen stock certificate evidencing the Common Stock.
5.1* Opinion of Jenkens & Gilchrist, A Professional Corporation.
10.1(a) Stock Restriction Agreement dated as of January 1, 1992, among the
stockholders of the Company and the Company.
10.1(b) First Modification to That Certain Stock Transfer and Restriction
Agreement Originally Dated as of Jan. 1, 1992 dated as of January
2, 1995.
10.1(c) Second Amendment to Stock Transfer Restriction and Voting
Agreement dated as of December 14, 1995, among the stockholders
of the Company and the Company.
10.2(a)*+ Agreement dated as of August 11, 1995, between the Company and
Outboard Marine Corporation.
10.2(b) Dealer Agreement dated as of October 13, 1995, between the Company
and Outboard Marine Corporation.
10.3*+ Dealer Agreement dated as of August 17, 1995, between the Company
and Larson Boats, a division of Larson/Glastron Boats, Inc., a
subsidiary of Genmar Industries, Inc.
10.4*+ Dealer Agreement dated as of August 17, 1995, between the Company
and Mastercrafters Corporation.
10.5(a) Inventory Security Agreement and Power of Attorney dated as of
November 30, 1993, between Bombardier Capital Inc. and the
Company.
10.5(b) Inventory Security Agreement and Power of Attorney dated as of
November 30, 1993, between Bombardier Capital Inc. and Falcon
Marine Abilene, Inc.
10.6(a) Agreement for Wholesale Financing dated as of August 17, 1995, by
and among Deutsche Financial Services Corporation, the Company
and its subsidiaries; and Amendment to Agreement for Wholesale
Financing dated as of September 22, 1995.
10.6(b) Agreement for Wholesale Financing dated as of August 17, 1995,
between Deutsche Financial Services Corporation and Travis Boats
& Motors Baton Rouge, Inc.
10.7(a) Inventory Loan Agreement dated as of September 20, 1995, between
TBC Arkansas, Inc. and Hibernia National Bank.
10.7(b)* Commercial Security Agreement dated September 1, 1995, between TBC
Arkansas, Inc. and Hibernia National Bank.
10.8(a) Inventory Loan Agreement dated as of December 17, 1992, between
Travis Boats & Motors Baton Rouge, Inc. and Hibernia National
Bank; and First Amendment to Inventory Loan Agreement dated as of
February 7, 1994.
</TABLE>
II-3
<PAGE>
<TABLE>
<C> <S>
10.8(b)* Promissory Note dated May 30, 1995, in the original principal
amount of $100,000, payable by Travis Boats & Motors Baton Rouge,
Inc. to Hibernia National Bank.
10.8(c)* Promissory Note dated May 30, 1995, in the original principal
amount of $800,000, payable by Travis Boats & Motors Baton Rouge,
Inc. to Hibernia National Bank.
10.8(d)* Promissory Note dated July 14, 1995, in the original principal
amount of $480,000, payable by Travis Boats & Motors Baton Rouge,
Inc. to Hibernia National Bank.
10.8(e)* Business Loan Agreement dated July 14, 1995, between Travis Boats
& Motors Baton Rouge, Inc. and Hibernia National Bank.
10.8(f)* Commercial Security Agreement dated July 14, 1995, between Travis
Boats & Motors Baton Rouge, Inc. and Hibernia National Bank.
10.8(g)* Collateral Mortgage dated July 14, 1995, from Travis Boats &
Motors Baton Rouge, Inc. to Hibernia National Bank.
10.8(h)* Assignment of Leases and Rents dated July 14, 1995, between Travis
Boats & Motors Baton Rouge, Inc. and Hibernia National Bank.
10.8(i)* Pledge of Collateral Mortgage Note dated July 14, 1995, from
Travis Boats & Motors Baton Rouge, Inc. to Hibernia National
Bank.
10.9(a)* Promissory Note dated September 1, 1995, in the original principal
amount of $3,000,000, payable by TBC Arkansas, Inc. to Hibernia
National Bank.
10.9(b)* Commercial Guaranty dated September 1, 1995 by the Company in
favor of Hibernia National Bank guarantying a $3,000,000
Promissory Note.
10.9(c)* Promissory Note dated September 1, 1995, in the original principal
amount of $250,000, payable by TBC Arkansas to Hibernia National
Bank.
10.10(a) Amended and Restated Loan Agreement dated as of September 15,
1995, by and among NationsBank of Texas, N.A., the Company and
its subsidiaries.
10.10(b)* Security Agreement dated July 31, 1995, by and among NationsBank
of Texas, N.A., the Company and its subsidiaries.
10.11 General Promissory Note dated August 31, 1995, in the original
principal amount of $300,000, payable by the Company to Amerisure
Property & Casualty, Ltd.
10.12 General Promissory Note dated August 31, 1995, in the original
principal amount of $100,000, payable by the Company to Capitol
Commerce Reporter, Inc.
10.13 General Promissory Note dated August 31, 1995, in the original
principal amount of $75,000, payable by the Company to Capitol
Commerce Reporter, Inc.
10.14 General Promissory Note dated August 31, 1995, in the original
principal amount of $150,000, payable by the Company to Joe
Simpson and Pat Simpson.
10.15* Asset Purchase Agreement dated as of September 20, 1995, by and
among Red River Marine, Inc., Red River Marine, Inc. #2, and TBC
Arkansas, Inc.
10.16* Promissory Note dated September 20, 1995, in the original
principal amount of $800,000, payable by TBC Arkansas, Inc. to
Benny Hargrove.
10.17(a)* Promissory Note dated as of September 20, 1995, in the original
principal amount of $462,145.53, payable by TBC Arkansas, Inc. to
Red River Marine, Inc. #2.
10.17(b)* Mortgage With Power of Sale (Realty) dated September 20, 1995,
from TBC Arkansas, Inc. to Red River Marine, Inc. #2.
10.18* Promissory Note dated September 20, 1995, in the original
principal amount of $230,177.16, payable by TBC Arkansas, Inc. to
Red River Marine, Inc. and Red River Marine, Inc. #2.
10.19* Promissory Note dated September 20, 1995, in the original
principal amount of $108,750, payable by TBC Arkansas, Inc. to
Red River Marine, Inc. and Red River Marine, Inc. #2.
10.20 Travis Boats and Motors, Inc. 1995 Incentive Plan.
10.21* Form of Amended and Restated Employment Agreement dated May 7,
1996, between the Company and Mark T. Walton, Ronnie L. Spradling
and Michael B. Perrine.
</TABLE>
II-4
<PAGE>
<TABLE>
<C> <S>
10.22* Form of Option Agreement dated May 17, 1995, between the Company
and Michael B. Perrine, Ronnie L. Spradling and Mark T. Walton.
10.23 Form of Indemnification Agreement for Directors and Officers of
the Company.
10.24 Management Agreement dated December 14, 1995, by and among TBC
Management, Ltd., the Company and its subsidiaries.
10.25 [Intentionally left blank]
10.26(a)* First Lien Promissory Note dated September 15, 1995, in the
original principal amount of $679,000, payable by Travis Snowden
Marine, Inc. to NationsBank of Texas, N.A.
10.26(b)* Second Lien Promissory Note dated September 15, 1995, in the
original principal amount of $311,000, payable by Travis Snowden
Marine, Inc. to NationsBank of Texas, N.A.
10.26(c)* First Lien Deed of Trust, Assignment, Security Agreement and
Financing Statement dated September 15, 1995, from Travis Snowden
Marine, Inc. to Michael F. Hord, Trustee.
10.26(d)* Second Lien Deed of Trust, Assignment, Security Agreement and
Financing Statement dated September 15, 1995, from Travis Snowden
Marine, Inc. to Michael F. Hord, Trustee.
10.27(a)* Second Modification and Extension Agreement dated April 26, 1994,
between the Company and NationsBank of Texas, N.A.
10.27(b)* "504" Note dated April 28, 1994, in the original principal amount
of $454,000, payable by the Company to Cen-Tex Certified
Development Corporation.
10.27(c)* Deed of Trust, Assignment, Security Agreement and Financing
Statement dated March 5, 1993, from the Company to Michael F.
Hord, Trustee.
10.27(d)* Deed of Trust dated April 28, 1994, from the Company to Wm. H.
Harrison, Jr., Trustee.
10.28* Trust Agreement dated December 31, 1994, by and among Ideal
Insurance Company, Ltd. and the Company.
21.1** List of subsidiaries of the Registrant.
23.1* Consent of Jenkens & Gilchrist, A Professional Corporation
(included in their opinion filed as Exhibit 5.1).
23.2 Consent of Ernst & Young, LLP.
23.3 Consent of Turner, Burkett & Ring, P.A.
23.4 Consent of Devona Jeffery, L.L.C.
24.1 Power of Attorney (contained on the signature page of this
Registration Statement).
27 Financial Data Schedule.
99(a) Consent of Steve Gurasich.
99(b) Consent of Zach McClendon, Jr.
</TABLE>
- --------
*Filed herewith
**Amended list of subsidiaries filed herewith.
+ Portions of this exhibit have been omitted and are subject to an application
for confidential treatment filed separately with the Commission.
(b) Financial Statement Schedules: None.
II-5
<PAGE>
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the Underwriters,
at the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the Securities Act or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of Prospectus filed as part of the
Registration Statement in reliance upon Rule 430A and contained in the form
of Prospectus filed by the Registrant pursuant to Rule 424(b) (1) or (4) or
497(h) under the Securities Act shall be deemed to be part of the
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of Prospectus shall
be deemed to be a new Registration Statement relating to the securities
offered herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 1 to Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Austin, State of Texas, on May 23, 1996.
Travis Boats & Motors, Inc.
/s/ Michael B. Perrine
By: _________________________________
MICHAEL B. PERRINE
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 1 Registration Statement has been signed by the following
persons in the capacities on the dates indicated:
SIGNATURE TITLE DATE
Chairman of the
* Board and President May 23, 1996
- ------------------------------------- (Principal
MARK T. WALTON Executive Officer)
Executive Vice , 1996
- ------------------------------------- President--New
RONNIE L. SPRADLING Store Development
/s/ Michael B. Perrine and Director
Chief Financial
- ------------------------------------- Officer (Principal May 23, 1996
MICHAEL B. PERRINE Accounting and
Financial Officer)
*
- ------------------------------------- Director May 23, 1996
E.D. BOHLS
*
- ------------------------------------- Director May 23, 1996
ROBERT C. SIDDONS
*
- ------------------------------------- Director May 23, 1996
JOSEPH E. SIMPSON
By: /s/ Michael B. Perrine
----------------------------------
MICHAEL B. PERRINE
ATTORNEY-IN-FACT
II-7
<PAGE>
EXHIBIT 4.1
TRAVIS BOATING CENTER
TRAVIS BOATS & MOTORS, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF TEXAS
THIS CERTIFICATE IS TRANSFERABLE SEE REVERSE FOR CERTAIN DEFINITIONS
IN DALLAS, TEXAS; CLEVELAND, OHIO; AND RESTRICTIONS
AND NEW YORK, NEW YORK CUSIP 894363 10 0
This Certifies that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, PAR VALUE $0.01, OF
TRAVIS BOATS & MOTORS, INC. issued under and subject to the Articles of
Incorporation and the Bylaws of the Company and any amendments thereto, copies
of which are on file with the Corporation and the Transfer Agent, to all of the
terms and conditions of which the said owner by accepting this Certificate
expressly assents and agrees to be bound. The shares represented by this
Certificate are transferable on the books of the Company in person or by
attorney upon surrender of this Certificate duly endorsed. This Certificate
shall not be valid unless duly countersigned by the Transfer Agent and
registered by the Registrar.
WITNESS the facsimile signatures of the duly authorized officers of the
Company.
Dated
COUNTERSIGNED AND REGISTERED:
KEYCORP SHAREHOLDER SERVICES, INC.
TRANSFER AGENT AND REGISTRAR
PRESIDENT AND
CHAIRMAN OF THE BOARD BY
AUTHORIZED SIGNATURE
SECRETARY
<PAGE>
TRAVIS BOATS & MOTORS, INC.
A STATEMENT DENYING PREEMPTIVE RIGHTS OF SHAREHOLDERS IS SET FORTH IN THE
ARTICLES OF INCORPORATION, AS AMENDED, ON FILE IN THE OFFICE OF THE SECRETARY OF
STATE. THE CORPORATION WILL FURNISH A COPY OF SUCH STATEMENT TO THE RECORD
HOLDER OF THIS CERTIFICATE WITHOUT CHARGE ON REQUEST TO THE CORPORATION AT ITS
PRINCIPAL PLACE OF BUSINESS OR REGISTERED OFFICE.
THE CORPORATION IS AUTHORIZED TO ISSUE SHARES OF MORE THAN ONE CLASS AND TO
ISSUE PREFERRED SHARES IN SERIES. A STATEMENT OF THE DESIGNATIONS, PREFERENCES,
LIMITATIONS, AND RELATIVE RIGHTS OF THE SHARES OF EACH CLASS AUTHORIZED TO BE
ISSUED BY THE CORPORATION. THE VARIATIONS IN THE RELATIVE RIGHTS AND
PREFERENCES OF THE SHARES OF EACH SERIES OF PREFERRED SHARES TO THE EXTENT THEY
HAVE BEEN FIXED AND DETERMINED, AND THE AUTHORITY OF THE BOARD OF DIRECTORS OF
THE CORPORATION TO FIX AND DETERMINE THE RELATIVE RIGHTS AND PREFERENCES OF ANY
SERIES OF PREFERRED SHARES IS SET FORTH IN THE ARTICLES OF INCORPORATION OF THE
CORPORATION ON FILE IN THE OFFICE OF THE SECRETARY OF STATE OF TEXAS. THE
CORPORATION WILL FURNISH A COPY OF SUCH STATEMENT TO THE RECORD HOLDER OF THIS
CERTIFICATE WITHOUT CHARGE ON WRITTEN REQUEST TO THE CORPORATION AT ITS
PRINCIPAL PLACE OF BUSINESS OR REGISTERED OFFICE.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM--as tenants in common UNIF GIFT MIN ACT--_____ Custodian _____
TEN ENT--as tenants by the entireties (Cust) (Minor)
JT TEN --as joint tenants with right Under Uniform Gifts to
of survivorship and not as Minors Act ___________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
For Value Received, _________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- -----------------------------------------------
| |
| |
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF
ASSIGNEE
- --------------------------------------------------------------------------------
Shares
- --------------------------------------------------------------------------
of the Stock represented by the within Certificate, and do hereby irrevocably
constitute and appoint
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Attorney to transfer the said stock on the books of the within-named
Corporation, with full power of substitution in the premises.
Dated
------------------------
X
---------------------------------------------
(SIGNATURE)
NOTICE:
THE SIGNATURE(S) TO
THIS ASSIGNMENT MUST
CORRESPOND WITH THE X
NAME(S) AS WRITTEN ---------------------------------------------
UPON THE FACE OF THE (SIGNATURE)
CERTIFICATE IN EVERY
PARTICULAR WITHOUT
ALTERATION OR EN-
LARGEMENT OR ANY
CHANGE WHATEVER.
------------------------------------------------
| THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN |
| ELIGIBLE GUARANTOR INSTITUTION (BANKS, |
| STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS |
| AND CREDIT UNIONS WITH MEMBERSHIP IN AN |
| APPROVED SIGNATURE GUARANTEE MEDALLION |
| PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15. |
|----------------------------------------------|
| SIGNATURE(S) GUARANTEED BY: |
| |
| |
| |
| |
------------------------------------------------
<PAGE>
EXHIBIT 5.1
[JENKENS & GILCHRIST LETTERHEAD APPEARS HERE]
J. Rowland Cook
(512) 499-3821
March 23, 1996
Travis Boats & Motors, Inc.
13045 Research Blvd.
Austin, Texas 78750
Re: Travis Boats & Motors, Inc.
Registration Statement on Form S-1
Ladies and Gentlemen:
On May 7, 1996, Travis Boats & Motors, Inc., a Texas corporation (the
"Company"), filed with the Securities and Exchange Commission ("Commission") a
Registration Statement on Form S-1 (File No. 333-03283) (the "Registration
Statement"), under the Securities Act of 1933, as amended (the "Act"), relating
to the offer and sale by the Company and by certain Selling Stockholders of an
aggregate of 1,750,000 shares of common stock, $.01 par value per share (the
"Common Stock"), plus an additional 262,500 shares of Common Stock subject to
the exercise of an over-allotment option to be granted by the Company
(collectively, the "Shares"). We have acted as counsel to the Company and the
Selling Stockholders in connection with the preparation and filing of the
Registration Statement.
In connection therewith, we have examined and relied upon the original or
copies, certified to our satisfaction, of (i) the Articles of Incorporation and
the Bylaws of the Company, in each case as amended to date, (ii) copies of
resolutions of the Board of Directors of the Company authorizing the offering
and the issuance of the shares to be sold by the Company and related matters,
(iii) the Registration Statement, and all exhibits thereto, and (iv) such other
documents and instruments as we have deemed necessary for the expression of
opinions herein contained. In making the foregoing examinations, we have assumed
the genuineness of all signatures and the authenticity of all documents
submitted to us as originals, and the conformity to original documents of all
documents submitted to us as certified or photostatic copies. As to various
questions of fact material to this opinion, we have relied, to the extent we
deem reasonably appropriate, upon representations or certificates of officers or
directors of the Company and of the Selling Stockholders and upon documents,
records and instruments furnished to us by the Company, without independent
check or verification of their accuracy.
<PAGE>
Travis Boats & Motors, Inc.
March 23, 1996
Page 2
Based upon the foregoing examination, we are of the opinion that the Shares
to be issued by the Company in the offering and to be sold by the Selling
Stockholders, as described in the Registration Statement, have been duly and
validly authorized for issuance and the Shares, when issued and delivered by the
Company and by the Selling Stockholders, as applicable, in the manner and for
the consideration stated in the Prospectus constituting a part of the
Registration Statement and in accordance with the Underwriting Agreement
described in the Registration Statement, will be legally issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Prospectus forming a part of the Registration Statement. In
giving such consent, we do not admit that we come within the category of persons
whose consent is required by Section 7 of the Act or the rules and regulations
of the Commission thereunder.
Respectfully submitted,
JENKENS & GILCHRIST,
A Professional Corporation
By: /s/ J. Rowland Cook
---------------------
J. Rowland Cook
Authorized Signatory
<PAGE>
EXHIBIT 10.2(a)
Pages where confidential treatment has been requested are stamped "Confidential
Treatment Requested. The redacted material has been separately filed with the
Commission," the appropriate section has been marked at the appropriate place
and in the margin with a star (*).
AGREEMENT
THIS AGREEMENT is made this 11 day of August, 1995, by and between Travis
Boats & Motors, Inc. ("TRAVIS"), A Texas corporation, and Outboard Marine
Corporation of Waukegan, Illinois ("OMC").
WHEREAS, TRAVIS has received an offer from a competitor of OMC to purchase
outboard motors under a multi-year agreement; and
WHEREAS, OMC intends to remain competitive with but not exceed the offer
made TRAVIS by a competitive; and
WHEREAS, TRAVIS represents that OMC's offer and the offer made by OMC's
competitors are very competitive with each other;
NOW THEREFORE, in consideration of the promises contained in this
Agreement, the parties agree as follows:
1. The following terms shall have the following meaning wherever used in
this Agreement:
a. DEALER BEST BUY - The lowest price available for OMC dealers to
purchase Johnson Outboard Motors and Johnson Electric Motors
based upon the attainment of the maximum discount levels
collectively available under the Dealer Program.
b. DEALER NET - The price published as Dealer Net by OMC for Johnson
Outboard Motors and Johnson Electric Motors.
c. DEALER PROGRAM - Shall refer to the collective programs
established from time to time by OMC under which OMC dealers
purchase products and receive certain services and benefits. Such
Dealer Programs commonly include, but are not limited to, pricing
options, payment terms and advertising assistance.
d. OEM PRICING - Shall refer to the price of OMC products charged by
OMC to Original Equipment Manufacturers purchasing such product.
e. OMC CO-OP - Shall refer to the reimbursement of such qualified
expenses by OMC to OMC dealers submitting
AGREEMENT PAGE 1
<PAGE>
qualified expenses under the OMC CO-OP Advertising Programs.
f. OMC CO-OP ADVERTISING PROGRAMS - Programs that allow OMC dealers
to obtain reimbursement from OMC for up to 100% of qualified
expenses on advertising and promotion including, but not limited
to, newspaper and magazine ads, radio and television commercials,
signage, display materials and direct mail and certain boat show
expenses.
2. This Agreement will apply to all TRAVIS location that are now, or
hereunder become, authorized Johnson Dealers.
3. TRAVIS agrees to purchase and OMC agrees to sell Johnson Outboard
Motors, Johnson Electric Motors and OMC Parts & Accessories
("PRODUCTS") according to the terms and conditions of this AGREEMENT.
4. TRAVIS may participate in OMC CO-OP Advertising programs as may be in
place during the term of this Agreement. OMC agrees that the total CO-
OP available to Travis shall not be less than 3% of the collar amount
at dealer invoice of the aggregate annual motor purchases by TRAVIS.
5. TRAVIS agrees that each location which is an authorized PRODUCTS
Dealer shall prominently display Johnson Outboard Motors'
identification on the outside of the building, local ordinances
permitting. To the extent signage is required under this paragraph, it
shall be included as part of OMC CO-OP Advertising programs, as
described in paragraph 3 of this Agreement.
6. TRAVIS agrees to increase its Parts & Accessories business by 15% per
year starting with a goal of $1,000,000 in Parts & Accessories
purchases for the 1996 model year. TRAVIS will be allowed to
participate in all OMC Parts & ACCESSORIES Program, and will receive a
5% rebate per annum on all Parts & Accessories purchases, provided the
annual Parts & Accessories purchase goals are met.
OMC will accept, with no re-stocking fee for return, up to 10% of the
OMC Parts & Accessories TRAVIS purchases collectively per model year
This return is not per store, rather a collective return from one or
all stores, including stores purchased during the term of this
Agreement. Returned Parts & Accessories must be in their original.
AGREEMENT PAGE 2
<PAGE>
carton, current (Activity codes: 1,2,3, or 4) and shipped prepaid once per
year.
OMC also agrees to grant TRAVIS OEM pricing on certain rigging items needed
for the pre-rigging of TRAVIS Edition boats. These rigging items are not
eligible for the 5% Parts & Accessories year end rebate and such items may
change over time. These rigging items will, however, count toward TRAVIS'
annual Parts & Accessories goal.
7. OMC will sell to TRAVIS OMC Electric Trolling Motors at lesser of: (1) * *
off of Dealer Net; or (2) Dealer Best Buy. Units will be shipped per the
free freight program in effect during the term of this Agreement. Terms on
OMC Electric Trolling Motors will be interest free per the interest free
program applicable at the time of purchase.
8. TRAVIS shall be subject to such price increases as OMC may generally
implement for PRODUCTS, provided OMC shall use its best efforts to maintain
competitive pricing on its PRODUCTS. OMC shall provide TRAVIS with the
opportunity to place orders prior to the effective date of any such price
increases.
9. The prices to be paid by Travis to OMC for Johnson Outboard Motors are as
follows:
a. The lesser of (1) * off of Dealer Net; or (2) Dealer Best Buy, in *
accordance with the Dealer Program; and
b. * additional volume discount off of Dealer Net, in accordance with *
the Dealer Program, to keep OMC competitive with other manufacturers.
C. The purchase of Johnson Outboard Motors will be interest free per the
interest free program applicable at the time of purchase.
10. It is anticipated that TRAVIS will purchase a minimum * of units during *
the term of this Agreement. If OMC fails to supply Travis a minimum of * *
units during model year of this Agreement, Travis, at its option, may
terminate this Agreement. If TRAVIS fails to purchase * units during any *
model year of this Agreement, OMC, at its option, may terminate this
Agreement. Notwithstanding, OMC is not entitled to terminate this
Agreement if Travis' failure to purchase * units during any model year *
due to
AGREEMENT PAGE 3
Confidential Treatment Requested.
The redacted material has been
separately filed with the Commission.
<PAGE>
circumstances beyond its reasonable control, including, without
limitation, fire, flood, explosion, storm, act of God, governmental
act, strike or labor dispute, or unforeseen difficulties caused by
local law, labor agreement or other related cause.
11. TRAVIS agrees to OMC's normal dealer terms on OMC Parts & Accessories
purchases and motor purchases of net 10 days, or such other terms that
may be in effect during the course of this Agreement.
12. Since TRAVIS assembles its own packages, commonly referred to as
TRAVIS Editions, and has represented that it will not purchase any
boat blanks that would otherwise qualify for OMC pre-rig allowance,
and to keep TRAVIS Edition packages competitive in the marketplace,
OMC will pay TRAVIS an additional * off of the Dealer Net price of *
the outboard. TRAVIS agrees to provide OMC with a letter from each
boat manufacturer stating that such boat manufacturer waives any
pre-rigging fee which may be owed from OMC with respect to boats sold
to TRAVIS. If the letter required above is not furnished to OMC,
TRAVIS agrees to reimburse OMC up to the amount paid TRAVIS for any
pre-rigging payments OMC is required to make for boats shipped to
TRAVIS from boat builders. Payment will be made to TRAVIS by OMC on a
monthly basis.
13. OMC has agreed to established TRAVIS as an authorized Johnson Outboard
Motors dealer only in those markets identified on Exhibit "A",
attached hereto, provided the facility is acceptable to OMC. Such
acceptance shall not be unreasonably withheld. TRAVIS has agreed to a
minimum notice of ninety (90) days to OMC for any other new locations.
14. OMC will assist TRAVIS with disposal of non-OMC products TRAVIS
acquires through store acquisitions. In no case, however, shall OMC be
obligated for the purchase of such products.
15. The term of this Agreement shall be three model years beginning with
the 1996 model year and ending at the conclusion of the 1998 model
year. A model year runs from July 1 through June 30.
16. The discounts and benefits described in this Agreement are in lieu of
any other and all discounts and benefits which OMC may offer to its
other dealers and TRAVIS is not entitled to receive any discounts or
benefits not specified in this Agreement.
AGREEMENT PAGE 4
Confidential Treatment Requested.
The redacted material has been
separately filed with the Commission.
<PAGE>
17. This Agreement shall be considered an addendum to each Dealer
Agreement which may be in effect between OMC and TRAVIS during the
term of this Agreement. If provisions of the Dealer Agreement and this
Agreement conflict, provisions of this Agreement shall govern.
18. Should any provisions of this Agreement be declared, or be determined,
by any court to be illegal or invalid, the validity of the remaining
parts, terms or provisions of this Agreement shall not be affected and
any illegal or invalid part, term, or provision, should not be deemed
to be a part of this Agreement.
TRAVIS BOATS & MOTORS, INC. OUTBOARD MARINE CORPORATION
/s/Mark Walton /s/ David Lumley
- --------------------------- ---------------------------
MARK WALTON DAVID LUMLEY
President VP S & M
- -------------------------- --------------------------
Its______________ Its______________
8-11-95 8-14-95
- -------------------------- --------------------------
Date Date
<PAGE>
EXHIBIT 10.3
Pages where confidential treatment has been requested are stamped "Confidential
Treatment Requested. The redacted material has been separately filed with the
Commission," the appropriate section has been marked at the appropriate place
and in the margin with a star(*).
DEALER AGREEMENT [LOGO OF LARSON]
THIS AGREEMENT entered into as of the 17 day of August
---------- -----------------,
1995 _____, between Larson Boats, a Division of Larson/Glastron Boats, Inc., a
Subsidiary of GENMAR Industries, Inc., a Delaware corporation (hereinafter
called "Manufacturer") and
Firm Name: Travis Boats and Motors, Inc. Doing Business As: Travis
------------------------------------ -----------
Boating Center Address: City: County:
- ---------------- --------- ---------- -----------
State: Zip: being (corporation) of the state of Texas
---------- -------- -----------
(hereinafter referred to as "Dealer").
WITNESSETH
In consideration of the mutual covenants hereinafter set forth,
Manufacturer and Dealer AGREE:
1. Appointment: Manufacturer hereby appoints Dealer as an authorized Dealer
for the promotion and sale of Manufacturer boats, parts and accessories as
described from time to time in Manufacturer's products literature (the
"Products") within the marching territory described on Addendum A attached
hereto and made a part hereof.
In the event that this appointment is for less than Manufacturer's
entire line of boats and related items, the boats and items included in this
appointment are set forth on Addendum B attached hereto and made a part hereof.
Dealer agrees to concentrate Dealer's sales efforts within the
above-defined territory to provide pre-sale, point of sale service to Dealer's
customers. Dealer hereby agrees that, unless otherwise provided on Addendum C
attached hereto and made a part hereof, Dealer will not (i) direct any
advertising to customers located outside the Dealer's territory as described on
Addendum A (whether in the form of billboards, radio ads, flyers, catalogs or
other media that encourage consumers outside of the territory to travel to
Dealer), and/or (ii) use a toll-free ("800") number to solicit customers Dealer
agrees that a breach of the foregoing covenant will constitute a material breach
of this Agreement.
Dealer is authorized to offer for sale Manufacturer's Products only from
the location shown on Addendum A hereto, and Dealer agrees not to offer for sale
or otherwise deal in Manufacturer's Products from other locations without prior
written consent of Manufacturer.
Dealer agrees that this Agreement does not constitute the grant of a
franchise or frachise rights, nor does it confer an exclusive territory upon
Dealer. Dealer acknowledges that it has not been required to, nor has it paid
any franchise fee in connection with the execution of this Agreement.
2. Duration: The term of this Agreement shall commence on the date first
shown above and shall expire on the next following June 30th. Manufacturer
agrees to provide Dealer with written notice of non-renewal, if renewal is not
contemplated, at least 90 days prior to the expiration of this Agreement. Dealer
agrees to provide Manufacturer with written notice of non-renewal, if
renewal is not contemplated, at least 90 days prior to expiration of this
Agreement. Notwithstanding any prior agreements or course of conduct between the
parties, this Agreement shall not be automatically renewed.
3. Dealer Responsibilities: (i) Dealer agrees to identify himself as a
dealer of Manufacturer's Products by use of such indentification and advertising
material as may be made available to Manufacturer, and to display, advertise,
sell and promote retail sales of Manufacturer's Products. Dealer agrees to
purchase and carry on hand, at all times, an inventory of Manufacturer's current
models and realated parts and accessories to adequately represent Manufacturer's
product line. Dealer agrees to sell Manufacturer Products only for use and not
for resale. Dealer agrees to maintain a staff of personnel who are properly
trained to sell and service Manufacturer's Products. Dealer agrees to render
prompt and courteous service with respect to Manufacturer's Products including
initial outfitting, commissioning and delivery of Products sold by Dealer as
well as post-sale service of all Manufacturer's Products brought to Dealer for
service.
(ii) Dealer agrees to provide complete financial statements for the
dealership and it principal equity owner(s) when requested or on all mutually
agreeable intervals but at least on an annual basis. Dealer consents to full and
open disclosure of financial information concerning Dealer, between
Manufacturer and any financial institution or company which finances Dealer's
inventory of Manufacturer Products. Dealer agrees to conduct business in a
manner that preserves and enhances the reputation of both Manufacturer and
dealer for providing quality Products and services.
4. Orders: Dealer shall submit all orders to Manufacturer in a manner
prescribed by Manufacturer. All orders submitted are subject to Manufacturer's
written acceptance and Manufacturer may reject any order or portion thereof
upon written notice. To the extent that Dealer's printed purchase orders or
other purchasing documents are used and are inconsistent with the terms and
conditions established by Manufacturer herein, the latest terms shall prevail.
The filling of any order, in whole or in part, is subject to inability of
manufacturer to perform caused by labor disputes, fires, floods, accidents to
machinery, material shortages or regulations or any cause beyond the control of
Manufacturer. It being the intention that no liability shall be sustained by
Manufacturer by reason of its non filling any order thereof by such occurance.
5. Prices and Terms: (1) Dealer may purchased Manufacturer's Products at
the prices set forth on Exhibit 1 hereto.
(ii) Terms of payments on all sales shall be cash on delivery unless
otherwise specified upon the Manufacturer's sales invoice. Dealers shall pay
Manufacturer the lesser of 1.5% late charges per month on any post due invoices,
or the maximum permitted by state law. Manufacturer may refuse shipment for any
credit reason, including refusal to pay for a prior shipment. In case of
dispute, both parties agree to openly discuss and make reasonable efforts to
amicably resolve such disputes.
6. Shipments: All shipments shall be subject to Manufacturer's then current
terms and conditions of sale. Manufacturer shall pay all applicable
shipping, delivery and handling charges. If Dealer fails to accept or refuses
delivery of any Products ordered. Dealer agrees to reimburse Manufacturer for
all costs incurred in returning the Products to Manufacturer. Manufacturer
warrants not to ship to Dealer any Products not first ordered by Dealer, and in
the event unordered Products are shipped and refused by Dealer, Manufacturer
shall pay all costs incurred in returning said Products in Manufacturer. All
shipments are subject to Manufacturer's production schedules. Manufacturer will
make all reasonable efforts to fill Dealer orders in a timely fashion.
7. Title and Risk of Loss: Title and risk of loss to Manufacture's Products
shall pass to Dealer at Dealer's location identified above when delivered by
Manufacturer in vehicle directly operated by manufacturer.
8. Product Modification: Manufacturer reserves the right to discontinue
media and/or revise change or modify the design and construction of its
Products without being obligated to make such changes in Products of prior
manufacture. If change or modification significantly alters the Products
already ordered by Dealer, Manufacturer agrees to notify Dealer of the
modifications prior to shipment and Dealer shall have the option of cancelling
the order or shipment. Modification by Manufacturer or cancellation by Dealer
shall not constitute a cause for damages.
9. Claims: (1) Dealer agrees to make all claims for shortages, damaged
unacceptable Products in writing within seven (7) days after receipt of
shipment. Failure of Dealer by to make said notification shall constitute a
waiver of any such claim.
(ii) Dealer agrees to file all claims for reinbursement of, but not limited
in, such items as intended reimbursement, coop advertising funds and similar
items owed in Dealer by Manufacturer on forms and/or in a manner prescribed by
Manufacturer. Manufacturer agrees to approve and satisfy all such claims, except
any which may be in dispute, within 45 days of receipt of properly filed claims
from Dealer.
10. Dealer Performance: Manufacturer and Dealer agree to mutually establish
fair and reasonable performance standards for the dealership. Dealer shall
employ its best efforts to promote and sell Manufacturer's Products. The
Manufacturer shall on a regular basis give to the Dealer all leads that come to
the manufacturer for retail prospects in the Dealer's defined marketing
territory. Dealer agrees to purchase from Manufacturer Products during the term
hereof in the aggregate amount and further detailed on a quarterly projection
which is attached to this Agreement as Addendum D and made a part hereof. It is
further agreed that such standards shall reflect population and sales potential
within the territory, previous annual sales statistics, area annual new
Boat registration statistics as well as economic conditions, competition and
past market penetration for specific Manufacturer's Products. Any revision of
performance standards must be by mutual consent and in writing, and may be made
at anytime.
<PAGE>
11. PRODUCT WARRANTY: (i) In the event Dealer repudiates or revokes
acceptance, in whole or in part, any order placed pursuant to this Agreement or
rejects any of the manufacturer's Products. Manufacturer shall have the right to
repair or replace the Products at its election. Any repairs or substitutions
shall be made or performed by Manufacturer within a reasonable time after notify
Dealer of its intent to do so.
(ii) Manufacturer will furnish through Dealer to first-use purchaser its
standard written Warranty in effect at the time of delivery of Products to
Dealer. Dealer shall have an authority to and shall not make any representation
relating to Manufacturer's warranty other than those made by Manufacturer in its
written Warranty. Dealer agrees to make Manufacturer Warranty known to the
purchaser, including all Disclaims and limitations. Dealer agrees to obtain the
first-use purchaser signature on the Warranty Registration Card provided by
Manufacturer and to mail the appropriate portion of said card directly to
Manufacturer within thirty (30) days after delivery of product to the first-use
purchaser. In the event Dealer fails to obtain said signature and return card to
manufacturer as prescribed herein, Dealer agrees to Indemnify Manufacturer
against any liability, loss or damage which it may sustain as a result of any
successful claim against Manufacturer for breach of Warranty.
(iii) Dealer agrees to provide timely warranty services on all
Manufacturer's Products presented to Dealer by purchaser in accordance with
Manufacturer's warranty program in effect from time to time during the term of
this Agreement. Dealer agrees to make all claims for reimbursement under
manufacturer's warranty service program in the manner prescribed by
manufacturer. Manufacturers may revise its warranty services programs from time
to time providing Dealer with written notification of all revisions and sold
revisions will supersede all previous programs and be made part hereof.
MANUFACTURER'S STANDARD WRITTEN WARRANTY IS EXPRESSLY IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING SPECIFICALLY ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
12. Services Dealer agrees to establish and maintain a service department
staffed and equipped to provide service to purchasers of Manufacturer's
Products. Dealer agrees to inventory sufficient parts and supplies to provide
prompt service to purchasers. Dealer agrees to maintain complete service
records.
13. TERMINATION/CANCELLATION: (i) This Agreement may be terminated at any
time by mutual consent of the parties. This Agreement may be cancelled by
Manufacturer for good cause with ninety (90) days prior notice provided,
however, that Manufacturers need not provide ninety (90) days prior notice if
cancellation arises out of financial default of Dealer or fraudulent activity of
the Dealer or Dealer's principal which results in the conviction of a crime
punishable by imprisonment.
All other terms of Paragraph 13. Termination/Cancellation in the Dealership
Agreement not in conflict or inconsistent with the above, shall continue to be
in effect and enforceable.
(ii) This Agreement may be immediately terminated by either party upon
written notice to the other if any of the following occur: (a) Either, if a
corporation ceases to exist, (b) Either shall become insolvent or take or fail
to take any action which constitutes an admission of inability to pay debts as
they mature; (c) Make a general assignment for the benefit of creditors or to an
agent authorized to liquidate any substantial amount of assets; (d) Become a
subject of an "order for relief" within the meaning of the United States
Bankruptcy Court; (e) apply to a court for the appointment of a receiver for any
assets or properties; (f) Fraudulent misrepresentation that is material to this
Agreement; (g) Failure of Dealer to purchase any new boat from Manufacturer for
any period of four (4) calendar months, and Dealer's failure to cure this breach
within sixty (60) days of notice; (h) Failure of Dealer to pay; (A) when due,
any amount owed to Manufacturer or any of its affiliates, and such failure
continues more than five (5) days after notice thereof; or, (B) Manufacturer (or
any of its affiliates) or any lienholder, lender or vendor any amounts due them
for products immediately upon the transfer, sale or surrendering possession
thereof (commonly referred in as "selling out of trust"), and failure to resolve
within two (2) days of said transfer of sale or surrender, without notice or
demand. (i) Dealer being in default under any lease, mortgage, or deed of trust
pertaining to its business location for a period in excess of thirty (30) days;
(j) Conviction of Dealer or any officer, director or substantial shareholder or
principal of Dealer in any court for any offense related to Dealer's business or
and act of moral terpitude.
(iii) Neither party shall be under obligation, expressed or implied, to
enter into a new Agreement upon expiration or in the event of termination, as
provided, of this Agreement. In the event Manufacturer does not renew, extend or
enter into a new Agreement with Dealer, or this contract is terminated as
provided, Manufacturer shall have no obligation to tell or ship any orders for
Products previously placed by Dealer, nor shall Dealer have any obligation to
accept any Products previously ordered. In the event of any termination or non-
renewal of this Agreement neither party shall have any further liability or
obligation to the other, and neither party shall have any resource for the
damages against the other which it may suffer by reason of termination of non-
renewal of this Agreement. The provisions of paragraphs 9, 13 (iii), 14, 16, 20,
21, and 23 shall survive the expiration or termination of this Agreement.
14. REPURCHASE: In the event this Agreement is terminated or expires, and
upon written notice from the Dealer sent no later than thirty (30) days after
the date of termination or expiration, the Manufacturer shall repurchase all
new, unused, unsold, retailable undamaged and complete Boats or Manufacturer
products, parts or accessories of the current or immediate prior model years.
15. AGREEMENT TRANSFER: This Agreement may not be assigned or transferred
by Dealer without prior written consent of Manufacturer Any assignment of this
Agreement without such consent, any change in majority ownership of capital
stock of Dealer (if Corporation) or any change in majority ownership of
partnership (if partnership) shall automatically terminate this Agreement.
16. ARBITRATION: Except as otherwise specifically set forth herein or
agreed to in writing by the parties, any action, whether sounding in contact,
tort or otherwise ("Dispute" or "Disputes"), shall be resolved by arbitration as
set forth below and shall include all Disputes arising out of or in connection
with (1) this Agreement or any related agreements or instruments, (2) all past,
present, and future agreement involving the parties, (3) any transaction
contemplated hereby, and all past and future transactions involving the parties,
(4) any aspect of the past, present or future relationships of the parties. Such
disputes shall resolved by binding arbitration in accordance with Title 9 of the
U.S. Code and the Commercial Arbitration Rules of the American Arbitration
Association (AAA). In the event of any inconsistency between such Rules and
these arbitration provisions, these provisions shall supersede such rules.
Judgement upon the award rendered by arbitration may be entered in any
court having jurisdiction. Any arbitration of court proceeding commenced by
either party arising from their dealership relationship shall only be brought in
the County of Morrison, State of Minnesota.
17. NO AGENCY created: Nothing contained herein shall be deemed to
authorize or empower Dealer to act as an agent or legal representative of
manufacturer for any purpose whatsoever.
18. TRADEMARKS: Dealer is authorized to use manufacturer's trademarks and
commercial symbols for the limited purpose of advertising the sale of
Manufacturer's Products and indicating that Dealer is an authorized reseller of
the products. Dealer shall not use trademarks in any form or style not
authorized by Manufacturer. Authorization shall not be interpreted as a license
for use of such trademarks or symbols. Dealer acquires no proprietary rights
with respect to such trademarks or symbols and this authorization shall
terminate simultaneously with the termination of expiration of this Agreement
except for the purpose of disposing of on any unsold inventory. Dealer shall not
use any trademark, service mark or tradename owned by Manufacturer as part of
the Dealer's corporate name or business name unless specifically approved in
writing in an addendum to this Agreement.
19. SUB DEALERS: Dealer represents that he shall only purchase
Manufacturer's Products for sale to retail customers and shall not knowingly
sell a Manufacturer's new boat or product through any agent other than a
salesman at Dealer's authorized location, or to a broker, wholesaler, sub dealer
of anyone other than a retail customer with the written consent of the
manufacturer.
20. SEVERABILITY: If any provision of this Agreement is deemed to be
invalid or unenforceable or is prohibited by the laws of the state or place
where it is to be performed, this Agreement shall be considered divisible as to
such provision and such provision shall be inoperative in such state place and
shall not be a part of the consideration moving from either party to the other.
The remaining provisions of this Agreement, however, shall be valid and binding
and of like effect as though such provisions were not included herein.
21. GOVERNING LAW: This agreement shall be governed by the laws of
Minnesota.
22. ENTIRE AGREEMENT: This agreement contains the entire Agreement between
the parties with respect to its subject matter, and this Agreement may be
amended or modified only by written instrument signed by both parties.
23. NOTICE: All notices permitted or required hereunder may be given to
the other party in writing by FAX transmission, U.S. mail, or commercial courier
services addressed or directed at the address given above. All notices shall be
deemed to have been given where mailed, sent or transmitted.
LARSON BOATS, a division of Larson/ DEALER (LOUISIANA):
Glastron Boats, Inc., a Subsidiary
of Genman Industries, Inc.,
By: /s/ James Farrell Name: Travis Boats and Motors, Inc.
----------------------- -----------------------------
Title: Vice President Date 8-17-95 By: /s/ Mark Walton
-------------- ------- ---------------
President Date 8-15-95
<PAGE>
[LOGO OF LARSON APPEARS HERE]
================================================================================
DEALER AGREEMENT ADDENDUMS
================================================================================
_______________________ ("Manufacturer") and Travis Boats and Motors Inc.
-----------------------------------
("Dealer")
ADDENDUM A - DEALER'S MARKETING TERRITORY
- -----------------------------------------
Location Marketing Territory
-------- -------------------
14369 Florida Boulevard Baton Rouge, Louisiana
ADDENDUM B - SPECIFIC PRODUCTS COVERED BY DEALERSHIP APPOINTMENT
- ----------------------------------------------------------------
[xx] Not Applicable
ADDENDUM C - DEALER ADVERTISING OF MANUFACTURER'S PRODUCTS
- ----------------------------------------------------------
[xx] Not Applicable
ADDENDUM D - QUARTERLY PROJECTIONS BY DEALER
- --------------------------------------------
[xx] Not Applicable
-3-
<PAGE>
Exhibit 1
---------
LARSON BOATS
Travis Incentive Program
1996 Model Year
<TABLE>
<CAPTION>
1996 1996
Model Year Model Year
Net Purchases Rebate
----------------- ----------------
<S> <C>
$6,000,000 * *
$7,000,000 * *
</TABLE>
All Larson models purchased during the period July 1, 1995 through June 30, 1996
will count toward the purchase levels specified above.
If either of the 1996 Model Year Purchases levels as specified above are
attained, the 1996 model year rebate will be calculated on the aggregate model
year purchases of the following models:
SEI 194 BR STD
SEI 215 BR STD
LXI 194 BR STD
LXI 215 BR STD
SEI 235
No other Larson models qualify for the 1996 model year rebate.
Any rebate earned will be paid on or before August 15, 1996.
Confidential Treatment
Requested. The redacted
material has been
separately filed with
the Commission.
<PAGE>
EXHIBIT 10.4
Pages where confidential treatment has been requested are stamped "Confidential
Treatment Requested. The redacted material has been separately filed with the
Commission," the appropriate section has been marked at the appropriate place
and in the margin with a star(*).
================================================================================
DEALER AGREEMENT
================================================================================
THIS AGREEMENT entered into as of the ______ day of August , 1995 , between
----------- --
Mastercrafters Corporation, 3200 Industrial Drive, Winnsboro, La. 71295, a
Louisiana corporation (hereinafter called "Manufacturer") and
Firm Name: Travis Boats and Motors, Inc.
----------------------------------------------------------------------
Doing business as: Travis Boating Center
--------------------------------------------------------------
Address:_______________________________City:____________________________________
County:_________________________________State:____________Zip:__________________
being (corporation) of the state of Texas (hereinafter referred to as
---------------
"Dealer").
WITNESSETH
In consideration of the mutual covenants hereinafter set forth,
Manufacturer and Dealer AGREE:
1) Appointment: Manufacturer hereby appoints Dealer as an authorized Dealer
-----------
for the promotion and sale of Manufacturer boats, parts and accessories as
described from time to time in Manufacturer's product literature (the
"Products") within the marketing territory described on Addendum A attached
hereto and made a part hereof.
In the event that this appointment is for less than Manufacturer's entire line
of boats and related items, the boats and items included in this appointment are
set forth on Addendum B attached hereto and made a part hereof.
Dealer agrees to concentrate Dealer's sales efforts within the above-defined
territory to provide pre-sale, point of sale and post-sale service to Dealer's
customers. Dealer hereby agrees that, unless otherwise provided on Addendum C
attached hereto and made a part hereof, Dealer will not (i) direct any
advertising to customers located outside the Dealer's territory as described on
Addendum A (whether in the form of billboards, radio ads, flyers, catalogs or
other media that encourage consumers outside of the territory to travel to
Dealer), and/or (ii) use a toll-free ("800") number to solicit customers. Dealer
agrees that a breach of the foregoing covenant will constitute a material breach
of this Agreement.
Dealer is authorized to offer for sale Manufacturer's Products only from the
location shown on Addendum A hereto, and Dealer agrees not to offer for sale or
otherwise deal in Manufacturer's Product from other locations without prior
written consent of Manufacturer.
Dealer agrees that this Agreement does not constitute the grant of a franchise
or franchise rights, nor does it confer an exclusive territory upon Dealer.
Dealer acknowledges that it has not been required to, nor has it paid any
franchise fee in connection with the execution of this Agreement.
2) Duration: The term of this Agreement shall commence on the date first shown
--------
above and shall expire on the next following June 30th. Manufacturer agrees to
provide Dealer with written notice of non-renewal, if renewal is not
contemplated, at least 30 days prior to the expiration of this Agreement. Dealer
agrees to provide Manufacturer with written notice of non-renewal, if renewal is
not contemplated, at least 30 days prior to expiration of this Agreement.
Notwithstanding any prior agreements or course of conduct between the parties,
this Agreement shall not be automatically renewed.
<PAGE>
3) Dealer Responsibilities: (i) Dealer agrees to identify himself as a Dealer
-----------------------
of Manufacturer's Products by use of such identifications and advertising
material as may be made available by Manufacturer, and to display, advertise,
sell and promote retail sales of Manufacturer's Products. Dealer agrees to
purchase and carry on hand, at all times, an inventory of Manufacturer's current
models and related parts and accessories to adequately represent Manufacturer's
product line. Dealer agrees to sell Manufacturer Products only for use and not
for resale. Dealer agrees to maintain Manufacturer's product under sufficient
cover to protect any metal flake finish thereon, and any upholstery therein from
any permanent damage resulting from exposure to the elements. Dealer agrees to
maintain a staff of personnel who are properly trained to sell and service
Manufacturer's Products. Dealer agrees to render prompt and courteous service
with respect to Manufacturer's Products including initial outfitting,
commissioning and delivery of Products sold by Dealer as well as post-sale
service of all Manufacturer's Products brought to Dealer for service.
(ii) Dealer agrees to provide complete financial statement for the
dealership and its principal equity owner(s) when requested or on a mutually
agreeable intervals but at least on an annual basis. Dealer consents to full and
open disclosure on financial information concerning Dealer, between Manufacturer
and any financial institution or company which finances Dealer's inventory of
Manufacturer's Products. Dealer agrees to conduct business in a manner that
preserves and enhances the reputation of both Manufacturer and Dealer for
providing quality Products and services.
4) Orders: Dealer shall submit all orders to Manufacturer in a manner
------
prescribed by Manufacturer. All orders submitted are subject to Manufacturer's
written acceptance and Manufacturer may reject any order or portion thereof upon
written notice. To the extent that Dealer's printed purchase orders or other
purchasing documents are used and are inconsistent with the terms and conditions
established by Manufacturer herein, the latter terms shall prevail. The filling
of any order, in whole or in part, is subject to inability of Manufacturer to
perform caused by labor disputes, fires, floods, accidents to machinery,
material shortages or regulations or any cause beyond the control of
Manufacturer, it being the intention that no inability shall be sustained by
Manufacturer by reason of its not filling any order thereof by such occurrences.
5) Prices and Terms: (i) Dealer may purchase Manufacturer's Products at the
----------------
prices set forth on Exhibit 1 hereto.
(ii) Terms of payments on all sales shall be cash on delivery unless
otherwise specified upon the Manufacturer's sales invoice. Dealer shall pay
Manufacturer the lesser of 15% late charges per month on any past due invoices,
or the maximum permitted by state law. Manufacturer may refuse shipment for any
credit reason, including refusal to pay for a prior shipment. In case of
dispute, both parties agree to openly discuss and make reasonable efforts to
amicably resolve such disputes.
6) Shipments: All shipments shall be subject to Manufacturer's then current
---------
terms and conditions of sale. Manufacturer shall pay all applicable shipping,
delivery and handling charges. If Dealer fails to accept or refuses delivery of
any Products ordered, Dealer agrees to reimburse Manufacturer for all costs
incurred in returning the Products to Manufacturer. Manufacturer warrants not to
ship to Dealer any Products not first ordered by Dealer, and in the event
unordered Products are shipped and refused by Dealer, Manufacturer shall pay all
costs incurred in returning said Products to Manufacturer. All shipments are
subject to Manufacturer's production schedules. Manufacturer will make all
reasonable efforts to fill Dealer orders in a timely fashion.
7) Title and Risk of Loss: Title and risk of loss to Manufacturer's Products
----------------------
shall pass to Dealer at Dealer's location identified above when delivered by
Manufacturer in vehicles directly operated by Manufacturer.
<PAGE>
8) Product Modification: Manufacturer reserves the right to discontinue models
--------------------
and/or revise, change or modify the design and construction of its Products
without being obligated to make such changes in Products of prior manufacture.
If change or modification significantly alters the Products already ordered by
Dealer, Manufacturer agrees to notify Dealer of the modifications prior to
shipment and Dealer shall have the option of cancelling the order or shipment.
Modifications by Manufacturer or cancellation by Dealer shall not constitute a
cause for damages.
9) Claims: (i) Dealer agrees to make all claims for shortages, damaged
------
unacceptable Products in writing within seven (7) days after receipt of
shipment. Failure of Dealer to make said notification shall constitute a waiver
of any such claim.
(ii) Dealer agrees to file all claims for reimbursement of, but not limited
to, such items as interest reimbursement, coop advertising funds and similar
items owed to Dealer by Manufacturer on forms and/or in a manner prescribed by
Manufacturer. Manufacturer agrees to approve and satisfy all such claims, except
any which may be in dispute, within 45 days of receipt of properly filed claims
from Dealer.
10) Dealer Performance: Manufacturer and Dealer agree to mutually establish
------------------
fair and reasonable performance standards for the dealership. Dealer shall
employ its best efforts to promote and sell Manufacturer's Products.
Manufacturer shall on a regular basis give to the Dealer all leads that come to
the Manufacturer for retail prospects in the Dealer's defined marketing
territory. Dealer agrees to purchase from Manufacturer Products during the term
hereof in the aggregate amount and further detailed on a quarterly projection
which is attached to this Agreement as Addendum D and made a part hereof. It is
further agreed that such standards shall reflect population and sales potential
within the territory, previous annual sales statistics, area annual new boat
registration statistics as well as economic conditions, competition and past
market penetration for specific Manufacturer's Products. Any revision of
performance standards must be by mutual consent and in writing, and may be made
at any time.
11) Products Warranty: (i) Manufacturer will furnish through Dealer to
-----------------
first-use purchaser its standard written Warranty in effect at the time of
delivery of Products to Dealer. Dealer shall have no authority to and shall not
make any representation relating to Manufacturer's Warranty other than those
made by Manufacturer in its written Warranty. Dealer agrees to make
Manufacturer's Warranty known to the purchaser, including all disclaimers and
limitations. Dealer agrees to obtain the first-use purchaser's signature on the
Warranty Registration Card provided by Manufacturer and to mail the appropriate
portion of said card directly to Manufacturer within thirty (30) days after
delivery of product to the first-use purchaser. In the event Dealer fails to
obtain said signature and return card to Manufacturer as prescribed herein,
Dealer agrees to indemnify Manufacturer against any liability, loss or damage
which it may sustain as a result of any successful claim against Manufacturer
for breach of Warranty.
(ii) Dealer agrees to provide timely warranty service on all Manufacturer's
Products presented to Dealer by purchasers in accordance with Manufacturer's
warranty program in effect from time to time during the term of this Agreement.
Dealer agrees to make all claims for reimbursement under manufacturer's warranty
service program in the manner prescribed by Manufacturer. Manufacturer may
revise its warranty service program from time to time providing Dealer with
written notification of all revisions and said revisions will supersede all
previous programs and be made part hereof. MANUFACTURER'S STANDARD WRITTEN
WARRANTY IS EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING SPECIFICALLY ANY IMPLIED WARRANTY OF MERCHANTABILITY OF FITNESS FOR A
PARTICULAR PURPOSE.
12) Service: Dealer agrees to establish and maintain a service department
-------
staffed and equipped to provide service to purchasers of Manufacturer's
Products. Dealer agrees to inventory sufficient parts and supplies to provide
prompt service to purchasers. Dealer agrees to maintain complete service
records.
13) Termination/Cancellation: (i) This Agreement may be terminated at any time
------------------------
by the mutual consent of the parties. Either party may, upon 30 days notice to
the other stating the reasons for, terminate this Agreement for cause due to
material breach hereof and provided the failure has not been remedied during
this period.
<PAGE>
(ii) This Agreement may be immediately terminated by either party upon
written notice to the other if any of the following occur: (a) Either, if a
corporation ceases to exist; (b) Either shall become insolvent or take or fail
to take any action which constitutes an admission of inability to pay debts as
they mature; (c) Make a general assignment for the benefit of creditors or to an
agent authorized to liquidate any substantial amount of assets; (d) Becomes a
subject of an "order for relief" within the meaning of the United States
Bankruptcy Court; (e) Apply to a court for the appoint of a receiver for any
assets or properties; (f) Fraudulent misrepresentation that is material to this
Agreement, (g) Failure of Dealer to purchase any new boat from Manufacturer for
any period of four (4) calendar months, and Dealer's failure to cure this breach
within sixty (60) days of notice; (h) Failure of Dealer to pay: (A) when due,
any amount owed to Manufacturer or any of its affiliates, and such failure
continues more than five (5) days after notice thereof; or, (B) Manufacturer (or
any of its affiliates) or any lienholder, lender or vendor any amounts due them
for products immediately upon the transfer, sale or surrendering possession
thereof (commonly referred to as "selling out of trust"), and failure to cure
within two (2) days of said transfer of sale or surrender, without notice or
demand.; (i) Dealer being in default under any lease, mortgage, or deed of trust
pertaining to its business location for a period in excess of thirty (30) days;
(j) Conviction of Dealer or any officer, director or substantial shareholder or
principal of Dealer in any court for any offense related to Dealer's business or
an act of moral turpitude.
(iii) Neither party shall be under obligation, expressed or implied, to
enter into a new Agreement upon expiration or in the event of termination, as
provided, of this Agreement. In the event Manufacturer does not renew, extend or
enter into a new Agreement with Dealer, or this contract is terminated as
provided, Manufacturer shall have no obligation to fill or ship any orders for
Products previously placed by Dealer, nor shall Dealer have any obligation to
accept any Products previously ordered. In the event of any termination or non-
renewal of this Agreement neither party shall have any further liability or
obligation to the other, and neither party shall have any recourse for the
damages against the other which it may suffer by reason of termination or non-
renewal of this Agreement. The provisions of paragraphs 9, 13(iii), 14, 16, 20,
21, and 23 shall survive the expiration or termination of this Agreement.
14) Repurchase: In the event this Agreement is terminated by Manufacturer, and
----------
upon written notice from the Dealer sent not later than thirty days after the
date of termination, the Manufacturer shall repurchase a) all new, unused,
unsold, retailable, undamaged and complete boats with accessories and packaged
trailer sold with the boat by the Manufacturer within the one year period before
the date of termination; and b) any new, current, unsold, undamaged and unused
parts or accessories for Manufacturer's boats in the original resalable
merchandising packaging purchased by the Dealer from the Manufacturer at
Dealer's invoiced price.
15) Agreement Transfer: This Agreement may not be assigned or transferred by
------------------
Dealer without prior written consent of Manufacturer. Any assignmemt of this
Agreement without such consent, any change in majority ownership of capital
stock of Dealer (if Corporation) or any change in majority ownership of
partnership (if partnership) shall automatically terminate this Agreement.
16) Arbitration: Except as otherwise specifically set forth herein or agreed to
-----------
in writing by the parties, any action, whether sounding in contract, tort or
otherwise ("Dispute" or "Disputes"), shall be resolved by arbitration as set
forth below and shall include all Disputes arising out of or in connection with
(1) this Agreement or any related agreements or instruments, (2) all past,
present, and future agreements involving the parties, (3) any transaction
contemplated hereby, and all past and future transactions involving the parties,
(4) any aspect of the past, present or future relationships of the parties. Such
disputes shall be resolved by binding arbitration in accordance with Title 9 of
the U.S. Code and the Commercial Arbitration Rules of the American Arbitration
Association (AAA). In the event of any inconsistency between such Rules and
these arbitration provisions, these provisions shall supersede such Rules.
Any arbitration proceeding arising hereunder shall be held in the State of
Texas.
To the extent that any terms of this Dealer Agreement conflict or are
inconsistent with the mandatory terms of Texas Civil Statute, Article 8911, the
mandatory terms of said statute shall control and such terms of this agreement
shall be void ab initio. In all other respects, the terms of the Dealer
Agreement shall control.
<PAGE>
17) No Agency Created: Nothing contained herein shall be deemed to authorized
-----------------
or empower Dealer to act as an agent or legal representative of Manufacturer for
any purpose whatsoever.
18) Trademarks: Dealer is authorized to use a Manufacturer's trademarks and
----------
commercial symbols for the limited purposes of advertising the sale of
Manufacturer's Products and indicating that Dealer is an authorized reseller of
the Products. Dealer shall not use trademarks in any form or style not
authorized by Manufacturer. Authorization shall not be interpreted as a license
for use of such trademarks or symbols. Dealer acquires no proprietary rights
with respect to such trademarks or symbols and this authorization shall
terminate simultaneously with the termination or expiration of this Agreement
except for the purpose of disposing on any unsold inventory. Dealer shall not
use any trademark, service mark or tradename owned by Manufacturer as part of
the Dealer's corporate name or business name unless specifically approved in
writing in an addendum to this Agreement.
19) Sub Dealers: Dealer represents that he shall only purchase Manufacturer's
-----------
Products for sale to retail customers and shall not knowingly sell a
Manufacturer's new boat or product through any agent other than a salesman at
Dealer's authorized location, or to a broker, wholesaler, sub dealer or anyone
other than a retail customer without the written consent of the Manufacturer.
20) Severability: If any provision of this Agreement is deemed to be invalid or
------------
unenforceable or is prohibited by the laws of the state or place where it is to
be performed, this Agreement shall be considered divisible as to such provision
and such provision shall be inoperative in such state place and shall not be a
part of the consideration moving from either party to the other. The remaining
provisions of this Agreement, however, shall be valid and binding and of like
effect as though such provisions were not included herein.
21) Governing Law: This agreement shall be governed by the laws of Louisiana.
-------------
22) Entire Agreement: This Agreement contains the entire Agreement between the
----------------
parties with respect to its subject matter, and this Agreement may be amended or
modified only by written instrument signed by both parties.
23) Notice: All notices permitted or required hereunder may be given to the
------
other party in writing by FAX transmission, U.S. Mail, or commercial courier
services addressed or directed at the address given above. All notices shall be
deemed to have been given where mailed, sent or transmitted.
Mastercrafters Corporation DEALER (TEXAS)
Travis Boats and Motors, Inc.
-----------------------------------
By: /s/ James B. Ferrell By: /s/ Mark Walton
--------------------------- --------------------------------
Title: Vice Pres Title: President
------------------------ -----------------------------
Date: 8-17-95 ( ) corporation
------------------------- ( ) proprietorship
( ) partnership
Date: 8-15-95
------------------------------
<PAGE>
================================================================================
DEALER AGREEMENT ADDENDUMS
================================================================================
___________________ ("Manufacturer") and Travis Boats and Motors, Inc.
-----------------------------
("Dealer")
ADDENDUM A - DEALER'S MARKETING TERRITORY
- -----------------------------------------
(See Attached.)
ADDENDUM B - SPECIFIC PRODUCTS COVERED BY DEALERSHIP APPOINTMENT
- ----------------------------------------------------------------
[X] Not Applicable
ADDENDUM C - DEALER ADVERTISING OF MANUFACTURER'S PRODUCTS
- ----------------------------------------------------------
[_] Not Applicable
Permissable to advertise in any Texas publication and use a within Texas
"800" number.
ADDENDUM D - QUARTERLY PROJECTIONS BY DEALER
- --------------------------------------------
[x] Not Applicable
<PAGE>
ADDENDUM A - Locations and Dealer's Marketing Territory
-------------------------------------------------------
<TABLE>
===================================================================================================================================
<S> <C> <C> <C>
TRAVIS BOATING CENTER ACTIVE REP: HULEN MORRISON BOAT : RAY LEYDECKER
7530 I 45 NORTH PARTS: PETER
7530 I 45 NORTH PHONE: (713) 591-2028 DELIV: RAY LEYDECKER
* HOUSTON TX 77037 MILES: 0 MOTORS: JOHNSON
===================================================================================================================================
TRAVIS BOATING CENTER ACTIVE REP: HULEN MORRISON BOAT : BILLY BREED
1201 E. HWY 88 PARTS: BILLY BREED
1201 E. HWY 88 PHONE: (913) 672-2171 DELIV: BILLY BREED
* ABILENE TX 79681 MILES: MOTORS: JOHNSON
===================================================================================================================================
TRAVIS BOATING CENTER ACTIVE REP: HULEN MORRISON BOAT : MARK WALTON/KELLY
13045 RESEARCH PARTS:
PHONE: (512) 250-9000 DELIV: KELLY HARBER
* AUSTIN TX 78750 MILES: MOTORS: JOHNSON
===================================================================================================================================
TRAVIS BOATING CENTER ACTIVE REP: HULEN MORRISON BOAT : ART HANSEN
1320 S. Stemmons PARTS: ROBERT
PHONE: (214) 436-2628 DELIV: ART HANSEN
* LEWISVILLE TX 75067 MILES: MOTORS: JOHNSON
===================================================================================================================================
TRAVIS BOATING CENTER ACTIVE REP: HULEN MORRISON BOAT : CHARLIE BELL
1928 N. LOOP 250 W PARTS: JAMES
1928 N. LOOP 250 W PHONE: (915) 697-3261 DELIV: RON SPRADLING
* MIDLAND TX 79701 MILES: MOTORS: JOHNSON
===================================================================================================================================
TRAVIS BOATING CENTER ACTIVE REP: HULEN MORRISON BOAT : DARREN ROYAL
12388 I.H.10 WEST PARTS: JERRY
12388 I.H.10 WEST PHONE: (218) 690-6270 DELIV: JESSE COX/DARREN
* SAN ANTONIO TX 78330 MILES: MOTORS: JOHNSON
===================================================================================================================================
TRAVIS BOATING CENTER ACTIVE REP: HULEN MORRISON BOAT: ROB HARRELL
7660 COLLEGE ST PARTS:
PHONE: (409) 860-9444 DELIV: ROB HARRELL
* BEAUMONT TX 77707 MILES: MOTORS: JOHNSON
===================================================================================================================================
TRAVIS BOATING CENTER ACTIVE REP: HULEN MORRISON BOAT : DON NICKELL
1785 W. DIVISION PARTS:
1725 W. DIVISION PHONE: (817) 265-3232 DELIV: DON NICKELL
* ARLINGTON TX 76012 MILES: MOTORS: JOHNSON
===================================================================================================================================
</TABLE>
* Dealer's Marketing Territory.
<PAGE>
Exhibit 1
---------
MASTERCRAFTERS CORPORATION
Cajun Boats
Travis Incentive Program
1996 Model Year
Rebate Schedule
- -------------------
<TABLE>
<CAPTION>
1996 1996
Model Year Model Year
Net Purchases Rebate
----------------- --------------
<S> <C> <C>
$6,500,000 * *
$6,000,000 * *
$5,500,000 * *
</TABLE>
Terms and Conditions
- --------------------
1. All Cajun models purchased during the period July 1, 1995 through June 30,
1996 will count toward the purchase levels specified above.
2. If any of the 1996 Model Year Purchases levels as specified above are
attained, the 1996 model year rebate will be calculated on the aggregate
model year purchases of models shown on attached price list.
3. Any rebate earned will be paid on or before August 15, 1996.
4. Travis intends to purchase 800 Cajun units and Mastercrafters intends to
produce and deliver such units for the prices shown on the attached "1996
Travis Pricing" schedule. Prices stated are for cash.
5. Travis shall order 350 units for delivery at factory convenience prior to
January 15, 1996.
*Confidential Treatment
Requested. The redacted
Material has been
separately filed with
the Commission.
<PAGE>
EXHIBIT 10.7(b)
COMMERCIAL SECURITY AGREEMENT
Borrower: TBC Arkansas, Inc. (TIN: 710778068) Lender: Hibernia National Bank
c/o Travis Group, TIN: 72-021040
13045 Research Boulevard Loan Administration
Austin, TX 78750 Department
440 Third Street
Baton Rouge, LA 70801
- -------------------------------------------------------------------------------
THIS COMMERCIAL SECURITY AGREEMENT is entered into between TBC Arkansas, Inc.
(referred to below as "Grantor"); and Hibernia National Bank (referred to below
as "Lender"). For valuable consideration, Grantor hereby pledges to Lender and
grants to Lender a continuing security interest in the Collateral to secure
Grantor's present and future Indebtedness and agrees that Lender shall have the
rights stated in this Agreement with respect to the Collateral, in addition to
all other rights which Lender may have by low or otherwise.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Louisiana Commercial Laws (La. R.S.
10: 9-101, et seq.). All references to dollar amounts shall mean amounts in
lawful money of the United States of America.
AGREEMENT. The word "Agreement" means this Commercial Security Agreement,
as this Commercial Security Agreement may be amended or modified from time
to time, together with all exhibits and schedules attached or to be
attached to this Commercial Security Agreement from time to time.
COLLATERAL. The word "Collateral" means individually, collectively and
interchangeably any and all of Grantor's present and future rights, title
and interest in and to the following described property, together with any
and all present and future additions thereto, substitutions therefor, and
replacements thereof:
All of Grantor's present and future inventory, whether held by
Grantor or by others, and held for sale or lease or furnished or to
be furnished under contracts for service or used or consumed in
Debtor's business and all documents of every type covering all or any
part of the foregoing, and any and all additions thereto and
substitutions or replacements therefor, and all accessories,
attachments, and accessions thereto, whether added now or later, and
all products and proceeds derived or to be derived therefrom,
including without limitation, all Insurance proceeds and refunds or
insurance premiums, if any, and all sum, that may be due from third
parties who may cause damages to any of the foregoing, or from any
insurer, whether due to judgement, settlement, or other process, and
any and all present and future accounts, contract rights, chattel
paper, instruments, documents, and notes that may be derived from the
sale, lease or other disposition of any of the foregoing, and any
rights of Grantor to collect or enforce payment the-of, as wall as
to enforce any guarantees of the foregoing and security therefor
The Collateral includes any and all of Grantor's present and future
inventory (including consigned inventory), related equipment, goods,
merchandise and other items of personal property, no matter where located,
of every type and description, including without limitation any and all of
Grantor's present and future raw materials, components, work-in-process,
finished items, packing and shipping materials, containers, items hold for
sale, items hold for lease, items for which Grantor is lessor, goods to be
furnished under contract for services, materials used or consumed in
Grantor's business, whether hold by Grantor or by others, and all
documents of title, warehouse receipts, bills of lading, and other
documents of every type covering all or any part of the foregoing, and any
and all additions thereto and substitutions or replacements therefor, and
all accessories attachments, and accessions thereto, whether added now or
later, and all products and proceeds derived or to be derived therefrom,
including without limitation all insurance proceeds and refunds of
insurance premium, if any, and all sums that may be due from third
parties who may cause damage to any of the foregoing, or from any insurer,
whether due to judgment, settlement, or other process, and any and all
present and future accounts, contract rights, chattel paper, instruments,
documents, and notes that may be derived from the sale, lease or other
disposition of any of the foregoing, and any rights of Grantor to collect
or enforce payment thereof, as wall as to enforce any guarantees of the
forgoing and security therefor, and all of Grantor's present and future
general intangibles in any way related or pertaining to the ownership,
operation, use, or collection of any of the foregoing, including without
limitation Grantor's books, records, files, computer disks and software,
and all rights that Grantor may have with regard thereto. Inventory
includes inventory temporarily out of Grantor's possession or custody and
all returns on accounts, chattel paper and instruments.
The word "Collateral" also includes any and all present or future parts,
accessories, attachments additions, accessions, substitutions and
replacements to and for the collateral. The word "Collateral" further
includes any and all of Grantor's present and future rights to any
proceeds derived or to be derived from the sale, lease, damage,
destruction, insurance loss, expropriation and other disposition of the
collateral, including without limitation, any and all of Grantor's rights
to enforce collection and payment of such proceeds.
ENCUMBRANCES. The word "Encumbrances" means individually, collectively and
interchangeably any and all presently existing and/or future mortgages,
liens, privileges and other contractual and/or statutory security interests
and rights of every nature and kind that, now and/or in the future, may
affect the Collateral or any part or parts thereof.
EVENT OF DEFAULT. The words "Event of Default" mean individually,
collectively, and interchangeably any of the Events of Default set forth
below in the section titled "Events of Default."
GRANTOR. The word "Grantor" means individually, collectively, and
interchangeably TBC Arkansas, Inc., its successors and assigns
GUARANTOR. The word "Guarantor" means and includes individually,
collectively, interchangeably and without limitation each and all of the
guarantors, sureties, and accommodation parties in connection with the
Indebtedness.
INDEBTEDNESS. The word "Indebtedness" means the indebtedness evidenced by
the Note, in principal, interest, costs, expenses and attorneys' lose and
all other fees and charges, together with all other indebtedness and costs
and expenses for which Grantor is responsible under this Agreement or under
any of the Related Documents. In addition, the word "Indebtedness" also
includes any and all other loans, extensions of credit, obligations, debts
and liabilities, plus interest thereon, of Grantor, or any one or more of
them, that may now and in the future be owed to or incurred in favor of
Lender, as well as all claims by Lender against Grantor, or any one or more
of them, whether existing now or later; whether they are voluntary or
involuntary, whether related or unrelated, whether committed or purely
discretionary, due or to become due, direct or indirect or by way of
assignment, determined or undetermined, absolute or contingent, liquidated
or unliquidated; whether Grantor may be liable individually or jointly
with others, of every nature and kind whatsoever, in principal, interest,
costs, expenses and attorneys' fees and all other fees and charges; whether
Grantor may be obligated as guarantor, surety, accommodation party or
otherwise; whether recovery upon such indebtedness may be or hereafter may
become barred by any statute of limitations; and whether such indebtedness
may be or hereafter may become void or otherwise unenforceable.
LENDER. The word "Lender" means Hibernia National Bank TIN: 72-0210640,
its successors and assigns, and any subsequent holder or holders of the
Note, or any interest therein.
NOTE. The word "Note" means the note or credit agreement dated September
1, 1995, in the principal amount of $3,000,000.00 from Grantor to Lender,
together with all substitute or replacement notes therefor, as well as all
renewals, extensions, modifications, refinancings, consolidations and
substitutions of and for the note or credit agreement.
RELATED DOCUMENTS. The words "Related Documents" mean and include
individually, collectively, interchangeably and without limitation all
promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, collateral
mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection with
the Indebtedness.
CONTINUING SECURITY INTEREST TO SECURE PRESENT AND FUTURE INDEBTEDNESS. Grantor
affirms that Grantor has granted a continuing security interest in the
Collateral in favor of Lender to secure any and all present and future
Indebtedness of Grantor in favor of Lender, as may
<PAGE>
be outstanding from time to time set forth above, in principal, interest, costs,
expenses, attorney fees and other fees and charges, with the continuing
preferences and priorities provided under applicable Arkansas or Louisiana law.
DURATION OF THIS AGREEMENT. This Agreement shall remain in full force and
effect until such time as this Agreement and the security interests created
hereby are terminated and cancelled by Lender under a written cancellation
instrument in favor of Grantor.
OBLIGATIONS OF GRANTOR. Grantor represents, warrants and covenants to Lender as
follows:
ORGANIZATION. Grantor is a corporation which is duly organized, validly
existing, and in good standing under the laws of the State of Arkansas.
AUTHORIZATION. Grantor's execution, delivery and performance of this
Agreement have been duly authorized, and do not conflict with, and will not
result in a violation of, or constitute or give rise to an event of default
under Grantor's Articles of Incorporation or Bylaws, or any agreement or
other instrument which may be binding upon Grantor, or under any law or
governmental regulation or court decree or order applicable to Grantor
and/or its properties.
PERFECTION OF SECURITY INTEREST. Grantor agrees to execute such financing
statements and to take whatever other actions are requested by Lender to
perfect and continue Lender's security interest in the Collateral. Upon
request of Lender, Grantor will deliver to Lender any and all of the
documents evidencing or constituting the Collateral, and Grantor will note
Lender's interest upon any and all chattel paper if not delivered to Lender
for possession by Lender. Grantor hereby appoints Lender as its irrevocable
attorney-in-fact for the purpose of executing any documents necessary to
perfect or to continue the security interest granted in this Agreement.
Lender may at any time, and without further authorization from Grantor,
file a carbon, photographic, facsimile, or other reproduction of any
financing statement. Grantor will reimburse Lender for all expenses for the
perfection, termination, and the continuation of the perfection of Lender's
security interest in the Collateral. Grantor promptly will notify Lender
before any change in Grantor's name including any change to the assumed
business names of Grantor. Grantor also promptly will notify Lender of any
change in Grantor's Employer Identification Number. Grantor further agrees
to notify Lender in writing prior to any change in address or location of
Grantor's principal governance office. Grantor represents and warrants to
Lender that Grantor has provided Lender with Grantor's correct Employer
identification Number and that Grantor has no other Employer Identification
Numbers. Grantor promptly shall notify Lender should Grantor apply for or
obtain a now Employer Identification Number or should Grantor merge or
consolidate with any other entity.
PURCHASE MONEY SECURITY INTEREST. Lender's security interest in
Grantor's inventory and/or equipment as provided herein constitutes a
"purchase money security interest" within the context of the Uniform
Commercial Code, and Grantor shall use, or, as applicable, has used the
proceeds of Grantor's loan evidenced by the above-referenced Note solely
to purchase or acquire such inventory and/or equipment.
NO VIOLATION. The execution and delivery of this Agreement will not
violate any law or agreement governing Grantor or to which Grantor is a
party, and its certificate or articles of incorporation and bylaws do not
prohibit any term or condition of this Agreement.
ENFORCEABILITY OF COLLATERAL. To the extent the Collateral consists of
accounts, contract rights, chattel paper, or general intangibles, the
Collateral is enforceable in accordance with its terms, is genuine, and
fully complies with applicable state and federal laws and regulations
concerning form, content and manner of preparation and execution, and all
persons appearing to be obligated on the Collateral have authority and
capacity to contract and are in fact obligated as they appear to be on the
Collateral, free of any offset, compensation, deduction or counterclaim.
LOCATION OF THE COLLATERAL. Grantor, upon request of Lender, will deliver
to Lender in form satisfactory to Lender a schedule of real properties and
Collateral locations relating to Grantor's operations, including without
limitation the following: (a) all real property owned or being purchased by
Grantor; (b) all real property being rented or leased by Grantor; (c) all
storage facilities owned, rented, leased, or being used by Grantor; and (d)
all other properties where Collateral is or may be located. Except in the
ordinary course of its business, Grantor shall not remove the Collateral
from its existing locations without the prior written consent of Lender.
Collateral consisting of inventory and other goods is not currently located
and, as long as this Agreement remains in affect, will not be kept in a
field or public warehouse or with a bailee, and shall be kept only at
locations approved by Lender.
REMOVAL OF COLLATERAL. Grantor shall keep the Collateral (or to the extent
the Collateral consists of intangible property such as accounts, the
records concerning the Collateral) at Grantor's address shown above, or at
such other locations as are acceptable to Lender. Except in the ordinary
course of its business, including the sales of inventory, Grantor shall
not remove the Collateral from its existing locations without the prior
written consent of Lender. To the extent that the Collateral consists of
vehicles, or other titled property, Grantor shall not take or permit any
action which would require application for certificates of title for the
vehicles outside the State of Louisiana, without the prior written consent
of Lender.
TRANSACTIONS INVOLVING COLLATERAL. Except for inventory sold or accounts
collected in the ordinary course of Grantor's business, Grantor shall not
sell, offer to sell, or otherwise transfer or dispose of the Collateral.
While Grantor in not in default under this Agreement, Grantor may sell
inventory, but only in the ordinary course of its business and only to
buyers who qualify as a buyer in the ordinary course of business.
A sale in the ordinary course of Grantor's business does not include a
transfer in partial or total satisfaction of a debt or any bulk sale.
Grantor shall not pledge, mortgage, encumber or otherwise permit the
Collateral to be subject to any Encumbrance or charge, other than the
security interest provided for in this Agreement, without the prior written
consent of Lender. This includes security interests even if junior in right
to the security interests granted under this Agreement. Unless waived by
Lender, all proceeds from any disposition of the Collateral (for whatever
reason) shall be hold in trust for Lender and shall not be commingled with
any other funds; provided however, this requirement shall not constitute
consent by Lender to any sale or other disposition. Upon receipt, Grantor
shall immediately deliver any such proceeds to Lender.
TITLE, AUTHORITY, BINDING EFFECT. Grantor represents and warrants to
Lender that it holds good and marketable title to the Collateral, free and
clear of all Encumbrances except for Lender's security interest. No
financing statement covering any of the Collateral is on file in any public
office other then those which reflect the security interest created by this
Agreement or to which Lender has specifically consented. Grantor further
represents and warrants that it has requisite authority to enter into this
Agreement in favor of Lender and to grant to Lender the security interest
in the Collateral as provided herein. Grantor additionally represents and
warrants that this Agreement is binding upon Grantor as well as Grantor's
heirs, successors, transferees and assigns, and is legally enforceable in
accordance with its terms. The foregoing representations and warranties and
all other representation* and warranties of Grantor under this Agreement
shall be continuing and shall survive the termination of this Agreement.
COLLATERAL SCHEDULES AND LOCATIONS. Insofar as the Collateral consists of
inventory, Grantor shall deliver to Lender, as often as Lender shall
require, such lists, descriptions, and designations of such Collateral as
Lender may require to identify the nature, extent, and location of such
Collateral. Such information shall be submitted for Grantor and each of its
subsidiaries or related companies.
REPAIRS AND MAINTENANCE. Grantor shall keep and maintain and shall cause
others to keep and maintain the Collateral in good order, repair and
merchantable condition. Grantor shall further make and/or cause all
necessary repairs to be made to the Collateral, including the repair and
restoration of any portion of the Collateral that may be damaged, lost or
destroyed. In addition, Grantor shall not, without the prior written
consent of Lender, make or permit to be made any alterations to any of
the Collateral that may reduce or impair the Collateral's use, value or
marketability. Furthermore, Grantor shall not, nor shall Grantor permit
others to abandon, commit waste, or destroy the Collateral or any part or
parts thereof.
TAXES. Grantor shall promptly pay or cause to be paid when due, all taxes,
local and special assessments, and governmental and other charges of every
type and description, that may from time to time be imposed, assessed and
levied against the Collateral or against Grantor. Grantor further agrees to
furnish Lender with evidence that such taxes, assessments, and
governmental and other charges have been paid in full and in a timely
manner. Grantor may withhold any such payment or elect to contest any lien
if Grantor is in good faith conducting an appropriate proceeding to contest
the obligation to pay and so long as Lender's interest in the Collateral is
not jeopardized.
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor shall comply promptly
with, and shall cause others to comply with, all laws, ordinances, rules
and regulations of all governmental authorities, now or hereafter in
effect, applicable to the ownership, production, disposition, or use of
the Collateral. Grantor may contest in good faith any such law, ordinance
or regulation and withhold compliance during any proceeding, including
appropriate appeals, so long as Lender's interest in the Collateral, in
Lender's opinion, is not jeopardized. Grantor
<PAGE>
shall not use the Collateral, and shall not permit others to use the
Collateral, for any purpose, other than those previously agreed to by
Lender in writing; but in no event shall any of the collateral be used in
any manner that would damage, depreciate or diminish its value or that may
result in cancellation or termination of insurance coverage. Grantor
additionally agrees not to do or suffer to be done anything that may
increase the risk of fire or other hazards to the Collateral.
HAZARDOUS SUBSTANCES. Grantor represents and warrants that the Collateral
never has been, and never will be so long as this Agreement remains a lien
on the Collateral, used for the generation, manufacture, storage,
transportation, treatment, disposal, release or threatened release of any
hazardous waste or substance, as those terms are defined in the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended, 42 U.S.C. Section 9801, at seq. ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1988, Pub. L. No. 99-499 ("SARA"),the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, at seq.,
the Resource Conservation and Recovery Act, 49 U.S.C. Section 6901, at
seq., or other applicable state or Federal laws, rules, or regulations
adopted pursuant to any of the foregoing. The terms "hazardous waste" and
"hazardous substance" shall also include, without limitation, petroleum and
petroleum by-products or any fraction thereof and asbestos. The
representations and warranties contained herein are based on Grantor's due
diligence in investigating the Collateral for hazardous wastes and
substances. Grantor hereby (a) releases and waives any future claims
against Lender for indemnity or contribution in the event Grantor becomes
liable for cleanup or other costs under any such laws, and (b) agrees to
indemnify and hold harmless Lender against any and all claims and losses
resulting from a breach of this provision of this Agreement. This
obligation to indemnity shall survive the payment of the Indebtedness and
the satisfaction of this Agreement.
REQUIRED INSURANCE. So long as this Agreement remains in effect, Grantor
shall, at its sole cost, keep and/or cause others, at their expense, to
keep the Collateral constantly insured against loss by fire, by hazards
included within the term "extended coverage," and by such other hazards
(including flood insurance where applicable) as may be required by Lender.
Such insurance shall be in an amount not less than the full replacement
value of the Collateral, or such other amount or amounts as Lender may
require or approve in writing. Grantor shall further provide and maintain,
at its sole cost and expense, comprehensive public liability insurance,
naming both Grantor and Lender as parties insured, protecting against
claims for bodily injury, death and/or property damage arising out of the
use, ownership, possession, operation and condition of the Collateral, and
further containing a broad form contractual liability endorsement covering
Grantor's obligations to indemnify Lender as provided hereunder.
Grantor may purchase such insurance from any insurance company or broker
that is acceptable to Lender, provided that such approval may not be
unreasonably withhold. All such insurance policies, including renewals and
replacements, must also be in form and substance acceptable to Lender, and
must additionally contain a loss payable or other endorsement in favor of
Lender, providing in part that (a) all proceeds and returned premiums under
such policies of insurance will be paid directly to Lender, and (b) no act
or omission on the part of Grantor, or any of its officers, agents,
employees or representatives, not breach of any warranty contained in such
policies, shall affect the obligations of the insurer to pay the full
amount of any lose to Lender. Such policies of insurance must also contain
a provision prohibiting cancellation or the alteration of such insurance
without at least thirty (3O) days' prior written notice to Lender of such
intended cancellation or alteration. Grantor agrees to provide Lender with
originals or certified copies of such policies of insurance. Grantor
further agrees to promptly furnish Lender with copies of all renewal
notices and, it requested by Lender, with copies of receipts for paid
premiums. Grantor shall provide Lender with originals or certified copies
of all renewal or replacement policies of insurance no later than fifteen
(15) days before any such existing policy or policies should expire. If
Grantor's insurance policies and renewals are held by another person,
Grantor agrees to supply original or certified copies of the some to Lender
within the time periods required above.
Grantor agrees to notify immediately Lender in writing of any material
casualty to or accident involving the Collateral, whether or not such
casualty or loss is covered by insurance. Grantor further agrees to
promptly notify Grantor's insurance company and to submit an appropriate
claim and proof of claim to the insurance company in the event that any
Collateral is lost, damaged, or destroyed as a result of an insured hazard,
Lender may submit such a claim and proof of claim to the insurance company
on Grantor's behalf, should Grantor fail to do so promptly for any reason.
Grantor hereby irrevocably appoints Lender as its agent and attorney-in-
fact, such agency being coupled with an interest, to make, settle and
adjust claims under such policy or policies of insurance and to endorse the
name of Grantor on any check of other item of payment for the proceeds
thereof; it being understood, however, that unless one or more Events of
Default exist under this Agreement, Lender will not settle or adjust any
such claim without the prior approval of Grantor (which approval shall not
be unreasonably withheld).
INSURANCE PROCEEDS. Lender shall have the right to directly receive the
proceeds of all insurance protecting the Collateral. In the event, that
Grantor should receive any such insurance proceeds, Grantor agrees to
immediately turn over and to pay such proceeds directly to Lender. All
insurance proceeds may be applied, at Lender's sole option and discretion,
and in such a manner as Lender may determine (after payment of all
reasonable costs, expenses and attorneys' fees necessarily paid or fees
necessarily paid or incurred by Lands, in this connection), for the
purpose of: (a) repairing or restoring the lost, damaged or destroyed
Collateral; or (b) reducing the then outstanding balance of Grantor's
Indebtedness.
Lender's receipt of such insurance proceeds and the application of such
proceeds as provided herein shall not, however, affect the lien of this
Agreement. Nothing under this section shall be deemed to excuse Grantor
from its obligations promptly to repair, replace or restore any lost or
damaged Collateral, whether or not the same may be covered by insurance,
and whether or not such proceeds of insurance are available, and whether
such proceeds are sufficient in amount to complete such repair, replacement
or restoration to the satisfaction of Lender. Furthermore, unless otherwise
confirmed by Lender in writing, the application or release of any
insurance proceeds by Lender shall not be deemed to cure or waive any Event
of Default under this Agreement. Any proceeds which have not been disbursed
within six (6) months after their receipt and which Grantor has not
committed to the repair of restoration of the Collateral shall be used to
prepay the Indebtedness.
INSURANCE REPORTS. Grantor, upon request of Lender, shall furnish to
Lender reports on each existing policy of insurance showing such
information as Lender may reasonably request including the following: (a)
the name of the insurer; (b) the risks insured, (c) the amount of the
policy; (d) the property insured; (a) the then current value on the basis
of which insurance has been obtained and the manner of determining that
value; and (f) the expiration date of the policy. In addition, Grantor
shall upon request by Lender (however not more often than annually) have an
independent appraiser satisfactory to Lender determine, as applicable, the
cash value or replacement cost of the Collateral.
PRIOR ENCUMBRANCES. To the extent applicable, Grantor shall fully and
timely perform any and all of its obligations under any prior Encumbrances
affecting the Collateral. Without limiting the foregoing. Grantor shall
prior Encumbrances. Grantor shall further promptly notify Lender in writing
upon the occurrence of any avant or circumstances that would, or that
might, result in a breach of or default under any such prior Encumbrance.
Grantor shall further not modify or extend any of the term of any prior
Encumbrance or any indebtedness secured thereby, or request or obtain any
additional loans or other extensions of credit from any third party
creditor or creditors whenever such additional loan advances or other
extensions of credit may be directly or indirectly secured, whether by
cross-collateralization or otherwise, by the Collateral, or any part or
parts thereof, with possible preference and priority over Lender's
security interest. Grantor additionally agrees to obtain, upon request by
Lender, and in form and substance as may then be satisfactory to Lender,
appropriate waivers and/or subordinations of any lessor's liens or
privileges, vendor's liens or privileges, purchase money security
interests, and any other Encumbrances that may affect the Collateral at any
time.
FUTURE ENCUMBRANCES. Grantor shall not, without the prior written consent
of Lender, grant any Encumbrance that may affect the Collateral, or any
part or parts thereof, nor shall Grantor permit or consent to any
Encumbrance attaching to or being filed against any of the Collateral in
favor of anyone other than Lender. Grantor shall further promptly pay when
due all statements and charges of mechanics, materialman, laborers and
others incurred in connection with the alteration, improvement, repair and
maintenance of the Collateral, or otherwise furnish appropriate security or
bond, so that no future Encumbrance may ever attach to or be filed against
any Collateral. Grantor additionally agrees to obtain, upon request by
Lender, and in form and substance as may then be satisfactory to Lender,
appropriate waivers and/or subordinations of any lessor's liens or
privileges, vendor's liens or privileges, purchase money security
interests, and any other Encumbrances that may affect the Collateral at any
time.
NOTICE OF ENCUMBRANCES. Grantor shall immediately notify Lender in writing
upon the filing of any attachment, lien, judicial process, claim, or other
Encumbrance. Grantor additionally agrees to notify Lender immediately in
writing upon the occurrence of any default, or event that with the passage
of time, failure to cure, or giving of notice, might result in a default
under any of Grantor's obligations that may be secured by any presently
existing or future Encumbrance, or that might result in an Encumbrance
affecting the Collateral, or should any of the Collateral be seized or
attached or levied upon, or threatened by seizure or attachment or levy,
by any person other than Lender.
BOOKS AND RECORDS. Grantor will keep proper books and records with regard
to Grantor's business activities and the Collateral in which a security
interest is granted hereunder, in accordance with generally accepted
accounting principles, applied on a consistent basis throughout, which
books and records shall at all reasonable times be open to inspection and
copying by Lender or its designated agents. Lender shall also
<PAGE>
have the right to inspect Grantor's books and records, and to discuss
Grantor's affairs and finances with Grantor's officers and representatives,
at such reasonable times as Lender may designate.
GRANTOR'S RIGHT TO POSSESSION. Until default, Grantor may have possession and
beneficial use of all the Collateral and may use it in any lawful manner not
inconsistent with this Agreement or the Related Documents, provided that
Grantor's right to possession and beneficial use shall not apply to any
Collateral where possession of the Collateral by Lender is required by law to
perfect Lender's security interest in such Collateral. If Lender at any time
has possession of any Collateral, whether before or after an Event of Default,
Lender shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral if Lender takes such action for that purpose as
Grantor shall request or as Lender, in Lender's sole discretion, shall deem
appropriate under the circumstances, but failure to honor any request by
Grantor shall not of itself be deemed to be a failure to exercise reasonable
care. Lender shall not be required to take any steps necessary to preserve any
rights in the Collateral against prior parties, nor to protect, preserve or
maintain any security interest given to secure the Indebtedness.
EXPENDITURES BY LENDER. Grantor recognizes and agrees that Lender may incur
certain expenses in connection with Lender's exercise of rights under this
Agreement. If not discharged or paid when due, Lender may (but shall not be
obligated to) discharge or pay any amounts required to be discharged or paid by
Grantor under this Agreement, including without limitation all taxes,
Encumbrances and other claims, at any time levied or placed on the Collateral.
Lender also may (but shall not be obligated to) pay all costs for insuring,
maintaining and preserving the Collateral, including without limitation, the
purchase of insurance protecting only Lender's interest in the Collateral.
Lender may further take such other action or actions and incur such additional
expenditures as Lender may deem to be necessary and proper to cure or rectify
any actions or inactions on Grantor's part as may be required under this
Agreement. Nothing under this Agreement or otherwise shall obligate Lender to
take any such actions or to incur any such additional expenditures on Grantor's
behalf, or as making Lender in any way responsible or liable for any loss,
damage, or injury to the Collateral, to Grantor, or to any other person or
persons, resulting from Lender's election not to take such actions or to incur
such additional expenses. In addition, Lender's election to take any such
actions or to incur such additional expenditures shall not constitute a waiver
or forbearance by Lender of any Event of Default under this Agreement. All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment. All such expenses shall become a part of the
Indebtedness and, at Lender's option, will (a) be payable on demand, (b) be
added to the balance of the Note and be apportioned among and be payable with
any payments to become due during either (i) the term of any applicable
insurance policy or (ii) the remaining term of the Note, or (c) be treated as a
balloon payment which will be due and payable at the Note's maturity. This
Agreement also will secure payment of these amounts. Such right shall be in
addition to all other rights and remedies to which Lender may be entitled upon
the occurrence of an Event of Default.
EVENTS OF DEFAULT. The following actions or inactions or both shall constitute
Events of Default under this Agreement:
DEFAULT UNDER THE INDEBTEDNESS. Should Grantor default in the payment of
principal or interest under any of the Indebtedness.
DEFAULT UNDER THIS AGREEMENT. Should Grantor violate, or fail to comply
fully with any of the terms and conditions of, or default under this
Agreement.
DEFAULT UNDER OTHER AGREEMENTS. Should any event of default occur or exist
under any Related Document which directly or indirectly secures repayment
of any of the Indebtedness.
OTHER DEFAULTS IN FAVOR OF LENDER. Should Grantor or any Guarantor default
under any other loan, extension of credit, security agreement, or
obligation in favor of Lender.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Grantor or any Guarantor default
under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person
that may materially affect any of Grantor's property, or Grantor's or any
Guarantor's ability to perform their respective obligations under this
Agreement, or any Related Document, or pertaining to the Indebtedness.
INSOLVENCY. Should the suspension, failure or insolvency, however
evidenced, of Grantor or any Guarantor occur or exist.
READJUSTMENT OF INDEBTEDNESS. Should proceedings for readjustment of
indebtedness, reorganization, composition or extension under any insolvency
law be brought by or against Grantor or any Guarantor.
ASSIGNMENT FOR BENEFIT OF CREDITORS. Should Grantor or any Guarantor file
proceedings for a respite or make a general assignment for the benefit of
creditors.
RECEIVERSHIP. Should a receiver of all or any part of Grantor's property,
or the property of any Guarantor, be applied for or appointed.
DISSOLUTION PROCEEDINGS. Should proceedings for the dissolution or
appointment of a liquidator of Grantor or any Guarantor be commenced.
FALSE STATEMENTS. Should any representation or warranty of Grantor or any
Guarantor made in connection with the Indebtedness prove to be incorrect or
misleading in any respect.
DEFECTIVE COLLATERALIZATION. Should this Agreement or any of the Related
Documents cease to be in full force and affect (including failure of any
Collateral documents to create a valid and perfected security interest or
lien) at any time and for any reason.
INSECURITY. Should Lender deem itself to be insecure with regard to
repayment of the Indebtedness.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a secured
party under applicable law, and more specifically under the Arkansas UCC and
Louisiana Commercial Laws (La. R.S. 10: 9-101 at seq.), as applicable. In
addition and without limitation, Lender may exercise any one or more of the
following rights and remedies:
ACCELERATE INDEBTEDNESS. Lender may declare the entire indebtedness,
including any prepayment penalty which Grantor would be required to pay,
immediately due and payable, without notice or further demand for payment.
SEIZURE AND SALE OF COLLATERAL IN LOUISIANA. In the event that Lender
elects to commence appropriate Louisiana foreclosure proceedings under this
Agreement, Lender may cause the Collateral, or any part or parts thereof,
to be immediately seized wherever found, and sold, whether in term of court
or in vacation, under ordinary or executory process, in accordance with
applicable law, to the highest bidder for cash, with or without
appraisement, and without the necessity of making additional demand upon or
notifying Grantor or placing Grantor in default, all of which are expressly
waived.
CONFESSION OF JUDGMENT. For purposes of foreclosure under Arkansas law,
Grantor confesses judgment and acknowledges to be indebted unto and in
favor of Lender, up to the full amount of the Indebtedness, in principal,
interest, costs, expenses, attorneys' fees and other fees and charges.
Grantor further confesses judgment and acknowledges to be indebted unto and
in favor of Lender in the amount of all additional advances that Lender may
make on Grantor's behalf pursuant to this Agreement, together with interest
thereon, up to a maximum of two (2) times the face amount of the aforesaid
Note. To the extent permitted under applicable Arkansas or Louisiana law,
Grantor additionally waives: (a) the benefit of appraisal as provided in
Articles 2332, 2336, 2723 and 2724 of the Louisiana Code of Civil
Procedure, and all other laws with regard to appraisal upon judicial sale;
(b) the demand and three (3) days' delay as provided under Articles 2639
and 2721 of the Louisiana Code of Civil Procedure; (c) the notice of
seizure as provided under Articles 2293 and 2721 of the Louisiana Code of
Civil Procedure, (d) the three (3) days' delay provided under Articles 2331
and 2722 of the Louisiana Code of Civil Procedure; and (e) all other
benefits provided under the Arkansas UCC or Articles 2331, 2722 and 2723 of
the Louisiana Code of Civil Procedure and all other Articles not
specifically mentioned above.
KEEPER. Should any or all of the Collateral be seized as an incident to an
action for the recognition or enforcement of this Agreement, by executory
process, sequestration, attachment, writ of fieri facies or otherwise,
Grantor hereby agrees that the court issuing any such order shall, it
requested by Lender, appoint Lender, or any agent designated by Lender, or
any person or entity named by Lender at the time such seizure is requested,
or any time thereafter, as receiver or as Keeper of the Collateral as
provided under La. R.S. 9:5136, at seq ("Keeper").
<PAGE>
Such a Keeper shall be entitled to reasonable compensation. Grantor agrees
to pay the reasonable fees of such Keeper, which are hereby fixed at
$150.00 per hour, which compensation to the Keeper shall also be secured by
this, Agreement in the form of an additional advance as provided herein.
DECLARATION OF FACT. Should it become necessary for Lender to foreclose
under this Agreement, all declarations of fact, which are made under an
authentic act before a Notary Public in the presence of two witnesses, by a
person declaring such facts to lie within his or her knowledge, shall
constitute authentic evidence for purposes of executory process and also
for purposes of La. R.S. 9:3509.1, La. R.S. 9:3504(D)(6) and La. R.S.
10:9-508, as applicable.
DELIVER COLLATERAL. This provision applies, to the extent applicable, if
and when the Collateral for any reason is located outside the State of
Arkansas following the occurrence of any Event of Default, or should there
be a subsequent change in Arkansas law permitting such remedies. Lender may
require Grantor to deliver to Lender all or any portion of the Collateral
and any and all certificates of title and other documents relating to the
Collateral. Lender may require Grantor to assemble the Collateral and make
it available to Lender at a place to be designated by Lender. Lender also
shall have full power to enter upon the property of Grantor to take
possession of and remove the Collateral. If the Collateral contains other
goods not covered by this Agreement at the time of repossession, Grantor
agrees Lender may take such other goods, provided that Lender makes
reasonable efforts to return them to Grantor after repossession.
PUBLIC OR PRIVATE SALE OF COLLATERAL. To the extent that any of the
Collateral is then in Lender's possession, Lender shall have full power to
sell, lease, transfer, or otherwise deal with the Collateral or proceeds
thereof in its own name or that of Grantor. Lender may sell the Collateral
at public auction or private sale. Unless the Collateral threatens to
decline speedily in value or is of a type customarily sold on a recognized
market, Lender will give Grantor reasonable notice of the time after which
any private sale or any other intended disposition of the Collateral is to
be made. The requirements of reasonable notice shall be met if such notice
is given at least ten (10) days before the time of the sale or disposition.
All expenses relating to the disposition of the Collateral, including
without limitation the expenses of retaking, holding, insuring, preparing
for sale and selling the Collateral, shall become a part of the
Indebtedness secured by this Agreement and shall be payable on demand, with
interest at the Note rate from date of expenditure until repaid. Grantor
agrees that any such sale shall be conclusively deemed to be conducted in a
commercially reasonable manner if it is made consistent with the standard
of similar sales of collateral by commercial banks in Baton Rouge,
Louisiana.
APPOINT RECEIVER. This provision applies if and when the Collateral for
any reason is located outside the State of Arkansas following the
occurrence of any Event of Default, or should Arkansas law change or be
interpreted to permit such a remedy. Lender shall have the following rights
and remedies regarding the appointment of a receiver: (a) Lender may have a
receiver appointed as a matter of right, (b) the receiver may be an
employee of Lender and may serve without bond, and (c) all fees of the
receiver and his or her attorney shall become part of the Indebtedness
secured by this Agreement and shall be payable on demand, with interest at
the Note rate from date of expenditure until repaid.
COLLECT REVENUES, APPLY ACCOUNTS. Lender shall have the right, at its sole
option and election, at any time, whether or not one or more Events of
Default then exist under this Agreement, to directly collect and receive
all proceeds and/or payments arising under or in any way accruing from the
Collateral, as such amounts become due and payable. In order to permit the
foregoing, Grantor unconditionally agrees to deliver to Lender, immediately
following demand, any and all of Grantor's records, ledger sheets, and
other documentation, in the form requested by Lender, with regard to the
Collateral and any and all proceeds and/or payments applicable thereto.
Lender shall have the further right, whether or not an Event of Default
then exists under this Agreement, where appropriate and within Lender's
sole discretion, to file suit, either in Lender's own name or in the name
of Grantor, to collect any and all proceeds and payments that may then
and/or in the future be due and owing under this Agreement, and if as a
result of such it is necessary for Lender to attempt to collect any such
proceeds and/or payments from the obligors therefor, Lender may compromise,
settle, extend, or renew for any period (whether or not longer than the
original period) any obligation or indebtedness thereunder or evidenced
thereby, or surrender, release, or exchange all or any part of said
obligation or indebtedness, without affecting the liability of Grantor
under this Agreement or under the Indebtedness. To that and, Grantor hereby
irrevocably constitutes and appoints Lender as its attorney-in-fact,
coupled with an interest and with full power of substitution, to take any
and all such actions and any and all other actions permitted hereby, either
in the name of Grantor or Lender.
ADDITIONAL EXPENSES. In the event that it should become necessary for
Lender to conduct a search for any of the Collateral in connection with any
foreclosure action, or should it be necessary to remove the Collateral, or
any part or parts thereof, from the premises in which or on which the
Collateral is then located, and/or to store and/or refurbish such
Collateral, Grantor agrees to reimburse Lender for the cost of conducting
such a search and/or removing and/or storing and/or refurbishing such
Collateral, which additional expense shall also be secured by the lien of
this Agreement.
SPECIFIC PERFORMANCE. Lender may, in addition to the foregoing remedies,
or in lieu thereof, in Lender's sole discretion, commence an appropriate
action against Grantor seeking specific performance of any covenant
contained herein, or in aid of the execution or enforcement of any power
herein granted.
OBTAIN DEFICIENCY. Lender may obtain a judgment against Grantor for any
deficiency remaining on the Indebtedness due to Lender after application of
all amounts received from the exercise of the rights provided in this
Agreement and any Related Document.
OTHER RIGHTS AND REMEDIES. In addition, Lender shall have and may exercise
any or all other rights and remedies it may have available at law, in
equity, or otherwise.
CUMULATIVE REMEDIES. All of Lender's rights and remedies, whether
evidenced by this Agreement or the Related Documents or by any other
writing, shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not exclude
pursuit of any other remedy, and an election to make expenditures or to
take action to perform an obligation of Grantor under this Agreement, after
Grantor's failure to perform, shall not affect Lender's right to declare a
default and to exercise its remedies.
ASSIGNMENT OF INDEBTEDNESS. Grantor hereby recognizes and agrees that Lender
may assign all or any portion of the Indebtedness to one or more third party
creditors. Such transfers may include, but are not limited to, sales of
participation interests in the Indebtedness. Grantor specifically agrees and
consents to all such transfers and assignments and further waives any subsequent
notice of such transfers or assignments as may be provided under applicable law.
Grantor additionally agrees that any and all of the Indebtedness in favor of
such a third party assignee, for the limited purposes set forth above, will be
secured by the Collateral.
PROTECTION OF LENDER'S SECURITY RIGHTS. Grantor will be fully responsible for
any losses that Lender may suffer as a result of anyone other than Lender
asserting any rights or interest in or to the Collateral. Grantor agrees to
appear in and to defend all actions or proceedings purporting to affect Lender's
security interests in any of the Collateral subject to this Agreement and any of
the rights and powers granted Lender hereunder. In the event that Grantor fails
to do what is required of it under this Agreement, or if any action or
proceeding is commenced naming Lender as a party or affecting Lender's security
interests or the rights and powers granted under this Agreement, then Lender
may, without releasing Grantor from any of its obligations under this Agreement,
do whatever Lender believes to be necessary and proper within its sole
discretion to protect the security of this Agreement, including without
limitation making additional advances on Grantor's behalf as provided herein.
INDEMNIFICATION OF LENDER. Grantor agrees to indemnify, to defend and to save
and hold Lender harmless from any and all claims, suits, obligations, damages,
losses, costs, expenses (including without limitation Lender's attorneys' fees),
demands, liabilities, penalties, fines and forfeitures of any nature whatsoever
that may be asserted against or incurred by Lender arising out of or in any
manner occasioned by this Agreement and the exercise of the rights and remedies
granted Lender hereunder. The foregoing indemnity provisions shall survive the
cancellation of this Agreement as to all matters arising or accruing prior to
such cancellation, and the foregoing indemnity shall survive in the event that
Lender elects to exercise any of the remedies as provided under this Agreement
following default hereunder.
EXECUTION OF ADDITIONAL DOCUMENTS. Grantor agrees to execute all additional
documents, instruments and agreements that Lender may deem to be necessary and
proper, within its sole discretion, in form and substance satisfactory to
Lender, to keep this Agreement in effect, to better reflect the true intent of
this Agreement, and to consummate fully all of the transactions contemplated
hereby and by any other agreement, instrument or document heretofore, now or at
any time or times hereafter executed by Grantor and delivered to Lender.
INSPECTION; AUDITS. Lender and its agents may periodically enter upon
Grantor's premises at reasonable hours and inspect the Collateral. Lender and
its agents may also periodically conduct audits of the Collateral and may
further inspect and audit Grantor's books and records that in any
<PAGE>
way pertain to the Collateral and any part or part, thereof. Provided, however,
that Grantor may elect by third parties, at Grantor's expense, subject to
Lender's reasonable approval.
APPLICATION OF PAYMENTS. Grantor agrees that all payments and other sums and
amounts received by Lender under the Indebtedness or under this Agreement, shall
be applied: first, to reimburse Lender for its costs of collecting the same
(including but not limited to, reimbursement of Lender's reasonable attorneys'
fees); second, to the repayment of interest on all additional advances that
Lender may have made on Grantor's behalf pursuant to this Agreement; third, to
the payment of principal of all such additional advances; and finally, to the
payment of principal and interest on the Indebtedness then outstanding, which
may be applied in such order and priority as Lender may determine within its
sole discretion.
TAXATION. In the event that there should be any change in law with regard to
taxation of security agreements or the debts they secure, Grantor agrees to pay
any taxes, assessments or charges that may be imposed upon Lender as a result of
this Agreement.
EFFECT OF WAIVERS. Grantor has waived, and/or does by those presents waive,
presentment for payment, protest, notice of protest and notice of nonpayment
under all of the Indebtedness secured by this Agreement. Grantor has further
waived, and/or does by these presents waive, all pleas of division and
discussion, and all similar rights with regard to the Indebtedness, and agrees
that Grantor shall remain liable, together with any and all Guarantors, on a
"solidary" or "joint and several" basis. Grantor further agrees that discharge
or release of any party who is, may, or will be liable to Lender under any of
the Indebtedness, or the release of the Collateral or any other collateral
directly or indirectly securing repayment of the same, shall not have the affect
of releasing or otherwise diminishing or reducing the actual or potential
liability of Grantor and/or any other party or parties guaranteeing payment of
the Indebtedness, who shall remain liable to Lender, and/or of releasing any
Collateral or other collateral that is not expressly released by Lender. Grantor
additionally agrees that Lender's acceptance of payments other than in
accordance with the terms of any agreement or agreements governing repayment of
the Indebtedness, or Lender's subsequent agreement to extend or modify such
repayment terms, shall likewise not have the effect of releasing any party or
parties from their respective obligations to Lender, and/or of releasing any of
the Collateral or other collateral directly or indirectly securing repayment of
the Indebtedness. In addition, no course of dealing between Grantor and Lender,
nor any failure or delay on the part of Lender to exercise any of the rights and
remedies granted to Lender under this Agreement, or under any other agreement or
agreements by and between Grantor and Lender, shall have the effect of waiving
any of Lender's rights and remedies. Any partial exercise of any rights and
remedies granted to Lender shall furthermore not constitute a waiver of any of
Lender's other rights and remedies, it being Grantor's intent and agreement that
Lender's rights and remedies shall be cumulative in nature. Grantor further
agrees that, upon the occurrence of any Event of Default under this Agreement,
any waiver or forbearance on the part of Lender to pursue the rights and
remedies available to Lender, shall be binding upon Lender only to the extent
that Lender specifically agrees to any such waiver or forbearance in writing. A
waiver or forbearance as to one Event of Default shall not constitute a waiver
or forbearance as to any other Event of Default. None of the warranties,
conditions, provisions and terms contained in this Agreement or any other
agreement, document, or instrument now or hereafter executed by Grantor and
delivered to Lender, shall be deemed to have been waived by any act or knowledge
of Lender, its agents, officers or employees; but only by an instrument in
writing specifying such waiver, signed by a duly authorized officer of Lender
and delivered to Grantor.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Agreement. No alteration of or amendment to this
Agreement shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or
amendment.
Applicable Law. This Agreement has been forwarded to Lender and finally
accepted by Lender in the State of Louisiana. Lender and Grantor hereby
waive the right to any jury trial in any action, proceeding, or
counterclaim brought by either Lender or Grantor against the other. This
agreement shall be governed by and construed in accordance with the laws of
the State of Louisiana, to the extent possible and practicable.
Attorneys' Fees; Expenses. Grantor agrees to pay upon demand all of
Lender's costs end expenses, including attorneys' fees and Lender's legal
expenses, incurred in connection with the enforcement of this Agreement.
Lender may pay someone also to help enforce this Agreement, and Grantor
shall pay the costs and expenses of such enforcement. Costs and expenses
include Lender's attorneys' fees and legal expenses whether or not there is
a lawsuit, including attorneys' fees and legal expenses for bankruptcy
proceedings (and including efforts to modify or vacate any automatic stay
or injunction), appeals, and any anticipated post-judgment collection
services. Grantor also shall pay all court costs and such additional fees
as may be directed by the court.
Caption Headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions
of this Agreement.
Notices. To give Grantor any notice required under this Agreement, Lender
may hand deliver or mail such notice to Grantor. Lender will deliver or
mail any notice to Grantor (or any of them if more than one) at any address
which Grantor may have given Lender by written notice as provided in this
paragraph. In the event that there is more than one Grantor under this
Agreement, notice to a single Grantor shall be considered as notice to all
Grantors. To give Lender any notice under this Agreement, Grantor (or any
Grantor) shall mail the notice to Lender by registered or certified mail at
the address specified in this Agreement, or at any other address that
Lender may have given to Grantor (or any Grantor) by written notice as
provided in this paragraph. All notices required or permitted under this
Agreement must be in writing and will be considered as given on the day it
is delivered by hand or deposited in the U.S. Mail, by registered or
certified mail to the address specified in this Agreement.
Power of Attorney. Grantor hereby appoints Lender as its true end lawful
attorney-in-fact, irrevocably, with full power of substitution to do the
following: (a) to demand, collect, receive, receipt for, sue and recover
all sums of money or other property which may now or hereafter become due,
owing or payable from the Collateral; (b) to execute, sign and endorse any
and all claims, instruments, receipts, checks, drafts or warrants issued in
payment for the Collateral; (c) to settle or compromise any and all claims
arising under the Collateral, and, in the place and stood of Grantor, to
execute and deliver its release and settlement for the claim; and (d) to
file any claim or claims or to take any action or institute or take part in
any proceedings, either in its own name or in the name of Grantor, or
otherwise, which in the discretion of Lender may seem to be necessary or
advisable. This power is given as security for the Indebtedness, and the
authority hereby conferred is and shall be irrevocable and shall remain in
full force and effect until renounced by Lender.
Severability. If a court of competent jurisdiction finds any provision of
this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other provisions of
this Agreement in all other respects shall remain valid and enforceable.
Sole Discretion of Lender. Whenever Lender's consent or approval is
required under this Agreement, the decision as to whether or not to consent
or approve shall be in the sole and exclusive discretion of Lender and
Lender's decision shall be final and conclusive.
Successors and Assigns Bound; Solidary Liability. Grantor's obligations
and agreements under this Agreement shall be binding upon Grantor's
successors, heirs, legatees, devisees, administrators, executors and
assigns. In the event that there is more than one Grantor under this
Agreement, all of the agreements and obligations made and/or incurred by
Grantors under this Agreement shall be on a "solidary" or "joint and
several" basis.
ADDITIONAL DEFINITION OF NOTE. The word "Note" shall also mean and include the
note or credit agreement dated September 1, 1995, in the principal amount of
$250,000.00 from Grantor to Lender, together with all substitutions or
replacements notes therefor, as well as all renewals, extensions, modifications,
refinancings, consolidations and substitutions of and for the note or credit
agreement.
<PAGE>
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENT AND GRANTOR AGREES TO ITS TERMS. THIS AGREEMENT IS DATED SEPTEMBER 1,
1995.
GRANTOR:
TBC ARKANSAS, INC.
By:/s/ Mark Walton President
-------------------------------------
Mark Walton, President
LENDER:
HIBERNIA NATIONAL BANK
By:/s/ Wade Carwile
-------------------------------------
Authorized Officer
<PAGE>
EXHIBIT 10.8(b)
PROMISSORY NOTE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$100,000.00 05-30-1995 05-29-1996 0001 9146962 880
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit
the applicability of this document to any particular loan or item.
- --------------------------------------------------------------------------------
Borrower: Travis Boats & Motors Lender: Hibernia National Bank
Baton Rouge, Inc. dba Baton TIN: 72-0210640
Rouge, Boating Centre (TIN: 721224466 Loan Administration
14369 Florida Boulevard Department
Baton Rouge, LA 70819 440 Third Street
Baton Rouge, LA 70801
===============================================================================
Principal Amount: $100,000 Initial Rate: 10.000% Date of Note: May 30, 1995
PROMISE TO PAY. Travis Boats & Motors Baton Rouge, Inc. dba Baton Rouge
Boating Centre ("Borrower") promises to pay to the order of Hibernia
National Bank ("Lender"), in lawful money of the United States of America
the sum of One Hundred Thousand & 00/100 Dollars (U.S. $100,000.00) or
such other or lesser amounts as may be reflected from time to time on the
books and records of Lender as evidencing the aggregate unpaid principal
balance of loan advances made to Borrower on a revolving line of credit
basis as provided below, together with simple interest assessed on a
variable rate basis at the rate per annum equal to 1.000 percentage point
over the index provided below, as the Index under this Note may be adjusted
from time to time, one or more times, with interest being assessed on the
unpaid principal balance of this Note as outstanding from time to time,
commencing on May 30, 1995 and continuing until this Note is paid in full,
or until default under this Note with interest thereafter being subject to
the default interest rate provisions set forth herein.
LINE OF CREDIT. This Note evidences a revolving line of credit "master
note". Advances under this Note, as well as directions for payment from
Borrower's accounts, may be requested orally or in writing by Borrower or
by an authorized person. Lender may, but need not, require that all oral
requests be confirmed in writing. The following party or parties are
authorized to request advances under the line of credit until Lender
receives from Borrower at Lender's address shown above written notice of
revocation of their authority: MARK T. WALTON, PRESIDENT; CORNELIUS JAMES
MCMANUS A/K/A JIM MCMANUS, VICE PRESIDENT: JUNE MCMANUS; AND MICHAEL B.
PERRINE, ASSISTANT SECRETARY, Borrower agrees to be liable for all sums
either (a) advanced in accordance with the instructions of an authorized
person or (b) credited to any of Borrower's deposit accounts with Lender.
The unpaid principal balance owing on this Note at any time may be
evidenced by endorsements on this Note or by Lender's internal records,
including daily computer print-outs. Lender will have no obligation to
advance funds under this Note it: (a) Borrower or any guarantor is in
default under the terms of this Note or any agreement that Borrower or any
guarantor has with Lender, including any agreement made in connection with
the signing of this Note: (b) Borrower or any guarantor ceases doing
business or is insolvent; (c) any guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such guarantor's guarantee of this Note
or any other loan with Lender; (d) Borrower has applied funds provided
pursuant to this Note for purposes other than those acceptable to Lender,
or (e) Lender in good faith deems itself insecure under this Note or any
other agreement between Lender and Borrower.
PAYMENT. Borrower will pay this loan in one payment of all outstanding
principal plus all accrued interest on May 29, 1996. In addition, Borrower
will pay regularly monthly payments of accrued unpaid interest beginning
June 30, 1995, and all subsequent interest payments are due on the last day
of each month after that until this Note is paid in full. Interest on this
Note is computed on a 365/360 simple interest basis; that is, by applying
the ratio of the annual interest rate over a year of 360 days, multiplied
by the outstanding principal balance, multiplied by the actual number of
days the principal balance is outstanding. Borrower will pay Lender at
Lender's address shown above or at such other place as Lender may designate
in writing. Unless otherwise agreed or required by applicable law, payments
will be applied first to accrued unpaid interest, then to principal, and
any remaining amount to any unpaid collection costs and later charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an independent Index which is the
CITIBANK N.A. RATE (the "Index"). The Index is not necessarily the lowest
rate charged by Lender on its loans. If the index becomes unavailable
during the term of this loan, Lender may designate a substitute index after
notice to Borrower. Lender will tell Borrower the current index rate upon
Borrower's request. Borrower understands that Lender may make loans based
on other rates as well. The interest rate change will not occur more than
each day. The Index currently is 9.000% per annum. The interest rate to be
applied to the unpaid principal balance of this Note will be at a rate of
1.000 percentage point over the index, resulting in an initial rate of
10.000% per annum. Under no circumstances will the interest rate on this
Note be more than the maximum rate allowed by applicable law.
PREPAYMENT. Borrower may prepay this Note in full at any time by paying the
then unpaid principal balance of this Note, plus accrued simple interest
and any unpaid late charges through date of prepayment. If Borrower prepays
this Note in full, or if Lender accelerates payment, Borrower understands
that, unless otherwise required by law, any prepaid fees or charges will
not be subject to rebate and will be earned and will be earned by Lender at
the time this Note is signed. Unless otherwise agreed to in writing, early
payments under this Note will not relieve Borrower of Borrower's
obligation to continue to make regularly scheduled payments under the
above payment schedule. Early payments will instead reduce the principal
balance due, and Borrower may be required to make fewer payments under this
Note.
LATE CHARGE. If Borrower fails to pay any payment under this Note in full
within 10 days of when due, Borrower agrees to pay Lender a late payment
fee in an amount equal to 10.000% of the delinquent interest due. Late
charges will not be assessed following declaration or default and
acceleration of maturity of this Note.
DEFAULT. The following actions and/or inactions shall constitute default
events under this Note:
DEFAULT UNDER THIS NOTE. Should Borrower default in the payment of
principal and/or interest under this Note.
DEFAULT UNDER SECURITY AGREEMENTS. Should Borrower or any guarantor
violate, or fail to comply fully with any of the terms and conditions
of, or default under any security right, instrument, document or
agreement directly or indirectly securing repayment of this Note.
OTHER DEFAULTS IN FAVOR OF LENDER. Should Borrower or any guarantor of
this Note default under any other loan, extension of credit, security
right, instrument, document, or agreement, or obligation in favor of
Lender.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any guarantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may affect any property or other
collateral directly or indirectly securing repayment of this Note.
INSOLVENCY. Should the suspension, failure or insolvency, however
evidenced of Borrower or any guarantor of this Note occur or exist.
DEATH OR INTERDICTION. Should any guarantor of this Note die or be
interdicted.
READJUSTMENT OF INDEBTEDNESS. Should proceedings for readjustment of
indebtedness, reorganization, bankruptcy, composition or extension
under any insolvency law be brought by or against Borrower or any
guarantor.
ASSIGNMENT FOR BENEFIT OF CREDITORS. Should Borrower or any guarantor
file proceedings for a respite or make a general assignment for the
benefit of creditors.
RECEIVERSHIP. Should a receiver of all or any part of Borrower's
property, or the property of any guarantor, be applied for or
appointed.
DISSOLUTION PROCEEDINGS. Should proceedings for the dissolution or
appointment of a liquidator of Borrower or any guarantor be commenced.
FALSE STATEMENTS. Should any representation, warranty, or material
statement of Borrower or any guarantor made in connection with the
obtaining of the loan evidenced by this Note or any security agreement
directly or indirectly securing repayment of this Note, prove to be
incorrect
<PAGE>
MATERIAL ADVERSE CHANGE. Should any material adverse change occur in
the financial condition of Borrower or any guarantor of this Note or
should any material discrepancy exist between the financial statements
submitted by Borrower or any guarantor and the actual financial
condition of Borrower or such guarantor.
INSECURITY. Should Lender deem itself to be insecure with regard to
repayment of this Note.
LENDER'S RIGHTS UPON DEFAULT. Should any one or more default events occur
or exist under this Note as provided above, Lender shall have the right, at
its sole option, to declare formally this Note to be in default and to
accelerate the maturity and insist upon immediate payment in full of the
unpaid principal balance then outstanding under this Note, plus accrued
interest, together with reasonable attorneys' fees, costs, expenses and
other fees and charges as provided herein. Lender shall have the further
right, again at its sole option, to declare formal default and to
accelerate the maturity and to insist upon immediate payment in full of
each and every other loan, extension of credit, debt, liability and/or
obligation of every nature and kind that Borrower may then owe to Lender,
whether direct or indirect or by way of assignment, and whether absolute or
contingent, liquidated or unliquidated, voluntary or involuntary,
determined or undetermined, secured or unsecured, whether Borrower is
obligated alone or with others on a "solidary" or "joint and several"
basis, as a principal obligor or otherwise, all without further notice or
demand, unless Lender shall otherwise elect.
INTEREST AFTER DEFAULT. If Lender declares this Note to be in default,
Lender has the right prospectively to adjust and fix the simple interest
rate under this Note until this Note is paid in full, as follows: (1) if
the original principal amount of this Note is $250,000 or less, the fixed
default interest rates shall be equal to eighteen (18%) percent per annum,
or three (3%) per cent per annum in excess of the interest rate under this
Note, whichever is greater. (2) if the original principal amount of this
Note is more than $250,000, the fixed default interest rate shall be equal
to twenty-one (21%) percent
<PAGE>
???? PROMISSORY NOTE PAGE 2
Loan No 0001 CONTINUED
================================================================================
per annum, or three (3%) per cent per annum in excess of the interest rate
under this Note at the time of default, whichever is greater.
ATTORNEY'S FEES. If Lender refers this Note to an attorney for collection,
or files suit against Borrower to collect this Note, or if Borrower files
for bankruptcy or other relief from creditors, Borrower agrees to pay
Lender's reasonable attorney's fees in an amount not exceeding 25.000% of
the unpaid debt then owing under this Note.
NSF CHECK CHARGES. In the event that Borrower makes any payment under this
Note by check and Borrower's check is returned to Lender unpaid due to
nonsufficient funds in my deposit account, Borrower agrees to pay Lender an
additional NSF check charge equal to $20.00.
DEPOSIT ACCOUNTS. As collateral security for repayment of this Note and all
renewals and extensions, as well as to secure any and all other loans,
notes, indebtedness and obligations that Borrower (or any of them) may now
and in the future own to Lender or incur in Lenders favor, whether direct
or indirect, absolute or contingent, due or to become due, of any nature
and kind whatsoever (with the exception of any indebtedness under a
consumer credit card account), Borrower is granting Lender a continuing
security interest in any and all funds that Borrower may now and in the
future have on deposit with Lender or in certificates of deposit or other
deposit accounts as to which Borrower is an account holder (with the
exception of IRA, pension, and other tax-deferred deposits). Borrower
further agrees that Lender may at any time apply any funds that Borrower
may have on deposit with Lender or in certificates of deposit or other
deposit accounts as to which Borrower is an account holder against the
unpaid balance of this Note and any and all other present and future
indebtedness and obligations that Borrower (or any of them) may then owe to
Lender, in principal, interest, fees, costs, expenses, and attorneys' fees.
FINANCIAL STATEMENTS. Borrower agrees to provide Lender with such financial
statements and other related information at such frequencies and in such
detail as Lender may reasonably request.
GOVERNING LAW. Borrower agrees that this Note and the loan evidenced
hereby shall be governed under the laws of the State of Louisiana.
Specifically, this business or commercial Note is subject to La. R.S.
8:3509 et seq.
ACKNOWLEDGEMENT OF COLLATERAL. Borrower hereby acknowledges, confirms and
ratifies that all collateral previously pledged to Lender or in which
Lender was granted a security interest to secure Borrower's other
obligation to Lender also secures this Note.
FINANCIAL STATEMENT REQUIREMENTS. Borrower further covenants and agrees
with Lender that in addition to those requirements in the Loan Agreement
dated December 17, 1982 between Borrower and Lender, Borrower will furnish
Lender with, as soon as available, but in no event later than 30 days after
the end of each fiscal quarter. Travis Boats & Motors, Inc.'s balance sheet
and income statement for the quarter ended prepared and certified as
correct to the best knowledge and belief by Travis Boats & Motors, Inc.'s
chief financial officer or other person acceptable to Lender. All financial
reports required hereunder shall be prepared in accordance with generally
accepted accounting principles, applied on a consistent basis, and shall be
in a form and substance acceptable to Lender. Failure to comply with this
provision shall constitute a default under this note.
WAIVERS. Borrower and each guarantor of this Note hereby waive demand,
presentment for payment, protest, notice of protest and notice of
nonpayment, and all places of division and discussion, and severally agree
that their obligations and liabilities to Lender hereunder shall be on a
"solidary" or "joint and several" basis. Borrower and each guarantor
further severally agree that discharge or release of any party who is or
may be liable to Lender for the indebtedness represented hereby, or the
release of any collateral directly or indirectly securing repayment hereof,
shall not have the effect of releasing any other party or parties, who
shall remain liable to Lender, or of releasing any other collateral that is
not expressly released by Lender. Borrower and each guarantor additionally
agree that Lender's acceptance of payment other than in accordance with the
terms of this Note, or Lender's subsequent agreement to extend or modify
such repayment terms, or Lender's failure or delay in exercising any rights
and remedies granted to Lender, shall likewise not have the effect of
releasing Borrower's or any other party or parties from their respective
obligations to Lender, or of releasing any collateral that directly or
indirectly secures repayment hereof. In addition, any failure or delay on
the part of Lender to exercise any of the rights and remedies granted to
Lender shall not have the effect of waiving any of Lender's rights and
remedies. Any partial exercise of any rights and/or remedies granted to
Lender shall furthermore not be construed as a waiver of any other rights
and remedies; it being Borrower's intent and agreement that Lender's rights
and remedies shall be cumulative in nature. Borrower and each guarantor
further agree that should any default event occur or ???? under this Note,
any waiver or forbearance on the part of Lender to pursue the rights and
remedies available to Lender, shall be binding upon Lender only to the
extent that Lender specifically agrees to any such waiver or forbearance in
writing. A waiver or forbearance on the part of Lender as to one default
event shall not be construed as a waiver or forbearance as to any other
default. Borrower and each guarantor of this Note further agree that any
late charges provided for under this Note will not be charges for deferral
of time for payment and will not and are not intended to compensate Lender
for a grace or cure period, and no such deferral, grace or cure period has
or will be granted to Borrower in return for the imposition of any late
charge. Borrower recognizes that Borrower's failure to make timely payment
of amounts due under this Note will result in damages to Lender, including
but not limited to Lender's loss of the use of amounts due, and Borrower
agrees that any late charges imposed by Lender hereunder will represent
reasonable compensation to Lender for such damages. Failure to pay in full
any installment or payment timely when due under this Note, whether or not
a late charge is assessed, will remain and shall constitute an Event of
Default hereunder.
SUCCESSORS AND ASSIGNS LIABLE. Borrower's and each guarantor's obligations
and agreements under this Note shall be binding upon Borrower's and each
guarantor's respective successors, heirs, legatees, devisees,
administrators, executors and assignee. The rights and remedies granted to
Lender under the Notes shall inure to the benefit of Lender's successors
and assigns. The rights and remedies granted to Lender under this Note
shall inure to the benefit of Lender's successors and assigns, as well as
to any subsequent holder or holders of this Note.
CAPTION HEADINGS. Caption headings of the sections of this Note are for
convenience purposes only and are not to be used to interpret or to define
their provisions. In this Note, whenever the context so requires, the
singular includes the plural and the plural also includes the singular.
SEVERABILITY. If any provision of this Note is held to be invalid, illegal
or unenforceable by any court, that provision shall be deleted from this
Note and the balance of this Note shall be interpreted as if the deleted
provision never existed.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. LENDER AND
BORROWER HEREBY WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM BROUGHT BY EITHER LENDER OR BORROWER AGAINST THE OTHER.
BORROWER:
Travis Boats & Motors Baton Rouge, Inc, dba Baton Rouge Boating Centre
By: /s/Jim McManus
----------------------
Cornelius James McManus a/k/a Jim McManus, Vice President
================================================================================
<PAGE>
EXHIBIT 10.8(c)
PROMISSORY NOTE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL LOAN DATE MATURITY LOAN NO CALL COLLATERAL ACCOUNT OFFICER INITIALS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$800,000.00 05-30-1995 05-28-1996 7900 9148885 880
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
References in the shaded area are for Lenders use only and do not limit the
applicability of this document to any particular loan or item,
- --------------------------------------------------------------------------------
BORROWER: Travis Boats & Motors LENDER: Hibernia National Bank
Baton Rouge, Inc. cba Baton TIN: 72-0210640
Rouge Boating Centre Loan Administration Department
(TIN: 721224466) 440 Third Street
14359 Florida Boulevard Baton Rouge, LA 70801
Baton Rouge, LA 70819
================================================================================
<TABLE>
<S> <C> <C>
Principal Amount: $800,000.00 Initial Rate: 10.000% Date of Note: May 30, 1995
</TABLE>
PROMISE TO PAY. Travis Boats & Motors Baton Rouge, Inc. dba Baton Rouge
Boating Centre ("Borrower') promises to pay to the order of Hibernia
National Bank ("Lender"), In lawful money of the United States of America
the sum of Eight Hundred Thousand & 00/100 Dollars (U,S. $800,000,00) or
such other or lesser amounts as may be reflected from time to time on the
books and records of Lender as evidencing the aggregate unpaid principal
balance of loan advances made to Borrower on a revolving line of credit
basis as provided below, together with simple interest on a variable rate
basis at the rate per annum equal to 1.000 percentage point over the Index
provided below, as the index under this Note may be adjusted from time to
time, one or more times, with interest being a on the unpaid principal
balance of this Note as outstanding from time to time, commencing on May
30, 1995 and continuing until this Note is paid in full, or until default
under this Note with interest therefore being subject to the default
interest rate provisions set forth herein.
LINE OF CREDIT. This Note, evidences a revolving line of credit "master
note". Advances under this Note, as well as directions for payment from
Borrowers' accounts, may be requested orally or in writing by Borrower or
by an authorized person. Lender may, but need not, require that all ???
requests be confirmed in writing. The following party or parties are
authorized to request advances under the line of credit until Lender
receives from Borrower at Lender's address shown above written notice of
revocation of their authority: MARK T. WALTON, PRESIDENT: CORNELIUS JAMES
MCMANUS A/K/A JIM MCMANUS, VICE PRESIDENT; JUNE MCMANUS; AND MICHAEL B.
PERRINE, ASSISTANT SECRETARY. Borrower agrees to be liable for all sums
either (a) advanced in accordance with the instructions of an authorized
person or (b) credited to any of Borrowers deposit accounts with Lender.
The unpaid principal balance owing on this Note at any time may be
evidenced by endorsements on this Note or by Lender's internal records,
including daily computer print-outs. Lender will have no obligation to
advance funds under this Note if; (a) Borrower or any guarantor is in
default under the terms of this Note or any agreement that Borrower or any
guarantor has with Lender, including any agreement made in connection with
the signing of this Note; (b) Borrower or any guarantor censes doing
business or is insolvent (c) any guarantor seeks, claims or otherwise
attempts to limit modify or revoke such guarantees guarantee of this Note
or any other loan with Lender (d) Borrower has applied funds provided
pursuant to this Note for purposes other than those acceptable to Lender,,
or (e) Lender in good faith deems itself insecure under this Note or any
other agreement between Lender and Borrower.
PAYMENT. Borrower will pay this loan in accordance with the following
payment schedule:
OUTSTANDING PRINCIPAL AND ACCRUED UNPAID INTEREST ON THIS NOTE IS DUE
AND PAYABLE IN FULL ON MAY 29,1996. BORROWER AGREES TO PAY MONTHLY
INTEREST PAYMENTS BEGINNING ON JUNE 1. 1995, WITH ALL SUBSEQUENT
INTEREST PAYMENTS DUE ON THE SAME DAY OF EACH MONTH THEREAFTER UNTIL
THIS NOTE IS PAID IN FULL. PRINCIPAL UNDER THIS NOTE SHALL BE
REPAYABLE EARLIER THAN MAY 29, 1996 IN ACCORDANCE WITH THE REPAYMENT
PROVISIONS AS PROVIDED IN THE LNVENTORY LOAN AGREEMENT DATED 17, 1992
AS AMENDED.
Interest on this Note is computed on a 365/360 simple interest basis; that
is, by applying the ratio of the annual interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied by the
actual number of days the principal balance is outstanding. Borrower will
pay Lender at Lender's address shown above or at such other place as Lender
may designate in writing. Unless otherwise agreed or required by applicable
law, payments will be applied first to accrued unpaid interest, then to
principal, and any remaining amount to any unpaid collection costs and late
charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in independent index which is the
CITIBANK N.A. RATE (the "Index"). The index is not necessarily the lowest
rate charged by Lender on its loans. If the index becomes unavailable
during the term of this loan, Lender may designate a substitute index after
notice to Borrower. Lender will tell Borrower the current index rate upon
Borrower's request. Borrower understands that Lender may make loans based
on other rates as well. The interest rate change will not occur more often
then each day. The index currently is 9.000% per annum. The interest rate
to be applied to the unpaid principal balance of this Note will be at a
rate of 1.000 percentage point over the index resulting in an initial rate
to be 10.000% per annum. Under no circumstances will the interest rate on
this Note be more than the maximum rate allowed by applicable law.
PREPAYMENT. Borrower may prepay this Note in full at any time by paying the
then unpaid principal balance of this Note, plus accrued simple interest
and any unpaid late charges through date of prepayment. If Borrower prepays
this Note in full, or if Lender accelerates payment Borrower understands
that unless otherwise required by law, any prepaid fees or charges will not
be subject to rebate and will be earned by Lender at the time this Note is
signed. Unless otherwise agreed to in writing, early payments under this
Note will not relieve Borrower of Borrower's obligation to continue to
make regularly scheduled payments under the above payment schedule. Early
payments will instead reduce the principal balance due, and Borrower may be
required to make few payments under this Note.
LATE CHARGE. If Borrower fails to pay any payment under this Note in full
within 10 days of when due, Borrower agrees to pay Lender a late payment
fee in an amount equal to 10.000% of the delinquent interest due. Late
charges will not be acceleration of maturity of this Note.
DEFAULT. The following actions and/or inactions shall constitute default
events under this Note:
DEFAULT UNDER THIS NOTE. Should Borrower default in the payment of
principal and/or interest under this Note.
DEFAULT UNDER SECURITY AGREEMENT. Should Borrower or any guarantor
violate, or fail to comply fully with any of the terms and
conditions of, or default under any security right, instrument,
document, or agreement directly or indirectly securing repayment of
this Note.
OTHER DEFAULTS IN FAVOR OF LENDER. Should Borrower or any guarantor of
this Note default under any other loan, extension of credit, security
right instrument, document, or agreement, or obligation in favor of
Lender.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any guarantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may affect any property or other
collateral directly or indirectly securing repayment of this Note.
INSOLVENCY. Should the suspension, failure or insolvency, however
evidenced, of Borrower or any guarantor of this Note occur or exist.
DEATH OR INTERDICTION. Should any guarantor of this Note die or be
interdicted.
READJUSTMENT OF INDEBTEDNESS. Should proceedings for readjustment of
indebtedness, reorganization, bankruptcy, composition or extension
under any insolvency law be brought by or against Borrower or any
guarantor.
ASSIGNMENT FOR BENEFIT OF CREDITORS. Should Borrower or any guarantor
file proceedings for a respite or make a general assignment for the
benefit of creditors.
RECEIVERSHIP. Should a receiver of all or any part of Borrower's
property or the property of any guarantor, be applied for or
appointed.
DISSOLUTION PROCEEDINGS. Should proceedings for the dissolution or
appointment of a liquidator of Borrower or any guarantor be commenced.
FALSE STATEMENTS. Should any representation, warranty, or material
statement of Borrower or any guarantor made in connection with the
obtaining of the loan evidenced by this Note or any security agreement
directly or indirectly securing repayment of this Note, prove to be
incorrect or misleading in any respect.
MATERIAL ADVERSE CHANGE. Should any material adverse change occur in
the financial condition of Borrower or any guarantor of this Note or
should any material discrepancy exist between the financial statements
submitted by Borrower or any guarantor and the actual financial
condition of Borrower or such guarantor.
INSECURITY. Should Lender deem itself to be insecure with regard to
repayment of this Note.
LENDER'S RIGHTS UPON DEFAULT. Should any one or more default events occur
or exist under this Note as provided above, Lender shall have the right at
its sole option, to declare formally this Note to be in default and to
accelerate the maturity and insist upon immediate payment in full of the
unpaid principal balance then outstanding under this Note, plus accrued
interest, together with reasonable attorneys' fees, costs, expenses and
other fees and charges as provided herein. Lender shall have the further
right, again at its sole option, to declare formal default and to
accelerate the maturity and to insist upon immediate payment in full of
each and every other loan, extension of credit debt liability and/or
obligation of every nature and kind that Borrower may then owe to Lender,
whether direct or indirect or by way of assignment and whether absolute or
contingent, liquidated or unliquidated, voluntary or involuntary,
determined or undetermined, secured or unsecured, whether Borrower is
obligated alone or with others on a "solidary" or "joint and several"
basis, as a principal obligor or otherwise, all without further notice or
demand, unless Lender shall otherwise elect.
<PAGE>
05-30-1995 . PROMISSORY NOTE PAGE 2
LOAN NO 7900 (CONTINUED)
================================================================================
INTEREST AFTER DEFAULT. If Lender declares this Note to be in default,
Lender has the right prospectively to adjust and fix the simple interest
rate under this Note until this Note is paid in full, as follows: (1) If
the original principal amount of this Note is more than $250,000, the fixed
default interest rate shall be equal to eighteen (18%) percent per annum,
or three (3%) per cent per annum in excess of the interest rate under this
Note, whichever is greater. (2) If the original principal amount of this
Note is more than $250,000, the fixed default interest rate shall be equal
to twenty-one (21%) per cent per annum or three (3%) per cent per annum In
excess of the interest rate under this Note at the time of default
whichever is greater.
ATTORNEYS' FEES. If Lender refers this Note to an attorney for collection,
or files suit against Borrower to collect this Note, or if Borrower files
for bankruptcy or other relief from creditors, Borrower agrees to pay
Lender's reasonable attorneys' fees in an amount not exceeding 25.0001% of
the unpaid debt then owing under this Note.
NSF CHECK CHARGES. In the event that Borrower makes any payment under this
Note by check and Borrower's check is returned to Lender unpaid due to
nonsufficient funds in my deposit account, Borrower agrees to pay Lender an
additional NSF check charge equal to $20.00.
DEPOSIT ACCOUNTS. As collateral security for repayment of this Note and all
renewals and extensions, as well as to secure any and all other loans,
notes, indebtedness and obligations that Borrower (or any of them) may now
and in the future owe to Lender or incur in Lender's favor, whether direct
or indirect, absolute or contingent due or to become due, of any nature and
kind whatsoever (with the exception of any indebtedness under a consumer
credit card account), Borrower is granting Lender a continuing security
interest in any and all funds that Borrower may now and in the future have
on deposit with Lender or in certificates of deposit or other deposit
accounts as to which Borrower is an account holder (with the exception of
IRA, pension, and other tax-deferred deposits). Borrower further agrees
that Lender may at any time apply any funds that Borrower may have on
deposit with Lender or in certificates of deposit or other deposit accounts
as to which Borrower is an account holder against the unpaid balances of
this Note and any and all other present and future indebtedness and
obligations that Borrower (or any of them) may then owe to Lender, in
principal, interest, fees, costs, expenses and attorneys' fees.
FINANCIAL STATEMENTS. Borrower agrees to provide Lender with such financial
statements and other related information at such frequencies and in such
detail as Lender may reasonably request.
GOVERNING LAW. Borrower agrees that this Note and the loan evidenced hereby
shall be governed under the laws of the State of Louisiana Specifically,
this business or commercial Note is subject to La. R.S. 9:3509 et seq.
ACKNOWLEDGMENT OF COLLATERAL Borrower hereby acknowledges, confirms and
ratifies that all collateral previously pledged to Lender or in which
Lender was granted a security interest to secure Borrower's other
obligation to Lender also secures this Note.
WAIVERS. Borrower and each guarantor of this Note hereby waive demand,
presentment for payment, protest, notice of protest, and notice of
nonpayment, and all pleas of division and discussion, and severally agree
that their obligations and liabilities to Lender hereunder shall be on a
"solidary" or "Joint and several" basis. Borrower and each guarantor
further severally agree that discharge or release of any party who is or
may be liable to Lender for the indebtedness represented hereby, or the
release of any collateral directly or indirectly accuring repayment hereof,
shall not have the effect of releasing any other party or parties who shall
remain liable to Lender, or of releasing any other collateral that is not
expressly released by Lender. Borrower and each guarantor additionally
agree that Lender's acceptance of payment other than in accordance with the
terms of this Note, or Lender's subsequent agreement to extend or modify
such repayment terms or Lender's failure or delay in exercising any rights
or remedies granted to Lender, shall likewise not have the effect of
releasing Borrower or any other party or parties from their respective
obligations to Lender, or of releasing any collateral that directly or
indirectly secures repayment hereof. In addition, any failure or delay on
the part of Lender to exercise any of the rights and remedies granted to
Lender shall not have the effect of waiving any of Lender's rights and
remedies. Any partial exercise of any rights and/or remedies granted to
Lender shall furthermore not be construed as a waiver of any other rights
and remedies; it being Borrowers intent and agreement that Lender's rights
and remedies shall be cumulative in nature. Borrower and each guarantor
further agree that, should any default event occur or exist under this
Note, any waiver or forbearance on the part of Lender to pursue the rights
and remedies available to Lender, shall be binding upon Lender only to the
extent that Lender specifically agrees to any such waiver or forbearance in
writting. A waiver or forbearance on the part of Lender as to one default
event shall not be construed as a waiver or forbearance as to any other
default Borrower and each guarantor of this Note further agree that any
late charges provided for under this Note shall not be charges for deferral
of time for payment and shall not and are not intended to compensate Lender
for a grace or cure period, and no such deferral, grace or cure period has
or will be granted to Borrower in return for the imposition of any late
charge, Borrower recognize that Borrower's failure to make timely payment
of amounts due under this Note shall result in damages to Lender, including
but not limited to Lender's loss of the use of amounts due, and Borrower
agrees that any late charges imposed by Lender hereunder will represent
reasonable compensation to Lender or such damages. Failure to pay in full
any installment or payment timely when due under this Note, whether or not
a late charge is assessed, will remain and shall constitute an Event of
Default hereunder.
SUCCESSORS AND ASSIGNS LIABLE. Borrower's and each guarantees obligations
and agreements under this Note shall be binding upon Borrowers and each
guarantor's respective successors, heirs, legatees, devicees,
administrators, executors and assigns. The rights and remedies granted to
Lender under this Note shall Inure to the benefit of Lender's successors
and assigns, as well as to any subsequent holder or holders of this Note.
CAPTION HEADINGS. Caption headings of the sections of this Note are for
convenience purposes only and are not to be used to interpret or to define
their provisions. In this Note, whenever the context so requires, the
singular includes the plural and the plural also includes the singular.
SEVERABILITY. If any provision of this Note is held to be invalid, illegal
or unenforceable by any court, that provision shall be deleted from this
Note and the balance of the Note shall be interpreted as if the deleted
provision never existed.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. LENDER AND
BORROWER HEREBY WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY ACTION,
PROCEEDING, OR COUNTERCLAIM BROUGHT BY EITHER LENDER OR BORROWER AGAINST
THE OTHER.
BORROWER:
Travis Boats & Motors Baton Rouge, Inc. ciba Baton Rouge Boating Centre
/s/ Jim McManus
By:---------------------------------------------------------
Cornelius James McManus a/k/e Jim McManus, Vice President
================================================================================
<PAGE>
EXHIBIT 10.8(d)
PROMISSORY NOTE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
PRINCIPAL LOAN DATE MATURITY LOAN NO CALL COLLATERAL ACCRUED OFFICER INITIALS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$480,000.00 07-14-1995 07-14-2002 9001 9146962 854
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit
the applicability of this document to any particular loan or item.
- --------------------------------------------------------------------------------
BORROWER: Travis Boats & Motors Baton LENDER: Hibernia National Bank
Rouge, Inc. (TIN: TIN:72-0210640
721224466) Loan Administration
14369 Florida Boulevard Department
Baton Rouge, LA 70819 440 Third Street
Baton Rouge, LA 70801
================================================================================
Principal Amount: $480,000.00 Initial Rate: 9.750% Date of Note: July 14, 1995
PROMISE TO PAY. Travis Boats & Motors Baton Rouge, Inc. ("Borrower")
promises to pay to the order of Hibernia National Bank ("Lender") in lawful
money of the United States of America the sum of Four Hundred Eighty
Thousand & 00/100 Dollars (U.S. $480,000.00), together with simple interest
assessed on a variable rate basis at the rate per annum equal to 1.000
percentage point over the index provided below, as the index under this
Note may be adjusted from time to time, one or more times, with interest
being assessed on the unpaid principal balance of this Note as outstanding
from time to time, commencing on July 14, 1995 and continuing until this
Note is paid in full, or until default under this Note with interest
thereafter being subject to the default interest rate provisions set forth
herein.
PAYMENT. Subject to any payment changes resulting from changes in the
index, Borrower will pay this loan in 83 regular payments of U.S. $5,127.96
each and one irregular last payment estimated at $344,270.59. Borrower's
first payment is due August 14, 1996, and all subsequent payments are due
on the same day of each successive calendar month until this Note is paid
in full. Payments include principal and amortized simple interest. Interest
on this Note is computed on a 365/360 simple interest basis; that is, by
applying the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. Borrower will pay
Lender at Lender's address shown above or at such other place as Lender may
designate in writing. Unless otherwise agreed or required by applicable
law, payments wi11 be applied first to accrued unpaid interest, then to
principal, and any remaining amount to any unpaid collection costs and late
charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an independent index which is the
CITIBANK N.A. RATE (the "Index"). The Index is not necessarily the lowest
rate charged by Lender on its loans. If the index becomes unavailable
during the term of this loan, Lender may designate a substitute index after
notice to Borrower. Lender will tell Borrower the current index rate upon
Borrower's request. Borrower understands that Lender may make loans based
on other rates as well. The interest rate change will not occur more often
than each day. The index currently is 8.750% per annum. The interest rate
to be applied to the unpaid principal balance of this Note will be at a
rate of 1.000 percentage point over the index, resulting in an initial rate
of 8.750% per annum. Under no circumstances will the interest rate on this
Note be more than the maximum rate allowed by applicable law. Whenever
increases occur in the interest rate, Lender, at its option, may do one or
more of the following: (a) increase Borrower's payments to ensure
Borrower's loan will pay off by its original final maturity date, (b)
increase Borrower's payments to cover accruing interest, (c) increase the
number of Borrower's payments, and (d) continue Borrower's payments at the
same amount and increase Borrower's final payment.
PREPAYMENT. Borrower may prepay this Note in full at any time by paying the
then unpaid principal balance of this Note, plus accrued simple interest
and any unpaid late charges through date of prepayment. If Borrower prepays
this Note in full, or if Lender accelerates payment, Borrower understands
that unless otherwise required by law, any prepaid fees or charges will not
be subject to rebate and will be earned by Lender at the time this Note is
signed. Unless otherwise agreed to in writing, early payments under this
Note will not relieve Borrower of Borrower's obligation to continue to make
regularly scheduled payments under the above payment schedule. Early
payments will instead reduce the principal balance due, and Borrower may be
required to make fewer payments under this Note.
LATE CHARGE. If Borrower fails to pay any payment under this Note in full
within 10 days of when due, Borrower agrees to pay Lender a late payment
fee in an amount equal to 10.000% of the delinquent interest due. Late
charges will not be assessed following declaration of default and
acceleration of maturity of this Note.
DEFAULT. The following actions and/or inactions shall constitute default
events under this Note:
DEFAULT UNDER LOAN AGREEMENT. Should an event of default occur or
exist under the terms of Borrower's Loan Agreement in favor of Lender.
DEFAULT UNDER THIS NOTE. Should Borrower default in the payment of
principal and/or interest under this Note.
DEFAULT UNDER SECURITY AGREEMENTS. Should Borrower or any guarantor
violate, or fail to comply fully with any of the terms and conditions
of, and default under any security right, instrument, document, or
agreement directly or indirectly securing repayment of this Note.
OTHER DEFAULTS IN FAVOR OF LENDER. Should Borrower or any guarantor of
this Note default under any other loan, extension of credit, security
right, instrument, document, or agreement or obligation in favor of
Lender.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any guarantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may affect any property or other
collateral directly or indirectly securing repayment of this Note.
INSOLVENCY. Should the suspension, failure or insolvency, however
evidenced, of Borrower or any guarantor of this Note occur or exist.
DEATH OR INTERDICTION. Should any guarantor of this Note die or be
interdicted.
READJUSTMENT OF INDEBTEDNESS. Should proceedings for readjustment of
indebtedness, reorganization, bankruptcy, composition or extension
under any insolvency law be brought by or against Borrower or any
guarantor.
ASSIGNMENT FOR BENEFIT OF CREDITORS. Should Borrower or any guarantor
file proceedings for a respite or make a general assignment for the
benefit of creditors.
RECEIVERSHIP. Should a receiver of all or any part of Borrower's
property, or the property of any guarantor, be applied for or
appointed.
DISSOLUTION PROCEEDINGS. Should proceedings for the dissolution or
appointment of a liquidator of Borrower or any guarantor be commenced.
FALSE STATEMENTS. Should any representation, warranty, or material
statement of Borrower or any guarantor made in connection with the
obtaining of the loan evidenced by this Note or any security agreement
directly or indirectly securing repayment of this Note, prove to be
incorrect or misleading in any respect.
MATERIAL ADVERSE CHANGES. Should any material adverse change occur in
the financial condition of Borrower or any guarantor of this Note
should any material discrepancy exist between the financial statements
submitted by Borrower or any guarantor and the actual financial
condition of Borrower or such guarantor.
INSECURITY. Should Lender deem itself to be insecure with regard to
repayment of this Note.
LENDER'S RIGHTS UPON DEFAULT. Should any one or more default events occur
or exist under this Note as provided above, Lender shall have the right, at
its sole option, to declare formally this Note to be in default and to
accelerate the maturity and insist upon immediate payment in full of the
unpaid principal balance then outstanding under this Note, plus accrued
interest, together with reasonable attorneys' fees, costs, expenses and
other fees and charges as provided herein. Lender shall have the further
right again at its sole option, to declare formal default and to
accelerate the maturity and to insist upon immediate payment in full of
each and every other loan, extension of credit, debt, liability and/or
obligation of every nature and kind that Borrower may then owe to Lender,
whether direct or indirect or by way of assignment, and whether absolute or
contingent, liquidated or unliquidated, voluntary or involuntary,
determined or undetermined, secured or unsecured, whether Borrower is
obligated alone or with others on a "solidary" or "joint and several"
basis, as a principal obligor or otherwise, all without further notice or
demand, unless Lender shall otherwise elect.
INTEREST AFTER DEFAULT. If Lender declares this Note to be in default
Lender has the right prospectively to adjust and fix the simple interest
rate under this Note until this Note is paid in full, as follows: (1) if
the original principal amount of this Note is $250,000 or less, the fixed
default interest rate shall be equal to eighteen (18%) percent per annum,
or three (3%) per cent per annum in excess of the interest rate under this
Note, whichever is greater. (2) If the original principal amount of this
Note is more than $250,000, the fixed default interest rate shall be equal
to twenty-one (21%) percent per annum, or three (3%) per cent per annum in
excess of the interest rate under this Note at the time of default,
whichever is greater.
ATTORNEYS' FEES. If Lender refers this Note to an attorney for collection,
or files suit against Borrower to collect this Note, or if Borrower files
for bankruptcy or other relief from creditors, Borrower agrees to pay
Lender's reasonable attorneys' fees in an amount not exceeding 25.000% of
the unpaid debt then owing under this Note.
NSF CHECK CHARGES. In the event that Borrower makes any payment under this
Note by check and Borrower's check is returned to Lender unpaid due to
nonsufficient funds in my deposit account, Borrower agrees to pay Lender
an additional NSF check charge equal to $20.00.
DEPOSIT ACCOUNTS. As collateral security for repayment of this Note and all
renewals and extensions, as well as to secure any and all other loans,
notes, indebtedness and obligations that Borrower (or any of them) may now
and in the future owe to Lender or incur in Lender's favor, whether direct
or indirect, absolute or contingent, due or to become due, of any nature
and kind whatsoever (with the exception of any indebtedness under
<PAGE>
07-14-1995 PROMISSORY NOTE PAGE 2
LOAN NO (CONTINUED)
================================================================================
consumer credit card account), Borrower is granting Lender a continuing
security interest in any and all funds that Borrower may now and in the
future have on deposit with Lender or in certificates of deposit or other
deposit accounts as to which Borrower is an account holder (with the
exception of IRA, pension, and other tax-deferred deposits). Borrower
further agrees that Lender may at any time apply any funds that Borrower
may have on deposit with Lender or in certificates of deposit or other
deposit accounts as to which Borrower is an account holder against the
unpaid balance of this Note and any and all other present and future
indebtedness and obligations that Borrower (or any of them) may then owe to
Lender, in principal, interest fees, costs, expenses, and attorneys' fees.
FINANCIAL STATEMENTS. Borrower agrees to provide Lender with such financial
statements and other related information at such frequencies and in such
detail as Lender may reasonably request.
GOVERNING LAW. Borrower agrees that this Note and the loan evidenced hereby
shall be governed under the laws of the State of Louisiana. Specifically,
this business or commercial Note is subject to La. R.S. 9:3509 et seq.
ACKNOWLEDGEMENT OF COLLATERAL. Borrower hereby acknowledges, confirms and
ratifies that all collateral previously pledged to Lender or in which
Lender was granted a security interest to secure Borrower's other
obligation to Lender also secures this Note.
FIXED RATE. The interest rate on this Note may be fixed by the Borrower at
any time during the term of this Note at the then effective rate quoted by
Hibernia National Bank's Portfolio Department for its fixed rate loans plus
1% per annum. Should the Borrower elect to fix the rate pursuant to the
foregoing, the Borrower shall immediately pay Lender a non-refundable fee
of 1% of the then existing balance on this Note. Under no circumstances
will the interest rate on this Note be more than the maximum rate allowed
by applicable law.
WAIVERS. Borrower and each guarantor of this Note hereby waive demand,
presentment for payment, protest, notice of protest and notice of
nonpayment, and all pleas of division and discussion, and severally agree
that their obligations and liabilities to Lender hereunder shall be on a
"solidary" or "joint and several" basis. Borrower and each guarantor
further severally agree that discharge or release of any party who is or
may be liable to Lender for the indebtedness represented hereby, or the
release of any collateral directly or indirectly securing repayment hereof,
shall not have the effect of releasing any other party or parties, who
shall remain liable to Lender, or of releasing any other collateral that is
not expressly released by Lender. Borrower and each guarantor additionally
agree that Lender's acceptance of payment other than in accordance with the
terms of this Note, or Lender's subsequent agreement to extend or modify
such repayment terms, or Lender's failure or delay in exercising any rights
or remedies granted to Lender, shall likewise not have the effect of
releasing Borrower or any other party or parties from their respective
obligations to Lender, or of releasing any collateral that directly or
indirectly secures repayment hereof. In addition, any failure or delay on
the part of Lender to exercise any of the rights and remedies granted to
Lender shall not have the effect of waiving any of Lender's rights and
remedies. Any partial exercise of any rights and/or remedies granted to
Lender shall furthermore not be construed as a waiver of any other rights
and remedies; it being Borrower's intent and agreement that Lender's rights
and remedies shall be cumulative in nature. Borrower and each guarantor
further agree that should any default event occur or exist under this Note,
any waiver or forbearance on the part of Lender to pursue the rights and
remedies available to Lender, shall be binding upon Lender only to the
extent that Lender specifically agrees to any such waiver or forbearance in
writing. A waiver or forbearance on the part of Lender as to one default
event shall not be construed as a waiver or forbearance as to any other
default. Borrower and each guarantor of this Note further agree that any
late charges provided for under this Note will not be charges for deferral
of time for payment and all will and are not intended to compensate Lender
for a grace or cure period, and no such deferral, grace or cure period has
or will be granted to Borrower in return for the imposition of any late
charge. Borrower recognizes that Borrower's failure to make timely payment
of amounts due under this Note will result in damages to Lender, including
but not limited to Lender's loss of the use of amounts due, and Borrower
agrees that any late charges imposed by Lender hereunder will represent
reasonable compensation to Lender for such damages. Failure to pay in full
any installment or payment timely when due under this Note, whether or not
a late charge is assessed, will remain and shall constitute an Event of
Default hereunder.
SUCCESSORS AND ASSIGNS LIABLE. Borrower's and each guarantor's obligations
and agreements under this Note shall be binding upon Borrower's and each
guarantor's respective successors, heirs, legatees, devisees,
administrators, executors and assigns. The rights and remedies granted to
Lender under this Note shall inure to the benefit of Lender's successors
and assigns, as well as to any subsequent holder or holders of this Note.
CAPTION HEADINGS. Caption headings of the sections of this Note are for
convenience purposes only and are not to be used to interpret or to define
their provisions. In this Note, whenever the context so requires, the
singular includes the plural and the plural also includes the singular.
SEVERABILITY. If any provision of this Note is held to be invalid, illegal
or unenforceable by any court, that provision shall be deleted from this
Note and the balance of this Note shall be interpreted as if the deleted
provision never existed.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. LENDER AND
BORROWER HEREBY WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY ACTION,
PROCEEDING, OR COUNTERCLAIM BROUGHT BY EITHER LENDER OR BORROWER AGAINST
THE OTHER.
BORROWER:
Travis Boats & Motors Baton Rouge, Inc.
By /s/Cornelius James McNamus
--------------------------------------------
Cornelius James McNamus a/k/a Jim McNamus, Vice President
================================================================================
<PAGE>
BUSINESS LOAN AGREEMENT
EXHIBIT 10.8(e)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$480,000.00 07-14-1995 07-14-2002 854
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
- --------------------------------------------------------------------------------
BORROWER: Travis Boats & Motors LENDER: Hibernia National Bank TIN:
Baton Rouge,Inc. 72-0210640
(TIN: 721224466) Loan Administration Department
14369 Florida Boulevard 440 Third Street
Baton Rouge, LA 70819 Baton Rouge, LA 70801
================================================================================
THIS BUSINESS LOAN AGREEMENT between Travis Boats & Motors Baton Rouge,
Inc. ("Borrower") and Hibernia National Bank ("Lender") is made and
executed on the following terms and conditions. Borrower has applied to
Lender for a loan or loans and other financial accommodations, including
those which may be described on any exhibit or schedule attached to this
Agreement.
DEFINITIONS. The following words shall have the following meanings when
used in this Agreement. Terms not otherwise defined in this Agreement shall
have the meanings attributed to such terms in the Louisiana Commercial Laws
(La. R.S. 10:9-101, et seq.). All references to dollar amounts shall mean
amounts in lawful money of the United States of America.
AGREEMENT. The word "Agreement" means this Business Loan Agreement, as
this Business Loan Agreement may be amended or modified from time to
time, together with all exhibits and schedules attached or to be
attached to this Business Loan Agreement from time to time.
BORROWER. The word "Borrower" means individually, collectively and
interchangeably Travis Boats & Motors Baton Rouge, Inc. and all other
persons and entities signing Borrower's Note. The word "Borrower" also
includes, as applicable, all subsidiaries and affiliates of Borrower
as provided below in the paragraph titled "Subsidiaries and
Affiliates."
CERCLA. The word "CERCLA" means the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
CASH FLOW. The words "Cash Flow" mean net income after taxes, and
exclusive of extraordinary gains and income, plus depreciation and
amortization.
COLLATERAL. The word "Collateral" means and includes individually,
collectively, interchangeably and without limitation all property and
assets granted as collateral security for a Loan, whether real or
personal property, whether granted directly or indirectly, whether
granted now or in the future, and whether granted in the form of a
security interest, mortgage, collateral mortgage, deed of trust,
assignment, pledge, crop pledge, chattel mortgage, collateral chattel
mortgage, chattel trust, factor's lien, equipment trust, conditional
sale, trust receipt, lien, charge, lien or title retention contract,
lease or consignment intended as a security device, or any other
security or lien interest whatsoever, whether created by law,
contract, or otherwise.
DEBT. The word "Debt" means all of Borrower's liabilities excluding
Subordinated Debt.
ERISA. The word "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
EVENT OF DEFAULT. The words "Event of Default" mean individually,
collectively, and interchangeably any of the Events of Default set
forth below in the section titled "EVENTS OF DEFAULT."
GRANTOR. The word "Grantor" means and includes individually,
collectively, interchangeably and without limitation each and all of
the persons or entities granting a Security Interest in any Collateral
for the indebtedness, including without limitation all Borrowers
granting such a Security Interest.
GUARANTOR. The word "Guarantor" means and includes individually,
collectively, interchangeably and without limitation each and all of
the guarantors, sureties, and accommodation parties in connection with
any indebtedness.
INDEBTEDNESS. The word "Indebtedness" means and includes individually,
collectively, interchangeably and without limitation, any and all
present and future loans, extensions of credit, liabilities and/or
obligations of every nature and kind whatsoever that Borrower may now
and in the future owe to or incur in favor of Lender and its
successors or assigns, including without limitation, Borrower's
indebtedness in favor of Lender under the Note, whether such loans,
extensions of credit, liabilities and/or obligations are direct or
indirect, or by way of assignment, and whether related or unrelated,
or whether committed or purely discretionary, and whether absolute or
contingent, voluntary or involuntary, determined or undetermined,
liquidated or unliquidated, due or to become due, together with
interest, costs, expenses, attorneys' fees and other fees and charges,
whether or not any such indebtedness may be barred under any statute
of limitations or may be otherwise unenforceable or voidable for any
reason.
LENDER. The word "Lender" means Hibernia National Bank TIN: 72-
0210640, its successors and assigns, and any subsequent holder or
holders of Borrower's Loan and Note, or any interest therein.
LIQUID ASSETS. The words "Liquid Assets" mean Borrower's cash on hand
plus Borrower's receivables.
LOAN. The words "Loan" and "Loans" mean and include any and all loans
and financial accommodations from Lender to Borrower (or any of them)
whether now or hereafter existing, and however evidenced, including
without limitation those loans and financial accommodations described
herein or described on any exhibit or schedule attached to this
Agreement from time to time, and further including any and all
subsequent amendments, additions, substitutions, renewals and
refinancings of Borrower's Loan.
NOTE. The word "Note" means and includes without limitation Borrower's
promissory note or notes evidencing Borrower's Loan obligations in
favor of Lender, as well as any substitute, replacement or refinancing
note or notes therefor.
RELATED DOCUMENTS. The words "Related Documents" mean and include
individually, collectively, interchangeably and without limitation all
promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, collateral
mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the indebtedness.
SECURITY AGREEMENT. The words "Security Agreement" mean and include
individually, collectively, interchangeably and without limitation any
agreements, promises, covenants, arrangements, understandings or other
agreements, whether created by law, contract or otherwise, evidencing,
governing, representing, or creating a Security Interest.
SECURITY INTEREST. The words "Security Interest" mean and include
individually, collectively, interchangeably and without limitation any
and all present and future mortgages, pledges, crop pledges,
assignments and other security agreements directly or indirectly
securing the repayment of Borrower's Loan and Note, whether created by
law, contract, or otherwise.
SARA. The word "SARA" means the Superfund Amendments and
Reauthorization Act of 1988 as now or hereafter amended.
SUBORDINATED DEBT. The words "Subordinated Debt" mean indebtedness and
liabilities of Borrower which have been subordinated by written
agreement to indebtedness owed by Borrower to Lender in form and
substance acceptable to Lender.
TANGIBLE NET WORTH. The words "Tangible Net Worth" mean Borrower's
total assets excluding all intangible assets (i.e., goodwill,
trademarks, patents, copyrights, organizational expenses, and similar
intangible items, but including leaseholds and leasehold improvements)
less total Debt.
WORKING CAPITAL. The words "Working Capital" mean Borrower's current
assets, excluding prepaid expenses, less Borrower's current
liabilities.
APPLICATION FOR AND PURPOSE OF THE LOAN. Borrower has applied to Lender for
a Loan in the aggregate principal amount of $480,000.00 for the following
purpose: to finance the purchase of the Baton Rouge, Louisiana dealership
facility.
BORROWER'S LOAN. Lender has agreed to extend a Loan to Borrower in the
amount of $480,000.00 subject to the terms and conditions of this Agreement
and Borrower's attached Note. Borrower agrees to be bound and obligated
under the terms and conditions of this Agreement and Borrower's Note, as
well as any and all Security Agreements directly or indirectly securing
repayment of the same.
BORROWER'S NOTE. Borrower's Loan in favor of Lender shall be evidenced
under Borrower's attached Note dated July 14, 1995, in the amount of
$480,000.00. Borrower's Loan and Note will bear interest at the rate or
rates, and will be repayable in accordance with the repayment terms as set
forth therein.
TERM. This Agreement shall be effective as of the date of its execution,
and shall continue in full force and effect until such time as all of
Borrower's Loan obligations in favor of Lender have been paid in full, in
principal, interest, costs, expenses, attorneys' fees, and other fees and
charges, or until such time as the parties may agree in writing to
terminate this Agreement.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the
initial Loan Advance and each subsequent Loan Advance under this Agreement
shall be subject to the fulfillment to Lender's satisfaction of all of the
conditions set forth in this Agreement and in the Related Documents.
LOAN DOCUMENTS. Borrower shall provide to Lender in form satisfactory
to Lender the following documents for the Loan: (a) the Note, (b)
Security Agreements granting to Lender security interests in the
Collateral, (c) Financing Statements perfecting Lender's Security
Interests; (d)
<PAGE>
07-14-1995 BUSINESS LOAN AGREEMENT PAGE 2
LOAN NO (CONTINUED)
================================================================================
evidenced of insurance below; and (e) any other documents required under
this Agreement or by Lender or its counsel, including without limitation
any guarantee described below.
BORROWER'S AUTHORIZATION. Borrower shall have provided in form and
substance satisfactory to Lender property certified resolutions, duly
authorizing the execution and delivery of this Agreement, the Note and the
Related Documents, and such authorizations and other documents and
instruments as Lender or its counsel, in their sole discretion, may
require.
PAYMENT OF FEES AND EXPENSES. Borrower shall have paid to Lender all fees,
charges, and other expenses which are then due and payable as specified in
this Agreement or any Related Document.
REPRESENTATIONS AND WARRANTIES. The representations and warranties set
forth in this Agreement, in the Related Documents, and in any document or
certificate delivered to Lender under this Agreement are true and correct.
NO EVENT OF DEFAULT. There shall not exist at the time of any advance a
condition which would constitute an Event of Default under this Agreement
or under any Related Document.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warranties to Lender as
of the date of this Agreement and as of the date of each disbursement of Loan
proceeds:
ORGANIZATION. Borrower represents and warrants to Lender as of the date of
this Agreement and as of the date of each disbursement of Loan proceeds:
AUTHORIZATION. Borrower's execution, delivery and performance of this
Agreement have been duly authorized, and do not conflict with, and will not
result in a violation of, or constitute or give rise to an event of default
under Borrower's Articles of Incorporation or Bylaw, or any agreement or
other instrument which may be binding upon Borrower, or under any law of
governmental regulation or court decree or order applicable to Borrower
and/or its properties. Borrower has the power and authority to enter into
Borrower's Loan and Note and to grant collateral security therefor,
Borrower has the further power and authority to own and to hold all of its
assets and properties, and to carry on its business as presently conducted.
FINANCIAL INFORMATION. Borrower's financial statements previously furnished
to Lender are and were complete and correct, and were prepared in
accordance with generally accepted accounting principles, and fairly
represent Borrower's financial condition as of the date thereof. To the
best of Borrower's knowledge, Borrower has no contingent obligations or
liabilities that were not disclosed or reserved against in Borrower's
financial statements or in the notes thereto. Since the dates of such
financial statements, there has been no material adverse change in
Borrower's financial condition or business.
PROPERTIES. Except as contemplated by this Agreement or as previously
disclosed in Borrower's financial statements or in writing to Lender and as
accepted by Lender, and except for property tax liens for taxes not
presently due and payable. Borrower owns and has good title to all of
Borrower's properties free and clear of all Security Interests, and has not
executed any security documents or financing statements relating to such
properties. All of Borrower's properties are titled in Borrower's legal
name, and Borrower has not used, or filed a financing statement under, any
other name for at least the last five (5) years.
HAZARDOUS SUBSTANCES. The terms "hazardous waste," "hazardous substance,"
"disposal," "release," and "threatened release," as used in this Agreement,
shall have the same meanings as set forth in the "CERCLA," "SARA," the
"Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.,
the Resource Conservation and Recovery Act, 49 U.S.C Section 6901, et seq.,
or other applicable State or Federal laws, rules, or regulations adopted
pursuant to any of the foregoing. Except as disclosed to and acknowledged
by Lender in writing, Borrower represents and warrants that: (a) During the
period of Borrower's ownership of the properties, there has been no use,
generation, manufacture, storage treatment, disposal, release or threatened
release of any hazardous waste or substance by any person on, under, or
about any of the properties (b) Borrower has no knowledge of, or reason to
believe that there has been (i) any use, generation, manufacture, storage,
treatment, disposal, release, or threatened release of any hazardous waste
or substance by any prior owners or occupants of any of the properties, or
(ii) any actual or threatened litigation or claims of any kind by any
person relating to such matters. (c) Neither Borrower nor any tenant,
contractor, agent or other authorized user of any of the properties shall
use, generate, manufacture, store, treat, dispose of, or release any
hazardous waste or substance on, under, or about any of the properties; and
any such activity shall be conducted in compliance with all applicable
federal, state, and local laws, regulations, and ordinances, including
without limitation those laws, regulations and ordinances described above.
Borrower authorizes Lender and its agents to enter upon the properties to
make such inspections and tests as Lender may deem appropriate to determine
compliance of the properties with this section of the Agreement. Any
inspections or tests made by Lender shall be at Borrower's expense and for
Lender's purposes only and shall not be construed to create any
responsibility or liability on the part of Lender to Borrower or to any
other person. The representations and warranties contained herein are based
on Borrower's due diligence in investigating the properties for hazardous
waste. Borrower hereby (a) releases and waives any future claims against
Lender for indemnify or contribution in the event Borrower becomes liable
for cleanup or other costs under any such laws, and (b) agrees to indemnify
and hold harmless Lender against any and all claims, losses, liabilities,
damages, penalties, and expenses which Lender may directly sustain or
suffer resulting from a breach of this section of the Agreement or as a
consequence of any use, generation, manufacture, storage, disposal, release
or threatened release occurring prior to Borrower's ownership or interest
in the properties, whether or not the same was or should have been known to
Borrower. The provisions of this section of the Agreement, including the
obligation to indemnify, shall survive the payment of the indebtedness and
the termination or expiration of this Agreement and shall not be affected
by Lender's acquisition of any interest in any of the properties, whether
by foreclosure or otherwise.
LITIGATION. There are no suits or proceedings pending, or to the knowledge
of Borrower, threatened against or affecting Borrower or its assets, before
any court or by any governmental agency, other than those previously
disclosed to Lender in writing, which, if adversely determined, may have a
material adverse effect on Borrower's financial condition or business.
TAXES. To the best of Borrower's knowledge, all tax returns and reports of
Borrower that are or were required to be filed, have been filed, and all
taxes, assessments and other governmental charges have been paid in full,
except those presently being or to be contested by Borrower in good faith
in the ordinary course of business and for which adequate reserves have
been provided.
LIEN PRIORITY. Unless otherwise previously disclosed to Lender in writing,
Borrower has not entered into or granted any Security Agreements, or
permitted the filing or attachment of any Security Interests on or
affecting any of the Collateral directly or indirectly securing repayment
of Borrower's Loan and Note, that would be prior or that may in any way be
superior to Lender's Security Interests and rights in and to such
Collateral.
BINDING EFFECT. This Agreement, the Note and all Security Agreements
directly or indirectly securing repayment of Borrower's Loan and Note are
binding upon Borrower as well as upon Borrower's successors, representative
and assigns, and are legally enforceable in accordance with their
respective terms.
COMMERCIAL PURPOSE. Borrower intends to use the Loan proceeds solely for
business or commercial related purposes.
EMPLOYEE BENEFIT PLANS. Each employee benefit plan as to which Borrower may
have any liability complies in all material respects with all applicable
requirements of law and regulations, and (i) no Reportable Event for
Prohibited Transaction (as defined in ERISA) has occurred with respect to
any such plan, (ii) Borrower has not withdrawn from any such plan or
initiated steps to do so, and (iii) no steps have been taken to terminate
any such plan.
LOCATION OF BORROWER'S OFFICES AND RECORDS. The chief place of business of
Borrower and the office or offices where Borrower keeps its records
concerning the Collateral is located at 14369 Florida Boulevard, Baton
Rouge, LA 70819.
INFORMATION. All information heretofore or contemporaneously herewith
furnished by Borrower to Lender for the purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all
information hereafter furnished by or on behalf of Borrower to Lender will
be, true and accurate in every material respect on the date as of which
such information is dated or certified; and none of such information is or
will be incomplete by omitting to state any material fact necessary to make
such information not misleading.
SURVIVAL OF REPRESENTATION AND WARRANTIES. Borrower understands and agrees
that Lender is relying upon the above representations and warranties in
making the above referenced Loan to Borrower. Borrower further agrees that
the foregoing representations and warranties shall be continuing in nature
and shall remain in full force and effect until such time as Borrower's
Loan and Note shall be paid in full, or until this Agreement shall be
terminated in the manner provided above, whichever is the last to occur.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long
as this Agreement remains in effect, Borrower will:
LITIGATION. Promptly inform Lender in writing of (a) all material adverse
changes in Borrower's financial condition, and (b) all litigation and
claims and all threatened litigation and claims affecting Borrower or any
Guarantor which could materially affect the financial condition of Borrower
or the financial condition of any Guarantor.
FINANCIAL RECORDS. Maintains its books and records in accordance with
generally accepted accounting principles, applied on a consistent basis,
and permit to examine audit Borrower's books and records at all reasonable
times.
<PAGE>
07-14-1995 BUSINESS LOAN AGREEMENT PAGE 3
LOAN NO (CONTINUED)
================================================================================
FINANCIAL STATEMENTS. Furnish Lender with, as soon as available, but in no
event later than ninety (90) days after the end of each fiscal year end
Borrower's balance sheet and income statement for the year ended, prepared
by Borrower, and, as soon as available, but in no event later than forty
five (45) days after the end of each fiscal quarter, Borrower's balance
sheet and profit and loss statement for the period ended, prepared and
certified as correct to the best knowledge and belief by Borrower's chief
financial officer or other officer or person acceptable to Lender. All
financial reports required to be provided under this Agreement shall be
prepared in accordance with generally accepted accounting principles
applied on a consistent basis, and certified by Borrower as being true and
correct.
ADDITIONAL INFORMATION. Furnish such additional information and
statements, lists of assets and liabilities, agings of receivables and
payables, inventory schedules, budgets, forecasts, tax returns, and other
reports with respect to Borrower's financial condition and business
operations as Lender may request from time to time. In addition, Borrower
shall furnish Lender with, as soon as available, but in no event later than
ninety (90) days after the end of each fiscal year, copies of Borrower's
tax returns and detailed projected cash flow statement in form and content
acceptable to Lender based upon planned operations for the following year,
if requested by Lender.
FINANCIAL COVENANTS AND RATIOS. Comply with the following covenants and
ratios:
TANGIBLE NET WORTH. Maintain a minimum Tangible Net Worth of not less
than $100,000.00.
OTHER RATIO. Maintain a ratio of Debt Service Coverage (defined as
Net Income + Depreciation and Amortization + non-floorplan Interest +
management fee paid to Travis Boats & Motors, Inc. divided by
Principal and Interest on term debt related to entity) of at least of
1.30 to 1.00.
The following provisions shall apply for purposes of determining compliance
with the foregoing financial covenants and ratios; Borrower and Travis
Boats & Motors, Inc. shall be tested annually for compliance with the Debt
Service Coverage ratios after receipt of Borrowers's and Travis Boats &
Motors, Inc.'s annual financial statements.
For purposes of this Agreement and to the extent the following terms are
utilized in this Agreement, the "Tangible Net Worth" shall mean Borrower's
total assets excluding all intangible assets (i.e., goodwill, trademarks,
patents, copyrights, organizational expenses, and similar intangible items,
but including leaseholds and leasehold improvements) less total Debt. The
term "Debt" shall mean all of Borrower's liabilities excluding Subordinated
Debt. The term "Subordinated Debt" shall mean indebtedness and liabilities
of Borrower which have been subordinated by written agreement to
indebtedness owed by Borrower to Lender in form and substance acceptable to
Lender. The term "Working Capital mean Borrower's current assets, excluding
prepaid expenses, less Borrower's current liabilities. The term "Liquid
Assets" shall mean Borrower's cash on hand plus Borrower's receivables. The
term "Cash Flow" shall mean net income after taxes, and exclusive or
extraordinary gains and income, plus depreciation and amortization. Except
as provided above, all computations made to determine compliance with the
requirements contained in this paragraph shall be made in accordance with
generally accepted accounting principles, applied on a consistent basis,
and certified by Borrower as being true and correct.
INSURANCE. Maintain fire and other risk insurance, public liability
insurance, and such other insurance as Lender may require with respect to
Borrower's properties and operations, in form, amounts, coverages and with
insuance companies reasonably acceptable to Lender. Borrower, upon request
of Lender, will deliver to Lender from time to time the policies or
certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished without at
least thirty (30) days' prior written notice to Lender. Each insurance
policy also shall include an endorsement providing that coverage in favor
of Lender will not be impaired in any way by any act, omission or default
of Borrower or any other person. In connection with all policies covering
assets in which Lender holds or is offered a security interest for the
Loans, Borrower will provide Lender with such lender's loss payable or
other endorsements as Lender may require.
INSURANCE REPORTS. Furnish to Lender, upon request of Lender, reports on
each existing insurance policy showing such information as Lender may
reasonably request, including without limitation the following: (a) the
name of the insurer; (b) the risks insured; (c) the amount of the policy;
(d) the properties insured; (e) the then current property values on the
basis of which insurance has been obtained, and the manner of determining
those values; and (f) the expiration date of the policy. In addition, upon
request of Lender (however not more often than annually), Borrower will
have an independent appraiser satisfactory to Lender determine, as
applicable, the actual cash value or replacement cost of any Collateral.
GUARANTIES. Prior to disbursement of any Loan proceeds, furnish executed
guaranties of the Loans in favor of Lender, on Lender's forms, and in the
amounts and by the guarantors named below:
<TABLE>
<CAPTION>
Guarantors Amounts
---------- -------
<S> <C>
Mark T. Walton $300,000.00
Ronnie L. Spradling $300,000.00
Joe E. Simpson $300,000.00
Jesse C. Cox $300,000.00
E.D. Bohls $300,000.00
Robert C. Siddons $300,000.00
Travis Boats & Motors, Inc. Unlimited
</TABLE>
OTHER AGREEMENTS. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and any
other party and notify Lender immediately in writing of any default in
connection with any other such agreements.
LOAN PROCEEDS. Use all Loan proceeds solely for Borrower's business
operations or as otherwise described above, unless specifically consented
to the contrary by Lender in writing.
TAXES, CHARGES AND LIENS. Pay and discharge when due all of its
indebtedness and obligations, including without limitation all assessments,
taxes, governmental charges, levies and liens, of every kind and nature,
imposed upon Borrower or its properties, income, or profits, prior to the
date on which penalties would attach, and all lawful claims that, if
unpaid, might become a lien or charge upon any of Borrower's properties,
income, or profits. Provided however, Borrower will not be required to pay
and discharge any such assessment, tax, charge, levy, lien or claim so long
as (a) the legality of the same, shall be contested in good faith by
appropriate proceedings, and (b) Borrower shall have established on its
books adequate reserves with respect to such contested assessment, tax,
charge, levy, lien, or claim in accordance with generally accepted
accounting practices. Borrower, upon demand of Lender, will furnish to
Lender evidence of payment of the assessments, taxes, charges, levies,
liens and claims and will authorize the appropriate governmental official
to deliver to Lender at any time a written statement of any assessments,
taxes, charges, levies, liens and claims against Borrower's properties,
income, or profits.
PERFORMANCE. Perform and comply with all terms, conditions, and provisions
set forth in this Agreement and in all other instruments and agreements
between Borrower and Lender in a timely manner, and promptly notify Lender
if Borrower learns of the occurrence of any event which constitutes an
Event of Default under this Agreement.
OPERATIONS. Substantially maintain its present executive and management
personnel; conduct its business affairs in a reasonable and prudent manner
and in compliance with all applicable federal, state and municipal laws,
ordinances, rules and regulations respecting its properties, charters,
businesses and operations, including without limitation, compliance with
the Americans With Disabilities Act and with all minimum funding standards
and other requirements of ERISA and other laws applicable to Borrower's
employee benefit plans.
INSPECTION. Permit employees or agents of Lender at any reasonable time to
inspect any and all Collateral for the Loan or Loans and Borrower's other
properties and to examine or audit Borrower's books, accounts, and records
and to make copies and memoranda of Borrower's books, accounts and records.
If Borrower now or at any time hereafter maintains any records (including
without limitations computer generated records and computer software
programs for the generation of such records) in the possession of a third
party, Borrower, upon request of Lender, shall notify such party to permit
Lender free access to such records at all reasonable times and to provide
Lender with copies of any records it may request, all at Borrower's
expense.
CHANGE OF LOCATION. Immediately notify Lender in writing of any additions
to or changes in the location of Borrower's businesses.
TITLE TO ASSETS AND PROPERTY. Maintain good and marketable title to all of
Borrower's assets and properties.
NOTICE OF DEFAULT, LITIGATION AND ERISA MATTERS. Forthwith upon learning of
the occurrence of any of the following. Borrower shall provide Lender with
written notice thereof, describing the same and the steps being taken by
Borrower with respect thereto: (i) the occurrence of any Event of
Default,or (ii) the institution of, or any adverse determination in, any
litigation, arbitration proceeding or governmental proceeding, or (iii) the
occurrence of a Reportable Event under, or the institution of steps by
Borrower to withdraw from, or the institution of any steps to terminate,
any employee benefit plan as to which Borrower may have any liability.
OTHER INFORMATION. From time to time Borrower will provide Lender with such
other information as Lender may reasonably request.
EMPLOYEE BENEFIT PLANS. So long as this Agreement remains in effect,
Borrower will maintain each employee benefit plan as to which it may have
any liability, in compliance with all applicable requirements of law and
regulations.
OTHER AGREEMENTS. Borrower will not enter into any agreement containing any
provision which would be violated or breached by the performance of its
obligations it hereunder or in connection herewith.
<PAGE>
07-14-1995 BUSINESS LOAN AGREEMENT PAGE 4
LOAN NO (CONTINUED)
================================================================================
COMPLIANCE CERTIFICATE. Unless waived in writing by Lender, provide
Lender at least annually and at the time of each disbursement of Loan
proceeds with a certificate executed by Borrower's chief financial
officer, or other officer or person acceptable to Lender, certifying
that the representations and warranties set forth in this Agreement
are true and correct as of the date of the certificate and further
certifying that, as of the date of the certificate, no Event of
Default exists under this Agreement.
ENVIRONMENTAL COMPLIANCE AND REPORTS. Borrower shall comply in all
respects with all environmental protection federal, state and local
laws, statutes, regulations and ordinances; not cause or permit to
exist, as a result of an intentional or unintentional action or
omission on its part or on the part of any third party, or property
owned and/or occupied by Borrower, any environmental activity where
damage may result to the environment, unless such environmental
activity is pursuant to and in compliance with the conditions of a
permit issued by the appropriate federal, state or local governmental
authorities: shall furnish to Lender promptly and in any event within
thirty (30) days after receipt thereof a copy of any notice, summons,
lien, citation, directive, letter or other communication from any
governmental agency or instrumentality concerning any intentional or
unintentional action or omission on Borrower's part in connection with
any environmental activity whether or not there is damage to the
environment and/or other natural resources.
ADDITIONAL ASSURANCES. Make, execute and deliver to Lender such
promissory notes, mortgages, deeds of trust, security arrangements,
financing statements, instruments, documents and other agreements as
Lender or its attorneys may reasonably request to evidence and secure
the Loans and to perfect all Security Interests.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that as long
as this Agreement remains in effect, Borrower shall not, without the prior
written consent of Lender.
INDEBTEDNESS AND LIENS. (a) Except for trade debt incurred in the
normal course of business and indebtedness to Lender contemplated by
this Agreement, create, incur or assume additional indebtedness for
borrowed money, including capital leases, in excess of the aggregate
amount of U.S. $50,000.00, (b) sell, transfer, mortgage, assign,
pledge, lease, grant a security interest in, or encumber any of
Borrower's assets, or (c) sell with recourse any of Borrower's
accounts, except to Lender.
CONTINUITY OF OPERATIONS. (a) Engage in any business activities
substantially different than those in which Borrower is presently
engaged, (b) cease operations, liquidate, merge, transfer, acquire or
consolidate with any other entity, change ownership, dissolve or
transfer or sell Collateral out of the ordinary course of business,
(c) pay any dividends on Borrower's stock (other than dividends
payable in its stock), provided, however that notwithstanding the
foregoing, but only so long as no Event of Default has occurred and is
continuing or would result from the payment of dividends, if Borrower
is a "Subchapter S Corporation" (as defined in the Internal Revenue
Code of 1988, as amended), Borrower may pay cash dividends on its
stock to its shareholders from time to time in amounts necessary to
enable the shareholders to pay income taxes and make estimated income
tax payments to satisfy their liabilities under federal and state law
which arise solely from their status as Shareholders of a Subchapter S
Corporation because of their ownership of shares of stock of Borrower,
or (d) purchase or retire any of Borrower's outstanding shares or
alter or amend Borrower's capital structure.
LOANS, ACQUISITIONS AND GUARANTIES. (a) Loan, invest in or advance
money or assets, (b) purchase, create or acquire any interest in any
other enterprise or entity, or (c) incur any obligation as surety or
guarantor other than in the ordinary course of business.
INTERVENTION. And now, into these presents, intervenes Travis Boats &
Motors, Inc., a Guarantor hereunder, appearing herein agreeing and
consenting to all of the terms of this Agreement, and agree that the
liability of each of the undersigned is in solido with each other and the
maker of the Note and that all of the terms, conditions, waivers, and
agreements of the Note shall be binding upon each of the undersigned, that
it does hereby waive presentment for payment, demand, protest, notice of
protest, notice of nonpayment and demand. Travis Boats & Motors, Inc.
further appears covenanting and agreeing with Lender that said Guarantor
will: (1) furnish Lender with, as soon as available, but in no event later
than 120 days after the end of each fiscal year, Guarantor's consolidated
balance sheet and income statement for the year end, audited with an
unqualified opinion by a certified public accountant; (2) furnish Lender
with, as soon as available, but in no event later than 45 days after the
end of each quarter, Guarantor's balance sheet and income statement for the
quarter ended, prepared and certified as correct to the best knowledge and
belief by Guarantor's chief financial officer or other person acceptable to
Lender. All financial reports required hereunder shall be prepared in
accordance with generally accepted accounting principles, applied on a
consistent basis, and shall be in a form and substance acceptable to
Lender. Travis Boats & Motors, Inc. further covenants and agrees with
Lender that Guarantor will: (1) maintain a minimum Tangible Net Worth of
not less than $1,250,000.00 on an annual basis and (2) maintain a ratio of
Debt Service Coverage (defined as Net Income + depreciation and
amortization + non-floorplan interest divided by Principal and interest on
term debt related to entity) of at least 1.00 to 1.00, to be measured
annually. Failure to comply with these covenants shall constitute an Event
of Default hereunder, and under any promissory note representing Borrower's
Indebtedness.
APPRAISAL COVENANT. Lender shall have the right to appraise the Collateral
by an MAI appraiser acceptable to Lender, at Borrower's expense, every 3
years from the date of the most recent appraisal on file with Lender.
Additionally, if during the term of the Loan, there exists a collateral
deficiency, determined in Lender's sole discretion, or if a default exists
hereunder, Lender shall have the right to have the Collateral appraised by
an MAI appraiser acceptable to Lender, at Borrower's expense, regardless of
whether 3 years have lapsed since the last appraisal.
ADDITIONAL DEFINITION OF LOAN. The term "Loan" shall also mean and include
that certain promissory note dated July 14, 1995 executed by Borrower in
the principal amount of $70,000.00.
CURE PERIOD FOR DEFAULTS. Notwithstanding the "DEFAULT" provision set forth
herein, prior to Lender declaring Borrower in default hereunder or under
the Loan, Lender agrees to give Borrower written notice of any such
default, and Borrower shall have ten (10) days within which to cure a
monetary default, or thirty (30) days within which to cure a non-monetary
default from the date Lender's written notice is given. Notices shall be
given to Borrower and to Guarantor, Travis Boats & Motors, Inc., at 13045
Research Blvd., Austin, Texas, 78750.
ADDITIONAL NEGATIVE COVENANT. Borrower covenants and agrees with Lender
that Borrower shall not, without the prior written consent of Lender, repay
amounts owed to Officers or Related Parties if the payment of such amounts
will create an event of default for indebtedness with Lender. Related
Parties is defined as any entity owned or partially owned by Travis Boats &
Motors, Inc. or any of the guarantors listed above.
CONFLICT OF PROVISIONS. If there is a conflict between the terms of this
Agreement and the related loan documents contemplated herein, the terms and
conditions of this Agreement shall prevail.
ADDITIONAL COVENANT - DELIVERY OF GUARANTIES. Borrower hereby covenants and
agrees to take such actions as may be needed to insure that within 30 days
of the date of closing this loan, guaranties by the individual guarantors
will be delivered to Lender and within 10 days, guaranty by Travis Boats &
Motors, Inc. will be delivered to Lender, if not delivered at closing.
DEPOSIT ACCOUNTS. As collateral security for repayment of Borrower's Note
and all renewals and extensions, as well as to secure any and all other
loans, notes, indebtedness and obligations that Borrower (or any of them)
may now and in the future owe to Lender or incur in Lender's favor, whether
direct or indirect, absolute or contingent, due or to become due, of any
nature and kind whatsoever (with the exception of any indebtedness under a
consumer credit card account), Borrower is granting Lender a continuing
security interest in any and all funds that Borrower may now and in the
future have on deposit with Lender or in certificates of deposit or other
deposit accounts as to which Borrower is an account holder (with the
exception of IRA, pension, and other tax-deferred deposits). Borrower
further agrees that Lender may at any time apply any funds that Borrower
may have on deposit with Lender or in certificates of deposit or other
deposit accounts as to which Borrower is an account holder against the
unpaid balance of Borrower's Note and any and all other present and future
indebtedness and obligations that Borrower (or any of them) may then owe to
Lender, in principal, interest, fees, costs, expenses, and attorneys' fees,
upon default hereunder.
EVENTS OF DEFAULT. The following actions or inactions or both shall
constitute Events of Default under this Agreement:
DEFAULT UNDER THE INDEBTEDNESS. Should Borrower default in the payment
of principal or interest under any of the indebtedness.
DEFAULT UNDER THIS AGREEMENT. Should Borrower violate, or fail to
comply fully with any of the terms and conditions of, or default under
this Agreement.
DEFAULT UNDER OTHER AGREEMENTS. Should any event of default occur or
exist under any Related Document which directly or indirectly secures
repayment of the Loan and any of the Indebtedness.
OTHER DEFAULTS IN FAVOR OF LENDER. Should Borrower or any Guarantor
default under any other loan, extension of credit, security agreement,
or obligation in favor of Lender.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Guarantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of Borrower's
property, or Borrower's or any Guarantor's ability to perform this
respective obligations under this Agreement, or any Related Document,
or pertaining to the Indebtedness. *Travis Boats & Motors, Inc., or by
two or more individual Guarantors,
INSOLVENCY. Should the suspension, failure or insolvency, however
evidenced, of Borrower or any Guarantor, Travis Boats & Motors, Inc.,
or by any two or more individual Guarantors, occur or exist.
READJUSTMENT OF INDEBTEDNESS. Should proceedings for readjustment of
indebtedness, reorganization, composition or extension under any
insolvency law be brought by or against Borrower or any Guarantor.
ASSIGNMENT FOR BENEFIT OF CREDITORS. Should Borrower or any Guarantor
file proceedings for a respite or make a general assignment for the
benefit of creditors.
<PAGE>
07-14-1995 BUSINESS LOAN AGREEMENT PAGE 5
LOAN NO (CONTINUED)
================================================================================
RECEIVERSHIP. Should a receiver of all or any part of Borrower's
property, or the property of any Guarantor, be applied for or
appointed.
DISSOLUTION PROCEEDINGS. Should proceedings for the dissolution or
appointment of a liquidator of Borrower or any Guarantor be commenced.
FALSE STATEMENTS. Should any representation or warranty of Borrower or
any Guarantor made in connection with the Loan prove to be incorrect
or misleading in any respect.
INSECURITY. Should Lender deem itself to be insecure with regard to
repayment of the Loan.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, all
commitments and obligations of Lender under this Agreement or the Related
Documents or any other agreement immediately will terminate (including any
obligation to make further Loan Advances or disbursements), and, at
Lender's option, all Loans immediately will become due and payable, all
without notice of any kind to Borrower, except that in the case of an Event
of Default of the type described in the "insolvency" subsection above, such
acceleration shall be automatic and not optional.
ADDITIONAL DOCUMENTS. Borrower shall provide Lender with the following
additional documents:
CORPORATE RESOLUTION. Borrower has provided or will provide Lender
with a certified copy of resolutions properly adopted by Borrower's
Board of Directors, and certified by Borrower's corporate secretary or
assistant secretary, under which Borrower's Board of Directors
authorized one or more designated officers or employees to execute
this Agreement on behalf of Borrower and to execute the above
referenced Note and any and all Security Agreements directly or
indirectly securing repayment of the same, and to consummate the
borrowings and other transactions as contemplated hereunder, and to
consent to the remedies following Borrower's default as provided
herein and under the above referenced Security Agreements.
CERTIFICATION. Where required by Lender, Borrower has provided or will
provide Lender with a certificate executed by Borrower's principal or
executive officer, certifying that the representations and warranties
set forth in this Agreement are true and correct, and further
certifying that no Event of Default presently exists under this
Agreement, or under Borrower's Note, or under any Security Agreement
directly or indirectly securing repayment of the same, as of the date
hereof.
OPINION OF COUNSEL. Where required by Lender, Borrower has provided or
will provide Lender with an opinion of Borrower's counsel certifying
to and that: (a) this Agreement and Borrower's Note and Security
Agreements constitute valid and binding obligations on the part of
Borrower that are enforceable in accordance with their respective
terms; (b) Borrower is validly existing and in good standing; (c)
Borrower has authority to enter into this Agreement and to consummate
the transactions contemplated hereunder; and (d) such other matters as
may have been requested by Lender or by Lender's counsel.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part
of this Agreement:
AMENDMENTS. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as
to the matters set forth in this Agreement. No alteration of or
amendment to this Agreement shall be effective unless given in writing
and signed by the party or parties sought to be charged or bound by
the alteration or amendment.
APPLICABLE LAW. This Agreement has been delivered to Lender and
accepted by Lender in the State of Louisiana. Lender and Borrower
hereby waive the right to any jury trial in any action, proceeding, or
counterclaim brought by either Lender or Borrower against the other.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Louisiana.
CAPTION HEADINGS. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or
define the provisions of this Agreement.
CONSENT TO LOAN PARTICIPATION. Borrower agrees and consents to
Lender's sale or transfer, whether now or later, of one or more
participation interests in the Loans to one or more purchasers,
whether related or unrelated to Lender. Lender may provide, without
any limitation whatsoever, to any one or more purchasers, or potential
purchasers, any information or knowledge Lender may have about
Borrower or about any other matter relating to the Loan, and Borrower
hereby waives any rights to privacy it may have with respect to such
matters. Borrower additionally waives any and all notices of sale of
participation interests, as well as all notices of any repurchase of
such participation interests. Borrower also agrees that the purchasers
of any such participation interests will be considered as the absolute
owners of such interests in the Loans and will have all the rights
granted under the participation agreement or agreements governing the
sale of such participation interests. Borrower further waives all
rights of offset or counterclaim that it may have now or later against
Lender or against any purchaser of such a participation interest and
unconditionally agrees that either Lender or such purchaser may
enforce Borrower's obligation under the Loans irrespective of the
failure or insolvency of any holder of any interest in the Loans.
Borrower further agrees that the purchaser of any such participation
interests may enforce its interests irrespective of any personal
claims or defenses that Borrower may have against Lender.
COSTS AND EXPENSES. Borrower agrees to pay upon demand all of Lender's
out-of-pocket expenses, including without limitation attorneys' fees,
incurred in connection with the preparation, execution, enforcement
and collection of this Agreement or in connection with the Loans made
pursuant to this Agreement. Lender may pay someone else to help
collect the Loans and to enforce this Agreement, and Borrower will pay
that amount. This includes, subject to any limits under applicable
law, Lender's attorneys' fees and Lender's legal expenses, whether or
not there is a lawsuit, including attorneys' fees for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay
or injunction), appeals, and any anticipated post-judgment collection
services. Borrower also will pay any court costs, in addition to all
other sums provided by law.
NOTICES. To give Borrower any notice required under this Agreement,
Lender may hand deliver or mail such notice to Borrower. Lender will
deliver or mail any notice to Borrower (or any of them if more than
one) at any address which Borrower may have given Lender by written
notice as provided in this paragraph. In the event that there is more
than one Borrower under this Agreement, notice to a single Borrower
shall be considered as notice to all Borrowers. To give Lender any
notice under this Agreement, Borrower (or any Borrower) shall mail the
notice to Lender by registered or certified mail at the address
specified in this Agreement, or at any other address that Lender may
have given to Borrower (or any Borrower) by written notice as provided
in this paragraph. All notices required or permitted under this
Agreement must be in writing and will be considered as given on the
day it is delivered by hand or deposited in the U.S. Mail, by
registered or certified mail to the address specified in this
Agreement.
SEVERABILITY. If a court of competent jurisdiction finds any provision
of this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible,
any such offending provision shall be deemed to be modified to be
within the limits of enforceability or validity; however, if the
offending provision cannot be so modified, it shall be stricken and
all other provisions of this Agreement in all other respects shall
remain valid and enforceable.
SOLE DISCRETION OF LENDER. Whenever Lender's consent or approval is
required under this Agreement, the decision as to whether or not to
consent or approve shall be in the sole and exclusive discretion of
Lender and Lender's decision shall be final and conclusive.
SUBSIDIARIES AND AFFILIATES OF BORROWER. To the extent the context of
any provisions of this Agreement makes it appropriate, including
without limitation any representation, warranty or covenant, the word
"Borrower" as used herein shall include all subsidiaries and
affiliates of Borrower. Notwithstanding the foregoing however, under
no circumstances shall this Agreement be construed to require Lender
to make any Loan or other financial accommodation to any subsidiary or
affiliate of Borrower.
SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or
on behalf of Borrower shall bind its successors and assigns and shall
inure to the benefit of Lender, its successors and assigns. Borrower
shall not, however, have the right to assign its rights under this
Agreement or any interest therein, without the prior written consent
of Lender.
SURVIVAL. All warranties, representations, and covenants made by
Borrower in this Agreement or in any certificate or other instrument
delivered by Borrower to Lender under this Agreement shall be
considered to have been relied upon by Lender and will survive the
making of the Loan and delivery to Lender of the Related Documents,
regardless of any investigation made by Lender or on Lender's behalf.
WAIVER. Lender shall not be deemed to have waived any rights under
this Agreement unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of Lender in exercising any
right shall operate as a waiver of such right or any other right. A
waiver by Lender of a provision of this Agreement shall not prejudice
or constitute a waiver of Lender's right otherwise to demand strict
compliance with that provision or any other provision of this
Agreement. No prior waiver by Lender, nor any course of dealing
between Lender and Borrower, or between Lender and any Grantor, shall
constitute a waiver of any of Lender's rights or of any obligations of
Borrower or of any Grantor as to any future transactions. Whenever the
consent of Lender is required under this Agreement, the granting of
such consent by Lender in any instance shall not constitute continuing
consent in subsequent instances where such consent is required, and in
all cases such consent may be granted or withheld in the sole
discretion of Lender.
<PAGE>
07-14-1995 BUSINESS LOAN AGREEMENT PAGE 6
LOAN NO (CONTINUED)
===============================================================================
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF
JULY 14, 1995.
BORROWER
Travis Boats & Motors Baton Rouge, Inc.
X /s/ JIM MCMANUS
_________________________________________
BORROWER: TRAVIS BOATS & MOTORS BATON ROUGE, INC. By Cornelius James McManus
a/k/a Jim McManus, Vice President
X/s/TRAVIS BOATS & MOTORS, INC. By Mark Walton - President
------------------------------
GUARANTOR: TRAVIS BOATS & MOTORS, INC. By Mark Walton, President
LENDER:
Hibernia National Park
By: /s/ WADE CAMILE
_____________________________
Authorized Officer
===============================================================================
<PAGE>
EXHIBIT 10.8(F)
COMMERCIAL SECURITY AGREEMEMENT
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL LOAN DATE MATURITY LOAN NO. CALL COLLATERAL ACCOUNT OFFICER INITIALS
<C> <C> <C> <C> <C> <C> <C> <C> <C>
$480,000.00 07-14-1995 07-14-2002 864
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Reference in the shaded area are for Lender's use only and do not limit the
applicability of the document to any particular loan or item.
- --------------------------------------------------------------------------------
BORROWER: Travis Boats & Motors LENDER: Hibernia National Bank
Baton Rouge, Inc. (TIN: TIN: 72-0210640
721224456) Loan Administration Department
14369 Florida Boulevard 440 Third Street
Baton Rouge, LA 70819 Baton Rouge, LA 70501
================================================================================
THIS COMMERCIAL SECURITY AGREEMENT is entered into between Travis Boats &
Motors Baton Rouge, Inc. (referred to below as "Grantor"); and Hibernia
National Bank (referred to below as "Lender"). For valuable consideration,
Grantor hereby pledges to Lender and grants to Lender a continuing security
interest in the Collateral to secure Grantor's present and future
indebtedness and agrees that Lender shall have the rights stated in this
Agreement with respect to the Collateral, in addition to all other rights
which Lender may have by law or otherwise.
DEFINITIONS. The following words shall have the following meanings when
used in this Agreement. Terms not otherwise defined in this Agreement shall
have the meanings attributed to such terms in the Louisiana Commercial Laws
(La. R.S. 10: 9-101, et seq.). All references to dollar amounts shall mean
amounts in lawful money of the United States of America.
AGREEMENT. The word "Agreement" means this Commercial Security
Agreement, as this Commercial Security Agreement may be amended or
modified from time) to time, together with all exhibits and schedules
attached or to be attached to this Commercial Security Agreement from
time to time.
COLLATERAL. The word "Collateral" means individually, collectively
and interchangeably any and all of Grantor's present and future
rights, title and interest in and to the following described property,
together with any and all present and future additions thereto,
substitutions therefor, and replacements thereof:
ALL INVENTORY, INCLUDING, WITHOUT LIMITATION, ALL BOAT, MOTOR,
TRAILER AND PARTS INVENTORY; WHETHER OWNED NOW OR ACQUIRED LATER;
ALL ACCESSIONS ADDITIONS, REPLACEMENTS, AND SUBSTITUTIONS; ALL
RELATED EQUIPMENT, AND ALL RELATED ACCOUNTS, CHATTEL PAPER,
DOCUMENTS, AND GENERAL INTANGIBLES; ALL RECORDS OF ANY KIND
RELATING TO ANY OF THE FOREGOING; ALL PROCEEDS (INCLUDING
INSURANCE, CHATTEL PAPER AND ACCOUNTS PROCEEDS) AND ALL RELATED
GENERAL INTANGIBLES.
The Collateral also includes any related equipment wherever located,
and any and all additions thereto and substitutions or replacements
therefor, and all accessories, attachments, and accessions thereto,
whether added now or later, and all products, and proceeds derived or
to be derived therefrom, including without limitation all insurance
proceeds and refunds of insurance premiums, if any, and all sums that
may be due from third parties who may cause damage to any of the
foregoing, or from any insurer, whether due to judgement, settlement,
or other process, and any and all present and future accounts,
contract rights, chattel paper, instruments, documents, and notes that
may be derived from the sale, lease or other disposition of any of the
forgoing, and any rights of Grantor to collect or enforce payment
thereof, as well as to enforce any guarantees of the forgoing and
security therefor, and all of Grantor's present and future general
intangibles in any way related or pertaining to the ownership,
operation, use or collection of any of the foregoing, including
without limitation Grantor's limitation Grantor's books, records,
files, computer disks and software, and all rights that Grantor may
have with regard thereto.
The word "Collateral" also includes any and all present or future
parts, accessories, attachments, additions, accessions, substitutions
and replacements to and for the collateral. The word "Collateral"
further includes any and all of Grantor's present and future rights to
any proceeds derived or to be derived from the sale, lease, damage,
destruction, insurance loss, expropriation and other disposition of
the collateral, including without limitation, any and all of Grantor's
rights to enforce collection and payment of such proceeds.
ENCUMBRANCES. The word "Encumbrances" means individually,
collectively and interchangeably any and all presently existing and/or
future mortgages, liens, privileges and other contractual and/or
statutory security interests and rights of every nature and kind that,
now and/or in the future, may affect the Collateral or any part or
parts thereof.
EVENT OF DEFAULT. The words "Event of Default" means individually,
collectively and interchangeably any of the Events of Default set
forth below in the section titled "Events of Default."
GRANTOR. The word "Grantor" means individually, collectively and
interchangeably Travis Boats & Motors Baton Rouge, Inc., its
successors and assigns
GUARANTOR. The word "Guarantor" means and includes individually,
collectively, interchangeably and without limitation each and all of
the guarantors, sureties, and accommodation parties in connection with
the Indebtedness.
INDEBTEDNESS. The word "Indebtedness" means the indebtedness
evidenced by the Note, in principal, interest costs, expenses and
attorneys' fees and all other fees and charges, together with all
other indebtedness and costs and expenses for which Grantor is
responsible under this Agreement or under any of the Related
Documents. In addition, the word "Indebtedness" also includes any and
all other loans, extensions of credit obligations, debts and
liabilities, plus interest thereon, of Grantor, or any one or more of
them, that may now and in the future be owed to or incurred in favor
of Lender, as well as all claims by Lender against Grantor, or any one
or more of them, whether existing now or later; whether they are
voluntary or involuntary, whether related or unrelated, whether
committed or purely discretionary, due or to become due, direct or
indirect or by way of assignment, determined or undetermined, absolute
or contingent liquidated or unliquidated; whether Grantor may be
liable individually or jointly with others, of every nature and kind
whatsoever, in principal, interest costs, expenses and attorneys' fees
and all other fees and charges; whether Grantor may be obligated as
guarantor, surety, accommodation party or otherwise; whether recovery
upon such indebtedness may be or hereafter may become barred by any
statute of limitations; and whether such indebtedness may be or
hereafter may become void or otherwise unenforceable.
LENDER. The word "Lender" means Hibernia National Bank TIN: 72-
0210640, its successors and assigns, and any subsequent holder or
holders of the Note, or any interest therein.
NOTE. The word "Note" means the note or credit agreement dated July
14, 1995, In the principal amount of $480,000.00 from Grantor to
Lender, together with all substitute or replacement notes therefor, as
well as all renewals, extensions, modifications, refinancings,
consolidations and substitutions of and for the note or credit
agreement.
RELATED DOCUMENTS. The words "Related Documents" mean and include
individually, collectively, interchangeably and without limitation all
promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, collateral
mortgages, deeds of trust, and all other instruments, agreements, and
documents, whether now or hereafter existing, executed in connection
with the indebtedness.
CONTINUING SECURITY INTEREST TO SECURE PRESENT AND FUTURE INDEBTEDNESS.
Grantor affirms that Grantor has granted a continuing security interest in
the Collateral in favor of Lender to secure any and all present and future
Indebtedness of Grantor in favor of Lender, as may be outstanding from time
to time set forth above, in principal, interest costs, expenses, attorneys'
fees and other fees and charges, with the continuing preferences and
preferences and priorities provided under applicable Louisiana law.
DURATION OF THIS AGREEMENT. This Agreement shall remain in full force and
effect until such time as this Agreement and the security interests created
hereby are terminated and cancelled by Lender under a written cancellation
instrument in favor of Grantor.
OBLIGATIONS OF GRANTOR. Grantor represents, warrants and covenants to
Lender as follows:
PREFECTION OF SECURITY INTEREST. Grantor agrees to executes such
financing statements and to take whatever other actions are requested
by Lender to perfect and continue Lender's security interest in the
Collateral. Upon request of Lender, Grantor will deliver to Lender any
and all of the documents evidencing or constituting the Collateral,
and Grantor will note Lender's interest upon any and all chattel paper
if not delivered to Lender for possession by Lender. Grantor hereby
appoints Lender as its irrevocable attorney-in-fact for the purpose of
executing any documents necessary to perfect or to continue the
security interest granted in this Agreement. Lender may at any time,
and without further authorization from Grantor, file a carbon,
photographic, facsimile, or other reproduction of any financing
statement Grantor will reimburse Lender for all expenses for the
perfection, termination, and the continuation of the perfection of
Lender's security interest in the Collateral. Grantor promptly will
notify Lender before any change in Grantor's name including any change
to the assumed business names of Grantor. Grantor also promptly will
notify Lender of any change in Grantor's Employer Identification
Number. Grantor further agrees to notify Lender in writing prior to
any change in address or location of Grantor's principal governance
office. Grantor represents and warrants to Lender that Grantor has
provided Lender with Grantor's correct Employer Identification Number
and that Grantor has no other Employer Identification Numbers. Grantor
promptly shall notify Lender should Grantor apply for or obtain a new
Employer ldentification Number or should Grantor merge or consolidate
with any other entity.
PURCHASE MONEY SECURITY INTEREST. Lender's security interest in
Grantor's inventory and/or equipment as provided herein constitutes a
"purchase money security interest" within the context of the Uniform
Commercial Code, and Grantor shall use, or, as applicable, has used
the
<PAGE>
07-14-1995 COMMERCIAL SECURITY AGREEMENT PAGE 2
LOAN NO (CONTINUED)
================================================================================
proceeds of Grantor's loan evidenced by the above-referenced Note
solely to purchase or acquire such inventory and/or equipment.
NO VIOLATION. The execution and delivery of this Agreement will not
violate any law or agreement governing Grantor or to which Grantor is
a party, and its certificate or articles of incorporation and bylaws
do not prohibit any term or condition of this Agreement.
ENFORCEABILITY OF COLLATERAL. To the extent the Collateral consists
of accounts, contract rights, chattel paper, or general intangibles,
the Collateral is enforceable in accordance with its terms, is
genuine, and fully complies with applicable state and federal laws and
regulations concerning form, content and manner of preparation and
execution, and all persons appearing to be obligated on the Collateral
have authority and capacity to contract and are in fact obligated as
they appear to be on the Collateral, free of any offset, compensation,
deduction or counterclaim.
LOCATION OF THE COLLATERAL. Grantor, upon request of Lender, will
deliver to Lender in form satisfactory to Lender a schedule of real
properties and Collateral locations relating to Grantor's operations,
including without limitation the following: (a) all real property
owned or being purchased by Grantor; (b) all real property being
rented or leased by Grantor, (c) all storage facilities owned, rented,
leased, or being used by Grantor; and (d) all other properties where
Collateral is or may be located. Except in the ordinary course of its
business, Grantor shall not remove the Collateral from its existing
locations without the prior written consent of Lender. Collateral
consisting of inventory and other goods is not currently located and,
as long as this Agreement remains in effect, will not be kept in a
field or public warehouse or with a bailee, and shall be kept only at
locations approved by Lender.
REMOVAL OF COLLATERAL. Grantor shall keep the Collateral (or to the
extent the Collateral consists of intangible property such as
accounts, the records concerning the Collateral) at Grantor's address
shown above, or at such other locations as are acceptable to Lender.
Except in the ordinary course of its business, including the sales of
inventory, Grantor shall not remove the Collateral from its existing
locations without the prior written consent of Lender. To the extent
that the Collateral consists of vehicles, or other titled property,
Grantor shall not take or permit any action which would require
application for certificates of title for the vehicles outside the
State of Louisiana, without the prior written consent of Lender.
TRANSACTIONS INVOLVING COLLATERAL. Except for inventory sold or
accounts collected in the ordinary course of Grantor's business,
Grantor shall not sell, offer to sell, or otherwise transfer or
dispose of the Collateral. While Grantor is not in default under this
Agreement, Grantor may sell inventory, but only in the ordinary course
of its business and only to buyers who qualify as a buyer in the
ordinary course of business. A sale in the ordinary course of
Grantor's business does not include a transfer in partial or total
satisfaction of a debt or any bulk sale. Grantor shall not pledge,
mortgage, encumber or otherwise permit the Collateral to be subject to
any Encumbrance or charge, other than the security interest provided
for in this Agreement, without the prior written consent of Lender.
This includes security interests even it junior in right to the
security interests granted under this Agreement. Unless waived by
Lender, all proceeds from any disposition of the Collateral (for
whatever reason) shall be held in trust for Lender and shall not be
commingled with any other funds; provided however, this requirement
shall not constitute consent by Lender to any sale or other
disposition. Upon receipt, Grantor shall immediately deliver any such
proceeds to Lender.
TITLE, AUTHORITY, BINDING EFFECT. Grantor represents and warrants to
Lender that it holds good and marketable title to the Collateral, free
and clear of all Encumbrances except for Lender's security interest.
No financing statement covering any of the Collateral is on file in
any public office other than those which reflect the security interest
created by this Agreement or to which Lender has specifically
consented. Grantor further represents and warrants that it has
requisite authority to enter into this Agreement in favor of Lender
and to grant to Lender the security interest in the Collateral as
provided herein. Grantor additionally represents and warrants that
this Agreement is binding upon Grantor as well as Grantor's heirs,
successors, transferees and assigns, and is legally enforceable in
accordance with its terms. The foregoing representations and
warranties and all other representations and warranties of Grantor
under this Agreement shall be continuing and shall survive the
termination of this Agreement.
COLLATERAL SCHEDULES AND LOCATIONS. Insofar as the Collateral
consists of inventory, Grantor shall deliver to Lender, as often as
Lender shall require, such lists, descriptions, and designations of
such Collateral as Lender may require to identify the nature, extent,
and location of such Collateral. Such information shall be submitted
for Grantor and each of its subsidiaries or related companies.
REPAIRS AND MAINTENANCE. Grantor shall keep and maintain and shall
cause others to keep and maintain the Collateral in good order, repair
and merchantable condition. Grantor shall futher make and/or cause all
necessary repairs to be made to the Collateral, including the repair
and restoration of any portion of the Collateral that may be damaged,
lost or destroyed. In addition, Grantor shall not, without the prior
written consent of Lender, make or permit to be made any alterations
to any of the Collateral that may reduce or impair the Collateral's
use, value or marketability. Furthermore, Grantor shall not, nor shall
Grantor permit others to abandon, commit waste, or destroy the
Collateral or any part or parts thereof.
TAXES. Grantor shall promptly pay or cause to be paid when due, all
taxes, local and special assessments, and governmental and other
charges of every type and description, that may from time to time be
imposed, assessed and levied against the Collateral or against
Grantor. Grantor further agrees to furnish Lender with evidence that
such taxes, assessments, and governmental and other charges have been
paid in full and in a timely manner. Grantor may withhold any such
payment or elect to contest any lien if Grantor is in good faith
conducting an appropriate proceeding to contest the obligation to pay
and so long as Lender's interest in the Collateral is not jeopardized.
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor shall comply
promptly with, and shall cause others to comply with, all laws,
ordinances, rules and regulations of all governmental authorities, now
or hereafter in effect, applicable to the ownership, production,
disposition, or use of the Collateral. Grantor may contest in good
faith any such law, ordinance or regulation and withhold compliance
during any proceeding, including appropriate appeals, so long as
Lender's interest in the Collateral, in Lender's opinion, is not
jeopardized. Grantor shall not use the Collateral, and shall not
permit others to use the Collateral, for any purpose other than those
previously agreed to by Lender in writing; but in no event shall any
of the Collateral be used in any manner that would damage, depreciate
or diminish its value or that may result in cancellation or
termination of insurance coverage. Grantor additionally agrees not to
do or suffer to be done anything that may increase the risk of fire or
other hazards to the Collateral.
HAZARDOUS SUBSTANCES. Grantor represents and warrants that the
Collateral never has been, and never will be so long as this Agreement
remains a lien on the Collateral, used for the generation,
manufacture, storage, transportation, treatment, disposal, release or
threatened release of any hazardous waste or substance, as those terms
are defined in the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986,
Pub. L No. 99-499 ("SARA"), the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and
Recovery Act, 49 U.S.C. Section 6901, et seq., or other applicable
state or Federal laws, rules, or regulations adopted pursuant to any
of the foregoing. The terms "hazardous waste" and "hazardous
substance" shall also include, without limitation, petroleum and
petroleum by-products or any traction thereof and asbestos. The
representations and warranties contained herein are based on Grantor's
due diligence in investigating the Collateral for hazardous wastes and
substances. Grantor hereby (a) releases and waives any future claims
against Lender for indemnity or contribution in the event Grantor
becomes liable for cleanup or other costs under any such laws, and (b)
agrees to indemnify and hold harmless Lender against any and all
claims and losses resulting from a breach of this provision of this
Agreement. This obligation to indemnity shall survive the payment of
the indebtedness and the satisfaction of this Agreement.
REQUIRED INSURANCE. So long as this Agreement remains in effect,
Grantor shall, at its sole cost, keep and/or cause others, at their
expense, to keep the Collateral constantly insured against loss by
fire, by hazards included within the term "extended coverage," and by
such other hazards (including flood insurance where applicable) as
may be required by Lender. Such insurance shall be in an amount not
less than the full replacement value of the Collateral, or such other
amount or amounts as Lender may require or approve in writing. Grantor
shall further provide and maintain, at its sole cost and expense,
comprehensive public liability insurance, naming both Grantor and
Lender as parties insured, protecting against claims for bodily
injury, death and/or property damage arising out of the use,
ownership, possession, operation and condition of the Collateral, and
further containing a broad form contractual liability endorsement
covering Grantor's obligations to indemnity Lender as provided
hereunder.
Grantor may purchase such insurance from any insurance company or
broker that is acceptable to Lender, provided that such approval may
not be unreasonably withheld. All such insurance policies, including
renewals and replacements, must also be in form and substance
acceptable to Lender, and must additionally contain a loss payable or
other endorsement in favor of Lender, providing in part that (a) all
proceeds and returned premiums under such policies of insurance will
be paid directly to Lender, and (b) no act or omission on the part of
Grantor, or any of its officers, agents, employees or representatives,
nor breach of any warranty contained in such policies, shall affect
the obligations of the insurer to pay the full the amount of any loss
to Lender. Such policies of insurance must also contain a provision
prohibiting cancellation or the alteration of such insurance without
at least thirty (30) days' prior written notice to Lender of such
intended cancellation or alteration.
Grantor agrees to provide Lender with originals or certified copies of
such policies of insurance. Grantor further agrees to promptly
furnish Lender with copies of all renewal notices and, if requested by
Lender, with copies of receipts for paid premiums. Grantor shall
provide Lender with originals or certified copies of all renewal or
replacement policies of insurance no later than fifteen (15) days
before any such existing policy or policies should expire. If
Grantor's insurance policies and renewals are held by another person,
Grantor agrees to supply original or certified copies of the same to
Lender within the time periods required above.
Grantor agrees to notify immediately Lender in writing of any material
casualty to or accident involving the Collateral, whether or not such
casualty or loss is covered by insurance. Grantor further agrees to
promptly notify Grantor's insurance company and to submit an
appropriate claim and proof of claim to the insurance company in the
event that any Collateral is lost, damaged, or destroyed as a result
of an insured hazard. Lender may submit such a claim and proof of
claim to the insurance company on Grantor's behalf, should Grantor
fail to do so promptly for any reason.
<PAGE>
07-14-1995 COMMERCIAL SECURITY AGREEMENT PAGE 3
LOAN NO (CONTINUED)
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Grantor hereby irrevocably appoints Lender as its agent and attorney-
in-fact, such agency being coupled with an Interest to make, settle
and adjust claims under such policy or policies of insurance and to
endorse the name of Grantor on any check or other item of payment
for the proceeds thereof, it being understood, however, that unless
one or more Events of Default exist under this Agreement, Lender will
not settle or adjust any such claim without the prior approval of
Grantor (which approval shall not be unreasonably withheld).
INSURANCE PROCEEDS. Lender shall have the right to directly receive
the proceeds of all insurance protecting the Collateral. In the event
that Grantor should receive any such insurance proceeds. Grantor
agrees to immediately turn over and to pay such proceeds directly to
Lender. All insurance proceeds may be applied, at Lender's sole option
and discretion, and in such a manner as Lender may determine (after
payment of all reasonable costs, expenses and attorneys' fees
necessarily paid or fees necessarily paid or incurred by Lender in
this connection), for the purpose of (a) repairing or restoring the
lost, damaged or destroyed Collateral; or (b) reducing the then
outstanding balance of Grantor's Indebtedness.
Lenders receipt of such insurance proceeds and the application of such
proceeds as provided herein shall not, however, affect the lien of
this Agreement. Nothing under this section shall be deemed to excuse
Grantor from its obligations promptly to repair, replace or restore
any lost or damaged Collateral, whether or not the same may be covered
by insurance, and whether or not such proceeds of insurance are
available, and whether such proceeds are sufficient in amount to
complete such repair, replacement or restoration to the satisfaction
of Lender. Furthermore, unless otherwise confirmed by Lender in
writng, the application or release of any insurance proceeds by
Lender shall not be deemed to cure or waive any Event of Default under
this Agreement. Any proceeds which have not been disbursed within six
(6) months after their receipt and which Grantor has not committed to
the repair or restoration of the Collateral shall be used to prepay
the Indebtedness.
INSURANCE REPORTS. Grantor, upon request of Lender, shall furnish to
Lender reports on each existing policy of insurance showing such
information as Lender may reasonably request including the following:
(a) the name of the Insurer; (b) the risks Insured; (c) the amount of
the policy; (d) the property insured; (e) the then current value on
the basis of which insurance has been obtained and the manner of
determining that value; and (f) the expiration date of the policy. In
addition, Grantor shall upon request by Lender (however not more often
than annually) have an independent appraiser satisfactory to Lender
determine, as applicable, the cash value or replacement cost of the
Collateral.
PRIOR ENCUMBRANCES. To the extent applicable, Grantor shall fully and
timely perform any and all of its obligations under any prior
Encumbrances affecting the Collateral. Without limiting the foregoing,
Grantor shall not commit or permit to exist any breach of or default
under any such prior encumbrances. Grantor shall further promptly
notify Lender in writing upon the occurrence of any event or
circumstances that would, or that might, result in a breach of or
default under any such prior Encumbrance. Grantor shall further not
modify or extend any of the terms of any prior Encumbrance or any
indebtedness secured thereby, or request or obtain any additional
loans or other extensions of credit from any third party creditor or
creditors whenever such additional loan advances or other extensions
of credit may be directly or indirecty secured, whether by cross-
collateralizatlon or otherwise, by the Collateral, or any part or
parts thereof, with possible preference and priority over Lender's
security interest. Grantor additionally agrees to obtain, upon request
by Lender, and in form and substance as may then be satisfactory to
Lender, appropriate waivers and/or subordinations of any lessor's
liens or privileges, vendor's liens or privileges, purchase money
security interests, and any other Encumbrances that may affect the
Collateral at any time.
FUTURE ENCUMBRANCES. Grantor shall not, without the prior written
consent of Lender, grant any Encumbrance that may affect the
Collateral, or any part or parts thereof, nor shall Grantor permit or
consent to any Encumbrance attaching to or being filed against any of
the Collateral in favor of anyone other than Lender. Grantor shall
further promptly pay when due all statements and charges of
mechanics, materialmen, laborers and others incurred in connection
with the alteration, improvement, repair and maintenance of the
Collateral, or otherwise furnish appropriate security or bond, so that
no future Encumbrance may ever attach to or be filed against any
Collateral. Grantor additionally agrees to obtain, upon request by
Lender, and in form and substance as may then be satisfactory to
Lender, appropriate waivers and/or subordinations of any lessor's
liens or privileges, vendor's liens or privileges, purchase money
security interests, and any other Encumbrances that may affect the
Collateral at any time.
NOTICE OF ENCUMBRANCES. Grantor shall immediately notify Lender in
writing upon the filng of any attachment lien, judicial process,
claim, or other Encumbrance. Grantor additionally agrees to notify
Lender immediately in writing upon the occurrence of any default, or
event that with the passage of time, failure to cure, or giving of
notice, might result in a default under any of Grantor's obligations
that may be secured by any presently existing or future Encumbrance,
or that might result in an Encumbrance affecting the Collateral, or
should any of the Collateral be seized or attached or levied upon, or
threatened by seizure or attachment or levy, by any person other than
Lender.
BOOKS AND RECORDS. Grantor will keep proper books and records with
regard to Grantor's business activities and the Collateral in which a
security interest is granted hereunder, in accordance with generally
accepted accounting principles, applied on a consistent basis
throughout, which books and records shall at all reasonable times be
open to inspection and copying by Lender or its designated agents.
Lender shall also have the right to inspect Grantor's books and
records, and to discuss Grantor's affairs and finances with Grantor's
officers and representatives, at such reasonable times as Lender may
designate.
GRANTOR'S RIGHT TO POSSESSION. Until default, Grantor may have possession and
beneficial use of all the Collateral and may use it in any lawful manner not
inconsistent with this Agreement or the Related Documents, provided that
Grantor's right to possession and beneficial use shall not apply to any
Collateral where possession of the Collateral by Lender is required by law to
perfect Lender's security interest in such Collateral. If Lender at any time has
possession of any Collateral, whether before or after an Event of Default,
Lender shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral if Lender takes such action for that purpose as
Grantor shall request or as Lender, in Lender's sole discretion, shall deem
appropriate under the circumstances, but failure to honor any request by Grantor
shall not of itself be deemed to be a failure to exercise reasonable care.
Lender shall not be required to take any steps necessary to preserve any rights
in the Collateral against prior parties, nor to protect, preserve or maintain
any security interest given to secure the Indebtedness.
EXPENDITURES BY LENDER. Grantor recognizes and agrees that Lender may incur
certain expenses in connection with Lender's exercise of rights under this
Agreement If not discharged or paid when due, Lender may (but shall not be
obligated to) discharge or pay any amounts required to be discharged or paid by
Grantor under this Agreement, Including without limitation all taxes,
Encumbrances and other claims, at any time levied or placed on the Collateral,
Lender also may (but shall not be obligated to) pay all costs for insuring,
maintaining and preserving the Collateral, including without limitation, the
purchase of Insurance protecting only Lender's interest in the Collateral.
Lender may further take such other action or actions and incur such additional
expenditures as Lender may deem to be necessary and proper to cure or rectify
any actions or inactions on Grantor's part as may be required under this
Agreement. Nothing under this Agreement or otherwise shall obligate Lender to
take any such actions or to incur any such additional expenditures on Grantor's
behalf, or as making Lender in any way responsible or liable for any loss,
damage, or injury to the Collateral, to Grantor, or to any other person or
persons, resulting from Lender's election not to take such actions or to incur
such additional expenses. In addition, Lender's election to take any such
actions or to incur such additional expenditures shall not constitute a waiver
or forbearance by Lender of any Event of Default under this Agreement. All such
expenditures Incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repaymenet. All such expeness shall becomme a part of the
Indebtedness and, at Lender's option, will (a) be payable on demand, (b) be
added to the balance of the Note and be apportioned among and be payable with
any payments to become due during either (i) the term of any applicable
insurance policy or (ii) the remaining term of the Note, or (c) be treated as a
balloon payment which will be due and payable at the Note's maturity. This
Agreement also will secure payment of these amounts. Such right shall be in
addition to all other rights and remedies to which Lender may be entitled upon
the occurrence of an Event of Default.
EVENTS OF DEFAULT. The following actions or inactions or both shall constitute
Events of Default under this Agreement:
DEFAULT UNDER LOAN AGREEMENT. Should an event of default occur or
exist under the terms of Grantor's Loan Agreement in favor of Lender.
DEFAULT UNDER THE INDEBTEDNESS. Should Grantor default in the payment
of principal or interest under any of the Indebtedness.
DEFAULT UNDER THIS AGREEMENT. Should Grantor violate, or fail to
comply fully with any of the terms and conditions of, or default under
this Agreement.
DEFAULT UNDER OTHER AGREEMENTS. Should any event of default occur or
exist under any Related Document which directly or indirectly secures
repayment of any of the indebtedness.
OTHER DEFAULTS IN FAVOR OF LENDER. Should Grantor or any Guarantor
default under any other loan, extension of credit, security agreement
or obligation in favor of Lender.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Grantor or any Guarantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement in favor of any
other creditor or person that may materially affect any of Grantor's
property, or Grantor's or any Guarantor's ability to perform their
respective obligations under this Agreement, or any Related Document,
or pertaining to the Indebtedness.
INSOLVENCY. Should the suspension, failure or insolvency, however
evidenced, of Grantor or any Guarantor occur or exist.
READJUSTMENT OF INDEBTEDNESS. Should proceedings for readjustment of
indebtedness, reorganization, composition or extension under any
insolvency law be brought by or against Grantor or any Guarantor.
ASSIGNMENT FOR BENEFIT OF CREDITORS. Should Grantor or any Guarantor
file proceedings for a respite or make a general assignment for the
benefit of creditors.
RECEIVERSHIP. Should a receiver of all or any part of Grantor's
property, or the property of any Guarantor, be applied for or
appointed.
<PAGE>
07-14-L995 COMMERCIAL SECURITY AGREEMENT PAGE 4
LOAN NO (CONTINUED)
================================================================================
DISSOLUTION PROCEEDINGS. Should proceedings for the dissolution or
appointment of a liquidator of Grantor or any Guarantor be commenced.
FALSE STATEMENTS. Should any representation or warranty of Grantor or
any Guarantor made in connection with the indebtedness prove to be
incorrect or misleading in any respect.
DEFECTIVE COLLATERILIZATION. Should this Agreement or any of the
Related Documents cease to be in full force and effect (including
failure of any Collateral documents to create a valid and perfected
security interest or lien) at any time and for any reason.
INSECURITY. Should Lender deem itself to be insecure with regard to
repayment of the indebtedness.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a
secured party under applicable law, and more specifically under the
Louisiana Commercial Laws (La. R.S. 10: 9-101 et seq.). In addition and
without limitation, Lender may exercise any one or more of the following
rights and remedies:
ACCELERATE INDEBTEDNESS. Lender may declare the entire Indebtedness,
including any prepayment penalty which Grantor would be required to
pay, immediately due and payable, without notice or further demand for
payment.
SEIZURE AND SALE OF COLLATERAL IN LOUISIANA. In the event that Lender
elects to commence appropriate Louisiana foreclosure proceedings
under this Agreement, Lender may cause the Collateral, or any part or
parts thereof, to be immediately seized wherever found, and sold,
whether in term of court or in vacation, under ordinary or executory
process, in accordance with applicable Louisiana law, to the highest
bidder for cash, with or without appraisement, and without the
necessity of making additional demand upon or notifying Grantor or
placing Grantor in default, all of which are expressly waived.
CONFESSION OF JUDGEMENT. For purposes of foreclosure under Louisiana
executory process procedures, Grantor confesses judgment and
acknowledges to be indebted unto and in favor of Lender, up to the
full amount of the Indebtedness, in principal, interest, costs,
expenses, attorneys' fees and other fees and charges. Grantor further
confesses judgment and acknowledges to be indebted unto and in favor
of Lender in the amount of all additional advances that Lender may
make on Grantor's behalf pursuant to this Agreement, together with
interest thereon, up to a maximum of two (2) times the face amount of
the aforesaid Note. To the extent permitted under applicable Louisiana
law, Grantor additionally waives: (a) the benefit of appraisal as
provided in Articles 2332, 2336, 2723 and 2724 of the Louisiana Code
of Civil Procedure, and all other laws with regard to appraisal upon
judicial sale; (b) the demand and three (3) days' delay as provided
under Articles 2639 and 2721 of the Louisiana Code of Civil Procedure;
(c) the notice of seizure as provided under Articles 2293 and 2721 of
the Louisiana Code of Civil Procedure; (d) the three (3) days' delay
provided under Articles 2331 and 2722 of the Louisiana Code of Civil
Procedure; and (a) all other benefits provided under Articles 2331,
2722 and 2723 of the Louisiana Code of Civil Procedure and all other
Articles not specifically mentioned above.
KEEPER. Should any or all of the Collateral be seized as an incident
to an action for the recognition or enforcement of this Agreement, by
executory process, sequestration, attachment, writ of fieri facias
or otherwise, Grantor hereby agrees that the court issuing any such
order shall, it requested by Lender, appoint Lender, or any agent
designated by Lender, or any person or entity named by Lender at the
time such seizure is requested, or any time thereafter, as Keeper of
the Collateral as provided under La. R.S. 9:5136, et seq. Such a
Keeper shall be entitled to reasonable compensation. Grantor agrees to
pay the reasonable fees of such Keeper, which are hereby fixed at
$150.00 per hour, which compensation to the Keeper shall also be
secured by this Agreement in the form of an additional advance as
provided herein.
DECLARATION OF FACT. Should it become necessary for Lender to
foreclose under this Agreement all declarations of fact, which are
made under an authentic act before a Notary Public in the presence of
two witnesses, by a person declaring such facts to lie within his or
her Knowledge, shall constitute authentic evidence for purposes of
executory process and also for purposes of La. R.S. B:3509.1,
La. R. S. 9:3504(D)(B) and La. R.S. 9:3504(D)(6) and La. R.S.
10:9-508, as applicable.
DELIVER COLLATERAL. This provision applies, to the extent applicable,
if and when the Collateral for any reason is located outside the State
of Louisiana following the occurrence of any Event of Default, or
should there be a subsequent change in Louisiana low permitting such
remedies. Lender may require Grantor to deliver to Lender all or any
portion of the Collateral and any and all certificates of title and
other documents relating to the Collateral. Lender may require Grantor
to assemble the Collateral and make ft available to Lender at a place
to be designated by Lender. Lender also shall have full power to enter
upon the property of Grantor to take possession of and remove the
Collateral. If the Collateral contains other goods not covered by this
Agreement at the time of repossession, Grantor agrees Lender may take
such other goods, provided that Lender makes reasonable efforts to
return them to Grantor after repossession.
PUBLIC OR PRIVATE SALE OF COLLATERAL. To the extent that any of the
Collateral is then in Lender's possession, Lender shall have full
power to sell, lease, transfer, or otherwise deal with the Collateral
or proceeds thereof in its own name or that of Grantor. Lender may
sell the Collateral at public auction or private sale. Unless the
Collateral threatens to decline speedily in value or is of a type
customarily sold on a recognized market, Lender will give Grantor
reasonable notice of the time after which any private sale or any
other intended disposition of the Collateral is to be made. The
requirements of reasonable notice shall be met if such notice is given
at least ten (10) days before the sale or disposition. All expenses
relating to the disposition of the Collateral, including without
limitation the expenses of retaking, holding, insuring, preparing for
sale and selling the Collateral, shall become a part of the
Indebtedness secured by this Agreement and shall be payable on demand,
with interest at the Note rate from date of expenditure until repaid.
Grantor agrees that any such sale shall be conclusively deemed to be
conducted In a co sky reasonable manner if it is made consistent with
the standard of similar sales of collateral by commerciai banks in
Baton Rouge, Louisiana
APPOINT RECEIVER. This provision applies it and when the Collateral
for any reason is located outside the State of Louisiana following the
occurrence of any Event of Default or should Louisiana law change or
be interpreted to permit such a remedy. Lender shall have the
following rights and remedies regrading the appointment of a receiver;
(a) Lender may have a receiver appointed as a matter of right (b) the
receiver may be an employee of Lender and may serve without bond, and
(c) all fees of the receiver and his or her attorney shall become part
of the indebtedness accured by this Agreement and shall be payable on
demand, with Interest at the Note rate from date of expenditure until
repaid.
COLLECT REVENUES, APPLY ACCOUNTS. Lender shall have the right at its
sole option and election, at any time, whether or not one or more
Events of Default then exist under this Agreement, to directly collect
and receive all proceeds and/or payments arising under or in any way
accruing from the Collateral, as such amounts become due and payable.
In order to permit the foregoing, Grantor unconditionally agrees to
deliver to Lender, immediately following demand, any and all of
Grantor's records, ledger sheets, and other documentation, in the
form requested by Lender, with regard to the Collateral and any and
all proceeds and/or payments applicable thereto.
Lender shall have the further right, whether or not an Event of
Default then exist under this Agreement, where appropriate and within
Lender's sole discretion, to file suit either in Lender's own name or
in the name of Grantor, to collect any and all proceeds and payments
that may then and/or in the future be due and owing under this
Agreement and if as a result of such it is necessary for Lender to
attempt to collect any such proceeds and/or payments from the obligors
therefor, Lender may compromise, settle, extend, or renew for any
period (whether or not longer than the original period) any obligation
or indebtedness thereunder or evidenced thereby, or surrender,
release, or exchange all or any part of said obligation or
indebtedness, without affecting the liability of Grantor under this
Agreement or under the indebtedness. To that end, Grantor hereby
irrevocably constitues and appoints Lender as the attorney-in-fact,
coupled with an interest and with full power of substitution, to take
any and all such actions and any and all other actions permitted
hereby, either in the name of Grantor or Lender.
ADDITIONAL EXPENSES. In the event that it should become necessary for
Lender to conduct a search for any of the Collateral in connection
with any foreclosure action, or should it be necessary to remove the
Collateral, or any part or parts thereof, from the premises in which
or on which the Collateral is then located, and/or to store and/or
refurbish such Collateral, Grantor agrees to reimburse Lender for the
cost of conducting such a search and/or removing and/or storing and/or
refurbishing such Collateral, which additional expense shall also be
secured by the lien of this Agreement.
SPECIFIC PERFORMANCE. Lender may, in addition to the foregoing
remedies, or in lieu thereof, in Lender's sole discretion, commence an
appropriate action against Grantor seeking specific performance of any
covenant contained herein, or in aid of the execution or enforcement
of any power herein granted.
OBTAIN DEFICIENCY. Lender may obtain a judgment against Grantor for
any deficiency remaining on the indebtedness due to Lender after
application of all amounts received from the exercise of the rights
provided in this Agreement and any Related Document
OTHER RIGHTS AND REMEDIES. In addition, Lender shall have and may
exercise any or all other rights and remedies it may have available at
law, in equity, or otherwise.
CUMULATIVE REMEDIES. All of Lender's rights and remedies, whether
evidenced by this Agreement or the Related Documents or by any other
writing, shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make
expenditures or to take action to perform an obligation of Grantor
under this Agreement after Grantor's failure to perform, shall not
affect Lender's right to declare a default and to exercise its
remedies.
ASSIGNMENT OF INDEBTEDNESS. Grantor hereby recognizes and agrees that
Lender may assign all or any portion of the Indebtedness to one or more
third party creditors. Such transfers may include, but are not limited to,
sales of participation interests in the indebtedness. Grantor specifically
agrees and consents to all such transfers and assignment and further waives
any subsequent notice of such transfers or assignments as may be provided
under applicable law. Grantor additionally agrees that any and all of the
indebtedness in favor of such a third party assignee, for the limited
purposes set forth above will be secured by the Collateral
<PAGE>
07-14-L995 COMMERCIAL SECURITY AGREEMENT PAGE 5
LOAN NO (CONTINUED)
================================================================================
PROTECTION OF LENDER'S SECURITY RIGHTS. Grantor will be fully responsible
for any losses that Lender may suffer as a result of anyone other than
Lender asserting any rights or interest in or to the Collateral. Grantor
agrees to appear in and to defend all actions or proceedings purporting to
affect Lender's security interests in any of the Collateral subject to this
Agreement and any of the rights and powers granted Lender hereunder. In the
event that Grantor fails to do what is required of it under this Agreement,
or if any action or proceeding is commenced narring Lender as a party or
affecting Lender's security interests or the rights and powers granted
under this Agreement, then Lender may, without releasing Grantor from any
of its obligations under this Agreement, do whatever Lender believes to be
necessary and proper within its sole discretion to protect the security of
this Agreement including without limitation making additional advances on
Grantor's behalf as provided herein.
INDEMNIFICATION OF LENDER. Grantor agrees to indemnity, to defend and to
save and hold Lender harmless from any and all claims, suits, obligations,
damages, losses, costs, expenses (including without limitation Lender's
attorneys' fees), demands, liabilities, penalties, fines and forfeitures of
any nature whatsoever that may be asserted against or incurred by Lender
arising out of or in any manner occasioned by this Agreement and the
exercise of the rights and remedies granted Lender hereunder. The foregoing
indemnity provisions shall survive the cancellation of this Agreement as to
all matters arising or accruing prior to such cancellation, and the
foregoing indemnity shall survive in the event that Lender elects to
exercise any of the remedies as provided under this Agreement following
default hereunder.
EXECUTION OF ADDITIONAL DOCUMENTS. Grantor agrees to execute all
additional documents, instruments and agreements that Lender may deem to be
necessary and proper, within its sole discretion, in form and substance
satisfactory to Lender, to keep this Agreement in effect, to better
reflect the true intent of this Agreement, and to consummate fully all of
the transactions contemplated hereby and by any other agreement, instrument
or document heretofore, now or at any time or times hereafter executed by
Grantor and delivered to Lender.
INSPECTION; AUDITS. Lender and its agents may periodically enter upon
Grantor's premises at reasonable hours and inspect the Collateral. Lender
and its agents may also periodically conduct audits of the Collateral and
may further inspect and audit Grantor's books and records that in any way
pertain to the Collateral and any part or parts thereof.
APPLICATION OF PAYMENTS. Grantor agrees that all payments and other sums
and amounts received by Lender under the Indebtedness or under this
Agreement, shall be applied: first, to reimburse Lender for its costs of
collecting the same (including but not limited to, reimbursement of
Lender's reasonable attorneys' fees); second, to the repayment of interest
on all additional advances that Lender may have made on Grantor's behalf
pursuant to this Agreement, third, to the payment of principal of all such
additional advances, and finally, to the payment of principal and interest
on the Indebtedness then outstanding, which may be applied in such order
and priority as Lender may determine within its sole discretion.
TAXATION. In the event that there should be any change in law with regard
to taxation of security agreements or the debts they secure, Grantor agrees
to pay any taxes, assessments or charges that may be imposed upon Lender as
a result of this Agreement.
EFFECT OF WAIVERS. Grantor has waived, and/or does by these presents
waive, presentment for payment, protest, notice of protest and notice of
nonpayment under all of the Indebtedness secured by this Agreement.
Grantor has further waived, and/or does by these presents waive, all pleas
of division and discussion, and all similar rights with regard to the
indebtedness, and agrees that Grantor shall remain liable, together with
any and all Guarantors, on a "solidary" or "joint and severer" basis.
Grantor further agrees that discharge or release of any party who is, may,
or will be liable to Lender under any of the Indebtedness, or the release
of the Collateral or any other collateral directly or indirectly securing
repayment of the same, shall not have the effect of releasing or
otherwise diminishing or reducing the actual or potential liability of
Grantor and/or any other party or parties guaranteeing payment of the
Indebtedness, who shall remain liable to Lender, and/or of releasing any
Collateral or other collateral that is not expressly released by Lender.
Grantor additionally agrees that Lender's acceptance of payments other than
in accordance with the terms of any agreement or agreements governing
repayment of the Indebtedness, or Lender's subsequent agreement to extend
or modify such repayment terms, shall likewise not have the effect of
releasing any party or parties from their respective obligations to Lender,
and/or of releasing any of the Collateral or other collateral directly or
indirectly securing repayment of the Indebtedness. In addition, no course
of dealing between Grantor and Lender, nor any failure or delay on the part
of Lender to exercise any of the rights and remedies granted to Lender
under this Agreement or under any other agreement or agreements by and
between Grantor and Lender, shall have the effect of waiving any of
Lender's rights and remedies. Any partial exercise of any rights and
remedies granted to Lender shall furthermore not constitute a waiver of any
of Lender's other rights and remedies. It being Grantor's intent and
agreement that Lender's rights and remedies shall be cumulative in nature.
Grantor further agrees that upon the occurrence of any Event of Default
under this Agreement any waiver or forbearance on the part of Lender to
pursue the rights and remedies available to Lender, shall be binding upon
Lender only to the extent that Lender specifically agrees to any such
waiver or forbearance in writing. A waiver or forbearance as to one Event
of Default shall not constitute a waiver or forbearance as to any other
Event of Default. None of the warranties, conditions, provisions and terms
contained in this Agreement or any other agreement, document, or instrument
now or hereafter executed by Grantor and delivered to Lender, shall be
deemed to have been waived by any act or knowledge of Lender, its agents,
officers or employees; but only by an instrument in writing specifying such
waiver, signed by a duty authorized officer of Lender and delivered to
Grantor.
MISCELLANEOUS PROVISION. The following miscellaneous provisions are a part
of this Agreement:
AMENDMENTS. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as
to the matters set forth in this Agreement. No alteration of or
amendment to this Agreement shall be effective unless given in writing
and signed by the party or parties sought to be charged or bound by
the alteration or amendment
APPLICABLE LAW. This Agreement has been delivered to Lender and
accepted by Lender in the State of Louisiana. Lender and Grantor
hereby waive the right to any jury trial in any action, proceedings or
counterclaim brought by either Lender or Grantor against the other.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Louisiana.
ATTORNEYS' FEES; EXPENSES. Grantor agrees to pay upon demand all of
Lender's costs and expenses, including attorneys' fees and Lender's
legal expenses, incurred in connection with the enforcement of this
Agreement. Lender may pay someone else to help enforce this Agreement,
and Grantor shall pay the costs and expenses of such enforcement.
Costs and expenses include Lender's attorneys' fees and legal expenses
whether or not there is a lawsuit including attorneys' fees and legal
expenses for bankruptcy proceedings (and including efforts to modify
or vacate any automatic stay or injunction), appeals, and any
anticipated post-judgment collection Grantor also shall pay all court
costs and such additional fees as may be directed by the court.
CAPTION HEADINGS. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or
define the provisions of this Agreement.
NOTICES. To give Grantor any notice required under this Agreement,
Lender may hand deliver or mail such notice to Grantor. Lender will
deliver or mail any notice to Grantor (or any of them if more than
one) at any address which Grantor may have given Lender by written
notice as provided in this paragraph. In the event that there is more
than one Grantor under this Agreement notice to a single Grantor shall
be considered as notice to all Grantors. To give Lender any notice
under this Agreement, Grantor (or any Grantor) shall mail the notice
to Lender by registered or certified at the address specified in this
Agreement, or at any other address that Lender may have given to
Grantor (or any Grantor) by written notice as provided in this
paragraph. All notices required or permitted under this Agreement must
be in writing and will be considered as given on the day it is
delivered by hand or deposited in the U.S. Mail, by registered or
certified mail to the address specified in this Agreement.
POWER OF ATTORNEY. Grantor hereby appoints Lender as its true and
lawful attorney-in-fact, irrevocably, with full power of substitution
to do the following: (a) to demand, collect, receive, receipt for, sue
and recover all sums of money or other property which may now or
hereafter become due, owing or payable from the Collateral; (b) to
execute, sign and endorse any and all claims, instruments, receipts,
checks, drafts or warrants issued in payment for the Collateral;
(c) to settle or compromise any and all claims arising under the
Collateral, and, in the place and stead of Grantor, to execute and
deliver its release and amendment for the claim; and (d) to file any
claim or claims or to take any action or institute or take part in any
proceedings, either in its own name or in the name of Grantor, or
otherwise, which in the discretion of Lender may seem to be necessary
or advisable. This power is given as security for the indebtedness,
and the authority conferred is and shall be irrevocable and shall
remain in full force and effect until renounced by Lender.
SEVERABILITY. If a court of competent jurisdiction finds any
provision of this Agreement to be invalid or unenforceable as to any
other persons or circumstance, such finding shall not render that
provision invalid or unenforceable as to any other persons or
circumstances. If feasible, any such offending provision shall be
deemed to be modified to be within the limits or enforceability of
validity; however, if the offending provision cannot be so modified,
it shall be stricken and all other provisions of this Agreement in all
other shall remain valid and enforceable.
SOLE DISCRETION OF LENDER. Whenever Lender's consent or approval is
required under this Agreement, the decision as to whether or not to
consent or approve shall be in the sole and exclusive discretion of
Lender and Lender's decision shall be final and conclusive.
SUCCESSOR AND ASSIGNS BOUND; SOLIDARY LIABILITY. Grantor's
obligations and agreements under this Agreement shall be binding upon
Grantor's successors, heirs, legatees, devises, administrators,
executors and assigns. In the event that there is more than one
Grantor under this Agreement, all of the agreements and obligations
made and/or incurred by Grantors under this Agreement shall be on a
"solidary" or "joint and several" basis.
ADDITIONAL DEFINITION OF NOTE. The word "Note" shall also mean and include
the notes or credit agreements dated July 14, 1995 in the principal amount
of $70,000.00, dated May 30, 1995 in the principal amount of $80O,000.00
and dated May 30, 1995 in the principal amount of $100,000.00, from Grantor
to Lender, together with all substitutions or replacement notes therefor,
as well as all renewals, extensions, modifications, refinancings,
consolidations and substitutions of and for the notes or credit agreements.
<PAGE>
07-14-L995 COMMERCIAL SECURITY AGREEMENT PAGE 6
LOAN NO (CONTINUED)
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GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL
SECURITY AGREEMENT, AND GRANTOR AGREES TO ITS TERMS. THIS AGREEMENT IS
DATED JULY 14, 1995.
GRANTOR:
Travis Boats & Motors Baton Rouge, Inc.
By:/s/ Cornelius James McMarius a/k/a Jim McMarius
-------------------------------------------------------
Cornelius James McMarius a/k/a Jim McMarius, Vice President
LENDER:
Hibernia National Bank
By:/s/ Wade Carwile
-------------------------------------------------------
Authorized Officer
================================================================================
<PAGE>
EXHIBIT 10.8(g)
COLLATERAL MORTGAGE
================================================================================
BORROWER: Travis Boats & Motors LENDER: Hibernia National Bank
Baton Rouge, Inc. TIN:72-0210640
(TIN: 721224466) Loan Administration Department
14369 Florida Boulevard 440 Third Street
Baton Rouge. LA 70819 Baton Rouge, LA 70801
================================================================================
COLLATERAL MORTGAGE UNITED STATES OF AMERICA
BY: Travis Boats & Motors Baton Rouge, Inc. STATE OF LOUISIANA
PARISH OF EAST BATON ROUGE
IN FAVOR OF:
Hibernia National Bank
And Any Future Holder or Holders
BE IT KNOWN, that on the 14th day of July, 1995;
BEFORE ME, the undersigned Notary Public, and in the presence of the
undersigned competent witnesses;
PERSONALLY CAME AND APPEARED:
Travis Boats & Motors Baton Rouge, Inc. TIN:721224466, a corporation
duly organized, validly existing and in good standing under the laws
of the State of Louisiana, and has its registered offices at 14369
Florida Boulevard, Baton Rouge, LA 70819, appearing herein through its
duly authorized representative(s), pursuant to a resolution its Board
of Directors, a certified copy of which is attached hereto and
expressly made a part hereof;
WHO DECLARED THAT:
TERMS AND CONDITIONS:
DEFINITIONS. The following words shall have the following meanings when used
in this Mortgage:
ADDITIONAL ADVANCES. The words "Additional Advances" mean any and all
additional sums that Mortgagee may advance on Mortgagor's behalf as
provided under this Mortgage.
ENCUMBRANCES. The word "Encumbrances" means individually, collectively an
interchangeably any and all presently existing and/or future mortgages,
liens, privileges, encumbrances, and other contractual and/or statutory
security interests and rights of every nature and kind that, now and/or
in the future, may affect the mortgaged Property or any part or parts
thereof.
EVENT OF DEFAULT. The words "Event of Default" mean individually,
collectively, and interchangeably any of the Events of Default set forth
below in the section titled "Events of Default."
GUARANTOR. The word "Guarantor" means and includes individually,
collectively, interchangeably and without limitation each and all of the
guarantors, sureties, and accommodation parties in connection with the
indebtedness.
INDEBTEDNESS. The word "Indebtedness" means individually, collectively
and interchangeably any and all present and future loans, advances,
and/or other extensions of credit obtained and/or to be obtained by
Mortgagor from Mortgages, as well as Mortgagee's successors and assigns,
from time to time, one or more times, now and in the future. Under a
certain Loan Agreement dated July 14, 1995 and any and all promissory
notes evidencing such present and/or future loans, advances, and/or other
extensions of credit, including without limitation, Mortgagor's
promissory note dated July 14, 1995, in the principal amount of U.S.
$480,000.00, and any and all amendments thereto and/or substitutions
therefor, and any and all renewals, extensions and refinancings thereof,
as well as any and all other obligations, including, without limitation,
Mortgagors covenants and agreements in any present or future loan or
credit agreement or any other agreement, document or instrument executed
by Mortgagor, and liabilities that Mortgagor may now and/or in the future
owe to and/or incur in favor of Mortgagee, as well as Mortgagee's
successors or assigns, whether direct or Indirect, or by way of
assignment or purchase of a participation interest, and whether related
or unrelated, or whether committed or purely discretionary, and whether
absolute or contingent, liquidated or unliquidated, voluntary or
involuntary, determined or undetermined, due or to become due, and
whether now existing or hereafter arising, or otherwise secured or
unsecured, whether Mortgagor is obligated alone or with others on a
"solidary" or "joint and several" basis, as a principal obligor or as a
surety, guarantor, or endorser, of every nature and kind whatsoever,
whether or not any such indebtedness may be barred under any statute of
limitations or prescriptive period or may be or become otherwise
unenforceable or voidable for any reason whatsoever.
LENDER. The word "Lender" means Hibernia National Bank (TIN: 72-0210640),
its successors and assigns.
MORTGAGE. The word "Mortgage" means this Mortgage as this Mortgage may be
amended, supplemented, restated or otherwise modified from time to time.
MORTGAGEE. The word "Mortgagee" means Hibernia National Bank (TIN:
72-0210640), its successors and assigns, and any future holder or holders
of Mortgagors Collateral Mortgage Note or any interest therein.
MORTGAGOR. The word "Mortgagor" means individually, collectively and
interchangeably the above referenced Borrower(s), as well as any and all
persons and entities subsequently purchasing the mortgaged Property, with
or without assumption of this Mortgage.
NOTE. The word "Note" means Mortgagor's Collateral Mortgage Note described
below.
PROPERTY. The word "Property" means individually, collectively and
interchangeably any and all of Mortgagor's present and future property
subject to this Mortgage.
RELATED DOCUMENTS. The words "Related Documents" mean and include
individually, collectively, interchangeably and without limitation all
promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, collateral
mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection with
the indebtedness.
RIGHTS. The word "Rights" means individually, collectively and
interchangeably any and all of Mortgagor's additional rights collaterally
assigned and pledged to Mortgages as provided under this Mortgage.
COLLATERAL MORTGAGE NOTE. Desiring to secure the prompt and punctual payment
and satisfaction of any and all present and future indebtedness in favor of
Mortgagee, as defined above, Mortgagor executed a certain Collateral Mortgage
Note dated July 14, 1995, in the principal amount of U.S. $600,000.00, payable
to the order of BEARER, on demand, at the offices of Mortgages, which Note
stipulates to bear interest at the rate of 21.000 percent per annum from date
until paid and is paraphed "Ne Varietur" for identification with this Mortgage
by the Notary Public before whom this Mortgage is passed.
PLEDGE OF COLLATERAL MORTGAGE NOTE TO SECURE INDEBTEDNESS. The aforesaid Note,
after having been paraphed "Ne Varietur" for identification with this Mortgage
by the Notary before whom this Mortgage was passed, was delivered to Mortgagor,
who hereby acknowledges receipt thereof. Mortgagor declared that said Note has
been and/or will be pledged to Mortgages as the initial Mortgagee under this
Mortgage for the purpose of securing any and all present and future indebtedness
that Mortgagor may obtain or incur, from time to time, one or more times, from
Mortgagee and any subsequent holder or holders of said Note as heretofore
stated.
GRANTING OF MORTGAGE TO SECURE PLEDGED NOTE. And now, in order to secure the
prompt and punctual payment and satisfaction of the aforesaid Note, in
principal, interest, costs, expenses, attorneys' fees and other fees and
charges, and additionally to secure repayment of any and all Additional Advances
that Mortgagee may make on behalf of Mortgagor as provided in this Mortgage,
together with interest thereon, Mortgagor does by these presents specifically
mortgage, affect and hypothecate unto and in favor of Mortgagee, any and all of
Mortgagor's present and future rights, title and interest in and to the
following described Property.
The Immovable (real) property specifically described as follows:
SEE ATTACHED EXHIBIT
together with any and all present and future building(s), constructions,
component parts, improvements, attachments, appurtenances,
<PAGE>
07-14-1995 MORTGAGE PAGE 2
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================================================================================
fixtures, rights, ways, privileges, advantages, batture, and batture
rights, servitudes and easements of every type and description, now and/or
in the future relating to the mortgaged Property, and any and all items and
fixtures attached to and/or forming integral or component parts of the
mortgaged Property in accordance with the Louisiana Civil Code.
THE REAL PROPERTY OR ITS ADDRESS is commonly known as 14369 FLORIDA
BOULEVARD, BATON ROUGE, LA 70819.
MORTGAGE SECURING FUTURE INDEBTEDNESS. The aforesaid Note and this Mortgage
have been executed by Mortgagor for the purpose of securing Mortgagor's
indebtedness that may now be existing and/or that may arise in the future as
provided herein, with the preferences and priorities provided under applicable
Louisiana law. However, nothing under this Mortgage shall be construed as
limiting the duration of this Mortgage or the purpose or purposes for which
Mortgagor's indebtedness may be requested or extended.
DURATION OF MORTGAGE. Mortgagor agrees that Mortgagor's Property is to remain
mortgaged to Mortgagee until Mortgagor's pledged Note is returned to Mortgagor
by Mortgagee marked "PAID" or "CANCELLED, or until Mortgagor marks the Note
"PAID" or "CANCELLED" after it is returned to Mortgagor.
PROHIBITIONS REGARDING MORTGAGED PROPERTY. So long as this Mortgage remains in
effect, Mortgagor agrees not to, without Mortgagee's prior written consent:
(a) sell, assign, transfer, convey, option, mortgage, or lease the mortgaged
Property; (b) permit any Encumbrance to be placed on or to attach to the
mortgaged Property; or (c) do anything or permit anything to be done that may in
any way impair Mortgagee's security interests and rights in and to the mortgaged
Property.
REPRESENTATIONS AND WARRANTIES CONCERNING THE MORTGAGED PROPERTY. Except as
previously disclosed to Mortgagee in writing, Mortgagor represents and warrants
that: (a) Mortgagor is and will continue to be the lawful owner of the mortgaged
Property; (b) Mortgagor has the right to mortgage the Property to Mortgages;
(c) as of the time this Mortgage is recorded, there are no Encumbrances
affecting the mortgaged Property; (d) the security rights and interest granted
under this Mortgage will at no time become subordinate or junior to any security
rights, interests, liens, or claims of, or in favor of, any person, firm,
corporation, or other entity; and (e) this Mortgage is binding upon Mortgagor as
well as Mortgagor's heirs, successors, legatees, administrators, executors,
representatives and assigns, and is legally enforceable in accordance with its
terms. The above representations and warranties, and all other representations
and warranties contained in this Mortgage, are and will be continuing in nature
and will remain in full force and effect until such time as this Mortgage is
cancelled in the manner provided above.
INSURANCE PROVISIONS. The following Insurance provisions are a part of this
Mortgage.
REQUIRED INSURANCE. So long as this Mortgage remains in effect, Mortgagor
shall, at its sole cost, keep and/or cause others, at their expense, to
keep the mortgaged Property constantly insured against loss by fire, by
hazards included within the term "extended coverage," and by such other
hazards (including flood insurance, where applicable) as may be be required
by Mortgagee. Such insurance shall be in an amount not less than the full
replacement value of the mortgaged Property, or such other amount or
amounts as Mortgagee may require or approve in writing Mortgagor shall
further provide and maintain, at its sole cost and expense, comprehensive
public liability insurance, naming both Mortgagor and Mortgagee as parties
insured, protecting against claims for bodily injury, death and/or property
damage arising out of the use, ownership, occupancy, possession, operation
and condition of the mortgaged Property, and further containing a broad
form contractual liability endorsement covering Mortgagor's obligations
to indemnify Mortgagee as provided hereunder. Should the Real Property at
any time become located in an area designated by the Director of the
Federal Emergency Management Agency as a special flood hazard area,
Mortgagor agrees to obtain and maintain Federal Flood Insurance to the
extent such insurance is required and is or becomes available, for the term
of the loan and for the full unpaid principal balance of the loan, or the
maximum limit of coverage that is available, whichever is less.
INSURANCE COMPANIES AND POLICIES. Mortgagor may purchase such insurance
from any insurance company or broker that is acceptable to Mortgages,
provided that such approval may not be unreasonably withheld. All such
insurance policies, including renewals and replacements must also be in
form and substance acceptable to Mortgages, and must additionally contain a
lender's loss payee endorsement in favor of Mortgagee, providing in part
that (a) all proceeds and returned premiums under such policies of
Insurance will be paid directly to Mortgagee, and (b) no act or omission
on the part of Mortgagor, or any of its directors, officers, agents,
employees or representatives, nor breach of any warranty contained in such
policies, shall affect the obligations of the insurer to pay the full
amount of any loss to Mortgages. Such policies of insurance must also
contain a provision prohibiting cancellation, nonrenewal, or the
alteration of such insurance without at least thirty (30) days' prior
written notice to Mortgagee of such intended cancellation or alteration.
Mortgagor agrees to provide Mortgagee with originals or certified copies of
such policies of insurance. Mortgagor further agrees to promptly furnish
Mortgages with copies of all renewal notices and, if requested by
Mortgages, with copies of receipts for paid premiums. Mortgagor shall
provide Mortgagee with originals or certified copies of all renewal or
replacement policies of insurance no later than fifteen (15) days before
any such existing policy or policies should expire. If Mortgagor's
insurance policies and renewals are held by another person, Mortgagor
agrees to supply original or certified copies of the same to Mortgagee
within the time periods required above.
PROPERTY LOSSES AND CLAIMS. Mortgagor agrees to immediately notify
Mortgagee in writing of any material casualty to or accident involving the
mortgaged Property, whether or not such casualty or loss is covered by
insurance. Mortgagor further agrees to promptly notify Mortgagor's
insurance company and to submit an appropriate claim and proof of claim to
the insurance company in the event that any of the mortgaged Property is
lost, damaged, or destroyed as a result of an insured hazard. Mortgages may
submit such a claim and proof of claim to the insurance company on
Mortgagor's behalf, should Mortgagor fail to do so promptly for any
reason. Mortgagor hereby irrevocably appoints Mortgagee as its agent and
attorney-in-fact such agency being coupled with an Interest, to make,
settle and adjust claims under such policy or policies of insurance and
to endorse the name of Mortgagor on any check or other item of payment for
the proceeds thereof; it being understood, however, that unless one or more
events of default exist under this Mortgage, Mortgagee will not settle or
adjust any such claim without the prior approval of Mortgagor (which
approval shall not be unreasonably withheld).
INSURANCE PROCEEDS. Mortgagee shall have the right to directly receive the
proceeds of all insurance protecting the mortgaged Property. In the event
that Mortgagor should receive any such Insurance proceeds, Mortgagor agrees
to immediately turn over and to pay such proceeds directly to Mortgagee.
All Insurance proceeds may be applied, at Mortgages's sole option and
discretion, and in such a manner as Mortgages may determine (after payment
of all reasonable costs, expenses and attorney's fees necessarily paid or
fees necessarily paid or Incurred by Mortgagee in this connection), for the
purpose of: (a) repairing or restoring the loss, damaged or destroyed
Property; or (b) reducing the then outstanding balance of the Indebtedness
and any Additional Advances that Mortgages may have made on Mortgagor's
behalf, together with interest thereon. Mortgages's receipt of such
Insurance proceeds and the application of such proceeds as provided herein
shall not, however, affect the lien of this Mortgage. Nothing under this
section shall be deemed to excuse Mortgagor from its obligations to
promptly repair, replace or restore any lost or damaged Property, whether
or not the same may be covered by insurance, and whether or not such
proceeds of insurance are available, and whether such proceeds are
sufficient in amount to complete such repair, replacement or restoration to
the satisfaction of Mortgages. Furthermore, unless otherwise confirmed by
Mortgagee in writing, the application or release of any Insurance proceeds
by Mortgagee shall not be deemed to cure or waive any Event of Default
under this Mortgage.
TAXES AND LIENS. The following provisions relating to the taxes and liens on the
Property are a part of this Mortgage.
Payment Mortgagor shall promptly pay or cause to be paid when due, all
taxes, local and special assessments, and governmental and other charges,
as well as all public and/or private utility charges, of every type and
description, that may from time to time be imposed, assessed and levied
against the mortgaged Property or against Mortgagor. Mortgagor further
agrees to furnish Mortgagee with evidence that such taxes, assessments, and
governmental and other charges have been paid in full and in a timely
manner.
POSSESSION AND MAINTENANCE OF THE PROPERTY. Mortgagor agrees that Mortgagor's
possession and use of the Property shall be governed by the following
provisions:
USE OF MORTGAGED PROPERTY. Mortgagor shall not use the Property and shall
not permit others to use the Property, for any purpose or purposes other
than those previously disclosed to Mortgages in writing, and in no event
shall any of the mortgaged Property be used in any manner that would
damage, depreciate, or diminish its value, or that may result in a
cancellation or termination of Insurance coverage. Mortgagor additionally
agrees not to do or to suffer to be done anything which may increase the
risk of fire or other hazard to the mortgaged Property or any part or parts
thereof. Mortgagor shall not permit the mortgaged Property, or any portion
thereof, to be used by the public and others as may make possible a claim
or claims of adverse usage, easement, servitude, right of way or
habitation, or adverse possession by the public and others, or any implied
tacit or other dedication of the Property.
COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS. Mortgagor shall observe
and abide by, and shall cause others to observe and abide by, all present
and future laws, ordinances, orders, rules, regulations, restrictions, and
requirements of all federal, state and municipal governments, courts,
departments, commissions, boards, agencies, and officers, affecting the
mortgaged Property and its use.
Mortgagor shall further promptly perform and observe, and shall cause
others to promptly perform and observe, all the terms, covenants and
conditions of any requirements, Instruments and agreements affecting the
mortgaged Property, non-compliance with which may adversely affect the
priority of this Mortgage, or which may impose any duty or obligation upon
Mortgagor, or upon any lessee or other occupant of the mortgaged Property.
Mortgagor shall further do and cause to be done all things necessary to
preserve intact and unimpaired any and all easements, servitudes,
appurtanances and other interests and rights in favor of, or constituting
any portion of, the mortgaged Property.
COMPLIANCE WITH ENVIRONMENTAL LAWS. Mortgagor hereby represents and
warrants to Mortgagee and covenants that Mortgagor is now complying, and
will continue to comply, with all environmental and environmental related
laws, rules, regulations and orders applicable to the mortgaged Property
and its use. Mortgagor shall further comply with and shall cause all
occupants of the mortgaged Property to comply with all
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federal, state and local laws, rules regulations and orders with respect
to the disposal of industrial refuge or waste, and/or the discharge,
procession, treatment, removal, transportation, storage and handling of
hazardous or toxic wastes and substances, and pay immediately when due
the cost of removal of any such waste or substances from, and keep the
mortgaged Property free of any lien imposed pursuant to any such laws,
rules, regulations or orders. Mortgagor shall not install or permit the
installation of friable asbestos or any substance containing asbestos, or
any machinery, equipment or fixtures containing polychlorinated
biphemyls (PCBs), in or on the mortgaged Property. With respect to any
such material or materials currently present in or on the mortgaged
Property, Mortgagor shall promptly comply with applicable federal, state
or local laws, rules, regulations or orders regarding the safe removal
thereof, at Mortgagor's sole expense.
In the event Mortgagor fails to do any of the foregoing, Mortgagee may
declare this Mortgage to be in default. In addition, Mortgagor hereby
grants Mortgagee and its employees and agents, an irrevocable and non-
exclusive license to enter the mortgaged Property to conduct testing and to
remove the hazardous waste and substances, and the cost of such testing and
removal shall constitute an Additional Advance under, and shall be
secured by this Mortgage.
No notice from any governmental body has ever been served upon Mortgagor
or, to Mortgagor's knowledge after due inquiry, upon any prior owner of
the Property, claiming a violation of or under any federal, state or local
law, regulation or ordinance concerning the environmental state, condition,
or quality of the Property, or the use thereof, or requiring or calling
attention to the need for any work, repairs, construction, removal, clean-
up, alterations, demolition, renovation or installation on, or in
connection with, the Property. Upon receipt of any such notice, Mortgagor
shall take any and all steps, and perform any and all actions necessary or
appropriate to comply with the same, at Mortgagor's sole expense.
ERISA. Mortgagor represents and warrants to Lender that the granting of
this Mortgage and the consummation of any loan or loans or other
transactions contemplated or secured hereby will not violate the provisions
of, and will not constitute a prohibited transaction under the Employee
Retirement Income Security Act of 1974 ("ERISA").
ALTERATIONS. Mortgagor shall not, without the prior written consent of
Mortgagee, demolish, remove, construct, restore, add to or alter any
building(s) or other improvements to or upon the mortgaged Property, or any
part or parts thereof, or consent to, or permit any such demolition,
removal, construction, restoration, addition or alteration. Mortgagor shall
further not, without the prior written consent of Mortgagee, remove or
permit the removal of any present or future fixtures and other property
forming part of the mortgaged Property. Mortgages may condition its consent
to permit Mortgagor to demolish or to remove such improvements, fixtures
and/or other property upon Mortgagor's agreement to replace the same with
new improvements and/or fixtures of at least equal value then satisfactory
to Mortgagee.
ABANDONMENT OF MORTGAGED PROPERTY. Mortgagor shall not, nor shall Mortgagor
permit others to abandon, commit waste, or destroy the managed Property,
or any part or parts thereof.
REPAIRS AND MAINTENANCE. Mortgagor shall keep and maintain, and/or cause
others to keep and maintain, the mortgaged Property and the sidewalks and
curbs adjoining the Property, in good order, repair and condition.
Mortgagor shall further make and/or cause all necessary repairs to be made
to the mortgaged Property (including the repair and restoration of any
portion of the Property that may have been damaged, lost or destroyed).
ENCUMBRANCES. The following provisions relating to Encumbrances on the Property
are a part of this Mortgage.
PRIOR ENCUMBRANCES. To the extent applicable, Mortgagor shall fully and
timely perform any and all of its obligations under any prior Encumbrances
affecting the mortgaged Property. Without limiting the foregoing, Mortgagor
shall not commit or permit to exist any breach of or default under any such
prior Encumbrances. Mortgagor shall further promptly notify Mortgagee in
writing upon the occurrence of any event or circumstances that would, or
that might, result in a breach of or default under any such prior
Encumbrance. Mortgagor shall further not modify or extend any of the terms
of any prior Encumbrance or any indebtedness secured thereby, or request or
obtain any additional loans or other extensions of credit from any third
party creditor or creditors whenever such additional loan advances or other
extensions of credit may be directly or indirectly secured, whether by
cross-collateralization or otherwise, by the mortgaged Property, or any
part or parts thereof, with possible preference and priority over the lien
of this Mortgage.
FUTURE ENCUMBRANCES. Mortgagor shall not, without the prior written consent
of Mortgagee, grant any Encumbrance that may affect the mortgaged Property,
or any part or parts thereof, nor shall Mortgagor permit or consent to any
Encumbrance attaching to or being filed against any of the mortgaged
Property in favor of anyone other than Mortgagee. Mortgagor shall further
promptly pay when due all statements and charges of mechanics, materialmen,
laborers and others incurred in connection with the alteration,
improvement, repair and maintenance of the mortgaged Property, or otherwise
furnish appropriate security or bond, so that no future Encumbrance may
ever attach to or be filed against the Property or any of Mortgagors'
Rights.
NOTICE OF ENCUMBRANCES. Mortgagor shall immediately notify Mortgagee in
writing upon the filing of any attachment, lien, judicial process, claim,
or other Encumbrance. Mortgagor additionally agrees to notify Mortgagee
immediately in writing upon the occurrence of any default, or event that
with the passage of time, failure to cure, or giving of notice, might
result in a default under any of Mortgagor's obligations that may be
secured by any presently existing or future Encumbrance, or that might
result in an Encumbrance affecting the mortgaged Property, or should any of
the mortgaged Property be seized or attached or levied upon, or threatened
by seizure or attachment or levy, by any person other than Mortgagee.
ADDITIONAL ADVANCES FOR SPECIFIC PURPOSES. Mortgagee shall have the right,
within Mortgagee sole option and discretion, to make Additional Advances on
Mortgagor's behalf for the following purposes:
INSURANCE. If Mortgagor should for any reason fail to maintain Insurance on
the mortgaged Property as required under this Mortgage, Mortgagee may make
Additional Advances on Mortgagor's behalf for the purpose of purchasing and
maintaining, and Mortgagee may purchase and maintain such insurance
coverage (including insurance protecting only Mortgagee's interests in the
Property).
TAXES. If Mortgagor should for any reason fail to promptly pay when due
taxes, assessments and governmental and other charges as required under
this Mortgage, Mortgagee may make Additional Advances on Mortgagor's behalf
for the purpose of paying, and Mortgagee may pay, such taxes, assessments
and governmental and other charges.
REPAIRS. It Mortgagor should for any reason fail to make all necessary
repairs to the mortgaged Property and to keep the Property in good working
order and condition as required under this Mortgage, Mortgagor agrees that
Mortgagee may make Additional Advances on Mortgagor's behalf for the
purpose of making, and Mortgagee may make, such repairs and maintenance to
the mortgaged Property as Mortgagee may deem to be necessary and proper
within its sole discretion.
ENCUMBRANCE. It Mortgagor should permit or allow any Encumbrance to
attach to or be recorded or filed against the mortgaged Property, without
having first obtained Mortgagee's prior written consent, or if Mortgagor
should for any reason default under any obligation secured by any presently
existing or future Encumbrance, Mortgagee may make Additional Advances on
Mortgagor's behalf and take such other action or actions as Mortgagee may
deem to be necessary and proper, within Mortgagee's sole discretion, to pay
and fully satisfy such obligation and/or Encumbrance, to cure or rectify
any such default or defaults, and to prevent the occurrence of any future
defaults.
OTHER. Mortgagee may further make Additional Advances on Mortgagor's behalf
and take such other action or actions as Mortgagee may deem to be necessary
and proper, within Mortgagee's sole discretion, to cure and rectify any
actions or inactions on Mortgagor's part, as are required under this
Mortgage, that are not listed immediately above.
NO OBLIGATIONS. Nothing under this Mortgage shall obligate Mortgagee to
make any such Additional Advances, or to take any of the above actions on
Mortgagor's behalf, or as making Mortgagee in any way responsible or liable
for any loss, damage or injury to Mortgagor, or to any other person or
entity, resulting from Mortgagee's election not to advance any such
additional sums or to take any such action or actions. In addition,
Mortgagee's election to make Additional Advances and/or to take any above
action or actions on Mortgagor's behalf, shall not constitute a waiver or
forbearance by Mortgagee of any Event of Default under this Mortgage.
OBLIGATION TO REPAY ADDITIONAL ADVANCES; INTEREST. Mortgagor unconditionally
agrees to repay any and all Additional Advances that Mortgagee may elect to make
on Mortgagor's behalf, together with interest as provided herein, immediately
upon demand by Mortgagee. Mortgagor further agrees to pay Mortgagee interest on
the amount of such Additional Advances at the Note rate from the date of each
such Advance until all such Advances are paid in full. Mortgagor's obligations
to repay Additional Advances to Mortgagee, together with interest thereon, shall
be secured by this Mortgage up to a maximum of two (2) times the face amount of
the aforesaid Note.
COLLATERAL ASSIGNMENT AND PLEDGE OF RIGHTS AS ADDITIONAL SECURITY. As additional
collateral security for the prompt and punctual payment and satisfaction of any
and all present and future indebtedness in favor of Mortgagee as may be
outstanding from time to time, at any one or more times, and all Additional
Advances that Mortgages may make on Mortgagor's behalf pursuant to this
Mortgage, together with interest thereon as provided herein up to a maximum
principal amount outstanding at any one or more times, from time to time, not to
exceed U.S. $50,000,000.00, together with interest, costs, expenses, attorneys'
fees and other fees and charges, Mortgagor hereby assigns, pledges and grants
Mortgagee a continuing security interest in and to:
PROCEEDS. Any and all proceeds derived or to be derived from the sale,
transfer, conveyance, Insurance loss, damage, destruction, condemnation.
expropriation, or other taking of the mortgaged Property, or other proceeds
and proceeds of proceeds, and any unearned insurance premiums relating
thereto, including the rights of Mortgagor to receive such proceeds
directly from the obligor or obligors therefor to further enforce any
rights that Mortgagor may have to collect such proceeds, including without
limitation, Mortgagor's rights to commence appropriate collection or
enforcement action or actions incident thereto.
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LEASES, RENTS AND PROFITS. Any and all present and future leases or
subleases affecting the mortgaged Property, and all rents, income, and
profits therefrom, including without limitation, any and all rents, income,
profits, bonuses, revenues, royalties, cash or security deposits, advance
rentals and other payments, and further including Mortgagor's rights to
enforce all present and future leases or subleases and to receive and
enforce any rights that Mortgagor might have to collect rental and all
other payments.
DEPOSITS. Any and all present and future deposits or other security or
advance payments, including rental payments, made by or on behalf of
Mortgagor to others, with respect to (a) utility service regarding the
mortgaged Property, (b) cleaning, maintenance, repair, or similar services
regarding the mortgaged Property, (c) refuse removal or sewer service
regarding the mortgaged Property, (d) rentals of equipment, if any, used in
the operation by or on behalf of Mortgagor regarding the mortgaged
Property, and/or (e) parking or similar services or rights regarding the
mortgaged Property.
OPTIONS. Any and all present and future options to sell or to lease the
mortgaged Property, or any interests therein.
CONTRACT RIGHTS. To the extent assignable and/or transferrable, any and all
of Mortgagor's present and future contract rights, instruments, documents,
and general intangibles necessary for use or useful in connection with the
ownership and operation of all or any part of the mortgaged Property,
whether now existing or hereafter created, or otherwise acquired by
Mortgagor, and all liens, security interests, guaranties, remedies,
privileges and other rights pertaining thereto, and all rights and remedies
of any kind forming the subject matter thereof.
REPRESENTATIONS AND WARRANTIES CONCERNING RIGHTS. Mortgagor represents and
warrants that: (a) Mortgagor is and/or will be the lawful owner of all of the
Rights; (b) Mortgagor has the right to collaterally assign and pledge all such
Rights to Mortgagee; (c) Mortgagor has not granted any previous security
interests and has not otherwise encumbered any of Mortgagor's Rights; (d) to
the extent applicable, all of Mortgagor's Rights that consist of or give rise
to obligations of third parties, represent and/or will at all times continue to
represent bona fide obligations of the obligors thereunder, free of any offset,
compensation, deduction or counterclaim. The collateral assignment and pledge
of Mortgagor's Rights are further binding upon Mortgagor, as well as Mortgagor's
heirs, successors, representatives and assigns, and are legally enforceable in
accordance with the foregoing terms and conditions.
ADDITIONAL OBLIGATIONS OF MORTGAGOR WITH REGARD TO COLLATERALLY ASSIGNED AND
PLEDGED RIGHTS. Mortgagor additionally agrees:
NO SALE OR ASSIGNMENT OF RIGHTS. So long as this Mortgage remains in
effect, Mortgagor will not, without the prior written consent of Mortgagee,
sell, transfer, forego, assign, pledge, or create or permit to exist any
Encumbrance in or against any of Mortgagor's Rights, in favor of any person
other than Mortgagee.
NO SETTLEMENT OR COMPROMISE. Mortgagor shall not, without the prior written
consent of Mortgagee, compromise, settle, adjust or extend payment under or
with regard to any of Mortgagor's Rights subject hereto.
BOOKS AND RECORDS. Mortgagor will keep proper books and records with regard
to Mortgagor's business activities and the Rights, in accordance with
generally accepted accounting principles, applied on a consistent basis
throughout, which books and records shall at all reasonable times be open
to inspection and copying by Mortgagee or its designated agents. Mortgagee
shall also have the right to inspect Mortgagor's books and records, and to
discuss Mortgagor's affairs and finances with Mortgagor's officers and
representatives, at such reasonable times as Mortgagee may designate.
NOTICE TO OBLIGORS. Upon request by Mortgagee, Mortgagor will immediately
notify individual obligors and debtors under Mortgagor's Rights, advising
such obligors and debtors of the fact that their respective agreements
and/or obligations have been collaterally assigned and pledged to
Mortgagee. In the event that Mortgagor should fail to provide such notices
for any reason upon request by Mortgagee, Mortgagor agrees that Mortgagee
may forward appropriate notices to such obligors and debtors, either in
Mortgagee's name or the name of Mortgagor, Mortgagee or Mortgagee's agents
may periodically contact individual obligors and debtors to verity the
amounts then owing under such obligations, to determine whether such
obligors and debtors have any offsets or counterclaims against Mortgagor,
and to inquire about such other matters as Mortgagee may deem necessary or
desirable.
PROTECTION OF RIGHTS. Mortgagor will at all times protect and preserve all
of Mortgagor's Rights.
NOTICE OF CHANGE OF NAMES. Mortgagor will promptly notify Mortgagee of any
change in Mortgagor's name, including any change to the assumed business
names of Mortgagor. Mortgagor will also promptly notify Mortgagee of any
change in Mortgagor's social security number or employer identification
number. Mortgagor further agrees to notify Mortgagee in writing prior to
any change in address or location of Mortgagor's principal governance
office.
EVENTS OF DEFAULT. The following actions or inactions or both shall constitute
Events of Default under this Mortgage:
DEFAULT UNDER LOAN AGREEMENT. Should an event of default occur or exist
under the terms of Mortgagor's Loan Agreement in favor of Lender.
DEFAULT UNDER THE INDEBTEDNESS. Should Mortgagor default in the payment of
principal or interest under any of the Indebtedness.
DEFAULT UNDER THIS MORTGAGE. Should Mortgagor violate, or fail to comply
fully with any of the terms and conditions of, or default under this
Mortgage.
DEFAULT UNDER OTHER AGREEMENT. Should any event of default occur or exist
under any Related Document which directly or indirectly secures repayment
of any of the Indebtedness.
OTHER DEFAULTS IN FAVOR OF LENDER. Should Mortgagor or any Guarantor
default under any other loan, extension of credit, security agreement or
obligation in favor of Lender.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Mortgagor or any Guarantor
default under any loan, extension of credit, security agreement, purchase
or sales agreement, or any other agreement, in favor of any other creditor
or person that may materially affect any of Mortgagor's property, or
Mortgagor's or any Guarantor's ability to perform their respective
obligations under this Mortgage, or any Related Document, or pertaining to
the Indebtedness.
INSOLVENCY. Should the suspension, failure or insolvency, however
evidenced, of Mortgagor or any Guarantor occur or exist.
READJUSTMENT OF INDEBTEDNESS. Should proceedings for readjustment of
indebtedness, reorganization, composition or extension under any insolvency
law be brought by or against Mortgagor or any Guarantor.
ASSIGNMENT FOR BENEFIT OF CREDITORS. Should Mortgagor or any Guarantor file
proceedings for a respite or make a general assignment for the benefit of
creditors.
RECEIVERSHIP. Should a receiver of all or any part of Mortgagors property,
or the property of any Guarantor, be applied for or appointed.
DISSOLUTION PROCEEDINGS. Should proceedings for the dissolution or
appointment of a liquidator of Mortgagor or any Guarantor be commenced.
FAILURE TO PAY ADDITIONAL ADVANCES. Should Mortgagor fail to pay any
Additional Advance, together with interest thereon, as provided in this
Mortgage, upon demand by Lender.
FALSE STATEMENTS. Should any representation or warranty of Mortgagor or any
Guarantor made in connection with the indebtedness prove to be incorrect or
misleading in any respect.
INSECURITY. Should Lender deem itself to be insecure with regard to
repayment of the indebtedness.
MORTGAGEE'S RIGHTS UPON DEFAULT. Should one or more Events of Default occur or
exist under this Mortgage, as provided above, Mortgagee at its option, may
exercise any one or more of the following rights and remedies, in addition to
any other rights and remedies provided by law:
ACCELERATION; FORECLOSURE. Mortgagee shall have the right, at its sole
option, to accelerate the maturity and demand immediate payment in full
of any and all of the indebtedness. Mortgagee shall have the additional
right, again at its sole option, to declare the aforesaid Note to be
immediately due and payable, in principal, interest cost and attorney's
fees. Mortgagee shall then have the right to commence appropriate
foreclosure proceedings against the mortgaged Property and against
Mortgagor's Rights as provided in this Mortgage.
SEIZURE AND SALE OF MORTGAGED PROPERTY. In the event that Mortgagee elect
to commence appropriate Louisiana foreclosure proceedings under this
Mortgage, Mortgagee may cause the mortgaged Property, or any part or parts
thereof, to be immediately seized and sold, whether in term of court or in
vacation, under ordinary or executory process, in accordance with
applicable Louisiana law, to the highest bidder for cash, with or without
appraisement and without the necessity of making additional demand upon or
notifying Mortgagor or placing Mortgagor in default, all of which are
expressly waived.
CONFESSION OF JUDGMENT. For purposes of foreclosure under Louisiana
executory process procedures, Mortgagor confesses judgment and acknowledges
to be indebted unto and in favor of Mortgagee, up to the full amount of the
Note, in principal, Interest, costs, expenses, attorneys' fees and other
fees and charges. Mortgagor further confesses judgment and acknowledges to
be indebted unto and in favor of Mortgagee in the amount of all Additional
Advances that Mortgagee may make on Mortgagor's behalf pursuant to this
Mortgage, together with interest thereon, up to a maximum of two (2) times
the face amount of the aforesaid Note. To the extent permitted under
applicable Louisiana law, Mortgagor additionally waives: (a) the benefit of
appraisal as provided in Articles 2332, 2336, 2723 and 2724 of the
Louisiana Code of Civil Procedure, and all other laws with regard to
appraisal upon judicial sale: (b) the demand and three (3) days' delay as
provided under Article 2639 and 2724
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07-14-1995 MORTGAGE PAGE 5
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the Louisiana Code of Civil Procedure; (c) the notice of seizure as
provided under Articles 2293 and 2721 of the Louisiana Code of Civil
Procedure; (d) the three (3) days' delay provided under Articles 2331 and
2722 of the Louisiana Code of Civil Procedure; and (e) all other benefits
provided under Articles 2331, 2722 and 2723 of the Louisiana Code of Civil
Procedure and all other Articles not specifically mentioned above.
KEEPER. Should any or all of the mortgaged Property be seized as an
incident to an action for the recognition or enforcement of this Mortgage,
by executory process, sequestration, attachment, writ of fiori facias or
otherwise, Mortgagor hereby agrees that the court issuing any such order
shall, if requested by Mortgagee, appoint Mortgagee, or any agent
designated by Mortgagee, or any person or entity named by Mortgagee at the
time such seizure is requested, or any time thereafter, as Keeper of the
mortgaged Property as provided under La. R.S. 9:5136, et seq. Such a Keeper
shall be entitled to reasonable compensation. Mortgagor agrees to pay the
reasonable fees of such Keeper, which are hereby fixed at $150.00 per hour,
which compensation to the Keeper shall also be secured by this Mortgage in
the form of an Additional Advance as provided herein.
DECLARATION OF FACT. Should it become necessary for Mortgagee to foreclose
under this Mortgage, all declarations of fact, which are made under an
authentic act before a Notary Public in the presence of two witnesses, by a
person declaring such facts to lie within his or her knowledge, shall
constitute authentic evidence for purposes of executory process and also
for purposes of La. R.S. 9:3509.1, La. R.S. 9:3504(D)(6) and La. R.S. 10:9-
508, where applicable.
SEPARATE SALE OF MORTGAGOR'S RIGHTS FOLLOWING DEFAULT. Should one or more
Events of Default occur or exist under this Mortgage, Mortgagee shall have
the additional right, at its sole option, to separately sell the aforesaid
Rights, or any part or parts thereof, at private or public sale, at such
price or prices as Mortgagee may deem best, either for cash or for any
other compensation, or on credit, or for future delivery, without the
assumption of any credit risk. The sale of the aforesaid Rights may be
without appraisement, the benefit of which is also expressly waived by
Mortgagor. Mortgagee may exercise any other remedies with regard to
Mortgagor's Rights as may be authorized under the Louisiana Commercial Laws
(La. R.S. 10:9-101, et seq.).
AUTOMATIC TRANSFER OF RIGHTS. In the event of foreclosure under this
Mortgage, or other transfer of title or assignment of the mortgaged
Property, or any part or parts thereof, in lieu of payment of the
Indebtedness, whether in whole or in part, all policies of insurance and
other Rights applicable to the foreclosed upon or transferred Property
shall automatically inure to the benefit of and shall pass to the
purchaser(s) or transferee(s) thereof, subject to the rights of the
purchaser(s) or transferee(s) to reject such insurance coverage and/or
Rights at its or their sole option and election.
SPECIFIC PERFORMANCE. Mortgagee may, in addition to the foregoing remedies,
or in lieu thereof, in Mortgagee's sole discretion, commence an appropriate
action against Mortgagor seeking specific performance of any covenant
contained herein, or in aid of the execution or enforcement of any power
herein granted.
CUMULATIVE REMEDIES. Mortgagee's remedies as provided herein shall be
cumulative in nature and nothing under this Mortgage shall be construed as
to limit or restrict the options and remedies available to Mortgagee
following any Event of Default, or to in any way limit or restrict the
rights and ability of Mortgagee to proceed directly against Mortgagor
and/or against any guarantor, surety or endorser of the Indebtedness, or to
proceed against other collateral directly or indirectly securing any such
Indebtedness.
MORTGAGEE'S RIGHT TO DIRECTLY COLLECT AND RECEIVE PROCEEDS AND PAYMENTS BEFORE
OR AFTER DEFAULT. Mortgagee shall have the right, at its sole option and
election, at any time, whether or not one or more Events of Default than exist
under this Mortgage, to directly collect and receive all proceeds and/or
payments arising under or in any way accruing from Mortgagor's Rights, as such
amounts become due and payable. In order to permit the foregoing, Mortgagor
unconditionally agrees to deliver to Mortgagee, immediately following demand,
any and all of Mortgagor's records, ledger sheets, and other documentation.
In the form requested by Mortgagee, with regard to Mortgagor's Rights and any
and all proceeds and/or payments applicable thereto.
Mortgagee shall have the further right, whether or not an Event of Default than
exists under this Mortgage, where appropriate and within Mortgagee's sole
discretion, to file suit, either in Mortgagee's own name or in the name of
Mortgagor, to collect any and all proceeds and payments that may then and/or in
the future be due and owing under and/or as a result of such rights. Where it is
necessary for Mortgagee to attempt to collect any such proceeds and/or payments
from the obligors therefor, Mortgagee may compromise, settle, extend, or renew
for any period (whether or not longer than the original period) any obligation
or indebtedness thereunder or evidenced thereby, or surrender, release, or
exchange all or any part of said obligation or Indebtedness, without affecting
the liability of Mortgagor under this Mortgage or under the Indebtedness. To
that end, Mortgagor hereby irrevocably constitutes and appoints Mortgagee as its
attorney-in-fact, coupled with an interest and with full power of substitution,
to take any and all such actions and any and all other actions permitted hereby,
either in the name of Mortgagor or Mortgagee.
PROTECTION OF MORTGAGEE'S SECURITY RIGHTS. Mortgagor will be fully responsible
for any losses that Mortgagee may suffer as a result of anyone other than
Mortgagee asserting any rights or interest in or to the mortgaged Property
and/or Mortgagor's Rights collaterally assigned and pledged hereunder. Mortgagor
agrees to appear in and to defend all actions or proceedings purporting to
affect Mortgagee's security interests in any of the Property and/or Rights
subject to this Mortgage and any of the rights and powers granted Mortgages
hereunder. In the event that Mortgagor fails to do what is required of it under
this Mortgage, or if any action or proceeding is commenced narring Mortgagee as
a party or affecting Mortgagee's security interests or the rights and powers
granted under this Mortgage, then Mortgagee may, without releasing Mortgagor
from any of its obligations under the Mortgage, do whatever Mortgagee believes
to be necessary and proper within its sole discretion to protect the security of
this Mortgage, including without limitation making Additional Advances on
Mortgagor's behalf as provided herein. Should the reappraisal of the mortgaged
Property occur, whether to comply with appropriate regulatory requirements or
otherwise, Mortgagor agrees to pay the costs of such appraisal or reappraisals
or to reimburse Mortgagee for the costs thereof.
INDEMNIFICATION OF MORTGAGEE. Mortgagor agrees to indemnity, to defend and to
save and hold Mortgagee harmless from any and all claims, suits, obligations,
damages, losses, costs, expenses (inducing, without limitation, Mortgagee's
attorney's fees), demands, liabilities, penalties, fines and forfeitures of any
nature whatsoever that may be asserted against or incurred by Mortgagee, its
officers, directors, employees, and agents arising out of or in any manner
occasioned by this Mortgage and the exercise of the rights and remedies granted
Mortgages hereunder. The foregoing indemnity provisions shall survive the
cancellation of this Mortgage as to all matters arising or accruing prior to
such cancellation and the foregoing indemnity shall survive in the event that
Mortgagee elects to exercise any of the remedies as provided under this Mortgage
following default hereunder.
EXECUTION OF ADDITIONAL DOCUMENTS. Mortgagor agrees to execute all additional
documents, instruments and agreements that Mortgagee may deem to be necessary
and proper, within its sole discretion, in form and substance satisfactory to
Mortgagee, to keep this Mortgage in effect, to better reflect the true intent of
this Mortgage, and to consummate fully all of the transactions contemplated
hereby and by any other agreement, instrument or document heretofore, now or at
any time or times hereafter executed by Mortgagor and delivered to Mortgagee.
Mortgagor further agrees to execute whatever acknowledgements, and to furnish
Mortgagee with such other security, as Mortgagee may require prior to the date
on which repayment under the aforesaid pledged Note may be or become barred by
any applicable statute of limitations or prescriptive period.
INSPECTION; AUDITS. Mortgagee and its agents may periodically enter upon
Mortgagor's premises at reasonable hours and inspect the mortgaged Property.
Mortgagee and its agents may also periodically conduct audits of Mortgagor's
books and records that in any way pertain to the mortgaged Property, the
foregoing Rights and any part or parts thereof.
APPLICATION OF PAYMENTS. Mortgagor agrees that all payments and other sums and
amounts received by Mortgagee under the indebtedness or under this Mortgage,
shall be applied: first, to reimburse Mortgagee for its costs of collecting the
same (including but not limited to, reimbursement of Mortgagor's reasonable
attorney's fees); second, to the repayment of interest on all Additional
Advances that Mortgagee may have made on Mortgagor's behalf pursuant to this
Mortgage; third, to the payment of principal of all such Additional Advances;
and finally, to the payment of principal and interest on the indebtedness then
outstanding, which may be applied in such order and priority as Mortgagee may
determine within its sole discretion.
TAXATION. In the event that there should be any change in law with regard to
taxation of mortgages or the debts they secure, Mortgagor agrees to pay any
taxes, assessments or charges that may be imposed upon Mortgagee as a result of
this Mortgage.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Mortgage:
WAIVERS. In granting this Mortgage, Mortgagor waives any homestead and
other exemptions from seizure with regard to the mortgaged Property to
which Mortgagor may be entitled under the laws of the State of Louisiana.
EFFECT OF WAIVERS. Any failure or delay on the part of the Mortgagee to
exercise any of the rights and remedies granted under this Mortgage, or
under Mortgagor's pledge agreement or agreements, or under Mortgagor's
pledged Note, or under any other agreement or agreements by and between
Mortgagor and Mortgagee, shall not have the affect of waiving any of
Mortgagee's rights and remedies. Any partial exercise of any rights and
remedies granted to Mortgagee shall furthermore not constitute a waiver of
any of Mortgagee's other rights and remedies; it being Mortgagor's intent
and agreement that all of Mortgagee's rights and remedies shall be
cumulative in nature. Furthermore, any failure on the part of Mortgagee at
any time or times hereafter to require strict performance by Mortgagor of
any of the provisions, warranties, terms and conditions contained herein or
in any other agreement, document or instrument now or hereafter executed by
Mortgagor and delivered to Mortgagee, shall not waive, affect, or diminish
the rights of Mortgagee to thereafter demand strict compliance and
performance therewith and with respect to all other provisions, warranties,
terms and conditions contained herein or therein. None of the warranties,
conditions, provisions and terms contained in this Mortgage or any other
agreement document or instrument now or hereafter executed by Mortgagor and
delivered to Mortgagee, shall be deemed to have been waived by any act or
knowledge of Mortgagee, its agents, directors, officers or employees; but
only by an Instrument in writing specifying such waiver, signed by a duly
authorized officer of Mortgagee and delivered to Mortgagor. A waiver or
forbearance on the part
<PAGE>
07-14-1995 MORTGAGE PAGE 6
LOAN NO (CONTINUED)
================================================================================
of Mortgagee as to one Event of Default shall not constitute a waiver or
forbearance as to any other or subsequent default.
SUCCESSORS AND ASSIGNS BOUND; SOLIDARY LIABILITY. Mortgagor's obligations
and agreements under this Mortgage shall be binding upon Mortgagor's
successors, heirs, legatees, devisees, administrators, executors and
assigns. In the event that there is more than one Mortgagor under this
Mortgage, all of the agreements and obligations made and/or incurred by
Mortgagors under this Mortgage shall be on a "solidary' or "joint and
several" basis. Mortgagors further agree that any Mortgagor acting alone
and/or with others may request and obtain loan advances and other
extensions of credit secured by the pledge of the aforesaid Note, and
thereby indirectly secured by this Mortgage, without the further agreement
and concurrence of all of the Mortgagors.
CAPTION HEADINGS. Caption headings of the sections of this Mortgage are for
convenience purposes only and are not to be used to interpret or to define
their provisions. In this Mortgage, whenever the context so requires, the
singular includes the plural and the plural also includes the singular.
GOVERNING LAW. This Mortgage shall be governed and construed in accordance
with the laws of the State of Louisiana.
SEVERABILITY. If any provision of this Mortgage is held to be invalid,
illegal or unenforceable by any court, that provision shall be deleted from
this Mortgage and the balance of this Mortgage shall be interpreted as it
the deleted provision never existed.
SOLE DISCRETION OF MORTGAGEE. Whenever Mortgagee's consent or approval is
required under this Mortgage, the decision as to whether or not to consent
or approve shall be in the sole and exclusive discretion of Mortgagee, and
Mortgagee's decision shall be final and conclusive.
ADDITIONAL PROVISION. The section of this Mortgage captioned "Compliance with
Environmental Laws" is hereby amended (1) to delete the phrase "hazardous or
toxic wastes and substances" from the first paragraph of that section and to
substitute therefor the phrase "solid waste, hazardous substances, hazardous
waste and any other substance subject to federal, state, or local regulation or
control" and (2) to delete the phrase "and to remove the hazardous waste and
substances, and the cost of such testing and removal shall constitute an
Additional Advance under, and shall be secured by this Mortgage" from the second
paragraph of that section. Further, anything in this Mortgage or otherwise to
the contrary notwithstanding, to the extent such action might involve Mortgagee
in any liability under any environmental or environmentally related law, rule,
regulation, judgement, decision, decree, or order, Mortgagee shall have no right
to enter the mortgaged property to conduct environmental testing.
WAIVER OF CERTIFICATES. The parties to this Mortgage hereby waive the
production of mortgage, conveyance, tax, paving, chattel mortgage, assignment
of accounts, and all other certificates and relieve and release the Notary
before whom this Mortgage was passed from all responsibilities and liabilities
in connection therewith.
POSSESSION OF PLEDGED NOTE. The parties to this Mortgage hereby agree that
Mortgagor's possession of the aforesaid Note, at any time and for any reason,
shall not have any affect upon the continued validity and/or enforceability of
this Mortgage, and that Mortgagor may pledge and repledge the aforesaid Note,
from time to time, one or more times within Mortgagor's sole election and
discretion, whether to Mortgagee or to any subsequent holder or holders of the
aforesaid Note.
INTERVENTION, AND NOW, INTO THIS MORTGAGE INTERVENES Wade Carwile, a resident
of East Baton Rouge Parish, LA, who accepts this Mortgage on behalf of Lender
and any future holder(s) of the Note.
WAIVE JURY. Mortgagor additionally irrevocably waives any right to, jury trial
of any and all actions arising out of or in connection with this Mortgage or
the Indebtedness hereby secured.
THUS DONE AND PASSED, on the day, month and year first written above, in the
presence of the undersigned Notary and the undersigned competent witnesses,
who hereunto sign their names with Mortgagor after reading of the whole.
WITNESSES: MORTGAGOR:
/s/ Kim Brecheen Travis Boats & Motors Baton Rouge, Inc.
- ------------------------
/s/ Cornelius James McManus
/s/ Tara Loudermill By:-----------------------------------
- ------------------------ Cornelius James McManus a/k/a Jim
Jim McManus, Vice President
INTERVENOR ON BEHALF OF MORTGAGEE:
/s/ Wade Carwile
----------------------
Wade Carwile
/s/ Richard C. Crawford
---------------------------
Richard C. Crawford
NOTARY PUBLIC
================================================================================
<PAGE>
CORPORATE RESOLUTION TO BORROW
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$480,000.00 07-14-1995 07-14-2002 854
- ------------------------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular
loan or item.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Borrower: Travis Boats & Motors Lender: Hibernia National Bank TIN:
Baton Rouge, Inc. (TIN: 72-0210640
721224466) Loan Administration Department
14309 Florida Boulevard 440 Third Street
Baton Rouge, LA 70819 Baton Rouge, LA 70801
================================================================================
I, the undersigned Secretary or Assistant Secretary of Travis Boats &
Motors Baton Rouge, Inc. (the "Corporation"), HEREBY CERTIFY that the
Corporation is organized and existing under and by virtue of the laws of
the State of Louisiana as a corporation for profit, with its principal
office at 14369 Florida Boulevard, Baton Rouge, LA 70819, and is duly
authorized to transact business in the State of Louisiana.
I FURTHER CERTIFY that at a meeting of the Directors of the Corporation (or
by other duly authorized corporate action in lieu of a meeting), due called
and held on July 14, 1995, at which a quorum was present and voting, the
following resolutions were adopted:
BE IT RESOLVED, that any one (1) of the following named officers,
employees, or agents of this Corporation whose actual signature is shown
below,
<TABLE>
<CAPTION>
NAME POSITION ACTUAL SIGNATURE
---- -------- ----------------
<S> <C> <C>
Cornelius James McManus a/k/a Jim McManus Vice President /s/ Jim McManus
----------------
</TABLE>
be and he or she is hereby specifically authorized, empowered and directed,
but without limitation, to the following for and on behalf of and in the
name of the Corporation:
LOAN. To negotiate and obtain a loan from Lender in the amount of Four
Hundred Eighty Thousand & 00/100 Dollars (U,S. $480,000.00) and such
terms and conditions as said officers or employees may agree to in
their sole discretion, and for such additional sum or sums of money as
their judgment should be borrowed, without limitation.
LOAN AGREEMENT. To negotiate and execute a loan agreement in favor of
Lender governing the aforesaid loan, containing such terms and
conditions, affirmative and negative covenants and other obligations
as said officers or employees may agree to in their sole discretion.
NOTE. To execute and deliver to Lender a promissory note evidencing
the Corporation's obligations and indebtedness under the aforesaid
loan.
GRANT SECURITY. To mortgage, pledge, hypothecate, or otherwise
encumber and deliver to Lender, as security for the payment of any
loans, obtained, any promissory notes so executed, or any other or
further indebtedness of the Corporation to Lender at any time owing,
however the same may be evidenced, any property now or hereafter
belonging to the Corporation or in which the Corporation now or
hereafter may have an interest, including without limitation all real
(immovable) property and all personal (movable) property and rights of
the Corporation. Such property may be mortgaged, pledged,
hypothecated, encumbered or otherwise secured at the time each loans
are obtained or such indebtedness incurred, or at any other time or
times, and may be other in addition to or in lieu of any property
theretofore mortgaged, pledged, hypothecated encumbered or otherwise
secured.
SECURITY AGREEMENTS. To execute and deliver one or more mortgagee,
collateral mortgagee, pledge agreements and other security agreement
in favor of Lender to secure the prompt and punctual payment and
satisfaction of the aforesaid loan, under which said officers or
employees grant a continuing security interest in the property
and/or the rights of the Corporation as more fully described therein,
which mortgages, collateral mortgages, pledge agreements and other
security agreements may contain provisions for foreclosure under
Louisiana executory process procedures, confessions of judgment,
waivers of appraisal and other rights and notices, all of which
remedies upon default are specifically consented to by this Board of
Directors.
NEGOTIATE ITEMS. To draw, endorse, and discount with Lender all
drafts, trade acceptance promissory notes, or other evidences
indebtedness payable to or belonging to the Corporation or in which
the Corporation may have an interest and either to receive cash for
the ???? or to cause such proceeds to be credited to the account of
the Corporation with Lender, or to cause such other disposition of the
process derived therefrom as they may deem advisable.
FURTHER ACTS. In the case of multiple advance loans, to designate
additional or alternate individuals as being authorized to request
advance thereunder, and in all cases, to do and perform such other
acts and things, to pay any and at fees and costs, and to execute and
deliver such other documents and agreements. Including agreements
waiving the right to a trial by jury, as he or she may in his or her
discretion do reasonably necessary or proper in order to carry into
effect the provisions of those Resolutions.
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
resolutions and performed prior to the passage of these resolutions are hereby
ratified and approved, that those Resolutions shall remain in full force and
effect and Lender may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Lender. Any such notice
shall not affect any of the Corporation's agreement commitments in affect at
the time notice is given.
NOTICES TO LENDER. The corporation will notify Lender in writing at Lender's
address shown above (or such other addresses as Lender ???? designate from time
to time) prior to any (a) change in the name of the Corporation, (b) change in
the assumed business name(s) of the Corporation (c) change in the authorized
signer(s), or (d) change in any other aspect of the Corporation that directly or
indirectly relates to any agreements between the Corporation and Lender. No
change in the name of the Corporation will take effect until after Lender has
been notified.
ADDITIONAL DEFINITION OF LOAN. The term "Loan" shall also mean and include that
certain promissory note dated July 14, 1995 executed Borrower in the principal
amount of $70,000.00.
I FURTHER CERTIFY that the officer, employee, or agent named above is duly
elected, appointed, or employed by or for the Corporation, as the ???? may be,
and occupies the position set opposite the name; that the foregoing Resolutions
now stand of record on the books of the Corporation; and the Resolutions are in
full force and effect and have not been modified or revoked in any manner
whatsoever.
IN TESTIMONY WHEREOF, I have hereunto set my hand on July 14, 1995 and attest
that the signatures set opposite the names listed about are their genuine
signatures.
CERTIFIED TO AND ATTESTED BY:
X /s/ June M. McManus
-----------------------------------
Secretary or Assistant Secretary
June M. McManus
X
-----------------------------------
*Note: In case the Secretary or other certifying officer is designated by the
foregoing resolutions as one of the signing officers, this certificate should
also be signed by a second Officer of Director of the Corporation.
================================================================================
<PAGE>
EXHIBIT "A"
One (1) certain lot and one-half (1/2) of a certain lot or parcel of ground
together with all the buidings and improvements thereon, and all of the
rights, ways, privileges, servitudes, appurtenances and advantages
thereunto belonging or in anywise appertaining, situated and lying partly
in what was formerly the 9th Ward and partly in what was formerly the 7th
Ward of the Parish of East Baton Rouge, Louisiana, and designated according
to a map showing the survey of FLORIDA HIGHWAY ACRES, being portions of
Section 4, 5, and 74, T-7-S, R-2-E, in the Parish of East Baton Rouge,
Louisiana, as LOT NUMBER THIRTY-NINE and the WEST ONE-HALF OF LOT FORTY (39
and West 1/2 if 40), said subdivision, said portion of Lot 39 measuring One
Hundred Fifty (150) feet on the north side of the Baton Rouge-Hammond
Highway, by a depth of One Thousand Four Hundred Seventy-Seven and 1/10
(1,477.10) feet between parallel lines, and the said West 1/2 of Lot 40
Measuring Seventy-Five (75) Feet front on the north side of the Baton
Rouge-Hammond Highway by a depth of One Thousand Four Hundred
Seventy-Seven and 1/10 (1,477.10) feet between parallel lines.
TRAVIS BOATS & MOTORS BATON ROUGE, INC.
BY: Cornelius James McManus
--------------------------
Cornelius James McManus, Vice President
Ne Varietur for indentification with an Act of Collateral Mortgage executed
before me this 14th Day of July, 1995.
/s/Richard L. Crawford
-----------------------------------
RICHARD L. CRAWFORD, Notary Public
<PAGE>
EXHIBIT 10.8(h)
ASSIGNMENT OF LEASES AND RENTS
================================================================================
Borrower: Travis Boats & Motors Baton Lender: Hibernia National Bank
Rouge, Inc. (TIN: TIN: 72-0210640
721224466) Loan Administration Department
14389 Florida Boulevard 440 Third Street
Baton Rouge, LA 70819 Baton Rouge, LA 70801
================================================================================
THIS ASSIGNMENT OF LEASES AND RENTS IS DATED JULY 14, 1995, between Travis Boats
& Motors Bator Rouge, Inc., whose address is 14369 Florida Boulevard, Baton
Rouge, LA 70819 (referred to below as "Grantor"); and Hibernia National Bank,
whose address is Loan Administration Department, 440 Third Street, Baton Rouge,
LA 70801 (referred to below as "Lender").
DEFINITIONS. The following words shall have the following meanings when used in
this Assignment. Terms not otherwise defined in this Assignment shall have the
meanings attributed to such terms in the Louisiana Commercial Laws (La. R.S. l0:
9-101, et seq.). All references to dollar amounts shall mean amounts In lawful
money of the United States of America.
ASSIGNMENT. The word "Assignment" means this Assignment of Leases and
Rents between Grantor and Lenders, and includes without limitation all
assignments and security interest provisions relating to the Rents.
COLLATERAL. The word "Collateral" refers individually, collectively and
interchangeably to any and all of Grantor's present and future rights,
interest and remedies in, to and under any and all present and future
Leases, including without limitation, any and all rents, income, profits,
revenues, royalties, bonuses, accounts receivable, cash or security
deposits, advance rentals and other payments and benefits derived or to be
derived from such Leases, of every nature and kind, further including
Grantor's rights to enforce such Leases and to receive and collect payment
and proceeds thereunder.
EVENT OF DEFAULT. The words "Event of Default" mean individually,
collectively, and interchangeably any of the Events of Default set forth
below in the section titled "Events of Default".
GRANTOR. The word "Grantor" means Travis Boats & Motors Baton Rouge, Inc..
INDEBTEDNESS. The word "Indebtedness" means individually, collectively and
interchangeably to any and all present and future loans, advance financial
accommodations and other extensions of credit obtained or to be obtained by
Grantor from Lender, from time to time, one or more times now and in the
future under a certain Commercial Loan Agreement dated July 14, 1995, and
any and all promissory notes evidencing such present and/or future loans,
financial accommodations, or other credit advances, including without
limitation, Grantor's Note to Lender, and any and all amendments thereto
and/or substitutions therefor and/or renewals, extensions or refinancings
thereof, as well as any and all other obligations and liabilities that
Grantor may now and in the future owe to or incur in favor of Lender,
whether direct or indirect or by way of assignment or purchase of a
participation interest, and whether absolute or contingent, liquidated or
unliquidated, voluntary or involuntary, determined or undetermined, due or
to become due, whether individually or with others on a joint, several or
solidary basis, as a principal obligor, or as a surety, of every nature
and kind whatsoever, and whether related or unrelated, or whether committed
or purely discretionary, up to maximum principal amount outstanding at any
one or more times, from time to time, not to exceed U.S. $50,000,000.00,
together with interest costs, expenses, attorneys' fees and other fees and
charges, whether or not any of the Indebtedness may become barred under any
statute limitations or prescriptive period or may become unenforceable or
voidable for any reason.
LEASES. The word "Leases" refers individually, collectively and
interchangeably to all of Assignor's right, title and interest in and to
any and all present and future leases, subleases, tenancies and/or
occupancies affecting all or any part of the Property defined below, as
well as any substitution, amendment, extension or renewal of such leases
and/or lease guaranties which may be executed or which may arise in the
future during the existence of this Assignment.
LENDER. The word "Lender" means Hibernia National Bank TIN: 72-0210640,
its successors and assigns, and any subsequent holder or holders, of the
Note, or any interest therein.
NOTE. The word "Note" means the promissory note or credit agreement dated
July 14, 1995, in the original principal amount of $480,000.00 from Grantor
to Lender, together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of, and substitutions for the promissory
note or agreement.
PROPERTY. The word "Property" means the following described immovable
(real) property specifically described as follows:
SEE ATTACHED EXHIBIT
together with any and all present and future building(s), improvements,
attachments, fixtures, rights, ways, privileges, servitudes and easements
of every type and description, now and/or in the future relating to the
immovable (real) property, and any and all items and fixtures attached
and/or forming integral or component parts of the immovable (real) property
in accordance with the Louisiana Civil Code.
The Real Property or its address is commonly known as 14369 Florida
Boulevard, Baton Rouge, LA 70819.
RELATED DOCUMENTS. The words "Related Documents" mean and include
individually, collectively, interchangeably and without limitation
promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, collateral
mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection with
the Indebtedness.
GRANT OF SECURITY INTEREST. Grantor assigns, pledges and hereby grants Lender a
continuing security interest in the above-described, Collateral to secure the
prompt and punctual payment and satisfaction of the Indebtedness. This
Assignment shall remain in effect until such time as this Assignment and the
security interests created hereby are terminated and cancelled by Lender under a
written cancellation instrument in favor of Lender.
COLLATERAL TO SECURE PRESENT AND FUTURE INDEBTEDNESS. Grantor affirms that its
assignment and pledge of the aforesaid Collateral is intended to and shall
secure any and all present and future Indebtedness in favor of Lender, as may be
outstanding from time to time, one or more times, up to the maximum principal
dollar limitations set forth above, together with interest, costs, expenses,
attorneys' fees and other fees and charged with the continuing preferences
and priorities provided under applicable Louisiana law.
DELIVERY OF DOCUMENTS. Contemporaneous with the execution of this Assignment,
Grantor shall deliver to Lender or Lender's designated agent any and all
documents, Instruments and other writings evidencing or giving rise to the
Collateral. As long as this Assignment remains in effect, Grantor shall
immediately deliver to Lender or to Lender's designated agent any and all future
documents, instruments or other writings applicable or in any way germane to
such Collateral.
NOTICE TO OBLIGORS. Upon request by Lenders, Grantor shall immediately notify
individual lessees, sublessees and/or obligors under the Collateral advising
such lessees, sublessees and/or obligors of the fact that their obligations have
been assigned to Lender. In the event that Grantor should fail to provide such
notice for any reason upon request by Lender, Grantor agrees that Lender may
forward appropriate notices to such lessees, subleases and/or obligors, either
in Lender's name or in the name of Grantor.
GRANTOR'S OBLIGATIONS AS LESSOR. Grantor shall faithfully perform any and all
of Grantor's obligations as lessor or sublessor of the Property, with Grantor
further agreeing not to do, neglect to do, or permit to be done, anything that
may result in the modification, substitution or termination of any such Lease,
or the obligations of any lessee or sublessee, or any other person, or which may
diminish or impair the value of any Lease, or rents provided therein, or the
Interests of Grantor or Lender therein or thereunder. Grantor shall further
immediately notify Lender in writing of any default, substitution, cancellation,
or notice of cancellation under any such Lease. Grantor will not without the
prior written consent of Lender, which consent shall not be unreasonably
withheld: (a) cancel, terminate, or accept a surrender or permit any
substitution, cancellation, termination or surrender of any Lease; (b) modify
any Lease as to reduce the term thereof, or the payments thereunder, or change
any renewal provisions contained therein; commence any summary proceeding
or other action to recover possession of any of the Property, other than a
proceeding brought in good faith resulting from a default by the lessee or
sublessee under the terms and conditions of the Lease; (d) receive or collect,
or permit the receipt or collection of, any rental payments under any Lease
except in accordance with the terms and conditions of the Lease previously
approved by Lender in writing; (e) take any other action with respect to any
Lease that may tend to impair the security of Lender under this Assignment; (f)
lease, sublease, or extend any present Lease other than in the manner provided
for therein, or enter into any future Leases of all or any portion of the
Property except on the base terms reasonably obtainable, under Leases which
shall in all respects be satisfactory to Lender as to the form and substance,
and the credit standing of the respective lessees or sublessees thereunder; or
(g) sell, assign, or otherwise transfer any such Lease.
DEFAULT UNDER GRANTOR'S OBLIGATIONS. Should Grantor for any reason fail to
comply with Grantor"s obligations under the above referenced Collateral,
Lender may make additional advances on Grantor's behalf and/or take such other
action or actions as Lender may deem proper within its sole discretion, to
perform such obligations on Grantor's behalf and to cure and rectify any such
default or defaults and/or to prevent additional defaults on Grantor's part.
All additional sums advanced by Lender for such purposes, together with
interest thereon at the rate provided under the Note.
<PAGE>
14-1995 ASSIGNMENT OF LEASES AND PARTS PAGE
LOAN NO (CONTINUED)
===============================================================================
other instrument(s) evidencing the Indebtedness, shall constitute additional
Indebtedness secured by this Assignment.
EVENTS OF DEFAULT. The following actions or inactions or both shall constitute
Events of Default under this Assignment:
DEFAULT UNDER LOAN AGREEMENT. Should an event of default occur or exist
under the terms of Grantor's Loan Agreement in favor of Lender.
DEFAULT UNDER THE INDEBTEDNESS. Should Grantor default in the payment of
principal or interest under any of the Indebtedness.
DEFAULT UNDER THIS AGREEMENT. Should Grantor violate, or fail to comply
fully with any of the terms and conditions of, or default under this
Assignment.
DEFAULT UNDER OTHER AGREEMENTS. Should any event of default occur or exist
under any Related Document which directly or indirectly secures repayment
of any of the Indebtedness.
OTHER DEFAULTS IN FAVOR OF LENDER. Should Grantor or any Guarantor default
under any other loan, extension of credit, security agreement, or
obligation in favor of Lender.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Grantor or any Guarantor default
under any loan, extension of credit, security agreement, purchase ??? sales
agreement, or any other agreement, in favor of any other creditor or person
that may materially affect any of Grantor's property, or Grantor??? or any
Guarantor's ability to perform their respective obligations under this
Assignment or any Related Document, or pertaining to the Indebtedness.
INSOLVENCY. Should the suspension, failure or insolvency, however
evidenced, of Grantor or any Guarantor occur or exist.
READJUSTMENT OF INDEBTEDNESS. Should proceedings for readjustment of
indebtedness, reorganization, composition or extension under an???
Insolvency law be brought by or against Grantor or any Guarantor.
ASSIGNMENT FOR BENEFIT OF CREDITORS. Should Grantor or any Guarantor file
proceedings for a respite or make a general assignment for the benefit of
creditors.
RECEIVERSHIP. Should a receiver of all or any part of Grantor's property,
or the property of any Guarantor, be applied for or appointed.
DISSOLUTION PROCEEDINGS. Should proceedings for the dissolution or
appointment of a liquidator of Grantor or any Guarantor be commenced.
FALSE STATEMENTS. Should any representation or warranty of Grantor or any
Guarantor made in connection with the Indebtedness prove to be incorrect or
misleading in any respect.
INSECURITY. Should Lender deem itself to be insecure with regard to
repayment of the Indebtedness.
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default and
at any time thereafter, Lender may exercise any one or more of the following
rights and remedies, In addition to any other rights or remedies provided by
law:
LENDER'S RIGHT TO ACCELERATE. Should one or more Events of Default occur
or exist under this Assignment, as provided above, Lender shall have the
right, at its sole option, to accelerate the maturity of and to declare any
and all Indebtedness then owed to Lender to be immediately due and payable.
Lender shall have the further right, again at its sole option, to exercise
and/or pursue any of the rights and remedies granted to Lender under this
assignment or otherwise.
SALE OF COLLATERAL. Subject to any mandatory requirements under applicable
Louisiana law, should any one or more Events of Default occur ??? exist
under this Assignment, as provided above, Lender shall have the right, at
its sole option, to sell or otherwise dispose of and deliver ???
Collateral, or any part or parts thereof, or interests therein, or agree to
do so, in one or more parcels, at private or public sale or sales, at any
exchange or at any of Lender's offices or elsewhere, at such prices and on
such terms as Lender may deem best, for cash or on credit or for future
delivery, without the assumption of any credit risk, and without any
further demand upon Grantor for performance, advertisement, appraisal, or
notice of any kind, all of which are expressly waived to the extent
permitted under applicable law.
Grantor expressly grants to Lender the full and irrevocable power to sell
the Collateral, or any part or parts thereof, in the manner hereinabove
specified without the intervention of any court and without any formalities
other than those provided above. For purposes of selling the Collateral,
Lender is hereby made and constituted the agent and attorney-in-fact of
Grantor, such agency being coupled with an interest. Grantor recognizes
that Lender may not be able to effect a public sale of all or a part of the
Collateral and Lender may be compelled or deem it best to resort to one or
more private sales to a restricted group of purchasers. At any such private
sale, Lender and/or anyone on whose behalf Lender shall act, or anyone
else, may be the purchaser of the Collateral, and any and all of the rights
and interests so sold, and may thereafter hold the same absolutely free of
any claim or right whatsoever, including any right of equity of redemption
of Grantor, anyone claiming through Grantor, and the title acquired by the
purchaser(s) of the Collateral, and any such sale shall be indefeasible as
though such sale had been made in a valid, judicial proceeding. Lender need
not give Grantor more than five (5) days' notice of the time and place of
any such private sale or of the time after which such a private sale may
take place, which notice Grantor hereby deems to be reasonable; provided,
however, that Lender may, at any time and at its sole discretion, and
without notice to Grantor, sell any of the Collateral for which a market
exists at the market price of such Collateral.
SPECIFIC PERFORMANCE. Lenders may, in addition to the foregoing remedies,
or in lieu thereof, in Lender's sole discretion, commence an appropriate
action against Grantor seeking specific performance of any covenant
contained herein or in aid of the execution or enforcement of any power
herein granted.
CUMULATIVE REMEDIES. Lender's Remedies upon any default under this
Assignment shall be cumulative in nature and nothing under this Assignment
shall be construed as to limit or restrict the options and remedies
available to Lender following default, or to in any way limit or restrict
the rights and ability of Lender to proceed directly against Grantor
and/or against any co-makers, guarantors, sureties and/or endorsers of the
indebtedness, and/or to proceed against any other collateral directly or
indirectly securing such Indebtedness.
LENDER'S RIGHT BEFORE OR AFTER DEFAULT TO PROCEEDS AND PAYMENTS. Lender shall
have the additional right, at any time and for any reason, whether or not an
event of default exists under this Assignment, to directly collect and receive
the benefit of all obligations and all proceeds and/or payments assigned to
Lender under this Assignment, as such amounts and/or obligations become due and
payable. In order to permit the foregoing, Grantor unconditionally agrees to
deliver to Lender, immediately following demand, any and all records and other
documentation, in form requested by Lender, with regard to the Collateral.
Grantor further unconditionally agrees that Lender shall have the right to
notify individual lessees, sublessees and/or obligors under such obligations to
pay such proceeds and payments directly to Lender at an address to be designated
by Lender and to do any and all other things as Lender may deem necessary and
proper, within its sole discretion, to carry out the terms and intent of this
Assignment. Lender shall have the further right, where appropriate and within
Lender's sole discretion, to file suit, either in its own name or in the name of
Grantor, to enforce any obligations and/or to collect any and all such proceeds
and payments that may now and in future be due and owing under the Collateral.
Grantor agrees that Lender may compromise or take such other actions, either in
Grantor's name or in the name of Lender, as Lender may deem appropriate within
its sole judgment, with regard to collection and payment of the same, without
affecting the liability of Grantor under this Assignment or under the
Indebtedness secured hereby.
In order to further permit the foregoing, Lender shall have the additional
irrevocable right, coupled with an Interest to: (a) remove any and all of
Grantor's documents, files and records related or pertaining to the Collateral
from any premises where the same shall then be located; (b) at Grantor's sole
cost and expense, use such of Grantor's personnel, supplies and space at
Grantor's place or places of business as may be necessary, with Lender's sole
discretion, to properly administer the Collateral and/or to handle collections
thereon; (c) receive, open and dispose of all mail addressed to Grantor
pertaining to any of the Collateral; (d) notify the postal authorities to change
the address and delivery of mail addressed to Grantor pertaining to any of the
Collateral, to such address as Lender may designate; (e) endorse Grantor's
name on any and all notes, acceptances, checks, drafts, money orders or
other evidence of payment of the Collateral that may come into Lender's
possession, and to deposit or otherwise collect the same, applying such funds to
the unpaid balance of Indebtedness in the manner provided below; (f) prepare and
mail invoices relating to the Collateral; (g) send verifications of the
Collateral to the lessees, sublessees and/or obligors thereunder; and (h)
execute in Grantor's name affidavits and/or notices with regard to any lien
rights available to Grantor under such the Collateral.
GRANTOR'S RECEIPT OF PROCEEDS AND PAYMENTS. In the event that Grantor should,
for any reason, receive any proceeds or payments assigned under this Assignment,
and Grantor should then deposit such proceeds or payments in one or more of
Grantor's deposit accounts, no matter where located, Lender shall have the
additional right following default under this Assignment, to attach any deposit
accounts in which such proceeds or payments were deposited, whether or not such
proceeds or payments were commingled with other funds of Grantor, and whether or
not such proceeds or payments then remain on deposit in such an account or
accounts. To this end, Grantor additionally grants Lender a continuing security
interest in any and all funds that Grantor may now and/or in the future maintain
on deposit with banks, savings and loan associations and other financial
institutions as well as money market accounts with other types of entities, in
which Grantor may at any time deposit any such proceeds or payments.
APPLICATION OF PROCEEDS AND PAYMENTS. Any and all accounts, proceeds and/or
payments that Lender receives and collects, whether resulting from the public or
private sale of the Collateral subject to this Assignment, or as otherwise
provided hereunder, shall be applied first to reimburse Lender for costs of
collecting the same (including, but not limited to, attorneys' fees incurred by
Lender), with the balance being applied to principal. Interest costs,
expenses, attorneys' fees and other fees and charges under the Indebtedness in
such order and with such preferences priorities as Lender shall determine
within its sole discretion. Any remaining amounts shall be returned to Grantor
as its interests may appear.
ASSIGNMENT OF INDEBTEDNESS; TRANSFER OF RIGHTS. Grantor hereby recognizes and
agrees that Lender may assign all or any portion of the
<PAGE>
07-14-1995 ASSIGNMENT OF LEASES AND RENTS PAGE
LOAN NO (CONTINUED)
===============================================================================
Indebtedness to one or more third party creditors. This may Include sales of
participation interests in the Indebtedness to third party creditors. Grantor
specifically agrees and consents to all such transfers and assignments and
further waives any subsequent notice of such transfers or assignments may be
provided under applicable Louisiana law. Grantor additionally agrees that any
and all of Grantor's other and future loans, extensions of credit liabilities
and obligations in favor of such a third party assignee will be secured by the
Collateral transferred to the assignee, subject to the maximum principal dollar
limitation provided above. Grantor further agrees that Lender may transfer all
or any portion of the Collateral to such a third party assignee, in which case
Lender will be fully released from any and all of its obligations and
responsibilities to Grantor with regard to the transferred Collateral. Any third
party creditor to whom the Collateral is transferred will acquire all of
Lender's rights and powers with respect to the transferred Collateral, with
Lender retaining all powers and rights with regard to any of the Collateral
which are not transferred to another party.
REPRESENTATIONS AND WARRANTIES OF GRANTOR. Grantor represents and warrants to
Lender that: (a) Grantor is, and will continue to be, the legal and beneficial
owner of the Collateral; (b) Grantor has the right, power and authority to
enter into this Assignment, to assign and pledge Collateral to Lender to
secure repayment of the Indebtedness; (c) Grantor's execution and delivery
of this Assignment and Grantor's performance hereunder, will not result in any
violation of any provision of Grantor's Articles of Incorporation or Bylaws or
violate or constitute a default under terms of any agreement, indenture or
other instrument, license, judgment, degree, order, law, statute, ordinance or
other governmental rule regulation applicable to the Collateral or any of
Grantor's property; (d) Grantor has not made any previous assignments or
pledges or otherwise encumbered any of the Collateral: (e) upon the proper
filing of this Assignment, this Assignment shall create a valid first lien in
favor of Lender upon and perfect a security interest in, such Collateral,
subject to no prior security interest, lien, charge, encumbrance or agreement
purporting to grant any third party a security interest in any of the
Collateral; (f) such Collateral represents and/or will represent bona fide
obligations of the lessees, sublessees and/or other obligors thereunder, free of
any offset, compensation, deduction or counterclaim; (g) such Collateral is and
will continue to be in full compliance with all applicable state and federal
laws and regulations; and (h) this Assignment is binding upon Grantor, as well
as Grantor's heirs, successors, representatives and assigns, and is legally
enforceable in accordance with its terms. The foregoing representations and
warranties, and other representations and warranties set forth in this
Assignment, shall be continuing in nature and shall remain in full force and
effect until such time as this Assignment is cancelled in the manner provided
hereinabove.
PROTECTION OF LENDER'S SECURITY INTERESTS. Grantor will be fully responsible
for any losses that Lender may suffer as a result of anyone other than Lender
asserting any rights or interest in or to all or any part of the Collateral.
Grantor agrees to appear in and to defend all actions of proceedings purporting
to affect Lender's security interests in any of the Collateral subject to this
Assignment and any of the rights and powers granted Lender hereunder. In the
event that Grantor fails to do what is required of it under this Assignment, or
if any action or proceeding is commenced naming Lender as a party or affecting
Lender's security interests in the Collateral or the rights and powers granted
to Lender under this Assignment, then Lender may, without demand upon Grantor
and without releasing Grantor from any of its obligations under this Assignment,
do whatever Lender believes is necessary and proper within its sole discretion
to protect the security of this Assignment. Grantor agrees to reimburse Lender
for its expenses associated therewith, including without limitation, Lender's
attorneys' fees, which additional costs and expenses shall be secured by this
Assignment.
INDEMNIFICATION OF LENDER. Grantor agrees to Indemnify, defend, save and hold
Lender harmless from any and all claims, losses, costs, expenses (including,
without limitation, Lender's attorney's fees), demands, liabilities, penalties,
fines and forfeiture of any nature whatsoever which may be asserted against or
incurred by Lender arising out of or in any manner occasioned by this Assignment
or any rights conferred upon Lender, hereunder. The foregoing Indemnification
shall survive the cancellation of this Assignment as to all matters arising or
accruing prior to such cancellation and the foregoing indemnification shall
further survive in the event that Lender elects to exercise any of the remedies
as provided under this Assignment.
ADDITIONAL OBLIGATIONS OF GRANTOR. The following shall constitute additional
obligations of Grantor under this Assignment:
ADDITIONAL COLLATERAL. In the event that any of the Collateral should
become unsatisfactory to Lender for any reason, Grantor agrees to
immediately provide Lender with additional collateral security as may then
be acceptable to Lender.
NO SALE OR ENCUMBRANCE. As long as this Assignment remains in effect,
Grantor unconditionally agrees not sell, assign, pledge or create or permit
to exist any lien or security Interest in or against any of the Collateral
in favor of any person or entity other than Lender.
NO SETTLEMENT OR COMPROMISE. Grantor will not, without the prior written
consent of Lender, compromise, settle, adjust or extend any of the
Collateral.
BOOKS AND RECORDS. Grantor will keep proper books and records with regard
to Grantor's business activities and the Collateral, which books and
records shall at all times be open to inspection and copying by Lender or
its designated agent. Lender shall also have the right to inspect Grantor's
books and records, and to discuss Grantor's affairs and finances with
Grantor at such reasonable times as Lender may designate.
VERIFICATIONS. Lender or Lender's agents may periodically contact
individual lessees, sublessees and/or obligors whose obligations have been
assigned and pledged hereunder in order to verify such obligations,
determine whether such lessees, sublessees and/or obligors have any offsets
or counterclaims against Grantor, and with respect to such other matters
about which Lender may inquire.
NOTIFICATION OF LENDER. Grantor shall promptly deliver to Lender all
written notices, and shall promptly give Lender written notice of any other
notices received by Grantor, with respect to the Collateral, and Lender
will promptly give like notice to Grantor of such notices received by
Lender or its nominee.
ADDITIONAL DOCUMENTS. Grantor further agrees to execute and deliver to
Lender upon request all additional documents which Lender may deem
necessary and proper, within its sole discretion, to better reflect the
true intent of this Assignment.
LIMITED OBLIGATIONS OF LENDER. Beyond the exercise of reasonable care to assure
the safe custody of any documents relating to the Collateral delivered to
Lender, Lender shall have no duty or liability to preserve any of the Collateral
and shall be relieved of all responsibility upon surrendering to Grantor the
various documents, instruments and other writings relating thereto than in
Lender's possession.
EFFECT OF WAIVERS. Grantor has waived, and/or does by these presents waive,
demand, presentment for payment, protest, notice of protest and notice of
non-payment under any and all of the Indebtedness secured by this Assignment.
Grantor has further waived, and/or does by these presents waive, all pleas of
division and discussion with regard to the Indebtedness and agrees that Grantor
shall remain liable together with all guarantors, endorsers and sureties of the
Indebtedness on a "joint and several" or "solidary" basis. Grantor further
agrees that discharge or release of any person who is or will be liable under
any of the Indebtedness, or the release of any collateral directly or indirectly
securing repayment of the same, shall not have the effect of releasing Grantor,
and/or the Collateral, and/or any other party or parties guaranteeing payment of
the Indebtedness, who shall remain liable to Lender, and/or of releasing any
other collateral that is not expressly released by Lender.
Grantor additionally agrees that Lender's acceptance of payments other than in
accordance with the terms of any agreement or agreements governing repayment of
the Indebtedness, or Lender's subsequent agreement to extend or modify such
repayment terms, shall likewise not have the effect of releasing Grantor and/or
of releasing the Collateral, and/or any other party or parties guaranteeing
payment of the Indebtedness from their respective obligations to Lender, and/or
of releasing any other collateral directly or indirectly securing repayment of
the Indebtedness. In addition, no course of dealing between Grantor and
Lender, nor any failure or delay on the part of the Lender to exercise any of
the rights and remedies granted to Lender under this Assignment or under any
other agreement or agreements by and between Grantor and Lender, shall have the
effect of waiving any of Lender's rights and remedies. Any partial exercise of
any rights and remedies granted to Lender shall furthermore not constitute a
waiver of any of Lender's other rights and remedies, it being Grantor's intent
and agreement that Lender's rights and remedies shall be cumulative in nature.
Grantor further agrees that, should Grantor default under any of the
Indebtedness in favor of Lender, any waiver or forbearance on the part of Lender
shall be binding upon Lender only if the forbearance is in writing.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Assignment.
ACCEPTANCE. This Assignment is accepted by Lender in the State of
Louisiana.
CAPTION HEADINGS. Caption headings of the sections of this Assignment are
for convenience purposes only and are not to be used to interpret or to
define their provisions. In this Assignment, whenever the context so
requires, the singular includes the plural and the plural also includes the
singular.
GOVERNING LAW. This Assignment shall be governed and construed in
accordance with the laws of the State of Louisiana.
POWERS OF ATTORNEY. The various agencies and powers of attorney conveyed
on Lender under this Assignment are granted for purposes of security and
may not be revoked by Grantor until such time as the same are renounced by
Lender.
SEVERABILITY. If any provision of this Assignment is held to be invalid,
illegal or unenforceable by any court, that provision shall be deleted
from this Assignment and the balance of this Assignment shall be
interpreted as if the deleted provision never existed.
SOLE DISCRETION OF LENDER. Whenever Lenders consent or approval is
required under this Assignment, the decision as to whether or not to
consent or approve shall be in the sole and exclusive discretion of Lender,
and Lender's decision shall be final and conclusive.
SUCCESSORS AND ASSIGNS BOUND; SOLIDARY LIABILITY. Grantor's obligations
and agreements under this Assignment shall be binding upon Grantor's
successors, heirs, legatees, devisees, administrators, executors and
assigns. The rights and remedies granted to Lender under this Assignment
shall inure to the benefit of Lender's successors and assigns, as well as
to all subsequent holders of the Indebtedness. In the event that there is
more than one Grantor under this Assignment all of the agreements and
obligations made and/or incurred by Grantors under this Assignment shall be
on a "solidary" or "joint and several" basis, and each Grantor severally
agrees that any Grantor, acting alone or with other
<PAGE>
14-1995 ASSIGNMENT OF LEASES AND RENTS PAGE
LOAN NO (CONTINUED)
===============================================================================
Grantors agree, concur or consent to each such additional loan or other
extension of credit.
ADDITIONAL DEFINITION OF NOTE. The word "Note" shall also mean and include
the notes or credit agreements dated July 14, 1995 in the principal amount
of $70,000.00, dated May 30, 1995 in the principal amount of $800,000.00
and dated May 30, 1995 in the principal amount of $100,000.00, from Grantor
to Lender, together with all substitutions or replacements notes therefor,
as well as all renewals, extensions modifications, refinancings,
consolidations and substitutions of and for the notes or credit agreements.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS ASSIGNMENT OF LEASES
AND RENTS, AND GRANTOR AGREE TO ITS TERMS.
GRANTOR:
Travis Boats & Motors Baton Rouge, Inc.
By:/s/ Cornelius James McManus
-----------------------------------------------
Cornelius James McManus a/k/a Jim McManus, Vice President
================================================================================
<PAGE>
One (1) certain lot and one-half (1/2) of a certain lot or parcel of ground
together with all the buildings and improvements thereon, and all of the rights,
ways, privileges, servitudes, appurentances and advantages thereunto belonging
or in anywise appertaining, situated and lying partly in what was formerly the
9th Ward and partly in what was formerly the 7th Ward of the Parish of East
Baton Rouge, Louisiana, and designated according to a map showing the survey
of FLORIDA HIGHWAY ACRES, being portions of Section 4, 5 and 74, T-7-S, R-2-E,
in the Parish of East Baton Rouge, Louisiana, as LOT NUMBER THIRTY-NINE and the
WEST ONE-HALF OF LOT FORTY (39 and West 1/2 of 40), said subdivision, said
portion of Lot 39 measuring One Hundred Fifty (150) feet on the north side of
the Baton Rouge-Hammond Highway, by a depth of One Thousand Four Hundred
Seventy-Seven and 1/10 (1,477.10) feet between parallel lines, and the said West
1/2 of Lot 40 Measuring Seventy-Five (75) Feet front on the north side of the
Baton Rouge-Hammond Highway by a depth of One Thousand Four Hundred
Seventy-Seven and 1/10 (1,477.10) feet between parallel lines.
ORIG 439 BNDL 10624
FILED AND RECORDED
EAST BATON ROUGE PARISH, LA.
1995 SEPT 05 PM 01:46:34
FTL BK FOLIO
DOUG WELBORN
CLERK OF COURT & RECORDER
CERTIFIED TRUE COPY
BY [SIGNATURE ILLEGIBLE]
-------------------------
DEPUTY CLERK & RECORDER
<PAGE>
EXHIBIT 10.8(I)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
<S> <C> <C> <C> <C> <C> <C> <C>
$480,000.00 07-14-1995 07-14-2002 854
- -------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
- -------------------------------------------------------------------------------
</TABLE>
Borrower: Travis Boats & Motors Lender: Hibernia National Bank
Baton Rouge, Inc. TIN: 72-0210640
(TIN: 721224466 Loan Administration
14369 Florida Boulevard Department
Baton Rouge, LA 70819 440 Third Street
Baton Rouge, LA 70801
================================================================================
PLEDGE OF COLLATERAL MORTGAGE NOTE UNITED STATES OF AMERICA
BY: Travis Boats & Motors STATE OF LOUISIANA
Baton Rouge, Inc. PARISH OF EAST BATON ROUGE
IN FAVOR OF:
Hibernia National Bank
And Any Future Holder or Holders
BE IT KNOWN, that on the 14th day of July, 1995;
BEFORE ME, the undersigned Notary Public, and in the presence of the
undersigned competent witnesses;
PERSONALLY CAME AND APPEARED:
TRAVIS BOATS & MOTORS BATON ROUGE, INC. TIN:721224466, A CORPORATION
DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS
OF THE STATE OF LOUISIANA, AND HAS ITS REGISTERED OFFICES AT 14369
FLORIDA BOULEVARD, BATON ROUGE, LA 70819, APPEARING HEREIN THROUGH ITS
DULY AUTHORIZED REPRESENTATIVE(S), PURSUANT TO A RESOLUTION OF ITS
BOARD OF DIRECTORS, A CERTIFIED COPY OF WHICH IS ATTACHED HERETO AND
EXPRESSLY MADE A PART HEREOF;
WHO DECLARED THAT:
TERMS AND CONDITIONS:
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement:
AGREEMENT. The word "Agreement" means this Pledge Agreement and all
subsequent amendments to said Agreement as it may be amended or modified
from time to time.
EVENT OF DEFAULT. The words "Event of Default" means individually,
collectively and interchangeably any event of default described below in
the section titled "EVENTS OF DEFAULT."
GRANTOR. The word "Grantor" means individually, collectively and
interchangeably Travis Boats & Motors Baton Rouge, Inc..
INDEBTEDNESS. The word "Indebtedness" means individually, collectively and
interchangeably any and all present and future loans, advances and other
extensions of credit obtained or to be obtained by Grantor from Lender,
from time to time, one or more times, now and in the future, under a
certain Loan Agreement dated July 14, 1995 and any and all promissory notes
evidencing such present and/or future loans or other credit advances,
including without limitation, Grantor's promissory note dated July 14,
1995, in the amount of U.S. $480,000.00, and any and all amendments thereto
and/or substitutions therefor, and/or renewals, extensions and refinancings
thereof, as well as any and all other obligations and liabilities that
Grantor may now and in the future owe to or incur in favor or Lender,
whether direct or indirect, or by way of assignment or purchase of a
participation interest, and whether absolute or contingent, liquidated or
unliquidated, voluntary or involuntary, determined or undetermined, due or
to become due, whether individually or with others on a joint, several
or solidary basis, as a principal obligor or as a surety, of every nature
and kind whatsoever, in principal, interest, costs, expenses, attorneys'
fees and other fees and charges, whether or not any of the indebtedness may
become barred under any statute of limitations or prescriptive period or
may be or become unenforceable or voidable for any reason.
LENDER. The word "Lender" means Hibernia National Bank TIN: 72-0210640,
its successors and assigns, and any subsequent holder or holders of the
Note or any interest therein.
NOTE. The word "Note" means the Collateral Mortgage Note described below.
PLEDGEE. The word "Pledgee" means Hibernia National Bank, its successors
and assigns, and any future holder or holders of the Note or any interest
therein.
COLLATERAL MORTGAGE NOTE. Desiring to secure the prompt and punctual payment and
satisfaction of any and all present and future indebtedness as may be
outstanding from time to time, one or more times, Grantor has executed a certain
Collateral Mortgage Note dated July 14, 1995, in the amount of U.S. $600,000
payable to the order of Bearer , on demand, at the offices of Lender, a copy of
which Note is attached hereto and is expressly made a part hereof by reference.
COLLATERAL MORTGAGE. The aforesaid Note is in turn secured by a Collateral
Mortgage dated even date therewith (Grantor's "Collateral Mortgage"), executed
by Grantor in favor of Hibernia National Bank and any future holder or holders
of the aforesaid Note.
PLEDGE OF NOTE. AND NOW, in order to secure the prompt and punctual payment and
satisfaction of any and all present and future indebtedness, Grantor hereby
pledges, transfers, conveys, delivers and grants a continuing security interest
in the aforesaid Note to and in favor of Lender, together with any and all of
Grantor's rights, title, interest and obligations in, to and under the aforesaid
Note and the Collateral Mortgage securing the same.
CONTINUING SECURITY INTEREST TO SECURE PRESENT AND FUTURE INDEBTEDNESS. Grantor
affirms that Grantor's continuing security interest in the aforesaid Note is
intended to and shall secure any and all present and future indebtedness of
Grantor in favor of Lender, as may be outstanding from time to time, one or more
times, with the continuing preferences and priorities provided under Louisiana
law. Grantor's Collateral Mortgage securing the aforesaid Note shall further be
entitled to the continuing preferences and priorities provided under applicable
Louisiana law.
DURATION. This Agreement shall remain in full force and effect, and Lender shall
have the right to continue to retain possession of the aforesaid Note, until
such time as this Agreement and the security interests created hereby are
terminated and cancelled by Lender under a written cancellation instrument, and
the Note is returned by Lender marked "PAID" or "CANCELLED".
EVENTS OF DEFAULT. The following shall constitute Events of Default under this
Agreement:
DEFAULT UNDER INDEBTEDNESS. Should Grantor default in the payment of
principal and/or interest under any of the Indebtedness.
DEFAULT UNDER LOAN AGREEMENT. Should a default occur or exist under the
terms of the aforesaid Loan Agreement.
DEFAULT UNDER OTHER AGREEMENT(S). Should Grantor fail to comply fully with
any of the terms and conditions of, or default under any other loan
agreement or agreements governing any of the indebtedness.
DEFAULT UNDER MORTGAGE. Should Grantor violate, or fail to comply fully
with any of the terms and conditions of, or default under this Agreement or
the Collateral Mortgage executed in connection herewith, and/or under any
of the additional obligations incurred by Grantor hereunder or thereunder.
OTHER DEFAULTS IN FAVOR OF LENDER. Should Grantor or any guarantor default
under any other extension of credit, or security agreement, or obligation
in favor of Lender.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Grantor or any guarantor default
under any loan, extension or credit, security agreement, or purchase or
sales agreement, in favor of any other creditor or person, that may affect
any of the property subject to the above referenced Collateral Mortgage, or
Grantor's or any guarantor's ability to perform their obligations hereunder
and/or pertaining to the indebtedness.
INSOLVENCY. Should the suspension, failure or insolvency, however
evidenced, of Grantor or any guarantor occur or exist.
READJUSTMENT OF INDEBTEDNESS. Should proceedings for readjustment of
indebtedness, reorganization, composition or extension under any
<PAGE>
07-14-1995 PLEDGE OF COLLATERAL MORTGAGE PAGE 2
LOAN NO (CONTINUED)
================================================================================
Insolvency law, be brought by or against Grantor or any guarantor.
ASSIGNMENT FOR THE BENEFIT OF CREDITORS. Should Grantor or any
guarantor file proceedings for a respite or make a general assignment
for the benefit of creditors.
RECEIVERSHIP. Should a receiver of all or any part of Grantor's
property, or the property of any guarantor be applied for or
appointed.
DISSOLUTION PROCEEDINGS. Should proceedings for the dissolution or
appointment of a liquidator of Grantor or any guarantor, be
commenced.
FALSE STATEMENTS. Should any representation or warranty of Grantor or
any guarantor made in this Agreement, or otherwise in connection with
the obtaining of any indebtedness secured by the aforesaid Note, prove
to be incorrect or misleading in any respect.
INSECURITY. Should Lender deem itself insecure with regard to
repayment of any of the indebtedness.
PLEDGEE'S RIGHTS TO ACCELERATE PAYMENT UPON DEFAULT. Should any one or more
Events of Default occur or exist under this Agreement, as provided above,
Pledgee shall have the right, at its sole option, to accelerate the
maturity of the declare immediately due and payable, in full, any and all
of the Indebtedness secured by the aforesaid Note. Pledgee shall have the
additional right, again at its sole option, to declare the aforesaid Note
to be immediately due and payable, in principal, interest, costs and
attorneys' fees, Pledgee shall then have the right, again at its sole
option, to commence appropriate foreclosure proceedings under the aforesaid
Collateral Mortgage and/or to exercise the additional remedies provided
thereunder and/or hereunder.
CUMULATIVE REMEDIES. Pledgee's remedies upon the occurrence of any default
under this Agreement shall be cumulative in nature, and nothing under this
Agreement or otherwise shall be construed to limit or restrict the options
and remedies available to Pledgee following default, or to in any way limit
or restrict the rights and ability of Pledgee to proceed directly against
Borrower, Grantor and/or against any other co-makers, guarantors, sureties
and/or endorsers of the Indebtedness, and/or to proceed against any other
collateral directly or indirectly securing such Indebtedness. Pledgee's
election to exercise any rights or remedies against a part, but not all, of
the property subject to the above referenced Collateral Mortgage shall not
preclude Pledgee from, separately and subsequently, exercising the same or
any other rights or remedies against any other part or parts of such
property, with Pledgee reserving the right to proceed against any part or
parts of such property from time to time after the occurrence of any Event
of Default, in such order as Pledgee may determine in its sole discretion.
APPLICATION OF PROCEEDS. Any and all proceeds that Pledgee actually
receives and collects, whether resulting from the public or private sale of
the Note or foreclosure under the aforesaid Collateral Mortgage, shall be
applied first to reimburse Pledgee for its costs of collecting the same
(including, but not limited to, any attorneys' fees incurred by Pledgee),
and then to Additional Advances that Pledgee may make or Grantor's behalf
as provided under the aforesaid Collateral Mortgage, together with interest
thereon; with the balance being applied to principal, interest, costs,
expenses, attorney's fees and other fees and charges under the
indebtedness, in such order and with such preferences and priorities as
Pledgee shall determine within its sole discretion.
TRANSFER OF INDEBTEDNESS. Grantor hereby recognizes and agrees that Pledgee
may transfer all or a portion of the indebtedness to one or more third
party creditors. Such transfers may include, but are not limited to, sales
of participation interests in the indebtedness. Grantor specifically agrees
and consents to all such transfers and further waives any notice of any
such transfers as may be provided for under applicable law. Grantor further
agrees that, upon any transfer of all or any portion of the indebtedness,
Pledgee may transfer and deliver any of the collateral securing repayment
of the indebtedness (including, but not limited to, the aforesaid Note) to
the transferee of such indebtedness, and such transfers shall not affect
the priority and ranking of the Collateral Mortgage, and such collateral
shall secure any and all present and/or future indebtedness in favor or
such a transferee in principal, interest, costs, expenses, attorneys' fees
and other fees and charges. Grantor additionally agree that, after any such
transfer has taken place, Pledgee shall be fully discharged from any and
all liability and responsibility to Grantor with respect to any collateral
so transferred, and the transferee thereafter shall be vested with all of
the powers and rights with respect to any collateral so transferred, and
the transferee thereafter shall be vested with all of the powers and rights
with respect to such transferred collateral, with Pledgee retaining all
powers and right with respect to any of the pledged collateral that is not
transferred to another party.
REPRESENTATIONS AND WARRANTIES OF GRANTOR. Grantor represents and warrants
to Pledgee that: (a) Grantor is the legal and beneficial owner of and the
obligor under the Note; (b) Grantor has the right, power and authority to
enter into this Agreement and to pledge and grant ???? continuing security
interest in the above described Note to Pledgee; (c) Grantor's execution
and delivery of this Agreement and Grantor's performance hereunder, will
not result in a violation of any provision of Grantor's Articles of
incorporation or By-laws or violate or constitute a default under the terms
of any agreement, indenture or other instrument, licensee, judgment,
decree, order, law, statute, ordinance or other governmental rule or
regulations applicable to Grantor and/or any of its property; and (d) this
Agreement is binding upon Grantor, as well as Grantor's heirs, successors,
representative; and assigns, and is legally enforceable in accordance with
its terms. The foregoing representations and warranties are and shall be
continuing its nature and shall remain in full force and effect until such
time as this Agreement is cancelled in the manner provided hereinabove.
PROTECTION OF PLEDGEE'S SECURITY RIGHTS. Grantor agrees to appear in and to
defend all actions or proceedings purporting to affect Pledgee's security
rights and interests granted under this Agreement. In the event that
Pledgee elects to defend any such action or proceeding Grantor agrees to
reimburse Pledge for Pledgee's costs associated therewith, including
without limitation, Pledgee's reasonable attorneys' fees, which additional
costs and expenses shall be accrued by this Agreement.
ADDITIONAL SECURITY AGREEMENTS. Grantor may, from time to time, one or more
times, enter into additional security agreements with Lender under which
Grantor may undertake to grant a continuing security interest in the same
Note. Grantor acknowledges and agrees that the execution of such
additional security agreements, including any pledge agreements now in
effect, will not have the effect of cancelling, novating, or otherwise
modifying this Agreement or any other pledge agreement; it being Grantor's
full intent that all such pledge agreements (including this Agreement)
shall be cumulative in nature and shall each and all remain in full force
and effect until expressly cancelled by Lender under a written cancellation
instrument delivered to Grantor.
EXECUTION OF ADDITIONAL DOCUMENTS. Grantor agrees to execute all additional
documents that Lender may deem necessary and proper within its sole
discretion, to better reflect the true intent of this Agreement. Grantor
additionally agrees to execute whatever acknowledgements, and to furnish
Lender with such other security, as Lender may require prior to the data on
which repayment of the aforesaid Note may be barred under an applicable
statute of limitations or prescriptive period.
EFFECT OF WAIVERS. Grantor has waived, and/or does by these presents waive,
presentment for payment, protest, notice of protest and notice of
nonpayment under all of the indebtedness secured by this Agreement. Grantor
has further waived, and/or does by these presents waive, all pleas,
division and discussion with regard to the indebtedness, and agrees that
Grantor shall remain liable together with any and all guarantors, endorser
and sureties of the indebtedness on a "joint and several" or "solidary"
basis. Grantor further agrees that discharge or release of any party who is
or will be liable to Lender under any of the indebtedness, or the release
of any collateral directly or indirectly securing repayment of the same,
shall not have the effect of releasing Grantor, and/or the Note, and/or any
other party or parties guaranteeing payment of indebtedness, who shall
remain liable to Lender, and/or of releasing any other collateral that is
not expressly released by Lender.
Grantor additionally agrees that Lender's acceptance of payments other than
in accordance with the terms of any agreement or agreements governing
repayment of the indebtedness, or Lender's subsequent agreement to extend
or modify such repayment terms, shall likewise not have the effect of
releasing Grantor, and/or of releasing the Note, and/or any other party or
parties guaranteeing payment of the indebtedness from their respective
obligators to Lender, and/or of releasing any other collateral directly or
indirectly securing repayment of the indebtedness. In addition, no course
of dealing between Grantor and Lender, nor any failure or delay on the part
of the Lender to exercise any of the rights and remedies granted under this
Agreement, or under any other agreement or agreements by and between
Grantor and Lender, shall have the effect of waiving any of Lender's rights
and remedies. Any partial exercise of any rights and remedies granted to
Lender shall furthermore not constitute a waiver of any of Lender's other
rights and remedies, it being Grantor's intent and agreement that Lender's
rights and remedies shall be cumulative in nature. Grantor further agrees
that upon the occurrence of any Event of Default under this Agreement, any
waiver of forbearance on the part of Lender to pursue the rights and
remedies available to Lender, shall be binding upon Lender only to the
extent that Lender specifically agrees to any such waiver or forbearance in
writing. A waiver or forbearance as to one Event of Default shall not
constitute a waiver or forbearance as to any other default.
IRREVOCABLE NATURE OF POWERS OF ATTORNEY. The various agencies and powers
of attorney conferred on Lender under this Agreement are granted for
security purposes and may not be revoked by Grantor until such time as the
same may be renounced by Lender.
SUCCESSORS AND ASSIGNS BOUND; SOLIDARY LIABILITY. Grantor's obligations and
agreements under this Agreement shall be binding upon Grantor's successors,
heirs, legatees, devisees, administrators, executors and assigns. The
rights and remedies granted to Lender under the Agreement shall inure to
the benefit of Lender's successors and assigns, as well as to all
subsequent holder or holders of the Indebtedness. In the event that there
is more than one Grantor under this Agreement, each Grantor severally
agrees that any Grantor, acting alone or with others, may enter into
additional loans and other extensions of credit with Lender secured by the
aforesaid Note, without the further necessity that all of the Grantors
agree or consent to, or concur in, or be given notice of, each such
additional loan or other extension of credit.
ADDITIONAL DEFINITION OF INDEBTEDNESS. The word "Indebtedness" shall also
mean the loans evidenced by the promissory notes dated July 14, 1995 in the
amount of $70,000.00, dated May 30, 1995 in the amount of $800,000.00 and
dated May 30, 1995 in the amount of $100,000.00 executed by Grantor.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part
of this document:
ACCEPTANCE. This Agreement and the delivery of Grantor's Note in
pledge is accepted by Lender in the State of Louisiana.
CAPTION HEADINGS. Caption headings of the sections of this Agreement
are for convenience purposes only and are not to be used to interpret
or
<PAGE>
07-14-1995 PLEDGE OF COLLATERAL MORTGAGE ????? PAGE 3
LOAN NO (Continued)
================================================================================
to define their provisions. In this Agreement, whenever the context so
requires, the singular includes the plural and the plural also includes the
singular.
GOVERNING LAW. This Agreement shall be governed and construed in accordance
with the laws of the State of Louisiana. Grantor hereby irrevocably waives
any right to jury trial of any action arising out of or in connection with
this Agreement or the indebtedness secured hereby.
SEVERABILITY. If any provision of this Agreement is held to be invalid,
illegal or unenforceable by any court, that provision shall be deleted from
this Agreement and the balance of this Agreement shall be interpreted as if
the deleted provision never existed.
THUS DONE AND PASSED, on the day, month and year first written above, in the
presence of the undersigned Notary and the undersigned competent witnesses, who
hereunto sign their names with Grantor after reading of the whole.
WITNESSES: GRANTOR:
X /s/ KIM BRECHEEN Travis Boats & Motors Baton Rouge, Inc.
-------------------------
By: /s/ JIM MCMANUS
-------------------------
Cornelius James McManus
a/k/a Jim McManus, Vice President
X /s/ TARA LOUDERMILL
--------------------------
/s/ RICHARD L. CRAWFORD
---------------------------
Richard L. Crawford
NOTARY PUBLIC
===============================================================================
<PAGE>
COLLATERAL MORTGAGE NOTE
================================================================================
U.S. $600,00.00 July 14, 1995
Baton Rouge, Lousiana
ON DEMAND, THE UNDERSIGNED, WHETHER ONE OR MORE, JOINTLY, SEVERALLY AND
SOLIDARILY PROMISE TO PAY TO THE ORDER OF BEARER, AT THE OFFICES OF HIBERNIA
NATIONAL BANK, LOAN ADMINISTRATOR DEPARTMENT, 440 THIRD STREET, BATON ROUGE, LA
70801, THE PRINCIPAL SUM OF SIX HUNDRED THOUSAND & 00/100 DOLLARS (U.S.
$600,000.00), FOR VALUE RECEIVED, WITH INTEREST THEREON AT THE RATE OF 21.000
PERCENT PER ANNUM FROM DATE UNTIL PAID.
In case this Note should be placed in the hands of an attorney or attorneys to
institute legal proceedings to recover the amount hereof, or any part or parts
hereof, in principal or interest, or to protect the interests of the holder
hereof, or in case the same should be placed in the hands of an attorney or
attorneys for collection, compromise or other action, the undersigned hereby
jointly, severally and solidarily bind themselves to pay the fees of the
attorney or attorneys who may be employed for that purpose, which fees are
hereby fixed at 25.000% of the amount then due and owing under this Note.
The maker(s) of this Note and all endorsers, guarantors and sureties hereon
hereby severally waive presentment for payment, notice of nonpayment protest,
notice of protest, and all pleas of division and discussion, and agree that the
time of payment hereof may be extended from time to time, one or more times,
without notice of such extension or extensions and without previous consent,
hereby binding themselves jointly, severally and solidarily unconditionally and
as original promisors, for the payment hereof, in principal, interest, costs and
attorneys' fees. Furthermore; no discharge or released of any collateral
securing this Note or any delay on the part of the holder hereof in exercising
any rights hereunder shall operate as a waiver of such rights, or to otherwise
diminish or release such collateral.
This Note is secured by a Collateral Real Estate Mortgage dated July 14, 1995,
executed by the undersigned in favor of Hibernia National Bank and any future
holder or holders of this Note, with this Note being paraphed "Ne Varietur" for
identification with said Collateral Real Estate Mortgage by the Notary Public
before whom said Mortgage was passed.
MAKER:
Travis Boats & Motors Baton Rouge,Inc.
By /s/Cornelius James McManus
-----------------------------
Cornelius James McManus
a/k/a Jim McManus, Vice President
NE VARIETUR
For Identification with an Act of Collateral Mortgage
passed before me on the 14th day of July, 1995.
/s/ Richard L. Crawford
- -----------------------
Richard L Crawford
NOTARY PUBLIC
================================================================================
<PAGE>
CORPORATE RESOLUTION TO BORROW
<TABLE>
- --------------------------------------------------------------------------------------------------------------------------
PRINCIPAL LOAN DATE MATURITY LOAN NO. CALL COLLATERAL ACCOUNT OFFICER INITIALS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$480,000,00 07-14-1995 07-14-2002 854
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
- --------------------------------------------------------------------------------
BORROWER: Travis Boats & Motors LENDER: Hibernia National Bank
Rouge, Inc. (TIN: TIN: 72-0210640
721224466) Loan Administration
14369 Florida Bouleyard 440 Third Street
Baton Rouge, LA 70819 Baton Rouge, LA 70801
================================================================================
I, the undersigned Secretary or Assistant Secretary of Travis Boats & Motors
Baton Rouge, Inc. (the "Corporation"), HEREBY CERTIFY that the Corporation is
organized and existing under and by virtue of the laws of the State of Louisiana
as a corporation for profit, with its principal office at 14359 Florida
Boulevard, Baton Rouge, LA 70819, and is duly authorized to transact business
in the State of Louisiana.
I FURTHER CERTIFY that at a meeting of the Corporation (or by other duly
authorized corporate action in lieu of a meeting), duly called and held on July
14, 1995, at which a quorum was present and voting, the following resolutions
were adopted.
BE IT RESOLVED, that any one (1) of the following named officers, employees, or
agents of this Corporation, whose actual signature is shown below:
NAME POSITION ACTUAL SIGNATURE
---- -------- ----------------
Cornelius James McManus a/k/a Jim McManus /s/ Jim McManus
Vice President
be and he or she is hereby specifically authorized, empowered and directed, but
without limitation to do the following for and on behalf of and in the name of
the Corporation:
LOAN. To negotiate and obtain a loan from Lender in the amount of Four
Hundred Eighty Thousand & 00/100 Dollars (U.S. $480,000.00) under such
terms and conditions as said officers or employees may agree to in their
sole discretion, and for such additional sum of money as in their judgment
should be borrowed, without limitation.
LOAN AGREEMENT. To negotiate and execute a loan agreement in favor of
Lender governing the aforesaid loan, containing such terms and conditions;
affirmative and negative covenants and other obligations as said officers
or employees may agree to in their sole discretion.
NOTE. To execute and deliver to Lender a promissory note evidencing the
Corporation's obligation and indebtedness under the aforesaid loan.
GRANT SECURITY. To mortgage, pledge, hypothecate, or otherwise encumber
and deliver to Lender, as security for the payment of any loans so
obtained, any promissory notes so executed, or any other or further
indebtedness of the Corporation to Lender at any time owing, however the
same may be evidenced, any property now or hereafter belonging to the
Corporation or in which the Corporation now or hereafter may have an
interest, including without limitation all real (immovable) property and
all personal (movable) property and rights of the Corporation. Such
property may be mortgaged, pledged, hypothecated, encumbered or otherwise
secured at the time such loans are obtained or such indebtedness is
incurred, or at any other time or times, and may be either in addition to
or in lieu of any property theretofore mortgaged, pledged, hypothecated,
encumbered or otherwise secured.
SECURITY AGREEMENTS. To execute and deliver one or more mortgages,
collateral mortgages, pledge agreements and other security agreements in
favor of Lender to secure the prompt and punctual payment and satisfaction
of the aforesaid loan, under which said officers or employees may grant a
continuing security interest in the property and/or the rights of the
Corporation as more fully described therein, which mortgages, collateral
mortgages, pledge agreements and other security agreements may contain
provisions for foreclosure under Louisiana executory process procedure,
confessions of judgment, waivers of appraisal and other rights and notices,
all of which remedies upon default are specifically consented to by this
Board of Directors.
NEGOTIATE ITEMS. To draw, endorse, and discount with Lender all drafts,
trade acceptances, promissory notes, or other evidences of indebtedness
payable to or belonging to the Corporation or in which the Corporation may
have an interest, and either to receive cash for the same or the cause such
proceeds to be credited to the account of the Corporation with Lender, or
to cause such other disposition of the proceeds derived therefrom as they
may deem advisable.
FURTHER ACTS. In the case of multiple advance loans, to designate
additional or alternate individuals as being authorized to request advances
thereunder, and in all cases, to do and perform such other acts and things,
to pay any and all fees and costs, and to execute and deliver such other
documents and agreements, including agreements waiving the right to a trial
by jury, as he or she may in his or her discretion deem reasonably
necessary or proper in order to carry into effect the provisions of these
Resolutions.
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
resolutions and performed prior to the passage of these resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Lender may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Lender. Any such notice
shall not affect any of the Corporation's agreements or commitments in effect at
the time notice is given.
NOTICES TO LENDER. The Corporation will notify Lender in writing at Lender's
address shown above (or such other addresses as Lender may designate from time
to time) prior to any (a) change in the name of the Corporation, (b) change in
the assumed business name(s) of the Corporation, (c) change in the authorized
signer(s), or (d) change in any other aspect of the Corporation that directly or
indirectly relates to any agreements between the Corporation and Lender. No
change in the name of the Corporation will take effect until after Lender has
been notified.
ADDITIONAL DEFINITION OF LOAN. The term "Loan" shall also mean and include that
certain promissory note dated July 14, 1995 executed by Borrower in the
principal amount of $70,000.00.
I FURTHER CERTIFY that the officer, employee, or agent named above is duly
elected, appointed, or employed by or for the Corporation, as the case may be,
and occupies the position set opposite the name; that the foregoing Resolutions
now stand of record on the books of the Corporation; and that the Resolutions
are in full force and effect and have not been modified or revoked in any manner
whatsoever.
IN TESTIMONY WHEREOF, I have hereunto set my hand on July 14, 1995 and attest
that the signatures set opposite the names listed above are their genuine
signatures.
CERTIFIED TO AND ATTESTED BY:
/s/ June M. McManus
--------------------------------------
Secretary or Assistant Secretary
June M. McManus
--------------------------------------
NOTE: In case the Secretary or other certifying officer is designated by the
foregoing resolutions as one of the signing officers, this certificate should
also be signed by a second Officer or Director of the Corporation.
================================================================================
<PAGE>
EXHIBIT 10.9(a)
PROMISSORY NOTE
Borrower: Lender:
TBC Arkansas, Inc. TIN: 710778068 Hibernia National Bank TIN 72-0210640
c/o Travis Group Loan Administration Department
13045 Research Boulevard 440 Third Street
Austin, TX 78750 Post Office Box 3807
Baton Rouge, LA 70820
- -------------------------------------------------------------------------------
Principal Amount: Initial Rate: Date of Note:
$3,000,000.00 9.250% September 1, 1995
PROMISE TO PAY. TBC Arkansas, Inc. ("Borrower") promises to pay to the order of
Hibernia National Bank ("Lender"), in lawful money of the United States of
America the sum of Three Million & 00/100 Dollars (U.S. $3,000,000.00) or such
other or lesser amounts as may be reflected from time to time on the books and
records of Lender as evidencing the aggregate unpaid principal balance of loan
advances made to Borrower on a revolving line of credit basis as provided below,
together with simple interest assessed on a variable rate basis at the rate per
annum equal to 0.500 percentage points over the Index provided below, as the
Index under this Note may be adjusted from time to time, one or more times, with
interest being assessed on the unpaid principal balance of this Note as
outstanding from time to time, commencing on September 1, 1995 and continuing
until this Note is paid in full, or until default under this Note with Interest
thereafter being subject to the default interest rate provisions set forth
herein.
LINE OF CREDIT. This Note evidences a revolving line of credit "master note."
Advances under this Note, as well as directions for payment from Borrower's
accounts, may be requested orally or in writing by Borrower or by an authorized
person. Lender may, but need not, require that all oral requests be confirmed in
writing. The following party or parties are authorized to request advances under
the line of credit until Lender receives from Borrower at Lender's address shown
above written notice of revocation of their authority: Mark Walton, President,
or any other officer designated by him in writing. Borrower agrees to be liable
for all sums either: (a) advanced in accordance with the instructions of an
authorized person or (b) credited to any of Borrower's deposit accounts with
Lender. The unpaid principal balance owing on this Note at any time may be
evidenced by endorsements on this Note or by Lender's internal records,
including daily computer print-outs. Lender will have no obligation to advance
funds under this Note if: (a) Borrower or any guarantor is in default under the
terms of this Note or any agreement that Borrower or any guarantor has with
Lender, including any agreement made in connection with the signing of this
Note; (b) Borrower or any guarantor ceases doing business or is insolvent; (c)
any guarantor seeks, claims or otherwise attempts to limit, modify or revoke
such guarantor's guarantee of this Note or any other loan with Lender; (d)
Borrower has applied funds provided pursuant to this Note for purposes other
than these acceptable to Lender; or (e) Lender in good faith deems itself
insecure under this Note or any other agreement between Lender and Borrower.
PAYMENT. Borrower will pay this loan in accordance with the following payment
schedule:
Outstanding principal and accrued unpaid interest on this Note is due
and payable in full on August 30, 1995. Borrower agrees to pay monthly
interest payments beginning October 1, 1995, with all subsequent
interest payments due on the same day of each month thereafter until
this note is paid in full. Principal under this note shall be repayable
earlier than August 30, 1995 in accordance with the repayment provisions
as provided in the Inventory Loan Agreement dated September 1, 1995.
Interest on this Note is computed on a 365/360 simple interest basis; that is,
by applying the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding. Borrower will pay Lender at
Lender's address shown above or at such other place as Lender may designate in
writing. Unless otherwise agreed or required by applicable law, payments will
be applied first to accrued unpaid interest then to principal, and any remaining
amount to any unpaid collection costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an independent index which is the CITIBANK
N.A. RATE (the "Index"). The index is not necessarily the lowest rate charged
by Lender on its loans. If the index becomes unavailable during the term of
this loan. Lender may designate a substitute index after notice to Borrower.
Lender will tell Borrower the current index rate upon Borrower's request.
Borrower understands that Lender may make loans based on other rates as well.
The interest rate change will not occur more often than each day. The index
currently is 8.750% per annum. The interest rate to be applied to the unpaid
principal balance of this Note will be at a rate of 0.500 percentage points over
the index, resulting in an initial rate of 9.250% per annum. Under no
circumstances will the interest rate on this Note be more than the maximum rate
allowed by applicable law.
LATE CHARGES. If Borrower fails to pay any payment under this Note in full
within 10 days of when due, Borrower agrees to pay Lender's late payment fee in
an amount equal to 10.000% of the delinquent interest due. Late charges will
not be assessed following declaration of default and acceleration of maturity of
this Note.
DEFAULT. The following actions and/or inactions shall constitute default events
under this Note:
Default Under This Note. Should Borrower default in the payment of
principal and/or interest under this Note.
Default Under Security Agreements. Should Borrower or any guarantor
violate, or fail to comply fully with any of the terms and conditions
of, or default under any security right, instrument, document, or
agreement already or indirectly securing repayment of this Note.
Other Defaults in Favor of Lender. Should Borrower or any guarantor of
this Note default under any other loan, extension of credit, security
right, instrument, document, or agreement, or obligation in favor of
Lender.
Default in Favor of Third Parties. Should Borrower or any guarantor
default under any loan, extension of credit, security agreement,
purchases of sales agreement, or any other agreement, in favor of any
other creditor or person that may affect any property or other
collateral directly or indirectly securing repayment of this Note.
Insolvency. Should the suspension, failure or insolvency, however
evidenced, of Borrower or any guarantor of this Note occur or exist.
Death or Interdiction. Should any guarantor of this Note die or be
interdicted.
Readjustment of Indebtedness. Should proceedings for readjustment of
indebtedness, reorganization, bankruptcy, composition or extension under
any insolvency law be brought by or against Borrower or any guarantor.
Assignment for Benefit of Creditors. Should Borrower or any guarantor
file proceedings for a respite or make a general assignment for the
benefit of creditors.
Receiverships. Should a receiver of all or any part of Borrower's
property, or the property of any guarantor, be applied for or appointed.
Dissolution Proceedings. Should proceedings for the dissolution or
appointment of a liquidator of Borrower or any guarantor be commenced.
False Statements. Should any representation, warranty, or material
statement of Borrower or any guarantor made in connection with the
obtaining of the loan evidenced by this Note or any security agreement
directly or indirectly securing repayment of this Note, prove to be
incorrect or misleading in any respect.
<PAGE>
material adverse change. Should any material adverse change occur in
the financial condition of Borrower or any guarantor of this Note or
should any material discrepancy exist between the financial statements
submitted by Borrower or any guarantor and the actual financial
condition of Borrower or such guarantor.
Insecurity. Should Lender deem itself to be insecure with regard to
repayment of this Note.
LENDER'S RIGHTS UPON DEFAULT. Should any one or more default events occur or
exist under this Note as provided above, Lender shall have the right, at its
sole option, to declare formally this Note to be in default and to accelerate
the maturity and insist upon immediate payment in full of the unpaid principal
balance then outstanding under this Note, plus accrued interest, together with
reasonable attorney's fees, costs, expenses and other fees and charges as
provided herein. Lender shall have the further right, again at its sole option,
to declare formal default and to accelerate the maturity and to insist upon
immediate payment in full of each and every other loan, extension of credit,
debt, liability and/or obligation of every nature and kind that Borrower may
then owe to Lender, whether direct or indirect or by way of assignment, and
whether absolute or contingent, liquidated or unliquidated, voluntary or
involuntary, determined or undetermined, secured or unsecured, whether Borrower
is obligated alone or with others on a "solidary" or "joint and several" basis,
as a principal obligor or otherwise, all without further notice or demand,
unless Lender shall otherwise elect.
INTEREST AFTER DEFAULT. If Lender declares this Note to be in default, Lender
has the right prospectively to adjust and fix the simple interest rate under
this Note until this Note is paid in full, as follows: (1) if the original
principal amount of this Note is $250,000 or less, the fixed default interest
rate shall be equal to eighteen (18%) percent per annum, or three (3%) percent
per annum in excess of the interest rate under this Note, whichever is greater,
(2) if the original principal amount of this Note is more than $250,000, the
fixed default interest rate shall be equal to twenty-one (21%) percent per
annum, or three (3%) percent per annum in excess of the interest rate under this
Note at the time of default, whichever is greater.
ATTORNEY'S FEES. If lender refers this Note to an attorney for collection, or
files suit against Borrower to collect this Note, or if Borrower files for
bankruptcy or other relief from creditors, Borrower agrees to pay Lender's
reasonable attorney's fees in an amount not exceeding 28.000% of the unpaid debt
then owing under this Note.
NSF CHECK CHARGES. In the event that Borrower makes any payment under this Note
by check and Borrower's check is returned to Lender unpaid due to nonsufficient
funds in my deposit account, Borrower agrees to pay Lender an additional NSF
check charge equal to $20.00.
DEPOSIT ACCOUNTS. As collateral security for repayment of this Note and all
renewals and extensions, as well as to secure any and all other loans, notes,
indebtedness and obligations that Borrower (or any of them) may now and in the
future owe to Lender or incur in Lender's favor, whether direct or indirect,
absolute or contingent, due or to become due, of any nature and kind whatsoever
(with the exception of any indebtedness under a consumer credit card account),
Borrower is granting Lender a continuing security interest in any and all funds
that Borrower may now and in the future have on deposit with Lender or in
certificates of deposit or other deposit accounts as to which Borrower is an
account holder (with the exception of IRA, pension, and other tax-deferred
deposits). Borrower further agrees that Lender may at any time apply any funds
that Borrower may have on deposit with Lender or in certificates of deposit or
other deposit accounts as to which Borrower is an account holder against the
unpaid balance of this Note and any and all other present and future
indebtedness and obligations that Borrower (or any of them) may then owe to
Lender in principal, interest, fees, costs, expenses, and attorneys' fees.
FINANCIAL STATEMENTS. Borrower agrees to provide Lender with such financial
statements and other related information at such frequencies and in such detail
as Lender may reasonably request.
GOVERNING LAW. Borrower agrees that this Note and the loan evidenced hereby
shall be governed under the laws of the State of Louisiana. Specifically, this
business or commercial Note is subject to La. A.S. a:3608 at seq.
COVENANT. The Borrower covenants to take such actions as may be needed to ensure
that within 30 days of the date of closing this loan, Borrower will deliver to
Lender the executed guaranties of the individual guarantors Mark T. Walton, Joe
R. Simpson, R. D. Bohis, Robert C. Sidderm, Jesse C. Cox and Ronnie L.
Spradling.
WAIVERS. Borrower and each guarantor of this Note hereby waive demand,
presentment for payment, protest, notice of protest and notice of nonpayment,
and all pleas of division and discussion, and severally agree that their
obligations and liabilities to Lender hereunder shall be on a "solidary" or
"joint and several" basis. Borrower and each guarantor further severally agree
that discharge or release of any party who is or may not have the effect of
releasing any other party or parties, who shall remain liable to Lender, or of
releasing any other collateral that is not expressly released by Lender.
Borrower and each guarantor additionally agree that Lender's acceptance of
payment other than in accordance with the terms of this Note, or Lender's
subsequent agreement to extend or modify such repayment terms, or Lender's
failure or delay in exercising any rights or remedies granted to Lender, shall
likewise not have the effect of releasing Borrower or any other party or parties
from their respective obligations to Lender, or of releasing any collateral that
directly or indirectly secures repayment hereof. In addition, any failure or
delay on the part of Lender to exercise any of the rights and remedies granted
to Lender shall not have the effect of waiving any of Lender's rights and
remedies. Any partial exercise of any rights and/or remedies granted to Lender
shall furthermore not be construed as a waiver of any other rights and remedies;
it being Borrower's intent and agreement that Lender's rights and remedies shall
be cumulative in nature. Borrower and each guarantor further agree that should
any default event occur or exist under this Note, any wiver or forbearance on
the part of Lender to pursue the rights and remedies available to Lender, shall
be binding upon Lender only to the extent that Lender specifically agrees to any
such wiver or forbearance in writing. A waiver or forbearance on the part of
Lender as to one default event shall not be construed as a waiver or forbearance
as to any other default. Borrower and each guarantor of this Note further agree
that any late charges provided for under this Note will not be charges for
deferral of time for payment and will not and are not intended to compensate
Lender for a grace or cure period, and no such deferral, grace or cure period
has or will be granted to Borrower in return for the imposition of any late
charge. Borrower recognizes that Borrower's failure to make timely payment of
amounts due under this Note will result in damages to Lender, including but not
limited to Lender's loss of the use of amounts due, and Borrower agrees that any
late charges imposed by Lender hereunder will represent reasonable compensation
to Lender for such damages. Failure to pay in full any installment or payment
timely when due under this Note, whether or not a late charge is assessed, will
remain and shall constitute an Event of Default hereunder.
SUCCESSORS AND ASSIGNS LIABLE. Borrower's and each guarantor's obligations and
agreements under this Note shall be binding upon Borrower's and each guarantor's
respective successors, heirs, legatees, devisers, administrators, executors and
assigns. The rights and remedies granted to Lender under this Note shall inure
to the benefit of Lender's successors and assigns, as well as to any subsequent
holder or holders of this Note.
CAPTION HEADINGS. Caption headings of the sections of this Note are for
convenience purposes only and are not to be used to interpret or to define their
provisions. In this Note, whenever the context as requires, the singular
includes the plural and the plural also includes the singular.
SEVERABILITY. If any provision of this Note is held to be invalid, illegal or
unenforceable by any court, that provision shall be deleted from this Note and
the balance of this Note shall be interpreted as if the deleted provision never
existed.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. LENDER AND BORROWER
HEREBY WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY ACTION, PROCEEDING,
OR COUNTERCLAIM BROUGHT BY EITHER LENDER OR BORROWER AGAINST THE OTHER.
BORROWER:
TBC ARKANSAS, INC.
By: /s/ Mark Walton
-----------------------------------------------
Mark Walton, President
<PAGE>
EXHIBIT 10.9(b)
COMMERCIAL GUARANTY
Borrower: Lender:
TBC Arkansas, Inc. (TIN: 710778068) Hibernia National Bank TIN: 72-0210640
c/o Travis Group, Loan Administration Department
13045 Research Boulevard 440 Third Street
Austin, TX 78750 Baton Rouge, LA 70801
Guarantor:
Travis Boats & Motors, Inc.
13045 Research Boulevard
Austin, TX 78750
- --------------------------------------------------------------------------------
AMOUNT OF GUARANTY. The amount of this Guaranty is Unlimited.
DEFINITIONS. The following terms shall have the following meanings when used in
this Agreement:
Agreement. The word "Agreement" means this Guaranty Agreement as this
Agreement may be amended or modified from time to time.
Borrower. The word "Borrower" means individually, collectively and
interchangeably TBC Arkansas, Inc.
Guarantor. The word "Guarantor" means individually, collectively and
interchangeably Travis Boats & Motors, Inc. and all other persons
guaranteeing payment and satisfaction of Borrower's indebtedness as
hereinafter defined.
Indebtedness. The word "Indebtedness" means individually, collectively,
interchangeably and without limitation any and all present and future
loans, loan advances, extensions of credit, obligations and/or liabilities
that Borrower may now and/or in the future owe to and/or incur in favor of
Lender, whether direct or indirect, or by way of assignment or purchase of
a participation interest, and whether absolute or contingent, voluntary or
involuntary, determined or undetermined, liquidated or unliquidated, due or
to become due, secured or unsecured, and whether Borrower may be liable
individually, jointly or solidarily with others, whether primarily or
secondarily, or as a guarantor or otherwise, and whether now existing or
hereafter arising, of every nature and kind whatsoever, in principal,
interest, costs, expenses and attorneys' fees and other fees and charges,
including without limitation Borrower's indebtedness and obligations under
a certain promissory note in favor of Lender dated September 1, 1995 in the
fixed principal amount of U.S. $3,000,000.00. In addition, all interest
thereon, costs, expenses, attorneys' fees and other fees and charges
related thereto under Borrower's indebtedness shall be fully guaranteed
hereunder.
Lender. The word "Lender" means Hibernia National Bank TIN: 72-0210640, its
successors and assigns, and any subsequent holder or holders of Borrower's
indebtedness.
GUARANTEE OF BORROWER'S INDEBTEDNESS. Guarantor hereby absolutely and
unconditionally agrees to, and by these presents does hereby, guarantee the
prompt and punctual payment, performance and satisfaction of any and all of
Borrower's present and future indebtedness in favor of Lender.
CONTINUING GUARANTY. THIS IS A CONTINUING GUARANTY AGREEMENT UNDER WHICH
GUARANTOR AGREES TO GUARANTEE PAYMENT OF BORROWER'S PRESENT AND FUTURE
INDEBTEDNESS IN FAVOR OF LENDER ON A CONTINUING BASIS. Guarantor's obligations
and liability under this Agreement shall be open and continuous in effect.
Guarantor intends to and does hereby guarantee at all times the prompt and
punctual payment, performance and satisfaction of all of Borrower's present and
future indebtedness in favor of Lender up to the maximum limitations set forth
above. Accordingly, any payments made on Borrower's indebtedness will not
discharge or diminish the obligations and liability of Guarantor under this
Agreement for any remaining and succeeding indebtedness of Borrower in favor of
Lender.
JOINT, SEVERAL AND SOLIDARY LIABILITY. Guarantor's obligations and liability
under this Agreement shall be on a "solidary" or "joint and several" basis along
with Borrower to the same degree and extent as if Guarantor had been and/or will
be a co-borrower, co-principal obligor and/or co-maker of Borrower's
indebtedness. In the event that there is more than one Guarantor under this
Agreement, or in the event that there are other guarantors, endorsers or
sureties of all or any portion of Borrower's indebtedness, Guarantor's
obligations and liability hereunder shall further be on a "solidary" or "joint
and several" basis along with such other guarantors, endorsers and/or sureties.
DURATION OF GUARANTY. This Agreement and Guarantor's obligations and liability
hereunder shall remain in full force and effect until such time as this
Agreement may be cancelled or otherwise terminated by Lender under a written
cancellation instrument in favor of Guarantor (subject to the automatic
reinstatement provisions hereinbelow). It is anticipated that fluctuations may
occur in the aggregate amount of Borrower's indebtedness guaranteed under this
Agreement and it is specifically acknowledged and agreed to by Guarantor that
reductions in the amount of Borrower's indebtedness, even to zero ($0.00)
dollars, prior to Lender's written cancellation of this Agreement, shall not
constitute or give rise to a termination of this Agreement. However, this
Agreement supercedes and replaces any previous guaranties.
CANCELLATION OF AGREEMENT; EFFECT. Unless otherwise indicated under such a
written cancellation instrument, Lender's agreement to terminate or otherwise
cancel this Agreement shall affect only, and shall be expressly limited to,
Guarantor's continuing obligations and liability to guarantee Borrower's
indebtedness incurred, originated and/or extended (without prior commitment)
after the date of such a written cancellation instrument; with Guarantor
remaining fully obligated and liable under this Agreement for any and all of
Borrower's indebtedness incurred, originated extended, or committed to prior to
the date of such a written cancellation instrument. Nothing under this
Agreement or any other agreement or understanding by and between Guarantor and
Lender, shall in any way obligate, or be construed to obligate, Lender to agree
to the subsequent termination or cancellation of Guarantor's obligations and
liability hereunder; it being fully understood and agreed to by Guarantor that
Lender has and intends to continue to rely on Guarantor's assets, income and
financial resources in extending credit and other indebtedness to and in favor
of Borrower, and that to release Guarantor from Guarantor's continuing
obligations and liabilities under this Agreement would so prejudice Lender that
Lender may, within its sole and uncontrolled discretion and judgment, refuse to
release Guarantor from any of its continuing obligations and liability under
this Agreement for any reason whatsoever as long as any of Borrower's
indebtedness remains unpaid and outstanding, or otherwise.
DEFAULT. Should any event of default occur or exist under any of Borrower's
indebtedness in favor of Lender, Guarantor unconditionally and absolutely
agrees to pay Lender the then unpaid amount of Borrower's indebtedness, in
principal, interest, costs, expenses, attorneys' fees and other fees and
charges, subject to the maximum principal dollar amount limitations set forth
above. Such payment or payments shall be made at Lender's offices indicated
above, immediately following demand by Lender.
GUARANTOR'S WAIVERS. Guarantor hereby waives:
(a) Notice of Lender's acceptance of this Agreement,
(b) Presentment for payment of Borrower's indebtedness, notice of dishonor
and of nonpayment, notice of intention to accelerate, notice of
acceleration, protest and notice of protest, collection or institution of
any suit or other action by Lender in collection thereof, including any
notice of default in payment thereof, or other notice to, or demand for
payment thereof, on any party.
(c) Any right to require Lender to notify Guarantor of any nonpayment
relating to any collateral directly or indirectly securing Borrower's
indebtedness, or notice of any action or nonaction on the part of Borrower,
Lender, or any other guarantor, surety or endorser of Borrower's
indebtedness, or notice of the creation of any new or additional
indebtedness subject to this Agreement.
(d) Any rights to demand or require collateral security from the Borrower
or any other person as provided under applicable Louisiana law or
otherwise.
(e) Any right to require Lender to notify Guarantor of the terms, time and
place of any public or private sale of any collateral directly or
indirectly securing Borrower's indebtedness.
(f) Any "one action" or "anti-deficiency" law or any other law which may
prevent Lender from bringing any action, including a claim for deficiency,
against Guarantor, before or after Lender's commencement or completion of
any foreclosure action, or any action in lieu of foreclosure.
<PAGE>
(g) Any election of remedies by Lender that may destroy or impair
Guarantor's subrogation rights or Guarantor's right to proceed for
reimbursement against Borrower or any other guarantor, surety or
endorser of Borrower's indebtedness, including without limitation, any
loss of rights Guarantor may suffer by reason of any law limiting,
qualifying, or discharging Borrower's indebtedness.
(h) Any disability or other defense of Borrower, or any other
guarantor, surety or endorser, or any other person, or by reason of
the cessation from any cause whatsoever, other than payment in full of
Borrower's indebtedness.
(i) Any statute of limitations or prescriptive period, if at the time
an action or suit brought by Lender against Guarantor is commenced;
there is any outstanding indebtedness of Borrower to Lender which is
barred by any applicable statute of limitations or prescriptive
period.
Guarantor warrants and agrees that each of the waivers set forth above is made
with Guarantor's full knowledge of its significance and consequences, and that,
under the circumstances, such waivers are reasonable and not contrary to public
policy or law. If any such waiver is determined to be contrary to any applicable
law or public policy, such waive shall be effective only to the extent permitted
by law.
GUARANTOR'S SUBORDINATION OF RIGHTS. In the event that Guarantor should for any
reason (a) advance or lend monies to Borrower, whether or not such funds are
used by Borrower to make payment(s) under Borrower's indebtedness, and/or (b)
make any payment(s) to Lender or others for and on behalf of Borrower under
Borrower's indebtedness, and/or (c) make any payment to Lender in total or
partial satisfaction of Guarantor's obligations and liabilities under this
Agreement, and/or (d) if any of Guarantor's property is used to pay or satisfy
any of Borrower's indebtedness, Guarantor hereby agrees that any and all rights
that Guarantor may have or acquire to collect from or to be reimbursed by
Borrower (or from or by any other guarantor, endorser or surety of Borrower's
indebtedness), whether Guarantor's rights of collection or reimbursement arise
by way of subrogation to the rights of Lender or otherwise, shall in all
respects, whether or not Borrower is presently or subsequently becomes
insolvent, be subordinate, inferior and junior to the rights of Lender to
collect and enforce payment, performance and satisfaction of Borrower's then
remaining indebtedness, until such time as Borrower's indebtedness is fully paid
and satisfied. In the event of Borrower's insolvency or consequent liquidation
of Borrower's assets, through bankruptcy, by an assignment for the benefit of
creditors, by voluntary liquidation, or otherwise, the assets of Borrower
applicable to the payment of claims of both Lender and Guarantor shall be paid
to Lender and shall be first applied by Lender to Borrower's then remaining
indebtedness. Guarantor hereby assigns to Lender all claims which it may have or
acquire against Borrower or any assignee or trustee of Borrower in bankruptcy;
provided that, such assignment shall be effective only for the purpose of
assuring to Lender full payment of Borrower's indebtedness guaranteed under this
Agreement.
If now or hereafter (a) Borrower shall be or become insolvent, and (b)
Borrower's indebtedness shall not at all times until paid be fully secured by
collateral pledged by Borrower, Guarantor hereby forever waives and relinquishes
in favor of Lender and Borrower, and their respective successors, any claim or
right to payment Guarantor may now have or hereafter have or acquire against
Borrower, by subrogation or otherwise, so that at no time shall Guarantor be or
become a "creditor" of Borrower within the meaning of 11 U.S.C. section 547(b),
or any successor provision of the Federal bankruptcy laws.
GUARANTOR'S RECEIPT OF PAYMENTS. Guarantor further agrees to refrain from
attempting to collect and/or enforce any of Guarantor's collection and/or
reimbursement rights against Borrower (or against any other guarantor, surety or
endorser of Borrower's indebtedness), arising by way of subrogation or
otherwise, until such time as all of Borrower's then remaining indebtedness in
favor of Lender is fully paid and satisfied. In the event that Guarantor should
for any reason whatsoever receive any payment(s) from Borrower (or any other
guarantor, surety or endorser of Borrower's indebtedness) that Borrower (or such
a third party) may owe to Guarantor for any of the reasons stated above,
Guarantor agrees to accept such payment(s) in trust for and on behalf of Lender,
advising Borrower (or the third party payee) of such fact. Guarantor further
unconditionally agrees to immediately deliver such funds to Lender, with such
funds being held by Guarantor over any interim period, in trust for Lender. In
the event that Guarantor should for any reason whatsoever receive any such funds
from Borrower (or any third party), and Guarantor should deposit such funds in
one or more of Guarantor's deposit accounts, no matter where located, Lender
shall have the right to attach any and all of Guarantor's deposit accounts in
which such funds were deposited, whether or not such funds were commingled with
other monies of Guarantor, and whether or not such funds then remain on deposit
in such an account or accounts. To this end and to secure Guarantor's
obligations under this Agreement, Guarantor collaterally assigns and pledges to
Lender, and grants to Lender a continuing security interest in, any and all of
Guarantor's present and future rights, title and interest in and to all monies
that Guarantor may now and/or in the future maintain on deposit with banks,
savings and loan associations and other entities (other than tax deferred
accounts with Lender), in which Guarantor may at any time deposit any such funds
that may be received from Borrower (or any other guarantor, endorser or surety
of Borrower's indebtedness) in favor of Lender.
DEPOSIT ACCOUNTS. As collateral security for repayment of Guarantor's
obligations hereunder and under any additional guaranties previously granted or
to be granted by Guarantor in the future, and additionally as collateral
security for any present and future indebtedness of Guarantor in favor of Lender
(with the exception of any indebtedness under a consumer credit card account),
Guarantor is granting Lender a continuing security interest in any and all funds
that Guarantor may now and in the future have on deposit with Lender or in
certificates of deposit or other deposit accounts as to which Guarantor is an
account holder (with the exception of IRA, pension, and other tax-deferred
deposits). Guarantor further agrees that Lender may at any time apply any funds
that Guarantor may have on deposit with Lender or in certificates of deposit or
other deposit accounts as to which Guarantor is an account holder against the
unpaid balance of any and all other present and future obligations and
indebtedness of Guarantor to Lender, in principal, interest, fees, costs,
expenses, and attorneys' fees.
ADDITIONAL COVENANTS. Guarantor agrees that Lender may, at its sole option, at
any time, and from time to time, without the consent of or notice to Guarantor,
or any of them, or to any other party, and without incurring any responsibility
to Guarantor or to any other party, and without impairing or releasing any of
Guarantor's obligations or liabilities under this Agreement:
(a) Make additional secured and/or unsecured loans to Borrower.
(b) Discharge, release or agree not to sue any party (including, but
not limited, Borrower or any other guarantor, surety, or endorser of
Borrower's indebtedness), who is or may be liable to Lender for any of
Borrower's indebtedness.
(c) Sell, exchange, release, surrender, realize upon, or otherwise
deal with, in any manner and in any order, any collateral directly or
indirectly securing repayment of any of Borrower's indebtedness.
(d) Alter, renew, extend, accelerate, or otherwise change the manner,
class, terms and/or times of payment or other terms of Borrower's
indebtedness, or any part thereof, including any increase or decrease
in the rate or rates of interest on any of Borrower's indebtedness.
(f) Subordinate and/or agree to subordinate the payment of all or any
part of Borrower's indebtedness, or Lender's security rights in any
collateral directly or indirectly securing any such indebtedness, to
the payment and/or security rights of any other present and/or future
creditors of Borrower.
(g) Apply any payments and/or proceeds to any of Borrower's
indebtedness in such priority or with such preferences as Lender may
determine in its sole discretion, regardless of which of Borrower's
indebtedness then remains unpaid.
(h) Take or accept any other collateral security or guaranty for any
or all of Borrower's indebtedness.
(i) Enter into, deliver, modify, amend, or waive compliance with, any
instrument or arrangement evidencing, securing or otherwise affecting,
all or any part of Borrower's indebtedness.
NO IMPAIRMENT OF GUARANTOR'S OBLIGATIONS. No course of dealing between Lender
and Borrower (or any other guarantor, surety or endorser of Borrower's
indebtedness), nor any failure or delay on the part of Lender to exercise any of
Lender's rights and remedies under this Agreement or any other agreement or
agreements by and between Lender and Borrower (or any other guarantor, surety or
endorser), shall have the effect of impairing or releasing Guarantor's
obligations and liabilities to Lender, or of waiving any of Lender's rights and
remedies under this Agreement or otherwise. Any partial exercise of any rights
and remedies granted to Lender shall furthermore not constitute a waiver of any
of Lender's other rights and remedies; it being Guarantor's intent and agreement
that Lender's rights and remedies shall be cumulative in nature. Guarantor
further agrees that, should Borrower default under any of its indebtedness, any
waiver or forbearance on the part of Lender to pursue Lender's available rights
and remedies shall be binding upon Lender only to the extent that Lender
specifically agrees to such waiver or forbearance in writing. A waiver or
forbearance on the part of Lender as to one event of default shall not
constitute a waiver or forbearance as to any other default.
NO RELEASE OF GUARANTOR. Guarantor's obligations and liabilities under this
Agreement shall not be released, impaired, reduced, or otherwise affected by,
and shall continue in full force and effect notwithstanding the occurrence of
any event, including without limitation any one or more of the following events:
(a) The death, insolvency, bankruptcy, arrangement, adjustment,
composition, liquidation, disability, dissolution, or lack of
authority (whether corporate, partnership or trust) of Borrower (or
any person acting on Borrower's behalf), or of any other guarantor,
surety or endorser of Borrower's indebtedness.
<PAGE>
(b) Any payment by Borrower, or any other party, to Lender that is
held to constitute a preference, transfer or a fraudulent conveyance
under any applicable law, or any such amounts or payment which, for
any reason, Lender is required to refund or repay to Borrower or to
any other person.
(c) Any dissolution of Borrower, or any sale, lease or transfer of
all or any part of Borrower's assets.
(d) Any failure of Lender to notify Guarantor of the making of
additional loans or other extensions of credit in reliance on this
Agreement.
AUTOMATIC REINSTATEMENT. This Agreement and Guarantor's obligations and
liabilities hereunder shall continue to be effective, and/or shall automatically
and retroactively be reinstated. If a release or discharge has occurred, or if
at any time, any payment or part thereof to Lender with respect to any of
Borrower's indebtedness, is rescinded or must otherwise be restored by Lender
pursuant to any insolvency, bankruptcy, reorganization, receivership, or any
other debt relief granted to Borrower or to any other party to Borrower's
indebtedness or any such security therefor. In the event that Lender must
rescind or restore any payment received in total or partial satisfaction of
Borrower's indebtedness, any prior release or discharge from the terms of this
Agreement given to Guarantor shall be without effect, and this Agreement and
Guarantor's obligations and liabilities hereunder shall automatically and
retroactively be renewed and/or reinstated and shall remain in full force and
affect to the same degree and extent as if such a release or discharge had never
been granted. It is the intention of Lender and Guarantor that Guarantor's
obligations and liabilities hereunder shall not be discharged except by
Guarantor's full and complete performance and satisfaction of such obligations
and liabilities; and then only to the extent of such performance.
LEGAL EXISTENCE. Guarantor is a corporation duly organized validly existing and
in good standing under the laws of the State of Texas. Guarantor is duly
qualified and in good standing as a foreign corporation in each jurisdiction
where in the nature of the business transacted and the property owned by
Guarantor makes such qualification necessary. Guarantor's guaranty of
Borrower's indebtedness and this Agreement does not violate Guarantor's Articles
of Incorporation or Bylaws. Guarantor has taken all corporate action necessary
to authorize the execution, delivery and performance of this Agreement.
REPRESENTATIONS AND WARRANTIES BY GUARANTOR. Guarantor represents and warrants
that
(a) Guarantor has the lawful power to own its properties and to
engage in its business as presently conducted.
(b) Guarantor's guaranty of Borrower's indebtedness and Guarantor's
execution, delivery and performance of this Agreement are not in
violation of any laws and will not result in a default under any
contract, agreement, or instrument to which Guarantor is a party, or
by which Guarantor or its property may be bound.
(c) Guarantor has agreed and consented to execute this Agreement and
to guarantee Borrower's indebtedness in favor of Lender, at Borrower's
request and not at the request of Lender.
(d) Guarantor will receive and/or has received a direct or indirect
material benefit from the transactions contemplated herein and/or
arising out of Borrower's indebtedness.
(e) This Agreement, when executed and delivered to Lender, will
constitute a valid, legal and binding obligation of Guarantor,
enforceable in accordance with its terms.
(f) Guarantor has established adequate means of obtaining information
from Borrower on a continuing basis regarding Borrower's financial
condition.
(g) Lender has made no representations to Guarantor as to the
creditworthiness of Borrower.
ADDITIONAL OBLIGATIONS OR GUARANTOR. So long as this Agreement remains in
effect, Guarantor has not and will not, without Lender's prior written consent,
sell, lease, assign, pledge, hypothecate, encumber, transfer, or otherwise
dispose of all or substantially all of Guarantor's assets. Guarantor agrees to
keep adequately informed of any facts, events or circumstances which might in
any way affect Guarantor's risks under this Agreement. Guarantor further agrees
that Lender shall have no obligation to disclose to Guarantor any information or
material relating to Borrower or Borrower's indebtedness.
ADDITIONAL DOCUMENTS; FINANCIAL STATEMENTS. Upon the reasonable request of
Lender, Guarantor will, at any time, and from time to time, execute and deliver
to Lender any and all such financial instruments and documents, and supply such
additional information, as may be necessary or advisable in the opinion of
Lender to obtain the full benefits of this Agreement. Guarantor further agrees
to provide Lender with such financial statements and other related information
at such frequencies and in such detail as Lender may reasonably request.
TRANSFER OF INDEBTEDNESS. This Agreement is for the benefit of Lender and for
such other person or persons as may from time to time become or be the holders
of all or any part of Borrower's indebtedness. This Agreement shall be
transferrable and negotiable with the same force and effect and to the same
extent as Borrower's indebtedness may be transferrable; it being understood and
agreed to by Guarantor that, upon any transfer or assignment of all or any part
of Borrower's indebtedness, the holder of such Indebtedness shall have all of
the rights and remedies granted to Lender under this Agreement. Guarantor
further agrees that, upon any transfer of all or any portion of Borrower's
indebtedness, Lender may transfer and deliver any and all collateral securing
repayment of such indebtedness (including, but not limited to, any collateral
provided by Guarantor) to the transferee of such indebtedness, and such
collateral shall secure any and all of Borrower's indebtedness in favor of such
a transferee. Guarantor additionally agrees that, after any such transfer or
assignment has taken place, Lender shall be full discharged from any and all
liability and responsibility to Borrower and Guarantor with respect to such
collateral, and the transferee thereafter shall be vested with all the powers
and rights with respect to such collateral.
CONSENT TO PARTICIPATION. Guarantor recognizes and agrees that Lender may, from
time to time, one or more times, transfer all or any part of Borrower's
indebtedness through sales of participation interests in such indebtedness to
one or more third party lenders. Guarantor specifically agrees and consents to
all such transfers and assignments, and Guarantor further waives any subsequent
notice of such transfers and assignments as may be provided under Louisiana law.
Guarantor additionally agrees that the purchaser of a participation interest in
Borrower's indebtedness will be considered as the absolute owner of a percentage
interest of such indebtedness and that such a purchaser will have all of the
rights granted under any participation agreement governing the sale of such a
participation interest. Guarantor waives any rights of offset that Guarantor may
have against Lender and/or any purchaser of such a participation interest, and
Guarantor unconditionally agrees that either Lender or such a purchaser may
enforce Guarantor's obligations and liabilities under this Agreement,
irrespective of the failure or insolvency of Lender or any such purchaser.
NOTICES. Any notice provided in this Agreement must be in writing and will be
considered as given on the day it is delivered by hand or deposited in the U.S.
mail, postage prepaid, addressed to the person to whom the notice is to be given
at the address shown above or at such other addresses as any party may designate
to the other in writing. If there is more than one Guarantor under this
Agreement, notice to any Guarantor shall constitute notice to all Guarantors.
ADDITIONAL GUARANTIES. Guarantor recognizes and agrees that Guarantor may have
previously granted, and may in the future grant, one or more additional
guaranties of Borrower's indebtedness in favor of Lender. Should this occur,
the execution of this Agreement and any additional guaranties on the part of
Guarantor will not be construed as a cancellation of this Agreement or any of
Guarantor's additional guaranties: it being Guarantor's full intent and
agreement that all such guaranties of Borrower's indebtedness in favor of Lender
shall remain in full force and effect and shall be cumulative in nature and
effect.
ADDITIONAL AFFIRMATIVE COVENANT. In addition to the covenants set forth above,
Guarantor covenants and agrees with Lender that Guarantor will, on an annual
basis, furnish Lender with Guarantor's financial statement, prepared and
certified as correct to the best knowledge and belief of Guarantor.
ADDITIONAL AFFIRMATIVE COVENANT. In addition to the covenants set forth above,
Guarantor covenants and agrees with Lender that Guarantor will, on an annual
basis, furnish Lender with Guarantor's financial statement, prepared and
certified as correct to the best knowledge and belief of Guarantor.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Guaranty:
Amendment. No amendment, modification, consent or waiver of any
provision of this Agreement, and no consent to any departure by
Guarantor therefrom, shall be effective unless the same shall be in
writing signed by a duly authorized officer of Lender, and then shall
be effective only as to the specific instance and for the specific
purpose for which given.
<PAGE>
Caption Headings. Caption headings of the sections of this Agreement are for
convenience purposes only and are not to be used to interpret or to define their
provisions. In this Agreement, whenever the context so requires, the singular
includes the plural and the plural also includes the singular.
Governing Law. This Agreement shall be governed and construed in accordance
with the substantive laws of the State of Louisiana.
Severability. If any provision of this Agreement is held to be illegal, invalid
or unenforceable under present or future laws effective during the term hereof,
such provision shall be fully severable. This Agreement shall be construed and
enforceable as if the illegal, invalid or unenforceable provision had never
comprised a part of it, and the remaining provisions of this Agreement shall
remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom. Furthermore,
in lieu of such illegal, invalid or unenforceable provision, there shall be
added automatically as a part of this Agreement, a provision as similar in terms
to such illegal, invalid or unenforceable provision as may be possible and
legal, valid and enforceable.
Successors and Assigns Bound. Guarantor's obligations and liabilities under
this Agreement shall be binding upon Guarantor's successors, heirs, legatees,
devisees, administrators, executors and assigns.
Waive Jury. Guarantor and Lender hereby waive the right to any jury trial in
any action, proceeding, or counterclaim brought by either against the other.
EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED. NO
FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS
GUARANTY IS DATED SEPTEMBER 1, 1995.
GUARANTOR:
TRAVIS BOATS & MOTORS, INC.
By: /s/ Mark Walton
------------------------
Mark Walton, President
<PAGE>
EXHIBIT 10.9(c)
PROMISSORY NOTE 8942404-7900
Borrower: Lender:
TBC Arkansas, Inc. (TIN: 710778068) Hibernia National Bank TIN: 72-0210640
c/o Travis Group Loan Administration Department
13045 Research Boulevard 440 Third Street
Austin, TX 78750 Post Office Box 3697
Baton Rouge, LA 70820
- --------------------------------------------------------------------------------
Principal Amount: Initial Rate: Date of Note:
$250,000.00 9.250% September 1, 1995
PROMISE TO PAY. TBC Arkansas, Inc. ("Borrower") promises to pay to the order of
Hibernia National Bank ("Lender"), in lawful money of the United States of
America the sum of Two Hundred Fifty Thousand & 00/100 Dollars (U.S.
$250,000.00) or such other or lesser amounts as may be reflected from time to
time on the books and records of Lender as evidencing the aggregate unpaid
principal balance of loan advances made to Borrower on a revolving line of
credit basis as provided below, together with simple interest assessed on a
variable rate basis at the rate per annum equal to 0.500 percentage points over
the index provided below, as the index under this Note may be adjusted from time
to time, one or more times, with interest being assessed on the unpaid principal
balance of this Note as outstanding from time to time, commencing on September
1, 1995 and continuing until this Note is paid in full, or until default under
this Note with interest thereafter being subject to the default interest rate
provisions set forth herein.
LINE OF CREDIT. This Note evidences a revolving line of credit "master note".
Advances under this Note, as well as directions for payment from Borrower's
accounts, may be requested orally or in writing by Borrower or by an authorized
person. Lender may, but need not, require that all oral requests be confirmed in
writing. The following party or parties are authorized to request advances under
the line of credit until Lender receives from Borrower at Lender's address shown
above written notice of revocation of their authority: Mark Walton, President,
or any other officer designated by him in writing. Borrower agrees to be liable
for all sums either; (a) advanced in accordance with the instructions of an
authorized person or (b) credited to any of Borrower's deposit accounts with
Lender. The unpaid principal balance owing on this Note at any time may be
evidenced by endorsements on this Note or by Lender's internal records,
including daily computer print-outs. Lender will have no obligation to advance
funds under this Note if: (a) Borrower or any guarantor is in default under the
terms of this Note or any agreement that Borrower or any guarantor has with
Lender, including any agreement made in connection with the signing of this
Note: (b) Borrower or any guarantor ceases doing business or is insolvent; (c)
any guarantor seeks, claims or otherwise attempts to limit, modify or revoke
such guarantor's guarantee of this Note or any other loan with Lender; (d)
Borrower has applied funds provided pursuant to this Note for purposes other
than those acceptable to Lender; or (e) Lender in good faith deems itself
insecure under this Note or any other agreement between Lender and Borrower.
PAYMENT. Borrower will pay this loan in accordance with the following payment
schedule:
Outstanding principal and unpaid interest on this note is due and
payable in full on August 30, 1996. Borrower agrees to pay monthly
interest payments beginning October 1, 1996, with all subsequent
interest payments due on the same day of each month thereafter until
this note is paid in full. Principal under this note shall be
repayable earlier than August 30, 1996 in accordance with the
repayment provisions as provided in the Inventory Loan Agreement dated
September 1, 1995.
Interest on this Note is computed on a 365/360 simple interest basis; that is,
by applying the rate of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding. Borrower will pay Lender at
Lender's address shown above or at such other place as Lender may designate in
writing. Unless otherwise agreed or required by applicable law, payments will
be applied first to accrued unpaid interest, then to principal, and any
remaining amount to any unpaid collection costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an independent index which is the CITIBANK N.A.
RATE (the "Index"). The Index is not necessarily the lowest rate charged by
Lender on its loans. If the index becomes unavailable during the term of this
loan, Lender may designate a substitute index after notice to Borrower. Lender
will tell Borrower the current index rate upon Borrower's request. Borrower
understands that Lender may make loans based on other rates as well. The
interest rate change will not occur more often than each day. The Index
currently is 8.750% per annum. The interest rate to be applied to the unpaid
principal balance of this Note will be at a rate of 0.500 percentage points over
the Index, resulting in an initial rate of 9.250% per annum. Under no
circumstances will the interest rate on this Note be more than the maximum rate
allowed by applicable law.
PREPAYMENT. Borrower may prepay this Note in full at any time by paying the
then unpaid principal balance of this Note, plus accrued simple interest and any
unpaid late charges through date of prepayment. If borrower prepays this Note
in full, or if Lender accelerates payment, Borrower understands that, unless
otherwise require by law, any prepaid fees or charges will not be subject to
rebate and will be earned by Lender at the time this Note is signed. Unless
otherwise agreed to in writing, early payments under this Note will not relieve
Borrower of Borrower's obligation to continue to make regularly scheduled
payments under the above payment schedule. Early payments will instead reduce
the principal balance due, and Borrower may be required to make fewer payments
under this Note.
LATE CHARGE. If Borrower fails to pay any payment under this Note in full
within 10 days of when due, Borrower agrees to pay Lender a late payment fee in
an amount equal to 10.000% of the delinquent interest due. Late charges will
not be assessed following declaration of default and acceleration of maturity of
this Note.
DEFAULT. The following sections and/or insertions shall constitute default
events under this Note:
Default Under This Note. Should Borrower default in the payment of
principal and/or interest under this Note.
Default Under Security Agreements. Should Borrower or any guarantor
violate, or fail to comply fully with any of the terms and conditions
of, or default under any security right, instrument, document, or
agreement directly or indirectly securing repayment of this Note.
Other Defaults in Favor of Lender. Should Borrower or any guarantor of
this Note default under any other loan, extension of credit, security
right, instrument, document or agreement, or obligation in favor of
Lender.
Default in Favor of Third Parties. Should Borrower or any guarantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may effect any property or other
collateral directly or indirectly securing repayment of this Note.
Insolvency. Should the suspension, failure or insolvency, however,
evidenced, of Borrower or any guarantor of this Note occur or exist.
Death or Interdiction. Should any guarantor of this Note die or be
interdicted.
Readjustment of Indebtedness. Should proceedings for readjustment of
indebtedness, reorganization, bankruptcy, composition or extension
under any insolvency law be brought by or against Borrower or any
guarantor.
Assignment for Benefit of Creditors. Should Borrower or any guarantor
file proceedings for a respite or make a general assignment for the
benefit of creditors.
Receivership. Should a receiver of all or any part of Borrower's
property, or the property of any guarantor, be applied for or
appointed.
Dissolution Proceedings. Should proceedings for the dissolution or
appointment of a liquidator of Borrower or any guarantor be commenced.
False Statements: Should any representation, warranty, or material
statement of Borrower or any guarantor made in connection with the
obtaining of the loan evidenced by this Note or any security agreement
directly or indirectly securing repayment of this Note, prove to be
incorrect or misleading in any respect.
<PAGE>
Material Adverse Change. Should any material adverse change occur in the
financial condition of Borrower or any guarantor of the Note or should any
material discrepancy exist between the financial statements submitted by
Borrower or any guarantor and the actual financial condition of Borrower or
such guarantor.
Insecurity. Should Lender deem itself to be insecure with regard to
repayment of this Note.
LENDER'S RIGHTS UPON DEFAULT. Should any one or more default events occur or
exist under this Note as provided above, Lender shall have the right, at its
sole option, to declare formally this Note to be in default and to accelerate
the maturity and insist upon immediate payment in full of the unpaid principal
balance then outstanding under this Note, plus accrued interest, together with
reasonable attorney's fees, costs, expenses and other fees and charges as
provided herein. Lender shall have the further right, again at its sole option,
to declare formal default and to accelerate the maturity and to insist upon
immediate payment in full of each and every other loan, extension of credit,
debt, liability and/or obligation of every nature and kind that Borrower may
then owe to Lender, whether direct or indirect or by way of assignment, and
whether absolute or contingent, liquidated or unliquidated, voluntary or
involuntary, determined or undetermined, secured or unsecured, whether Borrower
is obligated alone or with other on a "solidary" or "joint and several" basis,
as principal obligor or otherwise, all without further notice or demand, unless
Lender shall otherwise elect.
INTEREST AFTER DEFAULT. If Lender declares this Note to be in default, Lender
has the right prospectively to adjust and fix the simple interest rate under
this Note until this Note is paid in full, as follows: (1) If the original
principal amount of this Note is $250,000 or less, the fixed default interest
rate shall be equal to eighteen (18%) percent per annum, or three (3%) percent
per annum in excess of the interest rate under this Note, whichever is greater.
(2) If the original principal amount of this Note is more than $250,000, the
fixed default interest rate shall be equal to twenty-one (21%) percent per
annum, or three (3%) percent per annum in excess of the interest rate under this
Note at the time of default, whichever is greater.
ATTORNEYS' FEES. If Lender refers this Note to an attorney for collection, or
files suit against Borrower to collect this Note, or if Borrower files for
bankruptcy or other relief from creditors, Borrower agrees to pay Lender's
reasonable attorneys' fees in an amount not exceeding 25.000% of the unpaid debt
then owing under this Note.
NSF CHECK CHARGES. In the event that Borrower makes any payment under this Note
by check and Borrower's check is returned to Lender unpaid due to nonsufficient
funds in any deposit account, Borrower agrees to pay Lender an additional NSF
check charge equal to $20.00.
DEPOSIT ACCOUNTS. As collateral security for repayment of this Note and all
renewals and extensions, as well as to secure any and all other loans, notes,
indebtedness and obligations that Borrower (or any of them) may now and in the
future owe to Lender or incur in Lender's favor, whether direct or indirect,
absolute or contingent, due or to become due, of any nature and kind whatsoever
(with the exception of any indebtedness under a consumer credit card account),
borrower is granting Lender a continuing security interest in any and all funds
that Borrower may now and in the future have on deposit with Lender or in
certificates of deposit or other deposit accounts as to which Borrower is an
account holder (with the exception of IRA, pension, and other tax-deferred
deposits). Borrower further agrees that Lender may at any time apply any funds
that Borrower may have on deposit with Lender or in certificates of deposit or
other deposit accounts as to which Borrower is an account holder against the
unpaid balance of this Note and any and all other present and future
indebtedness and obligations that Borrower (or any of them) may then owe to
Lender, in principal, interest, fees, costs, expenses, and attorneys' fees.
FINANCIAL STATEMENTS. Borrower agrees to provide Lender with such financial
statements and other related information at such frequencies and in such detail
as Lender may reasonably request.
GOVERNING LAW. Borrower agrees that this Note and the loan evidenced hereby
shall be governed under the laws of the State of Louisiana. Specifically, this
business or commercial Note is subject to La. A.S. 9:3508 et seq.
COVENANT. The Borrower covenants to take such actions as may be needed to
ensure that within 30 days of the date of closing this loan, Borrower will
deliver to Lender the executed guarantee of the individual guarantors Mark T.
Walton, Joe E. Simpson, S. D. Bohls, Robert C. Siddons, Jesse C. Cox and Ronnie
L. Spradling.
WAIVERS. Borrower and each guarantor of this Note hereby waive demand,
presentment for payment, protest, notice of protest and notice of nonpayment,
and all pieces of division and discussion, and severally agree that their
obligations and liabilities to Lender hereunder shall be on a "solidary" or
"joint and several" basis. Borrower and each guarantor further severally agree
that discharge or release of any party who is or may be liable to Lender for the
indebtedness represented hereby, or the release of any collateral directly or
indirectly securing repayment hereof, shall not have the effect of releasing any
other party or parties, who shall remain liable to Lender, or of reissuing any
other collateral that is not expressly released by Lender. Borrower and each
guarantor additionally agree that Lender's acceptance of payment other than in
accordance with the terms of this Note, or Lender's subsequent agreement to
extend or modify such repayment terms, or Lender's failure or delay in
exercising any rights or remedies granted to Lender, shall likewise not have the
effect of releasing Borrower or any other party or parties from their respective
obligations to Lender, or of releasing any collateral that directly or
indirectly secures repayment hereof. In addition, any failure or delay on the
part of Lender to exercise any of the rights and remedies granted to Lender
shall not have the effect of waiving any of Lender's rights and remedies. Any
partial exercise of any rights and/or remedies granted to Lender shall
furthermore not be construed as a waiver of any other rights and remedies: it
being Borrower's intent and agreement that Lender's rights and remedies shall be
cumulative in nature. Borrower and each guarantor further agree that, should any
default event occur or exist under this Note, any waiver or forbearance on the
part of Lender to pursue the rights and remedies available to Lender, shall be
binding upon Lender only to the extent that Lender specifically agrees to any
such waiver or forbearance in writing. A waiver or forbearance on the part of
Lender as to one default event shall not be construed as a waiver or forbearance
as to any other default. Borrower and each guarantor of this Note further agree
that any late charges provided for under this Note will not be charges for
deferral of time for payment and will not and are not intended to compensate
Lender for a grace or cure period, and no such deferral, grace or cure period
has or will be granted to Borrower in return for the imposition of any late
charge. Borrower recognizes that Borrower's failure to make timely payment of
amounts due under this Note will result in damages to Lender, including but not
limited to Lender's loss of the use of amounts due, and Borrower agrees that any
late charges imposed by Lender hereunder will represent reasonable compensations
to Lender for such damages. Failure to pay in full any installment or payment
timely when due under this Note, whether or not a late charge is assessed, will
remain and shall constitute an Event of Default hereunder.
SUCCESSORS AND ASSIGNS LIABLE. Borrower's and each guarantor's obligations and
agreements under this Note shall be binding upon Borrower's and each guarantor's
respective successors, heirs, legatees, devices, administrators, executors and
assigns. The rights and remedies granted to Lender under this Note shall inure
to the benefit of Lender's successors and assigns, as well as to any subsequent
holder or holders of this Note.
CAPTION HEADINGS. Caption headings of the sections of this Note are for
convenience purposes only and are not to be used to interpret or to define their
provisions. In this Note, whenever the context so requires, the singular
includes the plural and plural also includes the singular.
SEVERABILITY. If any provision of this Note is held to be invalid, illegal or
unenforceable by any court, that provision shall be deleted from this Note and
the balance of this Note shall be interpreted as if the deleted provision never
existed.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. LENDER AND BORROWER
HEREBY WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM BROUGHT BY EITHER LENDER OR BORROWER AGAINST THE OTHER.
BORROWER:
TBC ARKANSAS, INC.
By: /s/ Mark Walton
---------------------------------------
Mark Walton, President
<PAGE>
EXHIBIT 10.10(b)
<TABLE>
<S> <C>
[LOGO OF NATIONSBANK APPEARS HERE] SECURITY
NATIONSBANK OF TEXAS, N.A. AGREEMENT
</TABLE>
<TABLE>
<CAPTION>
Date: July 31, 1995
Between and
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Banks (Secured Party) Debtor/Pledgor:
NationsBank of Texas, N.A. Travis Boats & Motors, Inc.
SAN ANTONIO Falcon Marine, Inc.
300 Convent Falcon Marine Abilene, Inc.
San Antonio, Texas 78205 Travis Snowden Marine, Inc.
Travis Boating Center Beaumont, Inc.
Travis Boating Center Arlington, Inc.
13045 Research Blvd.
Austin, Texas 78750
Bexar County Travis County
(address including country)
(Name and address including country)
- ---------------------------------------------------------------------------------------------------------------------------------
Debt or/Pledgor is: [_] individual [X] Corporation [_] Partnership [_] Other__________________
- ---------------------------------------------------------------------------------------------------------------------------------
Address is Debtor/Pledgor's: [_] [_] Place of Business [X] Chief Executive Officer if more than one place of Business
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(This Agreement contains some provisions preceded by boxes. Mark only those
boxes beside provisions which will be applicable to this transaction. A box
which is not marked means that the provision beside it is not applicable to this
transaction)
A. SECURITY INTEREST. For good valuable consideration, the receipt and
adequacy of which are hereby acknowledged and subject to the applicable terms of
this agreement, Debtor/Pledgor (hereinafter referred to as Debtor) assigns and
grants to Bank (also known as Secured Party), a security interest and lien in
the Collateral to secure the payments and the performance of the Obligation.
B. COLLATERAL. The security interest is granted in the following
("Collateral")(Check as applicable)
[_] ACCOUNTS. Any and all accounts, accounts receivable, receivables, contract
rights, books debts, checks, notes, drafts, instruments, chattel paper,
acceptances, chooses in action, any and all amounts due to Debtor from a factor
or other forms of obligations and receivables now existing or hereafter arising
out of the business of the Debtor, as well as any and all returned, refused and
repossessed goods and the cash or non-cash proceeds resulting therefrom.
[_] INVENTORY. Any and all of Debtor's inventory, including without
limitations any and all goods held for sale or lease or being processed for sale
or lease in Debtor's business as now or hereafter conducted, whether now owned
or hereafter acquired, including all materials, goods and work in process,
finished goods, and other tangible property held for sale or lease or furnished
or to be furnished under contracts of service or used or consumed in Debtor's
business, along with all documents (including documents of title) covering
inventory, all cash and non-cash proceeds from the sale of inventory including
proceeds from insurance and specially including box not limited to (attach
Schedule if necessary): ________________________
_____________________________________________________________________
[_] EQUIPMENT. Any and all of Debtor's furnishings, fixtures and equipment,
wherever located, whether now owned or hereafter acquired, together with all
increases, parts, fittings, accessories, equipment, and special tools now or
hereafter affixed to any part thereof or used in connection therewith, and all
products, addition, substitutions, accessories, and all cash and non-cash
proceeds, including proceeds from insurance thereof and thereto, including
without limitations the following (attach Schedule if necessary): ______________
_____________________________________________________________________
[_] FIXTURES. All of Debtor's fixtures now existing or hereafter acquired,
together with all substitutes and replacements therefor, all accessions and
attachments thereto, and all tools, parts and equipment now or hereafter added
to or used in connection therewith. These goods are or will become fixtures on
the following described real estate in _________________ Country, ______________
_______________ (State), owned by: ___________________________________ (name of
owner) more particularly described as follows: ________________________________
___________________[insert legal description (or attach Exhibit) of property,
not street address], including without limitation the following (attach Schedule
if necessary): _________________________________________________________________
______________________________________________________
[_] INSTRUMENTS AND/OR INVESTMENT DOCUMENTS. The following described
instruments and documents including, without limitation, negotiable instruments,
promissory notes, and documents of title owned or to be owned by Debtor,
certificates of deposit, and all liens, security agreements, leases and other
contracts securing or otherwise relating to any of said instruments or
documents, and all cash and non-cash proceeds and products thereof and such
additional property receivable or distribution in respect of or in exchange for
all or any of such instruments or documents (attach Schedule if necessary):_____
_____________________________________________________________________
[_] GENERAL INTANGIBLES. All patents, trademarks, service marks, trade secrets,
copyrights and exclusive licenses (whether issued or pending) and all documents,
applications, material and other matters related thereto, all inventions, and
all manufacturing, engineering and production plans, drawings, specifications,
processes and systems, all trade names: computer programs, data bases, systems
and software (including source and object codes), goodwill, chooses in action
and all other general intangibles of Debtor whether now owned or hereafter
acquired and all ash and non-cash proceeds thereof, including without limitation
the following described intangible personal property, and all chattel paper,
documents and instruments relating to such intangibles, including without
limitation (attach Schedule if necessary): __________________________
[_] TIMBER. All of Debtor's uncut timber growing or to be grown on the
following described property, and all cash and non-cash proceeds including
proceeds from insurance, and all products thereto (complete legal description of
real property required) (attach Exhibit if necessary):
_____________________________________________________________________
[X] OTHER: All of debtor's inventory of boats, motors and trailers, including
all parts and accessories now existing or hereafter acquired and wherever
located, together with all substitutes and replacements thereof, all
accessories, attachments, parts, equipment and additions now or hereafter
affixed thereto or used in connection therewith and all similar property
hereafter acquired by debtor, including any such goods as may be located or held
for leasing, together with any and all proceeds arising from the sale, lease or
other disposition of said property, and all returned, refused and repossesed
goods, all motors received from manufacurers by way of credits, refunds or
otherwise with respect to collateral and all proceeds thereof (hereafter
referred to as "Goods" and all proceeds thereof).
2. All substitutes and replacements for, accessories, attachments and other
additions to, tools, parts and equipment used in connection with, and proceeds
and products of, the above Collateral (including all income and benefits
resulting from any of the above, such as dividends payable or distributable in
cash, property or stock; interest, premium and principal payments; redemption
proceeds and subscription rights; all certificates of title, manufacturer's
statements of origin, other documents, accounts and chattel paper arising from
or related to the above Collateral, and reduced or repossessed Collateral, any
of which, if received by Debtor, upon request shall be delivered immediately to
Bank.
3. The balance of every deposit account of Debtor under control of Bank and
any other claim of Debtor against Bank, now or hereafter existing, liquidated or
unliquidated, and all money, instruments, securities, documents, chattel paper,
credits, claims, demands, income, and any other property, rights and interests
of Debtor which at any time shall come into the posession or custody or under
the control of Bank or any of its agents, affiliates or correspondents, for any
purpose, and the proceeds of any thereof, Bank shall be deemed to have
possession of any of the Collateral in transit to or set apart for it or any of
its agents, affiliates or correspondents.
<PAGE>
3. AGREEMENT CONTINUING. This agreement shall constitute a continuing
agreement, applying to all future as well as existing transactions, whether or
not of the character contemplated at the date of this agreement, and if all
transactions between Bank and Debtor shall be closed at any time, shall be
equally applicable to any new transactions thereafter. Provisions of this
agreement, unless by their terms exclusively, shall be in addition to other
agreements between the parties. Time is of the essence of this agreement.
4. DEFINITIONS. Unless the context indicates otherwise, definitions in
the UCC apply to words and phrases in this agreement; if UCC definitions
conflict, Article 9 definitions apply.
5. NOTICE. Notice shall be deemed reasonable if mailed postage prepaid
at least 5 days before the related action (or if the UCC elsewhere specifies a
longer period, such longer period) to the address of Debtor given above.
6. MODIFICATIONS. No provision hereof shall be modified or limited
except by a written agreement expressly referring hereto and to the provisions
so modified of limited and signed by the Debtor and Bank, nor by course of
conduct, usage of trade.
7. PARTIAL INVALIDITY. The unenforceabilty of invalidity of any
provision of this security agreement shall not affect the enforceabilty or
validity of any other provision herein and the invalidity or unenforceabilty of
any provision of any loan document to any person or circumstance shall not
affect the enforceabilty or validity of such provision as it may apply to other
persons or circumstances.
8. GENDER AND NUMBER. Where appropriate, the use of one gender shall be
construed to include the others or any of them; and the singular number shall be
construed to include the plural, and vice versa.
9. APPLICABLE LAW AND VENUE. This agreement has been delivered in the
State of Texas and shall be construed in accordance with the laws of that State.
It is performable by Debtor in the county or city of Bank's address set out
above and Debtor expressly waives any objection as to venue in any such
location. Wherever possible each provision of this agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this agreement.
10. FINANCING STATEMENT. To the extent permitted by applicable law, a
carbon, photographic or other reproduction of this security agreement or any
financing statement covering the Collateral shall be sufficient as a financing
statement.
11. COUNTERPARTS. This agreement may be executed in any number of
counterparts, each of which shall be considered to be an original, but all of
which shall constitute one in the same instrument. As used herein, "this
agreement" shall include all such attachments and addends.
12. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY RELATED AGREEMENTS OR INSTRUMENTS, INCLUDING ANY CLAIM BASED ON
OR ARISING FROM AN ALLEGED TORT, 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 JUDICIAL ARBITRATION AND MEDIATION SERVICES, INC.
(J.A.M.S.) AND THE "SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF ANY
INCONSISTENCY, THE SPECIAL RULES CONTROL. JUDGEMENT UPON ANY ARBITRATION AWARD
MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THIS AGREEMENT MAY
BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL
ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY
COURT HAVING JURISDICTION OVER SUCH ACTION.
A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE CITY OF THE
BORROWER'S DOMICILE AT THE TIME OF THIS AGREEMENT'S EXECUTION 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 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.
B. RESERVATIONS OF RIGHTS. NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO
(I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION
OR REPOSE AND ANY WAIVERS CONTAINED IN THIS AGREEMENT; OR (II) BE A WAIVER BY
THE 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 THE BANK HERETO
(A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SET OFF, OR (B)
TO FORECLOSE AGAINST 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. THE BANK
MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH
PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY
ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS AGREEMENT. AT BANK'S OPTION,
FORECLOSURE UNDER A DEED OF TRUST OR MORTGAGE MAY BE ACCOMPLISHED BY ANY OF THE
FOLLOWING: THE EXERCISE OF A POWER OF SALE UNDER THE DEED OF TRUST OR MORTGAGE,
OR BY JUDICIAL SALE UNDER THE DEED OF TRUST OR MORTGAGE, OR BY JUDICIAL
FORECLOSURE. NEITHER THIS EXERCISE OR SELF HELP REMEDIES NOR THE INSTITUTION OR
MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES
SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN
ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING
RESORT TO SUCH REMEDIES.
13. NOTICE OF FINAL AGREEMENT. THIS WRITTEN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OF SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN OR ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be duly
executed under seal by their duly authorized representatives as of the date
first above written.
BANK/SECURED PARTY: DEBTOR/PLEDGOR:
NATIONSBANK OF TEXAS, N.A. TRAVIS BOATS & MOTORS, INC.
By: /s/ Stevens E. Warrick By: /s/ Mark T. Walton
-------------------------- ------------------------
Name: Stevens E. Warrick Mark T. Walton, President
-----------------------
Title: Vice President
----------------------
FALCON MARINE, INC.
By: /s/ Mark T. Walton
------------------------
Mark T. Walton, President
FALCON MARINE ABILENE, INC.
By: /s/ Mark T. Walton
------------------------
Mark T. Walton, President
TRAVIS SNOWDEN MARINE, INC.
By: /s/ Mark T. Walton
------------------------
Mark T. Walton, President
TRAVIS BOATING CENTER BEAUMONT, INC.
By: /s/ Mark T. Walton
------------------------
Mark T. Walton, President
TRAVIS BOATING CENTER ARLINGTON, INC.
By: /s/ Mark T. Walton
------------------------
Mark T. Walton, President
<PAGE>
C. OBLIGATION.
1. DESCRIPTION OF OBLIGATION. The following obligations ("Obligation") are
secured by this agreement: (a) All debts, obligations, liabilities and
agreements of Debtor to Bank, now or hereafter existing, arising directly or
indirectly between Debtor and Bank whether absolute or contingent, joint or
several, secured or unsecured, due or not due, contractual or tortious
liquidated or unliquidated, arising by operation of law or otherwise, and all
renewals, extensions or rearrangements of any of the above; (b) Bank's
participation in any loan or other debt of Debtor to another person; (c) All
costs incurred by Bank to obtain, preserve, perfect and enforce this agreement
and maintain, preserve, collect and enforce the Collateral; (d) interest on the
above amounts as agreed between Bank and Debtor; (e) All Debt, obligations and
liabilities of Travis Boats & Motors, Inc., Falcon Marine, Inc., Falcon Marine
---------------------------------------------------------------
Abilene, Inc., Travis Snowden Marine, Inc., Travis Boating Center Beaumont,
- ---------------------------------------------------------------------------
Inc., and Travis Boating Center Arlington, Inc. (if the preceding space is
- -----------------------------------------------
completed, such party, together with the Debtor named above, is hereinafter
referred to collectively as "Debtor") to Bank of the kinds described in this
Item C, now existing or hereafter arising; (f) All expenses of the Bank,
including fees and expenses of the Bank's counsel, incident to the enforcement
of payment of all obligations of the Debtor by any action or participation in,
or in connection with a case or proceeding under the Bankruptcy Code, or any
successor statute thereto; (g) If the Debtor is not the obligor of any of the
Obligations, and in the event any amount paid to the Bank on any Obligation is
subsequently recovered from the Bank in or as a result of any bankruptcy,
insolvency or fraudulent conveyance proceeding, the Debtor shall be liable to
the Bank for the amounts so recovered up to the fair market value of the
Collateral whether or not the Collateral has been released or the security
interest terminated. In the event the Collateral has been released or the
security interest terminated, the fair market value of the collateral shall be
determined, at the Bank's option, as of the date the Collateral was released,
the security interest terminated, or said amounts were recovered; and (h) All
amounts which may be owed to Bank pursuant to all other loan documents executed
between Bank and any other Debtor.
Notwithstanding the foregoing, if the Collateral is personal property used as a
principal residence (such as a mobile home or a houseboat) or "household goods"
(as that term is defined at 12 C.F.R.(S)227.12, as it may be amended from time
to time) which are not in the Bank's possession and which are not fixtures, such
Collateral shall not secure any liability contracted for personal family or
household purposes between the Debtor or an obligor and the Bank already in
existence on the date hereof or that arises hereafter, unless the Debtor
otherwise expressly agrees.
D. DEBTOR'S WARRANTIES. Debtor hereby represents and warrants to Bank as
follows:
1. FINANCING STATEMENTS. Except as may be noted by schedule attached hereto
and incorporated herein by reference, no financing statement covering the
Collateral is or will be on file in any public office, except the financing
statements relating to this security interest, and no security interest, other
than the one herein created, has attached or been perfected in the Collateral or
any part thereof.
2. OWNERSHIP. Debtor owns, or will use the proceeds of any loans by Bank to
become the owner of, the Collateral free from any setoff, claim, restriction,
lien, security interest or encumbrance except liens for taxes not yet due and
the security interest hereunder.
3. FIXTURES AND ACCESSIONS. None of the Collateral is affixed to real estate
or is an accession to any goods, or will become a fixture or accession, except
as expressly set out herein.
4. CLAIMS OF DEBTORS ON COLLATERAL. All account debtors and other obligors
whose debts or obligations are part of the Collateral have no right to setoffs,
counterclaims or adjustments, and no defenses in connection therewith.
5. POWER AND AUTHORITY. Debtor has full power and authority to make this
agreement.
E. DEBTOR'S COVENANTS. Until full payment and performance of all Obligations
and termination or expiration of any obligation or commitment of Bank to make
advances or loans to Debtor, unless Bank otherwise consents in writing:
1. OBLIGATION AND THIS AGREEMENT. Debtor shall perform all of its
agreements herein and in any other agreements between it and Bank.
2. OWNERSHIP OF COLLATERAL. Debtor shall defend the Collateral against all
claims and demands of all persons at any time claiming any interest therein
adverse to Bank. Debtor shall keep the Collateral free from all liens and
security interests except those for taxes not yet due and the security interest
hereby created.
3. INSURANCE. Debtor shall insure the Collateral with companies acceptable
to Bank. Such insurance shall be in an amount not less than the fair market
value of the Collateral and shall be against such casualties, with such
deductible amounts as Bank shall approve. All insurance policies shall be
written for the benefit of Debtor and Bank as their interests may appear,
payable to Bank as loss payee, or in other form satisfactory to Bank, and such
policies or certificates evidencing the same shall be furnished to Bank. All
policies of insurance shall provide for written notice to Bank at least 30 days
prior to cancellation. Risk of loss or damage is Debtor's to the extent of any
deficiency in any effective insurance coverage.
4. MAINTENANCE. Debtor shall keep all tangible Collateral in good condition.
5. BANK'S COSTS. Debtor shall pay all costs necessary to obtain, preserve,
perfect, defend and enforce this security interest, collect the Obligation, and
preserve, defend, enforce and collect the Collateral including but not limited
to taxes, assessments, insurance premiums, repairs, reasonable attorney's fees
and legal expenses, feed, rent, storage costs and expenses of sales. Whether
Collateral is or is not in Bank's possession, and without any obligation to do
so and without waiving Debtor's default for failure to make any such payment,
Bank at its option may pay any such costs and expenses, discharge encumbrances
on Collateral, and pay for insurance of Collateral, and such payment shall be a
part of the Obligation and bear interest at the rate set out in the Obligation.
Debtor agrees to reimburse Bank on demand for any costs so incurred.
6. INFORMATION AND INSPECTION. Debtor shall (i) promptly furnish Bank any
information with respect to Collateral requested by Bank; (ii) allow Bank or its
representatives to inspect the Collateral, at any time and wherever located, and
to inspect and copy, or furnish Bank or its representatives with copies of, all
records relating to the Collateral and the Obligation; (iii) furnish Bank or its
representatives such information as Bank may request to identify Collateral, at
the time and in the form requested by Bank; and (iv) deliver upon request to
Bank shipping and delivery receipts evidencing the shipment of goods and
invoices evidencing the receipt of, and the payment for, Collateral.
7. ADDITIONAL DOCUMENTS. Debtor shall sign and deliver any papers furnished
by Bank which are necessary or desirable in the judgment of Bank to obtain,
maintain and perfect the security interest hereunder and to enable Bank to
comply with the Federal Assignment of Claims Act or any other federal or state
law in order to obtain or perfect Bank's interest in Collateral or to obtain
proceeds of Collateral.
8. PARTIES LIABLE ON COLLATERAL. Debtor will preserve the liability of all
obligors on any Collateral, will preserve the priority of all security therefor,
and will deliver to Bank the original certificates of title on all motor
vehicles or other titled vehicles constituting the Collateral. Bank shall have
no duty to preserve such liability or security, but may do so at the expense of
Debtor, without waiving Debtor's default.
9. RIGHT OF BANK TO NOTIFY DEBTORS. At any time, whether Debtor is or is not
in default hereunder, Bank may notify persons obligated on any Collateral to
make payments directly to Bank and Bank may take control of all proceeds of any
Collateral. Until Bank elects to exercise such rights, Debtor, as agent of Bank,
shall collect and enforce all payments owed on Collateral.
10. RECORDS OF COLLATERAL. Debtor at all times will maintain accurate books
and records covering the Collateral. Debtor immediately will mark all books and
records with an entry showing the absolute assignment of all Collateral to Bank
and Bank is hereby given the right to audit the books and records of Debtor
relating to Collateral at any time and from time to time. The amounts shown as
owed to Debtor on Debtor's books and on any assignment schedule will be the
undisputed amounts owing and unpaid.
11. DISPOSITION OF COLLATERAL. If disposition of any Collateral gives rise to
an account, chattel paper or instrument, Debtor immediately shall notify Bank,
and upon request of Bank shall assign or endorse the same to Bank. No Collateral
may be sold, leased, manufactured, processed or otherwise disposed of by Debtor
in any manner without the prior written consent of Bank, except Collateral sold,
leased, manufactured, processed or consumed in the ordinary course of business.
12. ACCOUNTS. Each account held as Collateral will represent the valid and
legally enforceable obligation of third parties, and shall not be evidenced by
any instrument or chattel paper.
13. LOCATION OF COLLATERAL. Debtor shall give Bank written notice of each
office of Debtor in which records of Debtor pertaining to accounts held as
Collateral are kept, and each location at which Collateral is or will be kept,
and of any change of any such location. If no such notice is given, all records
of Debtor pertaining to Collateral are and shall be kept at Debtor's address
shown above. All Collateral of Debtor will be kept at Debtor's address shown
above unless otherwise notes as follows: Please see Exhibit "A" attached
----------------------------------------
hereto and incorporated herein by reference.
- --------------------------------------------------------------------------------
14. NOTICE OF CHANGES. Debtor will notify Bank immediately of any material
change in the Collateral, of a change in Debtor's residence or location, of a
change in any matter warranted or represented by Debtor in this agreement or
furnished to Bank, and of any event of default.
15. USE AND REMOVAL OF COLLATERAL. Debtor will not use the Collateral
illegally nor, unless previously indicated as a fixture, permit the Collateral
to be affixed to real or personal property without the prior written consent of
Bank. Debtor will not permit any of the Collateral to be removed from the
locations specified herein without the prior written consent of Bank, except for
the sale of inventory in the ordinary course of business.
16. POSSESSION OF COLLATERAL. Debtor will deliver all other instruments,
documents, and chattel paper which are part of the Collateral and in Debtor's
possession to the Bank immediately, or if hereafter acquired, immediately
following acquisition, appropriately endorsed to Bank's order, or with
appropriate, executed powers. Debtor waives presentment ,notice of acceleration,
demand, notice of dishonor, protest, and all other notices with respect thereto.
17. CONSUMER CREDIT. If any Collateral or proceeds includes obligations of
third parties to Debtor, the transactions giving rise to the Collateral shall
conform in all respects to the applicable state or federal law including but not
limited to consumer credit law. Debtor shall hold harmless and indemnify Bank
against any cost, loss or expense arising from Debtor's breach of this covenant.
18. CHANGE OF NAME/STATUS. Without the written consent of Bank, Debtor shall
not change its name, change its corporate status, use any trade name or engage
in any business in which it was not engaged on the date of this agreement.
<PAGE>
19. POWER OF ATTORNEY. Debtor appoints Bank as Debtor's attorney-in-fact
with full power in Debtor's name and behalf to do every act which Debtor is
obligated to do or may be required to do hereunder; however, nothing in this
paragraph shall be construed to obligate Bank to take any action hereunder nor
shall Bank be liable to Debtor for failure to take any action hereunder. This
appointment shall be deemed a power coupled with an interest and shall not be
terminable as long as the Obligations are outstanding and shall not terminate on
the disability or incompetence of the Debtor.
20. WAIVERS BY DEBTOR. Debtor waives notice of the creation, advance,
increase, existence, extension or renewal of, and of any indulgence with respect
to, the Obligation; waives presentments, demand, notice of dishonor, and
protest: waives notice of the amount of the Obligation outstanding at any time,
notice of any change in financial condition of any person liable for the
Obligation or any part thereof, notice of any event of default, and all other
notices respecting the Obligation; and agrees that maturity of the Obligation
and any part thereof may be accelerated, extended or renewed one or more times
by Bank in its discretion, without notice to Debtor. Debtor waives any right to
require that any action be brought against any other person or to require that
resort be had to any other security or to any balance of any deposit accounts.
The Debtor further waives any right of subrogation or to enforce any right of
action against any other Debtor until the Obligation is paid in full.
21. OTHER PARTIES AND OTHER COLLATERAL. No renewal or extension of or any
other indulgence with respect to the Obligation or any part thereof, no release
of any security, no release of any person (including any maker, endorser,
guarantor or surety) liable on the Obligation, no delay in enforcement of
payment, and no delay or omission or lack of diligence or care in exercising any
right or power with respect to the Obligation or any security therefor or
guaranty thereof or under this agreement shall in any manner impair or affect
the rights of Bank under the law, hereunder, or under any other agreement
pertaining to the Collateral. Bank need not file suit or assert a claim for
personal judgment against any person for any part of the Obligation or seek to
realize upon any other security for the Obligation, before foreclosing or
otherwise realizing upon the Collateral for the purpose of paying the
Obligation. Debtor waives any right to the benefit of or to require or control
application of any other security or proceeds thereof, and agrees that Bank
shall have no duty or obligation to Debtor to apply to the Obligation any such
other security or proceeds thereof.
22. COLLECTION AND SEGREGATION OF ACCOUNTS. The Bank hereby authorizes the
Debtor to collect the Collateral, subject to the direction and control of the
Bank, but the Bank may, without cause or notice, curtail or terminate said
authority at any time. Upon notice by the Bank, whether oral or in writing, to
the Debtor, the Debtor shall forthwith upon receipt of all checks, drafts, cash,
and other remittances in payment of or on account of the Collateral, deposit the
same in one or more special accounts maintained with the Bank over which the
Bank alone shall have the power of withdrawal. The remittance of the proceeds of
such Collateral shall not, however, constitute payment or liquidation of such
Collateral until the Bank shall receive good funds for such proceeds. Funds
placed in such special accounts shall be held by the Bank as security for all
Obligations secured hereunder. These proceeds shall be deposited in precisely
the form received, except for the endorsement of the Debtor where necessary to
permit collection of items, which endorsement the Debtor agrees to make, and
which endorsement the Bank is also hereby authorized, as attorney-in-fact, to
make on behalf of the Debtor. In the event the Bank has notified the Debtor to
make deposits to a special account, pending such deposit, the Debtor agrees that
it will not commingle any such checks, drafts, cash or other remittances with
any funds or other property of the Debtor, but will hold them separate and apart
therefrom, and upon an express trust for the Bank until deposit thereof is made
in the special account. The Bank will, from time to time, apply the whole or any
part of the Collateral funds on deposit in this special account against such
Obligations as are secured hereby as the Bank may in its sole discretion elect.
At the sole election of the Bank, any portion of said funds on deposit in the
special account which the Bank shall elect not to apply to the Obligations, may
be paid over by the Bank to the Debtor.
23. COMPLIANCE WITH STATE AND FEDERAL LAWS. Debtor will comply with all
State and Federal laws and regulations applicable to its business, whether now
in effect or hereafter enacted including but not limited to the wage and hours
laws and relating to the use or disposal of hazardous materials and wastes.
F. RIGHTS AND POWERS OF BANK
1. GENERAL. Bank, before or after default, without liability to Debtor
may: obtain from any person information regarding Debtor or Debtor's business,
which information any such person also may furnish without liability to Debtor;
require Debtor to give possession or control of any Collateral to Bank; endorse
as Debtor's agent any instruments, documents or chattel paper in Collateral or
representing proceeds of Collateral; contact account debtors directly to verify
information furnished by Debtor; take control of proceeds including stock
received as dividends or by reason of stock splits; release Collateral in its
possession to any Debtor, temporarily or otherwise; require additional
Collateral; reject as unsatisfactory any property hereafter offered by Debtor as
Collateral; set standards from time to time to govern what may be used as after
acquired Collateral; designate, from time to time, a certain percent of the
Collateral as the loan value and require Debtor to maintain the Obligation at or
below such figure; take control of funds generated by the Collateral, such as
cash dividends, interest and proceeds or refunds from insurance, and use same to
reduce any part of the Obligation and exercise all other rights which an owner
of such Collateral may exercise, except the right to vote or dispose of
Collateral before an event of default; at any time transfer any of the
Collateral or evidence thereof into its own name or that of its nominee; and
demand, collect, convert, redeem, receipt for, settle, compromise, adjust, sue
for, foreclose or realize upon Collateral, in its own name or in the name of
Debtor, as Bank may determine. Bank shall not be liable for failure to collect
any account or instruments, or for any act or omission on the part of the Bank,
its officers, agents or employees, except willful misconduct and gross
negligence. The foregoing rights and powers of Bank will be in addition to, and
not a limitation upon, any rights and powers of Bank given by law, elsewhere in
this agreement, or otherwise. If Debtor fails to maintain any required
insurance, to the extent permitted by applicable law Bank may (but is not
obligated to) purchase single interest insurance coverage for the Collateral
which insurance may at Bank's option (i) protect only Bank and not provide any
remuneration or protection for Debtor directly and (ii) provide coverage only
after the Obligation has been declared due as herein provided. The premiums for
any such insurance purchased by Bank shall be a part of the Obligation and shall
bear interest as provided in B.1.d hereof.
2. CONVERTIBLE COLLATERAL. Bank, may present for conversion any
Collateral which is convertible into any other instrument or investment security
or a combination thereof with cash, but Bank shall not have any duty to present
for conversion any Collateral unless it shall have received from Debtor detailed
written instructions to that effect at a time reasonably far in advance of the
final conversion date to make such conversion possible.
G. DEFAULT
1. EVENT OF DEFAULT. An event of default shall occur if: (i) there is a
loss, theft, damage or destruction of any material portion of the Collateral for
which there is no insurance coverage or for which, in the opinion of the Bank
there is insufficient insurance coverage; or (ii) if Debtor or any other obligor
on the Obligation shall fail to timely and properly pay or observe, keep or
perform any item, covenant, agreement or condition in this agreement or in any
other agreement between Debtor and any other obligor on the Obligation,
including in any other note or instrument, loan agreement, security agreement,
deed of trust, mortgage, promissory note, assignment or other agreement or
instrument concerning the Obligation.
2. RIGHTS AND REMEDIES. If any Event of Default shall occur, then, in
each and every case, the Bank may, without presentment, demand, or protest;
notice of default, dishonor, demand, non-payment, or protest; notice of intent
to accelerate all or any part of the Obligation; notice of acceleration of all
or any part of the Obligation; or notice of any other kind, all of which Debtor
hereby expressly waives, (except for any notice required under this agreement,
any other loan document or applicable law); at any time thereafter exercise
and/or enforce any of the following rights and remedies:
A) POSSESSION AND COLLECTION OF COLLATERAL. At its option: (i) take
possession or control of, store, lease, operate, manage, sell or otherwise
dispose of, all or any part of the Collateral; (ii) notify all parties under any
account or contract right forming all or any part of the Collateral to make any
payments otherwise due to the Debtor directly to the Bank; (iii) in the Bank's
own name, or in the name of the Debtor, demand, collect, receive, sue for, and
give receipts and releases for, any and all amounts due under such accounts and
contract rights; (iv) endorse as the agent of the Debtor any check, note,
chattel paper, documents, or instruments forming all or any part of the
Collateral; (v) make formal application for transfer to the Bank (or to any
assignee of the Bank to any purchaser of any of the Collateral) of all of the
Debtor's permits, licenses, approvals, agreements, and the like relating to the
Collateral or to the Debtor's business; (vi) take any other action which the
Bank deems necessary or desirable to protect and realize upon its security
interest in the Collateral; and (vii) in addition to the foregoing, and not in
substitution therefor, exercise any one or more of the rights and remedies
exercisable by the Bank under any other provision of this agreement, under any
of the other loan documents, or as provided by applicable law (including,
without limitation, the Uniform Commercial Code as in effect in Texas
(hereinafter referred to as the "UCC"). In taking possession of the Collateral
the Bank may enter the Debtor's premises and otherwise proceed without legal
process, if this can be done without breach of the peace. The Debtor shall, upon
the Bank's demand, promptly make the Collateral or other security available to
the Bank at a place designated by the Bank, which place shall be reasonably
convenient to both parties.
The Bank shall not be liable for, nor be prejudiced by, any loss, depreciation
or other damages to the Collateral, unless caused by the Bank's willful and
malicious act. The Bank shall have no duty to take any action to preserve or
collect the Collateral.
B) RECEIVER. Obtain the appointment of a receiver for all or any of the
Collateral, the Debtor hereby consenting to the appointment of such a receiver
and agreeing not to oppose any such appointment.
C) RIGHT OF SET OFF. Without notice or demand to the Debtor, set off and
apply against any and all of the Obligations any and all deposits (general or
special, time or demand, provisional or final) and any other indebtedness, at
any time held or owing by the Bank to or for the credit of the accounts of the
Debtor.
Bank shall be entitled to immediate possession of all books and records
evidencing any Collateral or pertaining to chattel paper covered by this
agreement and it or its representatives shall have the authority to enter upon
any premises upon which any of the same, or any Collateral, may be situated and
remove the same there from without liability. Bank may surrender any insurance
policies in Collateral and receive the unearned premium thereon. Debtor shall be
entitled to any surplus and shall be liable to Bank for any deficiency. The
proceeds of any disposition after default available to satisfy the Obligation
shall be applied to the Obligation in such order and in such manner as Bank in
its discretion shall decide.
H. GENERAL
1. PARTIES BOUND. Bank's rights hereunder shall inure to the benefit of
its successors and assigns, and in the event of any assignment or transfer of
any of the Obligation or the Collateral, Bank thereafter shall be fully
discharged from any responsibility with respect to the Collateral so assigned or
transferred, but Bank shall retain all rights and powers hereby given with
respect to any of the Obligation or Collateral not so assigned or transferred.
All representations, warranties and agreements of Debtor if more than one are
joint and several and all shall be binding upon the personal representatives,
heirs, successors and assigns of Debtor.
2. WAIVER. No delay of Bank in exercising any power or right shall
operate as a waiver thereof; nor shall any single or partial exercise of any
power or right preclude other or further exercise thereof or the exercise of any
other power or right. No waiver by Bank of any right hereunder or of any default
by Debtor shall be binding upon Bank unless in writing, and no failure by Bank
to exercise any power or right hereunder or waiver of any default by Debtor
shall operate as a waiver of any other or further exercise of such right or
power or of any further default. Each right, power and remedy of the Bank as
provided for in any of the loan documents, or which shall now or hereafter exist
at law or in equity or by statute or otherwise, shall be cumulative and
concurrent and shall be in addition to every other such right, power or remedy.
The exercise or beginning of the exercise by the Bank of any one or more of such
rights, powers or remedies shall not preclude the simultaneous or later exercise
by the Bank of any or all other such rights, powers or remedies.
<PAGE>
Exhibit "A"
-----------
LOCATION OF COLLATERAL:
1) 12300 IH 10 West, San Antonio, Bexar County, Texas
2) 7530 N. Freeway, Houston, Harris County, Texas
3) 13045 Research Blvd., Austin, Travis County, Texas
4) 2620 N. IH 35, Carrollton, Dallas County, Texas
5) 1201 East Hwy 80, Abilene, Taylor County, Texas
6) 2949 College Street, Beaumont, Jefferson County, Texas
7) 1920 N. Loop 250 West, Midland, Midland County, Texas
8) 1806, 1806 C, and 1806 D North Loop 250 West, Midland, Midland County,
Texas
9) 1725 W. Division, Arlington, Tarrant County, Texas
10) 1320 S. Stemmons, Lewisville, Denton County, Texas
<PAGE>
EXHIBIT 10.15
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ASSET PURCHASE AGREEMENT
BY AND AMONG
RED RIVER MARINE, INC.,
RED RIVER MARINE, INC. #2
AND
TBC ARKANSAS, INC.
DATED AS OF
SEPTEMBER 20, 1995
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TABLE OF CONTENTS
Page
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Section 1. Sale of Assets............................................... 1
1.1 Purchase and Sale of Assets.................................. 1
Section 2. Consideration................................................ 1
2.1 Purchase Price............................................... 1
2.2 Post-Closing Distributions................................... 2
2.3 Sellers' Payment for Deposits................................ 2
2.4 Allocation of Consideration.................................. 2
Section 3. Assumed Liabilities and Excluded Assets...................... 2
3.1 Assignment and Assumption.................................... 2
3.2 Excluded Assets.............................................. 2
Section 4. Representations and Warranties of Sellers.................... 2
4.1 Organization and Qualification............................... 2
4.2 Authority and Validity....................................... 2
4.3 No Breach or Violation....................................... 3
4.4 Assets....................................................... 3
4.5 Contracts and Commitments.................................... 3
4.6 Compliance with Law.......................................... 3
4.7 Financial Statements......................................... 4
4.8 Legal Proceedings............................................ 4
4.9 Tax Returns; Other Reports................................... 4
4.10 Employment Matters........................................... 4
4.11 Environmental Matters.
4.12 Finders and Brokers.......................................... 5
4.13 Disclosure................................................... 5
Section 5. Representations and Warranties of Buyer...................... 5
5.1 Organization and Qualification............................... 5
5.2 Authority and Validity....................................... 5
5.3 No Breach or Violation....................................... 5
Section 6. Closing...................................................... 6
6.1 Closing; Effective Date...................................... 6
Section 7. Conditions to Closing........................................ 6
7.1 Conditions to the Obligations of Buyer and Sellers........... 6
7.2 Conditions to Obligations of Buyer........................... 6
7.3 Conditions to Obligations of Sellers......................... 7
7.4 Waiver of Conditions......................................... 8
Section 8. Survival of Representations and Warranties; Indemnification.. 8
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TABLE OF CONTENTS
(Continued)
Page
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8.1 Survival of Representations and Warranties.................. 8
8.2 Indemnification by Sellers.................................. 8
8.3 Indemnification by Hargrove................................. 8
8.4 Indemnification by Buyer.................................... 9
8.5 Third Party Claims.......................................... 9
Section 9. Post-Closing Covenants...................................... 10
9.1 Transfer Taxes.............................................. 10
9.2 Use of Sellers' Name........................................ 10
9.3 Confidentiality............................................. 10
9.4 Consignment and Repair...................................... 10
9.5 Audit....................................................... 10
9.6 Access to Records........................................... 10
Section 10. Definitions................................................. 11
10.1 Affiliate................................................... 11
10.2 Assets...................................................... 11
10.3 Business.................................................... 11
10.4 Deposits.................................................... 11
10.5 Encumbrance................................................. 11
10.6 Governmental Authority...................................... 11
10.7 Intangibles................................................. 11
10.8 Legal Requirement........................................... 11
10.9 Miscellaneous Equipment..................................... 11
10.10 New Boats, Motors and Trailers.............................. 11
10.11 Parts and Accessories....................................... 11
10.12 Permitted Encumbrances...................................... 11
10.13 Person...................................................... 12
10.14 Travis Principals........................................... 12
10.15 Other Definitions........................................... 12
Section 11. Miscellaneous............................................... 12
11.1 Parties Obligated and Benefited............................. 12
11.2 Notices..................................................... 12
11.3 Attorneys' Fees............................................. 13
11.4 Right to Specific Performance............................... 13
11.5 Waiver...................................................... 13
11.6 Captions.................................................... 13
11.7 Choice of Law............................................... 14
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TABLE OF CONTENTS
(Continued)
Page
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11.8 Terms......................................................... 14
11.9 Rights Cumulative............................................. 14
11.10 Further Actions............................................... 14
11.11 Time.......................................................... 14
11.12 Counterparts.................................................. 14
11.13 Entire Agreement.............................................. 14
11.14 Severability.................................................. 14
11.15 Construction.................................................. 14
11.16 Expenses...................................................... 14
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EXHIBITS AND SCHEDULES
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Exhibit A Seven-Year Promissory Note
Exhibit B Two-Year Promissory Note
Exhibit C Bill of Sale
Exhibit D Assignment and Assumption Agreement
Exhibit E Lease Agreement
Exhibit F Consulting Agreement
Exhibit G Non-Competition Agreement
Exhibit H Opinion of Sellers' Counsel
Exhibit I Guarantee Agreement
Exhibit J Opinion of Buyer's Counsel
Schedule 1.1 Assets
Schedule 2.2 Special Orders
Schedule 3.1 Sellers' Contracts
Schedule 4.4.1 Encumbrances
Schedule 4.4.2 Intangibles
Schedule 4.7 Financial Statements
Schedule 4.8 Legal Proceedings
Schedule 4.10 Employment Matters
<PAGE>
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made as of September
20, 1995, by and among TBC Arkansas, Inc., an Arkansas corporation ("Buyer"),
Red River Marine, Inc., and Red River Marine, Inc. #2, both Arkansas
corporations ("Sellers"), and Benny Hargrove, an individual living in Heber
Springs, Arkansas ("Hargrove").
RECITALS
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WHEREAS, Sellers are engaged in the business of retail marine products
sales and service; and
WHEREAS, Buyer desires to purchase, and Sellers desire to sell,
certain of Sellers' assets used or held for use in the Business as conducted by
Sellers;
NOW, THEREFORE, in consideration of the above recitals and of the
mutual agreements, representations, warranties, provisions, and covenants herein
contained, and other good and valuable consideration, the parties hereto agree
as follows:
SECTION 1. SALE OF ASSETS.
1.1 Purchase and Sale of Assets.
---------------------------
1.1.1 Subject to the terms and conditions set forth in this
Agreement, at the Closing, Sellers will sell to Buyer, and Buyer will purchase
from Sellers, all of Sellers' rights, title and interest in, to and under the
following Assets: (i) all New Boats, Motors and Trailers, (ii) all Parts and
Accessories, (iii) all Miscellaneous Equipment, (iv) all Intangibles, (v) all
Deposits, and (vi) all agreements for boat show space. Except as otherwise
specifically provided in this Agreement, all the Assets are intended to be
transferred to Buyer, whether or not described in the Schedules.
1.1.2 Attached hereto as SCHEDULE 1.1 is a list of the Assets.
SECTION 2. CONSIDERATION.
2.1 Purchase Price. Buyer shall pay the purchase price for the
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Assets in the amounts and in the manner set forth in this Section 2 (the
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"Purchase Price"), and Sellers shall pay Buyer the amount of the Deposits as set
forth in this Section 2:
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2.1.1 Intangibles, Deposits and other Assets: $10,000 in
immediately available funds at Closing.
<PAGE>
2.1.2 Parts and Accessories: $76,725.71 in immediately available
funds at Closing and $230,177.16 pursuant to a promissory note,
substantially in the form set forth in EXHIBIT B hereto.
2.1.3 New Boats, Motors, and Trailers: $818,440.60 in
immediately available funds at Closing per attached Exhibit 2.
2.1.4 Miscellaneous Equipment: $36,250 in immediately available
funds at Closing and $108,750 pursuant to a promissory note,
substantially in the form set forth in EXHIBIT B hereto.
2.2 Post-Closing Distributions. Buyer shall pay Sellers 25% of the
--------------------------
gross profits as computed by Buyer for pre-sold units with respect to which
Sellers have collected Deposits but that are not received into inventory as of
the Effective Date ("Special Orders"), listed on Schedule 2.2. These amounts
shall be paid to Sellers paid within 10 days of receipt by Buyer of payment from
the customer.
2.3 Sellers' Payment for Deposits. Seller shall pay Buyer in
-----------------------------
immediately available funds at Closing the aggregate amount of the Deposits
listed on SCHEDULE 1.1.
2.4 Allocation of Consideration. The consideration payable by
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Buyer under this Agreement shall be allocated among the Assets as set forth in
Section 2.1. . Buyer and Sellers agree to be bound by the allocation, will not
take any position inconsistent with such allocation and will file all returns
and reports with respect to the transactions contemplated by this Agreement,
including all federal, state and local tax returns, on the basis of such
allocation.
SECTION 3. ASSUMED LIABILITIES AND EXCLUDED ASSETS.
3.1 Assignment and Assumption. Sellers will assign to Buyer, and
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Buyer will assume and perform, the "Assumed Liabilities", which are defined as:
(a) obligations accruing and relating to periods after the Effective Date under
the contracts, oral and written, listed on SCHEDULE 3.1 hereof (the "Sellers'
Contracts"), and (b) warranty repair service on boats, motors and trailers
previously sold by Sellers, provided that (i) Buyer is recognized as an
authorized warranty repair facility by the manufacturer or extended service
contract provider, as the case may be, (ii) the requested warranty repair is
covered under the applicable manufacturer's warranty program or extended service
contract, and (iii) Sellers and Hargrove use their best efforts to assist Buyer
in collecting reimbursement from such manufacturers or extended service contract
providers for repairs. Buyer will not assume or have any responsibility for any
liabilities or obligations of Sellers other than the Assumed Liabilities. In no
event will Buyer assume or have any responsibility for any liabilities or
obligations associated with the Excluded Assets.
3.2 Excluded Assets. The excluded assets (the "Excluded Assets"),
---------------
which will be retained by Sellers, will consist of the following: cash, accounts
receivable, the Heber Springs Facility, insurance policies, books and records,
and other assets not listed on SCHEDULE 1.1.
2
<PAGE>
SECTION 4. REPRESENTATIONS AND WARRANTIES OF SELLERS.
To induce Buyer to enter into this Agreement, Sellers represent and
warrant to Buyer, as of the Effective Date, as follows:
4.1 Organization and Qualification. Sellers are corporations duly
------------------------------
organized, validly existing and in good standing under the laws of the State of
Arkansas and have all requisite corporate power and authority to own, lease and
use the Assets as they are currently owned, leased and used and to conduct the
Business as it is currently conducted. Sellers are duly qualified or licensed
to do business and are in good standing under the laws of each jurisdiction in
which the character of the properties owned, leased or operated by it or the
nature of the activities conducted by it makes such qualification necessary,
except any such jurisdiction where the failure to be so qualified or licensed
and in good standing would not have a material adverse effect on Sellers or on
the validity, binding effect or enforceability of this Agreement.
4.2 Authority and Validity. Sellers have all requisite power and
----------------------
authority to execute and deliver, to perform their obligations under, and to
consummate the transactions contemplated by, this Agreement. The execution and
delivery by Sellers of, the performance by Sellers of their obligations under,
and the consummation by Sellers of the transactions contemplated by this
Agreement have been duly authorized by all requisite action of Sellers. This
Agreement has been duly executed and delivered by Sellers and is the valid and
binding obligation of Sellers, enforceable against Sellers in accordance with
its terms, except insofar as enforceability may be affected by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect affecting creditors' rights generally or by principles
governing the availability of equitable remedies.
4.3 No Breach or Violation. The execution, delivery and performance
----------------------
of this Agreement by Sellers will not: (a) violate any provision of the
charters or bylaws of Sellers; (b) violate any Legal Requirement; (c) require
any consent, approval or authorization of, or any filing with or notice to, any
Person; or (d) (i) violate, conflict with or constitute a breach of or default
under, (ii) permit or result in the termination, suspension or modification of,
(iii) result in the acceleration of (or give any Person the right to accelerate)
the performance of Sellers under, or (iv) result in the creation or imposition
of any Encumbrance under, any Sellers Contract or any other instrument
evidencing any of the Assets or any instrument or other agreement to which
Sellers are a party or by which Sellers or any of its assets is bound or
affected, except, for purposes of this clause (d), such violations, conflicts,
breaches, defaults, terminations, suspensions, modifications, and accelerations
as would not, individually or in the aggregate, have a material adverse effect
on the Business or a Seller.
4.4 Assets.
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4.4.1 Sellers have exclusive, good and marketable title to the
Assets claimed by Sellers. The Assets are free and clear of all
Encumbrances of any kind or nature, except (a) Permitted Encumbrances
and (b) Encumbrances disclosed on SCHEDULE
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4.4.1, which will be removed or otherwise released of record
effective at or prior to the Closing, or for which executed releases
in form appropriate for filing by Buyer will be delivered to Buyer at
Closing. Except as set forth on SCHEDULES 3.1 AND 4.4.1, none of the
Assets is leased by Sellers from any other Person. All the New Boats,
Motors and Trailers, Parts and Accessories, and Miscellaneous
Equipment are in good and operable condition and repair, ordinary
wear and tear excepted, and has been maintained in accordance with
all applicable safety codes.
4.4.2 Sellers have adopted, used, are using, and are the owners
of the Intangibles, including trade names, brand names, trademarks,
service marks, or any other word, name, symbol, or device, or
combination thereof which is used by Sellers to identify and
distinguish Sellers' goods and services from those manufactured,
sold, or offered by others, as set forth on SCHEDULE 4.4.2, whether
existing at common law or which are applied for or which are
registered in the office of the Secretary of State of the State of
Arkansas or in the United States Patent and Trademark Office. Except
as set forth on SCHEDULE 4.4.2, Sellers have full title and ownership
of the Intangibles. Sellers has no knowledge of any infringement of
Sellers' rights with respect to the Intangibles. The Intangibles do
not conflict with or infringe the rights of others. No third party
has any ownership right, title, interest, claim in or lien on any of
the Intangibles.
4.4.3 The contracted customer purchase price for every Special
Order is greater than the wholesale price, plus freight, less
rebates, for the specially ordered product.
4.5 Contracts and Commitments. Sellers have disclosed to Buyer all
-------------------------
contracts and other contractual rights, oral and written, relating to the
Business. Except as may be disclosed on SCHEDULE 3.1, each of the written
agreements, contracts, commitments, leases, plans and other instruments,
documents and undertakings listed on SCHEDULE 3.1 is valid and enforceable in
accordance with its terms; Sellers are, and to the knowledge of Sellers, all
other parties thereto are, in compliance in all material respects with the
provisions thereof; Sellers are not, and to the knowledge of Sellers, no other
party thereto, is in default in the performance, observance or fulfillment of
any material obligation, covenants or condition contained therein; and no event
has occurred which with or without the giving of notice or lapse of time, or
both, would constitute a default thereunder; furthermore, except as may be
disclosed on SCHEDULE 3.1, no such material agreement, contract, commitment,
lease, plan or other instrument, document or undertaking, in the reasonable
opinion of Sellers, contains any contractual requirement with which there is a
reasonable likelihood the Sellers or any other party thereto will be unable to
comply.
4.6 Compliance with Law. The ownership, leasing and use of the
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Assets as they are currently owned, leased and used and the conduct of the
Business as it is currently conducted do not violate any Legal Requirement,
which violations, individually or in the aggregate, would have a material
adverse effect on the Business. Sellers have not received notice claiming a
violation by Sellers or the Business of any Legal Requirement applicable to
Sellers or the
4
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Business as it is currently conducted and to Sellers' best knowledge, there is
no basis for any claim that such a violation exists.
4.7 Financial Statements. SCHEDULE 4.7 presents correct and
--------------------
complete copies of Sellers' audited balance sheets for the fiscal years ended
January 31, 1992 and 1993, the eight months ended September 30, 1993, and the
fiscal year ended September 30, 1994, together with their audited statements of
income and cash flows for the fiscal years or periods then ended, and their
unaudited balance sheet as of July 31, 1995, together with their unaudited
statement of income for the seven months then ended (collectively, the
"Financial Statements"). The Financial Statements, have been prepared in
accordance with generally accepted accounting principles, consistently applied,
and fairly present Sellers' financial condition and results of operations as of
the dates and for the periods indicated. Since the opening date of the most
recent operating statement included in the Financial Statements, the Business
has been operated only in the ordinary course, except for the pre-Closing
liquidation agreed to by Buyer and Sellers, and there has been no material
adverse change in, and no event has occurred which is likely, individually or in
the aggregate, to result in any material adverse change in, the Business,
operations, Assets, prospects or condition (financial or otherwise) of the
Business.
4.8 Legal Proceedings. Except as set forth on SCHEDULE 4.8, there
-----------------
is no judgment or order outstanding, or any action, suit, complaint, proceeding
or investigation by or before any Governmental Authority or any arbitrator
pending, or to Sellers' best knowledge, threatened, involving or affecting all
or any part of the Business, the Assets or Sellers.
4.9 Tax Returns; Other Reports. Sellers have delivered to Buyer
--------------------------
true and correct copies of their U.S. tax returns for the fiscal years ended
January 31, 1993, 1994 and 1995. Sellers have duly and timely filed in proper
form with the appropriate Governmental Authority all income, franchise, sales,
use, property, excise, payroll and other tax returns, and all other reports
(whether or not relating to taxes) required to be filed with respect to the
Business. All taxes, fees and assessment of whatever nature due and payable by
Sellers with respect to the Business and the Assets have been paid, except such
amounts as are being contested diligently and in good faith and are not in the
aggregate material.
4.10 Employment Matters. SCHEDULE 4.10 includes a complete and
------------------
correct list of names and positions of all employees of Sellers engaged in the
Business and their current hourly wages or monthly salaries and other
compensation. Sellers have complied in all respects with all Legal Requirements
relating to the employment of labor, including the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), continuation coverage requirements
with respect to group health plans, and those relating to wages, hours,
collective bargaining, unemployment compensation, worker's compensation, equal
employment opportunity, age and disability discrimination, immigration control
and the payment and withholding of taxes. No reportable event, within the
meaning of Title IV of ERISA, has occurred and is continuing with respect to any
"employee benefit plan" or "multiemployer plan" (as those terms are defined in
ERISA) maintained by Sellers or any Affiliate of Sellers. No prohibited
transaction, within the meaning of Title I of ERISA, has occurred with respect
to any such employee benefit plan or multiemployer plan, and no material
accumulated funding deficiency (as defined in Title I of
5
<PAGE>
ERISA) or withdrawal liability (as defined in Title IV of ERISA) exists with
respect to any such employee benefit plan or multiemployer plan.
4.11 Environmental Matters. (i) Real property owned by Sellers has,
---------------------
during Seller's ownership thereof, been maintained, and all activities of
Sellers, their employees, agents, contractors, lessees and invites thereon have
been conducted, in compliance with all applicable environmental laws; (ii)
Sellers have not received written notification from any governmental authority
with respect to any actual or alleged violations of, or remedial obligations
arising under, any applicable environmental laws with respect to such property
which have not been responded to and cured; (iii) Sellers have not received
written notification from any Person or entity that they are (A) potentially
responsible or liable under any applicable environmental laws for removal or
remedial action or costs associated with the generation, treatment, storage,
transportation or disposal of hazardous materials at such property, or (B)
potentially liable for any costs or liability as a result of Sellers' operation
of the Business or Sellers' generation, transfer, storage, use, release,
transportation or disposal of hazardous materials in connection with the
Business; (iv) Sellers have not removed any underground storage tanks located on
such property; (v) Sellers shall, as expediently as possible and in accordance
with all applicable environmental law, remove from the real property to be
leased to Buyer the underground storage tanks present thereon; (vi) such
property has not been used by Seller for the generation, disposal storage,
treatment, processing or handling of hazardous materials in a manner that
violates, or creates any remedial obligation under, any applicable environmental
law, and such property is free of any on-site condition of environmental concern
and is not in violation of any applicable environmental law; (vii) such property
has not been listed on the National Priorities List maintained by the U.S.
Environmental Protection Agency pursuant to CERCLA or on any other "Superfund"
or "Superlien" list maintained by any governmental authority pursuant to any
applicable law; and (viii) Sellers have made available to Buyer true and correct
copies of all environmental reports or inspections delivered to Sellers or
prepared at the request of Sellers relating to such property.
4.12 Finders and Brokers. Any liability for any financial advisory,
-------------------
brokerage, finder's or similar fee or commission in connection with the
transactions contemplated by this Agreement shall be the liability of the party
incurring the liability.
4.13 Disclosure. No representation or warranty by Sellers in this
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Agreement or in any Schedule or Exhibit to this Agreement, or any statement,
list or certificate furnished or to be furnished by Sellers pursuant to this
Agreement, contains or will contain any untrue statement of material fact, or
omits or will omit to state a material fact required to be stated therein or
necessary to make the statements contained therein not misleading in light of
the circumstances in which made.
6
<PAGE>
SECTION 5. REPRESENTATIONS AND WARRANTIES OF BUYER
To induce Sellers to enter into this Agreement, Buyer represents and
warrants to Sellers, as of the Effective Date, as follows:
5.1 Organization and Qualification. Buyer is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of the State of
Arkansas and has all requisite corporate power and authority to carry on its
business as currently conducted and to own, lease, use and operate its assets.
5.2 Authority and Validity. Buyer has all requisite corporate power
----------------------
and authority to execute and deliver, to perform its obligations under, and to
consummate the transactions contemplated by this Agreement. The execution and
delivery by Buyer of, the performance by Buyer of its obligations under, and the
consummation by Buyer of the transactions contemplated by this Agreement have
been duly authorized by all requisite corporate action of Buyer and this
Agreement constitutes the valid and binding obligation of Buyer, enforceable in
accordance with its terms, except insofar as enforceability may be limited or
affected by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect affecting creditors' rights generally or
by principles governing the availability of equitable remedies.
5.3 No Breach or Violation. The execution, delivery and performance
----------------------
of this Agreement by Buyer will not: (a) violate any provision of the charter
or bylaws of Buyer; (b) violate any Legal Requirement; (c) require any consent,
approval or authorization of, or any filing with or notice to, any Person; or
(d) (i) violate, conflict with or constitute a breach of or default under
(without regard to requirements of notice, passage of time or elections of any
Person), (ii) permit or result in the termination, suspension or modification
of, (iii) result in the acceleration of (or give any Person the right to
accelerate) the performance of Buyer under, or (iv) result in the creation or
imposition of any Encumbrance under, any instrument or other agreement to which
Buyer is a party or by which Buyer or any of its assets is bound or affected,
except for purposes of this clause (d) such violations, conflicts, breaches,
defaults, terminations, suspensions, modifications, and accelerations as would
not, individually or in the aggregate, have a material adverse effect on Buyer
or on the validity, binding effect or enforceability of this Agreement.
SECTION 6. CLOSING.
6.1 Closing; Effective Date. The closing ("Closing") of the
-----------------------
transactions shall be in Heber Springs, Arkansas, at 2:00 p.m. local time on
September 21, 1995 ("Closing Date"). The transactions shall be "pre-closed" at
10:00 a.m. on September 20, 1995 and their "Effective Date" shall be September
20, 1995.
7
<PAGE>
SECTION 7. CONDITIONS TO CLOSING.
7.1 Conditions to the Obligations of Buyer and Sellers. The
--------------------------------------------------
obligations of each party to consummate the transactions contemplated by this
Agreement to take place at the Closing are subject to the satisfaction or
waiver, to the extent permitted by applicable Legal Requirements, at or prior to
the Closing Date, of each of the following conditions:
7.1.1 No action, suit or proceeding is pending or threatened by
or before any Governmental Authority and no Legal Requirement has been
enacted, promulgated or issued or deemed applicable to any of the
transactions contemplated by this Agreement by any Governmental
Authority, which would (a) prohibit Buyer's ownership or operation of
all or a material portion of the Business or the Assets, (b) compel
Buyer to dispose of or hold separate all or a material portion of the
Business or the Assets as a result of any of the transactions
contemplated by this Agreement, or (c) prevent or make illegal the
consummation of any transactions contemplated by this Agreement.
7.2 Conditions to Obligations of Buyer. The obligations of Buyer to
----------------------------------
consummate the transactions contemplated by this Agreement to take place at the
Closing are subject to the satisfaction or waiver, to the extent permitted by
applicable Legal Requirements, at or prior to the Closing Date, of each of the
following conditions:
7.2.1 Sellers have performed and complied in all material
respects with each obligation, agreement, covenant and condition
required by this Agreement to be performed or complied with by Sellers
at or prior to the Closing and have delivered to Buyer a certificate,
dated the Closing Date, signed by Sellers' President, to such effect.
7.2.2 Sellers have executed (or caused to be executed) and
delivered to Buyer each of the following items:
7.2.2.1 a Bill of Sale in substantially the form attached
as EXHIBIT C;
7.2.2.2 an Assignment and Assumption Agreement in
substantially the form attached as EXHIBIT D;
7.2.2.3 motor vehicle title certificates, applications for
title, assignments of Manufacturer's Statements of Origin, and
such other transfer instruments as Buyer may reasonably deem
necessary or advisable to transfer the Assets to Buyer and to
perfect Buyer's rights in the Assets.
7.2.2.4 a Lease Agreement for the Heber Springs facility in
substantially the form of EXHIBIT E.
7.2.2.5 Hargrove shall execute a Consulting Agreement in
substantially the form of EXHIBIT F.
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7.2.3 Hargrove, Tracy Hargrove and Virginia Hargrove shall sign
and deliver to Buyer a Non-Competition Agreement in substantially the
form of EXHIBIT G-1. Each Seller shall sign and deliver to Buyer a
Non-Competition Agreement in substantially the form of Exhibit G-2.
7.2.5 Sellers have delivered releases, in form reasonably
satisfactory to Buyer, of all Encumbrances affecting any of the Assets
(other than Permitted Encumbrances) and a certificate of no taxes due
with respect to Sellers and the Assets issued by appropriate Arkansas
state taxing authorities as of a date no earlier than 10 days prior to
the Closing.
7.2.6 Sellers have sold the Hot Springs facility to Buyer and
provided an appropriate title commitment.
7.2.7 Sellers have provided Buyer with a copy of amendments to
their charters, certified by the Secretary of State of the State of
Arkansas, that they have changed their names.
7.2.8 Sellers have provided Buyer with the original invoices
evidencing the cost of the New Boats, Motors and Trailers, and Parts
and Accessories, and an inventory sheet detailing these items.
7.3 Conditions to Obligations of Sellers. The obligations of
------------------------------------
Sellers to consummate the transactions contemplated by this Agreement to take
place at the Closing are subject to the satisfaction or waiver by Sellers, to
the extent permitted by applicable law, at or prior to the Closing Date, of each
of the following conditions:
7.3.1 Buyer has paid the Purchase Price required to be paid at
the Closing.
7.3.2 Buyer has performed and complied in all material respects
with each obligation, agreement, covenant and condition required by
this Agreement to be performed or complied with by Buyer at or prior
to the Closing and has delivered to Sellers a certificate, dated the
Closing Date, signed by Buyer's President, to such effect.
7.3.3 Buyer has executed and delivered to Sellers each of the
following:
7.3.3.1 an Assignment and Assumption Agreement in
substantially the form attached as EXHIBIT D.
7.3.3.2 a Promissory Note pursuant to Section 2.1.2 in
substantially the form of EXHIBIT B;
9
<PAGE>
7.3.3.3 a Promissory Note pursuant to Section 2.1.4 in
substantially the form of EXHIBIT B;
7.3.3.4 a Lease Agreement in substantially the form of
EXHIBIT E;
7.3.4 Buyers have purchased the Hot Springs facility.
7.3.5 The Travis Principals have executed a Guarantee Agreement
in substantially the form of EXHIBIT I.
7.3.6 Buyer shall have executed a Promissory Note in
substantially the form of EXHIBIT A.
7.3.7 Sellers have received the opinion of Winstead Sechrest &
Minick P.C., counsel to Buyer, dated the Closing Date, in the form set
forth in EXHIBIT J.
7.4 Waiver of Conditions. Any party may waive in writing any or all
--------------------
of the conditions to its obligations under this Agreement.
SECTION 8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.
8.1 Survival of Representations and Warranties. The representations
------------------------------------------
and warranties of Sellers in this Agreement and in the documents and instruments
to be delivered by Sellers pursuant to this Agreement will survive the Closing
without limitation until the third anniversary of the Effective Date. The
representations and warranties of Buyer in this Agreement and in the documents
and instruments to be delivered by Buyer pursuant to this Agreement will survive
the Closing without limitation until the third anniversary of the Effective
Date. The periods of survival of the representations and warranties prescribed
by this Section 8.1 are referred to as the "Survival Period." The liabilities
-----------
of the parties under their respective representations and warranties will expire
as of the expiration of the applicable Survival Period; provided, however, that
such expiration will not include, extend or apply to any representation or
warranty, the breach of which has been asserted by Buyer in written notice to
Sellers before such expiration or about which Sellers have given Buyer written
notice before such expiration indicating the facts or conditions existing that,
with the passage of time or otherwise, can reasonably be expected to result in a
breach (and describing such potential breach in reasonable detail). The
covenants and agreements of the parties in this Agreement and in the other
documents and instruments to be delivered by Sellers or Buyer pursuant to this
Agreement will survive the Closing and will continue in full force and effect
without limitation.
8.2 Indemnification by Sellers. Sellers shall indemnify, defend
--------------------------
and hold harmless Buyer and its shareholders and its and their respective
Affiliates, and the shareholders, directors, officers, employees, agents,
successors and assigns of any of such Persons, from and against:
10
<PAGE>
ASSET PURCHASE AGREEMENT PARAGRAPH 7.3.4 AMENDMENT
Paragraph 7.3.4 of the Asset Purchase Agreement dated September 20,
1995, by and among Red River Marine, Inc., Red River Marine, Inc. #2, and TBC
Arkansas, Inc., is hereby amended to read as follows, to-wit:
7.3.4. Buyer has purchased the Hot Springs facility by the
-----
acceptance of a Warranty Deed from Sellers in exchange for the execution
of a Promissory Note and Second Mortgage, copies of which are attached
hereto. Buyer agrees to assume the indebtedness owed by Sellers to
Arkansas Bank & Trust of Hot Springs, Arkansas, which as of September
20th is $172,854.47 and cause Sellers and Hargrove or any other
Guarantors to be released from any guaranty in favor of Arkansas Bank &
Trust. Sellers acknowledge that the assumption by Buyer of the
indebtedness owed to Arkansas Bank & Trust will take place no later than
September 27, 1995. The parties agree to execute any additional
documents necessary to consummate this transaction, including a
Correction Warranty Deed and Correction Mortgage if necessary, based
upon the requirements of any title insurance company. The parties agree
and authorize Arkansas Bank & Trust to attach any revised legal
description to the assumption agreement.
This Amendment is executed as of this 20th day of September, 1995.
RED RIVE MARINE, INC. AND RED
RIVER MARINE, INC. #2
By: /s/ BENNY HARGROVE
-------------------------------------
Benny Hargrove, President
TBC ARKANSAS, INC.
By: /s/ MARK WALTON
-------------------------------------
Mark Walton, President
<PAGE>
8.2.1 all losses, damages, liabilities, deficiencies or
obligations of or to Buyer resulting from or arising out of (i) any
breach of any then surviving representation or warranty made by
Sellers in this Agreement, (ii) any breach of any then surviving
covenant, agreement or obligation of Sellers contained in this
Agreement, (iii) any third party claim with respect to any act or
omission of Sellers with respect to Sellers' conduct of the Business,
which act or omission occurred prior to or on the Effective Date,
without regard to whether such third party claim with respect to such
act or omission is asserted before or after the Effective Date,
including any matter described on SCHEDULE 4.8, (iv) any liability or
obligation of Sellers not included in the Assumed Liabilities,
including contingent liability for products sold prior to the
Effective Date, (v) any claim that the transactions contemplated by
this Agreement violate the Worker Adjustment and Retraining
Notification Act, as amended, or any similar state or local law or any
bulk transfer or fraudulent conveyance laws of any jurisdiction, and
(vi) any liability or obligation of Sellers arising after the
Effective Date; and
8.2.2 all claims, actions, suits, proceedings, demands,
judgments, assessments, fines, interest, penalties, costs and expenses
(including settlement costs and reasonable legal, accounting, experts'
and other fees, costs and expenses) incident or relating to or
resulting from any of the foregoing.
In the event that an indemnified item arises under both clause
8.2.1(i) and under one or more of clauses 8.2.1(ii) through 8.2.1(vi)
-------- --------- ---------
of this Section 8.2, Buyer's rights to pursue its claim under clauses
-----------
8.2.1(ii) through 8.2.1(vi), as applicable, will exist notwithstanding
--------- ---------
the expiration of the Survival Period applicable to such claim under
clause 8.2.1(i).
--------
8.3 Indemnification by Hargrove. Hargrove shall indemnify, defend
---------------------------
and hold harmless Buyer and its shareholders and its and their respective
Affiliates, and the shareholders, directors, officers, employees, agents,
successors and assigns of any of such Persons, from and against:
8.3.1 all losses, damages, liabilities, deficiencies or
obligations of or to Buyer resulting from or arising out of (i) any
breach or misrepresentation under any then surviving representation or
warranty made by Sellers in this Agreement, (ii) any third party claim
with respect to any act or omission of Sellers with respect to
Sellers' conduct of the Business, which act or omission occurred prior
to or on the Effective Date, without regard to whether such third
party claim with respect to such act or omission is asserted before or
after the Effective Date, including any matter described on SCHEDULE
4.8, and (iii) any claim arising out of the transactions contemplated
by this Agreement by any shareholder of Sellers or any person signing
any agreements pursuant to the transactions contemplated by this
Agreement; and
8.3.2 all claims, actions, suits, proceedings, demands,
judgments, assessments, fines, interest, penalties, costs and expenses
(including settlement costs and
11
<PAGE>
reasonable legal, accounting, experts' and other fees, costs and
expenses) incident or relating to or resulting from any of the
foregoing.
In the event that an indemnified item arises under both clause
8.3.1(i) and under one or more of clauses 8.3.1(ii) and 8.3.1(iii) of
-------- --------- ----------
this Section 8.3, Buyer's rights to pursue its claim under clauses
-----------
8.3.1(ii) and 8.3.1(iii), as applicable, will exist notwithstanding
--------- ----------
the expiration of the Survival Period applicable to such claim under
clause 8.3.1(i).
--------
8.4 Indemnification by Buyer. Buyer will indemnify, defend and hold
------------------------
harmless Sellers and Sellers' officers, employees, agents, successors and
assigns, from and against:
8.4.1 all losses, damages, liabilities, deficiencies or
obligations of or to Sellers or any such other indemnified Person
resulting from or arising out of (i) any breach of any representation
or warranty made by Buyer in this Agreement, (ii) the breach of any
covenant, agreement or obligation of Buyer contained in this Agreement
or (iii) the failure by Buyer to perform any of its obligations in
respect of the Assumed Liabilities; and
8.4.2 all claims, actions, suits, proceedings, demands,
judgments, assessments, fines, interest, penalties, costs and expenses
(including, without limitation, settlement costs and reasonable legal,
accounting, experts' and other fees, costs and expenses) incident or
relating to or resulting from any of the foregoing.
In the event that an indemnified item arises under both clause
8.4.1(i) and under one or more of clauses 8.4.1(ii) or 8.4.1(iii) of
-------- --------- ----------
Section 8.4, Sellers' rights to pursue its claim under clauses
-----------
8.4.1(ii) or 8.4.1(iii), as applicable, will exist notwithstanding
--------- ----------
the expiration of the Survival Period applicable to such claim under
clause 8.4.1(i).
---------------
8.5 Third Party Claims. Promptly (and in any event with 30 days)
------------------
after the receipt by any party of notice of any claim, action, suit or
proceeding by any Person who is not a party to this Agreement (collectively, an
"Action"), which Action is subject to indemnification under this Agreement, such
party (the "Indemnified Party") will give reasonable written notice to the party
from whom indemnification is claimed (the "Indemnifying Party"). The
Indemnified Party will be entitled, at the sole expense and liability of the
Indemnifying Party, to exercise full control of the defense, compromise or
settlement of any such Action unless the Indemnifying Party, within a reasonable
time (and in any event within 30 days) after the giving of such notice by the
Indemnified Party, (a) admits in writing to the Indemnified Party the
Indemnifying Party's liability to the Indemnified Party for such Action under
the terms of this Section 8, (b) notifies the Indemnified Party in writing of
---------
the Indemnifying Party's intention to assume such defense, and (c) retains legal
counsel reasonably satisfactory to the Indemnified Party to conduct the defense
of such Action. The other party will cooperate with the party assuming the
defense, compromise or settlement of any such Action in accordance with this
Agreement in any reasonable manner that such party reasonably may request. If
the Indemnifying Party so assumes
12
<PAGE>
the defense of any such Action, the Indemnified Party will have the right to
employ separate counsel and to participate in (but not control) the defense,
compromise or settlement of the Action, but the fees and expenses of such
counsel will be at the expense of the Indemnified Party unless (i) the
Indemnifying Party has agreed to pay such fees and expenses, (ii) any relief
other than the payment of money damages is sought against the Indemnified Party
or (iii) the Indemnified Party will have been advised by its counsel that there
may be one or more defenses available to it which are different from or
additional to those available to the Indemnifying Party, and in any such case
that portion of the fees and expenses of such separate counsel that are
reasonably related to matters covered by the indemnity provided in this
Section 8 will be paid by the Indemnifying Party. No Indemnified Party will
- ---------
settle or compromise any such Action for which it is entitled to indemnification
under this Agreement without prior written consent of the Indemnifying Party,
unless the Indemnifying Party has failed, after reasonable notice, to undertake
control of such Action in the manner provided in this Section 8.5. No
-----------
Indemnifying Party will settle or compromise any such Action (A) in which any
relief other than the payment of money damages is sought against any Indemnified
Party or (B) in the case of any Action relating to the Indemnified Party's
liability for any tax, if the effect of such settlement would be an increase in
the liability of the Indemnified Party for the payment of any tax for any period
beginning after the Effective Date, unless the Indemnified Party consents in
writing to such compromise or settlement.
SECTION 9. POST-CLOSING COVENANTS.
9.1 Transfer Taxes. In the event that any Governmental Authority of
--------------
Arkansas or of any municipality, county or other subdivision thereof shall at
any time impose or otherwise require or demand payment by or from either Sellers
or Buyer of any state or local sales, use, transfer, excise, documentary or
license taxes or fees or any other charge (including filing fees) with respect
to Sellers' sale or transfer to Buyer of the Assets, Sellers shall be
responsible for the payment.
9.2 Use of Sellers' Name. Buyer may continue to operate the
--------------------
Business using Sellers' Marks, tradenames and all derivations and abbreviations
of such name after the Effective Date. Sellers may continue use of their
tradenames and Marks after the Effective Date only as long as necessary to, and
in connection with, winding up Business transactions undertaken before the
Effective Date, after which time Sellers shall cease all such usage. Sellers
shall assign unto Buyer all right, title, and interest in and to the
Intangibles, together with the goodwill of the Business connected with the use
of and symbolized by the Intangibles, the applications and registrations
identified in SCHEDULE 4.4.2, and the right to sue and recover for any and all
past infringements thereof.
9.3 Confidentiality. No party will issue any press release or make
---------------
any other public announcement regarding this Agreement or the transactions
contemplated hereby without the consent of the other party. Each party will
hold, and will cause its employees, consultants, advisors and agents to hold, in
confidence, the terms of this Agreement and any non-public information
concerning the other party obtained pursuant to this Agreement. Notwithstanding
13
<PAGE>
the preceding, a party may disclose such information to the extent required by
any Legal Requirement (including disclosure requirements under federal and state
securities laws), but the party proposing to disclose such information will
first notify and consult with the other party concerning the proposed
disclosure, to the extent reasonably feasible. Each party also may disclose
such information to employees, consultants, advisors, agents and actual or
potential lenders whose knowledge is necessary to facilitate the consummation of
the transactions contemplated by this Agreement. Each party's obligation to
hold information in confidence will be satisfied if it exercises the same care
with respect to such information as it would exercise to preserve the
confidentiality of its own similar information.
9.4 Consignment and Repair. In the event Sellers or Hargrove are
----------------------
required to retake possession of any products sold prior to the Effective Date,
Buyer will accept the products on consignment from Sellers or Hargrove. Any
repairs will be pre-approved and paid for by Sellers or Hargrove.
9.5 Audit. Sellers shall provide to Buyer audited financial
-----
statements for their fiscal year ended September 30, 1995, by December 31, 1995.
9.6 Access to Records. Sellers shall allow Buyer reasonable access
-----------------
to their records for a period of three years after the Effective Date, for any
reasonable business purpose related to the Business.
SECTION 10. DEFINITIONS.
In addition to terms defined elsewhere in this Agreement, the
following capitalized terms, when used in this Agreement, will have the meanings
set forth below:
10.1 Affiliate. With respect to any Person, any other Person
---------
controlling, controlled by or under common control with such Person, with
"control" for such purpose meaning the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities or voting interests,
by contract or otherwise.
10.2 Assets. All properties, privileges, rights, interests and
------
claims, real and personal, tangible and intangible, of every type and
description (including, without limitation, New Boats, Motors and Trailers,
Parts and Accessories, Miscellaneous Equipment, Intangibles, Deposits, and
Sellers' Contracts, more particularly described in Section 1.1 and on SCHEDULES
-----------
1.1, 3.2 AND 4.4.2), that are used, or held for use, by Sellers or Hargrove in
the Business and in which Sellers or Hargrove have any right, title or interest
(or in which Sellers or Hargrove hereafter acquires any right, title or interest
on or before the Closing Date), but excluding all Excluded Assets.
10.3 Business. The retail sales and service of boats, boat
--------
accessories and water sporting goods at stores located in Heber Springs and Hot
Springs, Arkansas.
14
<PAGE>
10.4 Deposits. All customer deposits relating to customer special
--------
orders as of the Effective Date.
10.5 Encumbrance. Any mortgage, lien, security interest, security
-----------
agreement, conditional sale or other title retention agreement, limitation,
pledge, option, assessment or other such charge, restrictive agreement,
restriction, encumbrance, adverse interest, restriction on transfer, or
exception to or defect in title or other ownership interest (including
reservations, rights of way, possibilities of reverter, encroachments,
easements, rights of entry, restrictive covenants, leases and licenses).
10.6 Governmental Authority. (i) The United States of America, (ii)
----------------------
any state, commonwealth, territory or possession of the United States of America
and any political subdivision thereof (including counties, municipalities and
the like), (iii) any foreign (as to the United States of America) sovereign
entity and any political subdivision thereof, or (iv) any agency, authority or
instrumentality of any of the foregoing, including any court, tribunal,
department, bureau, commission or board.
10.7 Intangibles. All intangible assets, including trademarks,
-----------
service marks, copyrights ("Marks"), customer lists, claims, patents, and
goodwill assigned in gross, rights of publicity and other intangibles, owned,
used or held for use in the Business, including the name "Red River Marine" and
the use of the name and likeness of Hargrove.
10.8 Legal Requirement. Any statute, ordinance, code, law, rule,
-----------------
regulation, order or other requirement, standard or procedure enacted, adopted
or applied by any Governmental Authority, including judicial decisions applying
common law or interpreting any other Legal Requirement.
10.9 Miscellaneous Equipment. All furniture, fixtures, and equipment
-----------------------
set forth on SCHEDULE 1.1.
10.10 New Boats, Motors and Trailers. All new boats, motors and
------------------------------
trailers described on SCHEDULE 1.1.
10.11 Parts and Accessories. All new parts and accessories
---------------------
described on SCHEDULE 1.1.
10.12 Permitted Encumbrances. The following Encumbrances: (a) liens
----------------------
for taxes, assessments and governmental charges not yet due and payable; (b)
zoning laws and ordinances and similar Legal Requirements; (c) rights reserved
to any Governmental Authority to regulate the affected property; and (d) as to
real property interests, any easements, rights-of-way, servitudes, permits,
restrictions and minor imperfections or irregularities in title which are
reflected in public records and which do not individually or in the aggregate
interfere with the right or ability to own, lease, use or operate (whichever may
be the case) the real property for the Business or to convey good, marketable
and indefeasible title to the real property; provided that (i) Permitted
Encumbrances will not include any item which could materially adversely affect
15
<PAGE>
the conduct of the Business and (ii) the classification of any item as a
Permitted Encumbrance will not affect any liability Sellers may have for such
item, including pursuant to any indemnity obligation under this Agreement.
10.13 Person. Any natural person, corporation, partnership, trust,
------
unincorporated organization, association, limited liability company,
Governmental Authority or other entity.
10.14 Travis Principals. Travis Boats & Motors, Inc., a Texas
-----------------
corporation, and Mark Walton, Ron Spradling, Jesse Cox, E.D. Bohls, Joe Simpson,
and Robert C. Siddons, all individuals living in Texas.
10.15 Other Definitions. The following terms are defined in the
-----------------
Sections indicated:
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
Action 8.5
Assumed Liabilities 3.1
Closing 6.1
Closing Date 6.1
Consulting Agreement 7.2.2.5
Deposits 1.1.1
Effective Date 6.1
ERISA 4.10
Excluded Assets 3.2
Financial Statements 4.7
Guarantee Agreement 7.2.3.5
Indemnifying Party; Indemnified Party 8.5
Marks 10.8
Non-Compete Agreement 7.2.3
Purchase Price 2.1
Sellers' Contracts 3.1
Special Orders 2.2
Survival Period 8.1
</TABLE>
SECTION 11. MISCELLANEOUS.
11.1 Parties Obligated and Benefited. Subject to the limitations set
-------------------------------
forth below, this Agreement will be binding on the parties and their respective
assigns and successors in interest and will inure solely to the benefit of the
parties and their respective assigns and successors in interest, and no other
Person will be entitled to any of the benefits conferred by this Agreement.
Without the prior written consent of the other parties, no party will assign any
of its rights under this Agreement or delegate any of its duties under this
Agreement, provided that Buyer may, without the consent of any other party, (i)
assign or delegate its rights or obligations under this Agreement to a commonly
controlled entity of Buyer, and such assignee will be substituted for Buyer
under this Agreement as though it were the original party to this Agreement
16
<PAGE>
and Buyer will be released from all obligations under this Agreement, and (ii)
make a collateral assignment of its rights hereunder to Buyer's or its
assignee's secured lenders.
11.2 Notices. Any notice, request, demand, waiver or other
-------
communication required or permitted to be given under this Agreement will be in
writing and will be deemed to have been duly given only if delivered in person
or sent by first class, prepaid, registered or certified mail (return receipt
requested), or delivered by commercial courier (e.g., United Parcel Service or
Federal Express) or, if receipt is confirmed, by telecopier:
To Buyer at:
TBC Arkansas, Inc.
13045 Research Blvd.
Austin, Texas 78750
Attention: Mike Perrine, Chief Financial Officer
Telecopy: 512/250-1207
With a copy (which will not constitute notice) transmitted by
telecopier to:
Winstead Sechrest & Minick P.C.
100 Congress Avenue, Suite 800
Austin, Texas 78701
Attention: Walter Earl Bissex, Esq.
Telecopy: 512/370-2850
To Sellers and Hargrove at:
2215 Lakeshore Drive
Heber Springs, Arkansas 72453
Telecopy:
-----------------------
With a copy (which will not constitute notice) transmitted by
telecopier to:
Lightle, Beebe, Raney, Bell & Hudgins
211 West Arch St.
Searcy, Arkansas 72145-5331
Attention: Donald P. Raney, Esq.
Telecopy: 501/268-5306
Any party may change the address to which notices are required to be sent by
giving notice of such change in the manner provided in this Section 11.2. All
------------
notices will be deemed to have been received on the date of delivery or on the
third business day after mailing in accordance with this Section, except that
any notice of a change of address will be effective only upon actual receipt.
17
<PAGE>
11.3 Attorneys' Fees. In the event of any action or suit based upon
---------------
or arising out of any alleged breach by any party of any representation,
warranty, covenant or agreement contained in this Agreement, the prevailing
party will be entitled to recover reasonable attorneys' fees and other costs of
such action or suit from the other party.
11.4 Right to Specific Performance. Sellers acknowledge that the
-----------------------------
unique nature of the Assets to be purchased by Buyer pursuant to this Agreement
renders money damages an inadequate remedy for the breach by Sellers of its
obligations under this Agreement, and Sellers agrees that in the event of such
breach, Buyer will upon proper action instituted by it, be entitled to a decree
of specific performance of this Agreement.
11.5 Waiver. This Agreement or any of its provisions may not be
------
waived except in writing. The failure of any party to enforce any right arising
under this Agreement on one or more occasions will not operate as a waiver of
that or any other right on that or any other occasion.
11.6 Captions. The section captions of this Agreement are for
--------
convenience only and do not constitute a part of this Agreement.
11.7 Choice of Law. This agreement and the rights of the parties
-------------
under it will be governed by and construed in all respects in accordance with
the laws of the State of Arkansas, without regard to the conflicts of laws rules
of Arkansas. Any litigation resulting from any dispute among the parties must
be filed in Garland County, Arkansas.
11.8 Terms. Terms used with initial capital letters will have the
-----
meanings specified, applicable to both singular and plural forms, for all
purposes of this Agreement. The word "include" and derivatives of that word are
used in this Agreement in an illustrative sense rather than a limiting sense.
11.9 Rights Cumulative. All rights and remedies of each of the
-----------------
parties under this Agreement will be cumulative, and the exercise of one or more
rights or remedies will not preclude the exercise of any other right or remedy
available under this Agreement or applicable law.
11.10 Further Actions. Sellers and Buyer will execute and deliver to
---------------
the other, from time to time at or after the Closing, for no additional
consideration and at no additional cost to the requesting party, such further
assignments, certificates, instruments, records, or other documents, assurances
or things as may be reasonably necessary to give full effect to this Agreement
and to allow each party fully to enjoy and exercise the rights accorded to and
acquired by it under this Agreement.
11.11 Time. Time is of the essence under this Agreement. If the last
----
day permitted for the giving of any notice or the performance of any act
required or permitted under this Agreement falls on a day which is not a
business day, the time for the giving of such notice or the performance of such
act will be extended to the next succeeding business day.
18
<PAGE>
11.12 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which will be deemed an original.
11.13 Entire Agreement. This Agreement (including the Schedules and
----------------
Exhibits referred to in this Agreement, which are incorporated in and constitute
a part of this Agreement) contains the entire agreement of the parties and
supersedes all prior oral or written agreements and understandings with respect
to the subject matter. This Agreement may not be amended or modified except by a
writing signed by the parties.
11.14 Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable will be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining rights
of the Person intended to be benefitted by such provision or any other
provisions of this Agreement.
11.15 Construction. This Agreement has been negotiated by Buyer and
------------
Sellers and their respective legal counsel, and legal or equitable principles
that might require the construction of this Agreement or any provision of this
Agreement against the party drafting this Agreement will not apply in any
construction or interpretation of this Agreement.
11.16 Expenses. Except as otherwise expressly provided in this
--------
Agreement, each party will pay all of its own expenses, including attorneys' and
accountants' fees, in connection with the negotiation of this Agreement, the
performance of its obligations and the consummation of the transactions
contemplated by this Agreement.
The parties have executed this Agreement as of the day and year first above
written.
SELLERS:
-------
RED RIVER MARINE, INC.
By: /s/ BENNY HARGROVE
-------------------------------------------
Benny Hargrove, President
RED RIVER MARINE, INC. #2
By: /s/ BENNY HARGROVE
-------------------------------------------
Benny Hargrove, President
19
<PAGE>
HARGROVE:
/s/ BENNY HARGROVE
----------------------------------------------
Benny Hargrove
BUYER:
-----
TBC ARKANSAS, INC.
By: /s/ MARK WALTON
--------------------------------------------
Mark Walton, President
20
<PAGE>
EXHIBIT 10.16
EXHIBIT A
PROMISSORY NOTE
$800,000.00 September 20, 1995 Heber Springs, Arkansas
FOR VALUE RECEIVED, TBC ARKANSAS, INC. ("Maker") promises to pay to the
order of BENNY HARGROVE, at Heber Springs, Arkansas the principal sum of EIGHT
HUNDRED THOUSAND DOLLARS ($800,000.00), with simple interest thereon from date
until due at the rate of 8.75% per annum, and thereafter until paid at the rate
of 8.75% per annum, due and payable as follows: (i) $36,500.00 on January 15,
1996, (ii) 81 consecutive monthly payments of $12,770.00 each payable on the
15th day of each successive month thereafter, and (iii) $12,542.83 on November
15, 2002.
Maker reserves the privilege to prepay the indebtedness in advance.
The Maker, endorser(s), sureties and grantor(s) of this note hereby
severally waive presentment for payment, notice of nonpayment, protest, notice
of protest and due diligence in enforcing payment hereof, and consent that an
extension of time for payment of this note or of any installments thereof may be
granted without notice to them and without waiver of any rights of the owner
hereof.
If default is made in the payment of any of said installments of principal
or interest as the same become due or in the performance or observance of any of
the covenants or agreements contained in the instrument securing this note, the
entire debt at the election of the legal holder of this note, notice of
election being expressly waived, shall become due and payable. No delay in the
exercise of the option of acceleration shall be construed a waiver of such
right, but it may be exercised at any subsequent time during default. In the
event of default and if this note is sued upon or placed in the hands of any
attorney for collection, then Maker agrees to pay all costs of collection and
reasonable attorney's fees.
It is further agreed and declared that this note is made and executed
under, and in all respects is to be construed and enforced according to, the
laws of the State of Arkansas.
TBC ARKANSAS, INC.
By: /s/ Mark Walton
-------------------------------------
Mark Walton, President
<PAGE>
EXHIBIT 10.17(a)
PROMISSORY NOTE
$462,145.53 September 20, 1995 Heber Springs, Arkansas
FOR VALUE RECEIVED, I\we promise to pay to the order of Red River Marine,
Inc. #2, at Heber Springs, Arkansas the principal sum of FOUR HUNDRED SIXTY-TWO
THOUSAND, ONE HUNDRED FORTY-FIVE AND 53/100 DOLLARS ($462,145.53), with interest
thereon from date until due at the rate of 8.75% per annum, due and payable as
follows: a payment of $13,500.00 on January 15, 1996, and monthly payments
thereafter beginning on February 15, 1996, in the amount of $4,650.00 per month
and monthly thereafore on or before the 15th day of each succeeding month for
178 months with a final payment of $762.25 due November 15, 2010. The aforesaid
first payment includes accrued interest from the date of this Promissory Note
until January 15, 1996, with interest being payable monthly on the unpaid
principal balance thereafter ind if not paid when due, it shall become part of
the principal and bear the same rate of interest.
The undersigned reserves the privilege to prepay the indebtedness in
advance.
This note is given for part of the purchase price of certain lands and is
-----------------------------------------------
secured by and is subject to an earlier maturity upon breach of any of the
conditions of a mortgage, reference to which is hereby made.
The makers, endorser(s), sureties and grantor(s) of this note hereby
severally waive presentment for payment, notice of nonpayment, protest, notice
of protest and due diligence in enforcing payment hereof, and consent that an
extension of time for payment of this note or of any installments thereof may be
granted without notice to them and without waiver of any rights of the owner
hereof.
If default is made in the payment of any of said installments of principal
or interest as the same become due or in the performance or observance of any of
the covenants or agreements contained in the instrument securing this note, the
entire debt at the election of the legal holder of this note, notice of election
being expressly waived, shall become due and payable. No delay in the exercise
of the option of acceleration shall be construed a waiver of such right, but it
may be exercised at any subsequent time during default. In the event of default
and if this note is sued upon or placed in the hands of any attorney for
collection, or the instrument securing this note is foreclosed, then the
undersigned agree to pay all costs of collection and foreclosure and reasonable
attorney's fees.
<PAGE>
It is further agreed and declared that this note is made and executed
under, and in all respects is to be construed and enforced according to, the
laws of the State of Arkansas.
TBC ARKANSAS, INC.
By: /s/ Mark Walton
----------------------
MARK WALTON, PRESIDENT
ATTEST:
/s/ Mike Perrine
- -----------------------
MIKE PERRINE, ASSISTANT
SECRETARY
13045 Research Blvd.
- -----------------------
Austin, TX 78750
- -----------------------
Address
<PAGE>
EXHIBIT 10.17(b)
MORTGAGE
--------
WITH POWER OF SALE (REALTY)
KNOW ALL MEN BY THESE PRESENTS:
THAT TBC Arkansas, Inc., GRANTOR, for and in consideration of the sum of
One Dollar ($1.00), to GRANTOR in hand paid, the receipt of which is hereby
acknowledged, and in consideration of the premises hereinafter set forth, do
hereby grant, bargain, sell and convey unto Red River Marine, Inc. #2, GRANTEE,
and unto GRANTEE'S successors and assigns forever, the following real property
and all improvements thereon, situated in Garland County, Arkansas:
Commercial Tract No. One (1) of Unit No. One (1) of Fairwood Subdivision,
according to the plat thereof recorded in Book 4 at Page 80 of the Plat
Records of Garland County, Arkansas.
LESS AND EXCEPT that property condemned by the Arkansas State Highway
Commission in Civil Case #82-193, filed for record April 13, 1982 on
Commercial Tract #1 of Unit 1 Fairwood Subdivision.
TO HAVE AND TO HOLD the same unto the said GRANTEE, and unto GRANTEE'S
successors and assigns forever, with all appurtenances thereunto belonging; and
all rents, income and profits therefrom after any default herein.
GRANTOR hereby covenants with GRANTEE, GRANTEE'S heirs and assigns, that
the above described real property is free and clear of all encumbrances and
liens, except for a mortgage lien in favor of Arkansas Bank and Trust Company of
Hot Springs, Arkansas, and will forever warrant and defend the title to said
property against all lawful claims except the aforesaid mortgage lien.
The sale is on the condition, that whereas, GRANTOR is justly indebted unto
said GRANTEE in the sum of FOUR HUNDRED SIXTY-TWO THOUSAND, ONE HUNDRED
FORTY-FIVE AND 53/100 DOLLARS ($462,145.53), evidenced by a Promissory Note
dated September 20, 1995, with said amount bearing interest from September 20,
1995, until paid in full at the rate of 8.75% per annum, paid and to be paid in
accordance with the terms and provisions of said promissory note reference to
which is hereby made. Interest after January 15, 1996, is payable monthly on
the unpaid principal balance and if not paid when due shall become part of the
principal and bear the same rate of interest.
GRANTOR acknowledges that this mortgage is second and subordinate to a
first mortgage lien executed by GRANTEE in favor of Arkansas Bank and Trust
Company dated October 29, 1986, and recorded October 30, 1986, in Mortgage Book
1195,
<PAGE>
Page 363, last extended by an Extension Agreement recorded May 20, 1993, in Book
1495, Page 896, all of the deed and mortgage records of Garland County,
Arkansas. GRANTEE further agrees and covenants that it will subordinate its
lien represented by this second mortgage to any first lien granted by GRANTOR
with respect to future financing, provided that none of the proceeds of any such
future refinancing are used for any other purpose than to obtain a release and
satisfaction of the then existing first lien of GRANTOR encumbering the above
described real property.
In the event of default of payment of any part of the principal or interest
of the note secured by this mortgage or upon failure of GRANTOR to perform the
agreements contained herein, GRANTEE shall give GRANTOR written notice of said
deficiency and GRANTOR shall have a reasonable time to cure said deficiency not
to exceed thirty (30) days from the date of the written notice from GRANTEE. If
GRANTOR fails to cure said deficiency within the aforesaid reasonable time
period, not to exceed thirty (30) days, GRANTEE, its successors and assigns,
shall have the right to declare the entire debt to be due and payable.
GRANTOR hereby covenants that it will keep all improvements insured against
fire, with all other full coverage insurance, loss payable clause to holder and
owner of this mortgage; that said improvements will be kept in a good state of
repair, and waste will neither be permitted nor committed; that all taxes of
whatever nature, as well as assessments for improvements will be paid when due,
and if not paid GRANTEE may pay same and shall have a prior lien upon said
property for repayment, with interest at the rate of 10% per annum; now,
THEREFORE, if GRANTOR shall pay all indebtedness secured hereby, with
interest, at the times and in the manner aforesaid, and perform the agreements
herein contained, then this conveyance shall be void. In case of nonpayment
or failure to perform the agreements herein contained, the said GRANTEE,
GRANTEE'S successors and assigns, shall have the right and power to take
possession of the property herein conveyed and expel any occupant therefrom
without process of law; to collect rents and profits and apply same on unpaid
indebtedness; and with or without possession to sell said property at public
sale, to the highest bidder for cash, at the Courthouse in Garland County,
Arkansas, public notice of the time, terms and place of sale having first been
given twenty days by advertising in some newspaper published in said County, by
at least three insertions, or by notices posted in five public places in the
County, at which sale any of the parties hereto, their heirs and assigns, may
bid and purchase as any third person might do; and GRANTOR hereby authorizes the
said GRANTEE, GRANTEE'S
<PAGE>
heirs or assigns to convey said property to anyone purchasing at said sale and
to convey an absolute title thereto, and the recitals of such conveyance shall
be taken as PRIMA FACIE true. The proceeds of said sale shall be applied,
first, to the payment of all costs and expenses attending said sale; second, to
the payment of all indebtedness secured hereby, with interest; and the
remainder, if any, shall be paid to said GRANTOR. GRANTOR hereby waives any and
all rights of appraisement, sale, redemption and homestead under the laws of the
State of Arkansas, and especially under the Act approved May 8, 1899, and acts
amendatory thereof.
WITNESS my hand and seal this 20th day of September, 1995.
TBC ARKANSAS, INC.
BY: /s/ Mark Walton
----------------------------
MARK WALTON, PRESIDENT
ATTEST:
/s/ Mike Perrine
- -------------------------------
MIKE PERRINE, ASSISTANT
SECRETARY
APPROVED BY:
RED RIVER MARINE, INC. #2
BY: /s/ Benny E. Hargrove
----------------------------
BENNY E. HARGROVE, PRESIDENT
/s/ Debby L. Hawkins, Sec.
- -----------------------------
DEBBY L. HAWKINS, SECRETARY
[COMPANY SEAL APPEARS HERE]
ACKNOWLEDGEMENT
---------------
STATE OF ARKANSAS
COUNTY OF WHITE
On this day, before me personally appeared Mark Walton and Mike Perrine,
who acknowledged that they were the President and Assistant Secretary,
respectively, of TBC Arkansas, Inc., a corporation, and that they, as such
officers, being authorized so to do, had executed the foregoing instrument for
the purposes therein contained, by signing the name of the corporation by
themselves as such officers.
<PAGE>
WITNESS by hand and official seal this 20th day of September, 1995.
/s/ Donald P. Raney
---------------------
NOTARY PUBLIC
My Commission Expires:
6-29-99
- ----------------------
(SEAL)
ACKNOWLEDGEMENT
---------------
STATE OF ARKANSAS
COUNTY OF WHITE
On this day, before me personally appeared Benny Hargrove and Debby L.
Hawkins, who acknowledged that they were the President and Secretary,
respectively, of Red River Marine, Inc. #2, a corporation, and that they, as
such officers, being authorized so to do, had executed the foregoing instrument
for the purposes therein contained, by signing the name of the corporation by
themselves as such officers.
WITNESS my hand and official seal this 20th day of September, 1995.
/s/ Donald P. Raney
---------------------
NOTARY PUBLIC
My Commission Expires:
6-29-99
- ----------------------
(SEAL)
<PAGE>
EXHIBIT 10.18
PARTS & ACCESSORIES
PROMISSORY NOTE
$230,177.16 September 20, 1995 Heber Springs, Arkansas
FOR VALUE RECEIVED, TBC ARKANSAS, INC. ("Maker") promises to pay to the
order of RED RIVER MARINE, INC. AND RED RIVER MARINE, INC. #2, at Heber Springs,
Arkansas the principal sum of $230,177.16 DOLLARS ($230,177.16), with simple
interest thereon from date until due at the rate of 8.75% per annum, due and
payable as follows: (i) $26,000.00 on January 15, 1996, (ii) 21 consecutive
monthly payments of $10,500.00 each payable on the 15th day of each successive
month thereafter, and (iii) $8059.59 on November 15, 1997.
Maker reserves the privilege to prepay the indebtedness in advance.
The Maker, endorser(s), sureties and grantor(s) of this note hereby
severally waive presentment for payment, notice of nonpayment, protest, notice
of protest and due diligence in enforcing payment hereof, and consent that an
extension of time for payment of this note or of any installments thereof may be
granted without notice to them and without waiver of any rights of the owner
hereof.
If default is made in the payment of any of said installments of principal
or interest as the same become due or in the performance or observance of any of
the covenants or agreements contained in the instrument securing this note, the
entire debt at the election of the legal holder of this note, notice of election
being expressly waived, shall become due and payable. No delay in the exercise
of the option of acceleration shall be construed a waiver of such right, but it
may be exercised at any subsequent time during default. In the event of default
and if this note is sued upon or placed in the hands of any attorney for
collection, then Maker agrees to pay all costs of collection and reasonable
attorneys' fees.
It is further agreed and declared that this note is made and executed
under, and in all respects is to be construed and enforced according to, the
laws of the State of Arkansas.
TBC ARKANSAS, INC.
By: /s/ Mark Walton
----------------------
Mark Walton, President
<PAGE>
EXHIBIT 10.19
MISCELLANEOUS EQUIPMENT
PROMISSORY NOTE
$108,750.00 September 20, 1995 Heber Springs, Arkansas
FOR VALUE RECEIVED, TBC ARKANSAS, INC. ("Maker") promises to pay to the
order of RED RIVER MARINE, INC. AND RED RIVER MARINE, INC. #2, at Heber Springs,
Arkansas the principal sum of ONE HUNDRED EIGHT THOUSAND SEVEN HUNDRED FIFTY
DOLLARS ($108,750.00), with simple interest thereon from date until due at the
rate of 8.75% per annum, due and payable as follows: (i) $14,000.00 on January
15, 1996, (ii) 21 consecutive monthly payments of $4,956.00 each payable on the
15th day of each successive month thereafter, and (iii) $1905.03 on November 15,
1997.
Maker reserves the privilege to prepay the indebtedness in advance.
The Maker, endorser(s), sureties and grantor(s) of this note hereby
severally waive presentment for payment, notice of nonpayment, protest, notice
of protest and due diligence in enforcing payment hereof, and consent that an
extension of time for payment of this note or of any installments thereof may be
granted without notice to them and without waiver of any rights of the owner
hereof.
If default is made in the payment of any of said installments of principal
or interest as the same become due or in the performance or observance of any of
the covenants or agreements contained in the instrument securing this note, the
entire debt at the election of the legal holder of this note, notice of election
being expressly waived, shall become due and payable. No delay in the exercise
of the option of acceleration shall be construed a waiver of such right, but it
may be exercised at any subsequent time during default. In the event of default
and if this note is sued upon or placed in the hands of any attorney for
collection, then Maker agrees to pay all costs of collection and reasonable
attorneys' fees.
It is further agreed and declared that this note is made and executed
under, and in all respects is to be construed and enforced according to, the
laws of the State of Arkansas.
TBC ARKANSAS, INC.
By: /s/ Mark Walton
----------------------
Mark Walton, President
<PAGE>
EXHIBIT 10.21
TBC MANAGEMENT, LTD.
[Form of Employment Agreement]
May 7, 1996
__________________________
Travis Boats & Motors, Inc.
13045 Research Boulevard
Austin, Texas 78750
Re: Employment Agreement
--------------------
Dear ____:
This letter agreement sets forth the terms of your employment relationship
with TBC Management, Ltd., a Texas limited partnership (the "Company"), which
has an agreement to provide management services to Travis Boats & Motors, Inc.,
a Texas corporation, and its subsidiaries (collectively referred to as "Travis
Boats"). As an inducement to you to enter into this agreement, if for any
reason the agreement between the Company and Travis Boats ceases to exist, the
Company shall immediately assign this agreement to Travis Boats and Travis
Boats, by signing below where indicated, agrees to accept such assignment and
perform the terms of this agreement. This Letter Agreement supersedes all
previous agreements between you and the Company and/or Travis Boats, including
but not limited to the Letter Agreement dated December 14, 1995.
1. Duties. You agree to perform the duties and assume the
------
responsibilities normally incidental to the position of _________ of Travis
Boats. You further agree to perform for the Company such other duties and
responsibilities as may be reasonably prescribed from time to time by the
Company. It is acknowledged that you are the _________, but not an employee, of
Travis Boats.
2. Extent of Service. The initial term of this employment contract with
-----------------
the Company shall expire on the third anniversary of this letter agreement
unless terminated in accordance with the provisions of paragraph 7. You shall
devote such time, attention and energy to the business of the Company as shall
be reasonably requested, and you will faithfully, industriously, and to the best
of your ability perform all of the duties that may be required of you as an
employee. You will not engage in activities, businesses, or investment that
would in any way conflict with the best interests of the Company or Travis
Boats.
<PAGE>
May 7, 1996
Page 2
3. Effective Date. This agreement shall be effective as of the date of
--------------
completion of an initial public offering of the common stock of Travis Boats.
In the event the initial public offering has not been completed by September 30,
1996, this agreement shall terminate and neither you, the Company, nor Travis
Boats shall have any further responsibilities or rights hereunder.
4. Salary. As long as you remain employed by the Company, the Company
------
will pay you an annual salary of $_______ (before federal or state withholding
deductions), subject to adjustments, payable on the same schedule that salary is
paid to other salaried employees of the Company. Your performance and base
salary will be reviewed annually by the Company. You may be entitled to receive
such further compensation as may be authorized by the Company upon such annual
review or at other times deemed appropriate by the Company.
5. Benefits. As long as you remain employed by the Company, you shall be
--------
entitled to participate in health insurance, dental insurance, disability
insurance, and accidental, death and disability insurance, as provided to the
other executive employees of the Company, and such vacation and holiday time as
provided in the Company's vacation/holiday policy. The Company shall provide
you the use of an automobile for business use with all maintenance costs,
automobile insurance premiums, gas and Company-related cellular phone charges
paid by the Company.
6. Bonus. As long as you remain employed by the Company and the
-----
consolidated income of Travis Boats before income tax expense and non-recurring
audit adjustments (collectively "Pre-tax Income") reflects growth of 20% or more
over the previous fiscal year, you shall receive an annual bonus of _% of such
total annual Pre-tax Income. If the Pre-tax Income reflects growth of less than
20% over the previous fiscal year, the annual bonus shall be an amount
determined by the Company.
7. Termination of Employment. Notwithstanding the foregoing or anything
-------------------------
to the contrary contained in this letter agreement:
(a) You may terminate your employment relationship with the Company at any
time and for any reason whatsoever, or for no reason, after giving the Company
written notice at least 30 days prior to such termination.
(b) From the date you voluntarily terminate your employment with the
Company, from the date of your death or from the date your employment is
terminated For Cause (as defined below) by the Company, you shall no longer be
entitled to any base salary, bonus or other compensation benefits, other than
such salary and bonus amounts earned but unpaid as of the date of termination of
your employment. The term "For Cause" shall mean (i) your gross neglect or
willful misconduct in the discharge of your duties and responsibilities to the
Company, as determined by the Board of
<PAGE>
May 7, 1996
Page 3
Directors of the general partner of the Company, (ii) your repeated failure to
obey reasonable directions from the Company or the Board of Directors of the
general partner of the Company, (iii) any act of yours against the Company or
Travis Boats intended to enrich you at the expense of the Company or Travis
Boats, (iv) any willful act or omission by you having the effect of materially
injuring the business or business relationships of the Company or Travis Boats,
or (v) your commission of a felony or any crime involving moral turpitude, fraud
or misrepresentation.
(c) If your employment is terminated by the Company other than "For Cause"
(including expiration of a term without renewal) you shall be entitled to
receive 2.99 times your then annual compensation with proration of bonus
for the year in which your employment was terminated, which amounts shall be
payable over the three-year term in the same manner as such compensation would
have been payable if employment had not terminated, provided that the Company
may elect to pay or you may elect to receive such compensation as a lump sum
payment.
(d) Notwithstanding the foregoing you may submit the decision to classify
termination of your employment as "For Cause" to binding arbitration under the
rules and auspices of the American Arbitration Association.
8. Nondisclosure and Noncompetition; Consideration.
-----------------------------------------------
(a) You shall not, at any time during the term of your employment by the
Company, nor so long as such information remains confidential with the Company
or Travis Boats, use for your own account or for the benefit of any other
person, firm, corporation or entity, directly or indirectly, except in the
ordinary course of business, any of the supplier lists, customer or subscriber
lists, contract terms, trade names, trade secrets or goodwill owned or used by
the Company or Travis Boats in its business or, directly or indirectly, disclose
or furnish to any other person, firm, corporation or entity, the methods by
which the Company's business or that of Travis Boats is or has been conducted,
any of the methods by which the customers or business of the Company or that of
Travis Boats are or have been obtained, or any confidential or proprietary
information whatsoever of the Company or Travis Boats, including, without
limitation, the Intellectual Property described in paragraph 9 below and the
identities of or other information regarding any customers or prospective
customers of the Company.
(b) Unless the Company consents in writing, at any time during the term of
your employment with the Company, and within one year after the date your
employment with the Company terminates, you will not, within the United States,
directly or indirectly own, manage, operate, control, be employed by, advise or
be connected in any manner (including, without limitation, as an employee,
director, agent, partner, officer, stockholder, creditor, consultant or
otherwise) with any person, firm, corporation or business which directly or
indirectly is competitive with the Company's business (i.e., any business which
engages in the business of retail marketing
<PAGE>
May 7, 1996
Page 4
or selling recreational power boats, boat motors or boat trailers or provides
services to people or entities selected because of their involvement in the same
industry).
(c) Notwithstanding the foregoing, nothing in this letter agreement will
prohibit you from owning less than five percent of the capital stock of a
corporation, the common stock of which is publicly traded on a national
securities exchange or through NASDAQ, notwithstanding that such corporation may
compete with the Company.
(d) At any time during the term of your employment by the Company, and
within one year after the date your employment with the Company terminates,
neither you nor any entity or business owned or controlled by you, will,
directly or indirectly for your benefit or the benefit of any third party,
without the written consent of the Company, hire or solicit the employment of
any employee of the Company or influence or induce any employee to leave or
decline employment by the Company.
9. Materials. All data, listings, charts, drawings, records, documents,
---------
programs, software, documentation, memoranda, journals, notebooks, records,
files, drafts, specifications and similar items relating to the business of the
Company or its affiliates, whether compiled by you, furnished to you by the
Company, its customers or clients or otherwise made accessible to you or coming
into your possession, while you are employed by the Company, and copies of any
such items, shall be and remain the sole and exclusive property of the Company
or its customers or clients, as the case may be, and none of such items shall be
removed from the Company's business premises by you without the prior consent of
the Company, except as required in the course of your employment. All of such
items shall be returned to the Company by you upon the termination of your
employment with the Company for whatever reason. The provisions of this
paragraph shall not, however, prohibit you from using any materials published by
the Company and made available (without a breach of this agreement) to the
general public.
10. Intellectual Property. If, during the term of your employment, you
---------------------
develop any proprietary technology (including without limitation any
architecture, structure, layouts, processes, formulae, inventions, know-how,
ideas, concepts, designs, drawings, specifications, test data, and quality and
quality control standards); any patents and patent rights (including all
information or discoveries covered thereby and all enhancements, modifications,
improvements, divisions, continuations, continuations in part, reissues, re-
examinations or extensions thereof), trademarks and trademark rights, copyrights
and copyright rights, trade secrets and trade secret rights, and applications,
registrations or their equivalents for any of the same; or any other
intellectual property rights (collectively, the "Intellectual Property"),
relating to the manufacturing or supplying of products or services in which the
Company is or is likely to be involved, such Intellectual Property shall
automatically become the property of the Company. You agree to cooperate with
the Company to perfect your respective claims to such Intellectual Property and
to execute and deliver any and all
<PAGE>
May 7, 1996
Page 5
documents reasonably necessary in order to effectuate the intent of this
paragraph, and you hereby grant to the Company an irrevocable power of attorney
to execute any such documents.
11. Notices. All notices and communications hereunder shall be in writing
-------
and shall be deemed to have been duly given to a party when delivered in person
(including delivery by an express delivery service or by facsimile transmission
during the recipient's regular business hours), or three business days after
such notice is enclosed in a properly sealed envelope, certified or registered,
and deposited (postage and certification or registration prepaid) in a post
office or collection facility regularly maintained by the United States Postal
Service and addressed for delivery, if to you, at _____________________________,
or if to the Company, at 13045 Research Boulevard, Austin, Texas 78750.
12. Miscellaneous.
-------------
(a) The rights and obligations of the Company under this letter agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of the Company.
(b) This letter agreement shall be subject to and governed by the laws
(except the conflict of laws) of the State of Texas.
(c) Whenever the context requires, the gender of all words used herein
shall include the masculine, feminine and neuter, and the number of all words
shall include the singular and plural. Titles of sections are for convenience
only and neither limit nor amplify any of the provisions contained herein.
(d) Upon execution of this agreement, the rights, duties and obligations of
the parties hereto with respect to the matters set forth herein shall be
governed solely by the provisions of this letter agreement, and all
representations, warranties, terms and conditions with respect to such matters
which may be contained in any prior writing executed by the parties (or by any
of them) shall be null and void and of no further force and effect.
(e) If any provisions of this letter agreement, or the application thereof
to any party hereto or under any circumstances, shall be invalid or
unenforceable to any extent, the remainder of this letter agreement and the
application of such provisions to other parties or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law;
provided, that a provision as similar in terms and effect to such invalid or
- --------
unenforceable shall be added automatically as part of this letter agreement.
(f) In the event of a breach or threatened breach by you of any provision
of this letter agreement, then in addition to any other available remedy to
which the Company may be entitled,
<PAGE>
May 7, 1996
Page 6
including the recovery of damages, the Company shall be entitled to an
injunction restraining you from breaching or attempting to breach, in whole or
in part, any of the provisions of this letter agreement. In addition, in the
event of a breach by either party of any provision of this letter agreement, the
non-breaching or (in the event of litigation) the prevailing party shall be
entitled to recover from the other party all reasonable costs and attorneys'
fees incurred by the non-breaching or prevailing party in seeking any of such
remedies, in addition to the other relief to which the non-breaching or
prevailing party may be entitled. As used in the preceding sentence,
"prevailing party" shall include, without limitation, the party who retains
legal counsel or brings an action against the other party and subsequently
obtains all or substantially all of the relief sought, whether by compromise,
settlement or judgment.
* * *
<PAGE>
May 7, 1996
Page 7
If you are in agreement with the foregoing, please so indicate by signing
the enclosed extra original of this letter agreement and returning it to the
Company, whereupon the provisions contained herein will be effective as of the
date of this letter. Travis Boats, by signing below where indicated, agrees to
be bound by the terms of this agreement in the event the management contract
between the Company and Travis Boats ceases to exist.
Very truly yours,
TBC Management, Ltd.
_________________________________________________
_______________________,
_______________________ of Travis Boats & Motors,
Inc., its General Partner
AGREED TO AND ACCEPTED:
_______________________________
Date:____________________, 1996
AGREED TO AND ACCEPTED:
Travis Boats & Motors, Inc.
By:____________________________
___________________________,
___________________________
Date:____________________, 1996
<PAGE>
EXHIBIT 10.22
OPTION AGREEMENT
----------------
This Option Agreement (this "Agreement") is executed to be effective as of
the 17th day of May, 1995, by and between Travis Boats & Motors, Inc. a Texas
corporation (the "Company"), and _______________, an employee of the Company
(the "Employee").
R E C I T A L S:
---------------
The Company desires to grant to the Employee an Option to purchase shares
of its Common Stock, $0.10 par value (the "Common Stock") pursuant to the terms
and conditions contained in this Agreement.
A G R E E M E N T:
-----------------
The parties agree as follows:
1. Grant of Option. The Company hereby irrevocably grants to the Employee
---------------
the right and option to purchase all or any part of an aggregate of _____ shares
of Common Stock, on the terms and conditions and subject to all the limitations
set forth herein.
2. Purchase Price. The purchase price of the shares of Common Stock
--------------
covered by the Option (the "Shares") shall be $112.00 per share.
3. Exercise of Option. Subject to the other terms and conditions of this
------------------
Agreement, the Option granted hereby shall vest and become exercisable only on
and after the dates set forth below as to the number of Shares set forth
opposite such dates below:
<TABLE>
<CAPTION>
Vesting Dates Number of Shares Vested
------------- -----------------------
<S> <C>
May 17, 1996 20%
May 17, 1997 40%
May 17, 1998 60%
May 17, 1999 80%
May 17, 2000 100%
</TABLE>
4. Term of Option. The Option shall terminate ten years from the date of
--------------
this Agreement, but shall be subject to earlier termination as provided herein.
<PAGE>
If the Employee ceases to be an employee of the Company for any reason
other than death or Disability, as defined below, or termination of the
Employee, the Option may be exercised within 45 days after the date the Employee
ceases to be an employee or, if earlier, the date upon which the Option
terminates, as originally prescribed by this Agreement. In such event, the
Option shall be exercisable only to the extent that the right to purchase shares
under this Agreement has vested at the date of such cessation of employment.
In the event the Employee's employment is terminated by the Company for
"cause" (as defined below), all of the Employee's unexercised Options shall
terminate immediately.
If the Employee's employment is terminated without cause, the Options
granted pursuant to this Agreement shall immediately become fully vested and
exercisable. The termination of the Employee's employment shall not operate to
terminate this Agreement and the Employee shall have the right to exercise the
vested but unexercised portion of the Options granted hereunder at any time
during the term of this Agreement.
In the event of the Disability of the Employee, the Option shall be
exercisable within 45 days after the date of such Disability or the date upon
which the Option terminates as originally prescribed by this Agreement,
whichever is earlier. In such event, the Option shall be exercisable to the
extent that the right to purchase the Shares hereunder has accrued on the date
the Employee becomes Disabled and is in effect as of such determination date.
In the event of the death of the Employee while an employee of the Company
or of an Affiliate, the Option, to the extent exercisable but not exercised as
of the date of death, may be exercised by the Employee's legal representatives
or any person who acquired the Employee's rights to the Option by will or by the
laws of descent and distribution. In such event, the Option must be exercised,
if at all, within one year after the date of death of the Employee or, if
earlier, the date upon which the Option terminates, as originally prescribed by
this Agreement.
The term "cause," as used in this Agreement, shall mean:
(a) The Employee's willful and repeated failure to perform his/her
duties;
(b) habitual abuse of drugs or alcohol;
(c) conviction of a felony or an unlawful act; or
(d) acts of gross disloyalty to the Company, including but not
limited to theft, embezzlement or intentional unauthorized
disclosure of confidential information.
"Disability" shall mean, as determined by the Board of Directors in the
sole discretion exercised in good faith of the Board of Directors, a physical or
mental impairment of sufficient severity that either the Optionee is unable to
continue performing the duties he performed before such impairment or the
Optionee's condition entitles him to disability benefits under any
2
<PAGE>
insurance or employee benefit plan of the Company and that impairment or
condition is cited by the Company as the reason for termination of the
Optionee's employment.
"Disability"
5. Exercise of Option and Issue of Shares. The Option may be exercised
--------------------------------------
in whole or in part (to the extent that it is exercisable in accordance with its
terms) by giving written notice to the Company, together with the tender of the
Option price. Such written notice shall be signed by the person exercising the
Option, shall state the number of Shares with respect to which the Option is
being exercised, shall contain any representation required by paragraph 6 below
and shall otherwise comply with the terms and conditions of this Agreement. The
Company shall pay all transfer or original issue taxes with respect to the issue
of the Shares pursuant hereto and all other fees and expenses necessarily
incurred by the Company in connection herewith. Except as specifically set
forth herein, the holder acknowledges that any income or other taxes due from
him or her with respect to this Option or the shares issuable pursuant to this
Option shall be the responsibility of the holder and that the Company may, in
accordance with the Internal Revenue Code, require the holder to pay additional
withholding taxes in respect of the amount that is considered compensation
includable in such holders' gross income. The holder of this Option shall have
rights as a shareholder only with respect to any Shares covered by the Option
after due exercise of the Option and tender of the full exercise price for the
shares being purchased pursuant to such exercise.
6. Adjustment of Awards and Authorized Stock. The terms of this
-----------------------------------------
Agreement shall be subject to adjustment from time to time, in accordance with
the following provisions:
a. If at any time, or from time to time, the Company shall subdivide
as a whole (by reclassification, by a stock split, by the issuance of a
distribution on Common Stock payable in Common Stock, or otherwise) the
number of shares of Common Stock then outstanding into a greater number of
shares of Common Stock, then (i) the number of shares of Common Stock (or
other kind of shares or securities) that may be acquired shall be increased
proportionately, and (ii) the purchase price for each share of Common Stock
(or other kind of shares or securities) shall be reduced proportionately,
without changing the aggregate purchase price for the shares.
b. If at any time, or from time to time, the Company shall
consolidate as a whole (by reclassification, reverse stock split, or
otherwise) the number of shares of Common Stock then outstanding into a
lesser number of shares of Common Stock, then (i) the number of shares of
Common Stock (or other kind of shares or securities) that may be acquired
shall be decreased proportionately, and (ii) the purchase price for each
share of Common Stock (or other kind of shares or securities) shall be
increased proportionately, without changing the aggregate purchase price.
c. Adjustments made pursuant to this Section 6 shall be made by the
Company, and its determination as to what adjustments shall be made and the
extent thereof shall be final, binding, and conclusive. No fractional
interests shall be issued on account of any such adjustments.
3
<PAGE>
7. Change in Control. Upon the occurrence of a Change in Control (as
-----------------
defined below) of the Company, the options granted hereunder shall immediately
become fully vested and exercisable (the total number of shares of Common Stock
as to which an Option is exercisable upon the occurrence of a Change in Control
is referred to herein as the "Total Shares"). If, in connection with the Change
in Control, other securities, cash, or property shall be issuable or deliverable
in exchange for Common Stock, then the Employee shall be entitled to purchase or
receive (in lieu of the Total Shares that the Employee would otherwise be
entitled to purchase or receive), the number of shares of Common Stock, other
securities, cash, or property to which that number of Total Shares would have
been entitled in connection with the Change in Control at an aggregate exercise
price equal to the purchase price that would have been payable if that number of
Total Shares had been purchased on the exercise of the option immediately before
the consummation of the Change in Control.
Nothing in this Section 7 shall impose on the Employee the obligation to
exercise any option immediately before or upon the Change of Control, or cause
the Employee to forfeit the right to exercise the option during the remainder of
the original term of this Agreement because of a Change in Control.
A "Change in Control" shall be deemed to have occurred if (i) any "person"
(as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended) is or becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 under the Act), directly or indirectly, of securities of
the Company representing 25% or more of the combined voting power of the
outstanding securities of the Company, (other than (A) a person owning 25% or
more as of the date of this Agreement, (B) a person who becomes the owner of 25%
or more by reason of the Company's acquisition of outstanding shares of the
Company's stock, (C) as a result of an initial public offering on the Company's
common stock, or (D) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company), or (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the board of directors of the Company and any new director whose election by the
board of directors or nomination for election by the Company's shareholders was
approved by a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof, or (iii) the shareholders of the
Company approve (x) a merger or consolidation of the Company with any other
entity (other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least 80% of the combined voting power of
the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation), (y) a plan of complete
liquidation of the Company or (z) an agreement or agreements for the sale or
disposition, in a single transaction or series of related transactions, by the
Company of all or substantially all of the property and assets of the Company.
8. Purchase for Investment. Unless the offering and sale of the Shares
-----------------------
to be issued upon the particular exercise of the Option shall have been
effectively registered under the
4
<PAGE>
Securities Act of 1933, as amended, or any successor legislation (the "Act"),
the Company shall be under no obligation to issue the Shares covered by such
exercise unless and until the following conditions have been fulfilled.
The person(s) who exercise the Option shall represent to the Company, at
the time of such exercise, that such person(s) are acquiring such Shares for his
or her own account, for investment and not with a view to, or for sale in
connection with, the distribution of any such Shares, in which event the
person(s) acquiring such Shares shall be bound by the provisions of the
following legend which shall be endorsed upon the certificate(s) evidencing
their option Shares issued pursuant to such exercise;
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE FEDERAL SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. WITHOUT
SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED, EXCEPT UPON DELIVERY TO THE
COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO
THE COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE
COMPANY TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION
OF THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER."
Without limiting the generality of the foregoing, the Company may delay
issuance of the Shares until completion of any action or obtaining of any
consent, which the Company deems necessary under any applicable law (including
without limitation state securities or "blue sky" laws).
9. Non-Assignability. The Option shall not be transferable by the
-----------------
Employee otherwise than by will or by the laws of descent and distribution and
shall be exercisable, during the Employee's lifetime, only by the Employee or
his or her guardian or legal representative. The Option shall not be assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
5
<PAGE>
attempted transfer, assignment, pledge, hypothecation or other disposition of
the Option or of any rights granted hereunder contrary to the provisions of this
paragraph 7, or the levy of any attachment or similar process upon the Option or
such rights, shall be null and void.
10. Notices. Any notices required or permitted by the terms of this
-------
Agreement shall be given by personal delivery or registered or certified mail,
return receipt requested, addressed as follows:
To the Company: 13045 Research Boulevard
Austin, Texas 78750
Attn: Mark T. Walton
To the Employee, to the
address shown below,
or to such other address or addresses of which notice in the same manner has
previously been given. Any such notice shall be deemed to have been given when
given in accordance with these provisions.
11. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
-------------
ACCORDANCE WITH THE INTERNAL LAWS, AND NOT THE LAWS OF CONFLICT, OF THE STATE OF
TEXAS.
12. Benefit of Agreement. This Agreement shall be for the benefit of and
--------------------
shall be binding upon the heirs, executors, administrators and successors of the
parties hereto.
EXECUTED as of the date set forth above.
TRAVIS BOATS & MOTORS, INC.
By:________________________________
Mark T. Walton, President
___________________________________
Address:
___________________________________
___________________________________
6
<PAGE>
EXHIBIT 10.26(a)
FIRST LIEN PROMISSORY NOTE
$679,000.00 September 15, 1995
FOR VALUE RECEIVED, the undersigned, TRAVIS SNOWDEN MARINE, INC., a Texas
corporation (the "Borrower") agrees and promises to pay to the order of
NATIONSBANK OF TEXAS, N.A., or any other owner and holder of this note
(collectively herein called the "Bank") at 300 Convent, San Antonio, Bexar
County, Texas, or such other place in the United States of America as may be
designated by the Bank for making payment hereunder, the principal sum of SIX
HUNDRED SEVENTY-NINE THOUSAND AND NO/100 DOLLARS ($679,000.00), or so much
thereof as may be advanced hereunder, in lawful money of the United States of
America, together with interest on the unpaid principal balance outstanding from
time to time from the date hereof until maturity at the following rates of
interest:
(a) From the date of this note through and including December 31, 1995, at
a varying rate of interest per annum (the "Varying Rate") equal to the
lesser of: (a) the prime rate of NationsBank of Texas, N.A. (the
"Prime Rate"), plus one-half of one percent (1/2%), as the same may
change from day to day, or (b) the maximum rate of interest allowed by
applicable law (the "Maximum Rate"); and
(b) After December 31, 1995, at the Varying Rate, unless the Bank receives
from the Borrower on or before December 28, 1995, a written election
to have interest accrue hereunder at a fixed rate of interest per
annum (the "Fixed Rate") determined solely by the Bank and
communicated to the Borrower prior to December 28, 1995, in which
event (i.e., the receipt by the Bank of such written election), at the
Fixed Rate.
The Prime Rate is the index agreed upon by the Borrower and the Bank to
determine the rate of interest for this note. Use of the Prime Rate is not to
be construed as a warranty or representation that the Prime Rate is more
favorable than another rate or index, that rates on other loans or credit
facilities may not be based on indices other than the Prime Rate or that rates
on loans to others may not be made below the Prime Rate.
Interest hereon shall be calculated at a daily rate equal to 1/360th of the
stated annual percentage rate this note bears, subject to the provisions hereof
limiting interest to the Maximum Rate. All past due principal and interest
shall bear interest from maturity until paid at an interest rate equal to twelve
percent (12%) per annum.
1
<PAGE>
Accrued interest under this note shall be due and payable monthly as it
accrues on the first day of each calendar month, beginning October 1, 1995, and
continuing regularly thereafter until and including January 1, 1996.
Thereafter, but subject to the Bank's Call Option as defined and described
below, principal and accrued interest under this note shall be due and payable
as follows:
(a) If interest is accruing at the Fixed Rate in equal monthly payments of
principal and interest, each in an amount sufficient to fully amortize
the principal balance of this note outstanding on January 1, 1996,
together with interest thereon over a fifteen (15) year period, such
monthly payments being due and payable on the first day of each
calendar month, beginning on February 1, 1996, and continuing
regularly thereafter until December 31, 2005, when all unpaid
principal and all accrued and unpaid interest shall be due and
payable.
(b) If interest is accruing at the Floating Rate, in monthly payments of
principal plus interest, each in the amount of $3,772.22 of principal,
plus all then accrued and unpaid interest, such monthly payments being
due and payable on the first day of each calendar month, beginning on
February 1, 1996, and continuing regularly thereafter until December
31, 2005, when all unpaid principal and all accrued and unpaid
interest shall be due and payable.
Each payment shall be applied first to interest and then to principal.
This note has been executed and delivered pursuant to that one certain Loan
Agreement (the "Construction Loan Agreement") of even date herewith between the
Borrower and the Bank. If a Default (as such term is used and defined in the
Construction Loan Agreement) occurs, then the Bank may declare this note mature
and all unpaid principal under this note, together with all accrued and unpaid
interest hereunder, and all sums owing under any instrument or document executed
in connection with this note (the "Loan Documents"), shall be due and payable
immediately. Words and terms in this note with the first letter capitalized and
not otherwise defined herein shall have the same meaning assigned to them in the
Construction Loan Agreement.
All or any portion of this note may be prepaid without penalty at any time
or times prior to January 1, 1996, provided that all prepayments, at the Bank's
option, may be applied first to accrued and unpaid interest and then to the
principal balance in inverse order of maturity.
If interest is accruing at the Fixed Rate and Borrower voluntarily prepays
any amounts due on this note on or after January 1, 1996, Borrower hereby agrees
to pay Bank, in addition to any amounts of principal and interest prepaid on
this note to Bank, such amount as is required to compensate Bank for any losses,
costs
2
<PAGE>
or expenses which Bank may reasonably incur as a result of such prepayment,
including without limitation, any loss (including loss of anticipated profits),
costs or expenses incurred by reason of the liquidation or re-employment of
deposits or other funds acquired by Bank to fund or maintain the loan evidenced
by this note. Bank shall deliver to Borrower a statement reasonably setting
forth the amount and manner of determining any such loss, costs or expenses,
which statement shall be conclusive and binding for all purposes absent manifest
error. Borrower agrees to pay such amount to Bank within three (3) days of
receipt of such statement.
In addition to the Bank's right to accelerate the maturity of this note
upon the occurrence of a Default, the Bank shall have the option (the "Bank's
Call Option") to immediately declare due the outstanding principal balance of
this note, together with all then accrued and unpaid interest if:
(a) The Bank has not received from the Borrower on or before December 31,
1995, a copy of a duly issued Certificate of Occupancy covering the
Improvements, or other written evidence of governmental approval of
occupancy of the Improvements from the municipality having
jurisdiction over such Improvements; or
(b) The Bank has not received on or before December 31, 1995, proceeds
from a Small Business Administration loan to the Borrower sufficient
to pay off amounts owed to the Bank under the Second Lien Note.
The Borrower agrees to pay all costs of the Bank in collecting any sums
payable hereunder and under the Loan Documents when such costs are incurred,
including reasonable attorney's fees, whether or not this note has been
accelerated or any other action shall then be instituted to enforce this note.
Unless otherwise specifically set forth in this note, the Borrower and each
surety, endorser, guarantor and other person liable upon this note waives all
notices, demands and presentments for payment, all notices of non-payment,
default, intention to accelerate maturity, acceleration of maturity, protest and
dishonor, and diligence in taking any action to collect amounts hereunder and in
the handling of any collateral securing this note.
The Borrower and the Bank intend that the loan evidenced by this note (the
"Loan") shall be in strict compliance with applicable usury laws. If at any
time any interest contracted for, charged or received under this note or
otherwise in connection with the Loan would be usurious under applicable law,
then regardless of the provisions of this note or the Loan Documents or any
action or event (including, without limitation, prepayment of principal
hereunder or acceleration of maturity by the Bank) which may occur with respect
to this note or the Loan, it is agreed that all sums that would otherwise be
usurious shall be immediately credited by the Bank as a payment of principal
hereunder, or if this note has already been paid, immediately refunded to the
Borrower. All compensation which
3
<PAGE>
constitutes interest under applicable law in connection with the Loan shall be
amortized, prorated, allocated and spread over the full period of time any
indebtedness is owing by the Borrower under the Loan, to the greatest extent
permissible without exceeding the Maximum Rate in effect from time to time
during such period.
This note and all of the Loan Documents shall be deemed contracts made
under the laws of the State of Texas and for all purposes shall be interpreted
under such laws. In particular, the Bank and the Borrower agree that the
Indicated (weekly) Rate ceiling, as determined in accordance with Article 5069-
1.04, as amended (Revised Civil Statutes of Texas), from time to time in effect,
shall constitute the Maximum Rate hereunder. Notwithstanding the immediately
preceding two sentences, if United States federal law should permit the Bank to
contract for, charge or receive a greater rate of interest than the rate
determined under said Article 5069-1.04, then such federal law, from time to
time in effect, shall determine the Maximum Rate hereunder.
In no event shall the provisions of Chapter 15, Article 5069 of the Revised
Civil Statutes of Texas (which regulates certain revolving loan accounts and
revolving tri-party accounts) apply to the Loan.
If this note is executed by more than one party, each such party shall be
jointly and severally liable for the payment of this note.
This note is secured by, among other collateral, a First Lien Deed of
Trust, Security Agreement and Financing Statement (the "First Lien Deed of
Trust") of even date herewith covering certain real property (the "Mortgaged
Property") in Denton County, Texas, more particularly described therein.
TRAVIS SNOWDEN MARINE, INC.
By: /s/ Mark Walton
-----------------------------------------------
Printed Name: MARK WALTON
-------------------------------------
Title: PRESIDENT
--------------------------------------------
4
<PAGE>
EXHIBIT 10.26(b)
SECOND LIEN PROMISSORY NOTE
$311,000.00 September 15, 1995
FOR VALUE RECEIVED, the undersigned, TRAVIS SNOWDEN MARINE, INC., a Texas
corporation (the "Borrower") agrees and promises to pay to the order of
NATIONSBANK OF TEXAS, N.A., or any other owner and holder of this note
(collectively herein called the "Bank") at 300 Convent, San Antonio, Bexar
County, Texas, or such other place in the United States of America as may be
designated by the Bank for making payment hereunder, the principal sum of THREE
HUNDRED ELEVEN THOUSAND AND NO/100 DOLLARS ($311,000.00), or so much thereof as
may be advanced hereunder, in lawful money of the United States of America,
together with interest on the unpaid principal balance outstanding from time to
time from the date hereof until maturity at a varying rate of interest per annum
equal to the lesser of: (a) the prime rate of NationsBank of Texas, N.A., plus
one-half of one percent (1/2%), as the same may change from day to day, or (b)
the maximum rate of interest allowed by applicable law (the "Maximum Rate").
The Prime Rate is the index agreed upon by the Borrower and the Bank to
determine the rate of interest for this note. Use of the Prime Rate is not to
be construed as a warranty or representation that the Prime Rate is more
favorable than another rate or index, that rates on other loans or credit
facilities may not be based on indices other than the Prime Rate or that rates
on loans to others may not be made below the Prime Rate.
Interest hereon shall be calculated at a daily rate equal to 1/360th of the
stated annual percentage rate this note bears, subject to the provisions hereof
limiting interest to the Maximum Rate. All past due principal and interest
shall bear interest from maturity until paid at an interest rate equal to the
lesser of (a) the prime rate of NationsBank of Texas, N.A., plus three percent
(3%), as the same may change from day to day, or (b) the Maximum Rate.
Accrued interest under this note shall be due and payable monthly as it
accrues on the first day of each calendar month, beginning October 1, 1995, and
continuing regularly thereafter until December 31, 1995, when all unpaid
principal and all accrued and unpaid interest shall be due and payable. Each
payment shall be applied first to interest and then to principal.
All or any portion of this note may be prepaid without penalty at any time
or times, provided that all prepayments, at the Bank's option, may be applied
first to accrued and unpaid interest and then to the principal balance in
inverse order of maturity.
1
<PAGE>
This note has been executed and delivered pursuant to that one certain Loan
Agreement (the "Construction Loan Agreement") of even date herewith between the
Borrower and the Bank. If a Default (as such term is used and defined in the
Construction Loan Agreement) occurs, then the Bank may declare this note mature
and all unpaid principal under this note, together with all accrued and unpaid
interest hereunder, and all sums owing under any instrument or document executed
in connection with this note (the "Loan Documents"), shall be due and payable
immediately.
The Borrower agrees to pay all costs of the Bank in collecting any sums
payable hereunder and under the Loan Documents when such costs are incurred,
including reasonable attorney's fees, whether or not this note has been
accelerated or any other action shall then be instituted to enforce this note.
Unless otherwise specifically set forth in this note, the Borrower and each
surety, endorser, guarantor and other person liable upon this note waives all
notices, demands and presentments for payment, all notices of non-payment,
default, intention to accelerate maturity, acceleration of maturity, protest and
dishonor, and diligence in taking any action to collect amounts hereunder and in
the handling of any collateral securing this note.
The Borrower and the Bank intend that the loan evidenced by this note (the
"Loan") shall be in strict compliance with applicable usury laws. If at any
time any interest contracted for, charged or received under this note or
otherwise in connection with the Loan would be usurious under applicable law,
then regardless of the provisions of this note or the Loan Documents or any
action or event (including, without limitation, prepayment of principal
hereunder or acceleration of maturity by the Bank) which may occur with respect
to this note or the Loan, it is agreed that all sums that would otherwise be
usurious shall be immediately credited by the Bank as a payment of principal
hereunder, or if this note has already been paid, immediately refunded to the
Borrower. All compensation which constitutes interest under applicable law in
connection with the Loan shall be amortized, prorated, allocated and spread over
the full period of time any indebtedness is owing by the Borrower under the
Loan, to the greatest extent permissible without exceeding the Maximum Rate in
effect from time to time during such period.
This note and all of the Loan Documents shall be deemed contracts made
under the laws of the State of Texas and for all purposes shall be interpreted
under such laws. In particular, the Bank and the Borrower agree that the
Indicated (weekly) Rate ceiling, as determined in accordance with Article 5069-
1.04, as amended (Revised Civil Statutes of Texas), from time to time in effect,
shall constitute the Maximum Rate hereunder. Notwithstanding the immediately
preceding two sentences, if United States federal law should permit the Bank to
contract for, charge or receive a greater rate of interest than the rate
determined
2
<PAGE>
under said Article 5069-1.04, then such federal law, from time to time in
effect, shall determine the Maximum Rate hereunder.
In no event shall the provisions of Chapter 15, Article 5069 of the Revised
Civil Statutes of Texas (which regulates certain revolving loan accounts and
revolving tri-party accounts) apply to the Loan.
If this note is executed by more than one party, each such party shall be
jointly and severally liable for the payment of this note.
This note is secured by a Second Lien Deed of Trust, Security Agreement and
Financing Statement (the "Second Lien Deed of Trust") of even date herewith
covering certain real property (the "Mortgaged Property") in Denton County,
Texas, more particularly described therein.
TRAVIS SNOWDEN MARINE, INC.
By: /s/ Mark Walton
-----------------------------------------------
Printed Name: MARK WALTON
-------------------------------------
Title: PRESIDENT
--------------------------------------------
3
<PAGE>
EXHIBIT 10.26(c)
FIRST LIEN DEED OF TRUST, ASSIGNMENT,
SECURITY AGREEMENT AND FINANCING STATEMENT
------------------------------------------
THE STATE OF TEXAS (S)
(S) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF DENTON (S)
THAT TRAVIS SNOWDEN MARINE, INC., a Texas corporation (herein called
"Grantor", whether one or more) whose address is 13045 Research Blvd., P.O. Box
9097, Austin, Texas 78766, for the purpose of securing the indebtedness
described below and in consideration of the sum of Ten Dollars ($10.00) paid by
the Trustee named herein, the receipt of which is hereby acknowledged, and for
the further consideration of the uses, purposes and trusts herein set forth, has
GRANTED, SOLD, TRANSFERRED, ASSIGNED and CONVEYED, and by these presents does
GRANT, SELL, TRANSFER, ASSIGN and CONVEY, in trust, unto MICHAEL F. HORD, as
Trustee, and unto his substitutes and successors in the trust hereby created
(such Trustee and any substitutes or successors in trust being called
"Trustee"), and unto his or their assigns forever, the real property described
in Exhibit "A" attached hereto and made a part hereof for all purposes, together
with the following:
(1) all buildings and other improvements now or hereafter erected,
constructed or developed on the above described real property (the
"Improvements"); (2) all equipment, fixtures and articles of personal
property now or hereafter attached to, located on or used in connection
with the above described real property or the Improvements including, but
not limited to, lighting, heating, ventilating, air conditioning and
plumbing materials, fixtures and equipment; engines, boilers, elevators,
and other such mechanical equipment; furniture, furnishings and appliances;
and trees, shrubs and other landscaping materials, and all renewals, or
replacements for any of them, whether or not they are or shall be attached
to the Improvements in any manner; (3) all building materials and equipment
now or hereafter delivered to the above described real property or the
Improvements and intended to be incorporated or installed thereon or
therein; (4) all plans, specifications, contracts and subcontracts relating
to the Improvements or the above described real property; (5) all deposits
(including tenant's security deposits), funds, accounts, instruments,
documents and general intangibles arising from or used in connection with
the above described real property or the Improvements (including
trademarks, trade names and symbols used in connection with the above
described real property and the Improvements); (6) all permits, licenses,
franchises, certificates and other rights and privileges obtained in
connection with the above described real property or the Improvements; (7)
all proceeds arising from or by virtue of the sale, lease or other
disposition of any of the real or personal property described herein; (8)
all proceeds (including premium refunds) payable or to be payable under
each policy of insurance relating to the Improvements and any real or
personal property described herein; (9) all proceeds resulting from the
taking of all or part of the real property described herein or any rights
appurtenant thereto including change of grade of streets, curb cuts or
other rights of access for any public or quasi-public use under any law, or
by right of eminent domain, or by private or
<PAGE>
other purchase in lieu thereof; and (10) all other interests of every kind
and character which Grantor now has or at any time hereafter acquires in
and to the above described real and personal property, and all reversionary
rights or interests of Grantor with respect to such property, together with
any substitutes, replacements, additions, increases, accessions and
proceeds of or to all of the above described properties.
It is agreed that to the extent permitted by law, all of the foregoing
personal property and fixtures are deemed to be a part of, and affixed to, the
real property. The foregoing described real and personal property is
hereinafter called the "Mortgaged Property".
TO HAVE AND TO HOLD the Mortgaged Property and all rights and appurtenances
in any manner belonging thereto, unto the Trustee, his successors in this trust
and his assigns forever; and Grantor does hereby bind Grantor, Grantor's heirs,
executors, administrators, successors and assigns to WARRANT and FOREVER DEFEND
the title to the Mortgaged Property unto the Trustee, his successors in this
trust and his assigns forever, against every person whomsoever lawfully claiming
or to claim the same or any part thereof.
This conveyance is made in trust, however, to secure and enforce the
payment of that one certain First Lien Promissory Note (hereinafter called the
"Note") in the amount of SIX HUNDRED SEVENTY-NINE THOUSAND AND NO/100 DOLLARS
($679,000.00) of even date herewith, executed by Grantor payable to the order of
NATIONSBANK, OF TEXAS, N.A. ("Beneficiary") whose address is 300 Convent St.,
P.O. Box 300, San Antonio, Texas 78291-0300, the Note bearing interest and
being payable as therein provided.
This Deed of Trust shall secure, in addition to the Note, all sums advanced
by Beneficiary to or for the benefit of Grantor pursuant to any covenant or
provision of this Deed of Trust or for any other purpose. This Deed of Trust
shall also secure all renewals, extensions, modifications (including increases)
and rearrangements of the Note. Unless any instrument evidencing such
indebtedness provides otherwise, it shall bear interest at the same rate as the
Note bears from the date of accrual of such indebtedness until paid. Grantor
agrees to pay all costs of Beneficiary in collecting any sums due under the
Note, this Deed of Trust or related loan documents, as provided in the Note,
including reasonable attorney's fees; and such sums shall be due and payable on
demand and a part of the indebtedness secured hereby. This Deed of Trust shall
also secure all renewals and extensions of any of the indebtedness secured
hereby.
This Deed of Trust and lien created hereby secures any and all indebtedness
of Grantor to Beneficiary of every nature whatsoever, whether created
simultaneously herewith, heretofore or hereafter (it being contemplated that
from time to time Grantor will become further indebted to Beneficiary), primary
or secondary, until such indebtedness is fully paid and until this Deed of Trust
is duly released by Beneficiary at the request and sole expense of Grantor.
This Deed of Trust and lien shall not affect or be affected by any additional
security that may be taken as to any indebtedness due Beneficiary by Grantor
and shall secure any renewals, extensions, modifications (including increases)
or rearrangements of all or any part thereof. It is further agreed that all
indebtedness of Grantor to Beneficiary, secured or unsecured, present or future,
shall be payable to
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<PAGE>
Beneficiary in San Antonio, Texas. Nothing herein is intended to be, or shall
be, construed to obligate Beneficiary to make further advances to Grantor.
The Note and all such other indebtedness secured by this Deed of Trust, or
any part thereof, is referred to herein as the "Indebtedness". All of the
Indebtedness shall be payable at the office of the Beneficiary at the address
for Beneficiary stated above, or such other place in Bexar County, Texas, as is
designated by Beneficiary by written notice to Grantor.
To secure payment of the Indebtedness, Grantor does hereby covenant,
warrant and represent to, and agrees with, Beneficiary and the Trustee as
follows:
(1) Payment and Performance. Grantor will pay all of the Indebtedness
-----------------------
together with the interest thereon when it shall become due in accordance with
the terms of the Note or other instrument evidencing, securing or pertaining to
the Indebtedness. Grantor shall punctually and completely perform all of
Grantor's covenants, obligations and liabilities under any loan agreement or
other instrument now or hereafter existing as security for, executed in
connection with or related to the Indebtedness, or any part thereof.
(2) Title. Grantor has good and indefeasible title in fee simple to the
-----
above described real property and good and marketable title to all other
property comprising the Mortgaged Property, which is free from encumbrance
superior to the liens securing the Indebtedness (unless otherwise expressly
provided herein), and Grantor has full right and authority to make this
conveyance. With respect to each Grantor who is an individual, no part of the
Mortgaged Property constitutes any part of his business or rural homestead.
(3) Insurance. Grantor shall, at Grantor's expense, keep the Mortgaged
---------
Property insured by policies of insurance issued by companies satisfactory to
Beneficiary against loss by fire and hazards included within the term "extended
coverage" or "builders risk" as required by Beneficiary, together with rent loss
and such other hazards, casualties, claims and liabilities for injury or damage
to persons or property and other contingencies as Beneficiary shall require.
Grantor shall furnish to Beneficiary annually receipts or other documentation
satisfactory to Beneficiary evidencing Grantor's payment of premiums on such
policies of insurance. The policies shall be in such amounts and for such
periods as Beneficiary shall require. All policies and renewals thereof are to
be payable to Beneficiary as the interest of the Beneficiary may appear, by
means of a standard mortgagee clause approved by Beneficiary showing Beneficiary
as first mortgagee without contribution. All policies shall provide that they
shall not be cancelled without thirty (30) days prior written notice to
Beneficiary. Grantor shall deposit such policies with Beneficiary with premiums
paid, as additional security, and Grantor hereby assigns to Beneficiary all of
Grantor's rights thereunder, including any return of premium. Such insurance
shall be in amounts at least equal to the value of the Improvements and at least
sufficient to satisfy all co-insurance requirements of policies covering the
Improvements.
Beneficiary shall have the right to hold the policies and renewals thereof,
and Grantor shall promptly furnish to Beneficiary all renewal notices and all
receipts for paid premiums. At least fifteen (15) days prior to the expiration
date of the policies, Grantor shall deliver to Beneficiary renewal policies in
form satisfactory to Beneficiary. In no event, and whether or not default
hereunder has occurred, shall Beneficiary by the fact of
3
<PAGE>
approving, accepting or obtaining such insurance, incur any liability for the
amount of such insurance, the form or legal sufficiency of insurance contracts,
solvency of insurers, or payment of losses by insurers, and Grantor hereby
expressly assumes full responsibility therefor and liability, if any,
thereunder.
In the event of loss, Grantor shall give immediate written notice to the
insurance company and Beneficiary. Upon the occurrence of a Default (as defined
below) hereunder, Grantor authorizes and empowers Beneficiary, at Beneficiary's
option and in Beneficiary's sole discretion as attorney-in-fact for Grantor, to
make proof of loss, to adjust and compromise any claim under insurance policies,
to appear in and prosecute any action arising from such insurance policies, to
collect and receive insurance proceeds, and to deduct Beneficiary's expenses
incurred in the collection of such proceeds. Nothing contained in this section
shall require Beneficiary to incur any expense or take any action hereunder.
Upon the occurrence of a Default hereunder, Grantor further authorizes
Beneficiary, at Beneficiary's option, (a) to hold the balance of such proceeds
to be used to reimburse Grantor for the costs of reconstruction or repair of the
Mortgaged Property or (b) to apply the balance of such proceeds to the payment
of the Indebtedness, whether or not then due, in the order of application as
Beneficiary may elect. If the insurance proceeds are held by Beneficiary to be
used to reimburse Grantor for the costs of restoration and repair of the
Mortgaged Property, the Mortgaged Property shall be restored to the equivalent
of its original condition, or such other condition as Beneficiary may approve in
writing. In such event, Beneficiary may, at Beneficiary's option, condition
disbursement of the proceeds on Beneficiary's approval of plans and
specifications by an architect satisfactory to Beneficiary, contractor's cost
estimates, architect's certificates, waivers of liens, sworn statements of
mechanics and materialmen and such other evidence of costs, percentage
completion of construction, application of payments, and satisfaction of liens
as Beneficiary may reasonably require. If the insurance proceeds are applied to
the payment of the Indebtedness, any such application to principal of the Note
shall be applied to the principal installments last maturing on the Note,
without reducing the amount or extending the time of payment of the remaining
installments of principal payable under the Note.
If the Mortgaged Property is sold or the Mortgaged Property is acquired by
Beneficiary, all right, title and interest of Grantor in and to any insurance
policies and unearned premiums thereon and in and to the proceeds thereof
resulting from damage to the Mortgaged Property prior to or after the sale or
acquisition shall pass to Beneficiary.
Grantor agrees that if the Mortgaged Property described herein is ever
identified by the United States Department of Housing and Urban Development as
having special flood hazards as provided in the Flood Disaster Protection Act of
l973, or any amendment(s) thereof, Grantor will provide, within thirty (30) days
after receipt of written request from Beneficiary, flood insurance at the
expense of Grantor, with the policy of flood insurance to be written by a
company acceptable to Beneficiary and with loss payable to Beneficiary. Such
flood insurance shall be in an amount at least equal to the amount of the unpaid
Indebtedness or the maximum amount of flood insurance that is available, under
the National Flood Insurance Program, whichever is less.
(4) Taxes and Assessments. Grantor shall pay all taxes and assessments
---------------------
against or affecting the Mortgaged Property as they become due and payable and
shall furnish to Beneficiary annually receipts or other documentation
satisfactory to Beneficiary
4
<PAGE>
evidencing Grantor's payment of such taxes and assessments. If Grantor fails to
do so, Beneficiary is authorized (but not required) to pay them, together with
all costs and penalties thereon at Grantor's expense. Grantor may, however, in
good faith, in lieu of paying such taxes and assessments as they become due and
payable, contest the validity thereof by appropriate proceedings. Pending such
contest Grantor shall not be deemed in default hereunder because of non-payment
provided that (a) prior to delinquency of the asserted tax or assessment Grantor
furnishes the Beneficiary an indemnity bond, conditioned that such tax or
assessment with interest, cost and penalties be paid as herein stipulated,
secured by a deposit in cash or other security acceptable to Beneficiary, or
with a surety acceptable to Beneficiary, in the amount of the tax or assessment
being contested by Grantor, together with a reasonable additional sum to pay all
possible costs, interest and penalties imposed or incurred in connection
therewith; and (b) Grantor promptly pays any amounts adjudged by a court of
competent jurisdiction to be due, with all costs, penalties and interest
thereon, before such judgment becomes final; and (c) in any event, each such
contest shall be concluded and the tax assessment, penalties, interest and costs
shall be paid prior to the date such judgment becomes final or any writ or order
is issued under which the Mortgaged Property may be sold pursuant to such
judgment.
(5) Tax and Insurance Reserve. In the event of a breach by Grantor of any
-------------------------
of Grantor's covenants set forth in paragraphs 3 or 4 hereof, Beneficiary may,
at Beneficiary's option, require Grantor to create a fund or reserve for the
payment of all insurance premiums, taxes and assessments against or affecting
the Mortgaged Property by paying to Beneficiary, on the first day of each
calendar month prior to the maturity of the Note, a sum equal to one-twelfth
(1/12) of the estimated annual taxes and insurance premiums covering the
Mortgaged Property, such estimates to be made by Beneficiary. All such sums
shall be held by Beneficiary without interest, unless interest is required by
applicable law, for the purposes of paying such premiums, taxes and assessments.
Any excess reserve shall, at the discretion of Beneficiary, be credited by
Beneficiary on subsequent reserve payments or subsequent payments to be made on
the Note. Any deficiency shall be paid by Grantor to Beneficiary on or before
the date when such premiums, taxes and assessments shall become delinquent.
Transfer of legal title to the Mortgaged Property shall automatically transfer
the interest of Grantor in all sums deposited with Beneficiary under the
provisions hereof. If any law shall be enacted imposing or authorizing the
imposition of any tax upon this Deed of Trust, or upon any rights, titles,
liens, or security interests created hereby, or upon the Note, or any part
thereof, Grantor shall immediately pay all such taxes. In the alternative,
Grantor may in the event of the enactment of such a law, and must if it is
unlawful for Grantor to pay such taxes, prepay the principal of the Note and
accrued interest in full within sixty (60) days after demand is made by
Beneficiary.
(6) Judgments and Awards. Upon the occurrence of a Default hereunder, all
--------------------
judgments, decrees and awards for injury or damage to the Mortgaged Property and
all awards pursuant to proceedings for condemnation are hereby assigned in their
entirety to Beneficiary which may apply them to the Indebtedness in such manner
as it may elect. Upon the occurrence of a Default hereunder, Beneficiary is
hereby authorized, in the name of Grantor, to execute and deliver valid
acquittances for and to appeal from any such award, judgment or decree. If
because of any such judgment, decree or award Beneficiary believes that the
payment or performance of any obligation secured by this Deed of Trust is
impaired, Beneficiary may notify Grantor in writing of such belief, and after
such notice,
5
<PAGE>
and without further notice, except as required by the terms of the Loan
Agreement (hereinafter defined), declare all of the Indebtedness immediately due
and payable.
(7) Defense of Title. If while this Deed of Trust is in force, the title
----------------
of the Trustee, or the interest of Beneficiary, in the Mortgaged Property or any
part thereof, shall be put into question in any legal or administrative
proceeding, Grantor hereby authorizes Beneficiary, at Grantor's expense, to take
all necessary and proper steps for the defense of such title or interest,
including the employment of counsel, the prosecution or defense of litigation
and the compromise or discharge of claims made against such title or interest.
(8) Additional Indebtedness. If Beneficiary shall expend any money
-----------------------
chargeable to Grantor or subject to reimbursement by Grantor under the terms of
this Deed of Trust or any other agreements executed in connection with it,
Grantor will repay the same to Beneficiary immediately at the place where the
Indebtedness is payable, together with interest thereon at the rate of interest
payable under the Note from and after the date of Beneficiary's payment. The
amount of each payment shall be added to and form a part of the Indebtedness,
and shall be secured by this Deed of Trust and, by subrogation, all rights of
the person or entity receiving such payment.
(9) Maintenance of the Mortgaged Property and Inspection. Grantor will
----------------------------------------------------
keep every part of the Mortgaged Property in first class condition and shall
promptly make all repairs, renewals and replacements necessary to such end.
Grantor will discharge all claims for labor performed and material furnished and
will not suffer any lien of builders, mechanics or materialmen to attach to any
part of the Mortgaged Property. Grantor shall protect every part of the
Mortgaged Property from removal, destruction or damage, and will not do or
suffer to be done any act whereby the value of any part of the Mortgaged
Property will be impaired. Beneficiary and any persons authorized by Beneficiary
shall have the right to enter upon and inspect the Mortgaged Property at all
reasonable times.
(10) Conveyance of Mortgaged Property. If (i) Grantor shall sell, convey,
--------------------------------
lease, exchange or otherwise transfer, voluntarily or involuntarily, all or any
part of the Mortgaged Property or any interest therein (other than items of
personalty which have become obsolete or worn beyond practical use and which
have been replaced by adequate substitutes having a value equal to or greater
than the replaced items when new) or (ii) a controlling interest of the
ownership in Grantor (if Grantor is not an individual) is sold, assigned or
otherwise transferred, voluntarily or involuntarily, to any person or entity
other than an entity or person that is a stockholder in Grantor on the date
hereof or is an officer or director of Grantor on the date hereof, and if
Borrower does not cause the status quo ante to be restored within five (5) days
after Beneficiary gives Grantor written notice to restore the status quo ante,
Grantor shall, without further action to be taken by Beneficiary, be deemed in
Default under this instrument and Beneficiary may, at its option, accelerate the
Note and declare all unpaid principal and accrued, but unpaid, interest thereon
due and payable in full. In such event, if all sums declared due and payable on
the Note are not paid within ten (10) days after the same are declared due and
payable, then Beneficiary may thereupon exercise all rights and remedies,
including foreclosure of the liens herein set forth, of Beneficiary as in the
case of the failure to pay, when due, the Indebtedness. Notwithstanding the
foregoing, Beneficiary may, at its option, consent to any such sale or other
conveyance and condition its consent upon, among other things, the following:
(i) an increase in the rate of interest payable under the Note, (ii) payment of
all
6
<PAGE>
assumption, transfer or other fees which may be required by the Beneficiary,
(iii) reimbursement of the Beneficiary for all costs and expenses, including
reasonable attorney's fees, incurred in connection therewith, (iv) assumption by
the proposed transferee of all obligations of the Grantor hereunder and of the
maker under the Note without the release of Grantor or such maker, (v) receipt
of evidence, satisfactory to Beneficiary, that the proposed transferee is as
creditworthy and as capable in managing the property covered by this deed of
trust as Grantor and (vi) receipt of evidence, satisfactory to Beneficiary, that
the proposed transfer will not impair the security of the Beneficiary for
repayment of the Indebtedness.
(11) Continuing Liability of Grantor. If the ownership of the Mortgaged
-------------------------------
Property or any part thereof becomes vested in a person other than Grantor, or
in the event a change of ownership of more than fifty percent interest in any
Grantor other than an individual occurs, Beneficiary may, without notice to
Grantor, deal with such successor or successors in interest with reference to
this Deed of Trust and to the Indebtedness in the same manner as with Grantor,
without in any way affecting or discharging Grantor's liability hereunder or
upon the Indebtedness. No sale of the Mortgaged Property and no forbearance on
the part of Beneficiary, and no extension of the time for payment of the
Indebtedness given by Beneficiary shall operate to release, discharge, modify,
change or affect the original liability of Grantor or the liability of any
guarantors or sureties of Grantor, either in whole or in part.
(12) Default. A Default (as such term is used and defined in the Loan
-------
Agreement) under the Loan Agreement shall be a "Default" under this Deed of
Trust. Upon the occurrence of any Default, Beneficiary, at its option, without
notice, may pursue any rights and remedies it may have hereunder or at law or in
equity, and Beneficiary may, without limitation, declare the unpaid principal
balance of the Note and all accrued, unpaid interest thereon immediately due and
payable, subject to any applicable notice and cure periods contained in the Loan
Agreement with respect to such Default, together with all other sums due and
owing under the loan documents.
(13) Performance and Release. If Grantor shall perform faithfully each of
-----------------------
the covenants and agreements herein contained, then this conveyance shall become
null and void and shall be released at Grantor's expense; otherwise it shall
remain in full force and effect. No release of this Deed of Trust or of the
lien, security interest or assignment created and evidenced hereby shall be
valid unless executed by Beneficiary.
(14) Foreclosure Sale. If Grantor shall Default hereunder, Grantor hereby
----------------
authorizes and empowers the Trustee, upon request by Beneficiary, to sell all or
any portion of the Mortgaged Property at public sale to the highest bidder for
cash at the specific location prescribed by Section 51.002 of the Texas Property
Code at the county courthouse of the county in Texas in which such Mortgaged
Property, or any part thereof, is situated as herein described, between the
hours of 10:00 o'clock A.M. and 4:00 o'clock P.M. on the first Tuesday of any
month, after giving notice of the time, place and terms of said sale and of the
property to be sold. The sale shall begin at the time stated in the notice or
not later than three hours after that time. Such notice shall be given and sale
held upon the following terms and conditions:
7
<PAGE>
(a) Notice of the proposed sale shall be given by posting written
notice thereof at least twenty-one (21) days preceding the date of sale at
the courthouse door, and by filing a copy of such notice in the Office of
the County Clerk, of the county in which the sale is to be made, and if the
property to be sold is situated in more than one county, one notice shall
be posted at the courthouse door and filed with the County Clerk of each
county in which the property to be sold is located. In addition,
Beneficiary shall, at least twenty-one (21) days preceding the date of
sale, serve written notice of the proposed sale by certified mail on each
debtor obligated to pay the Indebtedness according to the records of
Beneficiary. Service of such notice shall be completed upon deposit of the
notice, enclosed in a postpaid wrapper, addressed to such debtor at the
most recent address shown by the records of Beneficiary, in a post office
or official depository under the care and custody of the United States
Postal Service. The affidavit of any person having knowledge of the facts
to the effect that such service was completed shall be prima facie evidence
of the fact of service. Any notice that is required or permitted to be
given to Grantor may be addressed to Grantor at Grantor's address as stated
above. Any notice that is to be given by certified mail to any other debtor
may, if no address for such other debtor is shown by the records of
Beneficiary, be addressed to such other debtor at the address of Grantor as
it is shown on the records of Beneficiary.
(b) The provisions hereof with respect to posting and giving notices
of sale, and with respect to conducting a sale or sales pursuant to the
power of sale contained herein, are intended to comply with the provisions
of Section 51.002 of the Texas Property Code in effect on the date of this
Deed of Trust. In the event the requirement for any notice under Section
51.002 or the provisions of Section 51.002 prescribing the manner of giving
any such notice or the manner of conducting sales is eliminated or modified
by amendment to Section 51.002 or adoption of any statute superseding
Section 51.002, the requirement in this Deed of Trust for that notice, or
the provisions of this Deed of Trust prescribing the manner of giving
notice or the manner of conducting sales, shall be deemed stricken from or
modified in this instrument to conform with such amendment or superseding
statute, effective as of its effective date. The manner herein prescribed
for serving or giving any notice, other than the notice to be posted by the
Trustee, shall not be deemed exclusive and such notice or notices may be
given in any other manner which may be permitted by applicable law.
(c) Grantor hereby authorizes and empowers the Trustee to sell all or
any portion of the Mortgaged Property together or in lots or parcels, as
the Trustee may deem appropriate, and to execute and deliver to the
purchaser or purchasers of such property good and sufficient deeds of
conveyance of fee simple title with covenants of general warranty made on
behalf of the Grantor. In no event shall the Trustee be required to
exhibit, present or display at any such sale any of the personalty
described herein to be sold at the sale. The Trustee making the sale shall
receive the proceeds and apply them as follows: (i) first, he shall pay
the reasonable expenses of executing this trust, including a reasonable
Trustee's fee or commission; (ii) second, he shall pay the Indebtedness, so
far as may be possible, discharging first that portion of the Indebtedness
arising under the covenants and agreements herein contained not evidenced
by the Note and then that portion of the Indebtedness evidenced by the
Note; and (iii) third, he shall pay the residue, if any, to the person
8
<PAGE>
or persons legally entitled thereto. Payment of the purchase price to the
Trustee shall satisfy the obligation of the purchaser at such sale, and
such purchaser shall not be bound to look to the application thereof. A
sale or sales made by the Trustee of less than the whole of the Mortgaged
Property shall not exhaust the power of sale herein granted, and the
Trustee is specifically empowered to make successive sale or sales under
such power until all of the Mortgaged Property shall be sold. If the
proceeds of a sale of less than the whole of the Mortgaged Property shall
be less than the aggregate of the Indebtedness and the expenses of
executing this trust, this Deed of Trust and the lien, security interest
and assignment hereof shall remain in full force and effect as to the
unsold portion of the Mortgaged Property as though no sale or sales had
been made; provided, however, that Grantor shall never have any right to
require the sale or sales of less than the whole of the Mortgaged Property,
but Beneficiary shall have the right, at its sole election, to request the
Trustee to sell less than the whole of the Mortgaged Property.
(d) If default is made hereunder, the holder of the Indebtedness on
which a payment or payments are delinquent shall have the option to proceed
with foreclosure in satisfaction of such delinquent payment or payments
through either judicial proceedings or by directing the Trustee to proceed
as if under a full foreclosure, conducting the sale as herein provided
without declaring the entire Indebtedness due, and if the sale is made
because of default in payment of an installment, or any part of an
installment, such sale may be made subject to the unmatured balance of the
Note and the other Indebtedness, and it is agreed that such sale, if so
made, shall not in any manner affect the unmatured part of any of the
Indebtedness. As to such unmatured part, this Deed of Trust shall remain
in full force and effect as though no sale had been made under the
provisions of this paragraph. Several sales may be made hereunder without
exhausting the right of sale for any unmatured part of the Indebtedness.
(e) It is agreed that in the event a foreclosure hereunder shall be
commenced by the Trustee, Beneficiary may at any time before the sale of
the Mortgaged Property direct the said Trustee to abandon the sale, and may
then institute suit for the collection of said Note and for the foreclosure
of this Deed of Trust lien; it is further agreed that, if Beneficiary
should institute a suit for the collection thereof and foreclosure of this
Deed of Trust lien, he may at any time before the entry of a final judgment
in said suit dismiss the same and require the Trustee, his substitute or
successor to sell the Mortgaged Property in accordance with the provisions
of this Deed of Trust.
(15) Substitute Trustee. If the Trustee shall die or become disqualified
------------------
from acting in the execution of this trust, or shall fail or refuse to execute
this trust when requested by Beneficiary, or if for any reason Beneficiary shall
prefer to appoint a substitute trustee to act instead of the Trustee named,
Beneficiary shall have full power to appoint a substitute trustee by written
instrument and, if necessary, several substitute trustees in succession, who
shall succeed to all the estate, rights, powers and duties of the original
Trustee named herein. Such appointment may be executed by any authorized agent
of Beneficiary. If Beneficiary is a corporation and if such appointment is
executed in its behalf by any officer of such corporation, the appointment shall
be conclusively
9
<PAGE>
presumed to be executed with authority, and shall be valid and sufficient
without proof of any action by the board of director or any superior officer of
the corporation.
(16) Recitals in Trustee's Deed. Grantor agrees that any and all
--------------------------
statements of fact or other recitals made in any deed of conveyance given by the
Trustee with respect to the identity of Beneficiary, the occurrence or existence
of any default hereunder, the acceleration of the maturity of any of the
Indebtedness, the requests to sell, the notice of sale, the giving of notice to
all debtors legally entitled thereto, the time, place, terms and manner of sale
and receipt, distribution and application of the money realized therefrom, or
the proper appointment of a substitute trustee, and, without being limited to
the foregoing, with respect to any other act or thing having been duly performed
by the Beneficiary or by the Trustee hereunder, shall be taken by all courts of
law or equity as prima facie evidence that the statements or recitals state
facts and are without further question to be accepted as true and correct, and
Grantor hereby ratifies and confirms every act that the Trustee or any
substitute trustee may lawfully do in the premises by virtue hereof.
(17) Possession by Purchaser. The purchaser at any trustee's or
-----------------------
foreclosure sale hereunder may disaffirm any easement granted, or rental, lease
or other contract made in violation of any provision of this Deed of Trust, and
may take immediate possession of the Mortgaged Property free from, and despite
the terms of, such grant of easement, or rental, lease or other contract.
(18) Purchase by Beneficiary. Beneficiary may bid and become the purchaser
-----------------------
of all or any part of the Mortgaged Property at any trustee's sale or
foreclosure sale hereunder, and Beneficiary may have the amount for which the
Mortgaged Property is sold credited on the debt then owing.
(19) Other Remedies of Beneficiary. Upon the occurrence of a Default under
-----------------------------
the terms of this Deed of Trust, the Trustee or the Beneficiary shall have the
right and power to proceed by a suit or suits in equity or at law for either (a)
the specific performance of any covenant or agreement herein contained, or (b)
in aid of the execution of any power herein granted, or (c) for a foreclosure
hereunder or the sale of the Mortgaged Property under the judgment or decree of
any court of competent jurisdiction, or (d) for the appointment of a receiver
pending any foreclosure hereunder or the sale of the Mortgaged Property under
the order of a court of competent jurisdiction or under executory or other legal
process or (e) for the enforcement of any other appropriate legal or equitable
remedy. Grantor agrees to the full extent that it lawfully may do so, that
whenever a Default occurs hereunder and shall not have been remedied, the
Beneficiary shall have the right and power to enter into and upon and take
possession of all or any part of the Mortgaged Property in the possession of the
Grantor and may exclude the Grantor and all persons claiming under the Grantor
and its or their agents or servants from such property. The Beneficiary may
use, administer, manage, operate and control the Mortgaged Property and conduct
the business thereof to the same extent as the Grantor might at the time do, and
may exercise all rights and powers of the Grantor in the name, place and stead
of the Grantor as the Beneficiary shall deem best. In the exercise of any of the
foregoing rights and powers, Beneficiary shall not be liable to Grantor for any
loss or damage thereby sustained unless due solely to the willful misconduct or
gross negligence of Beneficiary.
10
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(20) Additional Collateral; Extensions and Renewals. The lien, security
----------------------------------------------
interest and other rights granted hereby shall not affect or be affected by any
other security taken for the Indebtedness. The taking of additional security,
or the extension, renewal, modification (including an increase) or rearrangement
of the Indebtedness shall not release or impair the lien, security interest and
other rights granted hereby, or affect the liability of any endorser, guarantor
or surety, or improve the right of any permitted junior lienholder. This Deed
of Trust as well as any instrument given to secure any renewal, extension,
modification or rearrangement of the Indebtedness shall be and remain a first
and prior lien on all of the Mortgaged Property not expressly released until the
Indebtedness is completely paid.
(21) Waiver of Other Laws. To the extent that Grantor may lawfully do so,
--------------------
Grantor agrees that Grantor shall not assert (and hereby expressly waives) any
right under any statute or rule of law pertaining to the marshalling of assets,
the exemption of homestead, the administration of estates of decedents or other
matters whatever to defeat, reduce or affect the right of Beneficiary under the
terms of this Deed of Trust to sell the Mortgaged Property for the collection of
the Indebtedness or the right of Beneficiary under the terms of this Deed of
Trust to the payment of the Indebtedness out of the proceeds of sale of the
Mortgaged Property in preference to every other person and claimant after
reasonable expenses of such sale have first been deducted.
(22) Assignment of Rents. All of the rents and royalties derived from the
-------------------
Mortgaged Property or arising from the use or enjoyment of any portion thereof
or from any lease or agreement pertaining thereto are hereby absolutely and
unconditionally assigned, transferred, conveyed and set over to Beneficiary to
be applied by Beneficiary in payment of the Indebtedness. Prior to the
occurrence of any Default hereunder, Grantor shall collect and receive all such
rents and other income as trustee for the benefit of Beneficiary and Grantor.
Grantor shall apply the funds so collected first to the payment of the principal
and interest and all other sums payable on the Note and all other indebtedness
secured hereby, and so long as no Default hereunder has occurred, the balance
shall be distributed to the account of Grantor. Grantor will not (a) execute an
assignment of any of its right, title or interest in such rents and other
income, or (b) except where the lessee is in default thereunder, terminate or
consent to the cancellation or surrender of any lease of the Mortgaged Property
now or hereafter existing having an unexpired term of one year or more, except
that any lease may be cancelled provided that promptly after such cancellation
or surrender a new lease is entered into with a new lessee having a credit
standing, in the judgment of Beneficiary, at least equivalent to that of the
lessee whose lease was cancelled, on substantially the same terms as the
terminated or cancelled lease; or (c) modify any amount of rent payable under
any lease or accept prepayments of any installments of rent becoming due under
any leases in excess of one month, except prepayments in the nature of security
for the performance of the lessee thereunder; or (d) in any other manner impair
the value of the Mortgaged Property or the security of this Deed of Trust.
Grantor will not execute any lease of all or any substantial portion of the
Mortgaged Property except for actual occupancy by the lessee thereunder, and
will at all times promptly and faithfully perform, or cause to be performed each
covenant, condition and agreement contained in each lease of the Mortgaged
Property now or hereafter existing on the part of lessor thereunder to be kept
and performed. Grantor shall furnish to Beneficiary, within ten days after a
request by Beneficiary to do so, a written statement
11
<PAGE>
containing the names of all lessees of the Mortgaged Property, the terms of
their respective leases, the space occupied and the rental payable thereunder.
(23) Subordinate Mortgages. Grantor will not, without the prior written
---------------------
consent of Beneficiary, execute or deliver any pledge, security agreement,
mortgage or deed of trust covering all or any portion of the Mortgaged Property
(hereinafter called "Subordinate Mortgage") other than a Second Lien Deed of
Trust in favor of Beneficiary given by Grantor to secure a Second Lien
Promissory Note of even date herewith in the amount of $311,000.00 executed by
Grantor and made payable to the order of Beneficiary in connection with the
construction loan from Grantor to Beneficiary associated with the construction
of the Improvements (as defined in the Loan Agreement). In the event of consent
by Beneficiary to a Subordinate Mortgage, or in the event the foregoing
prohibition is determined by a court of competent jurisdiction to be
unenforceable under provisions of then applicable law, Grantor will not execute
or deliver any Subordinate Mortgage unless there shall have been delivered to
Beneficiary not less than ten (10) days prior to the date thereof a copy of the
instrument creating the Subordinate Mortgage which shall contain covenants to
the effect that:
(a) The Subordinate Mortgage is in all respects unconditionally
subject and subordinate to the lien, security interest and assignment
evidenced by this Deed of Trust and each term and provision hereof.
(b) If any action or proceeding shall be instituted to foreclose the
Subordinate Mortgage (regardless of whether by judicial proceeding or
pursuant to the power of sale contained therein), no tenant of any portion
of the Mortgaged Property will be named as a party defendant nor will any
action be taken with respect to the Mortgaged Property which would
terminate any occupancy or tenancy of the Mortgaged Property without the
prior written consent of Beneficiary.
(c) The rents and other income from the Mortgaged Property, if
collected through a receiver or by the holder of the Subordinate Mortgage,
shall be applied first to the obligation secured by this Deed of Trust and
then to the payment of maintenance, and operating charges, taxes,
assessments and disbursements incurred in connection with the ownership,
operation and maintenance of the Mortgaged Property.
(d) If any action or proceeding shall be brought to foreclose the
Subordinate Mortgage, written notice of the commencement thereof will be
given to Beneficiary at the same time as such action or proceeding is
commenced.
(24) Subrogation. To the extent that proceeds of the Note are used to pay
-----------
any outstanding lien, charge or encumbrance against or affecting the Mortgaged
Property, such proceeds have been advanced by Beneficiary at Grantor's request,
and Beneficiary shall be subrogated to all rights, interests and liens owned or
held by any owner or holder of such outstanding liens, charges and encumbrances,
regardless of whether such liens, charges and encumbrances are released of
record.
12
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(25) Limitation of Interest. Reference is hereby made to the provisions of
----------------------
the Note limiting interest contracted for, charged or received by Beneficiary
hereunder, or otherwise, to the maximum lawful rate.
(26) Non-Waiver and Partial Invalidity. No waiver of any default on the
---------------------------------
part of Grantor or breach of any of the provisions of this Deed of Trust or of
any other instrument executed in connection with the Indebtedness shall be
considered a waiver of any other or subsequent defaults or breach. No delay or
omission in exercising or enforcing the rights and powers herein granted shall
be construed as a waiver of such rights and powers. No exercise or enforcement
of any rights or powers hereunder shall be held to exhaust such rights and
powers, and every such right and power may be exercised from time to time. If
any provision of this Deed of Trust is held to be illegal, invalid or
unenforceable under present or future laws while this Deed of Trust is in
effect, the legality, validity and enforceability of the remaining provisions of
this Deed of Trust shall not be affected thereby. If any of the liens, security
interests, assignments of rents or other rights created by this Deed of Trust
shall be invalid or unenforceable, the unsecured portion of the Indebtedness
shall be completely paid prior to the payment of the remaining and secured
portion, and all payments made on account of the Indebtedness shall be
considered to have been paid on and applied first to the complete payment of the
unsecured portion of the Indebtedness.
(27) Tenancy at Will. In the event of a trustee's sale hereunder and if at
---------------
the time of such sale the Grantor occupies the portion of the Mortgaged Property
so sold, Grantor shall immediately become the tenant of the purchaser at such
sale. Such tenancy shall be from day to day terminable at the will of either
tenant or landlord and for reasonable rental per day based on the value of the
portion of the Mortgaged Property so occupied, such rental to be due and payable
daily to the purchaser. An action of forcible entry and detainer shall lie if
the tenant holds over after a demand in writing for possession of such Mortgaged
Property.
(28) Security Agreement and Financing Statement. With respect to any
------------------------------------------
portion of the Mortgaged Property which constitutes personal property or
fixtures governed by the Uniform Commercial Code of the State of Texas
(hereinafter called the "Code") and all leases and contract rights affecting the
Mortgaged Property and any proceeds from any of the above, this Deed of Trust
shall constitute a security agreement between Grantor, as the Debtor, and
Beneficiary, as the Secured Party. Grantor hereby grants to Beneficiary a
security interest in such portion of the Mortgaged Property and all leases and
accounts affecting the Mortgaged Property and any proceeds from the Mortgaged
Property. Cumulative of all other rights of Beneficiary hereunder, Beneficiary
shall have all of the rights and remedies conferred upon secured parties by the
Code. Grantor will execute and deliver to Beneficiary all financing statements
that may from time to time be required by Beneficiary to establish and maintain
the validity and priority of the security interest of Beneficiary or any
modification thereof, and Grantor will pay all costs and expenses of any
searches reasonably required by Beneficiary. It is expressly agreed that if
upon Default Beneficiary should proceed to dispose of such property in
accordance with the provisions of the Code, then ten (10) days notice by
Beneficiary to Grantor shall be deemed to be reasonable notice under any
provision of the Code requiring such notice; provided, however, that Beneficiary
may, at its option, dispose of such property in accordance with Beneficiary's
rights and remedies with respect to the real property described herein
13
<PAGE>
pursuant to the provisions of this Deed of Trust, in lieu of proceeding under
the Code. Grantor shall give advance notice in writing to Beneficiary of any
proposed change in Grantor's name, identity or corporate structure and will
execute and deliver to Beneficiary prior to or concurrently with the occurrence
of any such change, all additional financing statements that Beneficiary may
require to establish and maintain the validity and priority of Beneficiary's
security interest with respect to any Mortgaged Property described or referred
to herein. Certain of the items of Mortgaged Property described herein are goods
that are or are to become fixtures related to the real estate described herein,
and it is intended that, as to those goods, this Deed of Trust shall be
effective as a financing statement filed as a fixture filing from the date of
its filing for record in the Real Estate Records of the county in which the
Mortgaged Property is situated. The record owner of the Mortgaged Property is
Grantor. The mailing addresses of the Grantor, as Debtor, and Beneficiary, as
Secured Party, are as stated above.
(29) Binding Effect. The covenants herein contained shall be covenants
--------------
running with the land and shall be binding upon and the benefits and advantages
of this Deed of Trust shall inure to, the respective heirs, executors,
administrators, personal representatives, successors and assigns of the parties
hereto, and any substitute trustee. The duties, covenants, conditions,
obligations and warranties of Grantor in this Deed of Trust shall be joint and
several obligations of Grantor and each Grantor, if more than one, and Grantor's
heirs, personal representatives, successors and assigns. Each party who executes
this Deed of Trust (other than the Beneficiary) and each subsequent owner of the
Mortgaged Property or any part thereof, covenants and agrees that it will
perform or cause to be performed each condition, term, provision and covenant of
this Deed of Trust. If Grantor is a corporation, general partnership, limited
partnership, joint venture, trust, or other entity, the execution and delivery
by Grantor of this Deed of Trust, the Note, and each and every other instrument
executed by Grantor in connection with the loan evidenced by the Note and the
performance by Grantor thereunder, are within Grantor's powers and have been
duly authorized by Grantor's Board of Directors, shareholders, partners,
venturers, trustees, or other necessary parties, as the case may be, and all
other requisite action for such authorization has been taken.
(30) Meaning of Terms. Whenever used in this Deed of Trust, the singular
----------------
number shall include the plural and the singular, and the use of any gender
shall be applicable to all genders. If this Deed of Trust is executed by more
than one party as Grantor, each such party shall be jointly and severally liable
for the obligations of Grantor under this Deed of Trust. All of the covenants
and agreements herein undertaken to be performed by and the rights conferred
upon Beneficiary and Grantor shall be binding upon and inure to the benefit of
not only said parties respectively but also their representative heirs,
executors, administrators, grantees, successors and assigns.
(31) Titles; Construction of Agreement. All section, subsection or
---------------------------------
paragraph titles contained in this Deed of Trust are for reference purposes only
and this Deed of Trust shall be construed without reference to such titles.
This Deed of Trust may be construed as a mortgage, conveyance, assignment,
security agreement, pledge, financing statement, contract or any one or more of
them in order fully to effectuate the lien hereof.
(32) Environmental Compliance. Grantor represents, warrants and covenants
------------------------
that the Mortgaged Property and Grantor and Grantor's use of the Mortgaged
Property
14
<PAGE>
now complies and in the future will at all times comply with all laws, statutes,
ordinances, rules and regulations ("Environmental Laws") of any governmental,
quasi-governmental or regulatory authority which relate to the transportation,
storage, placement, handling, treatment, discharge, generation, production,
removal or disposal (collectively, "Treatment") of any waste, petroleum product
(including, without limitation, gasoline and diesel fuel), waste products, poly-
chlorinated biphenyls, asbestos, hazardous materials, and/or any other
substance, the Treatment of which is regulated by any laws, rules or regulations
(collectively, "Waste"), or which otherwise relate to public health or the
environment, including without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of l980, as amended ("CERCLA"), the
Resource Conservation and Recovery Act of l976, as amended ("RCRA"), the Texas
Water Code and the Texas Solid Waste Disposal Act, as amended. Without limiting
the foregoing, Grantor specifically represents and warrants that there are no
underground storage tanks for gasoline, diesel fuel, other petroleum products or
of any other type on or installed in the Mortgaged Property and Grantor
covenants that Grantor will not install any such tanks in the Mortgaged Property
prior to the release of this Deed of Trust.
Grantor has taken all necessary steps to determine, has determined and
represents and warrants to Purchaser that no Spill of Waste has occurred on the
Mortgaged Property and that no "hazardous substance" or "solid waste" have been
disposed of or otherwise released on or to the Mortgaged Property nor will be
disposed of or otherwise released on or to the Mortgaged Property by Grantor, or
Grantor's agents and employees. The terms "hazardous substance(s)" and
"release" (or "released") shall have the meaning specified in CERCLA, and the
terms "solid waste" and "disposal" (or "dispose") shall have the meaning
specified in the RCRA, provided however, to the extent that the laws of the
State of Texas establish a meaning for hazardous substance(s), hazardous waste,
release, solid waste or disposal which is broader than that specified in either
CERCLA or RCRA, such broader meaning shall apply.
Immediately upon receipt of any Notice, as defined below, from any party,
Grantor will deliver to Beneficiary an accurate copy of any written Notice and
an accurate report of any non-written Notice. The term "Notice" means the
actual knowledge of Grantor of, or the receipt by Grantor, or Grantor's agents,
tenants or employees, of any notice or report of any of the following:
(1) Any suit, proceeding, investigation, order, consent order, injunction,
writ, award, or action concerning the Treatment of any Waste in, on or
affecting the Mortgaged Property;
(2) Any spill, contamination, discharge, leakage, release or escape of any
Waste in, on or affecting the Mortgaged Property, whether sudden or
gradual, accidental or anticipated, or of any other nature (a
"Spill");
(3) Any dispute relating to Grantor's or any other person's Treatment of
any Waste or any Spill in, on or affecting the Mortgaged Property;
(4) Any claim, by or against any insurer concerning any Waste or Spill in,
on or affecting the Mortgaged Property;
15
<PAGE>
(5) Any recommendation or requirement of any governmental or regulatory
authority, or insurer concerning any Treatment of Waste or a Spill in,
or affecting the Mortgaged Property;
(6) Any legal requirement or deficiency concerning the Treatment of Waste
or any Spill in, on or affecting the Mortgaged Property; or
(7) Any tenant, prior owner, concessionaire, manager, or other person or
entity occupying or using the Mortgaged Property, or any part thereof,
having engaged in or engaging in the Treatment of any Waste in, on or
affecting the Mortgaged Property.
If (a) Grantor has caused, suffered, or permitted, directly or indirectly,
any Spill in, on or affecting the Mortgaged Property, or (b) any Spill has
occurred on the Mortgaged Property, then Grantor will immediately take all of
the following actions:
(1) Promptly notify Beneficiary in writing, upon Grantor's acquiring
knowledge of such Spill with a full description thereof;
(2) Take all steps necessary or desirable in Beneficiary's reasonable
opinion, to clean up any Spill and any contamination related to the
Spill;
(3) Promptly comply with any Environmental Laws relating to the Treatment
of the Spill and provide Beneficiary with satisfactory evidence of
compliance;
(4) Fully restore the Mortgaged Property and, if necessary, any other
property damaged by the Spill, to the condition of the Mortgaged
Property and such other property prior to the Spill;
(5) Allow Beneficiary to monitor and inspect all cleanup and restoration
related to the Spill; and
(6) Provide Beneficiary, within thirty (30) days after demand by
Beneficiary, with a bond, letter of credit or similar financial
assurance, satisfactory to Beneficiary, demonstrating that the
necessary funds are available to pay the cost of Treatment of the
Spill and the cost to comply with all related Environmental Laws and
to discharge any associated assessments or charges, private or public,
which may be established on the Mortgaged Property.
Beneficiary (through its officers, employees and agents) at any time and
from time to time, either prior to or after Default in this Deed of Trust or
under the Note, may employ persons (the "Site Reviewers") to conduct
environmental site assessments ("Site Assessments") on the Mortgaged Property to
determine whether or not there exists on the Mortgaged Property any
environmental condition which might result in any liability, cost or expense to
the owner, occupier or operator of the Mortgaged Property arising under the
Environmental Laws relating to Waste; provided, however, that Beneficiary shall
not conduct more than one (1) Site Assessment per calendar year, unless (i) a
Site Assessment conducted previously that year discloses the existence of an
environmental condition which
16
<PAGE>
might result in any liability, cost or expense described above and because of
the existence of such environmental condition Beneficiary determines, in its
sole discretion, that further Site Assessments are necessary or desirable, or
(ii) if in the same calendar year, but subsequent to Beneficiary's performance
of a Site Assessment, an event occurs on the Mortgaged Property that Beneficiary
reasonably determines might create or cause an environmental condition which
might result in any liability, cost or expense described above and because of
the occurrence of such event, Beneficiary determines, in its sole discretion,
that further Site Assessments are necessary or desirable. The Site Assessments
may be performed at any time or times, upon reasonable notice, and under
reasonable conditions established by Beneficiary. The Site Reviewers are
authorized to enter upon the Mortgaged Property and to perform above and below-
the-ground testing (including, without limitation, taking of core samples) to
determine environmental damage or presence of Waste in, on or under the
Mortgaged Property and such other tests as may be necessary or desirable, in the
opinion of the Site Reviewers, to conduct Site Assessments. Grantor will supply
to the Site Reviewers such historical and operational information available to
Grantor regarding the Mortgaged Property as may be requested by the Site
Reviewers to facilitate the Site Assessments and will make available for
meetings with the Site Reviewers appropriate personnel having knowledge of such
matters. The cost of performing such Site Assessments will be paid by Grantor
upon demand of Beneficiary, which, if not paid, will be added to the
Indebtedness secured by this Deed of Trust.
Whether or not any Site Assessments are conducted, and regardless of
whether or not a Default occurs under this Deed of Trust or under the Note and
regardless of whether any remedies in respect of the Mortgaged Property are
exercised by Beneficiary, Grantor will defend, indemnify and hold harmless
Beneficiary and Trustee from any and all liabilities (including strict
liability), actions, claims, demands, causes of action, losses, penalties,
damages, costs, expenses (including, without limitation, attorneys' fees and
expenses, and court costs), suits, costs of any settlement or judgment of any
and every kind or nature, fixed or contingent, asserted against or incurred by
Beneficiary or Trustee at any time, and from time to time whatsoever (whether
before or after the release or foreclosure of this Deed of Trust) arising out of
(a) the breach of any representation or warranty of Grantor set forth in this
section; (b) the failure of Grantor to perform any obligation herein required to
be performed by Grantor; (c) Grantor's ownership, construction, occupancy,
operation, use and maintenance of the Mortgaged Property; (d) any Spill; (e) the
presence on or under, or the escape, seepage, leakage, spillage, discharge,
emission or release from the Mortgaged Property of any Waste; (f) the
environmental condition of the Mortgaged Property; or (g) the applicability of
any Environmental Laws relating to Waste (including, without limitation, CERCLA
or any federal, state or local so-called "Superfund" or "Superlien" law,
statute, ordinance, code, rule, regulation, order or decree), regardless of
whether or not caused by or within the control of Grantor, Beneficiary or
Trustee. The representations, covenants, warranties and indemnifications herein
contained shall survive the release and/or judicial or non-judicial foreclosure
(or transfer in lieu thereof) of the lien of this Deed of Trust. For the
purpose of this paragraph and not withstanding any other provision contained
herein to the contrary, the term "Grantor" shall refer not only to the Grantor
named herein, but also to all other persons who may hereafter assume the Note
and the obligations of this Deed of Trust.
(33) Use of Proceeds. Grantor expressly represents that a portion of the
----------------
Indebtedness, the payment of which is hereby secured, represents funds advanced
by
17
<PAGE>
Beneficiary at the special instance and request of Grantor and used in payment
of a portion of the purchase price of the Mortgaged Property, and Grantor hereby
expressly confesses, recognizes and acknowledges a vendor's lien on said
property as security therefor, and this Deed of Trust is given as further and
additional security, and as an additional lien securing the payment of the
Indebtedness.
A portion of the Indebtedness, the payment of which is secured hereby, is
given for, and represents cash to be advanced for materials and labor for
construction of certain improvements upon the Mortgaged Property in accordance
with the Loan Agreement (the "Loan Agreement") of even date herewith between
Beneficiary and Grantor, reference to which is hereby made for the terms and
provisions thereof and the rights of Beneficiary to accelerate the Indebtedness
and to exercise certain remedies, including foreclosure of the liens herein
described, upon certain events of default as therein set forth. In the event of
a conflict between the terms and provisions of this instrument and the Loan
Agreement, the Loan Agreement shall govern.
(34) Beneficiary's Rights to Complete Construction. Beneficiary may, at
---------------------------------------------
its option, enter into and upon the Mortgaged Property and perform and cause to
be performed and furnished any or all labor or work and materials it deems
necessary or desirable for the completion of the Improvements and their
protection and to this end do any act and enter into any contract and incur such
costs therefor as it deems proper for such purposes and to pay therefor with all
or any part of the unexpended sums of the loan secured hereby then remaining in
the hands of Beneficiary and any such sums so expended shall be deemed a
disbursement of the loan to Grantor and secured under the terms and provisions
of this Deed of Trust, and if sufficient moneys be not available from the
proceeds of the loan, Beneficiary may advance the same, and Grantor promises to
pay to Beneficiary, upon demand or its order, the full amounts so advanced with
interest at the stated rate of the Note. All such indebtedness under this
paragraph shall be secured by this Deed of Trust in like manner as the Note
secured hereby and the obligations described therein. Nothing herein shall be
construed as imposing any obligation upon Beneficiary to take any such action or
make any such advances.
(35) Construction Mortgage. This Deed of Trust secures an obligation
---------------------
incurred for the construction of improvements on the land described in Exhibit
"A" hereto, and as such constitutes a "construction mortgage" under Section
9.313 of the Texas Business and Commerce Code.
EXECUTED on the date of the acknowledgment set forth below, to be
effective, however, as of the 15th day of September, 1995.
TRAVIS SNOWDEN MARINE, INC.
By: /s/ Mark Walton
-------------------------------------------
Printed Name: MARK WALTON
---------------------------------
Title: PRESIDENT
----------------------------------------
18
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STATE OF TEXAS (S)
COUNTY OF TRAVIS (S)
----------
This instrument was acknowledged before me on the 25th day of October,
-------
1995, by Mark Walton , President of
------------------------------ ----------------------------------
TRAVIS SNOWDEN MARINE, INC., a Texas corporation, on behalf of said corporation.
[NOTARY STAMP APPEARS HERE] /s/ Michael Jones
----------------------------------------
Notary Public, State of Texas
Name and Mailing Address AFTER RECORDING
---------------
of Trustee: RETURN TO BENEFICIARY:
----------------------
NationsBank of Texas, N.A. NationsBank of Texas, N.A.
NationsBank Plaza, 51st Floor 300 Convent St.
901 Main Street P.O. Box 300
Dallas, Texas 75202 San Antonio, Texas 78291-0300
Attn: Real Estate Loan Administration
19
<PAGE>
EXHIBIT "A"
TRACT ONE:
Being all that certain lot, tract or parcel of land situated in the William King
Survey, Abstract Number 697, City of Lewisville, Denton County, Texas and being
part of a certain called 9.3016 acre tract of land described in a deed to A.P.
Stephens, recorded in Clerk's File Number 93-R0050774 of the Deed Records of
Denton County, Texas and being more particularly described as follows:
BEGINNING at a 2" pipe found on the east line of I.H. 35E (300' right-of-way) at
the westerly northwest corner of Lot 1, Block A of Huffines Chevrolet, an
addition to the City of Lewisville according to the plat thereof recorded in
Cabinet E, Page 200 of the Plat Records of Denton County, Texas, same being the
Southwest corner of said A.P. Stephens tract;
THENCE N 33 degrees 05 minutes 00 seconds W, 199.18 feet along the East line of
said I.H. 35E and the west line of said A.P. Stephens tract to a 5/8" rebar
found at the south corner of the remainder of a certain called 5.3 acre tract of
land described in a deed to XP-Lewisville Site, Inc. recorded in Volume 692,
Page 164 of the Deed Records of Denton County, Texas;
THENCE N 01 degrees 23 minutes 24 seconds E, 122.00 feet along the east line of
said 5.3 acre tract and the west line of said A.P. Stephens tract to a 1/2"
rebar set;
THENCE N 89 degrees 03 minutes 38 seconds E, 294.52 feet to a 1/2" rebar set;
THENCE N 43 degrees 55 minutes 37 seconds E, 64.00 feet to a 1/2" rebar set;
THENCE N 88 degrees 47 minutes 37 seconds E, 30.00 feet to a 1/2" rebar set;
THENCE S 01 degrees 12 minutes 23 seconds E, 126.15 feet to a 1/2" rebar set;
THENCE N 89 degrees 03 minutes 38 seconds E, 382.00 feet to a 1/2" rebar set on
the common line between said A.P. Stephens tract and said Lot 1, Block A of
Huffines Chevrolet;
THENCE S 02 degrees 46 minutes 18 seconds E, 210.00 feet along said common line
to a 2" pipe found;
THENCE S 89 degrees 03 minutes 38 seconds W, 657.97 feet along said common line
to the POINT OF BEGINNING and containing approximately 4.202 acres of land.
Now being known as Lot 1, Block A of Travis Boats Addition, an Addition to the
City of Lewisville, Texas, according to the Map thereof recorded in Cabinet L,
Page 86, Map Records, Denton County, Texas.
Page 1 of 2
<PAGE>
EXHIBIT "A" CONTINUED
Tract Two:
Non-exclusive easement and right-of-way for vehicular traffic use created in
Perpetual Easement Grand and Maintenance Agreement executed by and between A.P.
Stephens and Travis Snowden Marine, Inc., a Texas corporation, dated September
2, 1994, filed September 15, 1994, recorded under County Clerk's File Number
94-R0071353 of the Real Property Records of Denton County, Texas, said easement
being over, across and upon part of Lot 3, Block A of Travis Boats Addition, an
Addition to the City of Lewisville, Texas according to the Map thereof recorded
in Cabinet L, Page 86, Map Records of Denton County, Texas, and being more
particularly described as follows:
Being a tract or parcel of land situated in the City of Lewisville, Denton
County, Texas and being part of the William King Survey, Abstract No. 697 and
being a part of that tract of land conveyed to A.P. Stephens by Special Warranty
Deed recorded in Denton County Clerk's Office, County Clerk File No.
93-R0050774, Denton County, Texas and Correction Special Warranty Deed County
Clerk File No. 94-R0053684, Denton County, Texas and being more particularly
described as follows:
BEGINNING at a point for corner in the southerly right-of-way line of Bennett
Lane (70 feet wide), said point being along said southerly line a distance of
594.54 feet from the intersection of said southerly line with the northeasterly
right-of-way line of Interstate Highway 35E (300 feet wide);
THENCE North 88 degrees 48 minutes 15 seconds East continuing along said
southerly line of Bennett Lane a distance of 30.00 feet to a point for corner;
THENCE South 01 degrees 12 minutes 23 seconds East leaving said southerly line a
distance of 230.39 feet to a point for corner;
THENCE South 88 degrees 47 minutes 37 seconds West a distance of 30.00 feet to a
point for corner;
THENCE North 01 degrees 12 minutes 23 seconds West a distance of 230.40 feet to
the POINT OF BEGINNING and containing 6.912 square feet of 0.1587 acres, more or
less.
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EXHIBIT 10.26(d)
SECOND LIEN DEED OF TRUST, ASSIGNMENT,
SECURITY AGREEMENT AND FINANCING STATEMENT
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THE STATE OF TEXAS (S)
(S) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF DENTON (S)
THAT TRAVIS SNOWDEN MARINE, INC., a Texas corporation (herein called
"Grantor", whether one or more) whose address is 13045 Research Blvd., P.O. Box
9097, Austin, Texas 78766, for the purpose of securing the indebtedness
described below and in consideration of the sum of Ten Dollars ($10.00) paid by
the Trustee named herein, the receipt of which is hereby acknowledged, and for
the further consideration of the uses, purposes and trusts herein set forth, has
GRANTED, SOLD, TRANSFERRED, ASSIGNED and CONVEYED, and by these presents does
GRANT, SELL, TRANSFER, ASSIGN and CONVEY, in trust, unto MICHAEL F. HORD, as
Trustee, and unto his substitutes and successors in the trust hereby created
(such Trustee and any substitutes or successors in trust being called
"Trustee"), and unto his or their assigns forever, the real property described
in Exhibit "A" attached hereto and made a part hereof for all purposes, together
with the following:
(1) all buildings and other improvements now or hereafter erected,
constructed or developed on the above described real property (the
"Improvements"); (2) all equipment, fixtures and articles of personal
property now or hereafter attached to, located on or used in connection
with the above described real property or the Improvements including, but
not limited to, lighting, heating, ventilating, air conditioning and
plumbing materials, fixtures and equipment; engines, boilers, elevators,
and other such mechanical equipment; furniture, furnishings and appliances;
and trees, shrubs and other landscaping materials, and all renewals, or
replacements for any of them, whether or not they are or shall be attached
to the Improvements in any manner; (3) all building materials and equipment
now or hereafter delivered to the above described real property or the
Improvements and intended to be incorporated or installed thereon or
therein; (4) all plans, specifications, contracts and subcontracts relating
to the Improvements or the above described real property; (5) all deposits
(including tenant's security deposits), funds, accounts, instruments,
documents and general intangibles arising from or used in connection with
the above described real property or the Improvements (including
trademarks, trade names and symbols used in connection with the above
described real property and the Improvements); (6) all permits, licenses,
franchises, certificates and other rights and privileges obtained in
connection with the above described real property or the Improvements; (7)
all proceeds arising from or by virtue of the sale, lease or other
disposition of any of the real or personal property described herein; (8)
all proceeds (including premium refunds) payable or to be payable under
each policy of insurance relating to the Improvements and any real or
personal property described herein; (9) all proceeds resulting from the
taking of all or part of the real
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property described herein or any rights appurtenant thereto including
change of grade of streets, curb cuts or other rights of access for any
public or quasi-public use under any law, or by right of eminent domain, or
by private or other purchase in lieu thereof; and (10) all other interests
of every kind and character which Grantor now has or at any time hereafter
acquires in and to the above described real and personal property, and all
reversionary rights or interests of Grantor with respect to such property,
together with any substitutes, replacements, additions, increases,
accessions and proceeds of or to all of the above described properties.
It is agreed that to the extent permitted by law, all of the foregoing
personal property and fixtures are deemed to be a part of, and affixed to, the
real property. The foregoing described real and personal property is
hereinafter called the "Mortgaged Property".
TO HAVE AND TO HOLD the Mortgaged Property and all rights and appurtenances
in any manner belonging thereto, unto the Trustee, his successors in this trust
and his assigns forever; and Grantor does hereby bind Grantor, Grantor's heirs,
executors, administrators, successors and assigns to WARRANT and FOREVER DEFEND
the title to the Mortgaged Property unto the Trustee, his successors in this
trust and his assigns forever, against every person whomsoever lawfully claiming
or to claim the same or any part thereof.
This conveyance is made in trust, however, to secure and enforce the
payment of one (1) promissory note (hereinafter called the "Note", whether one
or more) in the amount of THREE HUNDRED ELEVEN THOUSAND AND NO/100
($311,000.00), of even date herewith, executed by Grantor payable to the order
of NATIONSBANK, OF TEXAS, N.A. ("Beneficiary") whose address is 300 Convent St.,
P.O. Box 300, San Antonio, Texas 78291-0300, the Note bearing interest and
being payable as therein provided.
This Deed of Trust shall secure, in addition to the Note, all sums advanced
by Beneficiary to or for the benefit of Grantor pursuant to any covenant or
provision of this Deed of Trust or for any other purpose. This Deed of Trust
shall also secure all renewals, extensions, modifications (including increases)
and rearrangements of the Note. Unless any instrument evidencing such
indebtedness provides otherwise, it shall bear interest at the same rate as the
Note bears from the date of accrual of such indebtedness until paid. Grantor
agrees to pay all costs of Beneficiary in collecting any sums due under the
Note, this Deed of Trust or related loan documents, as provided in the Note,
including reasonable attorney's fees; and such sums shall be due and payable on
demand and a part of the indebtedness secured hereby. This Deed of Trust shall
also secure all renewals and extensions of any of the indebtedness secured
hereby.
This Deed of Trust and lien created hereby secures any and all indebtedness
of Grantor to Beneficiary of every nature whatsoever, whether created
simultaneously herewith, heretofore or hereafter (it being contemplated that
from time to time Grantor will become further indebted to Beneficiary), primary
or secondary, until such indebtedness is fully paid and until this Deed of Trust
is duly released by Beneficiary at the request and sole expense of Grantor.
This Deed of Trust and lien shall not affect or be affected by any additional
security that may be taken as to any indebtedness due Beneficiary by Grantor
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and shall secure any renewals, extensions, modifications (including increases)
or rearrangements of all or any part thereof. It is further agreed that all
indebtedness of Grantor to Beneficiary, secured or unsecured, present or future,
shall be payable to Beneficiary in San Antonio, Texas. Nothing herein is
intended to be, or shall be, construed to obligate Beneficiary to make further
advances to Grantor.
The Note and all such other indebtedness secured by this Deed of Trust, or
any part thereof, is referred to herein as the "Indebtedness". All of the
Indebtedness shall be payable at the office of the Beneficiary at the address
for Beneficiary stated above, or such other place in Bexar County, Texas, as is
designated by Beneficiary by written notice to Grantor.
To secure payment of the Indebtedness, Grantor does hereby covenant,
warrant and represent to, and agrees with, Beneficiary and the Trustee as
follows:
(1) Payment and Performance. Grantor will pay all of the Indebtedness
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together with the interest thereon when it shall become due in accordance with
the terms of the Note or other instrument evidencing, securing or pertaining to
the Indebtedness. Grantor shall punctually and completely perform all of
Grantor's covenants, obligations and liabilities under any loan agreement or
other instrument now or hereafter existing as security for, executed in
connection with or related to the Indebtedness, or any part thereof.
(2) Title. Except as otherwise provided herein, Grantor has good and
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indefeasible title in fee simple to the above described real property and good
and marketable title to all other property comprising the Mortgaged Property,
which is free from encumbrance superior to the liens securing the Indebtedness
other than the lien to secure payment to the ad valorem taxes on the Mortgaged
Property which are not yet due and payable, and the lien of that one certain
First Lien Deed of Trust, Security Agreement and Financing Statement (the "First
Lien Deed of Trust") of even date herewith, executed by Grantor and given to
secure that one certain Promissory Note (the "First Lien Note") dated of even
date herewith, in the original principal amount of $679,000.00 executed by
Grantor and made payable to the order of NationsBank of Texas, N.A., the lien
and security interest of this Deed of Trust being in all respects subordinate
and inferior to the lien and security interest of the First Lien Deed of Trust,
and Grantor has full right and authority to make this conveyance. With respect
to each Grantor who is an individual, no part of the Mortgaged Property
constitutes any part of his business or rural homestead.
(3) Insurance. Grantor shall, at Grantor's expense, keep the Mortgaged
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Property insured by policies of insurance issued by companies satisfactory to
Beneficiary against loss by fire and hazards included within the term "extended
coverage" or "builders risk" as required by Beneficiary, together with rent loss
and such other hazards, casualties, claims and liabilities for injury or damage
to persons or property and other contingencies as Beneficiary shall require.
Grantor shall furnish to Beneficiary annually receipts or other documentation
satisfactory to Beneficiary evidencing Grantor's payment of premiums on such
policies of insurance. The policies shall be in such amounts and for such
periods as Beneficiary shall require. All policies and renewals thereof are to
be payable to Beneficiary as the interest of the Beneficiary may appear, by
means of a standard mortgagee clause approved by Beneficiary showing Beneficiary
as first mortgagee without contribution. All policies shall provide that they
shall not be cancelled without thirty (30) days prior written
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notice to Beneficiary. Provided that the indebtedness under the First Lien Note
has been satisfied and the First Lien Deed of Trust has been released, Grantor
shall deposit such policies with Beneficiary with premiums paid, as additional
security, and upon such deposit of such policies with beneficiary, Grantor shall
assign to Beneficiary all of Grantor's rights thereunder, including any return
of premium. Such insurance shall be in amounts at least equal to the value of
the Improvements and at least sufficient to satisfy all co-insurance
requirements of policies covering the Improvements.
Provided that the indebtedness under the First Lien Note has been satisfied
and the First Lien Deed of Trust has been released, Beneficiary shall have the
right to hold the policies and renewals thereof. Grantor shall promptly furnish
to Beneficiary copies of all renewal notices and all receipts for paid premiums.
At least fifteen (15) days prior to the expiration date of the policies, Grantor
shall deliver to Beneficiary copies of renewal policies in form satisfactory to
Beneficiary. In no event, and whether or not default hereunder has occurred,
shall Beneficiary by the fact of approving, accepting or obtaining such
insurance, incur any liability for the amount of such insurance, the form or
legal sufficiency of insurance contracts, solvency of insurers, or payment of
losses by insurers, and Grantor hereby expressly assumes full responsibility
therefor and liability, if any, thereunder.
In the event of loss, Grantor shall give immediate written notice to the
insurance company and Beneficiary. Provided that the indebtedness under the
First Lien Note has been satisfied and the First Lien Deed of Trust has been
released, upon the occurrence of a Default (as defined below) hereunder, Grantor
authorizes and empowers Beneficiary, at Beneficiary's option and in
Beneficiary's sole discretion as attorney-in-fact for Grantor, to make proof of
loss, to adjust and compromise any claim under insurance policies, to appear in
and prosecute any action arising from such insurance policies, to collect and
receive insurance proceeds, and to deduct Beneficiary's expenses incurred in the
collection of such proceeds. Nothing contained in this section shall require
Beneficiary to incur any expense or take any action hereunder. Upon the
occurrence of a Default hereunder, Grantor further authorizes Beneficiary, at
Beneficiary's option, (a) to hold the balance of such proceeds to be used to
reimburse Grantor for the costs of reconstruction or repair of the Mortgaged
Property or (b) to apply the balance of such proceeds to the payment of the
Indebtedness, whether or not then due, in the order of application as
Beneficiary may elect. If the insurance proceeds are held by Beneficiary to be
used to reimburse Grantor for the costs of restoration and repair of the
Mortgaged Property, the Mortgaged Property shall be restored to the equivalent
of its original condition, or such other condition as Beneficiary may approve in
writing. In such event, Beneficiary may, at Beneficiary's option, condition
disbursement of the proceeds on Beneficiary's approval of plans and
specifications by an architect satisfactory to Beneficiary, contractor's cost
estimates, architect's certificates, waivers of liens, sworn statements of
mechanics and materialmen and such other evidence of costs, percentage
completion of construction, application of payments, and satisfaction of liens
as Beneficiary may reasonably require. If the insurance proceeds are applied to
the payment of the Indebtedness, any such application to principal of the Note
shall be applied to the principal installments last maturing on the Note,
without reducing the amount or extending the time of payment of the remaining
installments of principal payable under the Note.
If the Mortgaged Property is sold or the Mortgaged Property is acquired by
Beneficiary, all right, title and interest of Grantor in and to any insurance
policies and
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unearned premiums thereon and in and to the proceeds thereof resulting from
damage to the Mortgaged Property prior to or after the sale or acquisition shall
pass to Beneficiary, subject, however, to the rights of the holder of the First
Lien Note under the First Lien Deed of Trust.
Grantor agrees that if the Mortgaged Property described herein is ever
identified by the United States Department of Housing and Urban Development as
having special flood hazards as provided in the Flood Disaster Protection Act of
l973, or any amendment(s) thereof, Grantor will provide, within thirty (30) days
after receipt of written request from Beneficiary, flood insurance at the
expense of Grantor, with the policy of flood insurance to be written by a
company acceptable to Beneficiary and with loss payable to Beneficiary as the
interest of Beneficiary may appear. Such flood insurance shall be in an amount
at least equal to the amount of the unpaid Indebtedness plus the unpaid
indebtedness under the First Lien Note or the maximum amount of flood insurance
that is available, under the National Flood Insurance Program, whichever is
less.
(4) Taxes and Assessments. Grantor shall pay all taxes and assessments
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against or affecting the Mortgaged Property as they become due and payable and
shall furnish to Beneficiary annually copies of receipts or other documentation
satisfactory to Beneficiary evidencing Grantor's payment of such taxes and
assessments. If Grantor fails to do so, Beneficiary is authorized (but not
required) to pay them, together with all costs and penalties thereon at
Grantor's expense. Grantor may, however, in good faith, in lieu of paying such
taxes and assessments as they become due and payable, contest the validity
thereof by appropriate proceedings. Pending such contest Grantor shall not be
deemed in default hereunder because of non-payment provided that (a) prior to
delinquency of the asserted tax or assessment Grantor furnishes the Beneficiary
an indemnity bond, conditioned that such tax or assessment with interest, cost
and penalties be paid as herein stipulated, secured by a deposit in cash or
other security acceptable to Beneficiary, or with a surety acceptable to
Beneficiary, in the amount of the tax or assessment being contested by Grantor,
together with a reasonable additional sum to pay all possible costs, interest
and penalties imposed or incurred in connection therewith; and (b) Grantor
promptly pays any amounts adjudged by a court of competent jurisdiction to be
due, with all costs, penalties and interest thereon, before such judgment
becomes final; and (c) in any event, each such contest shall be concluded and
the tax assessment, penalties, interest and costs shall be paid prior to the
date such judgment becomes final or any writ or order is issued under which the
Mortgaged Property may be sold pursuant to such judgment.
(5) Tax and Insurance Reserve. In the event of a breach by Grantor of any
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of Grantor's covenants set forth in paragraphs 3 or 4 hereof, Beneficiary may,
at Beneficiary's option, require Grantor to create a fund or reserve for the
payment of all insurance premiums, taxes and assessments against or affecting
the Mortgaged Property by paying to Beneficiary, on the first day of each
calendar month prior to the maturity of the Note, a sum equal to one-twelfth
(1/12) of the estimated annual taxes and insurance premiums covering the
Mortgaged Property, such estimates to be made by Beneficiary; provided, however,
that Grantor shall not be required to make such monthly reserve payments
hereunder while Grantor is making such monthly reserve payments under the terms
of the First Lien Deed of Trust. All such sums shall be held by Beneficiary
without interest, unless interest is required by applicable law, for the
purposes of paying such premiums, taxes and assessments. Any excess reserve
shall, at the discretion of Beneficiary, be
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credited by Beneficiary on subsequent reserve payments or subsequent payments to
be made on the Note. Any deficiency shall be paid by Grantor to Beneficiary on
or before the date when such premiums, taxes and assessments shall become
delinquent. Transfer of legal title to the Mortgaged Property shall
automatically transfer the interest of Grantor in all sums deposited with
Beneficiary under the provisions hereof. If any law shall be enacted imposing or
authorizing the imposition of any tax upon this Deed of Trust, or upon any
rights, titles, liens, or security interests created hereby, or upon the Note,
or any part thereof, Grantor shall immediately pay all such taxes. In the
alternative, Grantor may in the event of the enactment of such a law, and must
if it is unlawful for Grantor to pay such taxes, prepay the principal of the
Note and accrued interest in full within sixty (60) days after demand is made by
Beneficiary.
(6) Judgments and Awards. Upon the occurrence of a Default hereunder, all
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judgments, decrees and awards for injury or damage to the Mortgaged Property and
all awards pursuant to proceedings for condemnation are hereby assigned in their
entirety to Beneficiary which may apply them to the Indebtedness in such manner
as it may elect, subject, however, to the rights of the holder of the First Lien
Note under the First Lien Deed of Trust with respect to any such judgments,
decrees and awards. Provided that the indebtedness under the First Lien Note
has been satisfied and the First Lien Deed of Trust has been released, upon the
occurrence of a Default hereunder, Beneficiary is hereby authorized, in the name
of Grantor, to execute and deliver valid acquittances for and to appeal from any
such award, judgment or decree. If because of any such judgment, decree or
award Beneficiary believes that the payment or performance of any obligation
secured by this Deed of Trust is impaired, Beneficiary may notify Grantor in
writing of such belief, and after such notice, and without further notice,
except as required by the terms of the Loan Agreement (hereinafter defined),
declare all of the Indebtedness immediately due and payable.
(7) Defense of Title. If while this Deed of Trust is in force, the title
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of the Trustee, or the interest of Beneficiary, in the Mortgaged Property or any
part thereof, shall be put into question in any legal or administrative
proceeding, Grantor hereby authorizes Beneficiary, at Grantor's expense, to take
all necessary and proper steps for the defense of such title or interest,
including the employment of counsel, the prosecution or defense of litigation
and the compromise or discharge of claims made against such title or interest.
(8) Additional Indebtedness. If Beneficiary shall expend any money
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chargeable to Grantor or subject to reimbursement by Grantor under the terms of
this Deed of Trust or any other agreements executed in connection with it,
Grantor will repay the same to Beneficiary immediately at the place where the
Indebtedness is payable, together with interest thereon at the rate of interest
payable under the Note from and after the date of Beneficiary's payment. The
amount of each payment shall be added to and form a part of the Indebtedness,
and shall be secured by this Deed of Trust and, by subrogation, Grantor shall
have all rights of the person or entity receiving such payment.
(9) Maintenance of the Mortgaged Property and Inspection. Grantor will
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keep every part of the Mortgaged Property in first class condition and shall
promptly make all repairs, renewals and replacements necessary to such end.
Grantor will discharge all claims for labor performed and material furnished and
will not suffer any lien of builders, mechanics or materialmen to attach to any
part of the Mortgaged Property. Grantor shall
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protect every part of the Mortgaged Property from removal, destruction or
damage, and will not do or suffer to be done any act whereby the value of any
part of the Mortgaged Property will be impaired. Beneficiary and any persons
authorized by Beneficiary shall have the right to enter upon and inspect the
Mortgaged Property at all reasonable times.
(10) Conveyance of Mortgaged Property. If (i) Grantor shall sell, convey,
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lease, exchange or otherwise transfer, voluntarily or involuntarily, all or any
part of the Mortgaged Property or any interest therein (other than items of
personalty which have become obsolete or worn beyond practical use and which
have been replaced by adequate substitutes having a value equal to or greater
than the replaced items when new) or (ii) a controlling interest of the
ownership in Grantor (if Grantor is not an individual) is sold, assigned or
otherwise transferred, voluntarily or involuntarily, to any person or entity
other than an entity or person that is a stockholder in Grantor on the date
hereof or is an officer or director of Grantor on the date hereof, and if
Borrower does not cause the status quo ante to be restored within five (5) days
after Beneficiary gives Grantor written notice to restore the status quo ante,
Grantor shall, without further action to be taken by Beneficiary, be deemed in
Default under this instrument and Beneficiary may, at its option, accelerate the
Note and declare all unpaid principal and accrued, but unpaid, interest thereon
due and payable in full. In such event, if all sums declared due and payable on
the Note are not paid within ten (10) days after the same are declared due and
payable, then Beneficiary may thereupon exercise all rights and remedies,
including foreclosure of the liens herein set forth, of Beneficiary as in the
case of the failure to pay, when due, the Indebtedness. Notwithstanding the
foregoing, Beneficiary may, at its option, consent to any such sale or other
conveyance and condition its consent upon, among other things, the following:
(i) an increase in the rate of interest payable under the Note, (ii) payment of
all assumption, transfer or other fees which may be required by the Beneficiary,
(iii) reimbursement of the Beneficiary for all costs and expenses, including
reasonable attorney's fees, incurred in connection therewith, (iv) assumption by
the proposed transferee of all obligations of the Grantor hereunder and of the
maker under the Note without the release of Grantor or such maker, (v) receipt
of evidence, satisfactory to Beneficiary, that the proposed transferee is as
creditworthy and as capable in managing the property covered by this deed of
trust as Grantor and (vi) receipt of evidence, satisfactory to Beneficiary, that
the proposed transfer will not impair the security of the Beneficiary for
repayment of the Indebtedness.
(11) Continuing Liability of Grantor. If the ownership of the Mortgaged
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Property or any part thereof becomes vested in a person other than Grantor, or
in the event a change of ownership of more than fifty percent interest in any
Grantor other than an individual occurs, Beneficiary may, without notice to
Grantor, deal with such successor or successors in interest with reference to
this Deed of Trust and to the Indebtedness in the same manner as with Grantor,
without in any way affecting or discharging Grantor's liability hereunder or
upon the Indebtedness. No sale of the Mortgaged Property and no forbearance on
the part of Beneficiary, and no extension of the time for payment of the
Indebtedness given by Beneficiary shall operate to release, discharge, modify,
change or affect the original liability of Grantor or the liability of any
guarantors or sureties of Grantor, either in whole or in part.
(12) Default. A Default (as such term is used and defined in the Loan
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Agreement) under the Loan Agreement shall be a "Default" under this Deed of
Trust. Upon the
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occurrence of any Default, Beneficiary, at its option, without notice, may
pursue any rights and remedies it may have hereunder or at law or in equity, and
Beneficiary may, without limitation, declare the unpaid principal balance of the
Note and all accrued, unpaid interest thereon immediately due and payable,
subject to any applicable notice and cure periods contained in the Loan
Agreement with respect to such Default, together with all other sums due and
owing under the loan documents.
(13) Performance and Release. If Grantor shall perform faithfully each of
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the covenants and agreements herein contained, then this conveyance shall become
null and void and shall be released at Grantor's expense; otherwise it shall
remain in full force and effect. No release of this Deed of Trust or of the
lien, security interest or assignment created and evidenced hereby shall be
valid unless executed by Beneficiary.
(14) Foreclosure Sale. If Grantor shall Default hereunder, Grantor hereby
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authorizes and empowers the Trustee, upon request by Beneficiary, to sell all or
any portion of the Mortgaged Property at public sale to the highest bidder for
cash at the specific location prescribed by Section 51.002 of the Texas Property
Code at the county courthouse of the county in Texas in which such Mortgaged
Property, or any part thereof, is situated as herein described, between the
hours of 10:00 o'clock A.M. and 4:00 o'clock P.M. on the first Tuesday of any
month, after giving notice of the time, place and terms of said sale and of the
property to be sold. The sale shall begin at the time stated in the notice or
not later than three hours after that time. Such notice shall be given and sale
held upon the following terms and conditions:
(a) Notice of the proposed sale shall be given by posting written
notice thereof at least twenty-one (21) days preceding the date of sale at
the courthouse door, and by filing a copy of such notice in the Office of
the County Clerk, of the county in which the sale is to be made, and if the
property to be sold is situated in more than one county, one notice shall
be posted at the courthouse door and filed with the County Clerk of each
county in which the property to be sold is located. In addition,
Beneficiary shall, at least twenty-one (21) days preceding the date of
sale, serve written notice of the proposed sale by certified mail on each
debtor obligated to pay the Indebtedness according to the records of
Beneficiary. Service of such notice shall be completed upon deposit of the
notice, enclosed in a postpaid wrapper, addressed to such debtor at the
most recent address shown by the records of Beneficiary, in a post office
or official depository under the care and custody of the United States
Postal Service. The affidavit of any person having knowledge of the facts
to the effect that such service was completed shall be prima facie evidence
of the fact of service. Any notice that is required or permitted to be
given to Grantor may be addressed to Grantor at Grantor's address as stated
above. Any notice that is to be given by certified mail to any other debtor
may, if no address for such other debtor is shown by the records of
Beneficiary, be addressed to such other debtor at the address of Grantor as
it is shown on the records of Beneficiary.
(b) The provisions hereof with respect to posting and giving notices
of sale, and with respect to conducting a sale or sales pursuant to the
power of sale contained herein, are intended to comply with the provisions
of Section 51.002 of the Texas Property Code in effect on the date of this
Deed of Trust. In the event the requirement for any notice under Section
51.002 or the provisions of Section 51.002
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prescribing the manner of giving any such notice or the manner of
conducting sales is eliminated or modified by amendment to Section 51.002
or adoption of any statute superseding Section 51.002, the requirement in
this Deed of Trust for that notice, or the provisions of this Deed of Trust
prescribing the manner of giving notice or the manner of conducting sales,
shall be deemed stricken from or modified in this instrument to conform
with such amendment or superseding statute, effective as of its effective
date. The manner herein prescribed for serving or giving any notice, other
than the notice to be posted by the Trustee, shall not be deemed exclusive
and such notice or notices may be given in any other manner which may be
permitted by applicable law.
(c) Grantor hereby authorizes and empowers the Trustee to sell all or
any portion of the Mortgaged Property together or in lots or parcels, as
the Trustee may deem appropriate, and to execute and deliver to the
purchaser or purchasers of such property good and sufficient deeds of
conveyance of fee simple title with covenants of general warranty made on
behalf of the Grantor. In no event shall the Trustee be required to
exhibit, present or display at any such sale any of the personalty
described herein to be sold at the sale. The Trustee making the sale shall
receive the proceeds and apply them as follows: (i) first, he shall pay the
reasonable expenses of executing this trust, including a reasonable
Trustee's fee or commission; (ii) second, he shall pay the Indebtedness, so
far as may be possible, discharging first that portion of the Indebtedness
arising under the covenants and agreements herein contained not evidenced
by the Note and then that portion of the Indebtedness evidenced by the
Note; and (iii) third, he shall pay the residue, if any, to the person
or persons legally entitled thereto. Payment of the purchase price to the
Trustee shall satisfy the obligation of the purchaser at such sale, and
such purchaser shall not be bound to look to the application thereof. A
sale or sales made by the Trustee of less than the whole of the Mortgaged
Property shall not exhaust the power of sale herein granted, and the
Trustee is specifically empowered to make successive sale or sales under
such power until all of the Mortgaged Property shall be sold. If the
proceeds of a sale of less than the whole of the Mortgaged Property shall
be less than the aggregate of the Indebtedness and the expenses of
executing this trust, this Deed of Trust and the lien, security interest
and assignment hereof shall remain in full force and effect as to the
unsold portion of the Mortgaged Property as though no sale or sales had
been made; provided, however, that Grantor shall never have any right to
require the sale or sales of less than the whole of the Mortgaged Property,
but Beneficiary shall have the right, at its sole election, to request the
Trustee to sell less than the whole of the Mortgaged Property.
(d) If default is made hereunder, the holder of the Indebtedness on
which a payment or payments are delinquent shall have the option to proceed
with foreclosure in satisfaction of such delinquent payment or payments
through either judicial proceedings or by directing the Trustee to proceed
as if under a full foreclosure, conducting the sale as herein provided
without declaring the entire Indebtedness due, and if the sale is made
because of default in payment of an installment, or any part of an
installment, such sale may be made subject to the unmatured balance of the
Note and the other Indebtedness, and it is agreed that such sale, if so
made, shall not in any manner affect the unmatured part of any of the
Indebtedness. As to such unmatured part, this Deed of Trust shall remain
in
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full force and effect as though no sale had been made under the provisions
of this paragraph. Several sales may be made hereunder without exhausting
the right of sale for any unmatured part of the Indebtedness.
(e) It is agreed that in the event a foreclosure hereunder shall be
commenced by the Trustee, Beneficiary may at any time before the sale of
the Mortgaged Property direct the said Trustee to abandon the sale, and may
then institute suit for the collection of said Note and for the foreclosure
of this Deed of Trust lien; it is further agreed that, if Beneficiary
should institute a suit for the collection thereof and foreclosure of this
Deed of Trust lien, he may at any time before the entry of a final judgment
in said suit dismiss the same and require the Trustee, his substitute or
successor to sell the Mortgaged Property in accordance with the provisions
of this Deed of Trust.
(15) Substitute Trustee. If the Trustee shall die or become disqualified
------------------
from acting in the execution of this trust, or shall fail or refuse to execute
this trust when requested by Beneficiary, or if for any reason Beneficiary shall
prefer to appoint a substitute trustee to act instead of the Trustee named,
Beneficiary shall have full power to appoint a substitute trustee by written
instrument and, if necessary, several substitute trustees in succession, who
shall succeed to all the estate, rights, powers and duties of the original
Trustee named herein. Such appointment may be executed by any authorized agent
of Beneficiary. If Beneficiary is a corporation and if such appointment is
executed in its behalf by any officer of such corporation, the appointment shall
be conclusively presumed to be executed with authority, and shall be valid and
sufficient without proof of any action by the board of director or any superior
officer of the corporation.
(16) Recitals in Trustee's Deed. Grantor agrees that any and all
--------------------------
statements of fact or other recitals made in any deed of conveyance given by the
Trustee with respect to the identity of Beneficiary, the occurrence or existence
of any default hereunder, the acceleration of the maturity of any of the
Indebtedness, the requests to sell, the notice of sale, the giving of notice to
all debtors legally entitled thereto, the time, place, terms and manner of sale
and receipt, distribution and application of the money realized therefrom, or
the proper appointment of a substitute trustee, and, without being limited to
the foregoing, with respect to any other act or thing having been duly performed
by the Beneficiary or by the Trustee hereunder, shall be taken by all courts of
law or equity as prima facie evidence that the statements or recitals state
facts and are without further question to be accepted as true and correct, and
Grantor hereby ratifies and confirms every act that the Trustee or any
substitute trustee may lawfully do in the premises by virtue hereof.
(17) Possession by Purchaser. The purchaser at any trustee's or
-----------------------
foreclosure sale hereunder may disaffirm any easement granted, or rental, lease
or other contract made in violation of any provision of this Deed of Trust, and
may take immediate possession of the Mortgaged Property free from, and despite
the terms of, such grant of easement, or rental, lease or other contract.
(18) Purchase by Beneficiary. Beneficiary may bid and become the purchaser
-----------------------
of all or any part of the Mortgaged Property at any trustee's sale or
foreclosure sale hereunder, and Beneficiary may have the amount for which the
Mortgaged Property is sold credited on the debt then owing.
10
<PAGE>
(19) Other Remedies of Beneficiary. Upon the occurrence of a Default under
-----------------------------
the terms of this Deed of Trust, the Trustee or the Beneficiary shall have the
right and power to proceed by a suit or suits in equity or at law for either (a)
the specific performance of any covenant or agreement herein contained, or (b)
in aid of the execution of any power herein granted, or (c) for a foreclosure
hereunder or the sale of the Mortgaged Property under the judgment or decree of
any court of competent jurisdiction, or (d) for the appointment of a receiver
pending any foreclosure hereunder or the sale of the Mortgaged Property under
the order of a court of competent jurisdiction or under executory or other legal
process or (e) for the enforcement of any other appropriate legal or equitable
remedy. Grantor agrees to the full extent that it lawfully may do so, and
subject to the rights of the holder of the First Lien Note under the First Lien
Deed of Trust, that whenever a Default occurs hereunder and shall not have been
remedied, the Beneficiary shall have the right and power to enter into and upon
and take possession of all or any part of the Mortgaged Property in the
possession of the Grantor and may exclude the Grantor and all persons claiming
under the Grantor and its or their agents or servants from such property. The
Beneficiary may use, administer, manage, operate and control the Mortgaged
Property and conduct the business thereof to the same extent as the Grantor
might at the time do, and may exercise all rights and powers of the Grantor in
the name, place and stead of the Grantor as the Beneficiary shall deem best. In
the exercise of any of the foregoing rights and powers, Beneficiary shall not be
liable to Grantor for any loss or damage thereby sustained unless due solely to
the willful misconduct or gross negligence of Beneficiary.
(20) Additional Collateral; Extensions and Renewals. The lien, security
----------------------------------------------
interest and other rights granted hereby shall not affect or be affected by any
other security taken for the Indebtedness. The taking of additional security,
or the extension, renewal, modification (including an increase) or rearrangement
of the Indebtedness shall not release or impair the lien, security interest and
other rights granted hereby, or affect the liability of any endorser, guarantor
or surety, or improve the right of any permitted junior lienholder. This Deed
of Trust as well as any instrument given to secure any renewal, extension,
modification or rearrangement of the Indebtedness shall be and remain a first
and prior lien on all of the Mortgaged Property not expressly released until the
Indebtedness is completely paid.
(21) Waiver of Other Laws. To the extent that Grantor may lawfully do so,
--------------------
Grantor agrees that Grantor shall not assert (and hereby expressly waives) any
right under any statute or rule of law pertaining to the marshalling of assets,
the exemption of homestead, the administration of estates of decedents or other
matters whatever to defeat, reduce or affect the right of Beneficiary under the
terms of this Deed of Trust to sell the Mortgaged Property for the collection of
the Indebtedness or the right of Beneficiary under the terms of this Deed of
Trust to the payment of the Indebtedness out of the proceeds of sale of the
Mortgaged Property in preference to every other person and claimant after
reasonable expenses of such sale have first been deducted.
(22) Subordinate Mortgages. Grantor will not, without the prior written
---------------------
consent of Beneficiary, execute or deliver any pledge, security agreement,
mortgage or deed of trust covering all or any portion of the Mortgaged Property
(hereinafter called "Subordinate Mortgage"). In the event of consent by
Beneficiary to a Subordinate Mortgage, or in the event the foregoing prohibition
is determined by a court of competent jurisdiction to be
11
<PAGE>
unenforceable under provisions of then applicable law, Grantor will not execute
or deliver any Subordinate Mortgage unless there shall have been delivered to
Beneficiary not less than ten (10) days prior to the date thereof a copy of the
instrument creating the Subordinate Mortgage which shall contain covenants to
the effect that:
(a) The Subordinate Mortgage is in all respects unconditionally
subject and subordinate to the lien, security interest and assignment
evidenced by this Deed of Trust and each term and provision hereof.
(b) If any action or proceeding shall be instituted to foreclose the
Subordinate Mortgage (regardless of whether by judicial proceeding or
pursuant to the power of sale contained therein), no tenant of any portion
of the Mortgaged Property will be named as a party defendant nor will any
action be taken with respect to the Mortgaged Property which would
terminate any occupancy or tenancy of the Mortgaged Property without the
prior written consent of Beneficiary.
(c) The rents and other income from the Mortgaged Property, if
collected through a receiver or by the holder of the Subordinate Mortgage,
shall be applied first to the obligation secured by this Deed of Trust and
then to the payment of maintenance, and operating charges, taxes,
assessments and disbursements incurred in connection with the ownership,
operation and maintenance of the Mortgaged Property.
(d) If any action or proceeding shall be brought to foreclose the
Subordinate Mortgage, written notice of the commencement thereof will be
given to Beneficiary at the same time as such action or proceeding is
commenced.
(23) Subrogation. To the extent that proceeds of the Note are used to pay
-----------
any outstanding lien, charge or encumbrance against or affecting the Mortgaged
Property, such proceeds have been advanced by Beneficiary at Grantor's request,
and Beneficiary shall be subrogated to all rights, interests and liens owned or
held by any owner or holder of such outstanding liens, charges and encumbrances,
regardless of whether such liens, charges and encumbrances are released of
record.
(24) Limitation of Interest. Reference is hereby made to the provisions of
----------------------
the Note limiting interest contracted for, charged or received by Beneficiary
hereunder, or otherwise, to the maximum lawful rate.
(25) Non-Waiver and Partial Invalidity. No waiver of any default on the
---------------------------------
part of Grantor or breach of any of the provisions of this Deed of Trust or of
any other instrument executed in connection with the Indebtedness shall be
considered a waiver of any other or subsequent defaults or breach. No delay or
omission in exercising or enforcing the rights and powers herein granted shall
be construed as a waiver of such rights and powers. No exercise or enforcement
of any rights or powers hereunder shall be held to exhaust such rights and
powers, and every such right and power may be exercised from time to time. If
any provision of this Deed of Trust is held to be illegal, invalid or
unenforceable under present or future laws while this Deed of Trust is in
effect, the legality, validity and enforceability of the remaining provisions of
this Deed of Trust shall not be affected thereby. If any of the liens, security
interests or other rights created by this Deed of Trust
12
<PAGE>
shall be invalid or unenforceable, the unsecured portion of the Indebtedness
shall be completely paid prior to the payment of the remaining and secured
portion, and all payments made on account of the Indebtedness shall be
considered to have been paid on and applied first to the complete payment of the
unsecured portion of the Indebtedness.
(26) Tenancy at Will. In the event of a trustee's sale hereunder and if at
---------------
the time of such sale the Grantor occupies the portion of the Mortgaged Property
so sold, Grantor shall immediately become the tenant of the purchaser at such
sale. Such tenancy shall be from day to day terminable at the will of either
tenant or landlord and for reasonable rental per day based on the value of the
portion of the Mortgaged Property so occupied, such rental to be due and payable
daily to the purchaser. An action of forcible entry and detainer shall lie if
the tenant holds over after a demand in writing for possession of such Mortgaged
Property.
(27) Security Agreement and Financing Statement. With respect to any
------------------------------------------
portion of the Mortgaged Property which constitutes personal property or
fixtures governed by the Uniform Commercial Code of the State of Texas
(hereinafter called the "Code") and all leases and contract rights affecting the
Mortgaged Property and any proceeds from any of the above, this Deed of Trust
shall constitute a security agreement between Grantor, as the Debtor, and
Beneficiary, as the Secured Party. Grantor hereby grants to Beneficiary a
security interest in such portion of the Mortgaged Property and all leases and
accounts affecting the Mortgaged Property and any proceeds from the Mortgaged
Property. Cumulative of all other rights of Beneficiary hereunder, Beneficiary
shall have all of the rights and remedies conferred upon secured parties by the
Code. Grantor will execute and deliver to Beneficiary all financing statements
that may from time to time be required by Beneficiary to establish and maintain
the validity and priority of the security interest of Beneficiary or any
modification thereof, and Grantor will pay all costs and expenses of any
searches reasonably required by Beneficiary. It is expressly agreed that if
upon Default Beneficiary should proceed to dispose of such property in
accordance with the provisions of the Code, then ten (10) days notice by
Beneficiary to Grantor shall be deemed to be reasonable notice under any
provision of the Code requiring such notice; provided, however, that Beneficiary
may, at its option, dispose of such property in accordance with Beneficiary's
rights and remedies with respect to the real property described herein pursuant
to the provisions of this Deed of Trust, in lieu of proceeding under the Code.
Grantor shall give advance notice in writing to Beneficiary of any proposed
change in Grantor's name, identity or corporate structure and will execute and
deliver to Beneficiary prior to or concurrently with the occurrence of any such
change, all additional financing statements that Beneficiary may require to
establish and maintain the validity and priority of Beneficiary's security
interest with respect to any Mortgaged Property described or referred to herein.
Certain of the items of Mortgaged Property described herein are goods that are
or are to become fixtures related to the real estate described herein, and it is
intended that, as to those goods, this Deed of Trust shall be effective as a
financing statement filed as a fixture filing from the date of its filing for
record in the Real Estate Records of the county in which the Mortgaged Property
is situated. The record owner of the Mortgaged Property is Grantor. The mailing
addresses of the Grantor, as Debtor, and Beneficiary, as Secured Party, are as
stated above.
(28) Binding Effect. The covenants herein contained shall be covenants
--------------
running with the land and shall be binding upon and the benefits and advantages
of this Deed of
13
<PAGE>
Trust shall inure to, the respective heirs, executors, administrators, personal
representatives, successors and assigns of the parties hereto, and any
substitute trustee. The duties, covenants, conditions, obligations and
warranties of Grantor in this Deed of Trust shall be joint and several
obligations of Grantor and each Grantor, if more than one, and Grantor's heirs,
personal representatives, successors and assigns. Each party who executes this
Deed of Trust (other than the Beneficiary) and each subsequent owner of the
Mortgaged Property or any part thereof, covenants and agrees that it will
perform or cause to be performed each condition, term, provision and covenant of
this Deed of Trust. If Grantor is a corporation, general partnership, limited
partnership, joint venture, trust, or other entity, the execution and delivery
by Grantor of this Deed of Trust, the Note, and each and every other instrument
executed by Grantor in connection with the loan evidenced by the Note and the
performance by Grantor thereunder, are within Grantor's powers and have been
duly authorized by Grantor's Board of Directors, shareholders, partners,
venturers, trustees, or other necessary parties, as the case may be, and all
other requisite action for such authorization has been taken.
(29) Meaning of Terms. Whenever used in this Deed of Trust, the singular
----------------
number shall include the plural and the singular, and the use of any gender
shall be applicable to all genders. If this Deed of Trust is executed by more
than one party as Grantor, each such party shall be jointly and severally liable
for the obligations of Grantor under this Deed of Trust. All of the covenants
and agreements herein undertaken to be performed by and the rights conferred
upon Beneficiary and Grantor shall be binding upon and inure to the benefit of
not only said parties respectively but also their representative heirs,
executors, administrators, grantees, successors and assigns.
(30) Titles; Construction of Agreement. All section, subsection or
---------------------------------
paragraph titles contained in this Deed of Trust are for reference purposes only
and this Deed of Trust shall be construed without reference to such titles.
This Deed of Trust may be construed as a mortgage, conveyance, assignment,
security agreement, pledge, financing statement, contract or any one or more of
them in order fully to effectuate the lien hereof.
(31) Environmental Compliance. Grantor represents, warrants and covenants
------------------------
that the Mortgaged Property and Grantor and Grantor's use of the Mortgaged
Property now complies and in the future will at all times comply with all laws,
statutes, ordinances, rules and regulations ("Environmental Laws") of any
governmental, quasi-governmental or regulatory authority which relate to the
transportation, storage, placement, handling, treatment, discharge, generation,
production, removal or disposal (collectively, "Treatment") of any waste,
petroleum product (including, without limitation, gasoline and diesel fuel),
waste products, poly-chlorinated biphenyls, asbestos, hazardous materials,
and/or any other substance, the Treatment of which is regulated by any laws,
rules or regulations (collectively, "Waste"), or which otherwise relate to
public health or the environment, including without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of l980,
as amended ("CERCLA"), the Resource Conservation and Recovery Act of l976, as
amended ("RCRA"), the Texas Water Code and the Texas Solid Waste Disposal Act,
as amended. Without limiting the foregoing, Grantor specifically represents and
warrants that there are no underground storage tanks for gasoline, diesel fuel,
other petroleum products or of any other type on or installed in the Mortgaged
Property and Grantor covenants that Grantor will not install any such tanks in
the Mortgaged Property prior to the release of this Deed of Trust.
14
<PAGE>
Grantor has taken all necessary steps to determine, has determined and
represents and warrants to Purchaser that no Spill of Waste has occurred on the
Mortgaged Property and that no "hazardous substance" or "solid waste" have been
disposed of or otherwise released on or to the Mortgaged Property nor will be
disposed of or otherwise released on or to the Mortgaged Property by Grantor, or
Grantor's agents and employees. The terms "hazardous substance(s)" and
"release" (or "released") shall have the meaning specified in CERCLA, and the
terms "solid waste" and "disposal" (or "dispose") shall have the meaning
specified in the RCRA, provided however, to the extent that the laws of the
State of Texas establish a meaning for hazardous substance(s), hazardous waste,
release, solid waste or disposal which is broader than that specified in either
CERCLA or RCRA, such broader meaning shall apply.
Immediately upon receipt of any Notice, as defined below, from any party,
Grantor will deliver to Beneficiary an accurate copy of any written Notice and
an accurate report of any non-written Notice. The term "Notice" means the
actual knowledge of Grantor of, or the receipt by Grantor, or Grantor's agents,
tenants or employees, of any notice or report of any of the following:
(1) Any suit, proceeding, investigation, order, consent order, injunction,
writ, award, or action concerning the Treatment of any Waste in, on or
affecting the Mortgaged Property;
(2) Any spill, contamination, discharge, leakage, release or escape of any
Waste in, on or affecting the Mortgaged Property, whether sudden or
gradual, accidental or anticipated, or of any other nature (a
"Spill");
(3) Any dispute relating to Grantor's or any other person's Treatment of
any Waste or any Spill in, on or affecting the Mortgaged Property;
(4) Any claim, by or against any insurer concerning any Waste or Spill in,
on or affecting the Mortgaged Property;
(5) Any recommendation or requirement of any governmental or regulatory
authority, or insurer concerning any Treatment of Waste or a Spill in,
or affecting the Mortgaged Property;
(6) Any legal requirement or deficiency concerning the Treatment of Waste
or any Spill in, on or affecting the Mortgaged Property; or
(7) Any tenant, prior owner, concessionaire, manager, or other person or
entity occupying or using the Mortgaged Property, or any part thereof,
having engaged in or engaging in the Treatment of any Waste in, on or
affecting the Mortgaged Property.
If (a) Grantor has caused, suffered, or permitted, directly or indirectly,
any Spill in, on or affecting the Mortgaged Property, or (b) any Spill has
occurred on the Mortgaged Property, then Grantor will immediately take all of
the following actions:
15
<PAGE>
(1) Promptly notify Beneficiary in writing, upon Grantor's acquiring
knowledge of such Spill with a full description thereof;
(2) Take all steps necessary or desirable in Beneficiary's reasonable
opinion, to clean up any Spill and any contamination related to the
Spill;
(3) Promptly comply with any Environmental Laws relating to the Treatment
of the Spill and provide Beneficiary with satisfactory evidence of
compliance;
(4) Fully restore the Mortgaged Property and, if necessary, any other
property damaged by the Spill, to the condition of the Mortgaged
Property and such other property prior to the Spill;
(5) Allow Beneficiary to monitor and inspect all cleanup and restoration
related to the Spill; and
(6) Provide Beneficiary, within thirty (30) days after demand by
Beneficiary, with a bond, letter of credit or similar financial
assurance, satisfactory to Beneficiary, demonstrating that the
necessary funds are available to pay the cost of Treatment of the
Spill and the cost to comply with all related Environmental Laws and
to discharge any associated assessments or charges, private or public,
which may be established on the Mortgaged Property.
Beneficiary (through its officers, employees and agents) at any time and
from time to time, either prior to or after Default in this Deed of Trust or
under the Note, may employ persons (the "Site Reviewers") to conduct
environmental site assessments ("Site Assessments") on the Mortgaged Property to
determine whether or not there exists on the Mortgaged Property any
environmental condition which might result in any liability, cost or expense to
the owner, occupier or operator of the Mortgaged Property arising under the
Environmental Laws relating to Waste; provided, however, that Beneficiary shall
not conduct more than one (1) Site Assessment per calendar year, unless (i) a
Site Assessment conducted previously that year discloses the existence of an
environmental condition which might result in any liability, cost or expense
described above and because of the existence of such environmental condition
Beneficiary determines, in its sole discretion, that further Site Assessments
are necessary or desirable, or (ii) if in the same calendar year, but subsequent
to Beneficiary's performance of a Site Assessment, an event occurs on the
Mortgaged Property that Beneficiary reasonably determines might create or cause
an environmental condition which might result in any liability, cost or expense
described above and because of the occurrence of such event, Beneficiary
determines, in its sole discretion, that further Site Assessments are necessary
or desirable. The Site Assessments may be performed at any time or times, upon
reasonable notice, and under reasonable conditions established by Beneficiary.
The Site Reviewers are authorized to enter upon the Mortgaged Property and to
perform above and below-the-ground testing (including, without limitation,
taking of core samples) to determine environmental damage or presence of Waste
in, on or under the Mortgaged Property and such other tests as may be necessary
or desirable, in the opinion of the Site Reviewers, to conduct Site Assessments.
Grantor will supply to the Site Reviewers such historical and operational
information available to Grantor regarding the Mortgaged Property as may be
requested by the Site Reviewers to
16
<PAGE>
facilitate the Site Assessments and will make available for meetings with the
Site Reviewers appropriate personnel having knowledge of such matters. The cost
of performing such Site Assessments will be paid by Grantor upon demand of
Beneficiary, which, if not paid, will be added to the Indebtedness secured by
this Deed of Trust.
Whether or not any Site Assessments are conducted, and regardless of
whether or not a Default occurs under this Deed of Trust or under the Note and
regardless of whether any remedies in respect of the Mortgaged Property are
exercised by Beneficiary, Grantor will defend, indemnify and hold harmless
Beneficiary and Trustee from any and all liabilities (including strict
liability), actions, claims, demands, causes of action, losses, penalties,
damages, costs, expenses (including, without limitation, attorneys' fees and
expenses, and court costs), suits, costs of any settlement or judgment of any
and every kind or nature, fixed or contingent, asserted against or incurred by
Beneficiary or Trustee at any time, and from time to time whatsoever (whether
before or after the release or foreclosure of this Deed of Trust) arising out of
(a) the breach of any representation or warranty of Grantor set forth in this
section; (b) the failure of Grantor to perform any obligation herein required to
be performed by Grantor; (c) Grantor's ownership, construction, occupancy,
operation, use and maintenance of the Mortgaged Property; (d) any Spill; (e) the
presence on or under, or the escape, seepage, leakage, spillage, discharge,
emission or release from the Mortgaged Property of any Waste; (f) the
environmental condition of the Mortgaged Property; or (g) the applicability of
any Environmental Laws relating to Waste (including, without limitation, CERCLA
or any federal, state or local so-called "Superfund" or "Superlien" law,
statute, ordinance, code, rule, regulation, order or decree), regardless of
whether or not caused by or within the control of Grantor, Beneficiary or
Trustee. The representations, covenants, warranties and indemnifications herein
contained shall survive the release and/or judicial or non-judicial foreclosure
(or transfer in lieu thereof) of the lien of this Deed of Trust. For the
purpose of this paragraph and not withstanding any other provision contained
herein to the contrary, the term "Grantor" shall refer not only to the Grantor
named herein, but also to all other persons who may hereafter assume the Note
and the obligations of this Deed of Trust.
(32) Use of Proceeds. A portion of the Indebtedness, the payment of which
---------------
is secured hereby, is given for, and represents cash to be advanced for
materials and labor for construction of certain improvements upon the Mortgaged
Property in accordance with the Loan Agreement (the "Loan Agreement") of even
date herewith between Beneficiary and Grantor, reference to which is hereby made
for the terms and provisions thereof and the rights of Beneficiary to accelerate
the Indebtedness and to exercise certain remedies, including foreclosure of the
liens herein described, upon certain events of default as therein set forth. In
the event of a conflict between the terms and provisions of this instrument and
the Loan Agreement, the Loan Agreement shall govern.
(33) Second Lien. The lien of this Deed of Trust shall in all respects be
-----------
subject and subordinate to the lien and security interest of the First Lien Deed
of Trust, and the indebtedness evidenced by the Note shall in all respects be
subordinate to the indebtedness evidenced by the First Lien Note.
(34) Construction Mortgage. This Deed of Trust secures an obligation
---------------------
incurred for the construction of improvements on the land described in Exhibit
"A" hereto, and as such
17
<PAGE>
constitutes a "construction mortgage" under Section 9.313 of the Texas Business
and Commerce Code.
EXECUTED on the date of the acknowledgment set forth below, to be
effective, however, as of the 15th day of September, 1995.
TRAVIS SNOWDEN MARINE, INC.
By: /s/ MARK WALTON
-------------------------------------
Printed Name: MARK WALTON
---------------------------
Title: PRESIDENT
----------------------------------
STATE OF TEXAS (S)
COUNTY OF TRAVIS (S)
----------
This instrument was acknowledged before me on the 25th day of October,
------
1995, by Mark Walton , President of TRAVIS
---------------------------- ------------------------
SNOWDEN MARINE, INC., a Texas corporation, on behalf of said corporation.
[NOTARY SEAL APPEARS HERE] /s/ Michael Jones
------------------------------------------------
Notary Public, State of Texas
Name and Mailing Address AFTER RECORDING
---------------
of Trustee: RETURN TO BENEFICIARY:
----------------------
NationsBank of Texas, N.A. NationsBank of Texas, N.A.
NationsBank Plaza, 51st Floor 300 Convent St.
901 Main Street P.O. Box 300
Dallas, Texas 75202 San Antonio, Texas 78291-0300
Attn: Real Estate Loan Administration
18
<PAGE>
EXHIBIT "A"
TRACT ONE:
Being all that certain lot, tract or parcel of land situated in the William King
Survey, Abstract Number 697, City of Lewisville, Denton County, Texas and being
part of a certain called 9.3016 acre tract of land described in a deed to A.P.
Stephens, recorded in Clerk's File Number 93-R0050774 of the Deed Records of
Denton County, Texas and being more particularly described as follows:
BEGINNING at a 2" pipe found on the east line of I.H. 35E (300' right-of-way) at
the westerly northwest corner of Lot 1, Block A of Huffines Chevrolet, an
addition to the City of Lewisville according to the plat thereof recorded in
Cabinet E, Page 200 of the Plat Records of Denton County, Texas, same being the
Southwest corner of said A.P. Stephens tract;
THENCE N 33 degrees 05 minutes 00 seconds W, 199.18 feet along the East line of
said I.H. 35E and the west line of said A.P. Stephens tract to a 5/8" rebar
found at the south corner of the remainder of a certain called 5.3 acre tract of
land described in a deed to XP-Lewisville Site, Inc. recorded in Volume 692,
Page 164 of the Deed Records of Denton County, Texas;
THENCE N 01 degrees 23 minutes 24 seconds E, 122.00 feet along the east line of
said 5.3 acre tract and the west line of said A.P. Stephens tract to a 1/2"
rebar set;
THENCE N 89 degrees 03 minutes 38 seconds E, 294.52 feet to a 1/2" rebar set;
THENCE N 43 degrees 55 minutes 37 seconds E, 64.00 feet to a 1/2" rebar set;
THENCE N 88 degrees 47 minutes 37 seconds E, 30.00 feet to a 1/2" rebar set;
THENCE S 01 degrees 12 minutes 23 seconds E, 126.15 feet to a 1/2" rebar set;
THENCE N 89 degrees 03 minutes 38 seconds E, 382.00 feet to a 1/2" rebar set on
the common line between said A.P. Stephens tract and said Lot 1, Block A of
Huffines Chevrolet;
THENCE S 02 degrees 46 minutes 18 seconds E, 210.00 feet along said common line
to a 2" pipe found;
THENCE S 89 degrees 03 minutes 38 seconds W, 657.97 feet along said common line
to the POINT OF BEGINNING and containing approximately 4.202 acres of land.
Now being known as Lot 1, Block A of Travis Boats Addition, an Addition to the
City of Lewisville, Texas, according to the Map thereof recorded in Cabinet L,
Page 86, Map Records, Denton County, Texas.
Page 1 of 2
<PAGE>
EXHIBIT "A" CONTINUED
Tract Two:
Non-exclusive easement and right-of-way for vehicular traffic use created in
Perpetual Easement Grand and Maintenance Agreement executed by and between A.P.
Stephens and Travis Snowden Marine, Inc., a Texas corporation, dated September
2, 1994, filed September 15, 1994, recorded under County Clerk's File Number
94-R0071353 of the Real Property Records of Denton County, Texas, said easement
being over, across and upon part of Lot 3, Block A of Travis Boats Addition, an
Addition to the City of Lewisville, Texas according to the Map thereof recorded
in Cabinet L, Page 86, Map Records of Denton County, Texas, and being more
particularly described as follows:
Being a tract or parcel of land situated in the City of Lewisville, Denton
County, Texas and being part of the William King Survey, Abstract No. 697 and
being a part of that tract of land conveyed to A.P. Stephens by Special Warranty
Deed recorded in Denton County Clerk's Office, County Clerk File No.
93-R0050774, Denton County, Texas and Correction Special Warranty Deed County
Clerk File No. 94-R0053684, Denton County, Texas and being more particularly
described as follows:
BEGINNING at a point for corner in the southerly right-of-way line of Bennett
Lane (70 feet wide), said point being along said southerly line a distance of
594.54 feet from the intersection of said southerly line with the northeasterly
right-of-way line of Interstate Highway 35E (300 feet wide);
THENCE North 88 degrees 48 minutes 15 seconds East continuing along said
southerly line of Bennett Lane a distance of 30.00 feet to a point for corner;
THENCE South 01 degrees 12 minutes 23 seconds East leaving said southerly line a
distance of 230.39 feet to a point for corner;
THENCE South 88 degrees 47 minutes 37 seconds West a distance of 30.00 feet to a
point for corner;
THENCE North 01 degrees 12 minutes 23 seconds West a distance of 230.40 feet to
the POINT OF BEGINNING and containing 6.912 square feet of 0.1587 acres, more or
less.
Page 2 of 2
<PAGE>
EXHIBIT 10.27(A)
SECOND MODIFICATION AND EXTENSION AGREEMENT
-------------------------------------------
THIS SECOND MODIFICATION AND EXTENSION AGREEMENT (this "Agreement") is made
to be effective as of the 26th day of April, 1994, by and between TRAVIS BOATS &
MOTORS, INC., a Texas corporation ("Borrower") and NATIONSBANK OF TEXAS, N.A.
("Bank").
INTRODUCTION
------------
WHEREAS, Bank loaned to Borrower the sum of $765,000.00 (the "Loan"),
pursuant to the terms of the following documents:
(a) Loan Agreement (the "Loan Agreement") dated March 5, 1993,
executed by Borrower and Bank;
(b) Promissory Note (the "Note") dated March 5, 1993, in the original
principal amount of $765,000.00, executed by Borrower and made
payable to the order of Bank;
(c) Deed of Trust, Assignment, Security Agreement and Financing
Statement (the "Deed of Trust") dated March 5, 1993, from
Borrower to Michael F. Hord, Trustee, recorded in Volume 2278,
Pages 342-366, of the Real Property Records of Williamson County,
Texas, covering certain real property (the "Property") in
Williamson County, Texas, record reference to the Deed of Trust
being here made for a more complete description of said real
property, and said real property also being more fully described
in Exhibit "A" attached hereto and made a part hereof for all
purposes;
(d) Financing Statement (the "Financing Statement") dated March 5,
1993, executed by Borrower;
(e) Guaranty Agreement dated September 30, 1991, executed by Mark T.
Walton;
(f) Guaranty Agreement dated September 30, 1991, executed by E.D.
Bohls;
(g) Guaranty Agreement dated September 30, 1991, executed by Robert
C. Siddons;
(h) Guaranty Agreement dated September 30, 1991, executed by Joe E.
Simpson;
1
<PAGE>
(i) Guaranty Agreement dated September 30, 1991, executed by Jesse
Cox;
(j) Guaranty Agreement dated May 29, 1992, executed by Mark T.
Walton;
(k) Guaranty Agreement dated May 29, 1992, executed by E. D. Bohls;
(l) Guaranty Agreement dated May 29, 1992, executed by Robert C.
Siddons;
(m) Guaranty Agreement dated May 29, 1992, executed by Joe E.
Simpson; and
(n) Guaranty Agreement dated May 29, 1992, executed by Jesse Cox
(said Guaranty Agreements being collectively referred to herein
as the "Guaranty Agreements" and said Mark T. Walton, E.D. Bohls,
Robert C. Siddons, Joe E. Simpson and Jesse Cox being
collectively referred to herein as the "Guarantors"); and
WHEREAS, the Loan was extended and the terms of said loan documents were
modified by the terms of that one certain Modification and Extension Agreement
(the "First Modification Agreement") dated December 5, 1993, executed by
Borrower, Bank and the Guarantors, and recorded in Volume 2443, Page 0397, of
the Real Property Records of Williamson County, Texas; and
WHEREAS, the Loan Agreement, the Note, the Deed of Trust, the Financing
Statement and the Guaranty Agreements, and each document placing a lien or
security interest against the Property or any part of the Property to secure the
indebtedness evidence by the Note or any part thereof, and all other documents
executed in connection with the Loan, as extended and modified by the First
Modification Agreement, are referred to herein as the "Loan Documents"; and
WHEREAS, in connection with the obtaining of Small Business Administration
loan, Borrower shall make a partial repayment (the "Partial Repayment") on the
Note in the amount of $171,000.00 on or before July 1, 1994 (the date that the
Partial Repayment is received by the Bank being herein referred to as the
"Partial Repayment date");
WHEREAS, Bank and Borrower desire to extend the maturity of the Note and
make certain amendments to the Loan Documents as more fully described below;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, and for other good and valuable consideration, the
2
<PAGE>
receipt and sufficiency of which is hereby confessed and acknowledged, Borrower
and Bank agree as follows:
Agreement
---------
1. Extension. The final maturity date of the Note set forth in the
---------
fourth grammatical paragraph of the Note is hereby extended to April 26, 2004.
2. Interest Rate. Effective as of April 26, 1994, the pre-fault interest
-------------
rate set forth in the first paragraph of the Note is hereby amended to be as
follows:
With respect to unmatured principal, interest shall accrue on
$171,000.00 of the unpaid principal balance of the Note at a varying
rate of interest per annum equal to the lesser of (a) the prime rate
of NationsBank of Texas, N.A., plus one percent (1%), as the same may
change from day to day, or (b) the maximum rate of interest allowed by
applicable law (the "Maximum Rate") (interest accruing on such portion
of the unpaid principal balance at such floating rate of interest
being herein referred to as "Floating Interest"), and the unpaid
principal balance of the Note in excess of $171,000.00 shall accrue
interest at a fixed rate of interest equal to eight and four-tenths
percent (8.40%) per annum, until the Partial Repayment Date, after
which time all of the unpaid principal balance of the Note shall
accrue interest at a fixed rate of interest equal to eight and four-
tenths percent (8.40%) per annum. Interest on past due principal and
interest shall accrue as set forth in the Note.
3. Repayment. Effective as of April 26, 1994, the unpaid principal
---------
balance of the Note, together with interest thereon, shall be due and payable
as follows:
Commencing on May 1, 1994, there shall be due and payable on the first
day of each and every calendar month until the Partial Repayment Date
an interest payment in an amount equal to all then accrued and unpaid
Floating Interest. There shall also be due and payable on the Partial
Repayment date an interest payment in an amount equal to all then
accrued and unpaid Floating Interest. The Partial Repayment shall be
due and payable on July 1, 1994, but may be paid before such date.
There shall additionally be due and payable principal and interest
payments, each in the amount of $5,814.59, which shall be due and
payable on the first day of each calendar month commencing on June 1,
1994, and continuing regularly and monthly thereafter until April 26,
2004, at which time all unpaid principal plus all accrued and unpaid
interest shall be due and payable.
3
<PAGE>
4. Default. Effective as of April 26, 1994, and notwithstanding any other
-------
provision in the Loan Documents to the contrary, each of the Loan Documents is
hereby amended to provide that a "Default" is defined as follows:
(a) The failure to pay any installment of principal or interest upon
the Note when due and payable if such failure continues uncured for a
period of five (5) days after Bank mails written notice of such failure to
Borrower;
(b) The failure by Borrower to perform any term, covenant or
agreement contained in any of the Loan Documents (other than the failure to
pay any amounts under the Note) if Borrower does not remedy or cure such
failure within thirty (30) days after Bank has mailed written notice of
such failure to Borrower; provided, however, that if at the end of such
thirty (30) day period Borrower is diligently pursuing the cure of such
failure, but the failure has not been cured by the end of such period,
Borrower shall have an additional fifteen (15) days within which to
complete the cure of such failure.
Notwithstanding any other provision in the Loan Documents to the contrary, Bank
may exercise its rights and remedies under the Loan Documents only upon a
Default as defined above.
5. Modification Fee. Borrower shall pay to Bank a commitment fee in the
----------------
amount of $5,940.00 in connection with the execution of this Agreement. Such fee
shall be due and payable upon the execution of this Agreement.
6. Loan Documents. The Loan Documents are hereby renewed, extended and
--------------
modified to conform to the modifications of the Note set forth above.
7. Governing Law. The terms and conditions of this Agreement shall be
-------------
governed by the applicable laws of the State of Texas.
8. Paragraph Headings. The paragraph headings used herein are intended
------------------
for reference purposes only and shall not be considered in the interpretation of
the terms and conditions hereof.
9. Inurement. The terms and conditions of this Agreement shall be
---------
binding upon and shall inure to the benefit of the parties hereto, and
their respective successors, heirs, and assigns.
10. Compliance with Usury Laws. It is expressly stipulated and agreed
--------------------------
among the parties to this Agreement that it is the intent of such parties at all
times to comply with applicable usury and other applicable laws of the State of
Texas (to the extent not preempted by Federal Law, if any), and United States
Federal laws related to this Agreement and in particular with Article 5069 of
the Texas Revised
4
<PAGE>
Civil Statutes Annotated. If this Agreement and the modifications to the Loan
Documents result in any party to this Agreement having paid, contracted, or
received any interest in excess of that permitted by law, then it is the express
intent of the parties to this Agreement that all excess amounts therefore
collected by the holder of the Note be credited to the principal balance of the
Note and the provisions of this Agreement and any of the Loan Documents shall
immediately be deemed to be reformed and the amounts thereafter collected
reduced, without the necessity of execution of any new documents, so as to
comply with applicable law.
11. Lien Renewal and Extension. The lien of the Deed of Trust is hereby
--------------------------
renewed and extended to secure payment of the Note as herein modified.
12. Execution by Guarantors. The Guarantors have executed this Agreement
-----------------------
to evidence their consent and agreement to the extension of the Loan and the
modification of the Loan Documents as described and set forth in this Agreement
and to acknowledge and reaffirm that payment of the Loan as modified hereby is
guarantied by the Guaranty Agreements, and for the purpose of executing the "No
Oral Agreements" provision set forth below.
13. No Oral Agreements. The following notice is given in accordance with
------------------
(S)26.02 of the Texas Business and Commerce Code:
THE WRITTEN LOAN AGREEMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
---------------------------------------------------------------------
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
--------------------------------------------------------------------------
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
---------------------------------------------
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
-----------------------------------------------------------
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement to be effective as of the date first above written.
Borrower:
TRAVIS BOATS & MOTORS, INC.
a Texas corporation
By: /s/ Mark T. Walton
-------------------------------
Printed Name: MARK T. WALTON
--------------------
Title: PRESIDENT
----------------------------
5
<PAGE>
Guarantors:
/s/ Mark T. Walton
--------------------------------------
MARK T. WALTON
/s/ E.D. Bohls
--------------------------------------
E.D. BOHLS
/s/ Robert C. Siddons
--------------------------------------
ROBERT C. SIDDONS
/s/ Joe E. Simpson
--------------------------------------
JOE E. SIMPSON
/s/ Jesse Cox
--------------------------------------
JESSE COX
Bank:
NATIONSBANK OF TEXAS, N.A.
By: /s/ R. Mark Bearfield
-----------------------------------
Printed Name: R. Mark Bearfield
_________________________
Title: Vice President
________________________________
THE STATE OF TEXAS (S)
(S)
COUNTY OF TRAVIS (S)
------
The foregoing instrument was acknowledged before me this 17th day of May,
---- ---
1994, by MARK T. WALTON, PRESIDENT of TRAVIS BOATS & MOTORS, INC., a Texas
-------------- ---------
corporation, on behalf of said corporation.
/s/ Michael Jones
--------------------------------------
Notary Public, State of Texas
6
<PAGE>
THE STATE OF TEXAS (S)
(S)
COUNTY OF TRAVIS (S)
-------
The foregoing instrument was acknowledged before me this 17th day of
------
May 1994, by MARK T. WALTON.
- ----------,
/s/ Michael Jones
----------------------------------------
Notary Public, State of Texas
THE STATE OF TEXAS (S)
(S)
COUNTY OF TRAVIS (S)
-------
The foregoing instrument was acknowledged before me this 17th day of
------
May 1994, by E.D. BOHLS.
- ----------,
/s/ Michael Jones
----------------------------------------
Notary Public, State of Texas
THE STATE OF TEXAS (S)
(S)
COUNTY OF TRAVIS (S)
-------
The foregoing instrument was acknowledged before me this 17th day of
------
May 1994, by ROBERT C. SIDDONS.
- ----------,
/s/ Michael Jones
----------------------------------------
Notary Public, State of Texas
7
<PAGE>
THE STATE OF TEXAS (S)
(S)
COUNTY OF TRAVIS (S)
--------
The foregoing instrument was acknowledged before me this 17th day of May,
----- ------
1994, by JOE E. SIMPSON.
/s/ Michael Jones
[SEAL] ----------------------------------------
Notary Public, State of Texas
THE STATE OF TEXAS (S)
(S)
COUNTY OF (S)
The foregoing instrument was acknowledged before me this 17 day of
------
May , 1994, by JESSE COX
-----
[SEAL] /s/ Michael Jones
----------------------------------------
Notary Public, State of Texas
THE STATE OF TEXAS (S)
(S)
COUNTY OF BEXAR (S)
The foregoing instrument was acknowledged before me this 17th day of
------
May , 1994, by ___________________________________, _______________________
- -----
of NATIONSBANK OF TEXAS, N.A., a national banking association, on behalf of said
bank.
[SEAL] /s/ Michael Jones
----------------------------------------
Notary Public, State of Texas
AFTER RECORDING, RETURN TO:
NationsBank of Texas, N.A.
300 Convent
San Antonia, Texas 78205
Attention: Mark Bearfield
8
<PAGE>
LAND DESCRIPTION
----------------
A 3.423 ACRE TRACT OR PARCEL OF LAND OUT OF AND PART OF THE HENRY RHODES SURVEY,
ABSTRACT NO. 522, SITUATED IN WILLIAMSON COUNTRY, TEXAS, BEING LOT 2-A, BLOCK B
OF THE AMENDED PLAT OF LOTS 1 AND 2, BLOCK B, TRESS SONESTA SUBDIVISION BLOCK A
AND B, A SUBDIVISION OF RECORD IN CABINET I, SLIDES 385-386 OF THE PLAT RECORDS
OF WILLIAMSON COUNTY, TEXAS, LESS AND EXCEPT THAT PORTION OF SAID LOT 2-A
CONVEYED TO THE STATE OF TEXAS FOR RIGHT-OF-WAY PURPOSES BY DEED OF RECORD IN
VOLUME 1951, PAGE 210 OF THE REAL PROPERTY RECORDS OF WILLIAMSON COUNTY, TEXAS,
THE SAID 3.423 ACRES BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS AS
FOLLOWS:
BEGINNING at a 1/2 inch iron rod found in the southerly right-of-way line of
Hunters Chase Drive (90 foot R.O.W.) for the most northeasterly corner of Lot
1-A of said Amended Plat, same being the most northerly, northwest corner of the
said Lot 2-A and the tract herein described;
THENCE, N77degrees 19'11"E, along the southerly line of said Hunters Chase
Drive, same being the north line of the said Lot 2-A, a distance of 70.00 feet
to a punch hole chiseled in a concrete drainage structure for the most
northeasterly corner of the said Lot 2-A, same being the northwest corner of Lot
3 of Tress Sonesta Subdivision, Blocks A and B, a subdivision of record in
Cabinet G, Slides 380 through 383 of the said Plat Records;
THENCE, leaving the south line of said Hunters Chase Drive, along the common
line between the said Lot 2-A and Lot 3, the following two courses and
distances:
1) S12degrees 40'49"E, 324.64 feet to a 1/2 inch rod set for an angle point;
2) S55degrees 50'32"E, 157.67 feet to a 1/2 inch iron rod set for the most
easterly corner of the said Lot 2-A, same being an angle point in the
northwesterly line of Lot 5 of said Tress Sonesta Subdivision;
THENCE, S32degrees 51'38"W, along the common line between the said Lot 2-A and
Lot 5, a distance of 385.91 feet to an 1/2 iron rod found in the curving
northeasterly right-of-way line of U.S. Highway 183 (R.O.W. varies) for the most
southerly corner of the tract herein described, same being the most easterly
corner of that portion of the said Lot 2-A conveyed to the State of Texas for
right-of-way purposes; form which a 1/2 inch iron rod found for the most
southerly corner of Lot 2-A, bears S32degrees 51'38"W, 64.09 feet;
EXHIBIT "A"
PAGE 1 OF 2
<PAGE>
THENCE, leaving the southeasterly line of, and continuing across the said Lot
2-A along the northeasterly line of the said U.S. Highway 183, the following two
(2) courses and distances:
1) along a curve to the right having a radius of 5554.58 feet, a central angle
of 00 degrees 05'50", a chord distance of 9.42 feet (chord bears N54
degrees 13'04"W), an arc distance of 9.42 feet to a 1/2 inch iron rod set
for the point of tangency;
2) N54 degrees 10'10"W, 336.33 feet to a 1/2 inch iron rod found in the
northwesterly line of the said Lot 2-A, same being the southeasterly line
of the said Lot 1-A, for the most northerly corner of the said portion of
Lot 2-A conveyed to the State for right-of-way; same being the most
westerly corner of the tract herein described;
THENCE, leaving the northeasterly line of said U.S. Highway 183, along the
common line between the said Lot 1-A and the said Lot 2-A, the following three
(3) courses and distances:
1) N35 degrees 50'11"E, 456.04 feet to a 1/2 inch iron rod found for an angle
point;
2) N21 degrees 18'26"W, 100.00 feet to a 1/2" iron rod found for an angle
point;
3) N12 degrees 40'49"W, 50.00 feet to the POINT OF BEGINNING, containing 3.423
acres of land area within these metes and bounds.
EXHIBIT "A"
PAGE 2 OF 2
<PAGE>
EXHIBIT 10.27 (b)
U. S. Small Business Administration
Certified Development Company Program
"504" NOTE
Loan Number CDC-L-582, 157-3006-SA
----------------------------
San Antonio, Texas
-------------------------
(City and State)
$ 454,000.00 (Date) April 28 , 19 94
------------------------------ -------------------- ---
For value received, the Undersigned promises to pay to the order of
CEN-TEX CERTIFIED DEVELOPMENT CORPORATION
- --------------------------------------------------------------------------------
Payee (development company)
at its office in (City and State) Austin, Texas ,
--------------------------------------------
or upon assignment or transfer of this Note by the Payee, and written notice
thereof to the Undersigned, at such other place as may be designated from time
to time by said assignee or transferee, FOUR HUNDRED FIFTY-FOUR THOUSAND AND
----------------------------------------
NO/10------------------------------------------------------------------ dollars,
- -----------------------------------------------------------------------
(write out amount)
with interest on the outstanding balance at 7.670 % per annum commencing on
----------
on June 15 , 1994 (date of Debenture).
----------------------------- --
Loan payments shall be made in equal installments, each in the amount of
$ 3,699,36 , commencing on the first day of July , 1994, and continuing
--------------- ---------- --
due and payable on the first day of each month thereafter until June 1 ,
-----------
2014, when the full unpaid balance of principal and interest shall become due
- ----
and payable. In addition to the aforesaid loan payments, Undersigned's
total monthly obligation shall include the service fees set forth in the
Servicing Agent Agreement (SBA Form 1506) attached to and incorporated into this
Note.
This Promissory Note evidences and related Collateral is given, to secure a
loan made by the Payee to the Undersigned and such Note and Collateral will be
assigned by Payee to the Small Business Administration (SBA) to secure the
guaranty by SBA pursuant to (S)503 (a) of the Small Business Investment Act [15
U.S.C. (S)697 (a)], of a Debenture to be issued and sold by the Payee (the
"Debenture"), which is hereby incorporated herein by reference.
All payments under this note shall be applied in this order: (1) to the
servicing fees set forth in the Servicing Agent Agreement, (2) to interest, (3)
to principal, (4) to the late fee set forth in this Note.
Late Charge
- -----------
In the event Payee or its Agent or assignee accepts a late payment after the
fifteenth day of the month in which such payment is due, the Undersigned agrees
to pay a late payment charge equal to five percent of the late amount or
$100.00, whichever is greater, as compensation for additional collection
efforts.
Definitions
- -----------
The term "Indebtedness" as used herein shall mean the indebtedness evidenced by
this Note, including principal, interest, service fees, late payment
-1-
<PAGE>
charges, and expenses including but not limited to the expenses related to the
care and preservation of Collateral and interest at the note rate thereon,
whether contingent, now due or hereafter to become due, and the stated
prepayment premium, if applicable. The term "Collateral" as used in this Note
shall mean any funds, guaranties, or other property, or rights therein of any
nature whatsoever, or the proceeds thereof, which are, or hereafter may be
hypothecated, directly or indirectly, by the Undersigned or others, in
connection with, or as security for, the Indebtedness or any part thereof. The
Collateral, and each part thereof, shall secure the Indebtedness and each part
thereof. The covenants and conditions set forth or referred to in any
instruments of hypothecation constituting the Collateral are hereby incorporated
in this Note as covenants and conditions of the Undersigned with the same force
and effect as though such covenants and conditions were fully set forth herein.
The term "CSA" shall mean the Central Servicing Agent appointed by the
development company (SBA Form 1506) and accepted by the Undersigned to receive
all payments by the Undersigned under this Note. The term "Undersigned" shall
mean the borrower under this Note and, if the operating small concern for the
benefit of which this loan is made is not the borrower, such operating small
concern.
Prepayment
- ----------
Payment of the entire outstanding balance of the Indebtedness may be made prior
to the maturity date hereof, timing to be arranged with Payee or SBA as assignee
but no partial prepayments may be made. The amount required to prepay this Note
shall be the aggregate of the Indebtedness including interest to the prepayment
(repurchase) date, and any prepayment premium required by the schedule to be
attached to this Note and incorporated by this reference. For purposes of
prepayment the repurchase date is the next semi-annual payment date on the
Debenture. The Undersigned must make a written request for prepayment to the
payee or SBA as assignee at least forty-five (45) days before the prepayment
date. Ten (10) business days prior to the scheduled prepayment date the
undersigned shall cause to be transferred by wire a non-refundable good faith
deposit of one thousand dollars ($1,000) to the CSA. Such deposit shall be
applied in full to the repurchase price of said debenture and shall be forfeited
if undersigned fails to pay the designated total prepayment amount to the CSA on
the designated prepayment date, as compensation for the cost of arranging the
failed prepayment.
Acceleration
- ------------
The indebtedness shall immediately become due and payable, upon the appointment
of a receiver or liquidator, whether voluntary or involuntary, for the
Undersigned or for any of its property, or upon the filing of a petition by or
against the Undersigned under the provisions of any State or Federal insolvency
law or under the provisions of the Bankruptcy Code of 1978 or upon the making by
the Undersigned of an assignment for the benefit of its creditors. Payee with
the consent of SBA, or SBA as assignee is authorized to declare all or any part
of the Indebtedness immediately due and payable upon the happening of any of the
following events: (1) Failure to pay any part of the Indebtedness when due; (2)
nonperformance by the Undersigned of any agreement with, or any condition
imposed by, the development company or SBA; (3) failure of the Undersigned or
any person acting on behalf of the Undersigned to disclose any material fact, in
any application, declaration or other document delivered to the development
company or SBA or any misrepresentation by or for the benefit of the Undersigned
in such document; (4) the reorganization, merger or consolidation of the
Undersigned without
-2-
<PAGE>
prior written consent of the development company and SBA, or the making of an
agreement thereof; (5) the sale of the Collateral, or any part of it or any
interest in it, or any agreement that the Collateral will be alienated by the
Undersigned, or any alienation of the Collateral by operation of law or
otherwise; (6) the Undersigned's failure duly to account, to Payee's or SBA's as
(assignee) satisfaction, at such time or times as may be required, for any of
the Collateral, or proceeds thereof, coming into the control of the Undersigned;
(7) the institution of any suit affecting the Undersigned deemed by SBA to
affect adversely its interest hereunder in the Collateral or otherwise; (8) any
change, without prior written approval by SBA, affecting ten or more percent in
the legal or equitable ownership of the Undersigned; (9) any change in the
respective ownerships of the Undersigned; (10) if the Undersigned and/or its
affiliates acquire directly or indirectly an ownership interest of ten or more
percent in the development company; (11) any other event prohibited by the
related security or other instruments; or (12) any violation by the Undersigned
of SBA regulations. Payee's or SBA's as assignee failure to exercise its rights
under this paragraph shall not constitute a waiver thereof. Upon acceleration
pursuant to this paragraph, the indebtedness shall be computed in the same
manner as is set forth for the prepayment amount in the preceding paragraph
captioned "Prepayment".
Collateral
- ----------
Upon the nonpayment of the Indebtedness, or any part thereof, when due, whether
by acceleration or otherwise, Payee with SBA's consent or SBA as assignee is
empowered to sell, assign, and deliver the whole or any part of the Collateral
at public or private sale. After deducting all expenses incidental to such sale
or sales, Payee or SBA as assignee may apply the proceeds thereof to the payment
of the Indebtedness as it shall deem proper. The undersigned hereby waives all
rights to redemption or appraisement whether before or after sale. Payee with
SBA's consent or SBA as assignee is further empowered, to convert into money all
or any part of the Collateral, by suit or otherwise, and to surrender,
compromise, release renew, extend, exchange, or substitute any item of the
Collateral in transactions with the Undersigned or any third party. Whenever
any item of the Collateral in transactions with the Undersigned or any third
party. Whenever any item of the Collateral shall not be paid when due, or
otherwise shall be in default, whether or not the Indebtedness, or any part
thereof, has become due, Payee or SBA or assignee shall have the same rights and
powers with respect to such item of the Collateral as are granted in respect
thereof in this paragraph in case of nonpayment of the Indebtedness, or any part
thereof, when due. None of the rights, remedies, privileges, or powers of Payee
or SBA as assignee expressly provided for herein shall be exclusive, but each of
them shall be cumulative with and in addition to every other such power now or
hereafter existing in favor of Payee or SBA as assignee, whether at law or in
equity, by statute or otherwise.
The Undersigned agrees to take all necessary steps to administer, supervise,
preserve, and protect the Collateral; and regardless of any action taken by
Payee or SBA as assignee, there shall be no duty upon Payee or SBA as assignee
in this respect. The Undersigned shall pay all expenses of any nature,
including but not limited to reasonable attorney's fees and costs, which Payee
or SBA as assignee may deem necessary in connection with the satisfaction of the
Indebtedness or the administration, preservation (including, but not limited to,
adequate insurance of), or the realization upon the Collateral. Payee with
SBA's consent or SBA as assignee is authorized to pay at any time and from time
to time any or all of such expenses, add the amount of such payment to the
amount of the Indebtedness, and charge interest thereon at the rate specified
herein with respect to the principal amount of this Note.
The security rights of payee or SBA as assignee hereunder shall not be impaired
by any indulgence, including but not limited to (a) any renewal,
-3-
<PAGE>
extension, or modification which Payee or SBA as assignee may grant with respect
to the Indebtedness or any part thereof, or (b) any surrender, compromise,
release, exchange, or substitution which Payee or SBA as assignee may grant in
respect of the Collateral, or (c) any indulgence granted in respect to any
endorser, guarantor, or surety. The Payee or SBA as assignee of this Note, the
Collateral, any guaranty, and any other document (or any of them), sold,
transferred, or pledged, shall forthwith become vested with and entitled to
exercise all the powers and rights given by this Note as if said purchaser,
transferee, or pledgee were originally named as Payee in this Note.
TRAVIS BOATS & MOTORS, INC.
By: /s/ Mark T. Walton
------------------------------------
MARK T. WALTON, President
[Title] ____________________________________
[Name of Undersigned] Attest: /s/ Michael B. Perrine
------------------------------------
MICHAEL B. PERRINE, Secretary
In consideration of the guarantee by Small Business Administration of a
Debenture in the amount of $ 454,000.000, issued by
CEN-TEX CERTIFIED DEVELOPMENT CORPORATION
- --------------------------------------------------------------------------------
(Development Company)
(which Debenture is identified as Small Business Project TRAVIS BOATS & MOTORS,
---------------------
INC.
- --------------------------------------------------------------------------------
(Name of Small Concern)
said CEN-TEX CERTIFIED DEVELOPMENT CORPORATION hereby assigns and transfers all
-----------------------------------------
(Development Company)
rights, title and interest in this Note to the Small Business Administration.
SEAL
CEN-TEX CERTIFIED DEVELOPMENT
CORPORATION
--------------------------------------
By /s/ Wm. H. Harrison, Jr.,
-----------------------------------
WM. H. HARRISON, JR., President
Attest /s/ Alton Marwitz
------------------------------
ALTON MARWITZ, Secretary
-4-
<PAGE>
Exhibit 10.27(c)
DEED OF TRUST, ASSIGNMENT,
SECURITY AGREEMENT AND FINANCING STATEMENT
------------------------------------------
THE STATE OF TEXAS (S)
(S) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF WILLIAMSON (S)
THAT TRAVIS BOATS & MOTORS, INC., a Texas corporation (herein called
"Grantor", whether one or more) whose address is 9185 Research Blvd., P.O. Box
9097, Austin, Texas 78766, for the purpose of securing the indebtedness
described below and in consideration of the sum of Ten Dollars ($10.00) paid by
the Trustee named herein, the receipt of which is hereby acknowledged, and for
the further consideration of the uses, purposes and trusts herein set forth, has
GRANTED, SOLD, TRANSFERRED, ASSIGNED and CONVEYED, and by these presents does
GRANT, SELL, TRANSFER, ASSIGN AND CONVEY, in trust, unto MICHAEL F. HORD, as
Trustee, and unto his substitutes or successors in trust being called
"Trustee"), and unto his or their assigns forever, the real property described
in Exhibit "A" attached hereto and made a part hereof for all purposes, together
with the following:
(1) all buildings and other improvements now or hereafter erected,
constructed or developed on the above described real property (the
"Improvements"); (2) all equipment, fixtures and articles of personal
property now hereafter attached to, located on or used in connection with
the above described real property or the Improvements including, but not
limited to, lighting, heating ventilating, air conditioning and plumbing
materials fixtures and equipment; engines, boilers, elevators, and other
such mechanical equipment; furniture, furnishings and appliances; and
trees, shrubs and other landscaping materials, and all renewals, or
replacements for any of them, whether or not they are or shall be attached
to the Improvements in any manner; (3) all buildings materials and
equipment now or hereafter delivered to the above described real property
or the Improvements and intended to be incorporated or installed thereon or
therein; (4) all plans, specifications, contracts and subcontracts relating
to the Improvements or the above described real property; (5) all deposits
(including tenant's security deposits), funds, accounts, instruments,
documents and general intangibles arising from or used in connection with
the above described real property or the Improvements (including
trademarks, trade names and symbols used in connection with the above
described real property and the Improvements); (6) all permits, licenses,
franchises, certificates and other rights and privileges obtained in
connection
<PAGE>
with the above described real property or the Improvements; (7) all
proceeds arising from or by virtue of the sale, lease or other disposition
of any of the real or personal property described herein, (8) all proceeds
(including premium refunds) payable or to be payable under each policy of
insurance relating to the Improvements and any real or personal property
described herein; (9) all proceeds resulting from the taking of all or part
of the real property described herein or any rights appurtenant thereto
including change of grade of streets, curb cuts or other rights of access
for any public or quasi-public use under any law, or by right of eminent
domain, or by private or other purchase in lieu thereof; and (10) all other
interests of every kind and character which Grantor now has or at any time
hereafter acquires in and to the above described real and personal
property, and all reversionary rights or interests of Grantor with respect
to such property, together with any substitutes replacements additions,
increases, accessions and proceeds of or to all of the above described
properties.
It is agreed that to the extent permitted by law, all of the foregoing
personal property and fixtures are deemed to be a part of, and affixed to, the
real property. The foregoing described real and property is hereinafter called
the "Mortgaged Property".
TO HAVE AND TO HOLD the Mortgaged Property and all rights and appurtenances
in any manner belonging thereto, unto the Trustee, his successors in this trust
and his assigns forever; and Grantor does hereby bind Grantor, Grantor's heirs,
executors, administrators, successors and assigns to WARRANT and FOREVER DEFEND
the title to the Mortgaged Property unto the Trustee, his successors in this
trust and his assigns forever, against every person whomsoever lawfully claiming
or to claim the same or any part thereof.
This conveyance is made in trust, however, to secure and enforce the
payment of one (1) promissory note (hereinafter called the "Note", whether one
or more) in the amount of SEVEN HUNDRED SIXTY-FIVE THOUSAND AND NO/100 DOLLARS
($765,000.00), of even date herewith, executed by Grantor payable to the order
of NATIONSBANK, OF TEXAS, N.A. ("Beneficiary") whose address is 300 Convent St.,
P.O. Box 300, San Antonio, Texas 78291-0300, the Note bearing interest and being
payable as therein provided.
This Deed of Trust shall secure, in addition to the Note, all sums advanced
by Beneficiary to or for the benefit of Grantor pursuant to any covenant or
provision of this Deed of Trust of for any other purpose. This Deed of Trust
shall also secure renewals, extensions, modification (including increases) and
rearrangements of the Note. Unless any instrument evidencing such indebtedness
provides otherwise, it shall bear interest at the same rate as the Notes bears
from the date of accrual of such indebtedness until paid. Grantor agrees to pay
all costs of Beneficiary in collecting any sums due under the Note, this Deed of
Trust or related loan
2
<PAGE>
documents, as provided in the Note, including reasonable attorney's fees; and
such sums shall be due and payable on demand and a part of the indebtedness
secured hereby. This Deed of Trust shall also secure all renewals and
extensions of any of the indebtedness secured hereby.
This Deed of Trust and lien created hereby secures any and all indebtedness
of Grantor to Beneficiary of every nature whatsoever, whether created
simultaneously herewith, heretofore or hereafter (it being contemplated that
from time to time Grantor will become further indebted to Beneficiary), primary
or secondary, until such indebtedness is fully paid and until this Deed of Trust
is duly released by Beneficiary at the request and sole expense of Grantor.
This Deed of Trust and lien shall not affect or be affected by any additional
security that may be taken as to any indebtedness due Beneficiary by Grantor and
shall secure any or any renewals, extensions, modifications (including
increases) or rearrangements of all or any part thereof. It is further agreed
that all indebtedness of Grantor to Beneficiary, secured or unsecured, present
or future, shall be payable of Beneficiary in San Antonio, Texas. Nothing
herein is intended to be, or shall be, construed to obligate Beneficiary to make
further advances to Grantor.
The Note and all such other indebtedness secured by this Deed of Trust, or
any part thereof, is referred to herein as the "Indebtedness". All of the
Indebtedness shall be payable at the office of the Beneficiary at the address
for Beneficiary stated above or such other place in Bexar County, Texas, as is
designated by Beneficiary by written notice to Grantor.
To secure payment of the Indebtedness, Grantor does hereby covenant,
warrant and represent to, and agrees with, Beneficiary and the Trustee as
follows:
(1) Payment and Performance. Grantor will pay all of the Indebtedness
-----------------------
together with the interest thereon when it shall become due in accordance with
the terms of the Note or other instrument evidencing, securing or pertaining to
the Indebtedness. Grantor shall punctually and completely perform all of
Grantor's covenants, obligations and liabilities under any loan agreement or
other instrument now or hereafter existing as security for, executed in
connection with or related to the Indebtedness, or any part thereof.
(2) Title. Grantor has good and indefeasible title in fee simple to the
-----
above described real property and good and marketable title to all other
property comprising the Mortgaged Property, which is free from encumbrance
superior to the liens securing the Indebtedness (unless otherwise expressly
provided herein), and Grantor has full right and authority to make this
conveyance. With respect to each Grantor who is an individual, no part of the
Mortgaged Property constitutes any part of his business or rural homestead.
3
<PAGE>
(3) Insurance. Grantor shall, at Grantor's expense, keep the Mortgaged
---------
Property insured by policies of insurance issued by companies satisfactory to
Beneficiary against loss by fire and hazards included within the term "extended
coverage" or "builders risk" as required by Beneficiary, together with rent loss
and such other hazards, casualties, claims and liabilities for injury or damage
to persons or property and other contingencies as Beneficiary shall require.
Grantor shall furnish to Beneficiary annually receipts or other documentation
satisfactory to Beneficiary evidencing Grantor's payment of premiums on such
policies of insurance. The policies shall be in such amounts and for such
periods as Beneficiary shall require. All policies and renewals thereof are to
be payable to Beneficiary as the interest of the Beneficiary may appear, by
means of a standard mortgagee clause approved by Beneficiary showing Beneficiary
as first mortgagee without contribution. All policies shall provide that they
shall not be cancelled without thirty (30) days prior written notice to
Beneficiary. Grantor shall deposit such policies with Beneficiary with premiums
paid, as additional security, and Grantor hereby assigns to Beneficiary all of
Grantor's rights thereunder, including any return of premium. Such insurance
shall be in amounts at least equal to the value of the Improvements and at least
sufficient to satisfy all co-insurance requirements of policies covering the
Improvements.
Beneficiary shall have the right to hold the policies and renewals thereof,
and Grantor shall promptly furnish to Beneficiary all renewal notices and all
receipts for paid premiums. At least fifteen (15) days prior to the expiration
date of the policies, Grantor shall deliver to Beneficiary renewal policies in
form satisfactory to Beneficiary. In no event, and whether or not default
hereunder has occurred, shall Beneficiary by the fact of approving, accepting or
obtaining such insurance, incur any liability for the amount of such insurance,
the form or legal sufficiency of insurance contracts, solvency of insurers, or
payment of losses by insurers, and Grantor hereby expressly assumes full
responsibility therefor and liability, if any, thereunder.
In the event of loss, Grantor shall give immediate written notice to the
insurance company and Beneficiary. Upon the occurrence of an event of default
hereunder, Grantor authorizes and empowers Beneficiary, at Beneficiary's option
and in Beneficiary's sole discretion as attorney-in-fact for Grantor, to make
proof of loss, to adjust and compromise any claim under insurance policies, to
appear in and prosecute any action arising from such insurance policies, to
collect and receive insurance proceeds, and to deduct Beneficiary's expenses
incurred in the collection of such proceeds. Nothing contained in this section
shall require Beneficiary to incur any expense or take any action hereunder.
Upon the occurrence of an event of default hereunder, Grantor further authorizes
Beneficiary, at Beneficiary's option, (a) to hold the balance of such proceeds
to be used to reimburse Grantor for the costs of reconstruction or repair of the
Mortgaged Property of (b) to apply the balance of such proceeds to the payment
of the Indebtedness, whether or not then due, in the order of application as
Beneficiary may elect. If the insurance proceeds
4
<PAGE>
are held by Beneficiary to be used to reimburse Grantor for the costs of
restoration and repair of the Mortgaged Property, the Mortgaged Property shall
be restored to the equivalent of its original condition, or such other condition
as Beneficiary may approve in writing. In such event, Beneficiary may, at
Beneficiary's option, condition disbursement of the proceeds on Beneficiary's
approval of plans and specifications by an architect satisfactory to
Beneficiary, contractor's cost estimates, architect's certificates, waivers of
liens, sworn statements of mechanics and materialmen and such other evidence of
costs, percentage completion of construction, application of payments, and
satisfaction of liens as Beneficiary may reasonably require. If the insurance
proceeds are applied to the payment of the Indebtedness, any such application to
principal of the Note shall be applied to the principal installments last
maturing on the Note, without reducing the amount or extending the time of
payment of the remaining installments of principal payable under the Note.
If the Mortgaged Property is sold or the Mortgaged Property is acquired by
Beneficiary, all right, title and interest of Grantor in and to any insurance
policies and unearned premiums thereon and in and to the proceeds thereof
resulting from damage to the Mortgaged Property prior to or after the sale or
acquisition shall pass to Beneficiary.
Grantor agrees that if the Mortgaged Property described herein is ever
identified by the United States Department of Housing and Urban Development as
having special flood hazards as provided in the Flood Disaster Protection Act of
1973, or any amendment(s) thereof, Grantor will provide, within thirty (30) days
after receipt of written request from Beneficiary, flood insurance at the
expense of Grantor, with the policy of flood insurance to be written by a
company acceptable to Beneficiary and with loss payable to Beneficiary. Such
flood insurance shall be in an amount at least equal to the amount of the unpaid
Indebtedness or the maximum amount of flood insurance that is available, under
the National Flood Insurance Program, whichever is less.
(4) Taxes an Assessments. Grantor shall pay all taxes an assessments
--------------------
against or affecting the Mortgaged Property as they become due and payable and
shall furnish to Beneficiary annually receipts or other documentation
satisfactory to Beneficiary evidencing Grantor's payment of such taxes and
assessments. If Grantor fails to do so, Beneficiary is authorized (but not
required) to pay them, together with all costs and penalties thereon at
Grantor's expense. Grantor may, however, in good faith, in lieu of paying such
taxes and assessments as they become due and payable, contest the validity
thereof by appropriate proceedings. Pending such contest Grantor shall not be
deemed in default hereunder because of non-payment provided that (a) prior to
delinquency of the asserted tax or assessment Grantor furnishes the Beneficiary
an indemnity bond, conditioned that such tax or assessment with interest, cost
and penalties be paid as herein stipulated, secured by a deposit in cash or
other security acceptable to Beneficiary
5
<PAGE>
or with a surety acceptable to Beneficiary, in the amount of the tax or
assessment being contested by Grantor, together with a reasonable additional sum
to pay all possible costs, interest and penalties imposed or incurred in
connection therewith; and (b) Grantor promptly pays any amounts adjudged by a
court of competent jurisdiction to be due, with all costs, penalties and
interest thereon, before such judgment becomes final; and (c) in any event,
each such contest shall be concluded and the tax assessment, penalties, interest
and costs shall be paid prior to the date such judgement becomes final or any
writ or order is issued under which the Mortgaged Property may be sold pursuant
to such judgment.
(5) Tax and Insurance Reserve. In the event of a breach by Grantor of any
-------------------------
of Grantor's covenants set forth in paragraphs 3 or 4 hereof, Beneficiary may,
at Beneficiary's option, require Grantor to create a fund or reserve for the
payment of all insurance premiums, taxes and assessments against or affecting
the Mortgaged Property by paying to Beneficiary, on the first day of each
calendar month prior to the maturity of the Note, a sum equal to one-twelfth
(1/12) of the estimated annual taxes and insurance premiums covering the
Mortgaged Property, such estimates to be made by Beneficiary. All such sums
shall be held by Beneficiary without interest, unless interest is required by
applicable law, for the purposes of paying such premiums, taxes and assessments.
Any excess reserve shall, at the discretion of Beneficiary, be credited by
Beneficiary on subsequent reserve payments or subsequent payments to be made on
the Note. Any deficiency shall be paid by Grantor to Beneficiary on or before
the date when such premiums, taxes and assessments shall become delinquent.
Transfer of legal title to the Mortgaged Property shall automatically transfer
the interest of Grantor in all sums deposited with Beneficiary under the
provisions hereof. If any law shall be enacted imposing or authorizing the
imposition of any tax upon this Deed of Trust, or upon any rights, titles,
liens, or security interests created hereby, or upon the Note, or any part
thereof, Grantor shall immediately pay all such taxes. In the alternative,
Grantor may in the event of the enactment of such a law, and must if it is
unlawful for Grantor to pay such taxes, prepay the principal of the Note and
accrued interest in full within sixty (60) days after demand is made by
Beneficiary.
(6) Judgments and Awards. All judgments, decrees and awards for injury
---------------------
or damage to the Mortgaged Property and all awards pursuant to proceedings for
condemnation are hereby assigned in their entirety to Beneficiary which may
apply them to the Indebtedness in such manner as it may elect. Upon the
occurrence of an event of default hereunder, Beneficiary is hereby authorized,
in the name of Grantor, to execute and deliver valid acquittances for and to
appeal from any such award, judgement or decree. If because of any such
judgment, decree or award Beneficiary believes that the payment or performance
of any obligation secured by this Deed of Trust is impaired, Beneficiary may,
without notice, except as required by the terms of the Loan Agreement
(hereinafter defined), declare all of the Indebtedness immediately due and
payable.
6
<PAGE>
(7) Defense of Title. If while this Deed of Trust is in force, the title
----------------
of the Trustee, or the interest of Beneficiary, in the Mortgaged Property or any
part thereof, shall be put into question in any legal or administrative
proceeding, Grantor hereby authorizes Beneficiary, at Grantor's expense, to take
all necessary and proper steps for the defense of such title or interest,
including the employment of counsel, the prosecution or defense of litigation
and the compromise or discharge of claims made against such title or interest.
(8) Additional Indebtedness. If Beneficiary shall expend any money
-----------------------
chargeable to Grantor or subject to reimbursement by Grantor under the terms of
this Deed of Trust or any other agreements executed in connection with it,
Grantor will repay the same to Beneficiary immediately at the place where the
Indebtedness is payable, together with interest thereon at the rate of interest
payable under the Note from and after the date of Beneficiary's payment. The
amount of each payment shall be added to and form a part of the Indebtedness,
and shall be secured by this Deed of Trust and, by suggestion, all rights of the
person or entity receiving such payment.
(9) Maintenance of the Mortgaged Property and Inspection. Grantor will
----------------------------------------------------
keep every part of the Mortgaged Property in first class condition and shall
promptly make all repairs, renewals and replacements necessary to such end.
Grantor will discharge all claims for labor performed and material furnished and
will not suffer any lien of builders, mechanics or materialmen to attach to any
part of the Mortgaged Property. Grantor shall protect every part of the
Mortgaged Property from removal, destruction or damage, and will not do or
suffer to be done any act whereby the value of any part of the Mortgaged
Property will be impaired. Beneficiary and any persons authorized by Beneficiary
shall have the right to enter upon and inspect the Mortgaged Property at all
reasonable times.
(10) Conveyance of Mortgaged Property. If (i) Grantor shall sell, convey,
--------------------------------
lease, exchange or otherwise transfer, voluntarily or involuntarily, all or any
part of the Mortgaged Property or any interest therein (other than items of
personalty which have become obsolete or worn beyond practical use and which
have been replaced by adequate substitutes having a value equal to or greater
than the replaced items when new) or (ii) a controlling interest of the
ownership in Grantor (if Grantor is not an individual) is sold, assigned or
otherwise transferred, voluntarily or involuntarily, to any person or entity
other than an entity or person that is a stockholder in Grantor on the date
hereof or is an officer or director of Grantor on the date hereof, then
Beneficiary may, at its option, accelerate the Note and declare all unpaid
principal and accrued, but unpaid, interest thereon due and payable in full. In
such event, if all sums declared due and payable, then Grantor shall without
further action to be taken by Beneficiary, be deemed in default under this
instrument and Beneficiary may thereupon exercise all rights and remedies,
including foreclosure of the liens herein set forth, of Beneficiary as in
7
<PAGE>
the case of the failure to pay, when due, the Indebtedness. Notwithstanding the
foregoing, Beneficiary may, at its option, consent to any such sale or other
conveyance and condition its consent upon, among other things, the following:
(i) an increase in the rate of interest payable under the Note, (ii) payment of
all assumption, transfer or other fees which may be required by the Beneficiary,
(iii) reimbursement of the Beneficiary for all costs and expenses, including
attorney's fees, incurred in connection therewith, (iv) assumption by the
proposed transferee of all obligations of the Grantor hereunder and of the maker
under the Note without the release of Grantor or such maker, (v) receipt of
evidence, satisfactory to Beneficiary, that the proposed transferee is as
creditworthy and as capable in managing the property covered by this deed of
trust as Grantor and (vi) receipt of evidence, satisfactory to Beneficiary, that
the proposed transfer will not impair the security of the Beneficiary for
repayment of the Indebtedness.
(11) Continuing Liability of Grantor. If the ownership of the Mortgaged
-------------------------------
Property or any part thereof becomes vested in a person other than Grantor, or
in the event a change of ownership of more than fifty percent interest in any
Grantor other than an individual occurs, Beneficiary may, without notice to
Grantor, deal with such successor or successors in interest with reference to
this Deed of Trust and to the Indebtedness in the same manner as with Grantor,
without in any way affecting or discharging Grantor's liability hereunder or
upon the Indebtedness. No sale of the Mortgaged Property and no forbearance on
the part of Beneficiary, and no extension of the time for payment of the
Indebtedness given by Beneficiary shall operate to release, discharge, modify,
change or affect the original liability of Grantor or the liability of any
guarantors or sureties of Grantor, either in whole or in part.
(12) Events of Default. In addition to all other events of default
-----------------
designated herein, Grantor shall be in default hereunder if Grantor shall
default in the prompt payment of the Indebtedness or any installment thereof
when due (whether at the due dates thereof stipulated in the Note or in any
other agreement delivered to Beneficiary in connection with the Indebtedness or
by acceleration or otherwise) or shall fail to keep or perform any of the
covenants or agreements contained herein or in any of the documents executed in
connection with or as security for the Note, or if Beneficiary discovers that
any statement, representation or warranty in the Note, this Deed of Trust or any
writing delivered to Beneficiary in connection with the Indebtedness is false,
misleading or erroneous in any material respect; or if Grantor, or any person
liable for the Indebtedness including any guarantor of or surety for the
performance of any obligation hereunder, files a voluntary petition in
bankruptcy, makes an assignment for the benefit of any creditor, is adjudicated
a bankrupt or insolvent, admits in writing its inability to pay its debts
generally as they become due, applies for or consents to the appointment of a
receiver, trustee, or liquidator for all or a substantial part of its assets,
takes advantage of or seeks any relief under any bankruptcy, reorganization,
debtor's relief or other insolvency law now or hereafter existing, files an
answer admitting the material allegations of, or
8
<PAGE>
consenting to, or defaulting in, a petition in any bankruptcy, reorganization or
other insolvency proceedings, institutes or voluntarily is or becomes a party to
any other judicial proceedings intended to effect a discharge of its debts, in
whole or in part, or a postponement of the maturity or the collection thereof,
or a suspension of any of the rights or powers of Beneficiary granted in the
Note, this Deed of Trust or in any other instrument evidencing or securing the
Indebtedness, or if an order, judgment or decree shall be entered by any court
of competent jurisdiction appointing a receiver, trustee or liquidator for
Grantor (or any party comprising Grantor) or of all or any substantial part of
Grantor's assets, or if Grantor (or any party comprising Grantor) shall fail to
satisfy any money judgment against Grantor (or any party comprising Grantor) at
least ten (10) days prior to the date on which such assets may be sold to
satisfy such judgment, or if Grantor shall fail to have discharged within a
period of ten (10) days after the commencement thereof any attachment,
sequestration, or similar proceedings against any of Grantor's assets, or if the
Mortgaged Property is placed under control or in the custody of any court, or if
Grantor abandons any of the Mortgaged Property or if Grantor's existence
terminates, or if an Event of Default occurs under the Loan Agreement
(hereinafter defined). Upon the occurrence of any default, Beneficiary, at its
option, without notice, may pursue any rights and remedies it may have hereunder
or at law or in equity, and Beneficiary may, without limitation, declare the
unpaid principal balance of the Note and all accrued, unpaid interest thereon
immediately due and payable, subject to any applicable notice and cure periods
contained in the Loan Agreement with respect to such an event of default,
together with all other sums due and owing under the loan documents.
(13) Performance and Release. If Grantor shall perform faithfully each of
-----------------------
the covenants and agreements herein contained, then this conveyance shall become
null and void and shall be released at Grantor's expense; otherwise it shall
remain in full force and effect. No release of this Deed of Trust or of the
lien, security interest or assignment created and evidenced hereby shall be
valid unless executed by Beneficiary.
(14) Foreclosure Sale. If Grantor shall default hereunder, Grantor hereby
----------------
authorizes and empowers the Trustee, upon request by Beneficiary, to sell all or
any portion of the Mortgaged Property at public sale to the highest bidder for
cash at the specific location prescribed by Section 51.002 of the Texas Property
Code at the county courthouse of the county in Texas in which such Mortgaged
Property, or any part thereof, is situated as herein described, between the
hours of 10:00 o'clock A.M. and 4:00 o'clock P.M. on the first Tuesday of any
month, after giving notice of the time, place and terms of said sale and of the
property to be sold. The sale shall begin at the time stated in the notice or
not later than three hours after that time. Such notice shall be given and sale
held upon the following terms and conditions:
(a) Notice of the proposed sale shall be given by posting written
notice thereof at least twenty-one (21) days preceding the date of sale at the
9
<PAGE>
courthouse door, and by filing a copy of such notice in the Office of the
County Clerk, of the county in which the sale is to be made, and if the
property to be sold is situated in more than one county, one notice shall
be posted at the courthouse door and filed with the County Clerk of each
county in which the property to be sold is located. In addition,
Beneficiary shall, at least twenty-one (21) days preceding the date of
sale, serve written notice of the proposed sale by certified mail on each
debtor obligated to pay the Indebtedness according to the records of
Beneficiary. Service of such notice shall be completed upon deposit of the
notice, enclosed in a postpaid wrapper, addressed to such debtor at the
most recent address shown by the records of Beneficiary, in a post office
or official depository under the care and custody of the United States
Postal Service. The affidavit of any person having knowledge of the facts
to the effect that such service was completed shall be prima facie evidence
of the fact of service. Any notice that is required or permitted to be
given to Grantor may be addressed to Grantor at Grantor's address as stated
above. Any notice that is to be given by certified mail to any other debtor
may, if no address for such other debtor is shown by the records of
Beneficiary, be addressed to such other debtor at the address of Grantor as
it is shown on the records of Beneficiary.
(d) The provisions hereof with respect to posting and giving notices
of sale, and with respect to conducting a sale or sales pursuant to the
power of sale contained herein, are intended to comply with the provisions
of Section 51.002 of the Texas Property Code in effect on the date of this
Deed of Trust. In the event the requirement for any notice under Section
51.002 or the provisions of Section 51.002 prescribing the manner of giving
any such notice or the manner of conducting sales is eliminated or modified
by amendment to Section 51.002 or adoption of any statute superseding
Section 51.002, the requirement in this Deed of Trust for that notice, or
the provisions of this Deed of Trust prescribing the manner of giving
notice or the manner of conducting sales, shall be deemed stricken from or
modified in this instrument to conform with such amendment or superseding
statute, effective as of its effective date. The manner herein prescribed
for serving or giving any notice, other than the notice to be posted by the
Trustee, shall not be deemed exclusive and such notice or notices may be
given in any other manner which may be permitted by applicable law.
(c) Grantor hereby authorizes and empowers the Trustee to sell all or
any portion of the Mortgaged Property together or in lots or parcels, as
the Trustee may deem appropriate, and to execute and deliver to the
purchaser or purchasers of such property good and sufficient deeds of
conveyance of fee simple title with covenants of general warranty made on
behalf of the Grantor. In no event shall the Trustee be required to
exhibit, present or display at any such sale any of the personally
described herein to be sold at the sale. The Trustee making the sale shall
receive the proceeds and apply
10
<PAGE>
them as follows: (i) first, he shall pay the reasonable expenses of
executing this trust, including a reasonable Trustee's fee or commission;
(ii) second, he shall pay the Indebtedness, so far as may be possible,
discharging first that portion of the Indebtedness arising under the
covenants and agreements herein contained not evidenced by the Note and
then that portion of the Indebtedness evidenced by the Note; and (iii)
third, he shall pay the residue, if any, to the person or persons legally
entitled thereto. Payment of the purchase price to the Trustee shall
satisfy the obligation of the purchaser at such sale, and such purchaser
shall not be bound to look to the application thereof. A sale or sales made
by the Trustee of less than the whole of the Mortgaged Property shall not
exhaust the power of sale herein granted, and the Trustee is specifically
empowered to make successive sale or sales under such power until all of
the Mortgaged Property shall be sold. If the proceeds of a sale of less
than the whole of the Mortgaged Property shall be less than the aggregate
of the Indebtedness and the expenses of executing this trust, this Deed of
Trust and the lien, security interest and assignment hereof shall remain in
full force and effect as to the unsold portion of the Mortgaged Property as
though no sale or sales had been made; provided, however, that Grantor
shall never have any right to require the sale or sales of less than the
whole of the Mortgaged Property, but Beneficiary shall have the right, at
its sole election, to request the Trustee to sell less than the whole of
the Mortgaged Property.
(d) If default is made hereunder, the holder of the Indebtedness on
which a payment or payments are delinquent shall have the option to proceed
with foreclosure in satisfaction of such delinquent payment or payments
through either judicial proceedings or by directing the Trustee to proceed
as if under a full foreclosure, conducting the sale as herein provided
without declaring the entire Indebtedness due, and if the sale is made
because of default in payment of an installment, or any part of an
installment, such sale may be made subject to the unmatured balance of the
Note and the other Indebtedness, and it is agreed that such sale, if so
made, shall not in any manner affect the unmatured part of any of the
Indebtedness. As to such unmatured part, this Deed of Trust shall remain in
full force and effect as though no sale had been made under the provisions
of this paragraph. Several sales may be made hereunder without exhausting
the right of sale for any unmatured part of the Indebtedness.
(e) It is agreed that in the event a foreclosure hereunder shall be
commenced by the Trustee, Beneficiary may at any time before the sale of
the Mortgaged Property direct the said Trustee to abandon the sale, and may
then institute suit for the collection of said Note and for the foreclosure
of this Deed of Trust lien; it is further agreed that, if Beneficiary
should institute a suit for the collection thereof and foreclosure of this
Deed of Trust lien, he may at any time before the entry of a final judgment
in said suit
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dismiss the same and require the Trustee, his substitute or successor to
sell the Mortgaged Property in accordance with the provisions of this Deed
of Trust.
(15) Substitute Trustee. If the Trustee shall die or become disqualified
------------------
from acting in the execution of this trust, or shall fail or refuse to execute
this trust when requested by Beneficiary, or if for any reason Beneficiary shall
prefer to appoint a substitute trustee to act instead of the Trustee named,
Beneficiary shall have full power to appoint a substitute trustee by written
instrument and, if necesary, several substitute trustees in succession, who
shall succeed to all the estate, rights, powers and duties of the original
Trustee named herein. Such appointment may be executed by any authorized agent
of Beneficiary. If Beneficiary is a corporation and if such appointment is
executed in its behalf by any officer of such corporation, the appointment shall
be conclusively presumed to be executed with authority, and shall be valid and
sufficient without proof of any action by the board of director or any superior
officer of the corporation.
(16) Recitals in Trustee's Deed. Grantor agrees that any and all
--------------------------
statements of fact or other recitals made in any deed of conveyance given by the
Trustee with respect to the identity of Beneficiary, the occurrence or existence
of any default hereunder, the acceleration of the maturity of any of the
Indebtedness, the requests to sell, the notice of sale, the giving of notice to
all debtors legally entitled thereto, the time, place, terms and manner of sale
and receipt, distribution and application of the money realized therefrom, or
the proper appointment of a substitute trustee, and, without being limited to
the foregoing, with respect to any other act or thing having been duly performed
by the Beneficiary or by the Trustee hereunder, shall be taken by all courts of
law or equity as prima facie evidence that the statements or recitals state
facts and are without further question to be accepted as true and correct, and
Grantor hereby ratifies and confirms every act that the Trustee or any
substitute trustee may lawfully do in the premises by virtue hereof.
(17) Possession by Purchaser. The purchaser at any trustee's or
-----------------------
foreclosure sale hereunder may disaffirm any easement granted, or rental, lease
or other contract made in violation of any provision of this Deed of Trust, and
may take immediate possession of the Mortgaged Property free from, and despite
the terms of, such grant of easement, or rental, lease or other contract.
(18) Purchase by Beneficiary. Beneficiary may bid and become the purchaser
-----------------------
of all or any part of the Mortgaged Property at any trustee's sale or
foreclosure sale hereunder, and Beneficiary may have the amount for which the
Mortgaged Property is sold credited on the debt then owing.
(19) Other Remedies of Beneficiary. Upon the occurrence of a default under
-----------------------------
the terms of this Deed of Trust, the Trustee or the Beneficiary shall have the
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right and power to proceed by a suit in equity or at law for either (a) the
specific performance of any covenant or agreement herein contained, or (b) in
aid of the execution of any power herein granted, or (c) for a foreclosure
hereunder or the sale of the Mortgaged Property under the judgment or decree of
any court of competent jurisdiction, or (d) for the appointment of a receiver
pending any foreclosure hereunder or the sale of the Mortgaged Property under
the order of a court of competent jurisdiction or under executory or other legal
process or (e) for the enforcement of any other appropriate legal or equitable
remedy. Grantor agrees to the full extent that it lawfully may do so, that
whenever a default occurs hereunder and shall not have been remedied, the
Beneficiary shall have the right and power to enter into and upon and take
possession of all or any part of the Mortgaged Property in the possession of the
Grantor and may exclude the Grantor and all persons claiming under the Grantor
and its or their agents or servants from such property. The Beneficiary may use,
administer, manage, operate and control the Mortgaged Property and conduct the
business thereof to the same extent as the Grantor might at the time do, and may
exercise all rights and powers of the Grantor in the name, place and stead of
the Grantor as the Beneficiary shall deem best. In the exercise of any of the
foregoing rights and powers, Beneficiary shall not be liable to Grantor for any
loss or damage thereby sustained unless due solely to the willful misconduct or
gross negligence of Beneficiary.
(20) Additional Collateral; Extensions and Renewals. The lien, security
----------------------------------------------
interest and other rights granted hereby shall not affect or be affected by any
other security taken for the Indebtedness. The taking of additional security, or
the extension, renewal, modification (including an increase) or rearrangement of
the Indebtedness shall not release or impair the lien, security interest and
other rights granted hereby, or affect the liability of any endorser, guarantor
or surety, or improve the right of any permitted junior lienholder. This Deed of
Trust as well as any instrument given to secure any renewal, extension,
modification or rearrangement of the Indebtedness shall be and remain a first
and prior lien on all of the Mortgaged Property not expressly released until the
Indebtedness is completely paid.
(21) Waiver of Other Laws. To the extent that Grantor may lawfully do so,
--------------------
Grantor agrees that Grantor shall not assert (and hereby expressly waives) any
right under any statute or rule of law pertaining to the marshalling of assets,
the exemption of homestead, the administration of estates of decedents or other
matters whatever to defeat, reduce or affect the right of Beneficiary under the
terms of this Deed of Trust to sell the Mortgaged Property for the collection of
the Indebtedness or the right of Beneficiary under the terms of this Deed of
Trust to the payment of the Indebtedness out of the proceeds of sale of the
Mortgaged Property in preference to every other person and claimant after
reasonable expenses of such sale have first been deducted.
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(22) Assignment of Rents. All of the rents and royalties derived from the
-------------------
Mortgaged Property or arising from the use of enjoyment of any portion thereof
or from any lease or agreement pertaining thereto are hereby absolutely and
unconditionally assigned, transferred, conveyed and set over to Beneficiary to
be applied by Beneficiary in payment of the Indebtedness. Prior to the
occurrence of any default hereunder, Grantor shall collect and receive all such
rents and other income as trustee for the benefit of Beneficiary and Grantor.
Grantor shall apply the funds so collected first to the payment of the principal
and interest and all other sums payable on the Note and all other indebtedness
secured hereby, and so long as no default hereunder has occurred, the balance
shall be distributed to the account of Grantor. Grantor will not (a) execute an
assignment of any its right, title or interest in such rents and other income,
or (b) except where the lessee is in default thereunder, terminate or consent to
the cancellation or surrender of any lease of the Mortgaged Property now or
hereafter existing having an unexpired term of one year or more, except that any
lease may be cancelled provided that promptly after such cancellation or
surrender a new lease is entered into with a new lessee having a credit
standing, in the judgment of Beneficiary, at least equivalent to that of the
lessee whose lease was cancelled, on substantially the same terms as the
terminated or cancelled lease; or (c) modify and amount of rent payable under
any lease or accept prepayments of any installments of rent becoming due under
any leases in excess of one month, except prepayments in the nature of security
for the performance of the lessee thereunder; or (d) in any other manner impair
the value of the Mortgaged Property or the security of this Deed of Trust.
Grantor will not execute any lease of all or any substantial portion of the
Mortgaged Property except for actual occupancy by the lessee thereunder, and
will at all times promptly and faithfully perform, or cause to be performed each
covenant, condition and agreement contained in each lease of the Mortgaged
Property now or hereafter existing on the part of lessor thereunder to be kept
and performed. Grantor shall furnish to Beneficiary, within ten days after a
request by Beneficiary to do so, a written statement containing the names of all
lessees of the Mortgaged Property, the terms of their respective leases, the
space occupied and the rental payable thereunder.
(23) Subordinate Mortgages. Grantor will not, without the prior written
---------------------
consent of Beneficiary, execute or deliver any pledge, security agreement,
mortgage or deed of trust covering all or any portion of the Mortgaged Property
(hereinafter called "Subordinate Mortgage") other than a subordinate deed of
trust in favor of the Small Business Administration ("S.B.A.") given by Grantor
to secure a loan by the S.B.A. to Grantor for a portion of the costs associated
with constructing the Improvements (as defined in the Loan Agreement. In the
event of consent by Beneficiary to a Subordinate Mortgage, or in the event the
foregoing prohibition is determined by a court of competent jurisdiction to be
unenforceable under provisions of then applicable law, Grantor will execute or
deliver any Subordinate Mortgage unless there shall have been delivered to
Beneficiary not less
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than ten (10) days prior to the date thereof a copy of the instrument creating
the Subordinate Mortgage which shall contain covenants to the effect that:
(a) The Subordinate Mortgage is in all respects unconditionally
subject and subordinate to the lien, security interest and assignment
evidenced by this Deed of Trust and each term and provision hereof.
(b) If any action or proceeding shall be instituted to foreclose
the Subordinate Mortgage (regardless of whether by judicial proceeding or
pursuant to the power of sale contained therein), no tenant of any portion
of the Mortgaged Property will be named as a party defendant nor will any
action be taken with respect to the Mortgaged Property which would
terminate any occupancy or tenancy of the Mortgaged Property without the
prior written consent of Beneficiary.
(c) The rents and other income from the Mortgaged Property, if
collected through a receiver or by the holder of the Subordinate Mortgage,
shall be applied first to the obligation secured by this Deed of Trust and
then to the payment of maintenance, and operating charges, taxes,
assessments and disbursements incurred in connection with the ownership,
operation and maintenance of the Mortgaged Property.
(d) If any action or proceeding shall be brought to foreclose the
Subordinate Mortgage, written notice of the commencement thereof will be
given to Beneficiary at the same time as such action or proceeding is
commenced.
(24) Subrogation. To the extent that proceeds of the Note are used to pay
-----------
any outstanding lien, charge or encumbrance against or affecting Mortgaged
Property, such proceeds have been advanced by Beneficiary at Grantor's request,
and Beneficiary shall be subrogated to all rights, interests and liens owned or
held by any owner or holder of such outstanding liens, charges and encumbrances,
regardless or whether such liens, charges and encumbrances are released of
record.
(25) Limitation of Interest. Reference is hereby made to the provisions of
----------------------
the Note limiting interest contracted for, charged or received by Beneficiary
hereunder, or otherwise, to the maximum lawful rate.
(26) Non-Waiver and Partial Invalidity. No waiver of any default on the
---------------------------------
part of Grantor or breach of any of the provisions of this Deed of Trust or of
any other instrument executed in connection with the Indebtedness shall be
considered a waiver of any other or subsequent defaults or breach. No delay or
omission in exercising or enforcing the rights and powers herein granted shall
be construed as a waiver of such rights and powers. No exercise or enforcement
of any rights or powers hereunder shall be held to exhaust such rights and
powers, and every such
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right and power may be exercised from time to time. If any provision of this
Deed of Trust is held to be illegal, or unenforceable under present or future
laws while this Deed of Trust is in effect, the legality, validity and
enforceability of the remaining provisions of this Deed of Trust shall not be
affected thereby. If any of the liens, security interests, assignments of rents
or the other rights created by this Deed of Trust shall be invalid or
enforceable, the unsecured portion of the Indebtedness shall be completely paid
prior to the payment of the remaining and secured portion, and all payments made
on account of the Indebtedness shall be considered to have been paid on and
applied first to the complete payment of the unsecured portion of the
Indebtedness.
(27) Tenancy at Will. In the event of a trustee's sale hereunder and if
---------------
at the time of such sale the Grantor occupies the portion of the Mortgaged
Property so sold, Grantor shall immediately become the tenant of the purchaser
at such sale. Such tenancy shall be from day to day terminable at the will of
either tenant or landlord and for reasonable rental per day based on the value
of the portion of the Mortgaged Property so occupied, such rental to be due and
payable daily to the purchaser. An action of forcible entry and detainer shall
lie if the tenant holds over after a demand in writing for possession of such
Mortgaged Property.
(28) Security Agreement and Financing Statement. With respect to any
------------------------------------------
portion of the Mortgaged Property which constitutes personal property or
fixtures governed by the Uniform Commercial Code of the State of Texas
(hereinafter called the "Code") and all leases and contract rights affecting the
Mortgaged Property and any proceeds from any of the above, this Deed of Trust
shall constitute a security agreement between Grantor, as the Debtor, and
Beneficiary, as the Secured Party. Grantor hereby grants to Beneficiary a
security interest in such portion of the Mortgaged Property and all leases and
accounts affecting the Mortgaged Property and any proceeds from the Mortgaged
Property. Cumulative of all other rights of Beneficiary hereunder, Beneficiary
shall have all of the rights and remedies conferred upon secured parties by the
Code. Grantor will execute and deliver to Beneficiary all financing statements
that may from time to time be required by Beneficiary to establish and maintain
the validity and priority of the security interest of Beneficiary or any
modification thereof, and Grantor will pay all costs and expenses of any
searches reasonably required by Beneficiary. It is expressly agreed that if upon
default Beneficiary should proceed to dispose of such property in accordance
with the provisions of the Code, then ten (10) days notice by Beneficiary to
Grantor shall be deemed to be reasonable notice under any provision of the Code
requiring such notice; provided, however, that Beneficiary may, at its option,
dispose of such property in accordance with Beneficiary's rights and remedies
with respect to the real property described herein pursuant to the provisions of
this Deed of Trust, in lieu of proceeding under the Code. Grantor shall give
advance notice in writing to Beneficiary of any proposed change in Grantor's
name, identity or corporate structure and will execute and deliver to
Beneficiary prior to or concurrently with the occurrence of any such change, all
additional
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<PAGE>
financing statements that Beneficiary may require to establish and maintain the
validity and priority of Beneficiary's security interest with respect to any
Mortgaged Property described or referred to herein. Certain of the items of
Mortgaged Property described herein are goods that are or are to become fixtures
related to the real estate described herein, and it is intended that, as to
those goods, this deed of Trust shall be effective as a financing statement
filed as a fixture filing from the date of its filing for record in the Real
Estate Records of the country in which the Mortgaged Property is situated. The
record owner of the Mortgaged Property is Grantor. The mailing addresses of the
Grantor, as Debtor, and Beneficiary, as Secured Party, are as stated above.
(29) Binding Effect. The covenants herein contained shall be covenants
--------------
running with the land and shall be binding upon and the benefits and advantages
of this Deed of Trust shall inure to, the respective heirs, executors,
administrators, personal representatives, successors and assigns of the parties
hereto, and any substitute trustee. The duties, covenants, conditions,
obligations and warranties of Grantor in this Deed of Trust shall be joint and
several obligations of Grantor and each Grantor, if more than one, and Grantor's
heirs, personal representatives, successors and assigns. Each party who executes
this Deed of Trust (other than the Beneficiary) and each subsequent owner of the
Mortgaged Property or any part thereof, covenants and agrees that it will
perform or cause to be performed each condition, term, provision and covenant
of this Deed of Trust. If Grantor is a corporation, general partnership, limited
partnership, joint venture, trust, or other entity, the execution and delivery
by Grantor of this Deed of Trust, the Note, and each and every other instrument
executed by Grantor in connection with the loan evidenced by the Note and the
performance by Grantor thereunder, are within Grantor's powers and have been
duly authorized by Grantor's Board of Directors, shareholders, partners,
venturers, trustees, or other necessary parties, as the case may be, and all
other requisite action for such authorization has been taken.
(30) Meaning of Terms. Whenever used in this Deed of Trust, the singular
----------------
number shall include the plural and the singular, and the use of any gender
shall be applicable to all genders. If this Deed of Trust is executed by more
than one party as Grantor, each such party shall be jointly and severally liable
for the obligations of Grantor under this Deed of Trust. All of the covenants
and agreements herein undertaken to be performed by and the rights conferred
upon Beneficiary and Grantor shall be binding upon and inure to the benefit of
not only said parties respectively but also their representative heirs,
executors, administrators, grantees, successors and assigns.
(31) Titles; Construction of Agreements. All section, subsection or
----------------------------------
paragraph titles contained in this Deed of Trust are for reference purpose only
and this deed of Trust shall be construed without reference to such titles.
This Deed of Trust may be construed as a mortgage, conveyance, assignment,
security
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agreement, pledge, financing statement, contact or any one or more of them in
order fully to effectuate the lien hereof.
(32) Environmental Compliance. Grantor represents, warrants and covenants
------------------------
that the Mortgaged Property and Grantor and Grantor's use of the Mortgaged
Property now complies and in the future will at all times comply with all laws,
statutes, ordinances, rules and regulations ("Environmental Laws") of any
governmental, quasi-governmental or regulatory authority which relate to the
transportation, storage, placement, handling, treatment, discharge, generation,
production, removal or disposal (collectively, "Treatment") of any waste,
petroleum product (including, without limitation, gasoline and diesel fuel),
waste products, poly-chlorinated biphenyls, asbestos, hazardous materials,
and/or any other substance, the Treatment of which is regulated by any laws,
rules or regulations (collectively, "Waste"), or which otherwise relate to
public health or the environment, including without limitation, the
Comprehensive Environmental Response, compensation, and Liability Act of 1980,
as amended ("CERCLA"), the Resource Conservation and Recovery Act of 1976, as
amended ("RCRA"), the Texas Water Code and the Texas Solid Waste Disposal Act,
as amended. Without limiting the foregoing, Grantor specifically represents and
warrants that there are no underground storage tanks for gasoline, diesel fuel,
other petroleum products or of any other type on or installed in the Mortgaged
Property and Grantor covenants that Grantor will not install any such tanks in
the Mortgaged Property prior to the release of this Deed of Trust.
Grantor has taken all necessary steps to determine, has determined and
represents and warrants to Purchaser that no Spill of Waste has occurred on the
Mortgaged Property and that no "hazardous substance" or "solid waste" have been
disposed of or otherwise released on or to the Mortgaged Property nor will be
disposed of or otherwise released on or to the Mortgaged Property by Grantor, or
Grantor's agents and employees. The terms "hazardous substance(s)" and "release"
(or "released") shall have the meaning specified in CERCLA, and the terms "solid
waste" and "disposal" (or "dispose) shall have the meaning specified in the
RCRA, provided however, to the extent that the laws of the State of Texas
establish an meaning for hazardous substance(s), hazardous waste, release, solid
waste or disposal which is broader than that specified in either CERCLA or RCRA,
such broader meaning shall apply.
Immediately upon receipt of any Notice, as defined below, from any party,
Grantor will deliver to Beneficiary an accurate copy of any written Notice and
an accurate report of any non-written Notice. The term "Notice" means the actual
knowledge of Grantor of, or the receipt by Grantor, or Grantor's agents, tenants
or employees, of any notice or report of any of the following:
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(1) Any suit, proceeding, investigation, order, consent order, injunction,
writ, award, or action concerning the Treatment of any Waste in, on or
affecting the Mortgaged Property;
(2) Any spill, contamination, discharge, leakage, release or escape of any
Waste in, on or affecting the Mortgaged Property, whether sudden or
gradual, accidental or anticipated, or of any other nature (a
"Spill");
(3) Any dispute relating to Grantor's or any other person's Treatment of
any Waste or any Spill in, on or affecting the Mortgaged Property;
(4) Any claim, by or against any insurer concerning any Waste or Spill in,
on or affecting the Mortgaged Property;
(5) Any recommendation or requirement of any governmental or regulatory
authority, or insurer concerning any Treatment of Waste or a Spill in,
or affecting the Mortgaged Property;
(6) Any legal requirement or deficiency concerning the Treatment of Waste
or any Spill in, on or affecting the Mortgaged Property; or
(7) Any tenant, prior owner, concessionaire, manager, or other person or
entity occupying or using the Mortgaged Property, or any part thereof,
having engaged in or engaging in the Treatment of any Waste in, on or
affecting the Mortgaged Property.
If (a) Grantor has caused, suffered, or permitted, directly or indirectly,
any Spill in, on or affecting the Mortgaged Property, or (b) any Spill has
occurred on the Mortgaged Property, then Grantor will immediately take all of
the following actions:
(1) Promptly notify Beneficiary in writing, upon Grantor's acquiring
knowledge of such Spill with a full description thereof;
(2) Take all steps necessary or desirable in Beneficiary's reasonable
opinion, to clean up any Spill and any contamination related to the
Spill;
(3) Promptly comply with any Environmental Laws relating to the Treatment
of the Spill and provide Beneficiary with satisfactory evidence of
compliance;
(4) Fully restore the Mortgaged Property and, if necessary, any other
property damaged by the Spill, to the condition of the Mortgaged
Property and such other property prior to the Spill;
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<PAGE>
(5) Allow Beneficiary to monitor and inspect all cleanup and restoration
related to the Spill; and
(6) Provide Beneficiary, within thirty (30) days after demand by
Beneficiary, with a bond, letter of credit or similar financial
assurance, satisfactory to Beneficiary, demonstrating that the
necessary funds are available to pay the cost of Treatment of the
Spill and the cost to comply with all related Environmental Laws and
to discharge any associated assessments or charges, private or public,
which may be established on the Mortgaged Property.
Beneficiary (through its officers, employees and agents) at any time and
from time to time, either prior to or after default in this Deed of Trust or
under the Note, may employ persons (the "Site Reviewers") to conduct
environmental site assessments ("Site Assessments") on the Mortgaged Property to
determine whether or not there exists on the Mortgaged Property any
environmental condition which might result in any liability, cost or expense to
the owner, occupier or operator of the Mortgaged Property arising under the
Environmental Laws relating to Waste; provided, however, that Beneficiary shall
not conduct more than one (1) Site Assessment per calendar year, unless (i) a
Site Assessment conducted previously that year discloses the existence of an
environmental condition which might result in any liability, cost or expense
described above and because of the existence of such environmental condition
Beneficiary determines, in its sole discretion, that further Site Assessments
are necessary or desirable, or (ii) if in the same calendar year, but subsequent
to Beneficiary's performance of a Site Assessment, an event occurs on the
Mortgaged Property that Beneficiary reasonably determines might create or cause
an environmental condition which might result in any liability, cost or expense
described above and because of the occurrence of such event, Beneficiary
determines, in its sole discretion, that further Site Assessments are necessary
or desirable. The Site Assessments may be performed at any time or times, upon
reasonable notice, and under reasonable conditions established by Beneficiary.
The Site Reviewers are authorized to enter upon the Mortgaged Property and to
perform above and below-the-ground testing (including, without limitation,
taking of core samples) to determine environmental damage or presence of Waste
in, on or under the Mortgaged Property and such other tests as may be necessary
or desirable, in the opinion of the Site Reviewers, to conduct Site Assessments.
Grantor will supply to the Site Reviewers such historical and operational
information available to Grantor regarding the Mortgaged Property as may be
requested by the Site Reviewers to facilitate the Site Assessments and will make
available for meetings with the Site Reviewers appropriate personnel having
knowledge of such matters. The cost of performing such Site Assessments will be
paid by Grantor upon demand of Beneficiary, which, if not paid, will be added to
the Indebtedness secured by this Deed of Trust.
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Whether or not any Site Assessments are conducted, and regardless of
whether or not a default occurs under this Deed of Trust or under the Note and
regardless of whether any remedies in respect of the Mortgaged Property are
exercised by Beneficiary, Grantor will defend, indemnify and hold harmless
Beneficiary and Trustee from any and all liabilities (including strict
liability), actions, claims, demands, causes of action, losses, penalties,
damages, costs, expenses (including, without limitation, attorneys' fees and
expenses, and court costs), suits, costs of any settlement or judgement of any
and every kind or nature, fixed or contingent, asserted against or incurred by
Beneficiary or Trustee at any time, and from time to time whatsoever (whether
before or after the release or foreclosure of this Deed of Trust) arising out of
(a) the breach of any representation or warranty of Grantor set forth in this
section; (b) the failure of Grantor to perform any obligation herein required to
be performed by Grantor; (c) Grantor's ownership, construction, occupancy,
operation, use and maintenance of the Mortgaged Property; (d) any Spill; (e) the
presence on or under, or the escape, seepage, leakage, spillage, discharge,
emission or release from the Mortgaged Property of any Waste; (f) the
environmental condition of the Mortgaged Property; or (g) the applicability of
any Environmental Laws relating to Waste (including, without limitation, CERCLA
or any federal, state or local so-called "Superfund" or "Superlien" law,
statute, ordinance, code, rule, regulation, order or decree), regardless of
whether or not caused by or within the control of Grantor, Beneficiary or
Trustee. The representations, covenants, warranties and indemnifications herein
contained shall survive the release and/or judicial or non-judicial foreclosure
(or transfer in lieu therof) of the lien of this Deed of Trust. For the purpose
of this paragraph and not withstanding any other provision contained herein to
the contrary, term "Grantor" shall refer not only to the Grantor named herein,
but also to all other persons who may hereafter assume the Note and the
obligations of this Deed of Trust.
(33) Use of Proceeds. Grantor expressly represents that a portion of the
---------------
Indebtedness, the payment of which is hereby secured, represents funds advanced
by Beneficiary at the special instance and request of Grantor and used in
payment of a portion of the purchase price of the Mortgaged Property, and
Grantor hereby expressly confesses, recognizes and acknowledges a vendor's lien
on said property as security therefor, and this Deed of Trust is given as
further and additional security, and as an additional lien securing the payment
of the Indebtedness.
A portion of the Indebtedness, the payment of which is secured hereby, is
given for, and represents cash to be advanced for materials and labor for
construction of certain improvements upon the Mortgaged Property in accordance
with the Loan Agreement (the "Loan Agreement") of even date herewith between
Beneficiary and Grantor, reference to which is hereby made for the terms and
provisions thereof and the rights of Beneficiary to accelerate the Indebtedness
and to exercise certain remedies, including foreclosure of the liens herein
described, upon certain events of default as therein set forth. In the event of
a conflict
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between the terms and provisions of this instrument and the Loan Agreement, the
Loan Agreement shall govern.
In addition to the events of default described in this Deed of Trust, the
occurrence of any of the following shall constitute an event of default under
this Deed of Trust: (a) the discontinuance of the construction of the
Improvements to such an extent that Beneficiary deems it unlikely they can be
completed by the maturity date of the Note; (b) the material damage of the
Improvements by fire or other casualty; (c) the failure by Grantor to comply
with or observe any of the obligations of Grantor under all construction
contracts executed by Grantor for the construction of the Improvements; or (d)
the occurrence of any other event resulting in Beneficiary deeming itself
insecure, either because the prospect of payment of the Note becomes impaired,
or the prospect of performance of any agreements executed in connection with the
Indebtedness becomes impaired. Upon the occurrence of any of the foregoing
events of default Beneficiary shall have, in addition to any other rights or
remedies available to it, the right to declare the Note secured hereby to be
immediately due and payable without presentment, protest or notice of any kind.
Beneficiary also may, at its option, enter into and upon the Mortgaged Property
and perform and cause to be performed and furnished any or all labor or work and
materials it deems necessary or desirable for the completion of the Improvements
and their protection and to this end do any act and enter into any contract and
incur such costs therefor as it deems proper for such purposes and to pay
therefor with all or any part of the unexpended sums of the loan secured herby
then remaining in the hands of Beneficiary and any such sums so expended shall
de deemed a disbursement of the loan to Grantor and secured under the terms and
provisions of this Deed of Trust, and if sufficient moneys be not available from
the proceeds of the loan, Beneficiary may advance the same, and Grantor promises
to pay to Beneficiary, upon demand or its order, the full amounts so advanced
with interest at the stated rate of the Note. All such indebtedness under this
paragraph shall be secured by this Deed of Trust in like manner as the Note
secured hereby and the obligations described therein. Nothing herein shall be
construed as imposing any obligation upon Beneficiary to take any such action or
make any such action or make any such advances.
EXECUTED as of the 5th day of March, 1993.
TRAVIS BOATS & MOTORS, INC.
By: /s/ Mark Walton
-------------------------------------
Printed Name: Mark Walton
---------------------------
Title: President
----------------------------------
22
<PAGE>
STATE OF TEXAS (S)
COUNTY OF BEXAR (S)
This instrument was acknowledged before me on March 5, 1993, by Mark
-------- ----
Walton, President of TRAVIS BOATS & MOTORS, INC., a Texas corporation, on behalf
- ------ ---------
of said corporation.
[MICHAEL JONES'S SEAL] /s/ Michael Jones MICHAEL JONES
--------------------------------------
Notary Public, State of Texas
Name and Mailing Address AFTER RECORDING
---------------
of Trustee: RETURN TO BENEFICIARY:
NationsBank of Texas, N.A. NationsBank of Texas, N.A.
NationsBank Plaza, 51st Floor 300 Convent St.
901 Main Street P.O. Box 300
Dallas, Texas 75202 San Antonio, Texas 78291-0300
Attn: Real Estate Loan Administration
23
<PAGE>
EXHIBIT A
LAND DESCRIPTION
-----------------
A 3.423 ACRE TRACT OR PARCEL OF LAND OUT OF AND PART OF THE HENRY RHODES SURVEY,
ABSTRACT NO. 522, SITUATED IN WILLIAMSON COUNTY, TEXAS, BEING LOT 2-A, BLOCK B
OF THE AMENDED PLAT OF LOTS 1 AND 2, BLOCK B, TRESS SONESTA SUBDIVISION BLOCK A
AND B, A SUBDIVISION OF RECORD IN CABINET I, SLIDES 385-386 OF THE PLAT RECORDS
OF WILLIAMSON COUNTY, TEXAS, LESS AND EXCEPT THAT PORTION OF SAID LOT 2-A
CONVEYED TO THE STATE OF TEXAS FOR RIGHT-OF-WAY PURPOSES BY DEED OF RECORD IN
VOLUME 1951, PAGE 210 OF THE REAL PROPERTY RECORDS OF WILLIAMSON COUNTY, TEXAS,
THE SAID 3.423 ACRES BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS AS
FOLLOWS:
BEGINNING at a 1/2 inch iron rod found in the southerly right-of-way line of
Hunters Chase Drive (90 foot R.O.W.) for the most northeasterly corner of Lot
1-A of said Amended Plat, same being the most northerly, northwest corner of the
said Lot2-A and the tract herein described;
THENCE, N77 degrees 19'11"E, along the southerly line of said Hunters chase
Drive, same being the north line of the said Lot 2-A, a distance of 70.00 feet
to a punch hole chiseled in a concrete drainage structure for the most
northeasterly corner of the said Lot 2-A, same being the northwest corner of Lot
3 of Tress Sonesta Subdivision, Blocks A and B, a subdivision of record in
Cabinet G, Slides 380 through 383 of the said Plat Records;
THENCE, leaving the south line of said Hunters Chase Drive, along the common
line between the said Lot 2-A and Lot 3, the following two courses and
distances:
1) S12 degrees 40'49"E, 324.64 feet to a 1/2 inch rod set for an angle point;
2) S55 degrees 50'32"E, 157.67 feet to a 1/2 inch iron rod set for the most
easterly corner of the said Lot 2-A, same being an angle point in the
northwesterly line of Lot 5 of said Tress Sonesta Subdivision;
THENCE, S32 degrees 51'38"W, along the common line between the said Lot 2-A and
Lot 5, a distance of 385.91 feet to an 1/2 inch iron rod found in the curving
northeasterly right-of-way line of U.S Highway 183 (R.O.W. varies) for the most
southerly corner of the tract herein described, same being the most easterly
corner of that portion of the said Lot 2-A conveyed to the State of Texas for
right-of-way purposes; from which, a 1/2 inch iron rod found for the most
southerly corner of Lot 2-A, bears S32 degrees 51'38"W, 64.09 feet;
EXHIBIT "A"
Page 1 of 2
<PAGE>
THENCE, leaving the southeasterly line of, and continuing across the said Lot
2-A, along the northeasterly line of the said U.S. Highway 183, the following
two (2) courses and distances:
1) along a curve to the right having a radius of 5554. 58 feet, a central
angle of 00 degrees 05'50", a chord distance of 9.42 feet (chord bears N54
degrees 13"04"W), an arc distance of 9.42 feet to a 1/2 inch iron rod set
for the point of tangency;
2) N54 degrees 10'10"W, 336.33 feet to a 1/2 inch iron rod found in the
northwesterly line of the said Lot 2-A, same being the southeasterly line
of the said Lot 1_A, for the most northerly corner of the said portion of
Lot 2-A conveyed to the State for right-of-way; same being the most
westerly corner of the tract herein described;
THENCE, leaving the northeasterly line of said U.S. Highway 183, along the
common line between the said Lot 1-A and the said Lot 2-A, the following three
(3) courses and distances:
1) N35 degrees 50'11"E, 456.04 feet to a 1/2 inch iron rod found for an angle
point;
2) N21 degrees 18'26"W, 100.00 feet to a 1/2" iron rod found for an angle
point;
3) N12 degrees 40'49"W, 50.00 feet to the POINT OF BEGINNING, containing 3.423
acres of land area within these metes and bounds.
EXHIBIT "A"
Page 2 of 2
<PAGE>
EXHIBIT 10.27(d)
[SEAL APPEARS HERE]
DEED OF TRUST
(Participation)
THIS DEED OF TRUST, made this 28th day of April, 1994, by and between
TRAVIS BOATS & MOTORS, INC., a Texas corporation hereinafter referred to as
"Grantor," whose address is 13045 Research Boulevard, Austin, TX, WM. H.
HARRISON, JR. hereinafter referred to as "Trustee," whose address is 3701 Lake
Austin Boulevard, Austin, TX, CEN-TEX CERTIFIED DEVELOPMENT CORPORATION
hereinafter referred to as "Beneficiary," who maintains an office and place of
business at 3701 Lake Austin Boulevard, Austin, Texas 78703 in participation
with the Small Business Administration, an agency of the United States.
WITNESSETH, that for and in consideration of $1.00 and other good and
valuable consideration, receipt of which is hereby acknowledged, the Grantor
does hereby bargain, sell, grant, assign, and convey unto the Trustee, his
successors and assigns, all of the following described property situated and
being in the County of Williamson, State of Texas
3.423 acres of land, more or less, being all of Lot 2-A, Block "B", AMENDED PLAT
OF LOTS 1 AND 2, BLOCK "B", TRESS SONESTA SUBDIVISION, a subdivision in
Williamson County, Texas, according to the map or plat thereof recorded in
Cabinet I, Slides 385-386, Plat Records, Williamson, County Texas; SAVE AND
EXCEPT that portion of said Lot 2-A conveyed to the State of Texas for right-of-
way purposes by deed of record in Volume 1951, Page 210 of the Real Property
Records of Williamson County, Texas, said 3.423 acres being more particularly
described by metes and bounds in the attached Exhibit A, incorporated herein for
---------
all purposes.
Together with and including all buildings, all fixtures, including but not
limited to all plumbing, heating, lighting, ventilating, refrigerating,
incinerating, air conditioning apparatus, and elevators (the Trustor hereby
declaring that it is intended that the items herein enumerated shall be deemed
to have been permanently installed as part of the realty), and all improvements
now or hereafter existing thereon; the hereditaments and appurtenances and all
other rights thereunto belonging, or in anywise appertaining, and the reversion
and reversions, remainder and remainders, and the rents, issues, and profits of
the above described property. To have and to hold the same unto the Trustee,
and the successors in interest of the Trustee, forever, in fee simple or such
other estate, if any, as is stated herein in trust, to secure the payment of a
promissory note of this date, in the principal sum of $454,000.00
signed by
MARK T. WALTON, President
in behalf of TRAVIS BOATS & MOTORS, INC.
<PAGE>
1. This conveyance is made upon and subject to the further trust that
the said Grantor shall remain in quiet and peaceable possession of the above
granted and described premises and take the profits thereof to his own use until
default be made in any payment of an installment due on said note or in the
performance of any of the covenants or conditions contained therein or in this
Deed of Trust; and, also to secure the reimbursement of the Beneficiary or any
other holder of said note, the Trustee or any substitute trustee of any and all
costs and expenses incurred, including reasonable attorneys' fees, on account of
any litigation which may arise with respect to this Trust or with respect to
the indebtedness evidenced by said note, the protection and maintenance of the
property hereinabove described or in obtaining possession of said property after
any sale which may be made as hereinafter provided.
2. Upon the full payment of the indebtedness evidenced by said note and
the interest thereon, the payment of all other sums herein provided for, the
repayment of all monies advanced or expended pursuant to said note or this
instrument, and upon the payment of all other proper costs, charges,
commissions, and expenses, the above described property shall be released and
reconveyed to and at the cost of the Grantor.
3. Upon default in any of the covenants or conditions of this
instrument or of the note or loan agreement secured hereby, the Beneficiary or
his assigns may without notice and without regard to the adequacy of security
for the indebtedness secured, either personally or by attorney or agent without
bringing any action or proceeding, or by a receiver to be appointed by the
court, enter upon and take possession of said property or any part thereof, and
do any acts which Beneficiary deems proper to protect the security hereof, and
either with or without taking possession of said property, collect and receive
the rents, royalties, issues and profits thereof, including rents accrued and
unpaid, and apply the same, less costs of operation and collection, upon the
indebtedness secured by this Deed of Trust, said rents, royalties, issues, and
profits, being hereby assigned to Beneficiary as further security for the
payment of such indebtedness. Exercise of rights under this paragraph shall not
cure or waive any default or notice of default hereunder or invalidate any act
done pursuant to such notice but shall be cumulative to any right and remedy to
declare a default and to cause notice of default to be recorded as hereinafter
provided, and cumulative to any other right and/or remedy hereunder, or provided
by law, and may be exercised concurrently or independently. Expenses incurred
by Beneficiary hereunder including reasonable attorneys' fees shall be secured
hereby.
4. The Grantor covenants and agrees that if he shall fail to pay said
indebtedness, or any part thereof, when due, or shall fail to perform any
covenant or agreement of this instrument or of the promissory note secured
hereby, the entire indebtedness hereby secured shall immediately become due,
payable, and collectible without notice, at the option of the Beneficiary or
assigns, regardless of maturity, and the Beneficiary or assigns may enter upon
said property and collect the rents and profits thereof. Upon such default in
payment or performance, and before or after such entry, the Trustee, acting in
the execution of this Trust, shall have the power to sell said property, and it
shall be the Trustee's duty to sell said property (and in case of any default
of any purchaser, to resell) at public auction, to the highest bidder, first
giving four weeks' notice of the time, terms, and place of such sale, by
advertisement not less than once during each of said four weeks in a newspaper
published or distributed in the county or political subdivision in which said
property is situated, all other notice being hereby waived by the Grantor (and
the Beneficiary or any person on behalf of the Beneficiary may bid and purchase
at such sale). Such sale will be held at a suitable place to be selected by
the Beneficiary within said county or political subdivision. The Trustee is
hereby authorized to execute and deliver to the purchaser at such sale a
sufficient conveyance of said property, which conveyance shall contain recitals
as to the happening of default upon which the execution of the power of sale
herein granted depends; and the said Grantor hereby constitutes and appoints the
Trustee as his agent and attorney in fact to make such recitals and to execute
said conveyances and hereby covenants and agrees that the recitals so made shall
be binding and conclusive upon the Grantor, and said conveyance shall be
effectual to bar all equity or right of redemption, homestead, dower, right of
appraisement, and all other rights and exemptions of the Grantor, all of which
are hereby expressly waived and conveyed to the Trustee. In the event of a sale
as hereinabove provided, the Grantor, or any person in possession under the
Grantor, shall then become and be tenants holding over and shall forthwith
deliver possession to the purchaser at such sale or be summarily dispossessed,
in accordance with the provisions of law applicable to tenants holding over.
The power and agency hereby granted are coupled with an interest and are
irrevocable by death or otherwise, and are granted as cumulative to all other
remedies for the collection of said indebtedness. The Beneficiary or Assigns
may take any other appropriate action pursuant to state or Federal statute
either in state or Federal court or otherwise for the disposition of the
property.
<PAGE>
5. In the event of a sale as provided in paragraph 4, the Trustee shall
be paid a fee by the Beneficiary in an amount not in excess of 5 percent of the
gross amount of said sale or sales, provided, however, that the amount of such
fee shall be reasonable and shall be approved by the Beneficiary as to
reasonableness. Said fee shall be in addition to the costs and expenses
incurred by the Trustee in conducting such sale. The amount of such costs and
expenses shall be deducted and paid from the sale's proceeds. It is further
agreed that if said property shall be advertised for sale as herein provided and
not sold, the Trustee shall be entitled to a reasonable fee, in an amount
acceptable to the Beneficiary for the services rendered. The Trustee shall also
be reimbursed by the Beneficiary for all costs and expenses incurred in
connection with the advertising of said property for sale if the sale is not
consummated.
6. The proceeds of any sale of said property in accordance with
paragraph 4 shall be applied first to payments of fees, costs, and expenses of
said sale, the expenses incurred by the Beneficiary for the purpose of
protecting or maintaining said property and reasonable attorneys' fees;
secondly, to payment of the indebtedness secured hereby; and thirdly, to pay any
surplus or excess to the person or persons legally entitled thereto.
7. In the event said property is sold pursuant to the authorization
contained in this instrument or at a judicial foreclosure sale and the proceeds
are not sufficient to pay the total indebtedness secured by this instrument and
evidenced by said promissory note, the Beneficiary will be entitled to a
deficiency judgement for the amount of the deficiency without regard to
appraisement, the Grantor having waived and assigned all rights of appraisement
to the Trustee.
8. The Grantor covenants and agrees as follows:
a. He will promptly pay the indebtedness evidenced by said promissory
note at the times and in the manner therein provided.
b. He will pay all taxes, assessments, water rates, and other
governmental or municipal charges, fines or impositions, for which
provision has not been made hereinbefore, and will promptly deliver the
official receipts therefor to the Beneficiary.
c. He will pay such expenses and fees as may be incurred in the
protection and maintenance of said property, including the fees of any
attorney employed by the Beneficiary for the collection of any or all of
the indebtedness hereby secured, of such expenses and fees as may be
incurred in any foreclosure sale by the Trustee, or court proceedings or in
any other litigation or proceeding affecting said property, and attorneys'
fees reasonably incurred in any other way.
d. The rights created by this conveyance shall remain in full force
and effect during any postponement or extension of the time of the payment
of the indebtedness evidenced by said note or any part thereof secured
hereby.
e. He will continuously maintain hazard insurance of such type or
types and in such amounts as the Beneficiary may from time to time require,
on the improvements now or hereafter on said property, and will pay
promptly when due any premiums therefor. All insurance shall be carried in
companies acceptable to Beneficiary and the policies and renewals thereof
shall be held by Beneficiary and have attached thereto loss payable clauses
in favor of and in form acceptable to the Beneficiary. In the event of
loss, Grantor will give immediate notice in writing to Beneficiary and
Beneficiary may make proof of loss if not made promptly by Grantor, and
each insurance company concerned is hereby authorized and directed to make
payment for such loss directly to Beneficiary instead of to Grantor and
Beneficiary jointly, and the insurance proceeds, or any part thereof, may
be applied by Beneficiary at its option either to the reduction of the
indebtedness hereby secured or to the restoration or repair of the property
damaged. In the event of a Trustee's sale or other transfer of title to
said property in extinguishment of the indebtedness secured hereby, all
right, title, and interest of the Grantor in and to any insurance policies
then in force shall pass at the option of the Beneficiary to the purchaser
or Beneficiary.
f. He will keep the said premises in as good order and condition as
they are now and will not commit or permit any waste thereof, reasonable
wear and tear excepted, and in the event of the failure of the Grantor to
keep the buildings on said premises and those to be erected on said
premises, or improvements thereon, in good repair, the Beneficiary may make
such repairs as in the Beneficiary's discretion it may deem necessary for
the proper preservation thereof, and any sums paid for such repairs shall
bear interest from the date of payment at the rate specified in the note,
shall be due and payable on demand and shall be fully secured by this Deed
of Trust.
<PAGE>
g. He will not without the prior written consent of the Beneficiary
voluntarily create or permit to be created against the property subject to
this Deed of Trust any lien or liens inferior or superior to the lien of
this Deed of Trust and further that he will keep and maintain the same free
from the claim of all persons supplying labor and materials which will
enter into the construction of any and all buildings now being erected or
to be erected on said premises.
h. He will not rent or assign any part of the rent of said property
or demolish, remove, or substantially alter any building without the
written consent of the Beneficiary.
9. In the event the Grantor fails to pay any Federal, state, or local tax
assessment, income tax or other tax lien, charge, fee, or other expense charged
to the property hereinabove described, the Beneficiary is hereby authorized to
pay the same and any sum so paid by the Beneficiary shall be added to and become
a part of the principal amount of the indebtedness evidenced by said promissory
note. If the Grantor shall pay and discharge the indebtedness evidenced by said
promissory note, and shall pay such sums and shall discharge all taxes and liens
and the costs, fees, and expenses of making, enforcing and executing this Deed
of Trust, then this Deed of Trust shall be canceled and surrendered.
10. The Grantor covenants that he is lawfully seized and possessed of and
has the right to sell and convey said property; that the same is free from all
encumbrances except as hereinabove recited; and that he hereby binds himself and
his successors in interest to warrant and defend the title aforesaid thereto and
every part thereof against the lawful claims of all persons whomsoever.
11. For better security of the indebtedness hereby secured the Grantor,
upon the request of the Beneficiary, its successors or assigns, shall execute
and deliver a supplemental mortgage or mortgages covering any additions,
improvements, or betterments made to the property hereinabove described and all
property acquired after the date hereof (all in form satisfactory to Grantee).
Furthermore, should Grantor fail to cure any default in the payment of a prior
or inferior encumbrance on the property described by this instrument, Grantor
hereby agrees to permit Beneficiary to cure such default, but Beneficiary is not
obligated to do so; and such advances shall become part of the indebtedness
secured by this instrument, subject to the same terms and conditions.
12. That all awards of damages in connection with any condemnation for
public use of or injury to any of said property are hereby assigned and shall be
paid to Beneficiary, who may apply the same to payment of the installments last
due under said note, and the Beneficiary is hereby authorized, in the name of
the Grantor, to execute and deliver valid acquittances thereof and to appeal
from any such award.
Grantor represents, warrants and covenants that the note hereby secured
renews and extends the sum of $440,000.00 that Grantor owes on a prior note in
the original principal sum of $440,000.00, which is dated of even date herewith,
executed by TRAVIS BOATS & MOTORS, INC., and payable to the order of NATIONSBANK
OF TEXAS, N.A. The prior note is more fully described in and secured by a deed
of trust on the property, dated of even date herewith, recorded in the Real
Property Records of Williamson County, Texas. Grantor acknowledges that the
liens on the property securing the prior note are valid, that they subsist
against the property, and that by this deed of trust they are renewed and
extended in full force to secure payment of the note secured by this deed of
trust. All liens on the property securing payment of the prior note are renewed
and extended by this deed of trust without regard to how they are created or
evidenced. The prior note and all liens securing it have been assigned and
transferred to Beneficiary. The note hereby secured also represents $14,000.00
in cash that Beneficiary advanced to Grantor at Grantor's request. Grantor
acknowledges receipt of the amount advanced. The terms of the prior note and the
deed of trust renewed and extended are modified to the terms of the note hereby
secured and this deed of trust.
This deed of trust is subject to the exceptions to conveyance and warranty
set out in Exhibit B, incorporated herein for all purposes. If Grantor fails to
---------
pay any part of principal or interest secured by a prior lien or liens on the
property when it becomes payable or defaults on any prior lien instrument, the
debt secured by this deed of trust shall immediately become payable at the
option of Beneficiary.
If any portion of the note secured hereby cannot be lawfully secured by
this deed of trust, payments shall be applied first to discharge that portion.
If any portions of the note secured hereby are secured by liens which have a
priority that is different than the priority of the liens securing any other
portions of the note, payments shall be applied, at Beneficiary's option, first
to discharge those portions of the note secured by liens with the lowest
priority.
<PAGE>
13. The irrevocable right to appoint a substitute trustee or trustees is
hereby expressly granted to the Beneficiary, his successors or assigns, to be
exercised at any time hereafter without notice and without specifying any reason
therefor, by filing for record in the office where this instrument is recorded
an instrument of appointment. The Grantor and the Trustee herein named or that
may hereinafter be substituted hereunder expressly waive notice of the exercise
of this right as well as any requirement or application to any court for the
removal, appointment or substitution of any trustee hereunder.
14. Notice of the exercise of any option granted herein to the Beneficiary
or to the holder of the note secured hereby is not required to be given the
Grantor, the Grantor having hereby waived such notice.
15. If more than one person joins in the execution of this instrument as
Grantor of if anyone so joined be of the feminine sex, the pronouns and relative
words used herein shall be read as if written in the plural or feminine,
respectively, and the term "Beneficiary" shall include any payee of the
indebtedness hereby secured or any assignee or transferee thereof whether by
operation of law or otherwise. The covenants herein contained shall bind and
the rights herein granted or conveyed shall inure to the respective heirs,
executors, administrators, successors, and assigns of the parties hereto.
16. In compliance with section 101.1(d) of the Rules and Regulations of
the Small Business Administration [13 C.F.R. 101.1(d)], this instrument is to
be construed and enforced in accordance with applicable Federal law.
17. A judicial decree, order, or judgment holding any provision or portion
of this instrument invalid or unenforceable shall not in any way impair or
preclude the enforcement of the remaining provisions or portions of this
instrument.
IN WITNESS WHEREOF, the Grantor has executed this instrument and the
Trustee and Beneficiary have accepted the delivery of this instrument as of the
day and year aforesaid.
This deed of trust places a lien on all goods that are or are to become
fixtures related to the above-described real property and improvements. It is
intended that as to those goods, and pursuant to Article 9.402(f), Texas
Business and Commerce Code, this deed of trust shall be effective as a financing
statement filed as a fixture filing from the date of its filing for record, with
the Grantor as debtor and Beneficiary as secured party.
TRAVIS BOATS & MOTORS, INC.
By: /s/ MARK T. WALTON
-------------------------------------
MARK T. WALTON, President
Attest: /s/ MICHAEL B. PERRINE
---------------------------------
MICHAEL B. PERRINE, Secretary
STATE OF TEXAS
COUNTY OF WILLIAMSON
This instrument was acknowledged before me on April 28, 1994 by MARK T.
WALTON, President of TRAVIS BOATS & MOTORS, INC., a Texas corporation, on behalf
of said corporation.
/s/ MIKE CUMBERLAND
----------------------------------------
Notary Public, State of Texas
[SEAL] MIKE CUMBERLAND
Notary Public,
State of Texas
My Comm. Exp. 06/07/94
<PAGE>
Exhibit A
---------
LEGAL DESCRIPTION
3.423 ACRES OF LAND, MORE OR LESS, BEING ALL OF LOT 2-A, BLOCK "B", AMENDED PLAT
OF LOTS 1 AND 2, BLOCK "B", TRESS SONESTA SUBDIVISION, A SUBDIVISION IN
WILLIAMSON COUNTY, TEXAS, ACCORDING TO THE MAP OR PLAT THEREOF RECORDED IN
CABINET 1, SLIDES 385-386, PLAT RECORDS, WILLIAMSON COUNTY, TEXAS; SAVE AND
EXCEPT THAT PORTION OF SAID LOT 2-A CONVEYED TO THE STATE OF TEXAS FOR
RIGHT-OF-WAY PURPOSES BY DEED OF RECORD IN VOLUME 1951, PAGE 210 OF THE REAL
PROPERTY RECORDS OF WILLIAMSON COUNTY, TEXAS, SAID 3.423 ACRES BEING MORE
PARTICULARLY DESCRIBED BY METES AND BOUNDS AS FOLLOWS:
BEGINNING at a 1/2" iron rod found in the southerly right-of-way line of Hunters
Chase Drive (90 foot R.O.W.) for the most northeasterly corner of Lot 1-A of
said Amended Plat, same being the most northerly, northwest corner of the said
Lot 2-A and the tract herein described;
THENCE, N 77 degrees 19' 11" E, along the southerly line of said Hunters Chase
Drive, same being the north line of the said Lot 2-A, a distance of 70.00 feet
to a punch hole chiseled in a concrete drainage structure for the most
northeasterly corner of the said Lot 2-A, same being the northwest corner of Lot
3 of the Tress Sonesta Subdivision, Blocks A and B, a subdivision of record in
Cabinet G, Slides 380 through 383 of the said Plat Records;
THENCE, leaving the south line of said Hunters Chase Drive, along the common
line between the said Lot 2-A and Lot 3, the following two courses and
distances:
1. S 12 degrees 40' 49" E, 324.64 feet to a 1/2" rod set for an angle point;
2. S 55 degrees 50' 32" E, 157.67 feet to a 1/2" iron rod set for the most
easterly corner of the said Lot 2-A, same being an angle point in the
northwesterly line of Lot 5 of said Tress Sonesta Subdivision;
THENCE, S 32 degrees 51' 38" W, along the common line between the said Lot 2-A
and Lot 3, a distance of 385.91 feet to a 1/2" iron rod found in the curving
northeasterly right-of-way line of U.S. Highway 183 (R.O.W. varies) for the most
southerly corner of the tract herein described, same being the most easterly
corner of that portion of the said Lot 2-A conveyed to the State of Texas for
right-of-way purposes; from which, a 1/2" iron rod found for the most southerly
corner of Lot 2-A, bears S 32 degrees 51' 38" W, 64.09 Feet.
Exhibit A - Legal Description -1-
<PAGE>
THENCE, leaving the southeasterly line of, and continuing across the said Lot
2-A, along the northeasterly line of the said U.S. Highway 183, the following
two courses and distances:
1. along a curve to the right having a radius of 5554.58 feet, a central angle
of 00 degrees 05' 50", a chord distance of 9.42 feet (chord bears N 54
degrees 13' 04" W), an arc distance of 9.42 feet to a 1/2" iron rod set for
the point of tangency;
2. N 54 degrees 10' 10" W, 336.33 feet to a 1/2" iron rod found in the
northwesterly line of the said Lot 20A, same being the southeasterly line
of the said Lot 1-A, for the most northerly corner of the said portion of
Lot 2-A conveyed to the tate for right-of-way; same being the most westerly
corner of the tract herein described;
THENCE, leaving the northeasterly line of said U.S. Highway 183, along the
common line between the said Lot 1-A and the said Lot 2-A, the following three
courses and distances:
1. N 35 degrees 50' 11" E, 456.04 feet to a 1/2" iron rod found for an angle
point;
2. N 21 degrees 18' 26" W, 100.00 feet to a 1/2" iron rod found for an angle
point;
3. N 12 degrees 40' 49" W, 50.00 feet to the POINT OF BEGINNING, containing
3.423 acres of land area within these metes and bounds.
Exhibit A - Legal Description -2-
<PAGE>
EXHIBIT B
NONE
<PAGE>
EXHIBIT 10.28
TRUST AGREEMENT
This Agreement is entered into effective as of December 31, 1994 by and between
Ideal Insurance Company, Ltd. (hereinafter called INSURER) and Corporations
listed on EXHIBIT "A" attached hereto (Collectively referred to as Producer),
ARTICLE I
INSURER agrees to accept one hundred percent (100%) of the liability under each
and every extended service contract certificate issued by PRODUCER.
ARTICLE II
The PRODUCER shall pay to the INSURER the per contract amount equal to the
accompanying rate schedule. Schedule "A" and "B" attached hereto.
ARTICLE III
The liability of the INSURER shall begin upon acceptance of the funds from
PRODUCER.
ARTICLE IV
Each transmittal of certificates from PRODUCER to INSURER shall be accompanied
by a statement setting forth both the number and dollar amount of certificates
represented on each transmittal.
<PAGE>
ARTICLE V
Whenever this Agreement calls for written notice on the part of the parties
hereto, said notice requirement will be satisfied by mailing the same via
certified mail, postage prepaid, addressed to the concerned party as follows:
INSURER Ideal Insurance Company, Ltd.
2400 Louisiana Blvd. NE, Building 4, Suite 100
Albuquerque, New Mexico 87110
PRODUCER Travis Boats & Motors, Inc.
13045 Research Blvd.
Austin, Texas 78750
This document may only be amended by a written document signed by both INSURER
and PRODUCER through their authorized officers.
Ideal Insurance Company, Ltd.
By: /s/ ??????????????
-------------------------
Its: Vice President
-------------------------
Attest:
/s/ ??????????????
- ------------------
Producer
------------------------------
By: /s/ ??????????????
-------------------------
Its: Secretary & Treasurer
-------------------------
Attest:
/s/ ??????????????
- ------------------
<PAGE>
EXHIBIT "A"
TO TRUST AGREEMENT
Travis Boats & Motors, Inc., and subsidiary companies
<PAGE>
TRUST AGREEMENT
between
IDEAL INSURANCE COMPANY, LTD.
and
TRAVIS BOATS & MOTORS, INC.
SCHEDULE PAGE "A"
----------------
FOR CONTRACTS DATED PRIOR TO DECEMBER 26, 1995
----------------------------------------------
REINSURANCE FEE OF $14.00 PER CONTRACT
IDEAL INSURANCE COMPANY, LTD.
By: /s/ Jackie Fewell
------------------------
Attest: Its: Vice President
------------------------
/s/ Mia Goodwin
- ----------------------
TRAVIS BOATS & MOTORS, INC.
By: /s/ Michael B. Perrine
------------------------
Attest: Its: Secretary & Treasurer
------------------------
/s/ Gretchen Smith
- ----------------------
<PAGE>
TRUST AGREEMENT
between
IDEAL INSURANCE COMPANY, LTD.
and
TRAVIS BOATS & MOTORS, INC.
SCHEDULE PAGE "B"
----------------
FOR CONTRACTS DATED AFTER DECEMBER 26, 1995
-------------------------------------------
REINSURANCE FEE OF $20.00 PER CONTRACT
IDEAL INSURANCE COMPANY, LTD.
By: /s/ Jackie Fewell
------------------------
Attest: Its: Vice President
------------------------
/s/ Mia Goodwin
- ----------------------
TRAVIS BOATS & MOTORS, INC.
By: /s/ Michael B. Perrine
------------------------
Attest: Its: Secretary & Treasurer
------------------------
/s/ Gretchen Smith
- ----------------------
<PAGE>
EXHIBIT 21.1
TRAVIS BOATS & MOTORS, INC.
SUBSIDIARY COMPANIES
<TABLE>
<CAPTION>
State of
Name Incorporation Assumed Name
---- ------------- ------------
<S> <C> <C>
Falcon Marine, Inc. Texas Travis Boating Center
Falcon Marine Abilene, Inc. Texas Travis Boating Center
Travis Boating Center Arlington, Inc. Texas
Travis Boating Center Beaumont, Inc. Texas
Travis Snowden Marine, Inc. Texas Travis Boating Center
Travis Boats & Motors
TBC Management, Ltd. Texas
Red River Marine Arkansas, Inc. Arkansas
TBC Arkansas, Inc. Arkansas Travis Boating Center
Red River Marine I, Inc.
Travis Boating Center Little Rock, Inc. Arkansas
TBC Management, Inc. Delaware
Travis Boats & Motors Baton Rouge, Inc. Louisiana Baton Rouge Boating
Centre
Travis Boating Center Louisiana, Inc. Louisiana
</TABLE>
